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UNITED STATES v. HARPAL SINGH AHLUWALIA

November 3, 1992

UNITED STATES OF AMERICA, Plaintiff,
v.
HARPAL SINGH AHLUWALIA, Defendant. UNITED STATES OF AMERICA, Plaintiff, v. NARINDER PAL MAHAL, Defendant. UNITED STATES OF AMERICA, Plaintiff, v. DALIP SINGH GHOTRA, Defendant.



The opinion of the court was delivered by: RONALD M. WHYTE

ORDER REJECTING MAGISTRATE JUDGE'S RECOMMENDATION RE: MOTION TO DISMISS FOR OUTRAGEOUS GOVERNMENT CONDUCT AND DENYING MOTION TO DISMISS FOR OUTRAGEOUS GOVERNMENT CONDUCT

 I. Introduction

 On May 20, 1992, Magistrate Judge Trumbull issued a report and recommendation regarding defendants' motion to dismiss their indictments for outrageous governmental conduct. Judge Trumbull found that, given the totality of the circumstances, the government's conduct was "outrageous" and recommended that certain counts charged against all three defendants be dismissed. Nine days after Judge Trumbull issued her order, the government filed objections thereto pursuant to 28 U.S.C. § 636(b). The government posed its objections because it believes that (i) the report and recommendation mischaracterized and misapplied the law, and (ii) that the factual conclusions in the report and recommendation were unsupported by and inconsistent with the record. All three defendants oppose the government's objections to the magistrate judge's order. For the reasons set forth below, the court hereby rejects the recommendation of the magistrate judge, and denies defendants' motion to dismiss the indictments for outrageous governmental conduct.

 II. Standard of Review

 28 U.S.C. § 636(b) provides for the district court's de novo review of those portions of a magistrate judge's report and recommendation to which a party has objected. In Orand v. United States, the Ninth Circuit set forth the following procedures for such a review:

 
If neither party contests the magistrate's proposed findings of fact, the court may assume their correctness and decide the motion on the applicable law.
 
The district court, on application, shall listen to the tape recording [or read the transcript] of the evidence and proceedings before the magistrate and consider the magistrate's proposed findings of fact and conclusions of law. The court shall make a de novo determination of the facts and the legal conclusions to be drawn therefrom.
 
* * *
 
Finally, the court may accept, reject or modify the proposed findings or may enter new findings. It shall make the final determination of the facts and the final adjudication of the motion to [dismiss for outrageous government conduct].

 602 F.2d 207, 208 (9th Cir. 1979), quoting Campbell v. United States District Court, 501 F.2d 196, 206-07 (9th Cir.), cert. denied, 419 U.S. 879 (1974); accord United States v. Remsing, 874 F.2d 614, 617 (9th Cir. 1989).

 In this case, the court has reviewed not only the report and recommendation of the magistrate judge, but also the transcripts from the evidentiary hearings before the magistrate judge, the relevant grand jury transcripts, and the parties' briefs that present and oppose the objections to the report and recommendation. The court has made a de novo determination of the matters to which objections were posed. The court's findings of fact and application of the law to those facts are set forth below.

 III. Facts

 In November of 1990, a grand jury indicted defendants Ahluwalia, Mahal, and Ghotra, charging them with one or more counts of conspiracy and bribery of a public official. The indictments charged that defendants bribed Gregory Ward, the Chief Legalization Officer at the Salinas office of the Immigration and Naturalization Service (INS), to obtain Temporary Work Authorization Cards (INS Form I688-A).

 In 1990, these work authorization cards were available to certain eligible immigrants as a result of an INS Amnesty Program. Although the time for filing for legalization under the Amnesty Program had expired, the courts in litigation brought by Catholic Social Services and the League of United Latin American Citizens ordered the time for filing to be reopened to provide an opportunity for those eligible immigrants who were out of the country during the prior filing periods to file for work authorizations. The Salinas office was one of the few offices that remained open to accommodate the court order. To receive a card, eligible immigrants were required to complete a written questionnaire, be interviewed by an INS official, and be photographed.

