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United States v. Mustafa

United States District Court, Fourth Circuit

October 8, 2013

UNITED STATES OF AMERICA, Plaintiff,
v.
OSAMA MAHMUD MUSTAFA, Defendant.

REPORT AND RECOMMENDATION [1]

ROBERT S. BALLOU, Magistrate Judge.

This matter is before the court on the Government's Motion for Declaration and Judgment of Forfeiture of Appearance Bond (Dkt. No. 279) and the Sureties' Motion to Set Aside Bond Forfeiture, filed on behalf of Muna Adil Al-Aseer, individually, and as a trustee for the Muna Adil Al-Aseer Revocable Trust (Dkt. No. 290). The Government asks in its motion that the court enter judgment forfeiting defendant Osama Mahmud Mustafa's $50, 000 appearance bond and collateral posted for the bond to the United States pursuant to Federal Rule of Criminal Procedure 46(f).

The court ordered the appearance bond of Mustafa forfeited because of his failure to appear for a scheduled court hearing on August 30, 2013. (Dkt. No. 285). The court took under advisement what amount, if any, of the forfeiture amount to set aside pursuant to Fed. R. Crim. P. 46(f)(2). The government and Muna Adil Al-Aseer, both individually and as trustee of the Muna Adil Al-Aseer Trust (collectively referred to as "Al-Aseer") appeared at the hearing on the pending motions regarding the remittance of the forfeited bond on October 1, 2013. Having reviewed the pleadings, heard the evidence, and reviewed the appropriate case law, I find that the interests of justice do not require remittal of any bond amount and that forfeiture of the bond shall be in full, and accordingly, RECOMMEND GRANTING the government's motion for forfeiture of the bond (Dkt No. 279) and DENYING the motion of Al-Aseer to Set Aside the Bond Forfeiture (Dkt. No. 290). I further RECOMMEND STAYING execution of the judgment to permit substitution of alternative, more liquid assets to satisfy the judgment should Al-Aseer prefer to do so.

Procedural Background

Mustafa was charged in a Superseding Indictment on May 10, 2012 with conspiracy to defraud the United States, conspiracy to commit bank fraud, and conspiracy to commit money laundering (Dkt. No. 29). Five days later, Mustafa was arrested in the Middle District of Florida and was brought before a U.S. Magistrate Judge in that district for an initial appearance pursuant to Rule 5(c)(3) of the Federal Rules of Criminal Procedure. The magistrate judge set a secured bond in the amount of $50, 000. Mustafa was unable to post the required secured bond, and was transferred to this court in the custody of the U.S. Marshal. (Dkt. No. 56).

On June 15, 2012, Mustafa appeared before this Court for an initial appearance and arraignment. Mustafa made a motion for bond to be set as it was in the Middle District of Florida. The court held a telephone conference call with counsel regarding the security for Mustafa's bond on June 21, 2012 (Dkt. No. 74), and on June 27, 2012, after mutual agreement by the parties, this court set Mustafa's conditions of release (Dkt. No. 93). The court ordered that Mustafa "must appear in court as required" and that Mustafa execute an Appearance Bond in the amount of $50, 000, which Al-Aseer co-signed in her individual and trustee capacity. (Dkt. No. 94). As security for the bond, Al-Aseer posted property located at 305 Locha Poka Drive, Maryville, Tennessee 37803. (Dkt. No. 95).

A jury found Mustafa guilty on all three counts in the indictment on April 19, 2013, and Mustafa was allowed to remain free on bond pending sentencing. On August 5, 2013 the Government filed a Motion to Revoke Conditions of Release, predicated upon allegations that Mustafa threatened material witnesses in the case in violation of his conditions of release (Dkt. No. 260). A hearing on the Government's Motion to Revoke Conditions of Release was set for August 30, 2013.

On August 28, 2013, U.S. Probation Officer Jennifer K. Williams submitted a Petition for Action on Conditions of Pretrial Release to the court, stating that Mustafa's GPS tracking device had been tampered with and appeared idle in a wooded area off of Interstate 10 in Florida. Mustafa was also unresponsive to Probation's attempts to contact him. As a result, the court ordered a warrant for Mustafa's arrest (Dkt. No. 272).

On August 30, 2013, the Government filed a Motion for Declaration and Judgment of Forfeiture of Appearance Bond, based upon Mustafa's likely failure to appear at the hearing scheduled for that afternoon. (Dkt. No. 279.) That same day, the court held the hearing on the Government's motion, at which Mustafa did not appear. At the conclusion of the hearing, the court found that Mustafa violated the terms of his bond based upon his failure to appear at the court hearing. The court issued an order granting in part and taking under advisement in part the Government's Motion for Declaration and Judgment of Forfeiture of Appearance Bond (Dkt. No. 285). The Court ordered the $50, 000 bond and collateral forfeited pursuant to Rule 46(f)(1). A hearing was set for October 1, 2013 to address what amount of the bond forfeiture would be set aside or remitted pursuant to Rule 46(f)(2) and the Government's Motion for a Default Judgment pursuant to Rule 46(f)(3).

Evidentiary Hearing

At the October 1, 2013 hearing, the court heard testimony from Al-Aseer, who testified that she was an occupational therapist living alone in Tampa, Florida and had become friends with Mustafa's wife, Eklas Mustafa, prior to the present criminal proceedings. Mustafa was unable to post the required secured bond set in the Middle District of Florida, so his wife approached Al-Aseer about posting the bond. Al-Aseer agreed, securing the $50, 000 bond with property owned by the Muna Adil Al-Aseer Revocable Trust in Tennessee. Al-Aseer is not related to Mustafa and did not know Mustafa well at the time she posted the property to secure the bond. Al-Aseer testified that she was led to believe Osama Mustafa was innocent, and that she posted the bond to help Eklas Mustafa and her family from falling apart. Al-Aseer testified that she did not speak with Osama Mustafa prior to signing the bond paperwork, although his attorney at the time, Linda Moreno, explained the consequences of Mustafa failing to comply with his conditions of release, including the risk of forfeiture if Mustafa did not come to court when required.

Al-Aseer testified that she has had recent health problems related to tremors, her memory, and her heart, and that she helps take care of her disabled brother who lives with his wife nearby in Florida. Furthermore, Al-Aseer testified that she is now working part-time, and that she has a work retirement account.

The property posted by Al-Aseer is located at 305 Locha Poka Drive, Maryville, Tennessee 37803. Al-Aseer testified that she intended to retire to this property, and that it is currently subject to a mortgage of approximately $50, 000 and has a current tax assessed value of approximately $156, 500.00. The mortgage payments are paid through rental income of $950 per month. At the hearing, Al-Aseer testified that her home outside of Tampa, Florida, which she also owns solely in her own name, was appraised at $169, 000 and also subject to a mortgage of an unknown amount.

Al-Aseer additionally testified regarding property owned by two other entities, Muna Al-Aseer, LLC ("LLC") and the Muna Al-Aseer Trust ("Trust"). Al-Aseer testified that she and her disabled brother are the sole members of the LLC, but that 100% of the income for this company is reported to her annually. The LLC owns numerous properties in Tennessee which are mortgaged. Al-Aseer was not clear on the equity value of the various parcels ...


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