# Petition for Writ of Certiorari — Eqbal v. United States

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2002
- **Citation:** 535 U.S. 932

## Text

No. 011208 eB 15 2002

GFACE OF THE CLERK
In The

Supreme Court of the United States

ZULFIQAR EQBAL and SAMEENA IKBAL,

Petitioners,

UNITED STATES OF AMERICA.

e

On Petition For A Writ Of Certiorari
To The United States Court Of Appeals
For The Ninth Circuit

¢

PETITION FOR A WRIT OF CERTIORARI

¢

CHRISTOPHER J. CANNON

California Bar No. 88034

Counsel of Record

SUGARMAN & CANNON

44 Montgomery Street, Suite 2080
San Francisco, CA 94104
Telephone: 415/362-6252
Facsimile: 415/677-9445

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964
OR CALL COLLECT (402) 342-2831

POR

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te eee nt mane mn ae

QUESTIONS PRESENTED

I.

Whether the government may prosecute and convict
for an alleged false statement under 18 U.S.C. § 1001
when that statement is a legal conclusion which a court
has held is open to question.

I].

Whether the government, while engaged in civil liti-
gation with citizens over their legal status, may ignore
orders from a court of appeals and a district court to
conduct hearings to determine that legal status, and
instead, unilaterally, indict those individuals alleging
their legal conclusions are false statements.

ii
LIST OF PARTIES

The parties to the proceedings below were the plain-
tiff, United States of America and the defendants-Peti-
tioners, Zulfiqar Eqbal and Sameena Ikbal. Plaintiff is
represented by John Lyons, Assistant United States Attor-
ney for the Northern District of California (San Fran-
cisco).

ill

TABLE OF CONTENTS

Page
QUESTIONS PRESENTED ....-----ssscssereenn ee i
LIST OF PARTIES ...-------ss0e0rre ii
RT aa ci auisacosasacencctesseecersset tele sc 1
OPINIONS BELOW....-------sss007 1

I. JURISDICTION.....-------0sssre 1
Il. CONSTITUTIONAL AND STATUTORY PRO-

VISIONS INVOLVED....------ss00 2

Il. STATEMENT OF THE CASE. ...-----++0°**"" 3

A. INTRODUCTION ...-------:*570700"* 3

B. PROCEDURAL BACKGROUND....------ 4

IV. REASONS FOR GRANTING THE WRIT .---- 11

A. INTRODUCTION....-------s7s770n 11

B. PETITIONERS WERE PROSECUTED
UNDER AN UNCONSTITUTIONALLY
VAGUE THEORY...------*:ss07 77 12

Cc. THE FAR DEFINITION OF PRINCIPAL,
INCLUDING THE TERM “AND SIMILAR
POSITIONS” IS TOO INDEFINITE TO
SUPPORT A § 1001 PROSECUTION ...-- 18

OF OTHER CIRCUITS AND WILL NOT
IMPEDE THE GOVERNMENT'S INTER-
EST IN OBTAINING HONEST INFORMA-
To. <a penaeessessuexeeses see ***

iv

TABLE OF CONTENTS - Continued
Page

V. THIS COURT SHOULD FIND IT IS A DUE

VI.

PROCESS VIOLATION FOR THE GOVERN-
MENT TO INITIATE A CRIMINAL PROSECU-
TION BASED UPON A LEGAL CONCLUSION
THAT IT HAS FAILED TO CONVINCE A
COURT TO ACCEPT

CONCLUSION

TABLE OF AUTHORITIES

Page
CasEs

Brogan v. United States, 522 U.S. 398 (1998)....... 14, 15
Bronston v. United States, 409 U.S. 352 (1973) ..... 17, 18
Crowe v. Smith, 151 F.3d 217 (5th Cir. 1998) ......... 26
Dunn v. United States, 442 U.S. 100 (1979)........... 12
Granger v. Payton, 379 F.2d 709 (4th Cir. 1967)....... 26
Graynard v. City of Rockford, 408 U.S. 104 (1972)..... 12
Hubbard v. United Siates, 514 U.S. 695 (1995)...... 14, 16
Marshall v. Jerrico, Inc., 446 U.S. 238 (1980).......... 22
Morgan v. United States, 309 F.2d 234 (D.C. Cir.

DR 6s. dnd eS eadddscsivewee eee eee ee 14
Newton v. Rumery, 480 U.S. 386 (1987)............... 24
People v. Superior Court (Greer), 19 Cal.3d 255

3g Pe PEPE CT Pe Pe Per Pe ee Sere On re sy rere 24
Sameena, Inc. v. United States Air Force, 147 F.3d

oF 8, ee me | er) Ore Terry 1, 4, 5, 6
United States ex rel. S.E.C. v. Carter, 907 F.2d 484

(ee Rae nas awk vs eacds Sosa steee eel 25, 26
United States v. Alvarado-Sandoval, 557 F.2d 645

CR SO Rn oh eed bce kaw hueaebiees eee 28
United States v. Anderson, 579 F.2d 455 (8th Cir.

POPU eh54 5 ene RER OL EAA ee 15, 19
United States v. Armstrong, 517 U.S. 456 (1996)....... 29

United States v. Calhoun, 97 F.3d 518 (11th Cir.
ROR Khiin chides baa bboshassthabiank ii eee 15

vi

TABLE OF AUTHORITIES - Continued
Page

United States v. Dale, 991 F.2d 819 (D.C. Cir. 1993) .... 15

United States v. DeZarn, 157 F.3d 1042 (6th Cir.
ROG << c vcckulcedcchecetdscnendaueteee tee 18

United States v. Diogo, 320 F.2d 898 (2nd Cir. 1963) .... 16
United States v. Erhardt, 381 F.2d 173 (6th Cir. 1967) .... 14

United States v. Gahagan, 881 F.2d 1380 (6th Cir.
BOGE). ccccccccccucdsvesseedeuuasseusveenueceues 16, 19

United States v. Gaudin, 515 U.S. 506 (1995).......... 16
United States v. Hooten, 662 F.2d 628 (9th Cir. 1981) .... 28
United States v. Mayer, 775 F.2d 1387 (9th Cir. 1985) .... 14
United States v. Migliaccio, 34 F.3d 1517 (10th Cir.

Ps 6c kacerel iecktn nese ehdobesnecieeleiewenee 15
United States v. Moses, 94 F.3d 182 (5th Cir.

BG 0 cv cccuskeceguséis ecaskecseaceeeee 15, 19
United States v. Race, 632 F.2d 1114 (4th Cir.

RO 6 occ ceccctsnavesvendeeceis ae 20, 21
United States v. Schafrick, 871 F.2d 300 (2nd Cir.

BO. oncesd000sssnendius bake eo 16
United States v. Sells Engineering, Inc., 463 U.S. 418

CTDUR ns 6 .cesédsducsdhads pebeneutuelealaeeee 24
United States v. Tobon-Builes, 706 F.2d 1092 (11th

COs GR ck vdunk ceeseactens Saas PL hae aeeema ted 22

United States v. Wiener, 96 F.3d 35 (2nd Cir. 1996) .... 15

United States v. Vesaas, 586 F.2d 101 (8th Cir.
WOTED «. o o'v cava Cestetececuhbecatbareasabeeiee 15, 19

(RSG) so cccctindvacsecccccccueuseussead 22, 23, 25, 26

Vii

TABLE OF AUTHORITIES - Continued

Page
STATUTES
EY Ber pears ees 23
Pe TE MED eacee dd ncecdensbcausdeceeutecer passim
Oe ey Wt b bab 5 bbe en one bad darn de och deokdcads 24
OF Cel IN so vc accu cdancdbocesencccceccn's 1
California Penal Code § 519 ........................ 23
MISCELLANEOUS

ay WO MS MI, UIs aS soy Kcr cbs bevbddédccan, 23
Model Code of Prof. Resp. EC 7-21 (1994) .......... 23

Northern District of California, Local i 23

1
PRAYER

The Petitioners, Zulfigar Eqbal and Sameena Ikbal,}
respectfully pray that a Writ of Certiorari issue to review
the judgment of the United States Court of Appeals for
the Ninth Circuit entered October 2, 2000.?

OPINIONS BELOW

The October 2, 2001, memorandum opinion of the
Court of Appeals for the Ninth Circuit denying Peti-
tioners’ appeal is unpublished, and is reprinted in the
appendix hereto. (App. 1-8.) The Ninth Circuit’s opinion
in a related civil matter is published at 147 F.3d 1148, 1154
(9th Cir. 1998). (App. 24-38.)

I.
JURISDICTION

Jurisdiction of this Court is invoked under 28 U.S.C.
§ 1254(a)(1). This petition is filed within 90 days of the
denial of the Petition for Rehearing and Rehearing en

1 In 1994, Eqbal changed his name, due to a myriad of
personal and religious reasons, from Mirza Zulfiqar Ali to
Zulfigar Eqbal. At the same time and for the same reasons, Ikbal
changed her name from Sameena Ali to Sameena Ikbal, her
maiden name. (RT 7-937-939; 7-1053-1057.) Citations to “RT”
refer to the Reporter’s Transcript of the proceedings below.
Citations to “ER” refer to the Excerpt of Record filed in the
Ninth Circuit. Citations to “App.” refer to the appendix to this
petition for a writ of certiorari.

2 On November 20, 2001, the Ninth Circuit denied
Petitioners request for rehearing and rehearing en banc. United
States v. Eqbal and Ikbal, CR 00-10165 and 00-10217-CW. (App.
39-40.)

aia ata iii iil

|

:
q

Banc and is timely under the Rules of the Supreme Court

2

of the United States.

The Fifth Amendment to the United States Constitu-

II.

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

tion provides in relevant part:
No person . . . shall be deprived of life liberty, or
property, without due process of law.

18 U.S.C. § 1001 reads:

(a)

(b)

(c)

Except as otherwise provided in this sec-
tion, whoever, in any manner within the
jurisdiction of the executive, legislative, or
judicial branch of the Government of the
United States, knowingly and willfully -
(1) falsifies, conceals, or covers up by any
trick, scheme, or device a material fact;
(2) makes any materially false, fictitious,
or fraudulent statement or representa-
tion; or |
(3) makes or uses any false writing or
document knowing the same to con-
tain any materially false, fictitious, or
fraudulent statement or entry;
shall be fined under this title or imprisoned
not more than 5 years, or both.
Subsection (a) does not apply to a party to
a judicial proceeding, or that party’s coun-
sel, for statements, representations, writ-
ings, or documents submitted by such
party or counsel to a judge or magistrate in
that proceeding.
With respect to any matter within the juris-
diction of the legislative branch, subsection
(a) shall apply only to -

3

(1) administrative matters, including a
claim for payment, a matter related to
the procurement of property or ser-
vices, personnel or employment prac-
tices, Or support services, or a
document required by law, rule, or
regulation to be submitted to the Con-
gress or any office or officer within the
legislative branch; or

(2) any investigation or review, conducted
pursuant to the authority of any com-
mittee, subcommittee, commission or
office of the Congress, consistent with
applicable rules of the House or Sen-
ate.

Federal Accusation Regulation FAR 9.409(a)(2)
defines “principal” as:

officers; directors; owners; partners; and, per-

sons having primary management or super-

visory responsibilities within a business entity

(e.g., general manager; plant manager; head of a

subsidiary, division, or business segment, and
similar positions). (Emphasis added).

III.
STATEMENT OF THE CASE
A. INTRODUCTION.

While Petitioners were engaged in civil litigation
with the government over the legal conclusion of whether
Egbal was a “principal” in a company called Samtech,
Petitioners were indicted and convicted under 18 U.S.C.
§ 1001 for making the allegedly false statements that no
principals of Samtech had been debarred.

4

“Principal” is defined in Federal Accusation Regula-
tion FAR 9.409(a)(2), as noted supra, as:

officers; directors; owners; partners; and, per-

sons having primary management or super-

visory responsibilities within a business entity

(e.g., general manager; plant manager; head of a

subsidiary, division, or business segment, and

similar positions). (Emphasis added).°

In Sameena, Inc. v. United States Air Force, 147 F.3d at
1154 (App. 37) the Ninth Circuit held that Eqbal’s status
as a principal of Samtech was a question of fact. Within
weeks of that decision, and before the civil litigation was
resolved in Petitioners’ favor, the government indicted
Eqbal and claimed that Petitioners’ statements that no
principals of Samtech had been debarred were false state-
ments under 18 U.S.C. § 1001. This Court should grant
certiorari in this case to forbid § 1001 prosecutions for
statements based upon legal conclusions from uncertain
facts, and limit § 1001 prosecutions to instances where
defendants make statements of fact that are objectively
known to be false at the time the statements are made.
The rule we propose is the rule in the majority of Circuits.

