United States v. Yuri Izurieta

Case: 11-13585 Date Filed: 02/22/2013 Page: 1 of 26
[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
No. 11-13585
D.C. Docket No. 1:11-cr-20161-KMM-1
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
YURI IZURIETA,
ANNERI IZURIETA,
Defendants-Appellants.
Appeal from the United States District Court
for the Southern District of Florida
(February 22, 2013)
Before CARNES and COX, Circuit Judges, and RESTANI, * Judge.
*
Honorable Jane A. Restani, United States Court of International Trade Judge, sitting by
designation.
Case: 11-13585 Date Filed: 02/22/2013 Page: 2 of 26
RESTANI, Judge:
Defendants-Appellants Yuri Izurieta and Anneri Izurieta appeal their
convictions and sentencing for a conspiracy to unlawfully import goods into the
United States in violation of 18 U.S.C. § 545 and 18 U.S.C. § 371. For the
following reasons, we vacate the convictions of both of the Izurietas.
BACKGROUND
Anneri and Yuri Izurieta are the founders and officers of Naver Trading
Corp., a company that imports cheese, butter, and bread from Central America for
distribution in the United States. As part of the U.S. importation regime for food
products, all imports are screened upon entry at three distinct stages. First the
goods are examined by officials from Customs and Border Protection (ACustoms@)
for compliance with entry documentation regulations. See 19 C.F.R. § 141.86(a).
The goods are then approved for entry by the Department of Agriculture. See 19
C.F.R. § 12.8. Finally, food products are subject to inspection by the Food and
Drug Administration (AFDA@) under the Federal Food, Drug, and Cosmetic Act,
ch. 675, 52 Stat. 1040 (1938) (codified as amended at 21 U.S.C. §§ 301–399f). To
facilitate the importation and storage of covered goods, the FDA and Customs
permit importers to take possession of their goods under a conditional release,
pending test results or further inspection, provided the goods are securely stored in
2
Case: 11-13585 Date Filed: 02/22/2013 Page: 3 of 26
the importer=s warehouse pursuant to Asuch bond or other security as may be
prescribed by [the Secretary of the Treasury] . . . .@ 19 U.S.C. § 1499(a)(1). The
goods are considered to be on Ahold@ and may not be distributed until formal
authorization for entry into the commerce of the United States is provided by the
FDA. 21 U.S.C. § 381. Under the regulations, an importer may be required to
make the held goods available for inspection. See 19 C.F.R. § 141.113(c); 21
C.F.R. § 1.90. Ultimately, if the goods are found to be adulterated, the FDA may
demand under the applicable regulation that the goods be Aredelivered@ to Customs
for exportation or supervised destruction. See 21 U.S.C. § 381(a); 19 C.F.R.
§ 141.113(c).
In this case, the Izurietas and Naver Trading 1 were charged with seven
separate counts. Count 1 charged a conspiracy to unlawfully import in violation of
18 U.S.C. § 371. Counts 2B7 2 charged the Izurietas with the failure Ato redeliver,
export, and destroy with FDA supervision@ five shipments.3 Additionally, Count 3
also charged the Izurietas with failing Ato hold and make available for examination@
1
Although Naver Trading was tried with the Izurietas as a co-defendant and found guilty, it
is not a party to this appeal.
2
Count 6 was voluntarily dismissed by the prosecutor prior to trial.
3
The Izurietas stipulated for trial that the shipments in question were all contaminated, to
various extent, with E. coli, Staphylococcus aureus, and/or Salmonella.
3
Case: 11-13585 Date Filed: 02/22/2013 Page: 4 of 26
one shipment. The Izurietas were found guilty after a jury trial in which FDA
officials and the Izurietas= customs broker testified. The Izurietas appealed their
convictions and sentencing based on alleged violations of their Sixth Amendment
rights to confront witnesses, improper statements made by the prosecutor over the
course of trial, and faulty calculations underlying their sentences.
JURISDICTION
At oral argument, we sua sponte raised the question of whether the indictment
(attached to this opinion) underlying the convictions in this case sufficiently charged
a crime, thereby conferring subject-matter jurisdiction on both the district court and
this court. In particular, the court questioned whether Counts 2B7, charging the
Izurietas with unlawful importation in violation of 18 U.S.C. § 545, sufficiently
alleged crimes. The unlawful importation charge in the indictment was based on
violations of a Customs regulation, alleging the Afailure to deliver, export, and
destroy with FDA supervision@ certain imported goods found to be adulterated. See
19 C.F.R. § 141.113(c). Failure to comply with the regulation typically gives rise
to a civil remedy of liquidated damages in the amount of three times the value of the
goods. Id. § 141.113(c)(3).
