U.S. v. Murray

• Decision Date: 15 May 1980
• Docket Number: No. 79-1477,79-1477
• Citation: 621 F.2d 1163
• Parties: UNITED STATES of America, Appellee, v. John E. MURRAY, Jr., Defendant-Appellant.
• Court: U.S. Court of Appeals — First Circuit

Page 1163

621 F.2d 1163

UNITED STATES of America, Appellee, v. John E. MURRAY, Jr., Defendant-Appellant.

No. 79-1477.

United States Court of Appeals, First Circuit.

Argued March 11, 1980.

Decided May 15, 1980.

Steven J. Brooks, Boston, Mass., with whom John C. Foskett and Glass & Brooks Kevin J. O'Dea, Asst. U. S. Atty., Boston, Mass., with whom Edward F. Harrington, U. S. Atty., Boston, Mass., was on brief, for appellee.

Boston, Mass., were on brief for defendant-appellant.

Before COFFIN, Chief Judge, BOWNES, Circuit Judge, WYZANSKI, Senior District Judge. ^*

WYZANSKI, Senior District Judge:

Defendant John Murray, Jr. was convicted, after a jury trial, upon one count charging him with conspiracy in violation of 18 U.S.C. § 371 and upon twenty-one counts charging him with having willfully and knowingly introduced into the United States imported glue by means of false statements in violation of 18 U.S.C. § 542. The district judge imposed a sentence of 2 years 6 months to be served, the balance to be suspended and a fine of $20,000.

On his appeal to this court defendant states that the issues are (1) whether the sub-term "substantial transformation" used in 19 C.F.R. § 134.1(b) is "unconstitutionally vague," (2) whether the district judge in his instructions to the jury adequately defined that sub-term, (3) whether the district judge erroneously refused to permit cross-examination of a government witness as to his motives, and (4) whether the district judge erroneously denied defendant's motion for acquittal.

The gist ¹ of the allegations of count 1 is that, in violation of 18 U.S.C. § 371, defendant Counts 2 through 22 ² each charged that on a specified day defendant Murray and others did willfully enter glue into the commerce of the United States by means of false statements and by false and fraudulent invoices and declarations. Inasmuch as, except for dates and numbers, counts 2 through 22 were identical, it will suffice if we quote count 2 in the margin. ³

Murray and others conspired (1) to defraud the United States Customs Service by obstructing it in its lawful function of efficiently administering the customs laws, in violation of 18 U.S.C. § 371, (2) to knowingly and intentionally cause to be entered into the commerce of the United States merchandise by means of false statements, in violation of 18 U.S.C. § 542, and (3) to knowingly and willfully conceal and destroy papers relating to said merchandise for the purpose of suppressing evidence of fraud against the United States Customs Service, in violation of 18 U.S.C. § 551. The count also alleges that in furtherance of this single conspiracy Murray and the other conspirators caused the commission of thirty overt acts.

The evidence, viewed as it should be when the issue is whether the evidence is sufficient to support a conviction, (see Ingram v. United States, 360 U.S. 672, 678, 79 S.Ct. 1314, 1319, 3 L.Ed.2d 1503 (1959); United States v. Zozlio, 617 F.2d 314, at 315 (1st Cir. 1980); and United States v. Indelicato, 611 F.2d 376, at 384 (1st Cir. 1979)) in the light most favorable to the government, was to the following effect.

Nicholson and Company (hereinafter "Nicholson") of Cambridge, Massachusetts is an importer of animal glue. During 1972-1975 defendant John Murray, Jr. was its vice president and chief executive officer; John Murray, Sr., an elderly, ill man, was its president; and Stephen Hopkins was a vice president who was in charge of daily operations when defendant was absent.

N. V. Lijmfabriek C. Trommelen (hereinafter "Trommelen") of Dongen, Holland was a dealer and manufacturer of glue. Trommelen's chief operating officer was Bas Trommelen.

Defendant in May, 1972 agreed with his father, Hopkins, and Bas Trommelen upon a plan for Nicholson to purchase Chinese glue abroad from English and German brokers, to have that glue shipped to Trommelen at Rotterdam, and to have Trommelen take that glue to its Dutch factory to rebag the glue, and to re-export it as though it were made in Holland and as though it were sold by Trommelen to Nicholson.