B. PROCEDURAL BACKGROUND.

Zulfiqar Eqbal and his wife, Sameena Ikbal, operated
a computer products company called University Systems,
Inc. (“USI”). (RT 7-957:6-22.) In 1992, Eqbal, Ikbal and USI
became embroiled in a controversy with the Social Secu-
rity Administration (“SSA”) regarding false claims of the

3 During jury instructions, Appellants objected to this
definition on due process grounds and asked that the “similar
positions” language be stricken. (RT 6-877:1-7; ER 157-158.)

5

origin of a computer mouse (RT 2-59:13-25). See Sameena,
Inc. v. United States Air Force, 147 F.3d at 1150 (App. 25.)
Although there were no findings that Eqbal knew of the
false representations regarding the origin of the mouse,
the SSA Deputy Commissioner for Finance, Assessment
and Management recommended that Eqbal and USI be
debarred. A proposed debarment has the same practical
effect as an actual debarment, and immediately prohib-
ited Eqbal from soliciting, receiving or otherwise partici-
pating in any federal contracts or subcontracts. (RT
2-64:19-25; see FAR 9.405(a)-(c).)

Following the debarments, University Systems was
forced into bankruptcy. (RT 7-1008:14-22.) One of the
most valuable assets of University Systems was a contract
with the Department of Energy (“DOE”). The government
knew that Eqbal and Ikbal were husband and wife, knew
both had worked at USI, knew USI and Eqbal had been
debarred, but still agreed to the novation of the mainte-
nance contract from the debarred USI and Eqbal to
the still qualified Ikbal and Samtech. (ER 192.) This
novation could not have occurred unless the government
believed Eqbal was not a principal at Samtech. (RT
7-1010:11-7-1011:20; ER 192.)

On July 31, 1995, Samtech submitted a bid to the
government to provide laptop computers. (RT 3-209:3-24.)
That bid contained a certification that no debarred person
was a principal of Samtech. (RT 3-210:21-3-211:5; ER 92.)
The government disqualified Samtech from the bidding
process contending that certification was false because
Samtech employed Zulfiqar Eqbal, a debarred individual,
in a principal position within the company. (See, e.g., ER
199.) Based upon this allegedly false certification, the

6

government proposed both Ikbal and Egqbal (again) for
debarment. (RT 3-290:25-291:8; see ER 143.)

Petitioners then sued the government, openly and
notoriously claiming that Eqbal was not a principal of
Samtech, and sought to overturn their debarments alleg-
ing, among other things, that the government violated
their due process rights in failing to provide them with
an opportunity to present and cross-examine witnesses in
the debarment proceedings. Sameena, Inc. v. United States
Air Force, 147 F.3d at 1151. (App. 28-29.) The government
responded by filing a motion for summary judgment,
which the district court erroneously granted. Id.

Appellants appealed and won. The Ninth Circuit
found that because the evidence was in conflict and the
government had refused to grant a debarment hearing,
Eqbal’s original debarment and Petitioners’ later debar-
ments were improper. Sameena, Inc. v. United States Air
Force, 147 F.3d at 1153-1154 (App. 37-38); Ali v. Dept. of
Health and Human Services, et al., No. 97-15264.

While the appeals were pending, Eqbal and Ikbal
learned that the government had begun a criminal inves-
tigation and they retained Joseph Russoniello, the Former
United States Attorney for the Northern District of Cali-
fornia, to represent them. (ER 25.) According to Mr.
Russoniello, the government offered to enter into a plea
agreement calling for probation for both Eqbal and Ikbal
on the condition that Eqbal, Ikbal, and the entities drop
their civil litigation against the government. (ER 12-14;
26-29.) Eqbal and Ikbal refused to enter into the

4 The government filed a counter affidavit claiming that the
defense had brought up the subject of a global resolution of the
charges. (ER 18.) The district court, however, declined to resolve

7

proposed agreement. They won their appeals. (ER 97; 102;
App. 24-38.) The Ninth Circuit decided that Eqbal’s
alleged principal status was a question of fact and
remanded the case for a hearing and determination of
Egbal’s status. (App. 37.)

The government refused to participate in the hear-
ings ordered by the Ninth Circuit, and by the district
court on remand, to determine whether Eqbal was a
principal.5 Instead, the government unilaterally indicted
Eqbal and Ikbal and alleged that Petitioners’ legal conclu-
sion that Eqbal was not a principal, which Petitioners had
maintained throughout the debarment proceedings, in
the district court, and before the Ninth Circuit, (RT 3-294,
315) was a false statement under 18 U.S.C. § 1001.® (See
ER 46-57.)”

The fact of this new criminal indictment gave the
government the goal it had been unsuccessfully seeking:
disqualification of Petitioners from government contract-
ing. See FAR 9.405. At trial there was no evidence that
Eqbal held one of the positions identified as a “principal”
in the FAR, and the government’s case was not based

this factual dispute stating: “I suppose it would be somewhat
entertaining to have an evidentiary hearing in which Mr.
Russoniello and Mr. Burch swore that each other was lying
about their conversations, but not interesting enough to make
me want to do it.” (ER 23.)

5 As a result of the government’s refusal to hold the
ordered hearings, the district court dismissed the debarments
with prejudice. (ER 141.)

6 This indictment was a new and independent ground for
debarment.

7 Eqbal was first indicted on a charge of false statements to
a bank. That case, reversed on appeal, was combined with this
case, against both Petitioners, for trial.

8

upon a contention that Eqbal held one of the identified
positions.

Samuel Hilker, the Air Force Acting Deputy General
Counsel For Contractor Responsibility, had signed the
memorandum in support of Eqbal’s debarment. (RT 292.)
As indicated above, that debarment was based upon a
claim that Samtech had made a false statement that no
principals had been debarred. (RT 3-335.)

Hilker testified that his duties included interpreting
the FAR to determine whether a person was a “principal”
in a business. (RT 3-276, 3-349.) Hilker, however, was
unable to articulate a consistent definition of the term
“principal”:

Q: And a sales manager — would a sales man-
ager be a principal?

Could be.

Would a manager be a principal?

Could be.

But a manager may not be a principal?

: Possibly not.

(RT 3-302.)

Q: Everyone who conducts business on behalf
of a company is not a principal?

A: Possibly not.

(RT 3-304.)

Hilker contended that principal was defined, not by
the terms of the FAR, but by his official, private discretion:

Q: Now when Mr. Lyons asked you what
makes a principal, I want to make sure I got
your response correct. Did you say “it
makes someone a principal in my mind?”
Were those your words?

(RT 3-348.)

rFOPrOr

9

A: I don’t have a current and specific recollec-
tion of — of stating it that way.

Q: Because whether someone is a principal or
not is actually determined under the defini-
tion in the Federal Acquisition Regulations,
not in the definition in your mind, correct?

A: It’s part of my discretionary authority to
make that determination, so my mind is
very important.

(RT 3-349.)

Q: Are you free to broaden [the FAR]?

A: That determination is going to — is going to
rest on a number of matters, you know. I
can’t expand what the regulation states, but

I can construe it, and I can exercise my
discretion under it.

(RT 3-349.)

In its closing argument, the government conceded
that Eqbal did not hold one of the identified positions
and argued to the jury that Eqbal exercised authority: “in
a way that is similar to - and held a position similar to
those examples given in the definition;” (RT 8-1292; App.
43) and that while Eqbal’s role was important, his wife,
Ikbal “was the one that was really in charge.” (RT 8-1206;
App. 43.)

The jury was instructed in accordance with the “simi-
lar position” language. (RT 8-1186; App. 42.)

Accordingly, as the jury was instructed, and under
the arguments made, Petitioners could be, and were,
convicted for their legal conclusion that Eqbal was not a
principal of Samtech, even though he did not hold any of
the positions identified as a principal in the FAR.

The jury returned a guilty verdict against Zulfigar
Eqbal on one count of conspiracy and three counts of

10

making false statements to the government.® (RT
1326-1329; App. 15-16.) The jury found him not guilty of
three other counts of making false statements to a gov-
ernment agency. Id. The jury found Sameena Ikbal guilty
of one count of conspiracy and five counts of making
false statements to a government agency. (RT 1326-1329;
App. 9.)

On March 20, 2000, the district court sentenced Sam-
eena Ikbal to 60 months of probation, concurrent, on each
count of her conviction. (ER 228-231; App. 10.) On April
24, 2000, Zulfiqar Eqbal was sentenced to 30 months in
federal custody to be followed by a term of 48 months on
supervised release. (ER 235-240; App. 17.)9

On appeal, and in the trial court, Petitioners claimed
that the government's theory of prosecution violated due
process and was unconstitutionally vague because it used
18 U.S.C. § 1001 to criminalize a legal conclusion that
Eqbal was not a principal of Samtech and that there was
insufficient evidence Petitioners made any false state-
ments. Petitioners also sought discovery, alleging that the
government was using this criminal prosecution to
achieve the goals it could not achieve in its civil proceed-
ings.

8 Eqbal was also convicted of one count of bank fraud and
one count of false statements to a government agency. These
convictions were overturned by the Ninth Circuit at 266 F.3d
1242 (9th Cir. 2001).

9 Because this sentence was primarily based upon the
reversed bank fraud conviction, the Ninth Circuit remanded the
case for resentencing. (App. 7-8.)

11
IV.
REASONS FOR GRANTING THE WRIT
A. INTRODUCTION.

This case demonstrates the danger presented when
one party, the government, has the option to resort to
both civil and criminal litigation to obtain one goal, here
the disqualification of Petitioners from government con-
tracting. While the government and Petitioners were civ-
illy litigating whether Eqbal was a principal in Samtech,
and immediately after the Ninth Circuit decided that
whether Eqbal was a principal was an open question of
fact, the government indicted Petitioners, claiming the
legal conclusion that the Ninth Circuit had found to be an
open question of fact was a false statement in violation of
18 U.S.C. § 1001. In essence, this prosecution and convic-
tion were based upon the assumption that the govern-
ment’s legal conclusion that Eqbal was a principal was
infallible, and the Petitioners’ legal conclusions to the
contrary were false statements. This type of arbitrary law
enforcement strikes at the heart of Petitioners’ due pro-
cess rights under the Fifth Amendment.

This indictment also violated Petitioners’ rights to
fair notice of potential charges against them and these
convictions demonstrate the dangers this Court has pre-
viously noted which flow when the roles of prosecutor
and civil litigant are combined.

The problems presented by dual civil and criminal
proceedings in cases like this could be prevented if this
Court adopts the rule from the majority of Circuits that a
conviction for an alleged false statement charged as a
violation of 18 U.S.C. § 1001 may not stand if the charged
statement is ambiguous. If Eqbal’s status was ambiguous,

12

statements about that status could not be the predicate
for a § 1001 prosecution in the majority of Circuits. The
Ninth Circuit ignored that rule in affirming these convic-
tions.

Accordingly, this Court should clarify the law regard-
ing § 1001 prosecutions to clearly state that a prosecution
for a false statement under § 1001 may not be satisfied by
a statement that under the defendant's interpretation of
the facts could be true. As applied by the Ninth Circuit,
any statement of legal opinion becomes grounds for a
prosecution as a false statement if there is a difference of
opinion between the speaker and the government.

This Court should exercise its supervisorial role and
remind the Ninth Circuit that the government may not
prosecute individuals simply because they take a legal
position contrary to the government in civil litigation.

B. PETITIONERS WERE PROSECUTED UNDER AN
UNCONSTITUTIONALLY VAGUE THEORY.

Fundamental principles of due process require that
no individual be forced to speculate, at the risk of indict-
ment, whether his conduct is prohibited. Dunn v. United
States, 442 U.S. 100, 112 (1979); Graynard v. City of Rock-
ford, 408 U.S. 104, 108 (1972).

The term “principal” as defined under the FAR and
applied in this case is unconstitutionally vague because it
fails to give a person notice of what is prohibited and
grants law enforcement unfettered discretion to deter-
mine what acts are forbidden.

13

The Ninth Circuit rejected this argument by adopting
the government's argument that “because the vague reg-
ulations do not themselves contain criminal penalties, a
vagueness challenge is inapposite.” (App. 3.)*°

This “conclusion” ignores Petitioners’ clear and
repeated claim that the FAR was unconstitutionally vague
as applied as a predicate for a § 1001 prosecution because
the legal conclusion whether Eqbal was a principal has
not yet been decided. More importantly, however, and the
reason this court should review this issue, is that the
Ninth Circuit opinion makes it a crime to disagree with
the government in any forum other than a court.