The parties were permitted to file supplemental letter briefs following oral
argument on two issues: 1) may the court sua sponte raise the question of the
4
Case: 11-13585 Date Filed: 02/22/2013 Page: 5 of 26
sufficiency of the indictment on appeal, and if so, 2) does the indictment sufficiently
allege a crime?
The answer to the first question is clear in light of our previous opinions
explaining that a court may raise sua sponte jurisdictional issues up until the
issuance of the mandate on direct appeal. See United States v. Elso, 571 F.3d 1163,
1166 (11th Cir. 2009); United States v. Seher, 562 F.3d 1344, 1359 (11th Cir. 2009).
Fed. R. Crim. P. 12(b)(3)(B) permits a court, Aat any time while the case is pending
. . . to hear a claim that the indictment or information fails to invoke the court=s
jurisdiction or to state an offense.@ In Seher, we held that this court is required to
raise sua sponte the jurisdictional issue of whether the indictment sufficiently alleges
an offense in violation of the laws of the United States provided the mandate has not
issued on direct appeal. Seher, 562 F.3d at 1359. The government cites to the
unpublished opinion in United States v. Searcy for the proposition that the precise
date on which a case is no longer pending for purposes of Fed. R. Crim. P.
12(b)(3)(B) has not been firmly established. See 278 F. App=x 979, 981(11th Cir.
2008). Unpublished opinions are not binding precedent. See 11th Cir. R. 36-1,
IOP 6 (“Citation to Unpublished Opinions by the Court. The court generally does
not cite to its ‘unpublished’ opinions because they are not binding precedent.”). In
any event, we draw the line at the issuance of the mandate. Until the mandate
5
Case: 11-13585 Date Filed: 02/22/2013 Page: 6 of 26
issues, the court is required, if it has any doubt about the matter, to determine
whether the indictment states an offense.
The government=s citation to the Supreme Court=s opinion in United States v.
Cotton is equally unpersuasive. See 535 U.S. 625, 630B31 (2002). In dicta, the
Supreme Court in Cotton quoted an older opinion of Justice Holmes explaining that
A[t]he objection that the indictment does not charge a crime against the United States
goes only to the merits of the case.@ Id. (quoting Lamar v. United States, 240 U.S.
60, 65 (1916)). This court=s post-Cotton jurisprudence, however, has refused to
find that Cotton altered our established precedent recognizing that the failure to
allege a crime in violation of the laws of the United States is a jurisdictional defect.
United States v. Peter, 310 F.3d 709, 713B14 (11th Cir. 2002); see United States v.
McIntosh, 704 F.3d 894, 901B03 (11th Cir. 2013) (differentiating between
jurisdictional and technical defects in indictments). Accordingly, we address the
merits of the jurisdictional question.
We have not addressed squarely the second question briefed by the parties,
and there appears to be a circuit split on the key question as to what Alaw@ must be
violated for importation to be Acontrary to law@ under the charged statute, 18 U.S.C.
§ 545. See United States v. Place, 693 F.3d 219, 228B29 n.12 (1st Cir. 2012)
6
Case: 11-13585 Date Filed: 02/22/2013 Page: 7 of 26
(collecting cases).4 Under the smuggling statute:
Whoever fraudulently or knowingly imports or brings into the United
States, any merchandise contrary to law, or receives, conceals, buys,
sells, or in any manner facilitates the transportation, concealment, or
sale of such merchandise after importation, 5 knowing the same to have
been imported or brought into the United States contrary to law . . .
Shall be fined under this title or imprisoned not more than 20 years, or
both.
18 U.S.C. § 545 (emphasis and footnote added).
Recently, the Ninth Circuit in United States v. Alghazouli adopted a relatively
narrow interpretation of the statute. 517 F.3d 1179, 1187 (9th Cir. 2008). The
court decided that regulations are included within the definition of Alaw@ for
purposes of 18 U.S.C. § 545 only Aif there is a statute (a >law=) that specifies that
violation of that regulation is a crime.@ Id. (ultimately finding that violation of the
charged regulation was criminalized under a section of the Clean Air Act); see also
United States v. Lawson, 377 F. App=x 712, 716 (9th Cir. 2010) (finding a violation
of regulations related to the Convention on International Trade in Endangered
Species punishable under 18 U.S.C. § 545 because violation of the regulations was
4
The First Circuit did not decide in Place which sister circuit to follow. Place, 693 F.3d at
228 n.12. Because the appellant in that case made only an Aall-or-nothing@ argument that no
regulations could be included within the scope of Alaw@ under 18 U.S.C. § 545, the First Circuit
decided not to address Athis delicate point.@ Id.5
AImportation@ is the Abringing [of] an article into a country from the outside@ whether or
not legally entered or unloaded. Tomplain v. United States, 42 F.2d 203, 205 (5th Cir. 1930).
