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IN RE MORALES

October 26, 1995

IN THE MATTER OF THE EXTRADITION OF JAIME MORALES


The opinion of the court was delivered by: AARON

 I. PROCEDURAL HISTORY AND FACTUAL BACKGROUND

 A. Proceedings Before Magistrate Judge Moskowitz

 On March 29, 1995, the United States Attorney for the Southern District of California filed a Formal Request for Extradition on behalf of the Republic of Mexico, seeking the extradition to Mexico of Jaime Morales, a United States citizen. The Complaint for Arrest with a View Towards Extradition, which was filed with the Request, stated that a warrant for Morales' arrest had been issued by the Sixth Judge for Criminal Matters of the Judicial District Court in the City of Chihuahua, State of Chihuahua, Mexico, charging Morales with the criminal offense "breach of trust." *fn1" The complainant requested that a warrant for Morales' arrest be issued, and that he be brought before the United States District Court for the Southern District of California for an extradition hearing.

 The Mexican court's summary of the evidence upon which the Court relied in issuing the arrest warrant for Morales was set forth in documents which accompanied the Formal Request for Extradition. This summary indicates that on May 7, 1991, at the offices of a company called "Tanques Y Construccionnes de Chihuahua, S.A. de CV.," in Chihuahua, Chihuahua, Mexico, the alleged victim, Juan Manuel Puente Escarzaga *fn2" , arranged to purchase from "Equipment Consultants, Inc.," through its legal representative, Jaime Morales, a used fifty ton Link-Belt crane, for the price of $ 60,000.00. Mr. Escarzaga later delivered the $ 60,000.00 to Hector D. Vela *fn3" , an employee of the company selling the equipment, pursuant to Morales' instructions. Morales was to have the crane delivered to Escarzaga in El Paso, Texas, on May 23, 1991. When the delivery date came, Morales told Escarzaga that he had not yet received the crane. Escarzaga then went to Hector Vela to request that the crane be delivered, and was told by Vela that this would not be possible since, ". . . Jaime Morales had sold it to another person." Formal Request for Extradition at Annex 7.

 On July 23, 1991, Escarzaga filed a criminal complaint against Equipment Consultants, Inc., and Morales. Documents filed with the Formal Request for Extradition indicate that the Mexican prosecutor originally sought a warrant for Morales' arrest for both breach of trust (or embezzlement) and for fraud. Id. However, based upon the factual allegations summarized above, the Mexican court concluded that the elements of the crime of embezzlement had been established, but that the elements of the crime of fraud had not. The Mexican court reasoned that in the case of embezzlement,

 
. . . the perpetrator has in his possession the object as the object has been given to him to possess but once he has the object in his possession he disposes of it to his benefit; yet in the crime of FRAUD the perpetrator carries out schemes, machinations and deceit for the purpose of acquiring the thing for himself and thereby make an illicit profit. From the proceedings it can be deduced that JAIME MORALES had in his possession the already mentioned crane, and which had been bought by JUAN MANUEL PUENTE ESCARCEGA, and duly invoiced therefore he was the owner of the crane. However, JAIME MORALES disposed of same asset as he sold it to a third party.

 Formal Request for Extradition at Annex 7 (emphasis added).

 On November 11, 1991, an arrest warrant was issued by the Mexican court charging Morales with the offense of embezzlement, only.

 On March 30, 1995, Morales was arraigned by Magistrate Judge Barry Ted Moskowitz in the United States District Court for the Southern District of California in Case Number 95-0951-M, In the Matter of the Extradition of Jaime Morales. Morales was ordered held without bail. On April 6, 1995, a case management hearing was held before Magistrate Judge Moskowitz. At that hearing, counsel for Morales advised the Court that she intended to request that the Court set bail for Morales. Counsel acknowledged that, ". . . bail is extremely difficult to get in an extradition matter," but added that she planned to present to the Court evidence of "extraordinary circumstances" that would justify bail. [R.T. 4/6/95 at p.5.] *fn4" At the conclusion of the April 6 hearing, the Court set a motion hearing for May 18, 1995, and scheduled the extradition hearing for June 8, 1995. Id. at pp. 3-4.

 At the hearing on May 18, 1995, Morales' counsel made an oral motion for bail, and proffered the existence of "special circumstances" which she maintained justified the setting of bail. First, counsel argued that there was an inherent defect in the arrest warrant, since an essential element of the offense of breach of trust is that the accused possessed the personal property of another and disposed of that property, and Morales had never possessed the crane. [R.T. 5/18/95 at pp.7-8.] Counsel further argued that because Morales had never had possession of the crane, the government would be unable to establish probable cause as to this element of the offense, and that there was thus a high probability that Morales would succeed on the merits at the extradition hearing. Counsel contended that these facts constituted "special circumstances" justifying bail. Id. at pp.15-16. Morales' attorney also proffered that a similarly situated extraditee in Mexico would be entitled to bail under Mexican law, and argued that this, too, constituted a special circumstance justifying Morales' release on bail. Id. at pp.14-15.