Under the government's theory of prosecution in this
case, if an alien files a claim for asylum and loses, the
claim he is entitled to asylum is a prosecutable false
statement. Similarly, if a citizen pays his taxes but then
contests the assessment and files for refund, if he loses
his refund claim, he is guilty of making a false statement.
If an individual living near Federal land contests what
the government has described as the parcel boundaries, if
he is wrong, he is liable for making a false statement. The

1° Ironically, as it rejected Petitioners’ vagueness challenge,
the Ninth Circuit narrowed the “operative definition of the term
[principal]” to “persons having primary management or
supervisory responsibilities within a business entity.” (App. 4.)
This narrowed definition of the term principal mirrors
Petitioners’ rejected request that the jury be instructed as the
Panel suggested principal should be defined (RT 6-877; 1-7; ER
157-158) and does not explain how this narrowed “operative
definition” comports with jury instructions and argument based
upon the “similar positions.” Moreover, the government
conceded in argument that Eqbal was not the person having
primary management or supervisory responsibility at Samtech.

(App. 43.)

14

Ninth Circuit’s construction of § 1001 serves to elevate
any losing dispute with the government into a criminal
offense.

This Court has recognized the potentially broad
reach of § 1001, see, e.g., Hubbard v. United States, 514 U.S.
695, 709 (1995), and has noted that if § 1001 were to be
applied to representations made before the courts, § 1001
“might be interpreted to criminalize conduct that falls
well within the bounds of responsible advocacy.” Id. at
709. In order to avoid that problem, numerous courts of
appeals adopted a “judicial exception function” to the
broad language of § 1001. See, e.g., Morgan v. United States,
309 F.2d 234 (D.C. Cir. 1962); United States v. Erhardt, 381
F.2d 173, 175 (6th Cir. 1967); United States v. Mayer, 775
F.2d 1387, 1390 (9th Cir. 1985). That judicial exception
function was adopted by this Court in Hubbard v. United
States, 514 U.S. at 709 and recognized by Congress in the
1994 revision of § 1001 itself.

We would submit that all representations of legal
conclusions to any agency may be part of a similar advo-
cacy function and should not be a predicate for a false
statement prosecution.

In Brogan v. United States, 522 U.S. 398 (1998) several
members of this Court expressed concern that govern-
ment agents could use § 1001 to create crimes. Neverthe-
less, in Brogan, this Court recognized the broad reach of
§ 1001 and declined to depart from the text of the statute
to create an “exculpatory no” defense.

In her concurrence, however, Justice Ginsburg recog-
nized that the Brogan “opinion does not instruct lower
courts automatically to sanction prosecution or convic-
tion under § 1001 in all instances of false denials made to
criminal investigators.” Justice Ginsburg also noted that

LS <_< tll

15

both this Court and the Second Circuit left open the
question whether “to violate § 1001, a person must know
that it is unlawful to make such a false statement.” Id. at
416; United States v. Wiener, 96 F.3d 35, 40 (2nd Cir. 1996).
Justice Ginsburg noted that nothing suggested that “the
mere denial of criminal responsibility would be sufficient
to prove such [knowledge].” Brogan v. United States, 522
U.S. at 416, quoting United States v. Wiener, 96 F.2d at 40.

Here, there was not even a denial of criminal liability,
there was only an open and notorious statement of a legal
conclusion, a conclusion with which the government dif-
fered. It is now time to reach the question left open by
Wiener and Brogan. This Court should forbid § 1001 pros-
ecutions for disputes over legal conclusions, unless that
statement is made with an intent to deceive.

To avoid the problems referred to in Weiner and
noted by this Court in Brogan, the Fourth, Sixth, Eighth,
Tenth, Eleventh and District of Columbia Circuits have
held that when an alleged false statement is triggered by
ambiguous language in a contract or certification “the
government must negate any reasonable interpretation
that would make the defendant’s statement factually cor-
rect.” United States v. Anderson, 579 F.2d 455, 460 (8th Cir.
1978); United States v. Dale, 991 F2d 819 (D.C. Cir. 1993);
United States v. Migliaccio, 34 F.3d 1517 (10th Cir. 1994);
United States v. Calhoun, 97 F.3d 518 (11th Cir. 1996). The
Fifth Circuit has clearly stated that:

a prosecution for a false statement under Section

1001 or under the perjury statutes cannot be

based on an ambiguous question where the

response may be literally and factually correct.

. . » An indictment premised on a statement
which on its face is not false cannot survive.
United States v. Moses, 94 F.3d 182, 189 (Sth Cir. 1996)
citing United States v. Vesaas, 586 F.2d 101, 104 (8th Cir.

16

1978); United States v. Gahagan, 881 F.2d 1380, 1383 (6th
Cir. 1989).

If the Ninth Circuit had followed this rule, Peti-
tioners could not have been convicted, because as the
Ninth Circuit previously held, there was an open ques-
tion whether Eqbal was a principal.

The Second and Ninth Circuits, however, have taken
a contrary position, and have held that as long as the
issue of falsity is submitted to a jury, a defendant may be
prosecuted for ambiguous statements. United States v.
Schafrick, 871 F.2d 300 (2nd Cir. 1989) (false statement in a
ba: <ruptcy matter); but see United States v. Diogo, 320
F. 2d 898 (2nd Cir. 1963). While we agree that a jury must
be allowed to decide whether an individual statement is
false, a court should not even submit that question to the
jury if the allegedly false statement is not false on its face.

We are simply asking this Court to rule, in accor-
dance with the majority of Circuits which have addressed
this issue, that the government may not prosecute a
defendant under § 1001 for a statement which is not,
facially untrue, unless the government also proves that
the statement was designed to mislead.

Although this Court has not addressed the applica-
tion for § 1001 to ambiguous responses, in analogous
cases involving the perjury statute, which this Court has
observed “overlaps” § 1001, e.g., Hubbard v. United States,
514 U.S. at 714 n.14, this Court has held that perjury
prosecutions may not be based upon ambiguous ques-
tions and responses. Both perjury and § 1001 prosecu-
tions are similar in that they are prosecutions not for
harming another individual, but for offending against the
government itself. United States v. Gaudin, 515 U.S. 506,

17

515 (1995) and this Court has previously analyzed the law
of perjury in determining the elements of § 1001. Id.

In Bronston v. United States, 409 U.S. 352 (1973), this
Court stated that the federal perjury statute “does not
make it a criminal act for a witness to willfully state any
material matter that implies any material matter that he
does not believe to be true.” Bronston put the onus on the
questioner to clarify any misleading impression left by a
witness’s response, stating:

[i]t is the responsibility of the lawyer to probe;

testimonial interrogation, and cross-examination

in particular, is a probiftg, prying, pressing form

of inquiry. If a witness evades, it is the lawyer’s

responsibility to recognize the evasion and to

bring the witness back to the mark, to flush out

the whole truth with the tools of adversary

examination. Id. at 358-359.

Under Bronston, a perjury conviction may not be
based upon an answer under oath that is nonresponsive
and “arguably misleading by negative implication,” but
literally true. Id. at 353. In Bronston, the defendant testi-
fied that he did not have any Swiss bank accounts; when
asked whether he had ever had any such accounts, he
answered, “[t]he company had an account there for about
six months, in Zurich.” Id. at 354.-These answers were
literally true because the defendant did not personally
have any Swiss bank accounts at the time of the question-
ing, although his company did have a Swiss account. Id.
at 354-355. In the past, however, the defendant also had a
personal Swiss account. His perjury prosecution was
based on the theory that, in order to mislead the ques-
tioner, he answered the second question unresponsively,
teferring to the company’s account rather than his own,
implying he had no personal account at the relevant time.
Id. at 354.

18

In United States v. DeZarn, 157 F.3d 1042 (6th Cir.
1988), the Sixth Circuit noted that the purpose of the
Bronston rule is to prevent an examiner from resolving
ambiguities in the elicited testimony with a perjury pros-
ecution after the fact. The rationale behind Bronston
should apply with even more force to prosecutions under
§ 1001, where the questioning and the answers are not
supervised by the Court. Under the Ninth Circuit’s rul-
ing, any expression of opinion or conclusion, with which
the government disagrees, may subject the speaker to
prosecution under § 1001. Certainly many such prosecu-
tions would be barred by the First Amendment, but it is
questionable public policy to make citizens fearful of
voicing their opinions and conclusions to government
agents. Petitioners were prosecuted for the same legal
conclusion they took openly and notoriously before the
Ninth Circuit. If not for the judicial proceedings excep-
tion to § 1001, if they had not ultimately prevailed in the
debarment proceedings, they, and their counsel, could
have been prosecuted for the legal position taken in the
Ninth Circuit. This is an unprecedented expansion of the
reach of § 1001.

C. THE FAR DEFINITION OF PRINCIPAL, INCLUD-
ING THE TERM “AND SIMILAR POSITIONS” IS
TOO INDEFINITE TO SUPPORT A § 1001 PROS-
ECUTION.

Finally, the FAR definition of principal is ambiguous
and insufficient to support a § 1001 prosecution. Eqbal’s
status was open to question and Petitioners’ statements
that Eqbal was not a principal could not have supported a
perjury prosecution. Here, not even the government offi-
cial charged with determining whether an individual was

19

a principal could give a cogent explanation of what
makes someone a principal. No witness testified that
Eqbal had any of the positions specifically defined as a
principal under the FAR. He was not an officer, director,
owner, partner, and did not have primary management
responsibility in Samtech. (See RT 7-1007:11-16.) The gov-
ernment was forced to argue that Eqbal’s role was “simi-
lar” to that of a principal. (RT 8-1292:2-17; App. 43.)
Under these circumstances, Petitioners’ legal conclusions
that Eqbal was not a principal were not facially false.
[A] prosecution for a false statement under Sec-
tion 1001 or under the perjury statutes cannot be
based on an ambiguous question where the
response may be literally and factually correct.

. . An indictment premised on a statement
which on its face is not false cannot survive.

United States v. Moses, 94 F.3d at 189 citing United States v.
Vesaas, 586 F.2d at 104; United States v. Gahagan, 881 F.2d
at 1383.

In United States v. Anderson, 579 F.2d at 459, Leslie
Anderson was charged and convicted of making a false
statement in reimbursement certifications to receive fed-
eral highway funds. Anderson filled out four certifica-
tions that (1) CETA had not been billed for the project
and (2) “funds have not been received from the State or
expended for such services under any other contract
agreement or grant.” In fact, federal highway funds had
been irrevocably committed for services performed under
CETA, but the funds had not yet been received by the
contractor. Id.

The Eighth Circuit reversed, finding that the lan-
guage in the certification forms was ambiguous. The
Court concluded:

20

[i]Jn light of these ambiguities . . . it was incum-
bent upon the government to introduce proof
sufficient to establish the falsity of the state-
ments as well as the defendant’s knowing and
willful submission of the statements. In carrying
out that burden, government must negative [sic]
any reasonable interpretation that would make
the defendant’s statement factually correct. Id.
at 460.

Similarly, in United States v. Race, 632 F.2d 1114, 1120
(4th Cir. 1980), the Fourth Circuit heid that a defendant
did not make a false statement when the government did
not prove that the defendant’s interpretation of an ambig-
uous contract clause was unreasonable. In Race, the
defendant filed for per diem reimbursement expenses
under a government contract, even though he had not
actually paid his employees per diem expenses. The gov-
ernment conceded that the contract was ambiguous as to
whether the contractor could claim the reimbursement. In
response, the court held that because the clause was
ambiguous, there could be no false statement:

[w]hen the Government concedes the clause is

ambiguous, it necessarily concedes that the

defendants’ construction of the per diem clause,
which is one of the [two competing] construc-

tions, is reasonable. Such a conclusion requires a

ruling that the defendants cannot be convicted

under § 1001 for a statement or billing which
may be said to be accurate within a reasonable
construction of the contract. This is so because

one cannot be found guilty of a false statement

under a contract beyond a reasonable doubt

when his statement is within a reasonable con-

struction of the contract. Id.

Here, Petitioners only certified that Eqbal was not a
principal, and as Hilker testified, the definition of princi-
pal is subject to interpretation.

21

Moreover, as in Race, the testimony of the govern-
ment’s own witnesses highlights the ambiguity of the
FAR. As previously described, Samuel Hilker, the Deputy
General Counsel of the Air Force for Contractor Respon-
sibility, essentially testified that he was the discretionary
judge as to whether an individual is or is not a principal.
(RT 3-349:1-25:)

D. THE CLARIFICATION OF § 1001 PETITIONERS
SEEK WILL ALIGN THE NINTH CIRCUIT WITH
THE MAJORITY OF OTHER CIRCUITS AND
WILL NOT IMPEDE THE GOVERNMENT’S
INTEREST IN OBTAINING HONEST INFORMA-
TION.

The majority of Circuits which have addressed this
issue have decided a § 1001 prosecution requires a
facially false statement. See pg- 15 & 16 Introduction.
Contractors in the Ninth Circuit should have similar pro-
tection.

The Ninth Circuit has declined to follow the other
Circuits’ construction of § 1001 and allows conviction for
statements of legal opinion, as long as those statements of
opinion are not made in a judicial forum. This construc-
tion of § 1001 puts a dangerous burden on any individual
participating in any proceeding or transaction with the
government.