7
Case: 11-13585 Date Filed: 02/22/2013 Page: 8 of 26
criminalized under the Endangered Species Act).
The Ninth Circuit arrived at its conclusion by comparing 18 U.S.C. § 545 with
18 U.S.C. § 554. Alghazouli, 517 F.3d at 1187B88. The latter section, which was
newly enacted in 2006, 6 prohibits the fraudulent or knowing exportation from the
United States of goods Acontrary to any law or regulation of the United States.@ 18
U.S.C. § 554 (emphasis added); Alghazouli, 517 F.3d at 1186 n.3. Applying
common principles of statutory construction, the court reasoned that the word Alaw@
in 18 U.S.C. § 554 must not include regulations, otherwise the later mention of
regulations would be superfluous. Id. at 1187. The court then imposed this
interpretation of Alaw@ in 18 U.S.C. § 554 on the phrase Acontrary to law@ contained
in 18 U.S.C. § 545. Id.The Ninth Circuit also relied on older Supreme Court precedent which held,
A[i]t is necessary that a sufficient statutory authority should exist for declaring any
act or omission a criminal offence . . . .@ Id. at 1185 (citing United States v. Eaton,
144 U.S. 677, 688 (1892)). The Supreme Court in Eaton rejected the government=s
application of criminal penalties to a violation of a bookkeeping regulation under the
6
Although 18 U.S.C. § 545 was also amended in 2006 as part of the Patriot
Reauthorization Act, the only change was to extend the maximum sentence for a violation of the
section from five to twenty years. Alghazouli, 517 F.3d at 1186. The general content of 18
U.S.C. § 545 has remained substantially unchanged since 1930. See Act of June 17, 1930, Pub. L.
No. 71-361, 46 Stat. 590, 751 (1930).
8
Case: 11-13585 Date Filed: 02/22/2013 Page: 9 of 26
Oleomargarine Act. 144 U.S. at 688. The statute in the case imposed criminal
penalties for violations of Aany of the things required by law in the carrying on or
conducting of his business . . . .@ Id. at 685. But see United States v. Howard, 352
U.S. 212, 216 (1957) (limiting Eaton to Aits special facts@ and recognizing that the
violation of regulations may or may not give rise to criminal liability based on the
structure of the underlying statute).
By contrast, the Fourth Circuit has adopted a more expansive reading of 18
U.S.C. § 545. See United States v. Mitchell, 39 F.3d 465 (4th Cir. 1994). The
Fourth Circuit began its analysis in Mitchell with the proposition that A[i]t has been
established in a variety of contexts that properly promulgated, substantive agency
regulations have the >force and effect of law.=@ Id. at 468 (citing Chrysler Corp. v.
Brown, 441 U.S. 281, 295B96 (1979)). After reviewing the legislative history of
the section, the court determined that 18 U.S.C. § 545 criminalizes importation in
violation of any regulation Ahaving the force and effect of law.@ Id. at 470.
In classifying the regulation at issue in that case as one having the force and
effect of law, the court adopted a three-pronged test from Chrysler. 7 Id. The court
first looked to whether the regulations were A>substantive= or >legislative-type= rules,
7
Chrysler involved analysis of whether under 18 U.S.C. § 1905 a disclosure of information
by an agency is Aauthorized by law@ if such disclosure is permitted by an agency=s regulations.
