Joseph Englehardt v. Todd Blanche
CourtCourt of Appeals for the D.C. Circuit
Date FiledAugust 4, 2026
Docket24-5297
StatusPublished
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Full Opinion
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 4, 2025 Decided August 4, 2026
No. 24-5297
JOSEPH PAUL ENGLEHARDT AND YVONNE DORA WADE,
APPELLANTS
v.
TODD BLANCHE, IN HIS OFFICIAL CAPACITY AS ACTING
ATTORNEY GENERAL OF THE UNITED STATES OF AMERICA
AND UNITED STATES DEPARTMENT OF JUSTICE,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:24-cv-01865)
Amanda S. Berman argued the cause for appellants. With
her on the briefs was Daniel W. Wolff.
Baruch Weiss, Allon Kedem, and Samuel F. Callahan were
on the brief for amici curiae Former Members of Congress in
support of appellants.
Joshua M. Koppel, Attorney, U.S. Department of Justice,
argued the cause for appellees. With him on the brief were Brett
A. Shumate, Assistant Attorney General, and Sharon Swingle,
Attorney.
2
Before: RAO and WALKER, Circuit Judges, and ROGERS,
Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge RAO.
RAO, Circuit Judge: This is a case about which criminal
proceeds must be deposited into the United States Victims of
State Sponsored Terrorism Fund (the “Fund”). When the
Department of Justice collected over $629 million in criminal
penalties and forfeitures for conspiracies involving North
Korea, the Department allocated only a fraction of those
proceeds to the Fund. Two victims of state sponsored terrorism
who hold claims against the Fund sued, alleging that all of these
proceeds belonged in the Fund. The district court entered
summary judgment for the Department.
We hold that the Department erred in its allocation and that
the Justice for United States Victims of State Sponsored
Terrorism Act requires that these criminal proceeds be
deposited into the Fund. See 34 U.S.C. § 20144(e)(2)(A)(i). We
therefore reverse and remand with instructions that summary
judgment be entered for the plaintiffs.
I.
A.
Victims of state sponsored terrorism have long struggled
to obtain redress from foreign states. Under the terrorism
exception to the Foreign Sovereign Immunities Act (“FSIA”),
federal courts have jurisdiction over damages suits for acts of
terrorism by state sponsors of terrorism. 28 U.S.C. § 1605A.
These states, however, often lack assets in the United States.
Recognizing the slim prospect of recovering damages
from state sponsors of terrorism, Congress created the Fund.
3
See Justice for United States Victims of State Sponsored
Terrorism Act, Pub. L. No. 114-113, div. O, tit. IV, § 404, 129
Stat. 2242, 3007 (2015) (codified as amended at 34 U.S.C. §
20144) (“VSST Act”). Victims holding final judgments against
a state sponsor of terrorism for acts of terrorism under the
FSIA’s terrorism exception are eligible for compensation from
the Fund. 34 U.S.C. § 20144(c) (defining the scope and timing
of “eligible claims”). The Fund is administered by a special
master, appointed by the Attorney General, who provides
payments to eligible claimants on a generally pro rata basis. Id.
§ 20144(b), (d).
The Fund is financed with the penalties and forfeitures
imposed for certain criminal offenses:
All funds, and the net proceeds from the sale of
property, forfeited or paid to the United States
after December 18, 2015, as a criminal penalty
or fine arising from a violation of any license,
order, regulation, or prohibition issued under
the International Emergency Economic Powers
Act [(“IEEPA”)] or the Trading with the Enemy
Act [(“TWEA”)], or any related criminal
conspiracy, scheme, or other Federal offense
arising from the actions of, or doing business
with or acting on behalf of, a state sponsor of
terrorism.1
1
A parallel provision specifies that penalties and forfeitures from
covered civil offenses must also be deposited into the Fund. See 34
U.S.C. § 20144(e)(2)(A)(ii).
4
Id. § 20144(e)(2)(A)(i) (internal citations omitted) (emphasis
added) (“Funding Provision”). This case turns on a dispute over
how to interpret this statute.
