U.S. v. Felsen, 79-1519

• Decision Date: 03 June 1981
• Docket Number: No. 79-1519,79-1519
• Citation: 648 F.2d 681
• Parties: , 11 Envtl. L. Rep. 20,761 UNITED STATES of America, Plaintiff-Appellee, v. Mark FELSEN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 681

648 F.2d 681

58 A.L.R.Fed. 839, 11 Envtl. L. Rep. 20,761

UNITED STATES of America, Plaintiff-Appellee, v. Mark FELSEN, Defendant-Appellant.

No. 79-1519.

United States Court of Appeals Tenth Circuit.

Argued and Submitted Nov. 18, 1980.

Decided May 5, 1981.

Rehearing Denied June 3, 1981.

Alex Stephen Keller of Keller, Dunievitz & Johnson, Denver, Colo., for defendant-appellant.

Nancy E. Rice, Asst. U. S. Atty., Denver, Colo. (Joseph Dolan, U. S. Atty., Denver, Colo., with her, on brief), for plaintiff-appellee.

Before SETH, Chief Judge, and BARRETT and SEYMOUR, Circuit Judges.

SEYMOUR, Circuit Judge.

Defendant Mark Felsen was tried on four counts of importing Ferrari automobiles by false statements in violation of 18 U.S.C. § 542. The jury acquitted on Counts II and IV and convicted on Counts I and III, a conviction that Felsen now appeals. We affirm.

Felsen was the president and manager of Ferrari Denver, Ltd., a Colorado dealership engaged in importing Ferraris for resale in this country. In February 1978, Felsen imported a 1977 Ferrari Berlinetta Boxer 512 (BB512), Vehicle Identification Number (VIN) 23091. He bought the BB512 from a seller in Belgium, having previously arranged to resell it to a buyer in Texas. Count I of the indictment charges that Felsen lied about this Ferrari both on Customs entry documents and verbally to Customs officials at the port of entry. Specifically, although he stated the VIN correctly, he misdesignated the BB512 model as a model 308GTB and falsely stated the Ferrari was covered by a Certificate of Conformity from the U. S. Environmental Protection Agency (EPA) as required by 19 C.F.R. § 12.73. The EPA issues these certificates to automobile manufacturers for models that comply with certain environmental standards. See generally 40 C.F.R. § 86. In 1977, the EPA had issued Certificates of Conformity only for the Ferrari 308GTB and 308GTS models, and the Dino 308GT4 2 k 2 model. At all times pertinent to this lawsuit, the BB512 was not covered by an EPA Certificate of Conformity. The Ferrari manufacturer apparently believed that it was economically impracticable to bring the BB512 into compliance with EPA emission standards.

In April 1978, Felsen imported from the same Belgium seller another 1977 Ferrari, this one a 400 Automatic with VIN 23557. Count III charges that Felsen lied to Customs about this Ferrari as well. First, he called the 400 Automatic a "GT4 2 k 2," a model nonexistent as such. Second, he falsely stated that it was covered by an EPA Certificate of Conformity and that it could be conformed to Department of Transportation (DOT) standards by modifying the automobile with "readily attachable equipment items." 19 C.F.R. § 12.80(b)(2)(iv) (1978). Like the BB512, the 400 Automatic has never been covered by an EPA Certificate of Conformity. To achieve DOT compliance would require a retrofit operation of roughly 21/2 to 3 working days, assuming the parts for a 400 Automatic were available in this country.

Felsen challenges his conviction on four grounds:

(1) The trial court erred in denying his motion for judgment of acquittal based upon the Government's failure to prove the mental state element of the crime in 18 U.S.C. § 542.

(2) The trial court erred in its jury instruction on the scienter requirement of 18 U.S.C. § 542.

(3) The term "readily attachable equipment items" in 19 C.F.R. § 12.80(b)(2) (iv) (1978), dealing with DOT standards, is impermissibly vague.

(4) Prosecutorial misconduct in the cross-examination of Felsen was sufficiently prejudicial to warrant a new trial.

These contentions are meritless.

I.

Denial of judgment of acquittal

To test the trial court's denial of Felsen's acquittal motion, we must view the evidence most favorably to the verdict and determine whether such evidence was sufficient for a reasonable jury to infer guilt beyond a reasonable doubt. See United States v. Walton, 552 F.2d 1354, 1366-67 (10th Cir.), cert. denied, 431 U.S. 959, 97 S.Ct. 2685, 53 L.Ed.2d 277 (1977). Our review of the evidence establishes that the trial court's refusal to grant acquittal was not error.

18 U.S.C. § 542 prohibits the importation of goods by false statements. It reads in pertinent part:

"Whoever enters or introduces, or attempts to enter or introduce, into the commerce of the United States any imported merchandise by means of any fraudulent or false invoice, declaration, affidavit, letter, paper, or by means of any false statement, written or verbal, or by means of any false or fraudulent practice or appliance, or makes any false statement in any declaration without reasonable cause to believe the truth of such statement,

"

"Shall be fined for each offense not more than $5,000 or imprisoned not more than two years, or both "

Id.