441 U.S. at 295.
9
Case: 11-13585 Date Filed: 02/22/2013 Page: 10 of 26
as opposed to >interpretive rules, general statements of policy, or rules of agency
organization, procedure or practice.=@ Id. The court then considered whether the
regulations were promulgated pursuant to delegated quasi-legislative authority. Id.Finally, it addressed whether the regulations were issued in conformity with
congressionally-imposed procedural requirements such as the notice and comment
provisions of the Administrative Procedure Act. 8 Id.The Fourth Circuit=s general interpretation of Alaw@ appears consistent with
the precedent of the former Fifth Circuit, which is binding on this court. See Babb
v. United States, 252 F.2d 702, 707 (5th Cir. 1958) (AThere is nothing to indicate that
the term >contrary to law= as used in [18 U.S.C. § 545] is limited to laws for the
violation of which a penalty is imposed.@). The court also concludes that in some
cases this approach may reflect the likely intent of Congress in light of the pervasive
nature of administrative law, which the Supreme Court has often recognized as the
full equivalent of statutory law, absent evidence of congressional intent to the
contrary. See, e.g., Howard, 352 U.S. at 216. We are not persuaded by the Ninth
Circuit=s reasoning resulting in complete rejection of regulatory law absent a
coordinate criminal statute. The Ninth Circuit=s approach is principally based,
8
In applying its test, the court clarified that under the third prong regulations promulgated
prior to the enactment of the APA are required to meet only procedural requirements existing at the
time of enactment. Mitchell, 39 F.3d at 471 n.8.
10
Case: 11-13585 Date Filed: 02/22/2013 Page: 11 of 26
unconvincingly, on a statutory reading of 18 U.S.C. § 545 comparing its language
with 18 U.S.C. § 554, a statute enacted decades after 18 U.S.C. § 545. Further, we
find it unnecessary to reach such a sweeping result in order to consider the regulation
before us, which has not been addressed in any of the cases discussing whether
regulations are the subject of 18 U.S.C. § 545.
We are concerned, however, with the breadth of the Fourth Circuit=s
three-prong approach, derived from a non-criminal context. In contrast, lenity
remains an important concern in criminal cases, especially where a regulation giving
rise to what would appear to be civil remedies is said to be converted into a criminal
law. As the Supreme Court has explained: AThe rule of lenity is premised on two
ideas: First, a fair warning should be given to the world in language that the common
world will understand, of what the law intends to do if a certain line is passed;
second, legislatures and not courts should define criminal activity.@ Babbitt v.
Sweet Home Chapter of Cmtys. for a Great Or., 515 U.S. 687, 704 n.18 (1995)
(internal quotation marks omitted). When ambiguity exists, Athe ambit of criminal
statutes should be resolved in favor of lenity.@ United States v. Bass, 404 U.S. 336,
347 (1971). The rule is a limited one, however, applying only where there is a
Agrievous ambiguity or uncertainty@ in the statute. Chapman v. United States, 500
U.S. 453, 456 (1991). The lack of reference in 18 U.S.C. § 545 to violations of
11
Case: 11-13585 Date Filed: 02/22/2013 Page: 12 of 26
regulations does create some ambiguity and such ambiguity should be considered
grievous where the text or history of the regulation creates a strong perception that a
violation of the regulation will give rise to civil remedies only. 9
The court turns now to the indictment in the present case. The court will
examine only whether 19 C.F.R. § 141.113(c) meets this test because it is the one
regulation defendants were charged with violating in Counts 2B7.10 See Babb, 252
F.2d at 703B04 (requiring the indictment to specifically allege which law was
violated in 18 U.S.C. § 545 cases); see also Russell v. United States, 369 U.S. 749,
765 (1962) (requiring the indictment to Afully, directly, and expressly, without any
uncertainty or ambiguity, set forth all the elements necessary to constitute the
9
The government spends considerable space in its letter brief arguing that a statute may
impose both criminal and civil sanctions for the same act or criminalize the same act under
multiple statutes. This argument is undoubtedly true; however, it misses the problem discussed
here of a regulation that appears to be exclusively civil and that is said to be also a criminal law by
operation of an unrelated statute.
10
In its letter brief, the government argues that it alleged violations of a variety of statutes
and regulations in the indictment. Based on the evidence presented at trial, the court agrees that
the government may have been able to pursue convictions under a variety of laws, including 18
U.S.C. § 549, 21 U.S.C. §§ 331(a), 333(a), etc. In fact, Anneri Izurieta had her probation revoked
after her probation officer alleged violations of 21 U.S.C. §§ 331(a), 333(a)(2). See United States
v. Izurieta, 471 F. App=x 863, 865 (11th Cir. 2012). Contrary to its submission, however, the
government failed to actually allege violations of any of these statutes or regulations. Although
Counts 2B7 adopt paragraphs 1B10 of the AGeneral Allegations@ section of the indictment, these
paragraphs largely lay out the regulatory framework for importation in general terms. They do
not allege unlawful conduct by the Izurietas. The only conduct alleged to be unlawful in Counts
2B7 is the Afailure to redeliver, export, and destroy with FDA supervision@ or Afailure to hold and
make available for examination,@ mandates contained only within 19 C.F.R. § 141.113(c).