B.
In April 2023, British American Tobacco P.L.C. and its
subsidiary, British-American Tobacco Marketing (Singapore)
Private Limited, (collectively “BAT”) agreed to pay more than
$629 million in criminal penalties and forfeitures based on two
conspiracy charges pertaining to illicit business with North
Korean entities.
First, BAT was charged with conspiracy to evade
sanctions issued under IEEPA against North Korean state-
owned banks. See 50 U.S.C. § 1705(a) (IEEPA conspiracy).
The North Korean bank Korea Kwangson Banking
Corporation (“KKBC”) was under sanctions that prohibited
U.S. persons from transacting with or for the benefit of the
bank. See Designation of an Entity Pursuant to Executive Order
13382, 74 Fed. Reg. 41782 (Aug. 18, 2009). BAT conspired to
deceive U.S. financial institutions into processing payments for
the benefit of KKBC, as well as other North Korean entities
later subject to IEEPA sanctions. The IEEPA conspiracy ran
from August 2009 to June 2017.
Second, BAT was charged with bank fraud conspiracy for
conspiring to deceive U.S. financial institutions into processing
transactions involving North Korea by falsely representing it
had sold off its interest in the North Korean tobacco industry,
even as it continued to profit from operations in the country.
See 18 U.S.C. §§ 1344, 1349 (bank fraud conspiracy). During
this conspiracy, North Korea was subject to IEEPA and TWEA
sanctions that barred U.S. financial institutions from
processing transactions beneficial to North Korea. Because
BAT concealed its connection to North Korea, U.S. financial
5
institutions facilitated hundreds of millions of dollars in
transactions that they otherwise would have rejected. The bank
fraud conspiracy ran from at least August 2007 to June 2017.
BAT agreed to pay criminal penalties and forfeitures
resulting from its IEEPA and bank fraud conspiracy charges.2
It satisfied its obligations to the United States with a payment
of approximately $653 million, which included penalties,
forfeiture charges, and interest.
The Department determined that only a small portion of
the BAT proceeds should be deposited into the Fund.3 The
Department followed its longstanding position that only
proceeds arising from criminal offenses with a nexus to a state
sponsor of terrorism must be deposited into the Fund. In other
words, the Funding Provision’s final qualifying phrase—
“arising from the actions of, or doing business with or acting
on behalf of, a state sponsor of terrorism”—applied to all listed
offenses in the Funding Provision. 34 U.S.C.
§ 20144(e)(2)(A)(i).
Applying that interpretation to the BAT proceeds, the
Department concluded that none of the proceeds from the
IEEPA conspiracy should go into the Fund. The IEEPA
conspiracy began in August 2009, but North Korea’s status as
a state sponsor of terrorism had been rescinded in October
2008. Rescission of Determination Regarding North Korea, 73
Fed. Reg. 63540 (Oct. 24, 2008). On the Department’s view,
2
British American Tobacco P.L.C. entered into a deferred
prosecution agreement, and British-American Tobacco Marketing
(Singapore) Private Limited pleaded guilty to the charges.
3
We use the term “proceeds” to refer to all money payable to the
Fund, whether through penalty, forfeiture, or fine, for a covered
criminal offense.
6
the IEEPA conspiracy did not “aris[e] from the actions of, or
doing business with or acting on behalf of, a state sponsor of
terrorism.”
The Department next decided that only a small share of
proceeds from the bank fraud conspiracy qualified for deposit
into the Fund. The Department treated the conspiracy as a
series of transactions and allocated only those proceeds that
arose from transactions that occurred while North Korea was
designated as a state sponsor of terrorism. Although the bank
fraud conspiracy lasted from at least August 2007 to June 2017,
the state sponsor of terrorism designation was in place only
until October 2008. The Department calculated that the period
when North Korea was designated accounted for only 8.6
percent of the criminal transactions during the conspiracy, and
so it deposited only that share of proceeds (around $11 million)
into the Fund.
