United States v. DeFreitas
92 F. Supp. 2d 272 (2000)
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Rule of Law:
Trafficking in counterfeit goods under 18 U.S.C. § 2320 is a continuing offense, and pursuant to 18 U.S.C. § 3237(a), venue is proper in any district through which the goods are transported as part of their importation or interstate commerce, even if no sale occurs in that district.
Facts:
- Perry DeFreitas owned Drapkin's, a stationery store in New Jersey authorized to sell Ty, Inc.'s 'Beanie Babies' stuffed animals.
- Unable to obtain enough genuine products to meet high customer demand, DeFreitas traveled to China in March 1998.
- In China, DeFreitas purchased approximately 7,296 counterfeit Beanie Babies for less than $1 each, including valuable 'retired' styles he knew had high secondary market value.
- DeFreitas arranged for the counterfeit goods to be shipped from China to the United States, intending to resell them.
- The shipment traveled from China to Canada, was trucked to John F. Kennedy International Airport in Queens, New York, and then passed through the Southern District of New York en route to a warehouse in New Jersey.
- DeFreitas had pre-arranged to sell some of the anticipated shipment to Charles Martin, who also planned to resell them in the secondary market.
- Upon their arrival, DeFreitas sold some counterfeit 'Erin' bear Beanie Babies, but customers discovered they were fakes and returned them, prompting DeFreitas to stop selling them in his store.
Procedural Posture:
- The U.S. Government filed a criminal complaint against Perry DeFreitas.
- A grand jury in the U.S. District Court for the Southern District of New York issued a two-count indictment charging DeFreitas with conspiracy to traffic and trafficking in counterfeit goods.
- Following a trial in the district court, a jury found DeFreitas guilty on both counts.
- DeFreitas filed a post-verdict motion for a judgment of acquittal under Rule 29(c), arguing that the government failed to prove that venue was proper in the Southern District of New York.
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Issue:
Does the mere transportation of counterfeit goods through a judicial district, as part of a continuous journey from their point of origin to their ultimate destination for sale, establish proper venue for a trafficking charge under 18 U.S.C. § 2320 in that district?
Opinions:
Majority - Sweet, District Judge
Yes, the transportation of counterfeit goods through a judicial district is sufficient to establish venue for a trafficking charge. The court reasons that trafficking under 18 U.S.C. § 2320 constitutes a 'continuing offense' as defined by the general venue statute, 18 U.S.C. § 3237(a). Section 3237(a) explicitly states that any offense involving importation or transportation in foreign or interstate commerce is a continuing offense that can be prosecuted in any district 'from, through, or into which such commerce...moves.' The crime of trafficking begins when the defendant obtains control of the goods with the intent to transport and sell them, continues during transport, and ends with their disposal. Therefore, the passage of the counterfeit Beanie Babies through the Southern District of New York was part of the continuing offense, making venue in that district proper.
Analysis:
This decision clarifies the geographical scope of federal counterfeit trafficking prosecutions by defining the offense as a 'continuing' one. It establishes that the act of 'trafficking' is not confined to the point of purchase or sale but encompasses the entire transportation process. This interpretation provides federal prosecutors with significant flexibility, allowing them to bring charges in any judicial district along a counterfeit product's shipping route. Consequently, this precedent strengthens the government's ability to prosecute complex international and interstate trafficking schemes by preventing defendants from defeating venue simply because the final sale occurred elsewhere.
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