Khatskevich v. Shapiro

Background

Yevgeniya Khatskevich sued Len Shapiro and Allen E. Kaye under the Trafficking Victims Protection Reauthorization Act (TVPRA). She alleges that Adam H. Victor operated a group of businesses and used threats, immigration-related pressure, withheld compensation, and sexual abuse to force her to work. According to the amended complaint, Shapiro functioned as Victor’s day-to-day manager and helped prepare a fraudulent H-1B visa application that described Khatskevich as an organizational psychologist, even though she allegedly did not have that role or the necessary qualifications.

Khatskevich alleges that Shapiro helped generate information for the visa application and draft its narrative materials, including a letter to U.S. Citizenship and Immigration Services. She also alleges that Victor used the pending visa application to threaten and control her. Around the time of Shapiro’s work on the application, Victor allegedly arranged financial benefits for Shapiro, including a consulting agreement between Shapiro’s company, Energy Resources Group, Inc., and Manhattan Place Condominium. The agreement called for monthly payments and allegedly continued into 2018.

Khatskevich asserted a claim under 18 U.S.C. § 1589(b), which permits a civil claim against someone who knowingly benefits from participating in a venture that obtains labor through prohibited means. She also asserted a conspiracy claim under 18 U.S.C. § 1594(b). Shapiro moved under Federal Rule of Civil Procedure 12(b)(6) to dismiss the claims against him for failure to state a claim.

Documents Considered on the Motion

On a Rule 12(b)(6) motion, the court generally considers the complaint and certain documents attached to, incorporated into, or integral to it, while accepting well-pleaded factual allegations as true and drawing reasonable inferences for the plaintiff. Judge Failla ruled that the court could consider the state-court complaints incorporated into Khatskevich’s amended complaint, the consulting agreement because it was central to her allegations, and the visa application and accompanying letter because the amended complaint relied heavily on them.

The court could take judicial notice of certain public records, including a state-court decision and government website materials, but only to establish that those documents existed or what they said—not to accept the truth of disputed facts stated in them. The court declined to consider deposition testimony from the earlier state-court litigation because the amended complaint did not make that testimony integral to the claims; merely quoting or mentioning part of a deposition was not enough.

Analysis of the TVPRA Claims

The court held that Khatskevich plausibly alleged Shapiro’s knowing or reckless participation in the alleged trafficking venture. The allegations that Shapiro helped prepare a fraudulent visa application, assisted with the letter to immigration officials, knew or should have known about inaccuracies in the materials, and understood that Victor intended to use the application to control Khatskevich were sufficient at the motion-to-dismiss stage.

The court also held that Khatskevich plausibly alleged that Shapiro knowingly benefited from the venture. The alleged timing of the consulting agreement—shortly after Shapiro’s work on the visa application—together with the allegations that Victor controlled or influenced Manhattan Place Condominium, supported a reasonable inference that the consulting contract was provided because of Shapiro’s participation. The court rejected Shapiro’s argument that the agreement’s stated engineering and project-administration purposes conclusively disproved that connection.

The court further held that collateral estoppel, a rule that can prevent relitigation of an issue already finally decided, did not bar Khatskevich’s claim. A later state-court decision had reinstated a claim against Manhattan Place Condominium and found an issue of fact about whether Victor dominated the condominium. Therefore, the court concluded that there was no final determination establishing that the consulting agreement was unrelated to Victor’s alleged conduct.

Khatskevich’s conspiracy claim also survived. The court explained that she did not need to plead an explicit written or verbal agreement. It was enough at this stage to allege facts plausibly showing that Shapiro, Kaye, and Victor entered a joint enterprise with awareness of its general nature and extent. The allegations that they worked together on a fraudulent visa application intended to keep Khatskevich in the United States and under Victor’s control met that standard.

Statute of Limitations

The TVPRA generally requires a civil claim to be filed within ten years after it arises. Because Khatskevich filed her initial complaint on October 18, 2023, the relevant period extended back to October 18, 2013. The court acknowledged that the visa application and consulting agreement began in March or April 2013, before that period.

The court nevertheless found the claims timely at this stage because the consulting agreement allegedly continued into 2018 and provided for monthly payments. Drawing inferences for Khatskevich, the court found it plausible that Shapiro continued receiving a benefit from the alleged scheme during the limitations period. The court did not decide whether the continuing-violation doctrine applied.

Required Party Argument

Shapiro argued that Victor had to be joined under Rule 19 of the Federal Rules of Civil Procedure. The court rejected that argument. The TVPRA permits claims against participants and beneficiaries without requiring the primary alleged trafficker to be joined, so the court could provide complete relief among the existing parties. The court also found no sufficient showing that Victor’s interests would be impaired or that his absence would create inconsistent obligations.

Disposition

Judge Katherine Polk Failla denied Shapiro’s motion to dismiss the amended complaint in full. The clerk was directed to terminate the motion. The parties were ordered to meet and submit a case-management plan, and Khatskevich was directed to inform the court about her intentions regarding Kaye, who had not appeared in the action. The denial allows the claims against Shapiro to continue; it does not determine liability or resolve the factual disputes on the merits.