 In early June of 1990, the Federal Bureau of Investigations (FBI) was apprised by INS officials that Gregory Ward had been offered a bribe in exchange for work authorization cards. As a result, on June 11, 1990, FBI Agent Richard Lack met with Ward to discuss the details of the solicitation. Ward told Lack that he had been solicited on the previous day, June 10, and that he had arranged a follow up meeting with the bribers on June 12. Ward told Lack that he had been solicited by two East Indians, Dalip Ghotra and Om Sondhi. During that meeting, Ward agreed to participate with the FBI, which wanted to investigate the alleged bribery attempts, by secretly recording conversations with these and other alleged bribers.

 Initially, the focus of the bribery investigation was on Ghotra and Sondhi. Ward began to wear a body wire to meetings with them and record their conversations. Agent Lack personally wired and unwired Ward for these prearranged meetings. Early on in the investigation, almost all of the meetings between Ward and the bribers were recorded. Between June and September of 1990, there were at least ten to twelve undercover meetings with Ghotra and Sondhi. *fn1"

 In July, two other men, known as the Wahlia brothers approached Ward to purchase work permits. The Wahlia brothers offered Ward $ 1,000.00 per card (double the price that Ghotra and Sondhi were paying). When Ward informed Agent Lack and Special Assistant United States Attorney (AUSA) Linda Mitlyng of these solicitations, Lack and Mitlyng decided not to include these new bribers in the investigation, apparently in an attempt to control its scope. Ward, nonetheless, began to give the Wahlia brothers the work authorization cards (supposedly without charge) that they sought. Ward indicated that he gave them the cards since he believed they would not take "no" for an answer.

 By September 24, 1990, Ward had accepted bribes in the amount of approximately $ 100,000.00. This bribe money came from Sondhi, Ghotra, the Wahlias' and a Mr. Rami, an associate of Ghotra's who appears to have been only tangentially involved. *fn2" In addition, by this time Ward had issued about 200 work authorization cards. These cards were primarily issued to East Indian, Punjabi and Sikh immigrants.

 Sometimes, Ward accepted the bribes inside the INS office in Salinas. He took other bribes outside the office and across the INS parking lot in a cemetery, where the FBI could more easily observe the meetings between Ward and the bribers. The testimony is unclear whether third parties could observe the bribing of Ward outside of the INS office. In any event, the word got out that work permits were for sale at the Salinas office of the INS. The client population of the Salinas office changed accordingly. Agent Lack noticed that "all of a sudden" the Salinas office, which once handled mainly Hispanic immigrants, was handling "almost exclusively East Indians." RT 76.

 In September of 1990, the FBI decided to expand the investigation again for a period of time to include "all comers." *fn3" RT 101. The FBI instructed Ward that on September 24, 1990, he should accept bribes from everyone who offered them. Three days later, the FBI abandoned this idea and restricted the scope of the investigation again. The FBI was forced to do so because it was getting too much bribe money and receiving too many files to handle. In the four day period from September 24 through 27, Ward accepted bribes on behalf of hundreds of immigrants. RT 114. He accepted thousands of dollars in bribe money from approximately a dozen additional people. RT 112. Ahluwalia and Mahal were among those dozen people.

 By early October, Agent Lack and AUSA Mitlyng became convinced that there was no single unified conspiracy among the bribers to solicit Ward in exchange for work authorization cards. Several weeks thereafter, the FBI began doing the work necessary to conclude the investigation. The investigation culminated with the arrest on October 31, 1990 of twelve persons, with warrants outstanding for ten more.

