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United States v. Hasan

United States Court of Appeals, Fourth Circuit

June 6, 2013

UNITED STATES OF AMERICA, Plaintiff-Appellee,
v.
NAWAF M. HASAN, Defendant-Appellant.

Argued: March 28, 2013

Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. T. S. Ellis, III, Senior District Judge. (1:11-cr-00503-TSE-1)

ARGUED:

Marvin David Miller, Alexandria, Virginia, for Appellant.

Richard Daniel Cooke, OFFICE OF THE UNITED STATES ATTORNEY, Richmond, Virginia, for Appellee.

ON BRIEF:

Neil H. MacBride, United States Attorney, Rebeca H. Bellows, Assistant United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Alexandria, Virginia, for Appellee.

Before GREGORY, DUNCAN, and AGEE, Circuit Judges.

AGEE, Circuit Judge:

Nawaf Hasan was convicted of various offenses related to the trafficking of contraband cigarettes. Hasan challenges his convictions on the basis that the conduct of the government agents investigating this case was so outrageous as to violate his due process rights. Separately, Hasan argues that the district court applied the wrong statutory rule to calculate the amount of the civil forfeiture adjudicated against him. For the reasons explained herein, we reject both challenges and affirm the judgment of the district court in its entirety.

I.

Significant state-by-state disparities in the amount of taxes levied against the sale of a pack of cigarettes has created an interstate black market in the trafficking and distribution of cigarettes. Typically, cigarettes are purchased in a state with low taxes and then subsequently sold in another state where such taxes are much higher, but without the payment of the higher levy at point of sale. In this way, contraband cigarette traffickers seek to evade applicable state and local taxes on cigarettes while profiting from the tax disparity.

In response to this potential for state tax evasion, Congress enacted a statutory scheme to ensure that cigarettes are taxed at the applicable rate in the locality in which sold to the consumer. One part of the statutory framework is the Contraband Cigarette Trafficking Act ("CCTA"), 18 U.S.C. § 2341, et seq., which prohibits the trafficking of tobacco products to avoid payment of state taxes. Pursuant to 18 U.S.C. § 2342(a), "[i]t shall be unlawful for any person knowingly to ship, transport, receive, possess, sell, distribute, or purchase contraband cigarettes or contraband smokeless tobacco." "Contraband cigarettes" are defined as

a quantity in excess of 10, 000 cigarettes, which bear no evidence of the payment of applicable State or local cigarette taxes in the State or locality where such cigarettes are found, if the State or local government requires a stamp, impression, or other indication to be placed on packages or other containers of cigarettes to evidence payment of cigarette taxes[.]

18 U.S.C. § 2341(2).[1] Exempted from this definition, however, are cigarettes in the possession of, inter alia, "an officer, employee, or other agent of the United States . . . having possession of such cigarettes in connection with the performance of official duties." Id. § 2341(2)(D).

In 2008, agents with the Federal Bureau of Alcohol, Tobacco, and Firearms ("ATF") began an investigation, in conjunction with other state and federal authorities, into a ring of alleged traffickers of contraband cigarettes. For more than two years, ATF agents and other law enforcement officers participated in undercover transactions involving the sale of untaxed and unstamped cigarettes to members of the conspiracy, including Hasan.[2] The government alleges that between June 2009 and April 2011, undercover agents sold nearly 40, 000 cartons of untaxed or unstamped cigarettes to Hasan and other members of the conspiracy. Most of these contraband cigarettes were purchased from ATF agents in Virginia before being transported to New York for sale.[3]

In 2011, Hasan was indicted in the United States District Court for the Eastern District of Virginia on six counts: one count of conspiracy to purchase, possess, transport, and distribute contraband cigarettes, in violation of 18 U.S.C. ยง 371 (Count 1), and five substantive counts of purchasing, possessing, and ...


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