C.
Joseph Paul Englehardt and Yvonne Dora Wade are
victims of two terrorist attacks against the U.S. Embassy in
Beirut by Hezbollah, a terrorist organization supported by Iran.
Englehardt was injured in the 1983 bombing of the Embassy
while he served in the U.S. Army. Wade was a civilian
employee injured in the 1984 bombing of the Embassy Annex.
Englehardt and Wade obtained judgments for money damages
against Iran under the FSIA’s terrorism exception. Each made
claims for compensation from the Fund, and the special master
concluded they were eligible victims in September 2022. Thus
far, Englehardt and Wade have yet to receive the value of their
outstanding claims from the Fund, because victims’ claims
have dwarfed the available proceeds. Appellants’ Br. 10–11;
VSST Fund, Payment Calculation Explanation for Non-9/11-
7
Related Claims Sixth Distribution (Dec. 2025),
https://perma.cc/66WD-X8GM.
Englehardt and Wade challenged the Department’s
allocation of the BAT proceeds under the Administrative
Procedure Act, arguing the Funding Provision required all
BAT proceeds to be deposited into the Fund.4 The district court
granted summary judgment for the Department. It upheld the
Department’s interpretation of the Funding Provision and
concluded that the allocation of the BAT proceeds was
consistent with statutory requirements.
The plaintiffs appeal, and we review the district court’s
grant of summary judgment de novo. Sault Ste. Marie Tribe of
Chippewa Indians v. Haaland, 25 F.4th 12, 17 (D.C. Cir.
2022).
II.
Plaintiffs challenge the Department’s allocation of the
BAT proceeds as contrary to the Funding Provision. We begin
with the threshold dispute between the parties, namely which
offenses in the Funding Provision must have a nexus to a state
4
At the time the plaintiffs filed suit, the Department had not yet
determined whether to deposit any of the BAT proceeds into the
Fund. The plaintiffs initially claimed that the Department had
unreasonably delayed deposit of the proceeds, but they concede this
claim is now moot. See 5 U.S.C. § 706(1). Separately, the district
court dismissed the plaintiffs’ request for a declaratory judgment.
The Declaratory Judgment Act does not provide an independent
cause of action, so the plaintiffs’ request for declaratory relief rises
or falls with their APA claim. See Ali v. Rumsfeld, 649 F.3d 762, 778
(D.C. Cir. 2011).
8
sponsor of terrorism such that the proceeds from those offenses
must be deposited into the Fund.
A.
Congress channeled the proceeds from certain criminal
offenses into the Fund. To determine which offenses must have
a nexus to a state sponsor of terrorism, we start with the
Funding Provision’s text:
All funds, and the net proceeds from the sale of
property, forfeited or paid to the United States
after December 18, 2015, as a criminal penalty
or fine arising from a violation of any license,
order, regulation, or prohibition issued under
[IEEPA] or [TWEA], or any related criminal
conspiracy, scheme, or other Federal offense
arising from the actions of, or doing business
with or acting on behalf of, a state sponsor of
terrorism.
34 U.S.C. § 20144(e)(2)(A)(i) (internal citations omitted).
The parties dispute which listed offenses must have a
nexus to a state sponsor of terrorism. The Department
maintains that every offense in the Provision—violations of
IEEPA, TWEA, and related conspiracies, schemes, and other
Federal offenses—must have such a nexus. The plaintiffs argue
that only “other Federal offense[s]” require a nexus to a state
sponsor of terrorism.
We conclude that neither of these interpretations reflects
the best meaning of the statute. See Loper Bright Enters. v.
Raimondo, 144 S. Ct. 2244, 2265–66 (2024) (reaffirming that
courts must exercise “independent judgment” and employ “the
9
traditional tools of statutory construction” to discern the
“single, best meaning” of the statute).
