615 F.2d 441 (7th Cir. 1980), 79-1584, United States v. Beck
|Citation:||615 F.2d 441|
|Party Name:||UNITED STATES of America, Plaintiff-Appellant, v. Richard BECK, Defendant-Appellee.|
|Case Date:||February 04, 1980|
|Court:||United States Courts of Appeals, Court of Appeals for the Seventh Circuit|
Argued Dec. 5, 1979.
[Copyrighted Material Omitted]
Nan R. Nolan, Federal Defender Program, Chicago, Ill., for defendant-appellee.
Thomas P. Sullivan, U. S. Atty., Scott F. Turow and William J. Cook, Asst. U. S. Attys., Chicago, Ill., for plaintiff-appellant.
Before PELL, BAUER and WOOD, Circuit Judges.
BAUER, Circuit Judge.
Defendant-appellee Richard Beck was found guilty by a jury of one count of aiding and abetting the illegal export of arms in violation of 22 U.S.C. § 2778, 22 C.F.R. § 127.01, and 18 U.S.C. § 2, and five counts of aiding and abetting the filing of false customs export declarations in violation of 18 U.S.C. § 1001, 22 C.F.R. § 127.02 and 18 U.S.C. § 2. He was acquitted of a conspiracy count. After the return of the verdicts and discharge of the jury, the trial court denied all pending defense motions, and set a date for sentencing and ruling on post-trial motions.
On May 29, 1979, six weeks after the verdict, the trial court granted the defendant's post-trial motion for a judgment of acquittal. On May 31, 1979, the court denied the Government's motion for reconsideration of the judgment of acquittal.
The Government appeals 1 the trial court's ruling on several grounds. It asserts first that the trial court applied the wrong standard for ruling on a motion for acquittal; second, that the ruling was based on improper considerations; and third, that the evidence was sufficient to support the verdict. The Government also urges us to reassign the case to another district judge for sentencing in the event of a reversal.
Because we believe that the evidence was sufficient to sustain the jury's verdict as to each of the counts upon which the defendant was convicted, we reverse.
The commercial export of arms and ammunition from the United States is governed by the Arms Export Control Act, 22 U.S.C. § 2778, and the International Traffic in Arms Regulations (ITAR), 22 C.F.R. §§ 121-30. Persons desiring to export arms from the United States must first register with the State Department's Office of Munitions Control (OMC) and then obtain individual export licenses for each shipment of arms abroad. 22 C.F.R. §§ 122, 123.
Licenses for specific shipments are granted or withheld by the OMC on the basis of a number of considerations, principally the foreign policy of the United States toward the country of the arms' destination. 22 C.F.R. § 123.05. Since 1963, the United States, as a matter of its foreign policy, has prohibited the commercial sale of arms to the Republic of South Africa. 2
Richard Beck, a South African citizen, owned and operated an importing business with a partner, Roland Whiteing. 3 The business, as described by Beck, imported sporting goods, firearms, photographic equipment and radio equipment.
In April 1977, Whiteing contacted Seymour Freilich, the main operating officer of Concealable Body Armour of America (CBA), a police equipment distributor in Detroit. 4 Freilich indicated that he was willing to supply Beck with a variety of munitions. CBA was an OMC registrant, but had never applied for any arms export licenses.
Beck wrote to Freilich after Whiteing returned to South Africa. Beck's first letter of April 25, 1977 outlined what became the framework for his future arrangements with Freilich and detailed the shipping, labelling and means of payment for each shipment. Beck requested that his orders be filled in small parcels (only two or three guns to a package) in order "to make it less conspicuous from your side and also have a less chance of being confiscated en route." Beck stated that payment would be by international letter of credit. He wrote:
We will describe the goods in our Letter of Credit to your Bank as "Sporting Goods" if this does not suit you, please advise us as soon as possible as to the description you would prefer.
The means of payment is significant in this case because the seller cannot receive payment under a letter of credit unless his shipping documents including airway bills, commercial invoices, and export declarations match perfectly with the buyer's terms in the letter of credit. Beck's choice of the term "sporting goods" in his letter of credit bound Freilich to use that term in his documents if he expected payment. On
cross-examination, Beck admitted that he understood the requirements of letter of credit transactions.
