U.S. v. Abdullah, 97-1839

• Decision Date: 30 November 1998
• Docket Number: No. 97-1839,97-1839
• Citation: 162 F.3d 897
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Hamood ABDULLAH, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 897

162 F.3d 897

UNITED STATES of America, Plaintiff-Appellee, v. Hamood ABDULLAH, Defendant-Appellant.

No. 97-1839.

United States Court of Appeals, Sixth Circuit.

Argued Oct. 27, 1998.

Decided Nov. 30, 1998.

James C. Thomas (argued and briefed), Detroit, Michigan, for Defendant-Appellant.

Cynthia J. Oberg (argued and briefed), Office of the U.S. Attorney, Detroit, Michigan, for Plaintiff-Appellee.

Before: GUY, DAUGHTREY, and MOORE, Circuit Judges.

OPINION

DAUGHTREY, Circuit Judge.

The defendant, Hamood Abdullah, appeals his conviction for the illegal receipt and possession of contraband cigarettes and his sentence of 21 months, followed by two years of supervised release. In addition, Abdullah was held jointly and severally liable with other individuals involved in a contraband cigarette distribution network for restitution in the amount of $82,125.00. On appeal, the defendant raises numerous trial and sentencing issues, all of which we find to be without merit--except his challenge to the sufficiency of the evidence to support the calculation of his sentence. We therefore affirm the conviction, based on the verdict of the jury, but remand for a further hearing on Abdullah's sentence.

FACTUAL AND PROCEDURAL BACKGROUND

On May 1, 1994, the Michigan excise tax on a pack of cigarettes sold in the state tripled from 25 cents per pack to 75 cents per pack. Federal and state agents consequently increased their efforts to ensure that cigarettes were not being brought into the state and sold without payment of the required assessment. The investigation by officials of the Bureau of Alcohol, Tobacco and Firearms and the State of Michigan focused on the Dearborn homes of co-defendants Adel Alawi and Hassan Ilayan, both brothers-in-law of Hamood Abdullah. In early September 1994, agents conducted surveillance on the two residences, which were located around a corner from each other. Agents also pulled trash from garbage cans outside the homes and found records of cigarette orders, maps of New York State, phone bills, customer lists, and mail addressed to the defendant. The phone bills retrieved from that trash pull, as well as information obtained from a second trash pull at the residences in late October 1994 and from telephone toll records, revealed numerous calls made from the Dearborn homes to Lance Hoag at American Indian Crafts and to Roseine's, smoke shops located on Native American lands in New York State.

Finally, on November 3, 1994, the surveillance activities paid off. Law enforcement officers followed Ilayan from one of the houses being watched and observed him drive his van to a parking lot, park next to a large Ryder rental truck, and then drive away in the truck. Eventually, Ilayan was arrested when he stopped at Abdel Khidir's South Town Market and began unloading cases of cigarettes that did not bear Michigan tax stamps. Agents not only seized more than 7,100 cartons of contraband cigarettes from the truck and the market, but also uncovered documentary evidence that the untaxed cigarettes had been purchased the previous day from Lance Hoag in Salamanca, New York. Because Hoag's establishment was located on a Native American reservation, no excise tax had been paid on any of the goods, a fact which would allow the retailer to reduce prices significantly.

After his arrest, Ilayan consented to a search of the van he had driven from his home to the lot where the Ryder truck had been parked. During that search, police found Hamood Abdullah's identification card and a receipt for a storage locker originally rented by the defendant through October 31, 1994, and then extended through November 15, 1994.

Later that same evening, officials approached Ilayan's house with a search warrant and were allowed access to the dwelling by Ilayan himself. In the course of the search, officers found lists of brands of cigarettes and quantities to be purchased, as well as a receipt for a payment of $78,501.31. The defendant was in the kitchen of the home at the time and spoke fluently and coherently in English with the officers for 15-20 minutes about several topics, including the civil war raging in Abdullah's native Yemen. Moreover, when confronted with the existence of the receipt for the storage locker, the defendant insisted that he was merely storing furniture for a relative but that the locker was then empty and could be searched. Because the storage facility was closing for the evening, the officers asked Abdullah whether they could search the locker the next morning; the defendant agreed. Abdullah did not, however, respond to knocks on the door the next day. Consequently, the agents involved in this case returned to the storage locker without the defendant and conducted a search that revealed approximately 1,870 additional cartons of untaxed cigarettes and an empty case of contraband cigarettes bearing writing indicating that the goods were also purchased from Lance Hoag's American Indian Crafts in New York.

