UNITED STATES OF AMERICA, Plaintiff-Appellee, v. BING SUN; PATTE SUN; ALL PORTS, INCORPORATED, Defendants-Appellants.
No. 01-4026
UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT
Decided: January 10, 2002
Argued: September 28, 2001
Before MICHAEL and MOTZ, Circuit Judges, and HAMILTON, Senior Circuit Judge.
Affirmed by published opinion. Senior Judge Hamilton wrote the opinion, in which Judge Michael and Judge Motz joined.
COUNSEL
ARGUED: Anthony Francis Troy, TROUTMAN, SANDERS, MAYS & VALENTINE, L.L.P., Richmond, Virginia, for Appellants. Alan Mark Salsbury, Assistant United States Attorney, Norfolk, Virginia, for Appellee. ON BRIEF: James C. Roberts, John S. West, TROUTMAN, SANDERS, MAYS & VALENTINE, L.L.P., Rich-
OPINION
HAMILTON, Senior Circuit Judge:
Following a jury trial, Bing Sun and All Ports, Incorporated (All Ports) were convicted of conspiracy to export defense articles on the United States Munitions List (Munitions List) without a license and conspiracy to commit money laundering in violation of
I
A
The Arms Export Control Act (AECA),
B
When a United States military unit determines that a piece of military property, including an item on the Munitions List, is “obsolete,” in a condition that is “no longer repairable,” or in “excess,” (J.A. 273), the military unit turns the property over to the Defense Reutilization and Marketing Service (DRMS), an agency operated by the Department of Defense. Once the military property is turned over to the DRMS, the DRMS offers it to other military units. If no other military unit is interested, the military property is offered to federal agencies, state agencies, and non-profit organizations. If there are no federal agencies, state agencies, or non-profit organizations interested in the military property, the military property is offered for sale, sometimes labeled as “scrap,” to the general public through a national sales program. (J.A. 273). Often, multiple pieces of military property are offered for sale in “lots.” (J.A. 276).
Through its national sales program, the DRMS issues Invitations for Bid to prospective purchasers. An Invitation for Bid contains a description of the items for sale, the terms and conditions of sale, a bid sheet, and an End Use Certificate.1 The Invitation for Bid also indicates whether a particular lot contains items on the Munitions List. Importantly, even if a particular lot designates the military property as “scrap,” the Invitation for Bid will indicate whether the lot contains items on the Munitions List.
Prospective purchasers of military property are also furnished with a Sale By Reference pamphlet, which states that items on the Munitions List which do not require demilitarization may be sold for “military or other use,” (J.A. 1846), to those foreign countries to which the United States Department of State will issue an export license under the ITAR.2 The Sale By Reference pamphlet also states that the use,
C
Bing and Patte Sun were the primary owners of All Ports, a company headquartered in Fontana, California. The primary business of All Ports was the sale of United States government military property to the People‘s Republic of China. All Ports maintained warehouse facilities in Fontana, Norfolk, Virginia, and San Antonio, Texas.
The duties of operating All Ports were split between Bing and Patte Sun. Bing Sun inspected military property at various military facilities around the country. He prepared bid packages for submission to the DRMS. In addition, Bing Sun set up and oversaw the operation of All Ports’ export facilities. Patte Sun, who was described as a knowledgeable businesswoman, administered the contracts that All Ports had with the DRMS, each one of which, according to the written Invitations for Bid, contained Munitions List items. All contract documents were delivered to All Ports’ office in Fontana, where she worked. Patte Sun prepared the checks in payment of the contracts awarded to All Ports; assisted in the management of All Ports’ warehouse in Fontana; and made shipping arrangements with overseas freight forwarders for the export of the military property.3
On May 7, 1999, without a license, the Suns and All Ports attempted to export, from Norfolk to the People‘s Republic of China, four shipping containers of military “scrap” property purchased from the DRMS.6 These containers were presented for export at the Norfolk International Terminal, where they were detained and subsequently seized by the United States Customs Service. The material in three of these containers included items designated by the State Department as defense articles on the Munitions List, including fourteen twenty-millimeter tail-gun pods for the MK-4, nine twenty-millimeter nose pods for the MK-4, six underwater mines for the MK-60, two missile fins for air launched guided missiles, eight fin assemblies for air launched guided missiles, and thirteen twenty-millimeter gun pod center cylinders for the MK-4.
