U.S. v. Brodie, CRIM.A.00-629.
| Citation | 268 F.Supp.2d 408 |
| Decision Date | 31 May 2002 |
| Docket Number | No. CRIM.A.00-629.,CRIM.A.00-629. |
| Parties | UNITED STATES of America, v. Stefan A. BRODIE, Don B. Brodie, James E. Sabzali, Bro-Tech Corp. d/b/a "the Purclite Company". |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Gregory B. Craig, Williams and Connolly, Washington, DC, for defendants.
Joseph G. Poluka, U.S. Attorney's Office, Philadelphia, PA, for plaintiff.
The Court decides here defendant Stefan Brodie's motion for judgment of acquittal made after the close of the government's case. The Court reserved on the motion and the jury convicted the defendant of conspiracy to violate the Trading With the Enemy Act ("TWEA") and the Cuban Assets Control Regulations ("CACRs"). The alleged conspiracy involved sales to Cuba of ion exchange resins by Bro-Tech Corporation ("Bro-Tech"), of which the defendant is 50% owner and Chief Executive Officer. The Court will grant the motion because there was insufficient evidence from which a jury could conclude that the defendant knowingly and willfully entered into the charged conspiracy
Bro-Tech, which does business as the Purolite Company, is a Delaware corporation with headquarters in Bala Cynwyd, Pennsylvania; it manufactures and sells ion exchange resins, which are used in water purification. Bro-Tech is owned in equal portions by Stefan Brodie, its president and CEO, and his brother, defendant Don Brodie, its executive vice president.1 Bro-Tech has sales offices located around the world, including one in Canada. The Canadian office is a division of Bro-Tech. Defendant James Sabzali served as the Canadian Sales Manager for Bro-Tech, resident in the Canadian office, and then as the North American Director of Marketing, resident in Bala Cynwyd.
Bro-Tech Limited is a U.K. corporation, owned in thirds by Stefan Brodie, Don Brodie, and Bro-Tech. Bro-Tech Limited, in turn, is a ninety-five percent owner of Purolite International Limited ("Purolite International"), also a U.K. corporation. Purolite Internationa, has a manufacturing facility that produces ion exchange resins, located in Pontyclun, South Wales.
Count One of the seventy-seven-count indictment charges that from April 1993 to May 2000, Stefan Brodie, Don Brodie, James Sabzali, and Bro-Tech knowingly and willfully conspired to violate TWEA and the CACRs by engaging in transactions involving Cuba. Overt acts were alleged to have begun on or about June 21, 1994, and to have ended on or about July 31, 1999. Stefan Brodie is not charged in any other counts of the indictment. The other three defendants are charged in all counts. Thirty-five counts charge them with sales to Cuba from 1994 to 1996. Twenty-four counts charge them with sales to Cuba from 1997 to 1999. Sixteen counts charge them with authorizing or reimbursing payments of expenses associated with Cuban travel.
The government and the defendant agree that a reasonable jury could find that Bro-Tech made the following sales to Cuba through intermediaries. Tr. of Oral Arg. at 2-3. The Canadian sales office arranged each sale.
1. From 1992 to 1993, four sales were made by Bro-Tech through a Canadian company. The sales were booked at Bro-Tech, and the product was manufactured by and shipped from Purolite International. These sales were: not charged in the indictment.
2. From 1994 to 1996, thirty-five sales were made by Bro-Tech through intermediaries in Canada and Mexico. At times the product sold was manufactured by and shipped from Bro-Tech, and at other times Purolite International.
3. From 1997 to 1999, twenty-four sales were made by Bro-Tech through the intermediary San Marco. All sales in this period were booked at Purolite International, and the product was manufactured by and shipped from Purolite International.
Bro-Tech employees James Sabzali and Claude Gauthier, a Canadian citizen working as a salesman in the Canadian office, were reimbursed for their business-related travel to Cuba. The expense reports and approvals for this travel were processed in Bala Cynwyd.
Each of the defendants presented evidence during the trial. The jury convicted all of the defendants of conspiracy. Don Brodie, James Sabzali, and Bro-Tech were all acquitted of the counts involving the 1997-1999 sales, four 1996 sales, and three of the sixteen counts involving expense reimbursements. At least two defendants were convicted of each of the other forty-four counts.
The defendant moved for judgment of acquittal, pursuant to Fed.R.Crim.P. 29(a), at the close of the government's case. The Court reserved decision on the motion. It must, therefore, "decide the motion on the basis of the evidence at the time the ruling was reserved." Fed.R.Crim.P. 29(b).