Contractors should not be forced to fill out forms at
peril of criminal liability if their interpretation of a vague
term varies from that of the government.

The construction of § 1001 that we seek will not
inhibit the government in its attempts to obtain honest
and candid responses from contractors. Section 1001 not
only criminalizes false statements to the government, as

22

charged in this case, it also criminalizes those who cover
up material facts. See United States v. Tobon-Builes, 706
F.2d 1092 (11th Cir. 1983). In situations such as this,
where a person’s status is in dispute, an individual
should be free to come to a legal conclusion and argue in
support of that conclusion, without risk that his legal
conclusion could subject him or her to a prosecution
under § 1001. Section 1001 wisely specifically excludes
from coverage such legal conclusions in judicial proceed-
ings. There is no good reason to be able to prosecute an
individual for sincerely held expressions of legal opinion
simply because that opinion is presented out of court.

V.

THIS COURT SHOULD FIND IT IS A DUE PROCESS
VIOLATION FOR THE GOVERNMENT TO INITIATE
A CRIMINAL PROSECUTION BASED UPON A
LEGAL CONCLUSION THAT IT HAS FAILED
TO CONVINCE A COURT TO ACCEPT.

In Marshall v. Jerrico, Inc., 446 U.S. 238, 242 (1980) this
Court observed that a prosecutor’s direct pecuniary inter-
est in the outcome of a case that has an impact on the
prosecutor’s decision whether or not to enforce a particu-
lar statute may have constitutional ramifications. In
Young v. United States, 481 U.S. 787 (1987), this Court set
out a bright line rule forbidding counsel for the party
benefited by a civil ruling to be specially appointed to
prosecute violations of that rule as a contempt of court.
This Court specifically noted that:

if a Justice Department attorney pursued a con-

tempt prosecution for violation of an injunction

benefiting any client of that attorney involved in

the underlying civil litigation, that attorney

would be open to a charge of committing a

23

felony under § 208(a). Furthermore, such con-

duct would violate the ABA ethical provisions,

since the attorney could not discharge the oblig-
ation of undivided loyalty to both clients where

both have a direct interest. Id. at 805.

This Court summed up the heart of the problem with
the common sense observation that a prosecutor may be
tempted to bring a tenuously supported prosecution if
such a course promises financial or legal rewards for the
client. Id. Under the Model Code of Professional Respon-
sibility, “[a] lawyer shall not present or Participate in
presenting criminal charges solely to obtain an advantage
in a civil matter.” ABA Code of Prof. Resp. DR7-105(a)
(1969); see Cal. R. Prof. Resp. 5-110. As the drafting com-
mittee to DR-7-105(a) noted, the criminal process exists
for the protection of society as a whole, and that process
is undermined when it is used as a tool to force settle-
ment of private claims or controversies. Model Code of
Prof. Resp. EC 7-21 (1994). The civil process, which is
primarily designed for the settlement of disputes, is
impaired when the person against whom it is misused is
deterred from asserting his or her legal rights. Id. More-
over, the need to protect individuals from the whipsaw
effect of joint criminal and civil prosecution has been
recognized by state legislation. Just as this Court recog-
nized in Young that using a criminal prosecution for civil
advantage may violate 18 U.S.C. § 208(a), threatening
criminal prosecution for advantage in a civil case is a
violation of both California Penal Code § 519 and Califor-
nia Rule of Professional Responsibility 5-110.11 See also

11 Although the Department of justice has argued in the
past that the California Rules of Professional Responsibility are
not applicable to United States Attorneys, Local Rule 11 and the

\

24

People v. Superior Court (Greer), 19 Cal.3d 255, 261 (1977)
(“Nor should a prosecutor try a defendant with whom he
is embroiled in civil litigation.”).

In Newton v. Rumery, 480 U.S. 386 (1987) this Court
recognized that release dismissal agreements “may tempt
prosecutors to bring frivolous charges, or to dismiss mer-
itorious charges to protect the interest of other officials,”
id. at 396, and stated that “[a]ctions taken for these rea-
sons properly have been recognized as unethical.” Id. at
396 n.4. This Court acknowledged that these agreements
may infringe upon important interests of the criminal
defendant and of society as a whole, but held each case
must be examined on its own facts and that release dis-
missal agreements were not invalid per se. Id.

In United States v. Sells Engineering, Inc., 463 U.S. 418
(1982), this Court highlighted the problems presented by
government lawyers involving themselves in both civil
and criminal proceedings and barred government attor-
neys from obtaining automatic disclosure of grand jury
materials for use in civil proceedings. This Court stated

that:
because the Government takes an active part in
the activities of the grand jury, disclosure to
Government attorneys for civil use poses a sig-
nificant threat to the integrity of the grand jury
itself. If prosecutors in a given case knew that
their colleagues would be free to use the mate-
rials generated by the grand jury for a civil case,
they might be tempted to manipulate the grand
jury’s powerful investigative tools to root out
additional evidence useful in the civil suit, or

McDade Act, 28 U.S.C. § 530B, make California professional
conduct rules and decisions also applicable to attorneys in
federal practice within the state.

REE eS Somat ee et ee nee
pi

25

even to start or continue a grand jury inquiry
where no criminal prosecution seemed likely.
Any such use of grand jury proceedings to elicit
evidence for use in a civil case is improper per
se... . We do not mean to impugn the profes-
sional characters of Justice Department lawyers
in general;. . . . Our concern is based less on any
belief that grand jury misuse is in fact wide-
spread than on our concern that, if and when it
does occur, it would often be very difficult to
detect and prove. Id. at 432 (citation omitted).

In Young v. United States, 481 U.S. 787 (1987), this
Court again recognized that an interested prosecutor can-
not proceed against a defendant without threatening the
integrity of the judicial system. In Young, the Louis Vuit-
ton company obtained an injunction prohibiting the
defendants from counterfeiting Louis Vuitton merchan-
dise. Id. at 790. Undeterred, the defendant continued to
sell counterfeit merchandise. Id. at 791. Vuitton’s attor-
ney’s successfully set up a sting to obtain evidence of
violations of the injunction, and convinced a court to
issue an Order to Show Cause why the defendants should
not be held in contempt for their violations of the injunc-
tion. Id. at 791-792. Vuitton’s attorney’s successfully pros-
ecuted the contempt and the defendants were found
guilty. Id. at 792.

This Court reversed the finding of contempt and held
that counsel for the party benefited by an underlying
injunction may not prosecute a contempt proceeding
based upon that injunction. Id. at 804.

In United States ex rel. S.E.C. v. Carter, 907 F.2d 484
(5th Cir. 1990), the Fifth Circuit relied upon this Court’s
decision in Young v. United States to conclude that a
government attorney who represented a party’s interest

26

in an underlying civil matter might not be able to impar-
tially discharge his or her duty as a prosecutor to make a
“dispassionate assessment of the propriety of criminal
charges.” Id. at 486.

As in S.E.C. v. Carter, in this case, the competing
interest flows from concurrent representation of the civil
and criminal interests of the government. Here, the gov-
ernment specifically attempted to use this criminal pro-
ceeding as a method to resolve a civil case, which was not
going well for the government. After it looked as if the
Ninth Circuit was not going to rule favorably, the govern-
ment began a criminal prosecution, and offered a proba-
tionary disposition in return for abandoning the civil
litigation. Just as in S.E.C. v. Carter, while the government
was locked in an on-going civil struggle with Petitioners,
the government used its power to pursue criminal
charges against Petitioners to attempt to resolve the civil
matter. This case is far more troubling than Young, where
this Court observed that a pending civil action in which
the special prosecutor had an interest theoretically could
tempt a prosecutor to use the criminal investigation to
gather information of use in those suits. Here the very
initiation of the criminal proceeding gave the government
the result it had been unsuccessfully seeking, the disqual-
ification of Petitioners from government contracting.

We contend, as the Fourth Circuit held in Granger v.
Payton, 379 F.2d 709 (4th Cir. 1967), that the prosecution
by an individual handling litigation against a defendant
violates the due process clause. See also Crowe v. Smith,
151 F.3d 217 (5th Cir. 1998) (following Young, the Fifth
Circuit found due process rights were violated where the
contempt prosecutor also represented a party).

27

Here, the government in general and the San Fran-
cisco United States Attorney’s Office in particular had
been attempting to bar Petitioners from contracting since
1992. In that attempt, however, the government did not
follow its own procedures and failed to give Petitioners a
hearing where they could make their case. Petitioners
fought back and eventually the Ninth Circuit ordered the
government to hold a hearing on Egbal’s status as a
principal. Instead of holding the ordered hearing, how-
ever, the government unilaterally indicted Eqbal and
Ikbal and alleged that Petitioners’ legal conclusion that
Eqbal was not a principal, which they had maintained
throughout the debarment proceedings in the district
court, and before the Ninth Circuit (RT 3-294, 315), was a
false statement under 18 U.S.C. § 1001. That indictment
had the same practical effect as an actual debarment, and
immediately prohibited Petitioners from soliciting,
receiving or otherwise participating in any federal con-
tracts or subcontracts (RT 2-64:19-25; see FAR 9.405(a)-(c)).

This is far more than a prima facie showing of
improper interest on the part of the San Francisco United
States Attorney’s Office. The proposed plea agreement
required Appellants to dismiss their civil suits against the
government. The plea agreement was proposed in June of
1998, at a time when Petitioners’ appeals were still pend-
ing, and if Petitioners had accepted the plea, the need for
a debarment hearing would have been avoided. For
whatever reason, as the government’s later conduct
shows, the government wanted to avoid that hearing.

The government’s hopes to resolve the civil cases
through the plea agreement were dashed when Eqbal and
Ikbal decided to follow through with their appeals and
continue with their civil actions. Eqbal and Ikbal finally

28

won their appeal on July 3, 1998; the next month, on
August 27, 1998, Eqbal was indicted. These facts present a
prima facie showing that the government brought this
case with an improper motive.

Facts far less egregious than those shown here have
been seen as evidence of potential violations of due pro-
cess and indicative of vindictive prosecution.

In United States v. Hooten, 662 F.2d 628, 634 (9th Cir.
1981), the defendant argued that the prosecution indicted
him because he exercised his rights to file civil actions
against an ATF Agent and various government agencies.
Although the court rejected the defendant’s claim in
Hooten because the Agent did not have the prosectorial
authority to decide whether to file chezges, the court
stated that the government’s choice to file a case may
support a charge of vindictive prosecution. Id.

In United States v. Alvarado-Sandoval, 557 F.2d 645 (9th
Cir. 1977), the Ninth Circuit found that the defendant's
due process rights were violated where there was evi-
dence of vindictive prosecution. In Alvarado-Sandoval, the
defendant entered into plea negotiations with the govern-
ment. The defendant rejected the government’s offer to
plead guilty to a misdemeanor, and later raised the possi-
bility of filing suppression motions. The government then
proceeded to charge the defendant with a felony, rather
than a misdemeanor. The defendant filed a motion to
dismiss the indictment based upon vindictive prosecu-
tion. He was eventually convicted of the felony, and then
appealed. In reversing the conviction, the court empha-
sized that the “[a]ppearance of vindictiveness, not vindic-
tiveness in fact, is the touchstone.” Id. at 646. The
appearance of vindictiveness was apparent because:

29

[i]t was only after the appellant, through his
counsel, indicated that no plea would be entered
and only after the understanding of possible
motions was referred to by the magistrate, that
the assistant United States Attorney indicated
that a felony indictment would be considered.
Id.

Here, there was a clear appearance of vindictiveness
and use of the criminal process to resolve the civil suits
on the part of the United States Attorney’s Office. This
appearance is shown not only through the timing of the
prosecution, but also through the declaration of the for-
mer United States Attorney for the Northern District of
California. He stated the government offered Petitioners
probationary sentences if they would dismiss all litiga-
tion against the government. This showing was specific,
detailed, and substantial. It was certainly “some evi-
dence” (see United States v. Armstrong, 517 U.S. 456 (1996)
(setting out standard for requiring discovery in selective
prosecution case)) of a due process violation and should
have led to a more detailed inquiry.

This Court has clearly indicated that an interested
prosecutor may violate a defendant’s right to due pro-
cess, and that each case must be examined on its own
facts. This Court has not stated, however, what a defen-
dant must show to require a hearing on prosectorial
motives. If “[a]ppearance of vindictiveness, not vindic-
tiveness in fact, is the touchstone,” district courts need
guidance to determine what to do when that appearance
of vindictiveness is shown. It is time for this Court to
remind the lower courts that even if the hearts of prose-
cutors may be pure, the appearance of justice is important
to all participants in the justice system. When, as here, the
timing of a prosecution, coupled with hard evidence from

30

a reputable source indicates the line separating criminal
and civil prosecutions may have been breached, the dis-
trict court must at least conduct an inquiry to assure that
the appearance of justice is not infringed.

