United States v. Yahya Jawad ( 2017 )

United States Court of Appeals
For the Eighth Circuit
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No. 16-1596
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United States of America
lllllllllllllllllllll Plaintiff - Appellee
v.
Yahya Jawad
lllllllllllllllllllll Defendant - Appellant
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Appeal from United States District Court
for the Northern District of Iowa - Cedar Rapids
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Submitted: January 9, 2017
Filed: March 27, 2017
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Before RILEY,1 Chief Judge, LOKEN and BENTON, Circuit Judges.
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RILEY, Chief Judge.
Yahya Jawad challenges his sentence of 41 months imprisonment for
trafficking in counterfeit mark goods in violation of 18 U.S.C. § 2320(a)(1), asserting
1
The Honorable William Jay Riley stepped down as Chief Judge of the United
States Court of Appeals for the Eighth Circuit at the close of business on March 10,
2017. He has been succeeded by the Honorable Lavenski R. Smith.
the district court2 erred in calculating the value of the counterfeit goods and denying
Jawad an acceptance-of-responsibility reduction, and abused its discretion by setting
a substantively unreasonable sentence. Having appellate jurisdiction pursuant to
28 U.S.C. § 1291, we affirm.
I. BACKGROUND
In April 2014, the Michigan Department of State Police executed a traffic stop
of Jawad during which he consented to a search of his van and trailer. As a result of
this search, police officers discovered and seized a variety of counterfeit property,
including purses, shoes, and belt buckles. The total value of the counterfeit items was
estimated to be approximately $140,060. Jawad was convicted of possession of
counterfeit property in Michigan state court and was required to pay a fine.
Jawad again came to the attention of law enforcement approximately nine
months later. Jawad ran a liquidation or “Clearance Sale” in an abandoned store in
Cedar Rapids, Iowa, in January 2015. Undercover agents from Homeland Security
Investigations (HSI) paid a $7 fee to gain entry to the event, where employees
identified Jawad as the manager. Jawad admitted merchandise in his booth, such as
knock-off “Beats by Dr. Dre” headphones and phony designer purses, was
counterfeit. HSI agents seized all merchandise in Jawad’s possession, valued at
$156,650. On September 29, 2015, Jawad pled guilty to a one-count information
charging him with trafficking in counterfeit goods in violation of 18 U.S.C.
§ 2320(a)(1). The magistrate judge ordered Jawad released before sentencing on a
personal recognizance bond with supervision.
While released on supervision, Jawad once again found himself violating the
law. In December 2015, less than three months after Jawad pled guilty in Iowa
2
The Honorable Linda R. Reade, United States District Judge for the Northern
District of Iowa.
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federal court, Kansas law enforcement officers attended a “Nationwide Liquidation”
event in Topeka, Kansas, to ensure the event complied with state regulations. A
woman collecting a $6 “membership” fee at the doors to the abandoned grocery store
told officers Jawad was in charge of the event. The officers verbally warned Jawad.
Jawad assured the officers he would comply with all applicable regulations, including
making sure vendors were not selling counterfeit goods. Undercover officers later
returned to conduct a controlled buy. The undercover officers purchased hats and
sunglasses that were determined to be counterfeit, including several pairs of
counterfeit Ray-Ban sunglasses the undercover officers purchased directly from
Jawad, along with caps bearing logo marks of Adidas, North Face, Nike, and Under
Armour. Law enforcement then executed a search warrant and secured the entire
premises. Only a portion of the merchandise at the sales event was seized because
of the sheer amount of goods involved.
Jawad admitted the entrance fees collected went to him to “offset some of the
expenses that he has to pay” in setting up and running the sales event. When asked
where he obtained the merchandise, Jawad would only state the merchandise came
from UPS. Boxes containing merchandise recovered at the sales event were
addressed to Yahya Liquidation Sale, the name of Jawad’s business, and other
paperwork and business supplies such as credit card readers were registered to Yahya
Jawad or Yahya Collections. The total value of the merchandise seized was estimated
at $284,000.
