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UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION BENEVOLENCE INTERNATIONAL FOUNDATION, INC.

Plaintiff,

) )

) )

No.

JOHN ASHCROFT, in his official capacity as ) Attorney General of the United States of ) America; PAUL H. O'NEILL, in his official ) capacity as Secretary of the Treasury of the ) United States of America; COLIN L. POWELL, ) in his official capacity as Secretary of State of ) the United States of America; ROBERT S. ) MUELLER, III, in his official capacity as ) Director, Federal Bureau of Investigation; and ) R. RICHARD NEWCOMB, in his official ) capacity as Director, United States Department ) of the Treasury, Office of Foreign Asset Control,) Defendants.

) COMPLAINT

BENEVOLENCE INTERNATIONAL FOUNDATION, INC. ("BIF"), by counsel, complains of defendants as follows: INTRODUCTION

1.

This case challenges the defendants' unconstitutional actions in seizing the property,

and blocking the property and activities, of a law-abiding faith-based charity engaged in critical humanitarian work, without a hearing, without meaningful notice or opportunity for a hearing, and without probable cause. BIF seeks a declaration that these actions violate the United States Constitution and federal statutes; an injunction directing defendants to return the seized property and remove the restrictions placed upon BIF and its property; plus attorneys' fees and costs.

15 of 18 DOCUMENTS BENEVOLENCE INTERNATIONAL FOUNDATION, INC., Plaintiff, v. JOHN ASHCROFT, in his official capacity as Attorney General of the United States of America; PAUL H. O'NEILL, in his official capacity as Secretary of the Treasury of the United States of America; COLES L. POWELL, in his official capacity as Secretary of State of the United States of America; ROBERT S. MUELLER, III, in his official capacity as Director, Federal Bureau of Investigation; and R. RICHARD NEWCOMB, in his official capacity as Director, United States Department of Treasury, Office of Foreign Assets Control, Defendants. Case No. 02 C 0763 UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION 200 F. Supp. 2d 935; 2002 U.S. Dist. LEXIS 8658 May 14, 2002, Decided May 15,2002, Docketed

DISPOSITION: [**1] Case stayed in its entirety. LexisNexis (TM) HEADNOTES - Core Concepts: COUNSEL: For BENEVOLENCE INTERNATIONAL FOUNDATION, INC., plaintiff: Matthew J. Piers, Frederick Scott Rhine, Mary M. Rowland, Shilpa S Satoskar, Juliet Vanessa BergerWhite, Gessler, Hughes & Socol, Ltd., Chicago, IL. For BENEVOLENCE INTERNATIONAL FOUNDATION, INC., plaintiff: Edward Arthur Voci, Attorney at Law, Oak Park, IL. For JOHN ASHCROFT, PAUL H O'NEILL, COLIN L POWELL, ROBERT S MUELLER, R RICHARD NEWCOMB, defendants: Thomas P. Walsh, United States Attorney's Office, Chicago, IL. JUDGES: Judge James H. Alesia, United States District Court. OPINIONBY: James H. Alesia OPINION: [*936] ORDER

MEMORANDUM

OPINION AND

For the following reasons, the court stays this case in its entirety until the conclusion of the parallel criminal case, United States v. Benevolence Int'l Found., et al, No. 02 CR 414 (N.D. 111., filed Apr. 29,2002). I. BACKGROUND Plaintiff Benevolence International Foundation ("BIF") claims that it is a nonprofit, religious, humanitarian, charitable organization funded by donations from individuals, businesses, and other Islamic organizations and dedicated to assisting individuals afflicted by war, natural disaster, and extreme [**2] poverty. According to BIF, since 1992, it has administered essential humanitarian aid to the poor in needy areas of the world, by distributing food, clothing, and medical services in places such as Afghanistan, Bosnia, China, and Pakistan, and by operating hospitals, medical and dental clinics, and orphanages in places such as Tajikistan, Azerbaijan, Daghestan, and Ingushetia. According to BIF, it is an Illinois corporation with offices in Illinois and New Jersey and approximately ten offices overseas. BIF claims that, in October 2001, it retained counsel because it became aware of a story published in the New York Times on October 1, 2001, which indicated that BIF was targeted for investigation as a potential source of funding for terrorism.

