USA v. Charles Neuman

Filing

UNPUBLISHED OPINION FILED. [09-30705 Affirmed ] Judge: EGJ , Judge: PEH , Judge: JES Mandate pull date is 01/18/2011 for Appellant Charles Neuman [09-30705]

USA v. Charles Neuman Case: 09-30705

Document: 00511333859 Page: 1 Date Filed: 12/28/2010

Doc. 0

IN THE UNITED STATES COURT OF APPEALS United States Court of Appeals FOR THE FIFTH CIRCUIT Fifth Circuit FILED
December 28, 2010 N o . 09-30705 Lyle W. Cayce Clerk

U N IT E D STATES OF AMERICA, P la in t iff - Appellee v. C H A R L E S NEUMAN, D e fe n d a n t - Appellant

A p p e a l from the United States District Court fo r the Eastern District of Louisiana U S D C No. 2:08-CR-24-1

B e fo r e JOLLY, HIGGINBOTHAM, and SMITH, Circuit Judges. E . GRADY JOLLY, Circuit Judge:* O n January 29, 2009, Charles Neuman was convicted of facilitating the im p o r t a t io n of counterfeit Nike shoes into the United States, of conspiring to t r a ffic in such goods, and of trafficking in such goods.1 At trial, the government c a lle d numerous witnesses to establish Neuman's guilt, including an Im m ig r a t io n and Customs Enforcement ("ICE") agent who investigated Neuman,

Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. Neuman was also convicted of being a felon in possession of a firearm, but he does not appeal that conviction.
1

*

Dockets.Justia.com

Case: 09-30705 Document: 00511333859 Page: 2 Date Filed: 12/28/2010

No. 09-30705 in d iv id u a ls who sold Neuman counterfeit products, his employees, and his exg ir lfr i e n d . The government also showed, over objection, that Neuman had

a c c u m u la t e d substantial gambling losses, and that Tracy Maniecki, one of N e u m a n 's customers, complained that the shoes she had purchased from him w e r e fake. At sentencing, Neuman requested, and was denied, a downward d e p a r t u r e based on the disparity between the $7,642.07 reimbursement he paid t o Nike and the full trademark infringement resulting from his actions--some $ 6 3 2 ,0 7 5 .0 0 . Neuman appealed on four grounds: the insufficiency of the

e v id e n c e offered to demonstrate that he knew that the goods were counterfeit a n d knew that they had come from China; the admission of Maniecki's c o m p la in t s ; the admission of his gambling losses; and the sentence imposed. Finding no error, we AFFIRM. I. I n February 2006, ICE began investigating an influx of counterfeit Nike it e m s into New Orleans from China, and it learned that Neuman was a supplier o f these products. On October 18, 2007, after monitoring Neuman for months, I C E agents obtained a warrant and searched the warehouse registered to N e u m a n 's company, Xxxcyte, and seized many counterfeit items. After

c o m p le t in g its search, ICE told Neuman that he was suspected of selling c o u n t e r fe it items, but he was not taken into custody. Subsequently, he sold s o m e of the goods that he had stored at a separate location. Finally, following h is arrest, Neuman told a fellow prisoner that he knew that the goods he had b e e n selling were counterfeit. All of the foregoing was established at trial. In addition, a Nike employee testified that the seized Nikes were c o u n t e r fe it; her testimony was corroborated by a specially trained government in v e s t ig a t o r . The government showed, over objection, that Tracy Maniecki i n fo r m e d Neuman's then girlfriend, Pou Vatthongxay, that the shoes she had p u r c h a s e d from Neuman were counterfeit, and that when Vatthongxay told 2

Case: 09-30705 Document: 00511333859 Page: 3 Date Filed: 12/28/2010

No. 09-30705 N e u m a n of Maniecki's complaint, he did not deny it, and instead instructed V a t t h o n g x a y to refund Maniecki's money. Testimony also showed that Neuman t o ld his employees, after they had been robbed at gunpoint inside the warehouse, t h a t because he did not want the police to be inside the warehouse, the e m p lo y e e s should lie and say that they had been robbed outside. There was also t e s t im o n y that the goods were sold under Xxxcyte's umbrella, that Neuman h a n d e d out business cards; that he had his wholesaler's license; and that c u s t o m e r s had been permitted to visit the warehouse. The government also s h o w e d that Neuman's supplier told him that the goods came from China, and t h a t Neuman told one of his employees the same thing. The supplier conceded, h o w e v e r , that Neuman never instructed him to obtain goods from China, and the s u p p lie r 's wife admitted that Neuman was unaware of trips she had made to C h in a to secure items. Over Neuman's objection, the government also offered t e s t im o n y to show that he had incurred heavy gambling losses. After the four day trial, Neuman was found guilty. He made several postt r ia l motions, none of which are relevant here. Thereafter, at sentencing, he s o u g h t a downward departure from the sentence suggested by the guidelines, a r g u in g that although he had infringed Nike's trademark to the tune of $ 6 3 2 ,0 7 5 .0 0 , his sentence should reflect the $7,642.07 he was ordered to pay N ik e in restitution, saying that amount reflected Nike's pecuniary harm. After c o n s id e r in g the objection, the court overruled it and, after applying several e n h a n c e m e n t s , imposed a guidelines sentence of 210 months. Neuman appealed, arguing that the evidence was insufficient to d e m o n s t r a t e the mens rea necessary to support the conspiracy, trafficking, and s m u g g lin g charges; that the trial court abused its discretion by allowing the e v id e n c e regarding his gambling habit and the e-mails to be admitted; and that t h e trial court abused its discretion by denying a downward departure.

