U.S. v. Ranger Electronic Communications, Inc., 1:96-CR-211.

• Decision Date: 24 August 1998
• Docket Number: No. 1:96-CR-211.,1:96-CR-211.
• Citation: 22 F.Supp.2d 667
• Parties: UNITED STATES of America, Plaintiff, v. RANGER ELECTRONIC COMMUNICATIONS, INC., Defendant.
• Court: U.S. District Court — Western District of Michigan

22 F.Supp.2d 667 UNITED STATES of America, Plaintiff,
v.
RANGER ELECTRONIC COMMUNICATIONS, INC., Defendant. No. 1:96-CR-211. United States District Court, W.D. Michigan, Southern Division. August 24, 1998.

Page 668

COPYRIGHT MATERIAL OMITTED

Page 669

Daniel R. Gravelyn, Warner, Norcross & Judd, LLP, Grand Rapids, MI, Michael C. Olson, Newport Beach, CA, for Ranger Electronic Communications, Inc., Tseng Jyi Peng and Ranger Communications (Shanghai), Inc.

James S. Brady, Miller, Johnson, Snell & Cummiskey, Grand Rapids, MI, for John D. Gouvian.

John M. Karafa, McNeil Grafton Law Offices, Grand Haven, MI, for Texpro Sales Canada Inc.

Howard W. Gillingham, Sharon A. Turek, Federal Public Defenders, Grand Rapids, MI, for John Somach.

Craig W. Haehnel, Haehnel & Calomeni, Grand Rapids, MI, Charles A. Ross, Brafman Gilbert & Ross, PC, New York City, for Parkside Trading and Aron Tynauer.

Samuel J. Rabin, Jr., Samuel J. Rabin, Jr., PA, Miami, FL, for CTE International SRL.

William L. Fette, Cornell, Dalzell, Fette, Ramey, et al., Kalamazoo, MI, Eric D. Isicoff, Isicoff & Ragatz, PA, David S. Mandel, David S. Mandel Law Offices, Miami, FL, for Giuseppe Coppola.

Michael J. Dunn, Grand Rapids, MI, for Joseph Albert.

Daniel Y. Mekaru, Assistant U.S. Atty, Michael H. Dettmer, U.S. Attorney, Grand Rapids, MI, for U.S.

OPINION

ENSLEN, Chief Judge.

This matter is before the Court on Defendant Ranger Electronic Communications, Inc.'s Motion for Attorney Fees. For the reasons which follow, the Motion is granted.

FACTS

Defendant Ranger Electronic Communications, Inc. (referred to as "Ranger Taiwan" so as to distinguish it from its related Ranger companies) has had, on the motion of the United States of America, criminal charges against it dismissed with prejudice after a jury was empaneled and sworn to try the charges. It now requests attorney fees under the Hyde Amendment, Section 617 of the Departments of Commerce, Justice and State, the Judiciary, and the Related Agencies Appropriations Act of 1998, Pub.L. No. 105-119, 111 Stat. 2440, 2519 (Nov. 26, 1997), codified at 18 U.S.C. § 3006A note. Ranger Taiwan is a foreign manufacturer of radio equipment, including Citizens Band ("CB") and amateur radios. Its equipment is exported to the United States and throughout the world. According to Jim Peng, the President and majority stock holder of Ranger Taiwan, at the time of the initial indictment Ranger Taiwan employed 145 employees and had a net worth of less than seven (7) million dollars. (Declaration of Jim Peng of July 4, 1998.) The United States has questioned whether related companies were operated separately, but offers no evidence to this effect.