On May 13, 1999, without a license, the Suns and All Ports attempted to export, from Norfolk to the People‘s Republic of China, two shipping containers of military “scrap” property purchased from the DRMS. These containers were presented for export at the Norfolk International Terminal, where they were detained and subsequently
D
On February 24, 2000, Bing Sun, Patte Sun, and All Ports were charged in a forty-seven count indictment. Count One charged Bing Sun, Patte Sun, and All Ports with conspiracy to export defense articles on the Munitions List without a license and conspiracy to commit money laundering in violation of
Prior to trial, the government withdrew four counts of the indictment. Following a jury trial, with respect to Bing Sun and All Ports, the jury returned guilty verdicts on Counts One, Twenty-Four, and Twenty-Five. With respect to Patte Sun, the jury returned guilty verdicts on Counts Twenty-Four and Twenty-Five. The jury returned verdicts of not guilty on the remaining counts. Bing Sun was sentenced to sixty months’ imprisonment; Patte Sun to forty-one months’ imprisonment; and All Ports to two years’ probation and a $100,000 fine. The district court entered each defendant‘s judgment on December 28, 2000. Each defendant filed a timely appeal.
II
The defendants contend that the AECA and its implementing regulations are constitutionally void for vagueness under the Due Process
“Due process requires that a criminal statute provide adequate notice to a person of ordinary intelligence that his contemplated conduct is illegal, for ‘no man shall be held criminally responsible for conduct which he could not reasonably understand to be proscribed.‘” Buckley v. Valeo, 424 U.S. 1, 77 (1976) (quoting United States v. Harriss, 347 U.S. 612, 617 (1954)). Thus, “the void-for-vagueness doctrine requires that a penal statute define the criminal offense with sufficient definiteness that ordinary people can understand what conduct is prohibited and in a manner that does not encourage arbitrary and discriminatory enforcement.” Kolender v. Lawson, 461 U.S. 352, 357 (1983).
The defendants’ challenge to the AECA and its implementing regulations is reviewed only as the AECA and the implementing regulations were applied to them. Schleifer v. City of Charlottesville, 159 F.3d 843, 853 (4th Cir. 1998). “[V]agueness challenges to statutes which do not involve First Amendment freedoms must be examined in the light of the facts of the case at hand.” United States v. Mazurie, 419 U.S. 544, 550 (1975). The Supreme Court has noted “that the approach to ‘vagueness’ governing a case like this is different from that followed in cases arising under the First Amendment. There we are concerned with the vagueness of the statute ‘on its face’ because such vagueness may in itself deter constitutionally protected and socially desirable conduct.” United States v. Nat‘l Dairy Prods. Corp., 372 U.S. 29, 36 (1963). Moreover, “where, as here, a criminal statute regulates economic activity, it generally ‘is subject to a less strict vagueness test, because its subject matter is more often narrow and because businesses can be expected to consult relevant legislation in advance of action.‘” United States v. Iverson, 162 F.3d 1015, 1021 (9th Cir. 1998) (quoting United States v. Doremus, 888 F.2d 630, 634 (9th Cir. 1989)). “[A] scienter requirement may mitigate a law‘s
We cannot say that the AECA or its implementing regulations are unconstitutionally vague as applied to the defendants. In fact, as applied to the defendants in this case, the statute is rather specific as to what conduct is prohibited: the export and/or the attempted export, without a license, of items on the Munitions List. As such, a person of ordinary intelligence, especially businesspeople as knowledgeable as Bing and Patte Sun, would understand what conduct is illegal. Similarly, law enforcement is not vested with the unrestrained power to arrest anyone exporting or attempting to export, without a license, items listed on the Munitions List. Rather, under the circumstances of this case, the police may only make an arrest under the AECA and its implementing regulations if an individual exports or attempts to export Munitions List items, without a license, with the requisite criminal intent. Not surprisingly, other courts have upheld the constitutionality of the AECA and its implementing regulations against vagueness challenges. See, e.g., Lee, 183 F.3d at 1032-33 (holding that the AECA and its implementing regulations were aimed at a narrow group of persons which included the defendants and that in “the sensitive business of exporting military items, the statute and its implementing regulation more than suffice to put exporters on notice to consult the applicable regulations and, if necessary, contact the appropriate government agency to resolve any perceived ambiguity“); United States v. Gregg, 829 F.2d 1430, 1437 (8th Cir. 1987) (stating that the AECA “is as simple a matter as forbidding a passenger to ride on a train without a valid ticket” and rejecting the argument that the statute, which requires a knowing and willful export of Munitions List items, was unconstitutionally vague in violation of due process); United States v. Swarovski, 592 F.2d 131, 133 (2d Cir. 1979) (predecessor statute prohibiting export of Munitions List items was not unconstitutionally vague, as regulation was aimed at exporters and put them on notice of licensing requirements).
