U.S.A v. Zhen Zhou Wu A/k/a Alex Wu, CRIMINAL NO. 08-10386-PBS
| Decision Date | 04 January 2011 |
| Docket Number | CRIMINAL NO. 08-10386-PBS |
| Parties | UNITED STATES OF AMERICA v. ZHEN ZHOU WU a/k/a ALEX WU; YUFENG WEI a/k/a ANNIE WEI; CHITRON ELECTRONICS, INC., Defendants. |
| Court | U.S. District Court — District of Massachusetts |
Defendants Zhen Zhou Wu ("Wu"), Yufeng Wei ("Wei"), and Chitron Electronics, Inc. ("Chitron-US") were indicted for illegal export of defense articles, and of technology controlle by the Department of Commerce from the United States to the People's Republic of China.1 After a lengthy jury trial with close to 1, 000 exhibits, the jury convicted defendants Wu and W of four counts of unlawfully exporting defense articles in violation of the Arms Export Control Act (AECA) between 2004 an 2006, but found defendant Wu not guilty of a fifth count. Itconvicted defendant Chitron-US of all five counts.2 (See Jury Verdict, Docket No. 203.) Defendants were also convicted of various other charges. Both Wu and Wei were convicted of two counts of conspiracy and of a scheme to falsify, conceal, and cover up material facts in violation of 18 U.S.C. § 1001(a)(1). Wu was convicted of twelve counts of unlawful export of commerce controlled goods in violation of 50 U.S.C. § 1705 and 18 U.S.C. § 2, and Wei was convicted of seven counts of the same charge. Finally, Wei was convicted of using a fraudulently obtained permanent resident card in violation of 18 U.S.C. § 1546(a). (See Jury Verdict, Docket No. 2 03.)
Four days prior to trial, defendants moved to dismiss the AECA Counts on the grounds that the AECA does not provide sufficient notice of the conduct it prohibits, and that the government's determination that the charged parts were on the USML violates the Ex Post Facto clause of the Constitution as applied to the defendants. (Docket No. 161.) In order to give the government time to respond to the motion to dismiss, and so that the Court could properly consider the important, difficult and complex underlying legal and factual issues, the Court delayed ruling on the motion until after the completion of thetrial.3 After trial, defendants Wu and Wei filed motions to set aside the verdict and for a new trial. (Docket Nos. 208, 210.) Although the post-trial motions are far-reaching and seek to set aside each of defendants' convictions, the Court writes now only to address the constitutional concerns related to the AECA counts.
After a review of the evidence admitted at trial and the applicable law, the Court ALLOWS defendants' post-trial motions (Docket Nos. 208, 210) as to Counts 2 and 3 and DENIES those motions as to all other counts of which defendants were convicted. The Court also DENIES defendant Wei's Motion for Acquittal on Count 34 of the Indictment (Docket No. 190; see also Docket No. 210).
The defendants seek to vacate convictions of the AECA Counts on two grounds: (1) that the AECA and related regulations did not provide sufficient notice to defendants of the prohibited conduct; and (2) that the charges violate the Ex Post Facto clause of the Constitution.
Defendants are charged with violating the Arms Export Control Act, 22 U.S.C. § 2778, which states that
In furtherance of world peace and the security and foreign policy of the United States, the President is authorized to control the import and the export of defense articles and defense services and to provide foreign policy guidance to persons of the United States involved in the export and import of such articles and services. The President is authorized to designate those items which shall be considered as defense articles and defense services for the purposes of this section and to promulgate regulations for the import and export of such articles and services. The items so designated shall constitute the United States Munitions List.
Id. § 2778(a)(1). The Act goes on to state that "no defense articles or defense services designated by the President... may be exported or imported without a license." Id. § 2778(b)(1)(B). Section 2778(c) creates criminal liability forwillful violation of the Act, and defendants were prosecuted under this section.
The President has delegated his authority to designate defense articles and services to the Secretary of State. 22 C.F.R. § 120.1(a). The Department of State has promulgated the International Traffic in Arms Regulations (ITAR), which include the United States Munitions List (USML), a list of defense articles and services that require a license for export, subject to certain exceptions, under the AECA. However, the USML is not a list of specific parts or part numbers that require licenses. It is rather a grouping of twenty-one categories that list the types of parts that are defense articles. See 22 C.F.R. § 121.1 (USML).