To begin with, the Funding Provision reads most naturally
as identifying two categories of proceeds that must be
deposited into the Fund, those that arise from: (1) “a violation
of any license, order, regulation, or prohibition issued under”
IEEPA or TWEA; (2) “or any related criminal conspiracy,
scheme, or other Federal offense arising from the actions of, or
doing business with or acting on behalf of, a state sponsor of
terrorism.” The Provision’s text and grammatical structure
establish this two-part division. A comma and disjunctive “or”
separate each category of offenses. The first category is a
separate clause that includes proceeds from violations of orders
issued under IEEPA or TWEA. The second category begins
with the prepositive modifier “related,” a term that both parties
rightly agree extends to “criminal conspiracy, scheme, or other
Federal offense.” The grammatical structure reinforces that
there are two categories of offenses.
Given the Funding Provision’s text and internal structure,
the state sponsor of terrorism requirement qualifies the entire
list of offenses in the second category, “any related criminal
conspiracy, scheme, or other Federal offense.” A modifier may
apply to a list of terms when Congress has employed a
“straightforward, parallel construction that involves all nouns
or verbs in a series.” Facebook, Inc. v. Duguid, 141 S. Ct. 1163,
1169 (2021) (cleaned up). Here, the second category is a list of
parallel offenses, all of which must be “related” to an IEEPA
or TWEA violation. The state sponsor of terrorism qualifier
immediately follows this list of offenses without any offsetting
comma or other punctuation. The qualifying phrase “is
applicable as much to the first as to the last words in [the] list,”
and the offenses “form a single, integrated list.” Lockhart v.
United States, 577 U.S. 347, 355–56 (2016) (cleaned up).
10
Context confirms that the state sponsor of terrorism qualifier
applies to the entire list of offenses in the second category.
For similar reasons, however, the requirement of a nexus
to a state sponsor of terrorism does not extend to the first
category of offenses under IEEPA and TWEA. As already
discussed, the Funding Provision has two distinct categories of
offenses. The state sponsor of terrorism qualifier applies to the
entire second category, but it does not naturally extend back to
the first category of IEEPA and TWEA violations. When faced
with a similarly structured statutory provision, we applied the
relevant “limitation … only to the antecedent group and not to
others” that were “more remote” because Congress separated
them with a “disjunctive ‘or.’” United States v. Pritchett, 470
F.2d 455, 458–60 (D.C. Cir. 1972). Looking to the “plain
wording of the statute” and “context,” we concluded the
separation marked Congress’s treatment of each group as a
“separate class.” Id. at 456, 459–61. Here too, the text and
context indicate the state sponsor of terrorism qualifier applies
only to the immediately antecedent “separate class” of
offenses, namely “any related criminal conspiracy, scheme, or
other Federal offense.” Congress separated the categories with
a disjunctive “or” and set off the second category with the
prepositive modifier “related.” This grammatical structure
supports our interpretation that the Funding Provision sets out
two distinct categories of offenses and that the state sponsor of
terrorism qualifier applies only to the second.
The Funding Provision therefore sweeps all proceeds from
the relatively fixed set of IEEPA and TWEA violations into the
Fund, while limiting the more capacious category of proceeds
from related offenses to only those offenses that have a nexus
to a state sponsor of terrorism.
11
B.
We find the alternative interpretations advanced by the
plaintiffs and the Department unpersuasive because they
cannot be reconciled with the text and grammatical structure of
the Funding Provision.
Plaintiffs maintain the state sponsor of terrorism qualifier
extends exclusively to “other Federal offense.” They rely on
the last antecedent rule, which limits the application of a
qualifying clause to what it “immediately follows.” Lockhart,
577 U.S. at 351 (cleaned up). But like all general rules of
language, the last antecedent rule depends on context and is
“not inexorable.” United States v. Little, 78 F.4th 453, 456
(D.C. Cir. 2023). The Supreme Court has repeatedly cautioned
against mechanically applying the last antecedent rule where,
as here, a “modifying clause appears at the end of a single,
integrated list.” Lockhart, 577 U.S. at 355 (cleaned up).