Accordingly, we ask this Court to provide guidance
to lower courts to assist them in deciding what to do
when defendants have demonstrated an appearance of a
conflict by the prosecution.

VI.
CONCLUSION.

This case demonstrates the unfairness which flows
from mixing civil and criminal litigation. This Court has
the ability to insure that contractors are not punished for
legal disagreements in ambiguous circumstances. There is
no reason that § 1001 should have a lesser standard of
proof than a perjury prosecution; requiring the same
standard of proof will ensure that civil disagreements do
not ripen into criminal prosecutions. The majority of Cir-
cuits have all agreed that a factually ambiguous state-
ment is insufficient to support a § 1091 prosecution.
Accordingly, we request this Petition for Certiorari be
granted and that this Court direct the Ninth Circuit to fall
in line with its sister Circuits and forbid § 1001 prosecu-
tions unless the alleged statement is facially false.

Dated: February 15, 2002
Respectfully submitted,

CHRISTOPHER J. CANNON
Attorney for Zulfigar Eqbal
and Sameena Ikbal

App. 1

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

UNITED STATES

OF AMERICA, No. 00-10165

Plaintiff-Appellee, D.C. No. CR 99-40002 CW
v.

SAMEENA R. ALI,
aka Sameena Ikbal,

Defendant-Appellant.

No. 00-10217

DC No. CR 99-40002: CW
MEMORANDUM*

(Filed Oct. 2, 2001)

OF AMERICA,
Plaintiff-Appellee,
v.

MIRZA ALI, aka
Zulfigqar Eqbal, aka
Henry Stone,

)

)

)

)

)

)

)

)

UNITED STATES )
)

)

)

)

)

)

)

Defendant-Appellant.
)

Appeal from the United States District Court
for the Northern District of California
Claudia Wilken, District Judge, Presiding

Argued and Submitted May 14, 2001

San Francisco, California

* This disposition is not appropriate for publication and
may not be cited to or by the courts of this circuit except as
provided by Ninth Cir. R. 36-3.

App. 2

Before: O‘SCANNLAIN, TASHIMA, and THOMAS, Cir-
cuit Judges.

Sameena Ali appeals her conviction on one count of
conspiracy to make false statements to various govern-
ment agencies, in violation of 18 U.S.C. §§ 371 and 1001,
and on five counts of making false statements to a gov-
ernment agency, in violation of 18 U.S.C. § 1001. Mirza
Ali appeals his conviction on one count of conspiracy to
make false statements and three counts of making false
statements to a government agency. The defendants were
tried jointly in district court and their appeals have been
consolidated. Because the parties are familiar with the
facts of this case, we will not recite them here. We have
jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.

1. Prosecutorial Misconduct

Appellants contend that the prosecutor purposefully
elicited testimony that previously had been excluded as
privileged and then referred to the excluded and stricken
evidence during closing argument. We review for an
abuse of discretion a district court’s rulings on objections
to alleged prosecutorial misconduct. United States v. Sarki-
sian, 197 F.3d 966, 988 (9th Cir. 1999). Where counsel
objected to the acts of alleged prosecutorial misconduct at
trial, we review for harmless error. United States v. Cab-
rera, 201 F.3d 1243, 1246 (9th Cir. 2000).

With respect to the prosecutor’s questioning of the
witness, we find that no misconduct occurred. The pros- .
ecutor did nothing to elicit privileged testimony or to
prompt the witness’s response. See Sarkisian, 197 F.3d at

App. 3

988; United States v. Christophe, 833 F.2d 1296, 1301 (9th
Cir. 1987). With respect to the prosecutor’s comment dur-
ing closing argument, we believe the “misstatement has
earmarks of inadvertent mistake, not misconduct.” United
States v. Carillo, 16 F.3d 1046, 1050 (9th Cir. 1994). Even
assuming that there was misconduct, it was harmless.
The alleged misconduct consisted of only one brief, pass-
ing reference to excluded testimony and the court imme-
diately provided a curative instruction. The remark,
“followed by the court’s instruction, did not materially
affect the fairness of the trial.” United States v. Sayakhorn,
186 F.3d 928, 946 (9th Cir. 1999).

2. Vagueness of Federal Acquisition Regulations (“FAR”s)

Appellants contend that their due process rights
were violated because FAR § 9.409(a) and § 52.209-5(a)(2),
codified at 48 C.F.R. §§ 9.409(a) and 52.209-5(a)(2), are
unconstitutionally vague. Whether a regulation is uncon-
stitutionally vague is a question of law to de novo review.
United States v. Albers, 226 F.3d 989, 993 (9th Cir. 2000).
Here, however, such a vagueness challenge is inappropri-
ate because the regulations in question proscribe no con-
duct and were not enforced against the defendants;
rather, the defendants were charged under 18 U.S.C.
§ 1001 for false statements made to the government in
connection with the certification submitted pursuant to
the regulations. As such, a constitutional vagueness chal-
' lenge to the regulations themselves is inapposite. See, e.g.,
Bryson v. United States, 396 U.S. 64, 67-69 (1969) (rejecting
. vagueness challenge to underlying statutory provision in
the context of a false statement prosecution); United States
v. Harris, 185 F.3d 999, 1004 (9th Cir. 1999) (rejecting

App. 4

vagueness challenge by defendant charged with making
false statements on ERISA documents “because . . . it was
clear what he should do: truthfully fill out the ERISA
form according to the instructions”).

3. Sufficiency of the Evidence

Appellants contend that there is insufficient evidence
to establish beyond a reasonable doubt that they “know-
ingly and willfully” made false statements in the certi-
fication because the term “principal,” as defined in the
FARs, was ambiguous. The evidence was sufficient if,
viewing the evidence in the light most favorable to the
prosecution, any rational trier of fact could have found
the essential elements of the crime beyond a reasonable
doubt. Jackson v. Virginia, 443 U.S. 307, 319 (1979). The
operative definition of the term describes “persons hav-
ing primary management or supervisory responsibilities
within a business entity.” 48 C.F.R. § 52.209-5(a)(2). We
believe the definition is sufficiently clear for a rational
trier of fact to find that the defendants knowingly and
willfully made the false statements.

4. Exclusion of Notice Evidence

Appellants contend that the district court erred by
excluding evidence that Mirza Ali notified the govern-
ment of his debarred status. Evidentiary rulings made
during trial are reviewed for abuse of discretion. United
States v. Hankey, 203 F.3d 1160, 1166 (9th Cir. 2000).
Because the relevant issue was the identity of the

he ia aad A

App. 5

debarred individual, not his debarred status, such evi-
dence was irrelevant and thus its exclusion was not an
abuse of discretion.

5. Discovery on Selective/Vindictive Prosecution

Appellants contend. that the district court erred in
denying their motion for discovery regarding allegations
of selective or vindictive prosecution. We review a court’s
decision on whether to grant discovery related to a selec-
tive prosecution claim for abuse of discretion. United
States v. Candia-Veleta, 104 F.3d 243, 246 (9th Cir. 1996).
The standard of review for a claim of vindictive prosecu-
tion has not been settled. See United States v. Gamez-
Orduno, 235 F.3d 453, 462 n.9 (9th Cir. 2000) (recognizing
but not deciding the open question as to whether de
novo, clear error, or abuse of discretion review is appro-
priate).

The district court did not abuse its discretion when it
denied the motion for discovery with regard to the claim
of alleged selective prosecution because there was no
showing of “discriminatory effect” or “discriminatory
purpose.” Candia-Veleta, 104 F.3d at 246. With respect to
the allegation of vindictive prosecution, “a criminal
defendant may be entitled to discovery if he or she estab-
lishes a prima facie showing of a likelihood of vindictive-
ness by some evidence tending to show the essential
elements of the defense.” United States v. One 1985 Mer-
cedes, 917 F.2d 415, 421 (9th Cir. 1990). In order to estab-
lish a prima facie case,-a defendant “must show either
direct evidence of actual vindictiveness or facts that war-
rant an appearance of such.” United States v. Edmonds, 103

App. 6

F.3d 822, 826 (9th Cir. 1996) (quoting United States v.
Montoya, 45 F.3d 1286, 1299 (9th Cir. 1995)) (internal quo-
tation marks omitted).

The only facts alleged to support the vindictive pros-
ecution claim here were that Mirza Ali was offered a plea
that included a provision requiring dismissal of the pend-
ing civil suits challenging the debarments and that he
was indicted shortly after the debarments were reversed
on appeal. We have held that “the mere filing of an
indictment can support a charge of vindictive prosecu-
tion.” United States v. Hooton, 662 F.2d 628, 634 (9th Cir.
1981). However, “the link of vindictiveness cannot be
inferred simply because the prosecutor’s actions followed
the exercise of a right, or because they would not have
been taken but for exercise of a defense right.” United
States v. Gallegos-Curiel, 681 F.2d 1164, 1168 (9th Cir. 1982).
In other words, “[a] sequence of events is not enough; the
likelihood of retaliation is crucial.” Id. at 1171. There was
nothing to suggest that indictments were brought here in
retaliation for a civil appeal; in fact, the criminal investi-
gation had begun months before the plea offer was
broached or the civil appeal decided: Under any applica-
ble standard of review, there was no error in denying
discovery for a claim of vindictive prosecution.

6. Entrapment Instruction

Appellants contend that the district court erred by
denying an entrapment instruction because some false
statements were made in response to a request for infor-
mation by government officials after the decision had
already been made to cancel the relevant procurement.

App. 7

The standard of review for the court’s decision not to
provide the jury with a requested entrapment instruction
is unsettled. See United States v. Becerra, 992 F.2d 960, 963
(9th Cir. 1993). We need not address whether de novo or
abuse of discretion review is required here, however,
because under either standard the court’s denial of an
entrapment instruction was not error. “A defendant is
entitled to an entrapment instruction if he or she can
present some evidence that (1) a government agent
induced him or her to commit an illegal act that (2) he or
she was not predisposed to commit.” United States v.
Sotelo-Murillo, 887 F.2d 176, 179 (9th Cir. 1989). Because
the defendants presented no evidence to raise an issue of
fact regarding inducement to commit an illegal act, and
the relevant evidence actually suggests predisposition, an
entrapment instruction was properly denied. Cf. United
States v. Marbella, 73 F.3d 1508, 1512-13 (9th Cir. 1996)
(finding entrapment instruction unwarranted where
“there is no evidence the agents suggested to [defen-
dants] that they should submit the fraudulent medical
bills to the insurers” and “agents did not pressure [them]
and did not attempt to persuade them to engage in the
fraudulent activity.”).

For the foregoing reasons, the convictions of Sam-
eena Ali and Mirza Ali on the conspiracy count and on
the individual counts of making false statements to a
government agency are affirmed. In appeal No. 00-10217,
however, we vacate Mirza Ali’s sentence and remand for
resentencing. Mirza Ali was sentenced in a single, “con-
solidated” sentencing judgment in this case and in the
companion case, No. 00-10216, in which we have reversed
his conviction. Because his aggregate sentence was a

App. 8

“package,” United States v. Handa, 122 F.3d 690, 691-92
(9th Cir. 1997), we remand for resentencing on the counts
of conviction in this case.

Convictions AFFIRMED. Sentence in No. 00-10217
VACATED and REMANDED for resentencing.

App. 9

UNITED STATES DISTRICT COURT
Northern District of California

UNITED STATES
OF AMERICA
v.

SAMEENA R. ALI,
aka: Sameena Ikbal

Defendant.

Case Number
CR 99-40002-02 CW

JUDGMENT IN A CRIMINAL CASE
(For Offense(s) Committed On or
After November 1, 1987)

(Filed March 28, 2000)

The defendant, SAMEENA R. ALI, was represented
by Christopher J. Cannon.

The defendant was found guilty on counts 1, 2, 4, 5,
7, and 11 of the Indictment after a plea of not guilty.
Accordingly, the defendant is adjudged guilty of the fol-
lowing counts, involving the indicated offenses:

Nature of
Title & Section Offense Count Number(s)
18 U.S.C. § 371 Conspiracy 1

18 U.S.C. § 1001 Making False 2, 4, 5, 7, and 11
Statements to
a Government
Agency
As pronounced on March 20, 2000, the defendant is
sentenced as provided in pages 2 through 4 of this Judg-
ment. The sentence is imposed pursuant to the Sentenc-
ing Reform Act of 1984.

App. 10

It is ordered that the defendant shall pay to the
United States a special assessment of $600.00 for counts 1,
2, 4, 5, 7, and 11, which shall be due immediately.

It is further ordered that the defendant shall notify
the United States Attorney for this district within 30 days
of any change of name, residence, or mailing address
until all fines, restitution, costs, and special assessments
imposed by this Judgment are fully paid.

Signed this the 28th day of March, 2000.