In carrying out the scheme, Nicholson prepared in Cambridge purchase orders for Chinese glue and sent them to English and German glue brokers outside the United States. Those foreign brokers bought the glue in China and shipped it to Rotterdam. From there Trommelen trucked the glue to its factory in Dongen, Holland where Trommelen rebagged the glue. After the glue arrived in Rotterdam, Nicholson purported to sell the glue to Trommelen for prices lower than Nicholson paid its English and German brokers. After Trommelen had rebagged the glue, Trommelen purported to re-sell it to Nicholson for the same price Trommelen had originally paid Nicholson, plus charges for (1) the trucking in Holland, (2) the rebagging at Trommelen's factory, and (3) Trommelen's loss of interest on the money it paid Nicholson which Nicholson later repaid Trommelen.

Nicholson paid to Bas Trommelen individually for his part in the transactions a special commission on each shipment of glue.

When Trommelen's shipment of glue to Nicholson reached the United States Nicholson, through its custom broker, presented to the United States Customs Service the documents showing the purchases of glue from Trommelen, and filled in and delivered to the Service its Form 5515, "Special Customs Invoice" and its Form 7501-B, "Consumption Entry," ⁴ so as to show that (1) Holland was "the Country of Origin" of the merchandise and (2) the "Entered Value in United States Dollars" was an amount based upon the price which Nicholson paid Trommelen on the resale of the glue by Trommelen to Nicholson, but not taking into account the special commission which Nicholson paid Trommelen individually for his part in the preceding transaction.

With an intent to defraud the Customs Service, Nicholson concealed from the Service all documents or other information with respect to its purchases in China through its English and German brokers of the very glue which it was importing.

Defendant Murray personally directed or participated in all of the above acts of Nicholson, its custom brokers, and its other agents.

When defendant Murray became concerned that the Customs Service was on the trail of the fraudulent scheme with respect to the glue he sent to Bas Trommelen this message:

"Whatever needs to be done to defend yourself against whatever charges Customs may make, we advise you to do, even if it means preparing a set of duplicate books or whatever."

Responding to defendant Murray's statement of the issues he seeks to raise on this appeal, we first consider whether, as applied to the facts in this case, the definition of "Country of Origin" set forth in 19 C.F.R. § 134.1(b) was vague.

So far as relevant, 19 C.F.R. § 134 provided:

§ 134.0 Scope.

This part sets forth regulations implementing the country of origin marking requirements and exceptions of section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), together with certain marking provisions of the Tariff Schedules of the United States (19 U.S.C. 1202). It also contains provisions regarding false or misleading markings as to the country of origin. The consequences and procedures to be followed when articles are not legally marked are also set forth. Special marking and labeling requirements are covered elsewhere.

§ 134.1 Definitions.

When used in this part, the following terms shall have the meaning indicated:

(b) Country of origin. "Country of origin" means the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the "country of We perceive nothing vague in the sub-term "substantial transformation" as used in the 19 C.F.R. § 134.1(b) definition ⁵ of the basic term "country of origin," and as applied to the facts in this case. Our analysis of that basic term and the sub-term follow. ⁶

origin" within the meaning of this part. (Emphasis added)

The term "country of origin" and the sub-term "substantial transformation" appear in a regulation which has the declared purpose of "implementing . . . the Tariff Act of 1930 as amended (19 U.S.C. (s) 1304) and the Tariff Schedules of the United States (19 U.S.C. (s) 1202)." That act and those schedules impose a duty on each imported article at a rate determined according to the article's "country of origin." Were there no definition of that basic term it would be clear enough; the term would have its ordinary meaning; it would mean the country where the first manufacture, production, or growth of an imported article occurred; it would leave aside as totally irrelevant any subsequent country where the article had been processed or from which it had been exported to the United States. One purpose of the definition set forth in 19 C.F.R. 134.1(b) is, as the opening sentence of that sub-section reveals, to retain that ordinary meaning of "country of origin" as being in the generality of cases the appropriate key to the applicable rate set forth in the tariff schedules.

Another purpose of the definition is, as the closing sentence of that sub- section reveals, to cover the exceptional cases where "work or material (has been) added to an (imported) article in another country." The closing sentence of the subsection is necessarily premised on the proposition that in the case of some, but not all, imports originating in one country and processed in a second country, it would be appropriate to make applicable the rate of the second country. Without expressly so stating, the regulation has the obvious purpose of making applicable the second country's rate when and only when the contribution of the second country to the value of the imported article was of great significance compared to the contribution of the first country. We can discern no other...