Plaintiffs’ interpretation is at odds with ordinary grammar
because the state sponsor of terrorism qualifier follows an
integrated list, “any related criminal conspiracy, scheme, or
other Federal offense.” Moreover, we see nothing in the
context of the Funding Provision to support the conclusion that
the state sponsor of terrorism qualifier should attach only to the
last item of the integrated list.
Taking a different approach, the Department contends that
a nexus to a state sponsor of terrorism is required for all
offenses listed in the Funding Provision. The Department’s
overarching argument emphasizes that because the Fund
compensates victims of state sponsored terrorism, money
channeled into the Fund should be linked to criminal offenses
with a nexus to a state sponsor of terrorism. According to the
Department, Congress could not have intended to funnel the
billions in proceeds collected each year from IEEPA violations
12
into the Fund, irrespective of any connection to state sponsored
terrorism. The Department highlights that such proceeds
otherwise would be deposited into different funds that
compensate broader classes of victims, which it maintains is a
more reasonable allocation. But Congress struck a different
balance in the Funding Provision, and our obligation is to
follow the law, not impose an allocation the government finds
more reasonable.
Looking beyond the Funding Provision, the Department
points to other provisions in the VSST Act that demonstrate the
Fund is for the benefit of victims of state sponsored terrorism
and to two specialized provisions linking funding with state
sponsors of terrorism.5 According to the Department, these
distinct statutory requirements imply that all proceeds
deposited into the Fund must stem from a state sponsor of
terrorism. But these provisions unremarkably demonstrate
Congress’s concern with victims of state sponsored terrorism
in a statute that assists victims of state sponsored terrorism.
They reflect the general purposes of the statute but do not
inexorably lead to the conclusion that Congress chose to
compensate these victims only with proceeds from offenses
linked to state sponsors of terrorism. These scattered statutory
provisions cannot justify the Department’s attempt to
superimpose a state sponsor of terrorism requirement where
Congress did not provide for one.
5
See 34 U.S.C. § 20144(e)(2)(B) (channeling proceeds from two
then-pending proceedings involving Iran into the Fund and allowing
certain individuals with judgments in those proceedings to elect to
participate in the Fund in exchange for assigning any interest in the
proceeds from those proceedings to the United States); id.
§ 20144(g) (providing an award to eligible claimants who notify the
Attorney General of funds or property held by a state sponsor of
terrorism that are ultimately forfeited to the United States).
13
The Department also maintains that its interpretation of the
Funding Provision is longstanding, and Congress ratified that
interpretation when it revised the statute in 2019 but left the
Funding Provision’s state sponsor of terrorism qualifier
unchanged. Of course, “the fact that [a] practice is longstanding
cannot render it lawful.” Env’t Def. Fund v. EPA, 124 F.4th 1,
18 (D.C. Cir. 2024).
As for Congress’s purported ratification, the Department’s
argument fails for at least two reasons. First, “[w]here the law
is plain, subsequent reenactment does not constitute an
adoption of a previous administrative construction.” Demarest
v. Manspeaker, 498 U.S. 184, 190 (1991). Congress’s 2019
amendment does not disturb the “plain” scope of the state
sponsor of terrorism qualifier. Second, when there is
“no … evidence to suggest that Congress was even aware of”
an agency’s “interpretive position,” legislative reenactment is
“without significance.” Brown v. Gardner, 513 U.S. 115, 121
(1994) (cleaned up). The Department highlights isolated
reports and internal documents drafted before the reenactment
that reflect its preferred interpretation. See, e.g., VSST Fund,
Report from the Special Master 1 (Jan. 2017),
https://perma.cc/PUF4-KT6B (explaining in a single sentence
overviewing the Fund that “funds are to come from civil and
criminal matters involving prohibited transactions with state
sponsors of terrorism”). Yet the Department points to no
evidence Congress ratified this construction of the state
sponsor of terrorism qualifier. The Department simply fails to
show a “uniform weight of authority” that might justify
applying the reenactment canon. See Antonin Scalia & Bryan
A. Garner, Reading Law: The Interpretation of Legal Texts 323
(2012).