/s/ Claudia Wilken
CLAUDIA WILKEN
United States

District Judge

Defendant’s SSAN: 302-72-2115

Defendant’s Date of Birth: 01/29/54

Defendant’s address: 45030 Cougar Circle, Fremont, CA
94539

U.S. Marshal No.: 98433-011

PROBATION

The defendant is hereby placed on probation for a
term of 60 months on each count to run concurrent.

While on probation you shall not commit another
federal, state, or local crime and shall not illegally pos-
sess a controlled substance. Revocation of probation is
mandatory for possession of a controlled substance.

You shall pay the assessment imposed in accordance
with 18 U.S.C. Section 3013, and shall immediately notify
the probation officer of any change in your economic
circumstances that might affect your ability to pay a

App. 11

special assessment, fine, restitution, or co-payments
ordered by the Court.

If the judgment imposed a fine or a restitution obliga-
tion, it shall be a condition of supervision that you pay
any such fine or restitution that remains unpaid at the
commencement of the term of supervision in accordance
with any Schedule of Payments set forth in the Criminal
Monetary Penalties sheet of the judgment. In any case,
the defendant shall cooperate with the probation officer
in meeting any financial obligations.

Revocation of probation is mandatory for refusal to
comply with drug testing imposed as a condition of
supervision. 18 U.S.C. Sections 3565(b)(3) and 3583(g)(3)

STANDARD CONDITIONS OF PROBATION

It is the order of the Court that you shall comply with the
following standard conditions:

1) You shall not leave the judicial district or
other specified geographical area without
the permission of the court or probation
officer;

2) You shall report to the probation officer as
directed by the Court or probation officer,
and shall submit a truthful and complete
written report within the first five days of
each month;

3) You shall answer truthfully all inquiries by
the probation officer and follow the
instructions of the probation officer;

4)

5)

6)

7)

8)

9)

10)

App. 12

You shall support your dependents and
meet other family responsibilities, includ-
ing but not limited to, compliance with the
terms of any court order or administrative
process pursuant to the laws of a state, the
District of Columbia, or any other posses-
sion or territory of the United States,
requiring payment by you for the support
and maintenance of any child or of a child
and the parent with whom the child is
living;

You shall work regularly at a lawful occu-
pation unless excused by the probation
officer for schooling, training, or other
acceptable reasons;

You shall notify the probation officer ten
(10) days prior to any change in residence
or employment;

You shall consume no alcohol if sentenced
to the special condition that you are to
participate in a drug/alcohol program,

You shall refrain from excessive use of
alcohol and shall not purchase possess,
use, distribute, or administer any con-
trolled substance or any paraphernalia
related to any controlled substance, except
as prescribed by a physician;

You shall not frequent places where con-
trolled substances are illegally sold, used,
distributed, or administered;

You shall not associate with any persons
engaged in criminal activity, and shall not
associate with any ‘person convicted of a
felony unless granted permission to do so
by the probation officer;

11)

12)

13)

14)

App. 13

You shall permit a probation officer to visit
him or her at any time at home or else-
where and shall permit confiscation of any
contraband observed in plain view by the
probation officer;

You shall notify the probation officer
within seventy-two (72) hours of being
arrested or questioned by a law enforce-
ment officer;

You shall not enter into any agreement to
act as an informer or a special agent of a
law enforcement agency without the per-
mission of the court;

You shall notify third parties of risks
related to your criminal record, personal
history, or characteristics, and shall permit
the probation officer to make such notifica-
tions and/or confirm your compliance with
this notification requirement.

SPECIAL CONDITIONS OF PROBATION

While the defendant is on probation pursuant to
Judgment:

1) The defendant shall pay the special assess-

ment that is imposed by this judgment.

2) The defendant shall be prohibited from

engaging in self-employment without the.

prior permission of the probation officer.

3) The defendant shall not hold a position of.

fiduciary capacity without the prior per-
mission of the probation officer.

this

App. 14

4) The defendant is prohibited from being
involved in the contracting business with-
out the prior permission of the probation
officer.

5) The defendant shall perform 500 hours of
community service at the direction of the
probation officer.

6) The defendant shall provide the probation
officer access to any requested financial
information.

7) The defendant shall provide her true name,
Sameena Iqbal, and date of birth at all
times.

STATEMENT OF REASONS

The court adopts the factual findings and guideline
application in the presentence report.

Guideline Range Determined by the Court:

Total Offense Level: 8

Criminal History Category: 1

Imprisonment Range: 0 months to 6 months
Supervised Release Range: 2 to 3 years

Fine Range: $1,000 to $10,000
Restitution: $ none

The court declines to impose a fine in light of the
amount of restitution to be imposed against her hus-
band/co-defendant.

The sentence is within the guideline range, that range
does not exceed 24 months, and the court finds no reason
to depart from the sentence called for by application of
the guidelines.

App. 15

UNITED STATES DISTRICT COURT
Northern District of California

UNITED STATES

OF AMERICA Case Numbers

; ‘ CR 98-40159-01 CW
: CR 99-40002-01 CW
MIRZA ALI, aka Zulfigar

) Eqbal, aka Henry Stone,

Defendant.

BRL SARA N EM AAAI Sle TNE BPR RESON NE Ae

bass Hees icing

JUDGMENT IN A CRIMINAL CASE
(For Offense(s) Committed On or
After November 1, 1987)

(Filed April 28, 2000)

The defendant, MIRZA ALI, was represented by
Christopher J. Cannon.

ee a a A LET RCL IT TEEN ISLE SAE NPN

The defendant has been found not guilty on counts 2,
6, and 9 of the Indictment filed in CR-99-40002 CW, and is
discharged as to such counts.

chiar ic Seiten inc Sedbacie es Ds is Saanich

The defendant was found guilty on counts 1 and 2 of
the Superseding Indictment filed in CR-98-40159 CW and
guilty on counts 1, 3, 8, and 10 of the Indictment filed in
CR-99-40002 CW after a plea of not guilty. Accordingly,
the defendant is adjudged guilty of the following counts,
involving the indicated offenses:

2
».
5
4
*
4
=
7
*e

Title & Nature of | Count Number(s)
Section Offense
18 U.S.C. Bank Fraud 1

§ 1344(1) (CR-98-41059 CW)

App. 16
18 U.S.C. Making False 2 (CR-98-40159 CW)
§ 1014 Statements to Obtain ~
Bank Loan
18 U.S.C. Conspiracy 1 (CR-99-40002 CW)
§ 371
18 U.S.C. Making False 3, 8, 10

§ 1001 Statements to an (CR-99-40002 CW)
Agency of the
United States

As pronounced on April 24, 2000, the defendant is
sentenced as provided in pages 2 through 6 of this
Judgment. The sentence is imposed pursuant to the
Sentencing Reform Act of 1984.

It is ordered that the defendant shall pay to the
United States a special assessment of $600.00 for counts 1
and 2 in CR-98-40159 CW and counts 1, 3, 8, and 10 in
CR-99-40002 CW, which shall be due immediately.

It is further ordered that the defendant shall notify
the United States Attorney for this district within 30 days
of any change of name, residence, or mailing address
until all fines, restitution, costs, and special assessments
imposed by this Judgment are fully paid.

Signed this the 28th day of April, 2000.

/s/ Claudia: Wilken
CLAUDIA WILKEN
United States

District Judge

App. 17

Defendant’s SSAN: 611-78-9260

Defendant’s Date of Birth: 10/19/47

Defendant’s address: 45030 Cougar Circle, Fremont, CA
94539

U.S. Marshal No.: 98962-011

IMPRISONMENT

The defendant is hereby committed to the custody of
the United States Bureau of Prisons to be imprisoned for
a term of THIRTY (30) months on counts 1 and 2 in
CR-98-40159 CW and counts 1, 3, 8 and 10 in CR-99-40002
CW. The terms of imprisonment shall run concurrent on
all counts.

The surrender of defendant is stayed pending his
appeal to the 9th Circuit Court of Appeals. The defendant
is released on his own recognizance under the previous
terms and conditions of pretrial release pending the
defendant’s appeal. The defendant shall surrender for
service of sentence at the institution designated by the
Bureau of Prisons within 10 days after issuance of the
mandate by the Court of Appeals.

RETURN

I have executed this Judgment as follows:

App. 18

Defendant delivered on to at
, with a certified copy of this Judgment.

United States Marshal
By

Deputy Marshal

SUPERVISED RELEASE

Upon release from imprisonment, the defendant shall
be on supervised release for a term of 48 months on
counts 1 and 2 in CR-98-40159 CW, and 36 months on
counts 1, 3, 8 and 10 in CR-99-40002 CW. The terms of
supervised release shall run concurrent to each other.

While on Supervised Release you shall not commit
another federal, state or local crime and shall not illegally
possess a controlled substance. Revocation of supervised
release is mandatory for possession of a controlled
substance. ;

You shall pay the assessment imposed in accordance
with 18 U.S.C. Section 3013, and shall immediately notify
the probation officer of any change in your economic
circumstances that might affect your ability to pay a
special assessment, fine, restitution, or co-payments
ordered by the Court.

If the judgment imposed a fine or a restitution
obligation, it shall be a condition of supervision that you
pay any such fine or restitution that remains unpaid at
the commencement of the term of supervision in
accordance with any Schedule of Payments set forth in
the Criminal Monetary Penalties sheet of the judgment.

1)

2)

3)

4)

App. 19

In any case, the defendant shall cooperate with the
probation officer in meeting any financial obligations.

Revocation of supervised release is mandatory for
refusal to comply with drug testing imposed as a
condition of supervision. 18 U.S.C. Sections 3565(b)(3)
and 3583(g)(3)

STANDARD CONDITIONS OF SUPERVISED RELEASE

It is the order of the Court that you shall comply with the
following standard conditions:

You shall not leave the judicial district or
other specified geographical area without
permission of the court or probation
officer;

You shall report to the probation officer as
directed by the Court or the probation
officer, and shall submit a truthful and
complete written report within the first
five days of each month;

You shall answer truthfully all inquiries by
the probation officer and follow the
instructions of the probation officer;

You shall support your dependents and
meet other family responsibilities,
including but not limited tc, compliance
with the terms of any court order or
administrative process pursuant to the

-laws of a state, the District of Columbia, or

any other possession or territory of the
United States, requiring payments by you

‘for the support and maintenance of any

child or of a child and the parent with
whom the child is living;

5)

6)

7)

8)

9)

10)

11)

12)

App. 20

You shall work regularly at a lawful
occupation unless excused by the
probation officer for schooling, training, or
other acceptable reasons;

You shall notify the probation officer ten
(10) days prior to any change in residence
or employment;

You shall consume no alcohol if sentenced
to the special condition that you are to
participate in a drug/alcohol program;

You shall refrain from excessive use of
alcohol and shall not purchase possess,
use, distribute, or administer any
controlled substance or any paraphernalia
related to any controlled substance, except
as prescribed by a physician;

You shall not frequent places where
controlled substances are illegally sold,
used, distributed, or administered;

You shall not associate with any persons
engaged in criminal activity, and shall not
associate with any person convicted of a
felony unless granted permission to do so
by the probation officer;

You shall permit a probation officer to visit
you at any time at home or elsewhere, and
shall permit confiscation of any contraband
observed in plain view by the probation
officer; :

You shall notify the probation officer
within seventy-two (72) hours ‘of being
arrested or questioned by a law enforce-
ment officer;

App. 21

13) You shall not enter into any agreement to
act as an informer or a special agent of a
law enforcement agency without the
permission of court;

14) You shall notify third parties of risks
related to your criminal record, personal
history, or characteristics, and shall
permit the probation officer to make such
notifications and/or confirm your
compliance with this notification re-
quirement.

SPECIAL CONDITIONS OF SUPERVISION

While the defendant is on supervised release pursuant to
this Judgment:

1) The defendant shall pay any restitution
and special assessment that is imposed by
this judgment and that remains unpaid at
the commencement of the term of
supervised release as directed by the
probation officer.

2) The defendant is prohibited from engaging
in self-employment, including acting as a
consultant to a family owned business.

3) The defendant shall not maintain a position
of fiduciary capacity without the prior
permission of the probation officer.

4) The defendant is prohibited from being
involved in the contracting business.

5) The deferidant shall provide the probation
officer access to any requested financial
information.

App. 22

6) The defendant shall not possess any false
identification and shall provide his true
name of Zulfiqar Eqgal and date of birth of
10/19/47 at all times.

RESTITUTION AND FORFEITURE
RESTITUTION

The court, pursuant to the Victim and Witness
Restitution Act, finds that the following is a victim of
defendant’s criminal conduct and has sustained loss in
the indicated amount and orders restitution by the
defendant as follows:

Name & address of payee(s) Amount

Cupertino National Bank, $602,268.20
2860 West Bayshore Road,
Palo Alto, CA 94303
(Attn: Patrick Pierce,
Vice President, Special Assets)

Payments of restitution are to be made to Clerk, U. S.
District Court, for transfer to the payee.