Although some of this language also appears within 21 U.S.C. § 381(a), that language is directed
towards the Secretary of the Treasury and not an importer.
12
Case: 11-13585 Date Filed: 02/22/2013 Page: 13 of 26
offence@).
The regulation with which the Izurietas are charged with violating here, 19
C.F.R. § 141.113(c), has been in force in its current form since May 1, 2007. See
Conditional Release Period and CBP Bond Obligations for Food, Drugs, Devices,
and Cosmetics, 72 Fed. Reg. 4423, 4429 (Jan. 31, 2007) (to be codified at 19 C.F.R.
pts. 113, 141, 151); see also Entry, Examination, Classification, and Appraisement
of Merchandise; Liquidation of Duties, 38 Fed. Reg. 17,443, 17,446 (July 2, 1973)
(promulgating the previous version of the regulation which similarly required
redelivery of goods denied admission but previously released from Customs=
custody). It became effective after a robust notice and comment period in which
over 140 comments were received. See Conditional Release Period and CBP Bond
Obligations for Food, Drugs, Devices, and Cosmetics, 72 Fed. Reg. at 4425.
Further, the regulation was issued under the authority of a variety of statutes,
including among others, 21 U.S.C. § 381(a) and 19 U.S.C. §§ 1499, 1623. See 19
C.F.R. § 141.113. These statutes set out conditions under which goods may be
delivered out of Customs= custody pending admission as well as the procedures by
which the goods may be recalled and examined. Additionally, 21 U.S.C. § 381(a)
precludes admission of adulterated goods and mandates that the Secretary of the
Treasury destroy or export adulterated food items within 90 days. Notably, none of
13
Case: 11-13585 Date Filed: 02/22/2013 Page: 14 of 26
these provisions that authorize the conditional release system establish criminal
liability for a failure to comply with the provision itself, referring instead to only
civil remedies. For example, 21 U.S.C. § 381(b) specifically permits delivery of
imported goods to the owner pending an admission determination, provided
sufficient bond is given to cover Athe payment of such liquidated damages in the
event of default as may be required pursuant to regulations of the Secretary of the
Treasury.@
Although reference to a criminal statute is made in 21 U.S.C. § 381(q)(6) in
connection with falsification of entry documents, no reference is made to the
conduct or the criminal statute, 18 U.S.C. § 545, actually charged here. Similarly,
although 21 U.S.C. § 331 lays out dozens of prohibited acts in violation of the
Federal Food, Drug, and Cosmetics Act subject to criminal penalties, this statute
does not specify as a crime the simple failure to hold, redeliver, export, and/or
destroy.11 19 C.F.R. § 141.113(c) itself, which specifically addresses such a
11
21 U.S.C. § 331 does criminalize other acts involving the importation or distribution of
food and drugs, including: the introduction into interstate commerce of adulterated food, the
importation of drugs in violation of § 381(d)(1), the release into commerce of an article imported
under § 381(d)(3), the release of an item detained under § 334(h), and the importation of food in
violation of § 381(m). 21 U.S.C. § 331(a), (t), (bb), (ee). Additionally, 18 U.S.C. § 542criminalizes the introduction or attempted introduction into commerce of goods by means of false
statements. None of these acts, however, was alleged in Counts 2B7 of the indictment.
Count 3 also charges the Izurietas with failure to hold the goods and make them available
for inspection. This could be read to impliedly indicate that the Izurietas introduced or delivered
for introduction the goods into interstate commerce. As discussed below, however, this type of
(continued…)
14
Case: 11-13585 Date Filed: 02/22/2013 Page: 15 of 26
failure, specifies only liquidated damages, not criminal punishment, for failure to
comply with the regulation.
The regulation at issue, 19 C.F.R. § 141.113(c), is clearly a substantive
regulation establishing obligations for importers. It primarily acts to establish the
general contractual terms between Customs and the importer regarding temporary
release and storage of the imported goods, along with agreed-upon liquidated
damages for non-compliance. See 19 C.F.R. § 141.113(c); see also 19 C.F.R.