The charged parts in the AECA counts for which defendants were found guilty fall within USML Category XI-Military Electronics.5 Id. This category lists many types of electronics, such as radar equipment, that are "specifically designed or modified for military application." It also includes "[cjomponents, parts, accessories, attachments, and associated equipment specifically designed or modified for use with the equipment in paragraphs (a) and (b) of this category, except for such items as are in normal commercial use." The governmentindicted defendants for exporting electronics components specially designed or modified for use with military electronics.
The Department of State does not generally make USML determinations about specific products as soon as they reach the market. Most often, the manufacturer or license applicant self-designates an item as controlled under the USML. (Davis Tr. 1011, May 5, 2010.) In fact, in order to apply for USML licenses from the Department of State, a manufacturer must register with the Department of State. Registration requirements include the obligation to self-designate defense article at the time of manufacture. (Id. at 19.) However, this manufacturer determination is not made public in the regulations or any other pronouncement.
If a party is unsure about the status of a particular part, a Commodity Jurisdiction determination can be used "to clarify or readdress whether something is on the U.S. Munitions List." (Id.) A Commodity Jurisdiction request can be submitted to the Department of State by a private party, such as a manufacturer or exporter, or by another government agency. Thus, if a manufacturer or exporter is unsure whether or not a particular product falls within a category of the USML, the Directorate of Defense Trade Controls ("DDTC"), an office of the Department of State, will examine technical specifications of a product, along with other information, and determine whether or not it is on the Munitions List. 22 C.F.R. § 120.4. Terry Davis, the Deputy Director of the Office of Licensing within the DDTC, testified that under this regulatory framework, specific parts are considered to be on the USML "at the time of manufacture." (Id. at 21.) The Commodity Jurisdiction process can take up to six months where there is a dispute about jurisdiction. (See Def.'s TXs 30, 44.)
If a product is on the USML, then an exporter must obtain a license from the Department of State prior to exporting the defense article out of the United States.
The Due Process Clause of the Constitution "mandates that, before any person is held responsible for violation of the criminal laws of this country, the conduct for which he is held accountable be prohibited with sufficient specificity to forewarn of the proscription of said conduct." United States v. Anzalone, 766 F.2d 676, 678 (1st Cir. 1985). "As generally stated, the void-for-vagueness doctrine requires that a penal statute define the criminal offense with sufficient definiteness that ordinary people can understand what conduct is prohibited and in a manner that does not encourage arbitrary and discriminatory enforcement." Kolender v. Lawson, 461 U.S. 352, 357 (1983); see also Skilling v. United States, 130 S. Ct. 2896, 2933 (2010); Grayned v. City of Rockford, 408 U.S. 104, 108 (1972); Bouie v. City of Columbia, 378 U.S. 347, 350-51 (1964). The fact that thegovernment "might, without difficulty, have chosen '[c]learer and more precise language' equally capable of achieving the end which it sought does not mean that the [regulations] which it drafted [are] unconstitutionally vague." United States v. Powell, 423 U.S. 87, 94 (1975) (quoting United States v. Petrillo, 332 U.S. 1, 7 (1947)). "Rather, regulations are unconstitutionally vague 'only when they expose a potential actor to some risk or detriment without giving him fair warning of the nature of the proscribed conduct.'" United States v. Hescorp, Heavy Equip. Sales Corp., 801 F.2d 70, 77 (2d Cir. 1986) (quoting Rowan v. U.S. Post Office Dep't, 397 U.S. 728, 740 (1970)).
The Supreme Court has stated that "[i]n the field of regulatory statutes governing business activities, where the acts limited are in a narrow category, greater leeway is allowed" in terms of what level of notice can be deemed "fair." Papachristou v. City of Jacksonville, 405 U.S. 156, 162 (1972). "[E]conomic regulation is subject to a less strict vagueness test because its subject matter is often more narrow, and because businesses, which face economic demands to plan behavior carefully, can be expected to consult relevant legislation in advance of action." Vill. of Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 498 (1982) (involving a pre-enforcement facial challenge to village ordinance regulating drug paraphernalia); see also United States v. Hsu, 364 F.3d 192, 196 (4th Cir. 2004) ; United States v. Lee, 183 F.3d...
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