United States v. Nguyen, 13–1455.

Decision Date15 July 2014
Docket NumberNo. 13–1455.,13–1455.
PartiesUNITED STATES of America, Plaintiff–Appellee v. TANG (JANNY) NGUYEN, Defendant–Appellant.
CourtU.S. Court of Appeals — Eighth Circuit

OPINION TEXT STARTS HERE

Chad Douglas Primmer, argued, Council Bluffs, IA, for PlaintiffAppellee.

William W. Mickle, II, argued, AUSA, Lincoln, NE, for DefendantAppellant.

Before LOKEN, BYE, and BENTON, Circuit Judges.

LOKEN, Circuit Judge.

Tang (Janny) Nguyen and five others were charged with various offenses after they imported from Vietnam and sold in Nebraska thousands of cigarettes without paying pertinent federal, state, and local taxes. The most culpable defendants pleaded guilty and agreed to cooperate. The case went to trial against Ms. Nguyen and a codefendant, who was acquitted by the jury of all charges.

The multi-count indictment charged Ms. Nguyen with conspiracy to violate 18 U.S.C. §§ 545, 1341, 2342(a), and 26 U.S.C. §§ 5701(b) and 5762(c)(3); fraudulent importation of “contraband cigarettes”; evasion of federal cigarette taxes; and five counts of mail fraud. After a five-day trial, the jury acquitted her of those charges. In addition, Count VI alleged that Ms. Nguyen “did knowingly ship, transport, receive, possess, sell and distribute ‘contraband cigarettes' in violationof 18 U.S.C. § 2342(a) on or about March 22, 2012. The jury convicted Ms. Nguyen of that charge. She appeals, arguing the evidence was insufficient to convict her of knowingly trafficking in contraband cigarettes. We agree and therefore reverse.

I.

In May 2011, an informant notified the County Sheriff's Office that a person later identified as Van Phan was selling Vietnamese cigarettes in Nebraska City, some fifty miles east of Lincoln, Nebraska. An extensive investigation revealed multiple packages from Vietnam addressed to locations in the Lincoln area, including the home of Ms. Nguyen and the nearby home of her sister, Kim Nguyen. From December 2011 to March 2012, Immigration and Customs Enforcement agents conducted five “border searches” of packages addressed to those homes, opening the packages, photographing and inventorying the Vietnamese cigarettes inside, and resealing the packages for postal delivery. At trial, ICE Agent Stewart testified that he also obtained a warrant and searched eleven packages addressed to Ms. Nguyen on April 4. Inside the packages were cartons and packs containing 11,680 Vietnamese cigarettes. None of the cigarette packs had a Nebraska cigarette tax stamp, which is required to lawfully sell cigarettes in that State. Neb.Rev.Stat. § 77–2606. The eleven packages were then delivered to Ms. Nguyen's home and were the basis for the Count VI offense. During the investigation, agents searched a total of twenty-eight packages addressed to Ms. Nguyen, all of which contained unstamped Vietnamese cigarettes.

On April 24, investigator Marlan Hohnstein interviewed Ms. Nguyen during a warrant search of her home after giving Miranda warnings in both English and Vietnamese. At trial, Hohnstein testified that Ms. Nguyen “acknowledged that there were many packages that had come to her residence ... from Vietnam and she knew that they contained cigarettes.” Ms. Nguyen admitted to signing for the delivery of some packages; many others arrived while she was at work. When packages arrived, Ms. Nguyen said “her job was to ... get them to her sister Kim.” Ms. Nguyen would call Kim and ask her to pick them up. She knew “Kim sold the cigarettes on the street.” Her brother in Vietnam sent the packages, and during a visit to Vietnam she had once gone with him to seal and mail packages to the United States.

Kim Nguyen testified for the government pursuant to a plea agreement in which she agreed to cooperate. Kim testified that she began receiving shipments of untaxed cigarettes from relatives in Vietnam around March 2011. She did not have a license to import or sell the cigarettes and never paid federal or state cigarette taxes. Early on, Kim asked if she could “borrow [Ms. Nguyen's] address so cigarette[s] can be sent to her address and she agree [d].” Kim told Ms. Nguyen that the packages contained cigarettes. Relatives in Vietnam mailed two or three packages to Kim and Ms. Nguyen every one to three weeks. The packages contained six cartons of cigarettes. Kim sold some of the cigarettes herself, sending the profits back to relatives in Vietnam, and gave cigarettes to Hoa Van Huynh and Teo Van Phan, two resellers who also pleaded guilty and testified for the government at trial.

Kim testified that she picked up packages delivered to Ms. Nguyen's home. Kim did not pay Ms. Nguyen for receiving the packages of cigarettes. Ms. Nguyen did not sell any cigarettes but knew that money from sales of the cigarettes was sent to their brother in Vietnam. Kim did not discuss with Ms. Nguyen that the cigarettes coming from Vietnam “were not taxed by the United States.” At one point Ms. Nguyen “scream[ed] at Kim to “stop sending to my address.”