As is often the case when attempting to infer meaning from
legislative inaction, we simply have no idea whether Congress
14
acquiesced in, or was even aware of, the Department’s
interpretation. The Department’s reconstruction of
congressional intent cannot overcome the plain meaning of the
Funding Provision that Congress enacted.
***
In sum, the state sponsor of terrorism qualifier applies to
“any related criminal conspiracy, scheme, or other Federal
offense,” but not to IEEPA and TWEA violations. Proceeds
from IEEPA and TWEA violations must be deposited into the
Fund, irrespective of whether those violations have a nexus to
a state sponsor of terrorism. By contrast, proceeds from a
“related criminal conspiracy, scheme, or other Federal offense”
must go into the Fund only when the offense “aris[es] from the
actions of, or doing business with or acting on behalf of, a state
sponsor of terrorism.”
IV.
Having determined which offenses require a nexus to a
state sponsor of terrorism, we next consider whether the
Department’s allocation of the BAT proceeds comports with
the statute. To answer this question, we must further interpret
the Funding Provision and apply it to the particular offenses
charged against BAT.
A.
First, BAT was charged with a conspiracy to violate the
IEEPA sanctions on KKBC and other North Korean entities.
IEEPA makes it “unlawful for a person to violate, attempt to
violate, conspire to violate, or cause a violation of any license,
order, regulation, or prohibition issued under this chapter.” 50
U.S.C. § 1705(a) (emphasis added). The Funding Provision
mirrors this language, requiring the deposit of proceeds that
15
“aris[e] from a violation of any license, order, regulation, or
prohibition issued under [IEEPA].” 34 U.S.C.
§ 20144(e)(2)(A)(i). The conspiracy to violate IEEPA
sanctions was charged under IEEPA (section 1705(a)) and
therefore is a violation of IEEPA that falls within the first
category of offenses in the Funding Provision.
We disagree with the Department’s assertion that this
IEEPA conspiracy is only a conspiracy “related” to IEEPA and
therefore must have a nexus to a state sponsor of terrorism.
BAT was charged under section 1705(a) for violations of an
IEEPA sanctions order. The IEEPA conspiracy commenced on
or shortly after August 11, 2009, the date when the Department
of Treasury sanctioned KKBC under Executive Order 13382,
which was issued in part under IEEPA.6 See 74 Fed. Reg. at
41782. The conspiracy is plainly “a violation of” an
“order … issued under [IEEPA].” 34 U.S.C.
§ 20144(e)(2)(A)(i). Irrespective of any connection to a state
sponsor of terrorism, all proceeds from BAT’s IEEPA
conspiracy must go into the Fund.
B.
Second, we consider the proceeds from BAT’s bank fraud
conspiracy. We agree with the parties that the bank fraud
conspiracy is “related” to sanctions issued under IEEPA and
TWEA against North Korea.7 It is therefore a “related criminal
6
Executive Order 13382 prohibits not only direct transactions with
the designated entities, but also “[a]ny conspiracy formed to violate
the prohibitions set forth in [the] order.” 70 Fed. Reg. 38567, 38568
(July 1, 2005).
7
The record demonstrates that the charged bank fraud conspiracy
was sufficiently connected to IEEPA and TWEA sanctions to qualify
as a “related” criminal conspiracy eligible for deposit into the Fund.
See Related, Black’s Law Dictionary (12th ed. 2024) (“Connected in
16
conspiracy, scheme, or other Federal offense” and is subject to
the state sponsor of terrorism qualifier. 34 U.S.C.
§ 20144(e)(2)(A)(i). Whether the proceeds from BAT’s bank
fraud conspiracy must go into the Fund hinges on what it means
for a conspiracy to “aris[e] from … doing business with … a
state sponsor of terrorism.” Id.
