courthouseOn Monday, April 12, 2021, the Ninth Circuit Court of Appeals released its opinion in United States v. Ghanem, Case No. 19-50278. Ghanem, an international arms dealer, was convicted in the Central District of California for violation of a statute prohibiting dealing in surface-to-air missiles.

However, this was not the offense for which Ghanem was originally arrested. Instead, he was arrested by Greek authorities for related arms sales he made to undercover U.S. agents in Greece. After his extradition from Greece, Ghanem was brought to the United States.  The flight from Greece connected through JFK airport in New York and travelled on to the Central District of California. After he was physically present in California, the Government added the surface-to-air missile charge.

When an offense is committed outside the territory of the United States, 18 U.S.C. § 3238 provides that venue is proper in the district in which the defendant is arrested or first brought.  Despite that Ghanem was “first brought” to New York, where the plane transporting him landed, Ghanem failed to make a pre-trial objection to venue in the Central District of California.  Instead, Ghanem waited until negotiating the jury instructions to raise the venue issue. The district court judge overruled Ghanem’s objection because, in part, he waived the argument, and he was convicted.

Ghanem filed an appeal. In an admittedly unusual decision, the Ninth Circuit held that Ghanem did waive his objection to venue as a defense, but, despite his waiver, he was permitted to object to the venue jury instruction.  Because the district court gave an incorrect jury instruction for venue, the Ninth Circuit ruled, Ghanem’s conviction was vacated and he was remanded for trial.

The decision tests the tried and true doctrine of waiver – that failure to raise a procedural, pretrial issue waives the issue – and favors late objections to issues which should be resolved well in advance of trial. It is a backwards result, and its consequences could waste countless resources in this and subsequent cases.

The Investigation and Trial: Untimely Venue Arguments

The facts of this case are important and worthy of analysis.

Defendant Rami Ghanem is an international arms dealer. While living in Egypt, Ghanem operated a below-board military supply and logistics company, defrauded local officials, and illegally transported armaments across borders. Eventually, Ghanem’s activities attracted the attention of the United States Homeland Security Investigations team (“HSI”).  In August of 2015, undercover HSI agents contacted Ghanem and placed an order for various weapons, ammunition, and night vision devices, which were all sourced from within the Central District of California. On December 8, 2015, HSI agents led Ghanem to a warehouse in Greece to inspect the armament shipments where Greek authorities awaited him. He was arrested when he arrived at the warehouse.  Later the same month, the United States indicted Ghanem in the Central District of California. The indictment alleged Ghanem violated the Arms Export Control Act and smuggling and money laundering laws.

The United States subsequently extradited Ghanem from Greece to answer to the indictment. On April 25, 2016, United States Marshals met Ghanem at an airport in Greece and escorted him on a flight to JFK airport in New York. After a layover, the Marshals flew Ghanem to the Central District of California. Ghanem was detained there until trial.

On March 24, 2017, the government obtained a superseding indictment, adding three new counts for further violations of the Arms Export Control act and, most importantly to this case, violation of 18 U.S.C. 2332(g), which generally prohibits illicit dealings in surface-to-air missiles. During the pretrial process, Ghanem pled guilty to all counts except for the 2332(g) charge. Ghanem never moved to transfer venue or to dismiss for improper venue before trial.

Trial proceeded on Ghanem’s alleged violation of 18 U.S.C. 2332(g). The defense moved for a dismissal pursuant to Criminal Rule 29 at the close of the Government’s case in chief and argued for the first time that venue was improper. The Government responded that Ghanem waived the argument by failing to raise it before trial. The court denied the motion. As trial proceeded, the parties conferred on jury instructions. Ghanem objected to the proposed jury instruction concerning proof of venue, but the district court judge overruled his objection and instructed the jury that Ghanem’s foreign arrest was irrelevant.

The jury returned a guilty verdict. Ghanem moved for a new trial or to dismiss the indictment for, among other arguments, improper venue. The district court denied the motions and held that the venue argument was waived as untimely. Ghanem was sentenced to 360 months in prison.

The Appeal: Waiver Applies Only Until Negotiating Jury Instructions

Ghanem appealed the judgment, arguing that venue was improper. It was undisputed that Ghanem’s conduct fell within a special venue statute for foreign offenses. Proper venue for crimes committed outside of the United States lies within the district in which “the offender . . . is arrested or is first brought.” Ghanem argued he was “first brought” to the Eastern District of New York during his layover to California. The Government argued Ghanem waived an improper venue argument and the Ninth Circuit Court of Appeals agreed. The Ninth Circuit held that the venue issue was “apparent from the face of the indictment,” but Ghanem failed to raise the issue before trial.

But Ghanem’s appeal does not end there. Ghanem further argued that the jury instruction misstated the law with respect to his venue defense because it stated that his foreign arrest was irrelevant. The Government again argued the Ghanem waived venue and also posited substantive arguments. Ultimately, the Ninth Circuit sided with Ghanem. It held that a defendant, regardless of waiver of a procedural issue, is entitled to jury instructions which state the law correctly. The Ninth Circuit vacated Ghanem’s conviction and remanded him for trial.

Recognizing the “peculiarity of this result,” the Ninth Circuit offered additional “remarks.” Ghanem’s conviction was vacated – wiped clean as if it never occurred – but not dismissed, and he was remanded for trial. The Ninth Circuit explained its reasoning: “Mr. Ghanem waived his venue challenge because it was untimely, so he could not ask the district court to take the venue issue from the jury and determine it as a matter of law [under Criminal Rule 29]. But, . . . our precedent entitles a defendant, even one who has waived venue by untimeliness, to a correct jury instruction on the question.” Therefore, Ghanem must stand trial again for the same offense, but, this time, he will receive a proper jury instruction.

In sum, the Ninth Circuit held that, yes, Ghanem waived the venue challenge by his failure to raise the issue before trial, but, in the same breath, it held that the issue was not really waived, because he could raise the same issue during the jury instruction phase.

The Problem: Wacky Waiver Arguments Open New Doors

While venue is a constitutional consideration to ensure that a defendant is tried in a proper forum, it is ultimately procedural. Venue is not a substantive element of an offense that Ghanem or any other defendant is alleged to have committed. In fact, defendants, subjectively recognizing that the case is set in an improper forum, may waive venue if they prefer that improper forum.

After this decision, however, defendants in the Ninth Circuit may recognize an improper venue, strategically fail to raise the defense, and then demand a jury instruction that could result in an acquittal based on a non-substantive issue. That is not how venue was meant to work. Venue should be assessed before trial so that the defendant can move to transfer venue if appropriate. After that period for objection lapses, the venue question should be closed.

Under the Ninth Circuit’s holding, the district court should have given a “correct” jury instruction on venue (not the Government’s), and Ghanem – who a jury has decided is guilty beyond a reasonable doubt of the surface-to-air missile defense – would have been acquitted. In fact, the case likely deserved to be dismissed at the Rule 29 stage based on the Ninth Circuit’s analysis. Ghanem benefitted from a windfall in this case and his conviction was vacated, but the Ninth Circuit would have granted him an even larger windfall at trial—the ability to argue a waived defense to the jury and acquire an acquittal.