In deciding a motion for judgment of acquittal, the Court must determine whether, "upon the evidence, giving full play to the right of the jury to determine credibility, weigh the evidence, and draw justifiable inferences of fact, a reasonable mind might fairly conclude guilt beyond a reasonable doubt." United States v. Phifer, 400 F.Supp. 719, 724 (E.D.Pa.1975) (citation omitted), ajfd, 532 F.2d 748 (3d Cir.1976). A claim of insufficiency of the evidence places a heavy burden on a defendant. See United States v. Dent, 149 F.3d 180, 187 (3d Cir.1998) (citation omitted); United States v. Hitchens, No. 00-CR-654-2, 2001 WL 1257167, at *1 (E.D.Pa. Oct.19, 2001). The Court must view the evidence in the light most favorable to the government, and must sustain the verdict if "any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." Dent, 149 F.3d at 187 (citation omitted).
There are special evidentiary concerns in conspiracy cases. Because of the "looseness and pliability" of the conspiracy doctrine, courts have been instructed to be mindful of the doctrine's "inherent dangers." Krulewitch v. United States, 336 U.S. 440, 449, 69 S.Ct. 716, 93 L.Ed. 790 (1949) (Jackson, J, concurring). The Third Circuit has recognized that there is a tendency in conspiracy cases for finders-of-fact to believe a defendant "must have been involved in a conspiracy, once evidence has been presented of some questionable acts ...." United States v. Samuels, 741 F.2d 570, 574-75 (3d Cir.1984).
The Court recognizes that "[t]he sufficiency of the [circumstantial] evidence in a conspiracy prosecution requires close scrutiny." United States v. Coleman, 811 F.2d 804, 807 (3d Cir.1987). The existence of a conspiracy can be inferred "from a reasonable and logical inference, that the activities of the participants ... could not have been carried on except as the result of a preconceived scheme or common understanding." United States v. Kapp, 781 F.2d 1008, 1010 (3d Cir.1986) (citation omitted). But "conspiracy cannot be proven ... by piling inference upon inference .. .." Coleman, 811 F.2d at 808 (internal quotation omitted). Individual guilt must be proven beyond a reasonable doubt, and slight evidence connecting a defendant to a conspiracy is insufficient. Coleman, 811 F.2d at 808; Samuels, 741 F.2d at 575.
When knowledge is one of the essential elements of an offense, as it is here, it must be proven as to all co-conspirators. See United States v. Molt, 615 F.2d 141, 146 (3d Cir.1980); see also United States v. Wexler, 838 F.2d 88, 92 (3d Cir.1988). Thus, the government had the burden of proving that Stefan Brodie, with an understanding of the unlawful nature of the conspiracy, intentionally engaged, advised or assisted in the conspiracy for the purpose of furthering its illegal undertaking.
Drawing inferences from established facts is an acceptable method of proof in the absence of direct evidence, but only if there is a logical and convincing connection between the facts established and the conclusion inferred. See United States v. Casper, 956 F.2d 416, 422 (3d Cir.1992); United States v. McNeill, 887 F.2d 448, 450 (3d Cir.1989). When evidence of a defendant's guilt is based only on a chain of inferences, a court must determine if the "proved facts logically support the inference of guilt." Casper, 956 F.2d at 422 (internal quotation omitted).
Very little of the evidence presented by the government during the six days of its case-in-chief related to the defendant. There was no direct evidence of his involvement in any of the sales or reimbursements of expenses alleged in the indictment. Following is a description of all the evidence that related to the defendant.
A. 1992-1993
The most substantial evidence involving Stefan Brodie came from two witnesses, Stephen Coulter, a partner at Deloitte & Touche, LLP ("Deloitte"), and Edward Grossman, Bro-Tech's Director of Finance. I describe their testimony in detail. It primarily involved 1993, but in one important regard, 1982.
In early 1993, Deloitte conducted an audit of Bro-Tech's financial statements for the 1992 fiscal year. Tr. at 86-89; Gov't Ex. 3. During the audit, Deloitte identified a 1992 sale to a Canadian company named Galax. Tr. at 91-93. The sale had been booked by Bro-Tech in the United States, and the product had been shipped to Cuba from Purolite International in the United Kingdom. Tr. at 500, 501. Galax is a specially designated national ("SDN") under the CACRs, i.e., a company subject to the American ban on trading with Cuba. Tr.at 79; Gov't Ex. 4.
Mr. Coulter discussed the Galax transaction with both Mr. Brodie and Mr. Grossman. Tr. at 92-94. Mr. Coulter requested that Bro-Tech provide a legal opinion regarding the legal ramifications of the transaction. Tr. at 101. Mr. Brodie thought that Mr. Coulter was overreacting "because it was a single transaction performed by a salesman that was new to the company ...." Tr. at 101. The salesman for this transaction was Mr. Sabzali. Tr. at 507. Mr. Brodie did not want to incur the cost of a legal opinion, but he obtained one...
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U.S. v. Brodie
...was insufficient evidence of his knowing and willful participation in the charged conspiracy to support conviction. United States v. Brodie, 268 F.Supp.2d 408 (E.D.Pa.2002). After reviewing the government's evidence against the Defendant, we conclude that the District Court erred in enterin......