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Alquza v. United States

United States District Court, W.D. North Carolina, Charlotte Division

February 7, 2017



          Frank D. Whitney Chief United States District Judge

         THIS MATTER is before the Court on Petitioner's Motion to Vacate, Set Aside, or Correct Sentence pursuant to 28 U.S.C. § 2255, (Doc. No. 1), and on the Government's Motion for Summary Judgment, (Doc. No. 5).

         I. BACKGROUND

         A. Petitioner Nasser Kamal Alquza and Qazah conspire to traffic in stolen cigarettes and to launder the proceeds.

         In 2010, Petitioner's nephew, Kamal Zaki Qazah, began purchasing purportedly stolen cigarettes from undercover officers. (Crim. Case No. 3:11-r-373-FDW-DSC-10, Doc. No. 289 at 108-09, 124-25: Trial Tr. I).[1] In April 2011, Qazah told undercover officers that, for a fee, his uncle (Petitioner) could launder large amounts of cash, approximately $100, 000 every couple of months, by running the cash through different businesses. (Id., Doc. No. 291 at 600-02: Trial Tr. III). Petitioner and Qazah met with undercover officers in May 2011 and discussed the sale of additional stolen cigarettes, as well as options for concealing the nature and source of the proceeds generated by those sales. (Id. at 614-15). In Petitioner's presence, Qazah discussed purchasing 800 or more cases of cigarettes per month from the officers at prices between $1, 200 and $1, 500 per case. (Id. at 619-21). An undercover officer commented during the discussion, “What's a few stolen smokes amongst friends.” (Id. at 631). Petitioner stated, “My nephew has been doing this job [referring to his cigarette business] and then needed me and then told me about it.” (Id. at 625). Petitioner explained that he was “a moneyman, ” id. at 633, and offered several different ways he could launder cash, including writing checks from different businesses that Petitioner owned or controlled. (Id. at 623). For a larger fee, Petitioner offered to launder as much as $200, 000 cash through overseas accounts that he claimed to own in London, Jordan, and Paris. (Id. at 634).

         Petitioner discussed his past money-laundering experience with the undercover officers and gave them specific advice on how to avoid law enforcement. (Id., Doc. No. 292 at 826-27: Trial Tr. IV). Petitioner stated that he had previously laundered money for people he trusted for “two or three years.” (Id. at 773-74). Petitioner revealed his past experience with stolen baby formula, which he suggested was “something else [the officers] could get into besides the stolen cigarettes business.” (Id. at 775). Petitioner assured the officers, “I have been doing this for a while. I have been doing it while I was living in Kentucky for the same hot shit that you guys do, and it was formula milk.” (Id. at 775-76).

         In June 2011, undercover officers met with Petitioner to launder $50, 000 in cash from their sale of purportedly stolen cigarettes to Qazah. (Id., Doc. No. 291 at 650). Petitioner gave the officers five checks totaling $47, 000, drawn on accounts in the name of Petitioner and his wife. (Id. at 651-58). In July 2011, Qazah delivered checks from Petitioner to replace two earlier checks that the bank would not cash. (Id. at 668). Officers later called Petitioner to confirm receipt and to advise Petitioner that they had more cash from “hot smokes” to launder. (Id. at 673-74). In August 2011, the undercover officers met Petitioner at his pizza business, Milano's Pizza, and gave him $75, 000 cash in exchange for four checks totaling $70, 400. (Id., Doc. No. 292 at 798-802). Petitioner wrote “Subway Equipment, ” “Oven, ” and “Hood Installation, ” respectively, on the checks. (Id. at 803-05).

         During a September 15, 2011, cigarette transaction at Petitioner's shopping center, the undercover officers discussed additional money laundering with both Petitioner and Qazah. (Id. at 806-07, 817). Petitioner agreed to take amounts up to $100, 000, but stated that any amount over that would have to go “overseas.” (Id. at 817). On October 20, 2011, undercover officers brought $125, 000 cash in a toolbox to Petitioner and Qazah at Milano's Pizza. (Id. at 825). In exchange, Petitioner gave the officers six checks drawn on his Subway business account, payable to JROX Construction-a shell company. (Id. at 827-30). Petitioner had suggested that the officers create entities and use different business names and aliases that would not be associated with them or their illegal operations. See (Id.). The undercover officers had created JROX after Petitioner told them their prior company name, “Fast Eddie's Tobacco, ” was too closely associated with their illegal business. See (Id. at 753-54, 825-28, 898). During the meeting, Petitioner also told officers that they “can't do this forever as far as stolen cigarettes, ” but suggested that “they could start a new business with stolen baby formula and he had contacts that could help them.” (Id. at 831-35).

         In November 2011, after officers had expressed skepticism about dealing in baby formula, Petitioner drove the officers to a local Walmart, where he showed them the brands of baby formula that were the easiest to steal and sold the best on the black market. (Id. at 836-37, 842). Petitioner explained how undercover officers could make more money if they had a secret location where they could bring hijacked trailer loads of baby formula. (Id. at 842-43).