12 of 18 DOCUMENTS United States v. Benevolence Int'l Foundation, et al. Case No. 02 CR 414 UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS 2002 U.S. Dist. LEXIS 21758 October 8,2002, Decided October 10,2002, Docketed

DISPOSITION: denied.

[*1]

Defendants' request for stay

LexisNexis (TM) HEADNOTES - Core Concepts: COUNSEL: For BENEVOLENCE INTERNATIONAL FOUNDATION, INC., defendant: Matthew J. Piers, Mary L Rowland, Gessler, Hughes & Socol, Ltd., Chicago, IL. For ENAAM M ARNAOUT, defendant: Joseph J. Duffy, William Paul Ziegelmueller, Stetler & Duffy, Ltd., Chicago, IL. U. S. Attorneys: AUSA, United States Attorney's Office, Chicago, IL. U. S. Attorneys: Pretrial Services. U. S. Attorneys: Probation Department. JUDGES: Joan B. Gottschall, Judge. OPEVIONBY: JoanB. Gottschall OPINION: Reverse Side of Minute Order dated 10/8/02 Defendants have requested that this court modify its order of September 13, 2002, which dismissed the indictment in this case, to reflect its continuing jurisdiction while the government seeks new charges. Upon dismissal of a defective indictment, the district court retains jurisdiction to order that the defendant be

continued in custody or that bail be continued for a specified time pending the filing of a new indictment or information. Fed. R. Crim. P. 12(h). Moreover, case law provides that the district court "has inherent jurisdiction within the time allowed for appeal to modify its judgment for errors of fact [*2] or law or even to revoke a judgment." United States v. Villapudua-Perada, 896 F.2d 1154, 1156 (9th Cir. 1990). The government has thirty days to appeal an order dismissing an indictment. 18 U.S.C. § 3731. During this period of time, the court may entertain a motion for reconsideration. VillapuduaPerada, 896F.2dat 1156. The government argues that the court does not have power to stay its September 13, 2002 order, but this is plainly wrong. As the Villapudua-Perada case clearly states, the court maintains jurisdiction during the period provided for filing an appeal and has the power to modify or reconsider its ruling. If the court has the power to reconsider its ruling, it surely has the power to stay it. The problem here is that no reason for a stay has been advanced except as a means of asserting continuing jurisdiction over this case. Since the court retains jurisdiction over this case until the expiration of the time provided for appeal, it does not have to stay its September 13 order to accomplish that result. Presumably, within the thirty days provided for a government appeal, the court also has power to enter an [*3] order pursuant to Rule 12(h) "for a specified time." Defendants assert that they request a stay so that this court can continue to exercise jurisdiction over issues respecting defendant Arnaout's custody and pretrial preparation issues pending the anticipated return of another indictment. The clerk's office of this court has the capacity to assign a case to a district judge while a

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IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION BENEVOLENCE INTERNATIONAL FOUNDATION, INC. Plaintiffs,

v.

No. 02 C 0763

JOHN ASHCROFT, in his official capacity as Attorney General of the United States of America; PAUL H. O'NEILL, in his official capacity as Secretary of the Treasury of the United States of America; COLIN L. POWELL, in his official capacity as Secretary of State of the United States of America; ROBERT S. MUELLER, III, in his official capacity as Director, Federal Bureau of Investigation; and R.RICHARD NEWCOMB, in his official capacity as Director, United States Department of Treasury, Office of Foreign Assets Control,

Judge James H. Alesia Magistrate Judge Michael T. Mason No. 02 C 0674 Judge Wayne R. Andersen

Defendants. MOTION FOR PRELIMINARY INJUNCTION Plaintiff Benevolence International Foundation, Inc. (BIF) moves for a preliminary injunction requiring defendants to (1) grant a hearing in which BIF may respond to any allegations against it; (2) return the property seized from BIF's offices and the home of Enaam Arnaout; and (3) unblock BIF's funds. In the alternative, BIF respectfully requests entry of a preliminary injunction requiring defendants to (a) provide BIF with copies of the seized documents; (b) return the property seized from BIF's offices and the home of Enaam Arnaout; and (c) unblock BIF's funds on a monthly basis to allow BIF to pay its operating and charitable

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UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION UNITED STATES OF AMERICA, Plaintiff v. BENEVOLENCE INTERNATIONAL FOUNDATION, INC., and ENAAM M. ARNAOUT a/k/a ABU MAHMOUD a/k/a ABDEL SAMIA, Defendant.