Back in Iowa federal court, Jawad was sentenced on February 22, 2016. The
government sought an enhancement pursuant to United States Sentencing Guidelines
(U.S.S.G. or Guidelines) §§ 1B1.3(a)(2) and 2B1.1, treating Jawad’s Michigan
conviction and the Kansas sale as relevant conduct in calculating the infringement
amount of Jawad’s offense of conviction. The government recognized the
approximately $140,000 valuation from the Michigan conviction, the $156,000
valuation from the Iowa sale, and the $284,000 valuation from the Kansas sale would
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qualify Jawad for a fourteen-level enhancement, however, “out of an abundance of
caution, particularly related to the Michigan amount seized since we can’t get our
hands actually on it,” the government only recommended a twelve-level
enhancement. See id. § 2B1.1(b)(1)(G)-(H). Jawad contended a ten-level
enhancement was appropriate because only the merchandise Jawad was personally
responsible for in the Kansas sale should be included in the total value because
Jawad’s “involvement was limited to accepting the $6 entry fee and the items
contained in” only his booth. See id. § 2B1.1(b)(1)(F).
The district court found the Kansas sale was relevant conduct to the offense of
conviction and agreed with the government that the value of all merchandise seized
at that event should be included in the total value of the infringement amount for
purposes of U.S.S.G. § 2B1.1. Because “easily the amount fits within more than
250,000, but less than 550,000,” the district court applied a twelve-level
enhancement.
Jawad further argued for a two-level reduction for acceptance of responsibility
pursuant to U.S.S.G. § 3E1.1(a) because he pled guilty and was compliant and
forthcoming with investigators. The government objected to the reduction,
suggesting Jawad clearly did not accept responsibility for his actions because he
persisted in a “blatant re-offense of that which he had pled guilty to . . . in Iowa.” The
district court agreed with the government that Jawad did not accept responsibility. As
the district court observed, “[w]hen you are out on pretrial release, which is trusting
someone to go out and remain free of crime and he goes and sets up another sale out
of state, that argues very strongly against a break in sentencing for acceptance of
responsibility.” Accordingly, Jawad’s total offense level was 20. With a criminal
history category I, Jawad’s advisory Guidelines sentencing range was 33 to 41
months imprisonment.
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The district court then indicated it was inclined to sentence Jawad above his
advisory Guidelines sentencing range and that “the more appropriate sentence is
around a five year sentence.” The district court found Jawad’s conduct exhibited a
“total and complete lack of respect for the laws of the United States” and
demonstrated Jawad is “somebody who continually violates the same law or
regulation time after time.” Citing a need to reflect the seriousness of the offense and
to deter Jawad from future crimes, the district court sentenced Jawad to 41 months
imprisonment. Jawad filed this timely appeal, (1) contending the district court erred
in calculating his advisory Guidelines sentencing range because it (a) applied a
twelve-level increase for the amount of loss when it erroneously calculated the loss
amount, and (b) failed to apply a two-level reduction for acceptance of responsibility,
and (2) claiming his sentence is substantively unreasonable.
II. DISCUSSION
Though Jawad does not contend the Kansas sale itself should not be included
as relevant conduct, Jawad asserts the district court should have only included the
economic value of the goods for which he was personally responsible during the
Kansas sale, instead of including the value of all merchandise seized from the event,
when it calculated the infringement amount of his offense and relevant conduct
pursuant to U.S.S.G. § 1B1.3. We review the application of sentencing enhancements
and reductions de novo, and review the underlying factual basis, such as the value of
the infringement amount, for clear error. See United States v. Borders, 829 F.3d 558,
567 (8th Cir. 2016).
Specific offense characteristics, like the infringement amount, are determined
by including “all acts and omissions of others that were (i) within the scope of the
jointly undertaken criminal activity, (ii) in furtherance of that criminal activity, and
(iii) reasonably foreseeable in connection with that criminal activity.” U.S.S.G.
§ 1B1.3(a)(1)(B); see also id. § 1B1.3(a)(2). Thus, in calculating a defendant’s
advisory Guidelines sentencing range for an economic offense involving theft,
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property damage, or counterfeit goods, the defendant “can be held liable for any loss
from activities reasonably foreseeable, within the scope, and in furtherance of, the
criminal activity.” Borders, 829 F.3d at 568.