§ 113.62 (laying out the basic entry bond conditions used by Customs, including a
requirement to hold the goods for inspection). The regulation fails to qualify as a
Alaw@ for purposes of criminal liability under 18 U.S.C. § 545 not because it has no
effect as a law but because that law is civil only, and in particular reflects contractual
requirements.
implication is not permitted under the clarity test applied to indictments, at least where the
defendant is charged with a violation of 18 U.S.C. § 545. See Babb, 252 F.2d at 703B04; see also
Russell, 369 U.S. at 765.
15
Case: 11-13585 Date Filed: 02/22/2013 Page: 16 of 26
While some regulations may fall under the criminal prohibitions of 18 U.S.C.
§ 545, the text of 19 C.F.R. § 141.113(c) along with the comments issued during its
promulgation certainly indicate to the average person that liability is strictly civil
and monetary, capped at most at three times the value of the merchandise secured by
bond, and is not aimed at punishment. See 19 C.F.R. § 141.113(c)(3); see also
Assessment of Liquidated Damages Regarding Imported Merchandise That Is Not
Admissible Under the Food, Drug and Cosmetic Act, 66 Fed. Reg. 16,850,
16,852B53 (Mar. 28, 2001) (noting that the liquidated damages claimed for failure to
redeliver is not intended to be punitive). In reality, the text of 19 C.F.R.
§ 141.113(c) sets forth the terms of the contract between the importer and Customs
by delineating the obligations of the importer upon conditional release and the
damages for a breach of those contractual obligations. In this case, the statutory
and regulatory structure and the history of the regulation demonstrate the vagueness
and ambiguity of both the statute and regulation in terms of defining criminal
liability. We disagree with the conclusion of our sister circuit in Mitchell that 18
U.S.C. § 545 is not grievously ambiguous, at least with respect to its effect of
criminalizing conduct in violation of 19 C.F.R. § 141.113(c). See Mitchell, 39 F.3d
at 470 (discussing a different regulation having the effect of law). Rather there is,
at a minimum, great doubt as to whether violation of this regulation per se gives rise
16
Case: 11-13585 Date Filed: 02/22/2013 Page: 17 of 26
to criminal liability. Under principles of lenity, charges of violations of this
regulation under 18 U.S.C. § 545 do not charge a crime, and the protections intended
by Grand Jury indictment were not afforded the Izurietas. Accordingly, the
convictions of both of the Izurietas on Counts 2B7 are vacated.
The court now turns to the sole remaining count of the indictment, Count 1,
alleging a conspiracy under 18 U.S.C. § 371.12 Although the Izurietas assume in
their briefing that Count 1 cannot stand if Counts 2B7 fail, this may not be so if the
indictment for Count 1 lacks the jurisdictional defect of the other counts. See
Wong Tai v. United States, 273 U.S. 77, 81 (1927) (recognizing that an indictment
count on conspiracy charges may be sufficient even if it references another
substantive count that is found to be insufficient). In paragraphs three and nine of
Count 1, the government alleges that the Izurietas and Naver Trading conspired to
distribute or sell adulterated goods. This allegation in Count 1, unlike the
allegations in Counts 2B7, presumably is based upon a statutory crime, 21 U.S.C.
§ 331(a), and if that were so, it could properly fall within the scope of an Aoffense
12
18 U.S.C. § 371 reads:
If two or more persons conspire either to commit any offense
against the United States, or to defraud the United States, or any
agency thereof in any manner or for any purpose, and one or more of
such persons do any act to effect the object of the conspiracy, each
shall be fined under this title or imprisoned not more than five years,
or both.
17
Case: 11-13585 Date Filed: 02/22/2013 Page: 18 of 26
against the United States@ under 18 U.S.C. § 371. The court, however, observes
that the vast majority of Count 1 simply alleges a conspiracy to commit Counts 2B7,
conduct that is not criminal. As explained above, Babb requires the indictment to
put the defendants on notice as to which underlying statute they are alleged to have
violated. 252 F.2d at 703B04. The indictment fails to meet this low standard. A
violation of 21 U.S.C. § 331(a) is not alleged anywhere in the indictment.
Moreover, the passing mention of unlawful acts in paragraphs three and nine is
obscured by the vast majority of the indictment, which focuses on acts that are not
criminal in nature. The indictment was sufficiently unclear as to whether any crime
was charged such that the average person could easily read Count 1 as actually
charging only a conspiracy to commit non-criminal acts. See Russell, 369 U.S. at
765. Thus, we conclude the entire indictment did not adequately set forth a
violation of criminal law, and subject matter jurisdiction does not exist.
Because the court vacates the Izurietas= convictions on all counts, the court
need not reach the other issues raised on appeal by the parties.