) ) ) ) ) ) ) ) ) )

Case No. 02 CR 414

Judge Joan B. Gottschall

MEMORANDUM OPINION AND ORDER Defendants Benevolence International Foundation, Inc. ("BIF") and Enaam Amaout, BIF's Chief Executive Officer, are charged with making and using felse declarations signed by Amaout under penalty of perjury, in violation of 18 U.S.C. § 1623. Defendants have moved to dismiss the indictment. For the reasons set forth below, the motion is granted. Background Defendant BIF is an Illinois not-for-profit charitable organization incorporated in 1992. Defendant Amaout has been employed with BIF since 1993. He has been the CEO since 1998. On December 14,2001, pursuant to the emergency search provisions of the Foreign Intelligence Surveillance Act, 50 U.S.C. § 1801 et seq., the FBI seized financial and business records from BIF's Palos Hills, Illinois office. The FBI also searched Arnaout's home and seized certain of his and his family's personal effects. On the same date, acting pursuant to the International Emergency Economic Powers Act, 50 U.S.C. § 1701 et seq., the Treasury Department issued an order blocking BIF's assets and records pending further investigation.

2 of 6 DOCUMENTS GLOBAL RELIEF FOUNDATION, INC., Plaintiff-Appellant, v. PAUL H. O'NEILL, Secretary of the Treasury, et al., Defendants-Appellees. No. 02-2536 UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT 315 F.3d 748; 2002 U.S. App. LEXIS 27172 October 29,2002, Argued December 31,2002, Decided

SUBSEQUENT HISTORY: [**1] As Amended January 24, 2003. Rehearing denied by, Rehearing, en bane, denied by Global Relief Found, Inc. v. O'Neill, 2003 U.S. App. LEXIS 6708 (7th Cir. 111., Apr. 4, 2003)

PRIOR HISTORY: Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 02 C 674. Wayne R. Andersen, Judge. Global Relief Found., Inc. v. O'Neill, 207 F. Supp. 2d 779, 2002 U.S. Dist. LEXIS 10494 (N.D. 111., 2002) DISPOSITION: Affirmed.

corporations holding charters issued in the United States. The court found that the property of any corporation chartered within the United States was not necessarily domestic United States property. The corporation read the word "interest" in § 1702(a)(l)(B) as referring to a legal interest, in the way that a trustee was legal owner of the corpus even if someone else enjoyed the beneficial interest. However, the function of the IEEPA strongly suggested that beneficial rather than legal interests mattered. The statute was designed to give the United States President means to control assets that could be used by enemy aliens. The corporation conducted its operations outside the United States; the funds were applied for the benefit of non-citizens and thus were covered by § 1702(a)(l)(B). OUTCOME: The district court's denial of the corporation's request for.an injunction was affirmed.

CASE SUMMARY LerisNexis(TM) HEADNOTES - Core Concepts PROCEDURAL POSTURE: Plaintiff corporation appealed an order of the United States District Court for the Northern District of Illinois, Eastern Division, which denied the corporation's request for an injunction against defendant Secretary of the Treasury's blocking all assets of the corporation. OVERVIEW: The corporation was an Illinois charitable corporation that conducted operations in approximately 25 foreign entities, including Afghanistan, Albania, Bosnia, Kosovo, Iraq, Lebanon, Pakistan, Palestine, Russia, Somalia, and Syria. At issue was 50 U.S.C.S. § 7702(a)(l)(B). The corporation argued that the International Emergency Economic Powers Act (IEEPA), 50 U.S.C.S. § § 1701-01, did not apply to

Governments > Federal Government > Executive Offices [HN1] See 50 U.S.C.S. § 7702(a)(l)(B). Civil Procedure > Justiciability > Mootness [HN2] When relief is possible, a lawsuit is not moot. One application of this principle is that suits seeking money damages cannot become moot unless the defendant satisfies the plaintiffs demand. Business & Corporate Entities > Corporations > Shareholders & Other Constituents > Disregard of Corporate Entity