United States v. Yi
460 F.3d 623 (2006)
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Rule of Law:
To convict a defendant for trafficking specific counterfeit goods under 18 U.S.C. § 2320, the government must prove the defendant knowingly used a counterfeit mark on those particular goods; a general admission of dealing in 'fake' items is not, by itself, sufficient to prove knowledge of different counterfeit goods contained in a separate shipment never found in the defendant's possession.
Facts:
- Zheng Xiao Yi owned XYZ Trading Corp., a discount retail store in Houston that imported goods from China.
- In July 2003, U.S. Customs agents inspected and seized a shipping container destined for XYZ, finding counterfeit Gillette and Underwriters Laboratories (UL) products.
- On August 20, 2003, an undercover agent visited XYZ, where an employee named 'Anna' stated that some batteries 'were not as good as the real ones' and warned against selling them in a retail store.
- On September 15, 2003, agents seized a second container destined for XYZ which contained 4,000 pairs of counterfeit Nike sandals.
- On November 7, 2003, agents executed a search warrant at XYZ's store, finding counterfeit Gillette, UL, and Marvel products, but no counterfeit Nike sandals.
- During the search, agents discovered cease-and-desist letters from Gillette and UL addressed to Zheng.
- After being taken into custody on an unrelated immigration matter, Zheng admitted to agents that he knew 'the stuff that he was importing was fake' and that he had received the letters.
- While outside for a cigarette break, Zheng offered an agent a $50,000 bribe for his release and promised he 'wouldn't continue in this business any more.'
Procedural Posture:
- Zheng Xiao Yi was indicted in the U.S. District Court for the Southern District of Texas on six counts of trafficking in counterfeit goods.
- At the close of the government's case at trial, Zheng moved for a judgment of acquittal, which the district court denied.
- A jury convicted Zheng on all six counts.
- The district court sentenced Zheng to 63 months in prison, at the top of the applicable guideline range.
- Zheng, as appellant, appealed his conviction and sentence to the U.S. Court of Appeals for the Fifth Circuit, with the United States as appellee.
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Issue:
Is a defendant's general admission of trafficking 'fake' goods sufficient to prove, beyond a reasonable doubt, the knowledge element for a specific counterfeit product that was seized in a separate shipment and never found in the defendant's possession?
Opinions:
Majority - Clement, Circuit Judge
No. A defendant's general admission of trafficking in counterfeit goods is insufficient to prove the element of knowledge for a specific counterfeit product that was never found in the defendant's possession and was part of a separate shipment. While the evidence was sufficient for the five counts related to goods found in Zheng's store or linked to his admissions, it was insufficient for the Nike sandals. Zheng's admissions and bribery attempt occurred during the search of his store and thus provided a reasonable inference of guilt only for the goods present or previously handled there. The government failed to present any other evidence connecting Zheng's knowledge to the Nike sandals in the second seized container, as they were never found in his store and the only link was an invoice with an unexplained product number. This connection was too weak and attenuated to support a conviction beyond a reasonable doubt for that specific count.
Analysis:
This decision clarifies the evidentiary requirements for proving the knowledge element in multi-count counterfeit trafficking cases under 18 U.S.C. § 2320. It establishes that a defendant's general 'consciousness of guilt' does not automatically apply to every item charged. The ruling forces prosecutors to provide specific, non-speculative evidence linking the defendant's knowledge to each distinct set of counterfeit goods, especially when dealing with separate shipments or different products. This raises the bar for the government in cases built on circumstantial evidence, requiring a more direct connection between the defendant and each specific count of trafficking.
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