         B. Petitioner and Qazah are arrested and charged with trafficking in stolen goods and money laundering.

         Undercover officers arranged to deliver more than $1 million in cigarettes to Qazah at Petitioner's shopping center on November 30, 2011. Undercover officers initially informed Qazah that they could obtain 1, 377 master-cases, which they would sell for $1.8 million. (Id. at 913). Qazah said that he could only get $1.2 to $1.3 million, but that he would come back later for the rest of the cigarettes. (Id.). Instead of delivering the cigarettes, law enforcement officers arrested Petitioner and Qazah at Qazah's residence, where they executed a search warrant and found approximately $1.3 million. (Id. at 918-19). Officers also executed a search warrant at Petitioner's residence, id., doc. no. 293 at 998-1010, where they recovered United States and Jordanian passports in Petitioner's name; multiple identification documents that bore Petitioner's picture, but the name Saio Quza, whom Qazah identified at trial as Petitioner's brother; social-security cards in the names of both Petitioner and Qazah; and credit cards in Qazah's name. (Id., Doc. No. 236 at 31). Officers also recovered checkbooks and checks in Petitioner's name from several banks, including those used for the transactions with the undercover officers, a record of an international wire transfer to Pakistan, and a statement from the Cairo Amam Bank. (Id., Doc. No. 292 at 41; Doc. No. 293 at 1014-20, 1049-50). When Petitioner was interviewed shortly after his arrest, he falsely informed an agent that he had only a United States passport and that he no longer owned any Subway restaurant franchises. (Id. at 1026-32).

         A grand jury indicted Petitioner and Qazah. (Id., Doc. No. 3: Indictment). In September 2012, Petitioner was charged in a superseding indictment with conspiracy to receive and transport stolen property in interstate commerce, in violation of 18 U.S.C. § 371 (Count One); money laundering conspiracy in violation of 18 U.S.C. § 1956(h) (Count Twenty); and money laundering and aiding and abetting money laundering, in violation of 18 U.S.C. §§ 1956(a)(3) and 2 (Count 22). (Id., Doc. No. 192: Superseding Indictment). One of the allegations with respect to Count One was that Petitioner had helped unload cigarettes that were delivered on September 15, 2011. (Id. at ¶ 27). Petitioner moved to suppress the evidence obtained during the search of his residence. (Id., Doc. No. 227). This Court denied his motion after holding an evidentiary hearing. (Id., Doc. No. 289 at 52-64).

         C. Petitioner rejects the Government's plea offer and is convicted after trial.

         In December 2012, the Government offered Petitioner a plea agreement under which he would have pleaded guilty to conspiracy to commit money laundering (Count 20);[2] the parties would have recommended to the Court that the amount of loss attributable to Petitioner was between $1 million and $2.5 million; that a four-level enhancement for being in the business of money laundering applied, and that Petitioner would have been eligible for a three-level reduction for acceptance of responsibility, as well as an additional two-level reduction if he provided a truthful debriefing. (Doc. No. 5-1 at 6: Swerling Aff.). As part of this proposed plea agreement, the Government also agreed not to seek a four-level enhancement for being in the business of selling and receiving stolen property. (Id.). With truthful debriefing, Petitioner's total offense level would have been 21, which, with a criminal history category of I, would have resulted in an advisory guidelines range of 37-46 months of imprisonment. Without truthful debriefing, a 46- to 57-month sentence would have applied.

         Petitioner's counsel, Jack B. Swerling, met with Petitioner twice to discuss the proposed plea agreement. (Id.). Swerling advised Petitioner of the charge he would be pleading to, the effect of any cooperation, the advisory guidelines, as well as the service of his sentence. (Id. at 5). Swerling also discussed with Petitioner the consequences of proceeding to trial. (Id.). Petitioner rejected the proposed plea agreement at both meetings, stating that he did not want to cooperate and that the sentencing range was too high for his alleged conduct. (Id. at 6). Swerling proposed making counter-offers to the Government of a stipulation not to apply the four-level enhancement for being in the business of money laundering, or seeking an agreement to a two-year sentence. (Id.). However, Petitioner rejected these suggestions. (Id. at 6-7).

         During Petitioner's trial, this Court inquired whether the parties had engaged in plea negotiations. (Id., Doc. No. 291 at 430). The Government summarized the terms of the December 2012 plea offer, and Petitioner told the Court that his counsel had presented this plea deal to him, but that he had rejected it after consulting with his family. (Id. at 432-34). This Court found that Petitioner “knowingly, intelligently and voluntarily rejected the plea offer made by the United States.” (Id. at 434).

         Petitioner and Qazah were tried together. During the six-day trial, the Government presented extensive evidence of their guilt, including testimony from the undercover officers who engaged in cigarette-trafficking and money-laundering transactions with the two men, as well as recordings and photographs of these meetings. See, i.e. (Id., Doc. No. 289 at 123-27; Doc. No. 291 at 617-29, 650-60). Swerling states in his affidavit that although he was suffering from knee pain and took over-the-counter Ibuprofen during the trial, his mind was clear and unaffected by the pain in his knee or the pain medication. (Doc. No. 5-1 at 1-2). ...

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