CONCLUSION
For the foregoing reasons, we VACATE the judgment below and the
convictions and sentences of both Yuri and Anneri Izurieta in their entirety.
18
FIL 1 ofMC
Case 1:11-cr-20161-KMM Document 12 Entered on FLSD Docket 03/03/2011 PageD · " -~--D.C.
a.ec.r~tt:».~t
12
Case: 11-13585 Date Filed: 02/22/2013 Page: 19 of 26
Mar 3, 2011
UNITED STATES DISTRICT COURT
'!'Ell LAft l
SOUTHERN DISTRICT OF FLORIDA C: LEII!o
~.D .
~
Of
.!1-. Ol!liT. ItT,
~- M llill
11-20161-CR-MOORE/SIMONTON
Case No. ____________________
18 u.s.c. § 371
18 u.s.c. § 545
18 u.s.c. § 2
UNITED STATES OF AMERICA
vs.
YURI IZURIET A,
ANNERI IZURIETA,
and
NA VER TRADING, CORP.,
Defendants.
__________________________./
INDICTMENT
The Grand Jury charges that:
GENERAL ALLEGATIONS
At all times relevant to this Indictment:
1. The United States Food and Drug Administration ("FDA") was an agency of the
United States that, along with other federal agencies, protected the health of the American public
through the enforcement of federal laws and regulations that ensured the safety of food.
2. When a shipment of food reached the United States from abroad, an importer, or a
customs broker acting on its behalf, was required to file entry documents with United States
Customs and Border Protection ("CBP"). 19 C.F.R. § 14l.l(a). These documents needed to
provide the identity, quantity, and origin of the food. 19 C.F.R. § 141.86(a). The food was not
considereq legally entered into the United States until after the shipment had arrived at th~ port
' ..
of entry and the federal government had authorized the delivery of the goods.
Case 1:11-cr-20161-KMM Document 12 Entered on FLSD Docket 03/03/2011 Page 2 of 12
Case: 11-13585 Date Filed: 02/22/2013 Page: 20 of 26
3. CBP could place a "hold" on an imported food, prohibiting its sale but allo'fving
its "conditional release." Under a conditional release, the importer of record took physical
custody of the consignment but was not permitted to release the product for admission and sale
into the United States. Conditional release did not constitute a release of the goods by CBP. 19
C.F.R. § 141.113(c)(1). If the FDA notified the importer that it intended to examine the
merchandise, the importer was required to hold the merchandise and make it available to the
FDA. 21 C.F.R. § 1.90; 19 C.F.R. § 141.113(c). Upon satisfactory completion of any required
sampling, testing, or other procedures, CBP and the FDA released the imported goods. 19
U.S.C. § 1499. If the FDA determined that the food was adulterated or mislabeled, CBP ordered
its redelivery into the physical custody of CBP, its destruction, or its exportation. 21 U.S.C. §
381(a); 19 C.F.R. § 141.113(c)(3).
4. A food was deemed to be adulterated if it bore or contained any poisonous or
deleterious substance which may render it injurious to health. 21 U.S.C. § 342(a)(1).
5. Escherichia coli (abbreviated as E. coli) are bacteria that can cause diarrhea,
urinary tract infections, respiratory illness, pneumonia, and other illnesses.
6. Staphylococcus aureus are bacteria that can cause nausea, vomiting, retching,
abdominal cramping, prostration, and transient changes in blood pressure and pulse rate.
7. Salmonella are bacteria that can cause diarrhea, fever, and abdominal cramps.
8. Defendant NA VER TRADING, CORP., a registered Florida corporation, was
engaged in the business of importing and distributing food, including dairy products, in local and
interstate commerce. NA VER TRADING, CORP. was a licensed importer of record with both
the FDA and CBP and had a principal place of business located at 4941 NW 192"d Street, Miami,
FL 33055.
2
Case 1:11-cr-20161-KMM Document 12 Entered on FLSD Docket 03/03/2011 Page 3 of 12
Case: 11-13585 Date Filed: 02/22/2013 Page: 21 of 26
9. Defendant ANNERI IZURIETA, a resident of Miami-Dade County, served as I
the President and Director ofNAVER TRADING, CORP.
10. Defendant YURI IZURIETA, a resident of Miami-Dade County, was the
husband of ANNERI IZURIETA.
COUNTl
Conspiracy to Smuggle Goods into the United States
(18 u.s.c. § 371)
1. Paragraphs 1 through 10 of the General Allegations section of this Indictment are
realleged and incorporated by reference as though fully set forth herein.
