Man held in O.C. Jail for 6 years, without ever being charged, was wronged, judge said

The trial court was wrong, wrong, wrong.

Wrong to put a man who was sued by the state over a boiler room scam but never charged with a crime in jail — for six years.

Wrong to insist that he cough up $360,540 that had vanished in the care of his then-fiancee.

Wrong to keep him locked up even after acknowledging that he was broke — there was “very strong evidence that he was unable to pay $360,540,” said a federal judge’s critical decision.

But even though the government was wrong on so many fronts, for so long, Zulmai Nazarzai will get no compensation, according to a judgment handed down Jan. 14.

After being released from Orange County jail, in 2016, Nazarzai filed a federal lawsuit against the county, then-Sheriff Sandra Hutchens and Deputy Ben Garcia, seeking at least $25 million for civil rights violations.

“Mr. Nazarzai should have been released in 2014 and very likely earlier,” wrote U.S. Judge Andrew J. Guilford in the “findings of fact” document related to the case.

“But the possible defendants in this case were all government employees honoring in good faith the orders of the judge acting with judicial immunity…. (T)hose executing a court order valid on its face are entitled to immunity.”

Nazarzai’s real remedy was with higher courts that could have intervened. Eventually, the California Court of Appeal did order the trial court to hold another hearing, which lead to Nazarzai’s release.

“But now, the facts and the law simply and sadly don’t support an award of money damages,” Guilford wrote.

Those facts are deeply troubling, Guilford wrote. And what happened to Nazarzai suggests that anyone can be at risk from Guilford described as “a growing number of ‘alphabet-soup’ government agencies that are ultimately given the option of seeking to throw someone in jail without the time-honored protections normally given to criminal defendants.”

What happened?

No one has argued that Nazarzai was a choir boy.

He was one of the masterminds behind a “boiler-room telemarketing operation” that lied to distressed and elderly homeowners on the verge of losing their houses as the economy imploded in 2008 and 2009, prosecutors said in court documents. More than 1,200 people paid them $2 million to keep their homes from foreclosure, but while Nazarzai insists some of his clients got relief, the state attorney general said his operation was a scam and making “extravagant and false promises” targeted at “society’s most vulnerable consumers at a particularly difficult time by taking advantage of their desire to remain in their homes.”

The state sued the pair and others – a civil, not criminal, action – and won. The defendants were ordered to pay more than $4 million in penalties and restitution. Nazarzai pulled money from the bank and stashed it at his home.

Nazarzai said he counted out $360,540 in cash from his closet and gave it to his partner and then-fiancee to deliver to the court receiver, saying he had an event to attend at his daughter’s school.

But the money never got there. Nazarzai’s then fiancee, Sharon Fasela, said in a deposition that she packed the cash in a black duffel bag, drove toward the receiver’s office in Los Angeles, and blacked out on the way. When she awoke she was at a hospital and the car had been towed. When she reclaimed it, the black duffel bag with the cash was gone, she said.

Orange County Superior Court Judge Andrew Banks called Fasela’s claim “the most incredulous story I’ve ever heard, and I’ve heard some whoppers.”  

Fasela had been found to be minimally liable in the case, and she was not held in contempt when the money didn’t arrive. But on Dec. 7, 2010, Banks ordered Nazarzai to jail for contempt of court until he produced that $360,540.

And there Nazarzai remained.

He was held in “administrative segregation,” isolated from the jail’s other inmates, according to his federal suit. He was confined in “the hole” — “a minuscule cell that restricts a prisoner’s ability to move about, exercise or communicate” — for extended periods. He was harassed because he’s Muslim, denied access to exercise yards and other facilities, threatened when he tried to air his grievances, and tried to commit suicide.

He challenged his incarceration in state and federal courts, arguing that the law sets a clear, one-year limit on incarcerations for civil contempt. He had little to show for it until the appeals court ordered Banks to hold another hearing, in 2016, specifically addressing whether Nazarzai had the ability to pay, whether continuing to keep him behind bars could compel him to do so, and whether his incarceration had become punitive rather than coercive.

On Nov. 4, 2016, Judge Banks said he still believed that Nazarzai could produce the money.  He said “there is a substantial likelihood that continued confinement will accomplish the purpose of the turnover order.”

But, with the appeals court peering over his shoulder, Banks also said that, while he didn’t think six years in jail was punitive, “in my mind it has become close to that point. In this circumstance, my oath to support and defend the Constitutions of the United States and the state of California compel me to not try and cut the issue too finely. Therefore I declare that further confinement of Zulmai Nazarzai would be punitive rather than coercive and order that the Sheriff of Orange County release him from custody under my contempt order.”