3

Case: 09-30705 Document: 00511333859 Page: 4 Date Filed: 12/28/2010

No. 09-30705 II. B e fo r e determining whether the evidence presented was sufficient to s u s t a in the convictions, we will address Neuman's argument that the evidence r e g a r d in g his gambling losses and Maniecki's e-mails was improperly admitted. Neuman objected to this evidence at trial, so we review for an abuse of d is c r e t io n . United States v. Griffin, 324 F.3d 330, 347 (5th Cir. 2003). A. N e u m a n , in conclusory fashion, argues that this testimony regarding his g a m b lin g losses was irrelevant and prejudicial, and therefore should not have b e e n admitted. See FED. R. EVID. 402, 403. He does not, however, address the t r ia l court's rationale for permitting the evidence to be admitted--that it p o t e n t ia lly was indicative of Neuman's criminal motive or criminal intent, and t h e r e fo r e admissible under FED. R. EVID. 404(b). Faced with Neuman's deficient b r ie fin g , we decline to address the issue's merits, and hold that the trial court d id not abuse its discretion. United States v. Martinez, 263 F.3d 436, 438 (5th C ir . 2001) (failure to properly brief an issue leads to waiver). B. N e u m a n contends that the e-mails exchanged between Vatthongxay and M a n ie c k i were inadmissible hearsay. The government responds that the e-mails w e r e not offered for their truth, i.e., to show that Maniecki bought fake shoes fr o m Neuman, but instead to show that Vatthongxay was made aware there m ig h t be an issue with the authenticity of the goods.2 Evidence was then

a d m it t e d to show that Vatthongxay informed Neuman of Maniecki's complaints, a n d that he did not protest, but told Vatthongxay to refund Maniecki's money.

In his brief, Neuman claims that the evidence was admitted to show Maniecki's state of mind. At oral argument, Neuman's counsel argued that this was a distinction without a difference, as, in either case, no hearsay exception is applicable. Although this position is, at best, questionable, we will, for the sake of argument, entertain his argument on the merits.

2

4

Case: 09-30705 Document: 00511333859 Page: 5 Date Filed: 12/28/2010

No. 09-30705 I n short, the e-mails were introduced to provide context, ultimately allowing the p r o s e c u t io n to show that Neuman was on notice that he might be peddling c o u n t e r fe it goods. We thus find no abuse of discretion in the trial court's

d e c is io n to permit the e-mails to be introduced; they were not offered for their t r u t h , and are therefore not hearsay. See FED. R. EVID. 801(c) (hearsay rule e x t e n d s only to out of court statements that are offered to prove "the truth of the m a t t e r asserted."). III. N e u m a n challenges, for the first time on appeal, the sufficiency of the e v id e n c e introduced at trial, meaning we can reverse only if the record is so " d e v o id of evidence pointing to guilt" that the conviction creates "a manifest m is c a r r ia g e of justice." United States v. Ruiz, 860 F.2d 615, 617 (5th Cir. 1988) (in t e r n a l marks and citation omitted). Each of the statutes underlying the c h a lle n g e d convictions required the government to establish that Neuman acted k n o w in g ly . See 18 U.S.C. §§ 371, 545, 2320.3 He now acknowledges that the g o o d s were counterfeit and imported from China, but he argues that the e v id e n c e does not show that he was aware of these facts when he was selling the goods. Neuman argues that his supplier did not tell him the goods were c o u n t e r fe it, and that he believed the goods were wholesale items; that he created X x x c y te to sell the goods; that he handed out Xxxcyte business cards, and that h e allowed customers to visit Xxxcyte's warehouse. Neuman also argues that it w a s unclear to the untrained eye that the goods were counterfeit, a point the g o v e r n m e n t concedes. Neuman further argues that because he did not know the

We have previously recognized that Section 371 requires proof that the defendant "knew [his] conduct was unauthorized and illegal." United States v. Hopkins, 916 F.2d 207, 213 (5th Cir. 1990) (internal marks and citations omitted). Neuman does little to specifically challenge the conspiracy count, but, if we agree that he did not know that he was engaged in illicit activity, we would be required to overturn the conspiracy conviction.