The Department allocated the bank fraud proceeds by
treating the conspiracy as a series of transactions and only
depositing into the Fund proceeds from transactions that
occurred while North Korea was designated as a state sponsor
of terrorism. The conspiracy ran from at least 2007 to 2017, but
North Korea’s designation as a state sponsor of terrorism was
rescinded in 2008. The Department allocated 8.6 percent of the
bank fraud proceeds to the Fund, corresponding to the share of
fraudulent transactions that occurred while North Korea was
designated. The district court upheld the Department’s
transaction-focused construction, reasoning that the statute
focuses on when the “defendant in the federal enforcement
action ‘d[id] business with’ or ‘act[ed] on behalf of’” the
relevant state sponsor of terrorism. Englehardt v. Garland, 759
F. Supp. 3d 112, 119 (D.D.C. 2024) (quoting 34 U.S.C.
§ 20144(e)(2)(A)(i)). In the district court’s view, even though
a conspiracy is ongoing, only those proceeds tracing to
“unlawful conduct” that occurred while the state was
designated must be deposited into the Fund. Id. at 119–20.
some way; having relationship to or with something else”). BAT
conspired to evade sanctions issued against North Korea under
IEEPA and TWEA. BAT’s bank fraud conspiracy caused U.S.
financial institutions to process transactions on behalf of North
Korean entities in violation of these same sanctions. The bank fraud
conspiracy is therefore related to IEEPA and TWEA violations.
17
We disagree. When a conspiracy originates with a state
sponsor of terrorism, the entire conspiracy “arises from” doing
business with a state sponsor of terrorism and all of its proceeds
must go into the Fund.
To begin with, the Funding Provision focuses on the
proceeds from particular offenses, not individual transactions
underlying those offenses. The second category of the
Provision covers a “related criminal conspiracy, scheme, or
other Federal offense.” Both “criminal conspiracy” and “other
Federal offense” refer to a singular offense, rather than any
transactions that might underlie the offense. Cf. Iannelli v.
United States, 420 U.S. 770, 777 (1975) (“Conspiracy is an
inchoate offense, the essence of which is an agreement to
commit an unlawful act.”) (emphasis added). Conspiracy
carries with it a rich common law history, and “basic principles
of statutory construction require us to assume that Congress
meant to incorporate the cluster of ideas attached to the
common-law term it adopted.” Microsoft Corp. v. I4I Ltd.
P’ship, 564 U.S. 91, 103 (2011) (cleaned up). That a
conspiracy may be ongoing is fundamental to the cluster of
ideas attached to a conspiracy. Cf. United States v. Kissel, 218
U.S. 601, 608 (1910) (observing that conspiracy “may have
continuation in time”). A conspiracy is a single offense that
may encompass multiple unlawful transactions, but the
Funding Provision does not refer to unlawful acts or
transactions. When the “related” offense is a conspiracy, we
must consider whether that singular offense has a nexus to a
state sponsor of terrorism, not whether the transactions
undertaken as part of the conspiracy have such a nexus.
The surrounding context in the VSST Act also supports
this interpretation, because other provisions of the statute turn
on “acts” of terrorism. For instance, to recover from the Fund,
claimants must hold “a final judgment” that was
18
“issued … against a foreign state that was designated as a state
sponsor of terrorism at the time the acts [of international
terrorism] occurred or was so designated as a result of such
acts.” 34 U.S.C. § 20144(c)(2)(A)(i). By contrast, the Funding
Provision does not refer to criminal “acts,” let alone
“transactions.” This meaningful variation between two
neighboring statutory provisions supports an interpretation that
distinguishes a criminal “offense” from a transaction or act
involving a state sponsor of terrorism. See Wisconsin Cent. Ltd.
v. United States, 138 S. Ct. 2067, 2071 (2018) (recognizing
presumption that “differences in language … convey
differences in meaning”) (cleaned up). In the Funding
Provision, Congress specified that proceeds from certain
“offense[s]”—namely related conspiracies, schemes, or other
Federal offenses—must be deposited into the Fund.