II.

Ms. Nguyen was convicted of violating 18 U.S.C. § 2342(a), which provides: “It shall be unlawful for any person knowingly to ship, transport, receive, possess, sell, distribute, or purchase contraband cigarettes or contraband smokeless tobacco.” “Contraband cigarettes,” an element of the offense, is defined in § 2341(2):

(2) the term “contraband cigarettes” means a quantity in excess of 10,000 cigarettes, which bear no evidence of the payment of applicable State or local cigarette taxes in the State or locality where such cigarettes are found, if the state or local government requires a stamp, impression, or other indication to be placed on packages or other containers of cigarettes to evidence payment of cigarette taxes, and which are in the possession of any person other than [one who holds under proper authorization].

At trial, the government proved that more than 10,000 Vietnamese cigarettes bearing no evidence of the payment of applicable Nebraska cigarette taxes were received and sold in Nebraska by one or more persons who were not authorized to receive and sell them. The fighting issue was whether Ms. Nguyen knowingly violated § 2342(a).

Prior to and during trial, defense counsel requested a jury instruction that a violation of § 2342(a) “requires proof of specific intent,” that is, proof that Ms. Nguyen “knowingly did an act which the law forbids, purposely intending to violate the law.” The district court denied this request, explaining that it agreed with the Sixth Circuit that the Supreme Court's decision in Liparota v. United States, 471 U.S. 419, 105 S.Ct. 2084, 85 L.Ed.2d 434 (1985), adopting a specific intent requirement for knowing violations of the federal food stamp fraud offense, does not apply to knowing violations of § 2342(a). United States v. Elshenawy, 801 F.2d 856, 859 (6th Cir.1986), cert. denied,479 U.S. 1094, 107 S.Ct. 1309, 94 L.Ed.2d 164 (1987), followed in United States v. Baker, 63 F.3d 1478, 1491–93 (9th Cir.1995), cert. denied,516 U.S. 1097, 116 S.Ct. 824, 133 L.Ed.2d 767 (1996) and 516 U.S. 1117, 116 S.Ct. 921, 133 L.Ed.2d 850 (1996).

We agree that § 2342(a) is not a specific intent statute, but that does not resolve the question of what the government must prove to establish a “knowing” violation. On this question, the record and appellate briefs are silent, but the Supreme Court has provided substantial guidance:

[T]he term “knowingly” does not necessarily have any reference to a culpable state of mind or knowledge of the law. As Justice Jackson correctly observed, “the knowledge requisite to knowing violation of a statute is factual knowledge as distinguished from knowledge of the law.” ... Thus, unless the text of the statute dictates a different result [as in Liparota ], the term “knowingly” merely requires proof of knowledge of the facts that constitute the offense.

Bryan v. United States, 524 U.S. 184, 192–93, 118 S.Ct. 1939, 141 L.Ed.2d 197 (1998) (citations omitted). This was not an issue in Elshenawy, because the defendant conditionally pleaded guilty to violating § 2342(a), admitted he knew that the cigarettes in his possession bore no indicia and ... assumed that no state taxes had been paid,” and appealed the district court's ruling that the government need not prove knowledge of the state taxing requirement. 801 F.2d at 857.

When a criminal statute introduces the elements of a crime with the word “knowingly,” we apply that word to each element of the crime unless special context or background calls for a different reading. United States v. Bruguier, 735 F.3d 754, 758 (8th Cir.2013) (en banc). Thus, the district court properly instructed the jury that the government must prove beyond a reasonable doubt that Ms. Nguyen knowingly (i) trafficked in more than 10,000 cigarettes that (ii) “bore no evidence of the payment of applicable State or local cigarette taxes.” However, in denying Ms. Nguyen's postverdict motion for judgment of acquittal, the court lost sight of the second half of this instruction, which properly focused on whether the cigarettes “bore evidence” that applicable taxes had been paid, as § 2341(2) required. Instead, the court concluded, Ms. Nguyen's admissions to investigator Hohnstein that she knew packages mailed to her contained cigarettes, signed for some of the packages, and left them for Kim to pick up “is certainly sufficient to support the jury's determination that the defendant knowingly possessed contraband cigarettes.”

On appeal, Ms. Nguyen argues, as she did to the district court, that “there is no evidence in the record that [Ms. Nguyen] was aware of any applicable sales taxes on the cigarettes. This was a fact that the actual importer, Kim Nguyen, did not discuss with her.” The government's brief responded, citing page 373 of the trial transcript: “Nguyen informed Deputy Hohnstein she knew her brother and nephew were sending packages from Vietnam to her and her ...

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