Abdullah was arrested and indicted for trafficking in contraband cigarettes and for receipt and possession of contraband cigarettes. At trial, the government adduced testimony concerning the activities leading to the apprehension of Ilayan and Abdullah. In addition, evidence was offered that neither Abdullah nor his co-defendants were licensed in Michigan as wholesalers of cigarettes, that the defendant's fingerprints were found on some of the cigarette order and sale documents recovered during the search of Ilayan's residence, and that Abdel Khidir, the owner of the South Town Market, admitted purchasing untaxed cigarettes directly from Abdullah on at least three occasions in 1994.

Abdullah testified in his own defense and denied any connection with the purchase or storage of untaxed cigarettes. He also claimed that he had rented the storage locker in which the contraband cigarettes were found only through October 1994 and that he stored only furniture in that facility. Abdullah further attempted to offer an innocent explanation for the presence of his fingerprints on incriminating documents, stating that he must have handled those papers while looking for missing photographs during his visit to Dearborn. The defendant also offered an alibi for his whereabouts during late July 1994, and highlighted the testimony of Ilayan who attempted to exonerate Abdullah of all wrongdoing. Although the jury acquitted Abdullah of the trafficking charge, it found the defendant guilty of receipt and possession of contraband cigarettes. After a sentencing hearing, the district court imposed judgment upon Abdullah, requiring, among other punishments, the service of 21 months in prison and the payment of $82,125 in restitution.

DISCUSSION

I. Federal Jurisdiction Over Possession Of Contraband Cigarettes

Although first raised in a proceeding held after his conviction by a jury, Abdullah challenges the jurisdiction of the federal courts to criminalize what the defendant categorizes as state tax law violations, citing United States v. Lopez, 514 U.S. 549, 558, 115 S.Ct. 1624, 131 L.Ed.2d 626 (1995). In that case, the Supreme Court "identified three broad categories of activity that Congress may regulate under its commerce power."

First, Congress may regulate the use of the channels of interstate commerce. Second, Congress is empowered to regulate and protect the instrumentalities of interstate commerce, or persons or things in interstate commerce, even though the threat may come only from intrastate activities. Finally, Congress' commerce authority includes the power to regulate those activities having a substantial relation to interstate commerce, i.e., those activities that substantially affect interstate commerce.

Id. at 558-59, 115 S.Ct. 1624 (citations omitted).

The government contends that the statutory prohibitions on trafficking in contraband cigarettes actually regulate "the use of the channels of interstate commerce" and thus are a proper exercise of the federal government's criminal jurisdiction. The purpose of the ban on receipt or possession of untaxed cigarettes is not, however, to keep open the very avenues by which interstate commerce is transacted. Furthermore, the statute does nothing to regulate the instrumentalities of commerce. Instead, any federal authority over the possession of such contraband must be grounded in Congress's power to "regulate those activities having a substantial relation to interstate commerce."

Unlike the activities regulated by the Gun-Free School Zones Act, 18 U.S.C. § 922(q)(1)(A), under consideration in Lopez, contraband cigarette trafficking involves an inherently commercial or economic enterprise--the dealing of untaxed products in order to create a higher profit margin for unscrupulous retailers. Second, although 18 U.S.C. §§ 2341-2346 do not contain an explicit jurisdictional element that would ensure the presence of an effect upon interstate commerce, the legislative history of these statutes, again unlike the law at issue in Lopez, unmistakably recognizes the pervasive effects of cigarette smuggling on interstate commerce. For example, the Senate Report on the bill that eventually became P.L. 95-575 (18 U.S.C. §§ 2341-2346) states that the purpose of the legislation "is to provide a timely solution to the serious problem of organized crime and other large scale operations of interstate cigarette bootlegging and to help provide law enforcement assistance and relief to cities and States." S.Rep. No. 95-962, at 3 (1978), reprinted in 1978 U.S.C.C.A.N. 5518 (emphasis added).

The report then continues by explaining how large profits may be generated and legitimate businesses harmed by the unchecked practice of smuggling cigarettes from a low-tax state to a high-tax state for retail sale. S.Rep. No. 95-962, at 4-8 (1978), reprinted in 1978 U.S.C.C.A.N. at 5518-23. Finally, the report concludes that, "because of the interstate nature of the problem," federal l...