III
At trial, the main thrust of the Suns and All Ports’ defense was that the material the defendants exported and/or attempted to export fell
(g) Interpretation 7: Scrap arms, ammunition, and implements of war. Arms, ammunition, and implements of war, as defined in the U.S. Munitions List, and are under the jurisdiction of the U.S. Department of State, . . . except for the following, which are under the jurisdiction of the Department of Commerce . . . .
(3) Other commodities that may have been on the U.S. Munitions List are “scrap,” and therefore under the jurisdiction of the Department of Commerce, if they have been rendered useless beyond the possibility of restoration to their original identity only by means of mangling, crushing, or cutting. When in doubt as to whether a commodity covered by the Munitions List has been rendered useless, exporters should consult the Office of Defense Trade Controls, . . . or the Exporter Counseling Division, . . . before reporting a shipment as metal scrap.
Even though
Now, ladies and gentlemen, there has been some reference to the Department of Commerce in this case and demilitarization in this case. Title 15, Part 770.2, Section (g)(3) of the Federal Code of Regulations states, in part, that “commodi-
ties that may have been on the United States munitions list are scrap and, therefore, under the jurisdiction of the Department of Commerce, if they have been rendered useless beyond the possibility of restoration to their original identity only by means of mangling, crushing or cutting.” This section means that if any item that may have been on the munitions list has been rendered useless beyond the possibility of restoration to its original identity by means of mangling, cutting, or crushing, it may be exported without a license or written authorization from the Department of State. If, on the other hand, that item that may have been on the munitions list has not been rendered useless beyond the possibility of restoration to its original identity by means of mangling, crushing, or cutting, it may not be exported without a license or a written authorization from the State Department.
The defendants contend that items which they purchased that may have been on the munitions list were rendered useless beyond the possibility of restoration to their original identity by means of mangling, crushing or cutting and, therefore, could be exported without a license or a written authorization from the State Department . . . .
If you find and accept as true the evidence in support of this contention and theory and believe the defendants’ defense theory, and this defense leaves you with a reasonable doubt as to whether the government has proved beyond a reasonable doubt each and every element of the crimes charged . . . then you must find the defendants not guilty.
(J.A. 1490-91).
The defendants raise two arguments concerning
First, the defendants contend that
Like the AECA and its implementing regulations,
Second, the defendants contend that the jury should have been instructed that the “scrap exception” was an element of their AECA The district court‘s instruction is similar to the one upheld in United States v. Durrani, 835 F.2d 410 (2d Cir. 1987). In that case, the defendant was found guilty of exporting and attempting to export Munitions List items without a license in violation of the AECA. Id. at 413. In his defense, he relied on the official use and foreign assistance exceptions set forth in the AECA. Id. 419-22 (discussing Like Durrani, the “scrap exemption” theory advanced by the Suns and All Ports is an affirmative defense, not an element of a charge under the AECA. To be sure, if the official use exception, which is part of the AECA, is an affirmative defense to a charge under the AECA, then the “scrap exemption” must likewise be an affirmative defense. Furthermore, in this case, the district court correctly instructed the jury on the defendants’ affirmative defense and cautioned the jury that the government had the burden to prove the defendants’ guilt by proof beyond a reasonable doubt and that the government‘s burden of proof never shifted to the defendants. Patte Sun challenges the sufficiency of the evidence supporting her convictions for attempting to export defense articles on the Munitions A jury‘s verdict must be upheld on appeal if there is substantial evidence in the record to support it. Glasser v. United States, 315 U.S. 60, 80 (1942). In determining whether the evidence in the record is substantial, we view the evidence in the light most favorable to the government and inquire whether there is evidence that a reasonable finder of fact could accept as adequate and sufficient to support a conclusion of a defendant‘s guilt beyond a reasonable doubt. United States v. Burgos, 94 F.3d 849, 862 (4th Cir. 1996) (en banc). In evaluating the sufficiency of the evidence, we do not review