Restitution is due and payable immediately and may
be collected in accordance with the Bureau of Prisons
Inmate Financial Responsibility Program. Any balance
that remains unpaid at the commencement of supervised
release shall be paid as directed by the probation officer.

STATEMENT OF REASONS

The court adopts the factual findings and guideline
application in the presentence report as stated on the

" record in court. The court finds the Offense Level,

App. 23
Criminal History Category, and Guideline Range as
found by the Probation Officer and sentences the
defendant to the low end of the Guideline Range of 30
months custody of the Bureau of Prisons.

Guideline Range Determined by the Court:

Total Offense Level: 19
Criminal History Category: 1
Imprisonment Range: 30 months to 37 months

Supervised Release Range: 3 to 5 years
ig (CR-98-40159 CW)

2 to 3 years
(CR-99-40002 CW)
Fine Range: $6,000 to $1,000,000
Restitution: $602,268.20

The court declines to impose a fine because payment
of a fine would interfere with the defendant’s ability to
pay restitution.

App. 24

United States Court of Appeals,
Ninth Circuit.

SAMEENA INC., an Oregon corporation dba
Samtech Research; Sameena Ali; Mirza
Ali, Plaintiffs-Appellants,

Vv.

UNITED STATES AIR FORCE; V. Carol

Moore; Steve Bangs; Alan Schoenberg;

Maxwell Air Force Base; Pilson; Mike
Thomason, Defendants-Appellees.

No. 97-15252.

Argued and Submitted Feb. 10, 1998.
Decided July 6, 1998.

]. Christopher Hall, Oakland, CA, Joseph P. Russoniello,
Ann M. Mooney, Cooley Godward LLP, San Francisco, CA,
for plaintiffs-appellants.

John N. Hemann, Assistant United States Attorney,
San Francisco, CA, for defendants-appellees.

Appeal from the United States District Court for the
Northern District of California; Fern M. Smith, District
Judge, Presiding. D.C. No. CV-96-01889-FMS.

Before: D.W. NELSON, BOOCHEVER, and REIN-
HARDT, Circuit Judges.

D.W. NELSON, Circuit Judge:

This case arises from a contractor’s alleged attempts
to defraud the government and the government’s efforts
to bar the contractor from bidding on future government
projects. The appellants bring civil rights and common-
law tort claims against a number of individual employees
of the United States Air Force (the “Air Force”) and argue

App. 25

that the Air Force’s decision to debar them for a period of
fifteen years was arbitrary and capricious, in violation of
the Administrative Procedure Act (“APA”), codified in
pertinent part at 5 U.S.C. § 704. The district court dis-
missed the claims against the individual defendants and
granted summary judgment in favor of the Air Force on
the APA claims. We have jurisdiction pursuant to 28
U.S.C. § 1291. Although we affirm the dismissal of the
claims against the individual defendants, we reverse the
district court’s summary judgment because we conclude
that the Department of the Air Force (the “Air Force”)
violated the appellants’ constitutional right to due pro-
cess when it denied them an evidentiary hearing, as
required by 48 C.F.R. § 9.406-3(b)(2).

FACTUAL AND PROCEDURAL BACKGROUND

In February 1992, the Social Security Administration
(“SSA”) solicited bids from computer suppliers for a
quantity of microcomputer workstations. University Sys-
tems, Inc. (“USI”), a California-based corporation of
which Appellant Mirza Ali was Chief Executive Officer,
submitted a proposal to the SSA in April 1992. USI’s bid
was deemed competitive, and USI provided the SSA with
samples of its products for further evaluation.

During this process, questions arose regarding
whether a mouse device included in the proposal was
manufactured in compliance with the Trade Agreements
_ Act of 1979, 19 U.S.C. §§ 2501-2582. While this matter was
being investigated, it was discovered that two USI offi-
cers had submitted a fraudulent letter to the SSA. The

App. 26

SSA consequently eliminated USI from consideration for
the workstation contract.

Subsequently, the United States Department of
Health and Human Services (“HHS”), of which the SSA is
part, commenced “debarment” proceedings against USI
and four of its officers, including Mirza Ali, seeking to
disqualify them from submitting government contract
proposals for three years. On February 2, 1994, USI,
Mirza Ali, and the other USI officers were debarred from
government contracting through February 18, 1996.

Mirza Ali’s wife, Appellant Sameena Ali, is president
and sole director of Appellant Sameena Inc. (“Sameena”),
which was incorporated in February 1993 by Keith
Griffen, a USI officer. Each of the appellants uses aliases:
Sameena Ali sometimes goes by “Sameena Ikbal.” Mirza
Ali sometimes goes by “Zulfiqar Eqbal.” Sameena Inc.
operates under the assumed name “Samtech Research,
Inc.” (“Samtech”).

Like USI, Samtech supplied computer workstations
to government agencies. In June 1995, an Alabama-based
contracting squadron of the Air Force issued a contract
solicitation for laptop computers. An amendment to the
solicitation indicated that the buyer was V. Carol Moore.

Samtech submitted a proposal to Moore in July 1995.
Included in Samtech’s proposal was a certification that
neither Samtech nor any of its principals was debarred or
proposed for debarment at that time. The certification
defined “principals” as “officers; directors; owners; part-
ners; and persons having primary management or super-
visory_ responsibilities within a business entity.” Because
the Air Force solicitation required that bidders have at

App. 27

least three years of experience as a government contrac-
tor, Samtech’s proposal also included a list of “Govern-
ment Contract Awards.” Among them was a contract
with the United States Department of Energy (the “DoE
contract”) that Sameena had obtained in 1994 through a
novation from USI.

In response to a query, Samtech sent Moore a letter in
September 1995 explaining that Samtech “started doing
business with the Federal Government by acquiring a
contract for the supply of ADP equipment to the United
States Department of Energy in 1992.” On further investi-
gation, Moore discovered that the contract actually had
been awarded to USI in 1992 and had only been novated
to Samtech in 1994. Moore also obtained bank documents
indicating that “Sameena Ikbal” and “Zulfiqar Eqbal”
were authorized to make withdrawals from Samtech’s
accounts and were, respectively, “President/Secretary”
and “Vice President” of the corporation. This information
appeared to Moore to contradict the statements made in
Samtech’s contract proposal.

On the basis of these apparent misrepresentations,
Samtech was deemed ineligible for the Air Force contract.
Moreover, in December 1995, the Air Force Contracting
Officer, Gladys McBride, submitted a recommendation
that Samtech be debarred. McBride appended the entire
administrative file to her recommendation, including an
affidavit by Moore describing her investigations.

On December 26, 1995, Sameena Inc., Samtech, Sam-
eena Adi, and -Mirza Ali (“the appellants”) were notified
that they had been proposed for debarment (and, in
Mirza Ali’s case, an “extension” of debarment). The

App. 28

notices were accompanied by memoranda setting forth
the grounds for the proposed debarments. The notices
also invited the appellants to submit information and
argument in opposition to the debarment.

The appellants included in their response a letter
dated February 21, 1996, from an official at Samtech’s
bank. The letter stated that the document indicating that
Zulfigqar Eqbal was Vice President of Samtech — a bank
signature card — had been “corrected” after the bank was
informed “that Eqbal was not a corporate officer” of
Sameena or Samtech. The submission also included
copies of checks written on Sameena’s bank accounts. A
number of these checks were signed by “Zulfiqar Eqbal”
and were made out to a variety of payees, including
physicians, a sports club, and Eqbal (Mirza Ali) himself.
The appellants’ submission also requested an evidentiary
hearing on the issue of Mirza Ali’s role at Samtech. Not-
withstanding the submission, and without an evidentiary
hearing, the Air Force issued a final decision in June 1996
to debar Sameena/Samtech and Sameena Ali — and to
extend Mirza Ali’s debarment — until December 2010. The
debarment was based on findings that the appellants had
(1) made false statements regarding Samtech’s experience
as a contractor, (2) provided false certifications that none
of Samtech’s principals was debarred, and (3) partici-
pated in a scheme to avoid the effects of USI’s debarment.

On August 30, 1996, the appellants filed two com-
plaints in the United States District Court for the North-
ern District of California. The first complaint, brought by
Mirza Ali against HHS and against six agency employees
in their individual capacities, focused on Ali’s initial
debarment and sought declaratory relief and damages.

App. 29

The second complaint, brought by Mirza Ali, Sameena
Ali, and Sameena/Samtech against the Air Force and
seven Air Force employees in their individual capacities,
focused both on the debarment of Sameena/Samtech and
Sameena Ali and on the extension of Mirza Ali’s debar-
ment.

This second complaint made substantially the same
allegations as the first, even though it was directed at
entirely different defendants. The appellants alleged (1)
that the individual Air Force officials had conspired to
violate their civil rights and had committed several com-
mon-law torts and (2) that the Air Force’s decision to
debar them was arbitrary and capricious and should be
set aside pursuant to the APA.

—

In an order filed December 11, 1996, the district court
dismissed the claims against the individual defendants
for lack of personal jurisdiction and, alternatively, on the
grounds that the appellants had failed either to plead
conspiracy with sufficient particularity or to comply with
the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b),
2671-2680. The court also granted summary judgment to
the Air Force on the APA claims. The appellants timely
appeal. We affirm the district court’s dismissal of the
claims against the individual defendants but reverse\the
summary judgment in favor of the Air Force.

STANDARD OF REVIEW

A dismissal with leave to amend is reviewed de
novo. Dumas v. Kipp, 90 F.3d 386, 389 (9th Cir.1996). A
grant of summary judgment is also reviewed de novo.
Covey v. Hollydale Mobilehome Estates, 116 F.3d 830, 834

App. 30

(9th Cir.1997). The standards governing review of the
district court’s individual determinations are addressed
below.

ANALYSIS

I. The district court properly determined that the appellants
failed adequately to plead conspiracy.

The district court determined that the appellants
failed to “allege conspiracy with sufficient particularity.”
We agree. The appellants failed to allege facts to support
their allegations that the individual defendants agreed
illegally to debar them or that they agreed to discriminate
against them because of their race. Accordingly, we
affirm the district court’s dismissal of th: conspiracy
count. See Karim-Panahi v. Los Angeles Pole Dep't, 839
F.2d 621, 627 (9th Cir.1988).1

II. The district court properly dismissed the tort claims
against the individual defendants.

The district court dismissed the appellants’ common
law tort claims against the individual defendants on the

1 Because we affirm the district court’s dismissal of the
conspiracy claims against the individual defendants, we need
not decide whether the district court had personal jurisdiction
over the individual defendants. See Lee v. Beaumont, 12 F.3d 933,
937 (9th Cir.1993) (“A court may assume the existence of
personal jurisdiction and adjudicate the merits in favor of the
defendant without making a definitive ruling on jurisdiction.”).
We also need not reach the appellants’ claim that the district
court erred in staying discovery regarding the personal
jurisdiction issue.

App. 31

ground that the appellants had failed to comply with the
Federal Tort Claims Act (“FTCA”), 28 U.S.C. §§ 1346(b),
2671-2680. The district court did not err in this determina-
tion.

Pursuant to 28 U.S.C. § 2679(d), the United States
was properly substituted for the individual defendants.
United States Attorney Michael Yamaguchi certified that
the federal employees named in the complaint were act-
ing within the scope of their employment, see 28 U.S.C.
§ 2679(d)(1); 28 C.F.R. § 15.3, and the complaints did not
present any evidence to the contrary. The appellants do
not contest that the defendants’ jobs required them to
assess the integrity of government contractors and to
recommend and effect debarment where appropriate.
Thus, even if the defendants’ debarment decisions were
based upon improper motives, the debarment was plainly
within the scope of the defendants’ employment. See
Wilson v. Drake, 87 F.3d 1073, 1076 (9th Cir.1996).

Given the United States’ substitution, the appellants
were required to present their tort claims to the appropri-
ate federal agency before raising them in court. See 28
U.S.C. § 2675. There is no evidence in the administrative
record that the appellants filed their tort claims with the
Air Force. Accordingly, the district court correctly con-
cluded that it lacked subject mat’«r jurisdiction over the
claims. See Meridian Int'l Logistics inc. v. United States, 939
F.2d 740, 743 (9th Cir.1991).

, AAR tS AP 8 ek OPN

App. 32

III. The district court erred in granting the Air Force's
motion for summary judgment.

The appellants argue that the decision to debar them
was arbitrary and capricious. They appeal the district
court’s summary judgment in favor of the Air Force on
three grounds: First, they argue that Carol Moore’s decla-
ration failed to establish that she had personal knowledge
regarding the contract proposal at issue and should have
been stricken from the administrative record. Second,
they claim that, by the terms of the 1994 novation of the
DoE contract, USI’s previous two years of government
contracting experience should have been “imputed” to
Samtech. Finally, they contend that they had a due pro-
cess right to an evidentiary hearing regarding Mirza Ali’s
role at Samtech. We address each of the appellants’ claims
in turn.