Applying this interpretation to BAT’s bank fraud
conspiracy, the proceeds from that conspiracy belong in the
Fund if the conspiracy offense “ar[ose] from the actions of, or
doing business with or acting on behalf of, a state sponsor of
terrorism.” 34 U.S.C. § 20144(e)(2)(A)(i) (emphasis added). In
surveying case law interpreting similar statutory language, we
have concluded that the “ordinary understanding” of “arising
from” is to “originate or stem from.” N. Am. Butterfly Assoc. v.
Wolf, 977 F.3d 1244, 1260 (D.C. Cir. 2020) (cleaned up). The
phrase simply “requires a causal connection.” Id. Something
“arises from” an action when it originates or comes into being
due to that action. Arise, Black’s Law Dictionary (12th ed.
2024) (“To originate; to stem (from)”); see also Arise, The
Oxford English Dictionary (2d ed. 1989) (“To spring,
originate, or result from”).
The bank fraud conspiracy has the requisite nexus to a
state sponsor of terrorism because the conspiracy stemmed
from BAT’s business relationship with North Korean state-
19
owned entities while the country was a designated state sponsor
of terrorism. The causal connection is clear: but for BAT’s
business arrangement with those entities there would be no
criminal bank fraud conspiracy in 2007.8 The conspiracy
“originated” or “stemmed” from doing business with North
Korea while it was a state sponsor of terrorism. And the
conspiracy continued after the designation was rescinded. See
Kissel, 218 U.S. at 607 (explaining that a conspiracy to “bring[]
to pass a continuous result” is a single conspiracy, not “a
cinematographic series of distinct conspiracies”). BAT’s bank
fraud conspiracy was a single offense that arose from doing
business with a state sponsor of terrorism. Therefore, all
proceeds from the bank fraud conspiracy must be deposited
into the Fund.
Finally, we reject the Department’s various policy
arguments in favor of its transaction-based approach. The
Department contends that an offense-based interpretation
produces absurd results because Congress could not have
intended to capture proceeds from a criminal conspiracy that
continues after a state sponsor of terrorism designation is
rescinded. We doubt this result is absurd, and in any event we
cannot override the plain meaning of the Funding Provision to
promote the Department’s preferred results. See Soppet v.
Enhanced Recovery Co., 679 F.3d 637, 642 (7th Cir. 2012)
(recognizing absurdity doctrine does not empower judges to
make “substantive changes designed to make the law ‘better’”
when presented with statute that “can be applied as written”).
8
The charging documents state the bank fraud conspiracy
commenced “in at least August 2007” and suggest the conspiracy
may have started earlier. J.A. 145; see J.A. 72–75. In any event, there
is no dispute that North Korea was designated as a state sponsor of
terrorism when the conspiracy began.
20
If the Department favors a different allocation of proceeds for
policy reasons, it may of course direct its concerns to Congress.
The Department also argues an offense-based
interpretation would allow funding determinations to turn on a
prosecutor’s charging decisions, an outcome that Congress
could not have intended. It is true that conspiracies are often
made up of distinct criminal offenses, so a prosecutor’s choice
to charge separate criminal violations, as opposed to a single
conspiracy, could impact which proceeds must be deposited
into the Fund. Such prosecutorial discretion, however, is
simply a feature of our constitutional system, and charging
decisions may have a range of collateral consequences across
our voluminous federal laws. The Department finds such an
outcome untenable, but it is consistent with the Funding
Provision that Congress enacted.
BAT’s bank fraud conspiracy stemmed from its business
relationship with North Korean entities when North Korea was
designated as a state sponsor of terrorism. Because the bank
fraud conspiracy “ar[ose] from … doing business with a state
sponsor of terrorism,” all proceeds from the conspiracy must
be deposited into the Fund.
***
For the foregoing reasons, all proceeds from BAT’s
IEEPA and bank fraud conspiracies must be deposited into the
Fund. We accordingly reverse the district court’s judgment and
remand with instructions to enter summary judgment for
Englehardt and Wade.
So ordered.