the credibility of the witnesses and assume the jury resolved all contradictions in the testimony in favor of the government. United States v. Romer, 148 F.3d 359, 364 (4th Cir. 1998). The evidence in the record is more than sufficient to support Patte Sun‘s convictions for attempting to export defense articles on the Munitions List without a license. The evidence shows that Patte Sun was one of the primary operators of All Ports, which became a DRMS customer having the largest number of active contracts. She was familiar with DRMS sales procedures, and the evidence also shows that she was aware of export licensing requirements and falsely told the owner of one of the overseas freight forwarders used by the defendants that All Ports does not “send any military scrap to foreign countries.” (J.A. 495). Patte Sun also signed two of the End Use Certificates which put exporters on notice of export licensing restrictions and listed the People‘s Republic of China as a prohibited country. All Ports also received a Sale by Reference pamphlet which spelled out the applicable federal laws governing the export of Munitions List items. Patte Sun also administered the contracts that All Ports had with the DRMS, each one of which, according to the written Invitations for Bid, contained Munitions List items. All contract documents were delivered to All Ports’ office in Fontana, where she worked. In fact, she wrote the checks in payment for the DRMS contracts. Also, Patte Sun made most, if not all, of the shipping arrangements from the Norfolk International Terminal to the People‘s Republic of China. Finally, material in some of the containers which From the evidence described above, the jury was entitled to find beyond a reasonable doubt that Patte Sun knowingly and willfully attempted to export defense articles on the Munitions List without a license, Bing Sun argues that the district court erred when it enhanced his offense level by two levels for obstruction of justice. U.S. Sentencing Guidelines Manual (USSG) § 3C1.1. We disagree. We review an application of the Sentencing Guidelines by the district court for clear error in factual matters; legal conclusions are reviewed de novo. United States v. Wilson, 198 F.3d 467, 471 (4th Cir. 1999), cert. denied, 529 U.S. 1076 (2000). Section 3C1.1 of the Sentencing Guidelines directs a sentencing court to increase a defendant‘s offense level by two levels if the defendant “willfully obstructed or impeded . . . the administration of justice during the course of the investigation, prosecution, or sentencing of the instant offense of conviction.” USSG § 3C1.1. If the defendant commits or suborns perjury, the obstruction of justice enhancement must be applied. At trial, Bing Sun testified that he believed a license was not required because the military property being exported was merely military scrap. He further claimed that he relied on the advice of an attorney as well as an unidentified State Department official who purportedly told his daughter that an export license was not required for his shipments. Bing Sun also denied that the reason he had failed to list the People‘s Republic of China in any of the numerous End Use Certificates he completed was because he knew that, if he did so, All Ports would not have been awarded the contracts it sought from the DRMS. The district court found that Bing Sun made numerous materially false statements with the willful intent to deceive the district court. The district court found that Bing Sun lied when, among other instances, he: (1) testified that he relied on the advice of counsel; (2) testified that he relied on the advice a State Department official had allegedly given his daughter; and (3) denied that the reason he had failed to list the People‘s Republic of China in any of the numerous End Use Certificates he completed was because he knew that, if he did so, All Ports would not have been awarded the contracts it sought from the DRMS. In the district court‘s view, “an attempt was made, looking at the entire record, to deceive the court about what he knew, when he knew it, and what his intent was with respect to these shipments.” (J.A. 1563). We cannot conclude that the district court erred when it found that Bing Sun committed perjury at trial. First, we cannot take issue with the district court‘s finding that Bing Sun testified falsely when he: (1) testified that he relied on the advice of counsel; (2) testified that he relied on the advice a State Department official had allegedly given his daughter; and (3) denied that the reason he had failed to list the People‘s Republic of China in any of the numerous End Use Certificates he completed was because he knew that, if he did so, All Ports would not have been awarded the contracts it sought from the DRMS. For the reasons stated herein, the judgments of the district court are affirmed. AFFIRMEDIV
V
VI