A. The district court properly rejected the appellants’
request to strike Carol Moore's affidavit.

The appellants claim that the Moore affidavit should
not have been admitted as evidence in the administrative
proceedings against them. They point out that the affi-
davit does not indicate to which specific contract pro-
posal it refers. On that basis, they argue that Moore failed
to establish her personal knowledge of the facts con-
tained in the affidavit and that the affidavit consequently
was incompetent.

As the district court recognized, the appellants’ posi-
tion is wholly without merit. The affidavit contains infor-
mation that clearly links it to the events in question. It

App. 33

refers in detail to Samtech’s proposal (the appellants do
not allege that they submitted more than one proposal to
the Air Force), the debarment of USI and Mirza Ali, and
Moore’s personal investigations of the matter. Moreover,
the facts in the affidavit comport with the administrative
record, which includes documentation indicating that
Moore was the contract specialist assigned to the pro-
posal in question. Since the appellants do not allege any
facts that call the reliability of the affidavit into question,
we agree with the district court that its use as evidence in
the administrative proceedings against the appellants
was neither arbitrary nor capricious.

B. The 1994 novation did not “impute” to appellants
USI's government contracting experience.

On February 13, 1994, following USI’s debarment,
USI, Sameena, and the DoE entered into a Novation
Agreement, transferring USI’s rights and obligations to
Sameena. The agreement states, in pertinent part:

The government recognizes the Transferee [Sam-
eena] as the Transferor’s [USI’s] successor in
interest in and to the contract. The Transferee by
this Agreement becomes entitled to all rights,
titles, and interests of the Transferor in and to
the contract as if the Transferee were the origi-
nal party to the contract.

The appellants claim that the terms of this Agree-
ment led them “reasonably” to believe that, because they
would be treated as the “original party” to the contract,
the Novation “imputed the DoE contract experience
entirely to Samtech.” As the district court noted, how-
ever, this claim is directly belied by the appellants’ earlier

App. 34

representations in their submission in response to the
proposed debarment, in which they contended that their
overstatement of government contracting experience had
resulted from an “innocent” error about the date of the
contract. In light of this inconsistency, the Air Force did
not act arbitrarily or capriciously in refusing to attach any
credibility to this claim.

C. The appellants were entitled to an evidentiary hear-

ing.

The Supreme Court has long recognized that a fed-
eral agency is obliged to abide by the regulations it
promulgates. See Vitarelli v. Seaton, 359 U.S. 535, 545, 79
S.Ct. 968, 3 L.Ed.2d 1012 (1959); Service v. Dulles, 354 U.S.
363, 372, 77 S.Ct. 1152, 1 L.Ed.2d 1403 (1957); Accardi v.
Shaughnessy, 347 U.S. 260, 267, 74 S.Ct. 499, 98 L.Ed. 681
(1954). An agency’s failure to follow its own regulations
“tends to cause unjust discrimination and deny adequate
notice” and consequently may result in a violation of an
individual’s constitutional right to due process. NLRB v.
Welcome-American Fertilizer Co., 443 F.2d 19, 20 (9th
Cir.1971); see also United States v. Newell, 578 F.2d 827, 834
(9th Cir.1978). Where a prescribed procedure is intended
to protect the interests of a party before the agency, “ever
though generous beyond the requirements that bind such
_ agency, that procedure must be scrupulously observed.”
Vitarelli, 359 U.S. at 547, 79 S.Ct. 968 (Frankfurter, J.,
concurring); see also Note, Violations by Agencies of Their
~ Own Regulations, 87 Harv. L.Rev. 629, 630 (1974) (observ-
ing that agency violations of regulations promulgated to

App. 35

provide parties with procedural safeguards generally
have been invalidated by courts).

The Federal Acquisition Regulation (“FAR”) estab-
lishes a system of uniform policies and procedures gov-
erning acquisitions by all executive agencies. See 48°C.F.R.
§ 1.101. In recognition of the “serious nature of debar-
ment,” see 48 C.F.R. § 9.402, the FAR sets out detailed
procedures to ensure that this sanction, which is intended
to safeguard the integrity of the acquisitions process,
itseif is applied in conformity with “principles of funda-
mental fairness.” 48 C.F.R. § 9.406-3(b). Accordingly, the
FAR provides:

[I]f it is found that the contractor’s submission
in opposition raises a genuine dispute over facts
material to the proposed debarment, agencies
shall also - (i) Afford the contractor an oppor-
tunity to appear with counsel, submit documen-
tary evidence, and confront any person the
agency presents.

48 C.F.R. § 9.406-3(b)(2). Thus, in the event of a genuine
factual dispute, the FAR clearly establishes that a contrac-
tor facing debarment is entitled to an evidentiary hearing.

The appellants claim that they raised a genuine issue
of material fact with regard to Mirza Ali’s position at
Sameena/Samtech. They contend that Ali was mistakenly
listed as Vice President of the company on the bank
signature card discovered by Moore and that the Febru-
ary 1996 letter from.the bank supports that centention..
Accordingly, they claim that they were entitled under the
FAR to an evidentiary hearing on the matter.

App. 36

The district court rejected the appellants’ claims on
two grounds. First, the court found the letter from the
bank to be inconclusive. The court pointed out that the
letter merely acknowledged that the bank had issued a
new signature card deleting Eqbal’s name, and that it had
made this “correction” after being informed that Zulfigqar
Eqbal was not a corporate officer. The district court sug-
gested that the letter had little probative value because it
was sent after debarment proceedings against the appel-
lants already had commenced.

Second, the district court observed that the operative
factual question informing the debarment decision was
not whether Ali/Eqbal was Vice President of Sameena/
Samtech but, rather, whether he exercised control over
the business. As the court noted, the Debarring Official
found that Ali had written business-related and personal
checks on Samtech’s account and had stated on the tele-
phone that he was project manager for government solic-
itations. Based on that evidence, the Debarring Official
concluded, “[{I]t is clear that Mr. Eqbal had full authority
to expend Samtech’s resources and bind the company.”
Because the district court found that “[n]othing plaintiffs
submitted created a dispute as to this issue,” it concluded
that they were not entitled to an evidentiary hearing.

The district court failed, however, to acknowledge
evidence submitted by the appellants that calls into ques-
tion whether Ali/Eqbal was a principal of Sameena/
Samtech. The appellants submitted evidence that Ali/
Eqbal was Vice President of a Hong Kong corporation
also called Samtech and that his position there had likely
caused the confusion involving the signature cards. The
appellants also submitted evidence indicating that Ali/

App. 37

Eqbal held no official position with Sameena/Samtech
other than bookkeeper and that the writing of checks was
consistent with that position. The appellants denied that
Ali/Eqbal had represented himself to be a project man-
ager or any other type of corporate officer. They
explained that the checks made out to and signed by
Eqbal were not for his personal use and were not issued
at his discretion. Finally, the appellants challenged the
government to produce any document indicating that
Ali/Egbal had actually acted in the capacity of a principal
with regard to control over the company’s decisionmak-
ing process. Thus, although the appellants’ submission
does not establish that the Debarring Official acted arbi-
trarily or capriciously in determining that Ali/Eqbal was
a principal of Samtech/Sameena, it does raise a genuine
factual dispute regarding the issue.

The appellants requested an evidentiary hearing to
address this question. The Debarring Official decided,
however, that a hearing was unwarranted, finding the
appellants’ denials of the charges against them to be
“unsupported by credible evidence.” We do not doubt
that the Air Force is in a better position than this Court to
assess the credibility of the evidence offered by the appel-
lants. We are convinced, however, that an evidentiary
hearing would have been the appropriate forum in which
to make such an assessment, particularly in view of the
serious consequences attaching to a debarment of 15
years. The FAR states unambiguously that such a hearing
“shall” be afforded if genuine: factual disputes arise.
Accordingly, we conclude that the Air Force violated the
appellants’ constitutional right to due process in failing

App. 38

to comply with binding regulations and that the appel-
lants are entitled to such a hearing on remand. As Justice
Frankfurter observed in a similar context, “He that takes
the procedural sword shall perish with that sword.”
Vitarelli, 359 U.S. at 547, 79 S.Ct. 968 (Frankfurter, J.,
concurring).

CONCLUSION

For the foregoing reasons, we AFFIRM the district
court’s dismissal of the appellants’ claims against the
individual defendants. However, we REVERSE the sum-
mary judgment in favor of the Air Force and REMAND to
the district court with instructions to remand this matter
to the Air Force. The Air Force should hold an evidenti-
ary hearing, pursuant to 48 C.F.R. § 9.406-3(b)(2), to
address whether Mirza Ali/Zulfiqar Eqbal was a princi-
pal of Sameena/Samtech.

. AFFIRMED in part, REVERSED in part and
REMANDED. Each party shall bear its own costs.

App. 39

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF
AMERICA,
Plaintiff-Appellee,

No. 00-16165
DC No. CR 99-40002 CW
v.

SAMEENA R. ALI, aka
Sameena Ikbal,

Defendant-Appellant.

chennai
/

UNITED STATES OF No. 00-10217
AMERICA, DC NO. CR 99-40002 CW
Plaintiff-Appellee, ORDER

Vv.

MIRZA ALI, aka Zulfigar
Eqbal, aka Henry Stone,

Defendant-Appellant.

(Filed Nov. 20, 2001)

ee ee ee ee ee ee ee ee ee ee ee”

Before: O’SCANNLAIN, TASHIMA, and THOMAS, Cir-
cuit Judges.

The panel has voted to deny the petition for panel
rehearing and for rehearing en banc.

The full court has been advised of the petition for
rehearing en banc and no judge of the court has
requested a vote on en banc rehearing. Fed. R. App. P.
35(b).

App. 40

The petition for panel rehearing and the petition for
rehearing en banc are denied.

App. 41

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
OAKLAND DIVISION

UNITED STATES OF
AMERICA,

PLAINTIFF,
VS.
MIRZA Z. ALI,
DEFENDANT.

NO. CR 98-40159 CW

UNITED STATES OF NO. CR 99-40002 CW

AMERICA,
VOLUME 8
PLAINTIFF, PAGES 1129-1305
VS. JURY TRIAL .

MIRZA Z. ALI, and
SAMEENA R. ALI,

DEFENDANTS.

ee ee ee ee ee ee ee ee ee ee, ee, ee ee

OAKLAND, CALIFORNIA
THURSDAY, SEPTEMBER 23, 1999

TRANSCRIPT OF PROCEEDINGS
BEFORE THE HONORABLE CLAUDIA WILKEN .
UNITED STATES DISTRICT COURT JUDGE AND JURY

* * +

App. 42

INSTRUCTIONS TO THE JURY

[8-1185] AT ISSUE IN THIS CASE IS WHETHER OR
NOT DEFENDANT MIRZA ALI, ALSO KNOWN AS
ZULFIQAR EQBAL, WAS A PRINCIPAL OF SAMEENA
INC. DOING BUSINESS AS SAMTECH RESEARCH AT
THE TIME CERTAIN STATEMENTS WERE MADE TO
AGENCIES OF THE UNITED STATES GOVERNMENT.
THIS IS FOR YOU TO DECIDE.

PRINCIPALS ARE OFFICERS, DIRECTORS,
OWNERS, PARTNERS [8-1186] OR PERSONS HAVING
PRIMARY MANAGEMENT OR SUPERVISORY RESPON-
SIBILITY WITHIN A BUSINESS ENTITY, E.G., GENERAL
MANAGER, PLANT MANAGER, HEAD OF — HEAD
OF A SUBSIDIARY, DIVISION OR BUSINESS SEGMENT,
AND SIMILAR POSITIONS.

* * *

App. 43

CLOSING ARGUMENT/LYONS

[8-1206] WELL, YOU’VE HEARD EXTENSIVE EVI-
DENCE — AND INCLUDING FROM SAMEENA ALI
HERSELF — ABOUT HOW SHE RAN THE WHOLE
COMPANY. SHE ADMINISTERED EVERYTHING. SHE
WAS THE ONE THAT WAS REALLY IN CHARGE.

* * *

[8-1292] AND, OF COURSE, IT’S OUR ARGUMENT
THAT HE — THAT WHAT MR. MIRZA ALI, ALSO
KNOWN AS ZULFIQAR EQBAL, ALSO KNOWN AS
HENRY STONE, WAS, THAT HE FELL WITHIN THAT
DEFINITION OF HAVING PRIMARY SUPERVISORY
RESPONSIBILITY, MANAGEMENT RESPONSIBILITY,
IN A WAY THAT IS SIMILAR TO-— AND HELD A
POSITION SIMILAR TO THOSE EXAMPLES GIVEN IN
THE DEFINITION. THAT’S FOR YOU TO DECIDE.

* * *

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386010_1423%3A1. Public record. Not legal advice.