U.S. v. Wada, CR 03-96-BR.

• Citation: 323 F.Supp.2d 1079
• Decision Date: 29 June 2004
• Docket Number: No. CR 03-96-BR.,CR 03-96-BR.
• Parties: UNITED STATES of America, Plaintiff, v. Kozo WADA, Defendant.
• Court: U.S. District Court — District of Oregon

Page 1079

323 F.Supp.2d 1079

UNITED STATES of America, Plaintiff, v. Kozo WADA, Defendant.

No. CR 03-96-BR.

United States District Court, D. Oregon.

June 29, 2004.

Karin J. Immergut, United States Attorney, Fredric N. Weinhouse, Assistant United States Attorney, Portland, OR, for Plaintiff.

Steven T. Wax, Federal Public Defender, Christopher J. Schatz, Assistant Federal Public Defender, Portland, OR, for Defendant.

AMENDED OPINION AND ORDER

BROWN, District Judge.

In an Indictment dated February 25, 2003, the Grand Jury charged Defendant Kozo Wada with eleven felony counts of various firearms offenses and two counts seeking forfeiture of firearms, ammunition, and other property seized in the course of this investigation.

On December 12, 2003, Wada tendered, and the Court accepted, Alford¹ pleas to Counts One and Five of the Indictment, as amended, pursuant to the terms of a Settlement Agreement between the parties. The Court then found Wada guilty of Count One (Dealing in Firearms without a Federal Firearms License in violation of 18 U.S.C. § 922(a)(1)(A)) and Count Five (Exporting a "Defense Article" [a firearm] from the United States to Japan Without a Department of State License in violation of 22 U.S.C. §§ 2778(b)(2) and 2778(c) and certain Title 22 federal regulations).

The parties' Settlement Agreement provides the Court is to determine whether United States Sentencing Guideline (USSG) § 2K2.1(b)(1)(D) should be applied, which would increase by eight levels the base offense level for Count One. This enhancement applies if "the offense involved ... 100-199 ..." firearms. Id. The parties disputed the facts pertinent to this specific offense characteristic. The Court, therefore, conducted an evidentiary hearing on March 10, 2004; heard oral argument on April 16, 2004; and thereafter considered the parties' written submissions.²

For the reasons that follow, the Court concludes the government has not established by clear and convincing evidence that the items it seeks to count as "firearms" pursuant to USSG § 2K2.1(b)(1)(D) were, in fact, "firearms" as defined by the pertinent statute at the time Wada sold and shipped them to his customers in Japan. Instead the Court agrees with Wada, who characterized these items as "dewatted firearm-ornaments." The Court, therefore, finds USSG § 2K2.1(b)(1)(D) does not apply to enhance the base offense level for Count One because the "dewatted firearm-ornaments" that Wada sold as part of his business do not count as firearms under USSG § 2K2.1(b)(1)(D).³

THE LAW

1. Statutes

18 U.S.C. § 922(a)(1) provides:

It shall be unlawful for any person except a ... licensed dealer, to engage in the business of ... dealing in firearms, ....

18 U.S.C. § 921(a)(11)(A) provides:

The term "dealer" means any person engaged in the business of selling firearms at wholesale or retail....

18 U.S.C. § 921(a)(21)(C) provides:

The term "engaged in the business" means ... as applied to a dealer in firearms ... a person who devotes time, attention, and labor to dealing in firearms as a regular course of trade or business with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms, ....

18 U.S.C. § 921(a)(3) provides:

The term "firearm" means (A) any weapon (including a starter gun) which will or is designed to or may readily be converted to expel a projectile by the action of an explosive; (B) the frame or receiver of any such weapon; (C) any firearm muffler or firearm silencer; or (D) any destructive device. Such term does not include an antique firearm.

2. Burden of Proof

Because the addition of eight levels to the base offense level for Count One would more than double the potential sentencing range for that Count, the parties agreed the Court must base its factual findings on a standard of clear and convincing evidence. See United States v. Valensia, 222 F.3d 1173, 1179 (9th Cir.2000). The parties' agreement, however, was reached before the Supreme Court decided Blakely.

FINDINGS OF FACT

The parties made certain factual stipulations during the proceedings on April 16, 2004, and, accordingly, the Court accepts such facts as true for purposes of this analysis. In addition, the Court has weighed and evaluated all of the evidence presented in connection with this sentencing issue. Based on the parties' stipulations and the Court's assessment of the record, the Court finds the following facts by clear and convincing evidence:

1. Wada, a Japanese citizen, was engaged in business in Oregon under the name of "U S Mart Co." Beginning in the year 2000, Wada became interested in selling military accessories and other merchandise to buyers in Japan. After he contacted police authorities in Osaka, Wada understood Japanese law would permit him to sell "dewatted firearm-ornaments" to such buyers; that is, "firearms" that he modified to render them inoperable before he shipped them to Japan.

2. In the course of his business, Wada purchased more than 100 firearms in Oregon; paid a federally licensed gunsmith, Roger Loock, to modify them to render them inoperable; and then sold and shipped the firearms as modified to purchasers in Japan.

3. The methods Wada used to modify these firearms changed their fundamental character and rendered them inoperable as functioning firearms. The Court adopts as part of its findings all of the evidence Wada offered concerning the several methods he used for this purpose and his evidence showing the extreme difficulty and unlikelihood that, once modified, any such former "firearm" could readily be restored to functional use.

4. The following are examples of Wada's modifications of the firearms: Wada had Roger Loock modify a firearm by cutting the frame of the firearm vertically or by removing and deactivating the slide rail from the top of a semi-automatic handgun as described in Exhibit A to Wada's Evidentiary Hearing and Sentencing Memorandum. In addition, Wada used several methods to modify the barrels of semi-automatic handguns, which included cutting a slot out of the barrel and welding a metal rod to the barrel or drilling a hole on one side of the barrel and inserting a hardened metal pin into the barrel and through a steel rod.

5. After a "firearm" was "deactivated" by one of Wada's methods, it would take a great deal of time, expertise, equipment, and materials to attempt to reactivate the item so that it could "expel a projectile by the action of an explosive." As a result of Wada's modification methods, each "firearm" (a) no longer was "designed to ... expel a projectile by the action of an explosive," (b) could not "readily be converted" to do so, and (c) was no longer "the frame or receiver" of a weapon that was "designed to or ... [could] readily be converted to expel a projectile by the action of an explosive." The Court, therefore, finds unconvincing the government's evidence that such modified firearms could "readily" be returned to functional use.

DISCUSSION

According to the government, USSG § 2K2.1(b)(1)(D) applies to Count One because the "dewatted firearm-ornaments" that Wada sold fit the definition of "firearm" under federal law when he sold them, and, therefore, they should be counted for purposes of this specific offense characteristic.

Applying the definition of "firearm" in 18 U.S.C. § 921(a)(3) to the items Wada sold in the course of his business, the government asserts it need only prove by clear and convincing evidence any of the following to justify the application of USSG § 2K2.1(b)(1)(D) to Count One: (1) each item to be counted "was" designed to expel a projectile by an...