 There is no question that there were problems with the FBI sting operation. At times, it appears that the operation was getting so large that the FBI could not control it. Indeed, over the course of the four-month investigation, Ward received more than a million dollars in bribe money and approximately 1300 applications for work permits. Money was accepted which, today, cannot be tied to particular applications. Cards were issued for which no accurate accounting was made. Ward met with and accepted money from bribers without authorization from the FBI. Many of the meetings with the bribers went unsupervised and unrecorded. Surprisingly, to date, the FBI does not know whether it was accepting bribe money on behalf of people who were otherwise eligible to receive the work authorization cards. RT 96.

 In addition, throughout this investigation, Ward had a great deal of discretion in deciding to whom he issued work authorization cards. *fn4" He also had a great deal of discretion in deciding from whom to take money. Ironically, he refused to take money from people whom he did not like, thereby keeping those people outside of the scope of the investigation.

 The FBI gave Ward relatively free rein in connection with the investigation. Moreover, Ward did not always adhere to the FBI's directions regarding how to conduct the investigation. Ward appears to have been unable on numerous occasions to turn away those who were attempting to solicit him. Near the end of the investigation, Ward would refer new people who approached him wanting to buy cards to the "known brokers." He did this presumably because he had been directed by the FBI to refuse to accept bribe money from new people.

 The record reflects that by late September of 1990, there were approximately 500 to 600 East Indians in or about the Salinas office "trying to figure out how they could get a card." RT 108. It was not unusual for immigrants to line up begging Ward to obtain their cards. RT 106. In addition to the fact that the immigrants, in some cases, were desperate for cards, there is evidence in the record that bribery is "a fact of life in India. If you want something done by the government, you have to fork over some cash." Grand Jury Transcript (GJT) 40.

 The hoard scene at the Salinas INS office became the subject of media coverage, as well as complaints to local politicians and congressmen. Local law enforcement and the INS in San Francisco received complaints. Agent Lack himself received "anonymous phone calls from Indians all over the Bay Area telling [him] Greg Ward was taking bribe money. And [he] had to act stupid . . . [he] didn't want to tell them, 'yeah, it is because of my design over this.'" GJT 37; RT 117.

 Finally, it is unclear from the evidence whether during the period of the investigation, temporary work permits remained available at the Salinas Immigration Office to eligible applicants at the normal processing periods. Ward suggested in his testimony that the application process remained the same from June through September 1990, with the office conducting approximately twenty interviews per day. RT 295-99. Harvinder Singh, however, testified that he was unable to procure legally a work permit for his brother, who may have been eligible under the Amnesty Program. RT 445-60. Singh testified that, in his experience, the office accepted very few legal applications -- on some days, the office accepted approximately five applications, on other days, the office accepted none. During this same time period, Singh observed Ramesh Birla, one of the alleged bribers, hand in applications and obtain work permits for immigrants within a matter of hours.

 IV. Law on Outrageous Governmental Conduct

 The outrageous government conduct defense is based upon violations of the Due Process Clause of the Fifth Amendment to the United States Constitution. United States v. Russell, 411 U.S. 423 (1973). The Supreme Court in Russell commented in dicta that, although the outrageous government conduct defense did not apply in that case, the court

 
may someday be presented with a situation in which the conduct of law enforcement agents is so outrageous that due process principles would absolutely bar the government from invoking judicial processes to obtain a conviction . . . .

 411 U.S. 431-32 (citation omitted).

 A. Courts that Have Applied the Defense

 Since Russell, many courts have discussed this defense, but few have applied it to their facts. Only three federal appellate courts have reversed convictions on the basis of outrageous governmental conduct -- Greene v. United States, 454 F.2d 783 (9th Cir. 1971), United States v. West, 511 F.2d 1083 (3rd Cir. 1975), and United States v. Twigg, 588 F.2d 373 (3rd Cir. 1978). In the Northern District of California, only two courts have applied the outrageous government conduct defense -- United States v. Batres-Santolino, 521 F. Supp. 744 (N.D. Cal. 1990), and United States v. Marshank, ...


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