At the same time, Beck asked Freilich to send a separate invoice by mail listing all firearms by serial numbers for use by Beck's customs clearing agent, Freight Services. The import of American weapons into South Africa is legal under South African law; South African customs law is, however, quite strict. In order to clear through customs, Freight Services had to demonstrate that the weapons' serial numbers corresponded with invoices.
A series of letters followed, detailing orders by Beck to Freilich for various munitions. 5 Several shipments were made pursuant to the international letters of credit established by Beck. In each case, CBA usually Freilich personally delivered the goods directly to the air freight forwarding company. The air freight company then prepared certain shipping documents based on the information Freilich provided.
Among the documents prepared were United States Customs Export Declarations, which inform the Customs Service of the contents, ultimate consignee and ultimate destination of export shipments. Freilich told each air freight forwarding company to label the cartons as sporting goods. An employee of the forwarding company then looked to the United States Commodity Schedule B and picked the number corresponding to that description. The CBA cartons were designated number 735.1500, which covers underwater breathing devices and game, sport, gymnastic, athletic or playground equipment. This designation was repeated on every CBA shipment.
On October 27, 1977, President Carter announced at a news conference that the United States would support a mandatory arms embargo against the Republic of South Africa to be instituted by all countries of the United Nations. The President said that the United States would intensify its existing embargo on South Africa arms sales by extending the embargo beyond firearms to include a number of categories of police and military equipment and by forbidding the sale of spare weapons parts. While the Carter announcement did not alter the existing U.S. ban on arms sales to South Africa, it focused considerable public attention on United States arms policy toward South Africa both here and in that country. As a measure of the widespread attention the Carter announcement received in South Africa, clippings were introduced at trial from three South African papers showing that the United Nations embargo, the Carter announcement and related events had provoked extensive most often front page coverage every day from October 26 through November 1.
On November 1, four days after the Carter announcement, Beck wrote Freilich with a new order. His letter opened:
It is very sad that our mutual friend Mr. Carter is making our business as difficult as possible but I am sure we will circumvent his best intentions somehow.
Starting with the very next shipment on November 19, 1977, letters of credit were abandoned as the means of payment in favor of international wire transfers. A wire transfer is a direct movement of funds from buyer to seller. Unlike a letter of credit, payment by these means gives no indication to the various bank intermediaries of any details destination, purchaser, nature of goods involved in the underlying transaction.
While the November 19 shipment was sent directly to South Africa, the next shipment on November 23 was sent to a "Werner Saneli (sic), Gondrand Bros., Ltd., Schoneggstrasse # 5, 8021 Zurich, Switzerland." Werner Sameli is the air freight manager of Gondrand Bros., a Swiss customs brokerage
firm. 6 Shipping documents reflected Zurich to be the ultimate destination.
The November 23 shipment was preceded in Switzerland by a telex from South Africa sent to Sameli's attention from John Buckley-Jones of Freight Services, which acted as Beck's shipping agent in South Africa and which was the South African affiliate of Gondrand Bros. The telex, dated November 24, informed Sameli that a shipment addressed to him was on its way from the United States. The telex gave the airway bill number and requested that the shipment, identified as sporting goods, be transshipped to Freight Services in South Africa.
As Jones requested, Gondrand Bros. sent the goods on to South Africa on November 29. A wire transfer for the value of the shipment and shipping costs to Zurich was sent to CBA by Aimcom the same day.
On December 28, 1977, Beck sent Freilich an extensive order. On January 23, 1978, CBA packed 140 weapons and 5,000 rounds of ammunition in ten cartons. On January 25 Freilich delivered the cartons, along with seventeen cartons of flashlights, to Pandair, his new freight forwarding company. The five shipper's export declarations, prepared at Freilich's direction, described the commodities as 27 cartons of "Sporting Equipment" with Schedule B Commodity Number 735.1500 listed on the form.
Subsequently, the shipment was sent on an American Airlines flight to Chicago, where the boxes were to be transferred to a Swissair flight to Zurich. Buckley-Jones then sent several cables to Sameli again detailing the airway bill numbers and transshipment instructions.
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