Nazarzai was 40 years old when he went into jail. He is 49 now. In the six years he was imprisoned, his daughter grew up. The last person who apparently had the money — his ex-fiancee — remained free.

‘Debtor’s prison’

“Whenever the Government reaches its strong arm down to put someone in jail, important issues are always raised,” Guilford wrote. “Especially when it’s done without a jury for a failure to pay money. For nearly six years. In a case where a public defender would have been helpful from the start, but was not originally provided.”

Judges may indeed order a person to jail for failure to honor a court order that he or she is capable of honoring. And in Nazarzai’s case, the suspicious circumstances surrounding the money’s disappearance suggests that, early on, the money was available and he could have paid it, Guilford wrote.

But Nazarzai’s ability to pay the debt “became increasingly uncertain with the passage of time,” Guilford added. “For example, the woman allegedly involved in the initial scam, Ms. Fasela, broke off her engagement to Mr. Nazarzai, and might have left with the money. Money available at the beginning (of Nazarzai’s incarceration) likely was not available a few years later, and more likely not available six years later.”

But if Guilford awarded money damages to Nazarzai, Nazarzai’s creditors — including the state that imprisoned him to begin with — would immediately grab it to satisfy outstanding fines, which have grown from $4 million to $8 million with interest. “That is not relevant to the ultimate question of liability in this case, but like so much in this case, it is a troubling aspect difficult to overlook,” the judge wrote.

Guilford also described the circular nature of Nazarzai’s incarceration — in jail initially because he refused to pay a fine, and in jail later because he couldn’t pay the fine — and noted that he was troubled by its six-year duration.

“It is difficult to overlook how the long imprisonment in this case creates something akin to a debtor’s prison, long rejected in our modern society,” he wrote.

Growing threat

But the troubling aspects of this case go farther, the judge said.

The “growing number of ‘alphabet-soup’ government agencies” that can seek to throw people in jail without charging them with a crime include the U.S. Securities and Exchange Commission, the Federal Trade Commission and the Consumer Financial Protection Bureau, Guilford wrote.

“The government can seek a civil order of payment following a financial crime and then seek to send the civil defendant to jail for failure to pay,” he wrote. “After the dust settles, a civil defendant that committed a financial crime ends up in jail without the protections normally given to criminals” – such as free counsel, the highest burden of proof, and the right to a grand jury indictment.

The judge noted that if Nazarzai had been charged with the crime applicable to his case — theft by false pretenses — the punishment would have been about three years, or half the time Nazarzai spent in jail.

The trial court, he added, should not have imprisoned Nazarzai for as long as it did, and the California legislature should amend the penal code and provide “procedural safeguards” to prevent this from happening again.

Reaction

Legal scholars have likened the case to “Les Miserables” and decried the approach as a modern take on debtors prison.

“What was done to Mr. Nazarzai was outrageous,” said Erwin Chemerinsky, constitutional scholar, founding dean of UCI’s law school and now dean of UC Berkeley’s School of Law. “But there is not a defendant who can be sued, because of immunity doctrines. The law is terribly unjust here.”

Others have been treated similarly.

Former lawyer H. Beatty Chadwick set the America record, spending 14 years behind bars for civil contempt under circumstances similar to Nazarzai’s. In the mid-1990s, a Pennsylvania judge ordered Chadwick to place $2.5 million into a court-controlled account during his divorce. Chadwick said he had lost the money in bad investments, but his wife’s lawyer charged that the money was hidden offshore.

The judge believed the wife. Chadwick went to jail in 1995, at age 59, for failing to produce the money and stayed there until 2009, when he was 73 and the court finally agreed that his incarceration had morphed from something coercive into something punitive.

If Chadwick had been convicted of third-degree murder, he would have been out in half the time.

In Nazarzai’s case, his lawyers plan to file an objection to the court’s “Findings of Fact and Conclusion of Law.”

“There’s a maxim of jurisprudence, ‘For every wrong there’s a remedy,’ ” said attorney Afshin Eftekhari. “It took a federal district court judge to acknowledge that there was a wrong committed — how could there not be a remedy?”

Nazarzai is still in Southern California but has had trouble finding work since his release. Banks, the Superior Court judge who imprisoned Nazarzai, has retired.

The black duffel bag stuffed with $360,540 has never been found.