Page 670

On December 19, 1996, Ranger Taiwan was indicted by grand jury of this district for several crimes principally including the illegal importation of radio equipment into the United States of America in violation of 18 U.S.C. § 545. On March 27, 1997, Ranger Taiwan was re-indicted by Superseding Indictment for said crimes. The Superseding Indictment charged that a company in Niles, Michigan, A-1 Telecom Inc., had imported illegal CB radios into the United States and that Ranger Taiwan, and other Defendants, participated in the importation and laundered funds as to the sale of the radios. In this case and in three closely-related cases, no less than 17 individuals and companies were indicted. The radios in question were "prohibited by law" under the importation statute, 18 U.S.C. § 545, because of Federal Communications Commission ("FCC") regulations which require that CB radios be type accepted by the FCC. 47 C.F.R. §§ 2.803 and 95.603. The radios in question were not type accepted by the FCC and would not have been type accepted by the FCC because they broadcast on frequencies other than those approved by the FCC for CB broadcast (between 26.965 and 27.405 megahertz). See 47 C.F.R. §§ 95.625 and 95.655. In this regard, the radios were different from amateur radios. Under FCC regulations, amateur radios broadcast at frequencies different from the approved CB frequencies. 47 C.F.R. § 97.301. As such, the FCC does not required type-acceptance for amateur radios. 47 C.F.R. § 95.655(a). The FCC does, however, require operator licenses for amateur radio operators. 47 C.F.R. §§ 97.5-97.9. This procedure differs from that for CB radios as to which no operator license is required. 47 C.F.R. § 95.404.

Shortly before trial of Ranger Taiwan and the other Defendants, on January 9, 1998, the Court determined after legal briefing that proof of the conspiracy and illegal importation charges against the Defendants required the United States of America to prove that the Defendants knew that the law prohibited the importation of the radios imported. The Court did so after determining that the imported product was an inherently useful, non-dangerous product whose prohibited importation constituted a malum prohibitum rather than malum in se offense. Thus, the Court permitted testimony of Defendants' experts to the effect that the pertinent regulations were not understood in the electronics industry as prohibiting the imported radios when marketed as amateur radios. Just after that decision, the Court determined Ranger Taiwan's request for early disclosure of Brady and Jencks Act (18 U.S.C. § 3500) materials. Ranger Taiwan and other Defendants had moved the Court for early disclosure of these materials. (Dkt. No. 241.) The United States responded to the motion by promising disclosure of Brady and Jencks Act materials at least three days prior to trial. (Dkt. No. 275.) Based on this promise, no further relief was ordered. (Dkt. No. 285.)

Trial of the charges was commenced on January 13, 1998. The trial was hotly contested. The trial did not go as expected by the United States in that one of its chief witnesses, John Gouvian, the President of Ranger Communications Inc. ("Ranger U.S.A.") admitted during his testimony that he had knowingly lied to the United States about the contents of bank account records in order to obtain the United States' assistance in moving to quash a subpoena for the records. He did so to prevent the disclosure of the records to the Defendants on trial and to prevent his cross-examination concerning the records. When disclosed during trial, the records showed that he held a joint account with a debtor of Ranger U.S.A. and was borrowing substantial sums of money from the debtor for his personal expenses, while crediting the debtor's account with Ranger U.S.A. It is hard to imagine more important information being withheld from a defendant before trial.

Following the disclosure of this information, after a jury had been empaneled, the United States offered and some Defendants accepted a plea agreement. Under the plea agreement, some of the Defendants agreed to plead guilty to certain charges and the charges against Ranger Taiwan and Jim Peng would be dismissed in their entirety upon the recommendation of the United States. The charges against Defendant Ranger Taiwan were, thus, dismissed with

Page 671

prejudice by this Court by Order of February 3, 1998 (Dkt. No. 305).

During the later sentencing of other Defendants, it was disclosed that the Ranger/A-1 Telecom indictments were nearly novel. As now indicated by the United States, prior to these related indictments, there have been only three federal prosecutions for importation of illegal CB radios — all stemming from two related cases in the Eastern District of New York. The three New York convictions resulted in probationary sentences and fines. (Dkt. No. 372 at 17.) The instant set of prosecutions has resulted in forfeitures of over one million dollars and many felony and misdemeanor convictions of defendants with no prior...