By his own admission, Jawad was “in charge” of the Kansas sales event. At
Jawad’s sentencing hearing, the evidence demonstrated Jawad held the keys to the
building where the sales event was held and used the entrance fees to offset his
expenses in running the event. The investigators also found “[c]hecks, card readers,
business cards . . . national liquidation cards and connections to websites” that were
associated with some variation of Jawad’s name or his “Yahya” business. The
shipping labels on boxes of the counterfeit merchandise found throughout the event
space were addressed to “Yahya Liquidation Sale.” It is clear from this evidence
Jawad had a major role in organizing and arranging the Kansas sales event. As the
organizer of an event specializing in the sale of “knock-offs,” and of similar events
around the country, Jawad cannot claim other vendors’ sales of counterfeit goods
were not reasonably foreseeable or beyond the scope of his undertaking. See United
States v. Adejumo, 772 F.3d 513, 533 (8th Cir. 2014) (“In determining the individual
defendant’s relevant conduct, the district court must look at what the individual has
agreed to do and whether the actions of others in the conspiracy were foreseeable
from his vantage point.”).
The main point of Jawad’s argument against including all goods seized at the
Kansas sale is that the district court valued the counterfeit goods “[i]n a glaringly
inconsistent manner” by including only the counterfeit goods he personally held for
sale in the valuation of goods for the Iowa sale. If anything, this argument points to
a potential undervaluation of the infringement amount resulting from Jawad’s
criminal conduct—because Jawad was similarly in charge of the Iowa sales event, all
counterfeit merchandise from that event reasonably could be included in calculating
the amount of the infringement. The district court did not err in including the full
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value of the goods seized in the Kansas sale in Jawad’s infringement amount and
applying a twelve-level enhancement.
The district court similarly did not err in denying Jawad the requested two-level
reduction for acceptance of responsibility. A district court can properly consider
various factors in determining whether the defendant has accepted responsibility,
including whether he “truthfully admitt[ed] the conduct comprising the offense(s) of
conviction” and “voluntar[il]y terminat[ed] or withdr[ew] from criminal conduct or
associations.” U.S.S.G. § 3E1.1 cmt. n.1(A)-(B). “[W]e will reverse the district
court’s denial of a reduction ‘only if it is so clearly erroneous as to be without
foundation.’” United States v. Binkholder, 832 F.3d 923, 927 (8th Cir. 2016)
(quoting Adejumo, 772 F.3d at 536). Here, the district court had a strong foundation
upon which to base its denial of an acceptance-of-responsibility reduction. While
Jawad did admit the conduct underlying his conviction, he did not voluntarily
terminate or withdraw from his involvement in criminal conduct. “[C]ontinued
criminal conduct, even if minor and unrelated to the offense of conviction, can make
a sentence reduction for acceptance of responsibility inappropriate.” United States
v. Ngo, 132 F.3d 1231, 1233 (8th Cir. 1997). Certainly, if subsequent minor,
unrelated criminal conduct makes an acceptance-of-responsibility reduction
inappropriate, so too does continued involvement in the same criminal conduct as the
offense of conviction.
Finally, Jawad maintains his sentence was substantively unreasonable. While
the district court did sentence Jawad at the top of his advisory Guidelines range, “‘it
will be the unusual case when we reverse a district court sentence—whether within,
above, or below the applicable Guidelines range—as substantively unreasonable.’”
United States v. Feemster, 572 F.3d 455, 464 (8th Cir. 2009) (en banc) (quoting
United States v. Gardellini, 545 F.3d 1089, 1090 (D.C. Cir. 2008)). “Jawad’s total
and complete lack of respect for the laws of the United States,” as the district court
noted, and Jawad’s disrespect for the rightful property rights of others, evidenced
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especially by Jawad’s continued criminal conduct while on pretrial release, justify the
district court’s determination that Jawad is “at high risk to recidivate because [he
doesn’t] care.” While the district court recognized Jawad has no history of alcohol
or substance abuse, the district court set a sentence it felt reflected the seriousness of
Jawad “stealing the mark of manufacturers who have expended consider[able] time
and money to develop the mark” and then “deceiv[ing] the customer,” which could
have a “potential impact on the American economy and the business people that work
hard to produce responsible and respected goods.” The district court did not fail to
consider a relevant factor, give significant weight to an improper or irrelevant factor,
or commit a clear error of judgment in weighing the appropriate factors, and thus did
not abuse its discretion in sentencing Jawad. See United States v. Funke, 846 F.3d
998, 1000 (8th Cir. 2017).
III. CONCLUSION
We affirm in all respects.
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