 In response to these arguments, Magistrate Judge Moskowitz observed that if he were to find that Morales never in fact possessed the crane, then Morales could not be extradited, because there would not be probable cause to believe that he had committed the offense for which he had been charged. Id. at p.8. With respect to ruling on this issue for purposes of determining Morales' eligibility for bail, Judge Moskowitz pointed out that the extradition hearing was to be held on June 8 -- only three weeks later -- and that it would make more sense to simply move up the date of the extradition hearing rather than to hold protracted bail hearings on a dispositive issue. Id. at p.9.

 Magistrate Judge Moskowitz denied without prejudice Morales' oral motion for bail, indicating that a motion for bail in an extradition case should be in writing, thereby providing the government with notice as to what issues would be raised. Id. at p.24. The date for the extradition hearing was not changed.

 
. . . we may have here probable cause of fraud, but for some reason the judge in Mexico refused to accept fraud as the charge, and while the Government prosecutor went for both fraud and breach of confidence or embezzlement, they only returned a breach of confidence or embezzlement charge. So the question is: Is there probably [sic] cause for the charge they actually returned? And if he never had possession, constructive or actual, I don't know how it could be a breach of confidence because even you contend that possession of some sort is required for that offense.

 [R.T. 6/30/95 at p.7.]

 After hearing the testimony of the defense witnesses, Magistrate Judge Moskowitz pointed out that the defense evidence led to the conclusion that Morales may not have committed the crime of embezzlement at all, but rather, might have committed fraud. Judge Moskowitz again observed that, for some reason, the Mexican government had not asked that Morales be extradited for fraud, and inquired of government counsel, "[My] question is -- then am I stuck?," to which the Assistant U.S. Attorney replied, "Yes, your honor." Id. at p.101. Government counsel stipulated that the offense with which Morales had been charged, and for which extradition had been requested, required proof of the element of possession. Id. at p.102.

 The government was thus put on notice by Morales' counsel on May 18, 1995, that the defense intended to present evidence showing that Morales never had possession of the crane. Further, the government was on notice as of June 30, 1995, that the Court perceived a potentially fatal defect in the Formal Request for Extradition.

 At the conclusion of the June 30 hearing, Morales' counsel again made an oral motion for bail, and indicated that she had submitted paperwork regarding proposed sureties to government counsel. Id. at pp.123-24. The motion was not ruled upon on that date.

 On July 7, 1995, another hearing was held at which the government presented two witnesses, Juan Manuel Puente Escarzaga, the alleged victim, and Hector Daniel Vela-Hernandez, the person to whom Escarzaga paid the $ 60,000.00. At the conclusion of this hearing, the Court indicated that it was concerned with two questions: 1) whether constructive possession of the crane would be sufficient under Mexican law to establish the offense charged; and 2) if so, whether there was probable cause to believe that Morales ever had constructive possession of the crane. [R.T. 7/7/95 at pp.87-88.] At this hearing, Morales' counsel again requested that the Court consider setting bail. In response to the Court's inquiry, counsel indicated that she could offer no property at that time to secure a bond. Magistrate Judge Moskowitz stated that he was not willing to consider an unsecured bond. [R.T. 7/7/95 at p.83.]

 At a status hearing on July 18, 1995, Magistrate Judge Moskowitz again raised the issue of the error in the charging documents. Judge Moskowitz informed counsel that he had "very serious concerns," based upon the evidence presented by the defense, as to whether Morales ever possessed the crane. [R.T. 7/18/95 at p.3.] He observed that if the Mexican government had had the evidence presented by the defense on the issue of possession at the time it made its charging decision, it may have charged Morales with fraud, not embezzlement. Id. at p.5.

 In spite of the fact that he had previously put the government on notice as to this flaw in the Request for Extradition, Judge Moskowitz concluded that it would be unfair to the government to render a decision as to Morales' extraditability at that time, ". . . when the Government hasn't had a chance to consider the effect of the evidence that the Defense has offered." Id. at pp.6-7. Judge Moskowitz stated that he was going to give the government a continuance, and suggested that the Assistant U.S. Attorney notify the Government of Mexico that if Judge Moskowitz were to consider the evidence offered by the defense, then he would ...


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