In essence, Felsen's defense at trial was that he lacked the requisite mental state to commit any crime. He testified that by agreement his Belgium seller was to take charge over achieving EPA compliance for both Ferraris, while he retained the burden of DOT compliance. Felsen was surprised, so he testified, to learn that no EPA Certificate of Conformity covered either the BB512 or the 400 Automatic. Regarding what it would take to achieve DOT compliance for the 400 Automatic, Felsen assertedly believed that the necessary retrofit operation amounted to no more than "readily attach(ing) equipment items" onto the automobile, as permitted by 19 C.F.R. § 12.80(b)(2)(iv) (1978).

The Government, however, introduced ample evidence from which the jury could have concluded Felsen had willfully ¹ made false statements in importing the 1977 BB512 and 400 Automatic. Felsen had several years' experience as both a Ferrari dealer and mechanic. Due to this experience, Felsen had little difficulty in telling Ferrari models apart or spotting the difference between an 8-cylinder and a 12-cylinder engine. Felsen knew, for example, that a model 308GTB had an 8-cylinder engine and a cost of roughly $24,000 and that the BB512 model had a 12-cylinder engine and a cost of $40,000. The Ferrari imported in February 1978 was listed in the Customs entry documents as having a VIN of 23091 and a cost of $40,000. Felsen expressly told the Customs broker who prepared the entry documents that the correct model for that Ferrari was 308GTB, and that is how the documents were made to read. Felsen also knew that although the EPA Certificate of Conformity he supplied to the Customs broker covered the 308GTB, it did not cover the BB512. But from his negotiations with the Belgium seller before the Ferrari entered this country, Felsen knew the VIN 23091 actually belonged to a BB512. He had contracted with the Texas buyer to sell him a Ferrari BB512, VIN 23091. In attempting to finance his purchase and resale of the Ferrari, Felsen submitted to his bank a letter of credit from the Texas buyer's bank and a manufacturer's certificate of origin, both of which matched VIN 23091 to a BB512. Even after Felsen had cleared the BB512 through Customs and had delivered it to his Texas buyer, Felsen again called the BB512 a 308GTB when he applied for a motor vehicle title certificate.

From all this, a jury could have inferred beyond a reasonable doubt that as an experienced Ferrari dealer and mechanic Felsen intended all along to purchase and resell a BB512, that he knew the BB512 was not covered by an EPA Certificate of Conformity, and that he deliberately misdesignated it a 308GTB to slip the noncompliant BB512 past Customs.

Regarding what Felsen knew about the 400 Automatic imported in April 1978, the Government's proof showed the following. Like the BB512, Felsen purchased this Ferrari from the same Belgium seller by VIN 23557. This VIN appeared in the Customs entry documents. The model, however, was shown as "GT4 2 k 2." By itself, this designation does not meaningfully point to any single Ferrari model. Something more is needed, like "308GT4 2 k 2" or "365GT4 2 k 2," to make a bona fide Ferrari model out of the characters "GT4 2 k 2." According to expert testimony, all 1977 models having the core characters "GT4 2 k 2" differ significantly from the 400 Automatic, differences that a jury might reasonably infer would be readily discernible to an experienced Ferrari dealer and mechanic such as Felsen.

Regarding EPA compliance, the 400 Automatic stood on equal ground with the BB512. The EPA Certificate of Conformity that Felsen supplied to his Customs broker for inclusion in the entry documents failed to list either. And according to expert testimony, any attempt to modify the 400 Automatic into EPA compliance would involve the same degree of impracticability as the BB512. Nevertheless, during the Customs inspection at the port of entry, Felsen pointed out certain equipment items that purportedly conformed the 400 Automatic to EPA standards. In view of Felsen's expertise as a mechanic, the jury could reasonably infer he was deliberately trying to mislead the Customs inspectors regarding EPA compliance.

With respect to DOT compliance, the Customs Inspector testified he asked Felsen if he had the "readily attachable" parts required by 19 C.F.R. § 12.80, and Felsen said he did. But according to expert testimony no such parts were available for a 400 Automatic in this country. Even assuming they were, DOT compliance would require a significant retrofit operation of 21/2 to 3 working days.

There is additional telling evidence that Felsen's false statements about the 400 Automatic in the Customs entry documents were not innocent. The Customs inspection revealed that the automobile decals identifying the Ferrari as a 400 Automatic had been removed and the holes covered. Also, heavy black tape covered the logo "400 Automatic" on the VIN plate, leaving only the VIN numerals visible.

The above evidence, when viewed together and in context, is ample to support a jury finding that rather than being a product of innocent mistake, Felsen's false...