3

5

Case: 09-30705 Document: 00511333859 Page: 6 Date Filed: 12/28/2010

No. 09-30705 g o o d s were counterfeit, and instead thought that they were closeout items, he w a s not aware that they were being illegally smuggled into the United States. See 18 U.S.C. § 545. Finally, Neuman argues that the admissions from his s u p p lie r , and the supplier's wife, that Neuman never asked them to buy their g o o d s in China, and was unaware of their dealings in China, demonstrate that h e did not know that the goods came from China. The government says that the evidence was sufficient to show that N e u m a n knowingly violated the law. The government emphasizes that he r e fu n d e d Maniecki's purchase after she complained that the goods were fake; t h a t he did not want law enforcement in his warehouse, even though he and his e m p lo y e e s had been robbed at gunpoint; that after being informed of the charges a g a in s t him, he sold the remaining goods that he had stored in another location; a n d that he told a fellow prisoner that he knew the goods were counterfeit. The g o v e r n m e n t further asserts that the record is not "devoid of evidence" to d e m o n s t r a t e that Neuman knew the goods had been smuggled into the country, b e c a u s e the record shows that his supplier told him that the goods came from C h in a , and Neuman told one of his employees the same thing. To summarize, Neuman was put on notice, on two occasions--once by Tracy M a n ie c k i, and once by the ICE agent--that he might be selling counterfeit p r o d u c t s , but he continued to sell them. He admitted to a fellow prisoner that t h e goods were counterfeit. Following a harrowing robbery, he did not want the p o lic e to enter his warehouse. Finally, Neuman's supplier told him the goods c a m e from China, and Neuman admitted as much to one of his employees. In s h o r t , because the record is not so "devoid of evidence" as to create a "manifest m is c a r r ia g e of justice," we affirm Neuman's conviction. See Ruiz, 860 F.2d at 617.

6

Case: 09-30705 Document: 00511333859 Page: 7 Date Filed: 12/28/2010

No. 09-30705 IV . H a v in g concluded that the government offered sufficient evidence to e s t a b lis h Neuman's guilt, we must determine whether the trial court abused its d is c r e t io n by imposing a guidelines sentence of 210 months. When we review t h e substantive reasonableness of a sentence, we review for an abuse of d is c r e t io n . United States v. Gutierrez-Hernandez, 581 F.3d 251, 254 (5th Cir. 2 0 0 9 ). In so doing, we consider whether the sentence "1) does not account for a fa c t o r that should receive significant weight, 2) gives significant weight to an ir r e le v a n t or improper factor or 3) represents a clear error of judgment in b a la n c in g the sentencing factors." United States v. Smith, 440 F.3d 704, 708 (5 t h Cir. 2006). We presume that sentences that fall within the sentencing g u i d e lin e s are reasonable. United States v. Nikonova, 480 F.3d 371, 376 (5th C ir . 2007). To rebut that presumption it must be shown that the "sentence falls s o far afoul of one of the standards in Smith as to constitute clear error in the c o u r t's exercise of its broad sentencing discretion." Id. Neuman argues that the trial court abused its discretion in imposing a s e n te n c e that reflects the infringement amount, which was $632,075.00, instead o f the amount of the restitution he paid to Nike, which was $7,642.07. Neuman a r g u e s that the trial court should consider a downward departure in the face of s u c h disparities. See U.S.S.G. § 2B5.3, n.4(c). If viewed in the light of Smith, his a r g u m e n t appears to be that the trial court failed to account for a factor that s h o u ld receive significant weight, or that it committed a clear error in judgment in weighing that factor under the circumstances of this case. The government a r g u e s that the trial court considered, but rejected, Neuman's argument, and, in upholding the sentence imposed in Nikonova, we found it significant that the t r ia l court fully considered the defendant's objections. 480 F.3d at 377. As argued by the government, the trial court considered the disparity b e tw e e n the infringement amount and the restitution paid to Nike, but 7

Case: 09-30705 Document: 00511333859 Page: 8 Date Filed: 12/28/2010

No. 09-30705 d e t e r m in e d that the sentence should reflect the former instead of the latter, and t h e r e fo r e elected to impose a guidelines sentence instead of granting a d o w n w a r d variance. In so doing, it did not give improper weight to any factor, fa il to account for any factor, or commit a clear error of judgment in balancing t h e sentencing factors.4 In short, Neuman has failed to rebut the presumption o f reasonableness attached to sentences that fall within the guidelines, see id. a t 376-77, and we affirm his sentence. V. W e have held that the trial court did not abuse its discretion by permitting t h e government to introduce evidence of Neuman's gambling activities and e v id e n c e of a series of e-mails exchanged between his then girlfriend and one of h is customers. We have further held that the government presented sufficient e v id e n c e to demonstrate that Neuman was aware of the nature of his actions, i.e ., he had conspired with others to deal in counterfeit goods, had knowingly d e a lt in counterfeit goods, and knowingly facilitated the importation of such g o o d s into the United States from China. Finally, we have held that the trial c o u r t did not abuse its discretion by sentencing Neuman to 210 months in p r is o n , even though the sentence reflects the full infringement amount, instead o f the restitution Neuman paid to Nike. The judgment of the district court is t h e r e fo r e , in all respects, AFFIRMED.

We also recognize that the restitution paid to Nike was so low only because Nike sought to regain only its expenses incurred in helping to prosecute the case, instead of seeking to recover a larger amount. See 18 U.S.C. §§ 2323, 3663A (providing that victims are entitled to recover the value of their property that has been stolen).

4

8