2. Beginning on or about April 18, 2007, and continuing through on or about
December 23, 2010, in Miami-Dade County, in the Southern District of Florida, and elsewhere,
the defendants,
YURI IZURIET A,
ANNERI IZURIET A,
and
NAVER TRADING, CORP.,
did knowingly, and with intent to further the object of the conspiracy, combine, conspire,
confederate, and agree with each other, and others known and unknown to the Grand Jury, to
commit an offense against the United States, that is: to fraudulently and knowingly import and
bring into the United States any merchandise contrary to law, in violation of Title 18, United
States Code, Section 545.
Purpose of the Conspiracy
3. It was the purpose of the conspiracy for the defendants and their coconspirators to
unlawfully enrich themselves through the distribution and sale of dairy products which the FDA
had detained and after receiving notice from the FDA that the dairy products were suspected to
3
Case 1:11-cr-20161-KMM Document 12 Entered on FLSD Docket 03/03/2011 Page 4 of 12
Case: 11-13585 Date Filed: 02/22/2013 Page: 22 of 26
be adulterated with E. coli, Staphyloccocus aureus, and Salmonella and that in some instances
they were adulterated with E. coli, Staphyloccocus aureus, and Salmonella.
Manner and Means of the Conspiracy
The manner and means by which the defendants and their coconspirators sought to
accomplish the object and purpose of the conspiracy included, but were not limited to, the
following:
4. YURI IZURIET A, ANNERI IZURIET A, and NA VER TRADING, CORP.
imported and caused to be imported dairy products and other food from Honduras and
Nicaragua.
5. YURI IZURIETA, ANNERI IZURIETA, and NAVER TRADING, CORP.
under-declared and caused to be under-declared the quantity of shipments of dairy products to
disguise the full amount of the shipments.
6. Despite requests to do so from the FDA, YURI IZURIET A, ANNERI
IZURIET A, and NAVER TRADING, CORP. failed to disclose the location of shipments of
dairy products after learning that the FDA had slated specific shipments for examination due to
concerns of adulteration with E. coli, Staphylococcus aureus, and Salmonella.
7. YURI IZURIETA, ANNERI IZURIETA, and NAVER TRADING, CORP.
distributed shipments of dairy products after learning that the FDA had slated specific shipments
for examination due to concerns of adulteration with E. coli, Staphylococcus aureus, and
Salmonella and which were not authorized for entry into the United States.
8. YURI IZURIET A, ANNERI IZURIET A, and NA VER TRADING, CORP.
failed to redeliver for destruction and exportation shipments of dairy products which the FDA
4
Case 1:11-cr-20161-KMM Document 12 Entered on FLSD Docket 03/03/2011 Page 5 of 12
Case: 11-13585 Date Filed: 02/22/2013 Page: 23 of 26
had determined to be adulterated with E. coli, Staphylococcus aureus, and Salmonella and which
were not authorized for entry into the United States.
9. YURI IZURIETA, ANNERI IZURIETA, and NAVER TRADING, CORP.
distributed dairy products which the FDA had determined to be adulterated with E. coli,
Staphylococcus aureus, and Salmonella and which were not authorized for entry into the United
States.
Overt Acts in Furtherance of the Conspiracy
In furtherance of the conspiracy, and to accomplish its object and purpose, at least one of
the conspirators committed and caused to be committed, in the Southern District of Florida, and
elsewhere, at least one of the following overt acts, among others:
1. On or about April 18, 2007, YURI IZURIETA, ANNERI IZURIETA, and
NAVER TRADING, CORP. imported and caused to be imported a shipment with entry number
BFV-0143458-8.
2. On or about September 9, 2007, YURI IZURIETA, ANNERI IZURIETA, and
NA VER TRADING, CORP. failed to redeliver, export, and destroy under FDA supervision
4,434 kg of dairy products from shipment BFV-0143458-8 after receiving notice that the FDA
refused their admission into the United States due to a concern of adulteration with
Staphylococcus aureus and Escherichia coli.
3. On or about December 27,2007, YURI IZURIETA, ANNERI IZURIETA, and
NAVER TRADING, CORP. imported and caused to be imported a shipment with entry number
BFV -0153541-8.
4. On or about June 12, 2008, YURI IZURIET A, ANNERI IZURIET A, and
NA VER TRADING, CORP. failed to redeliver, export, and destroy with FDA supervision
5
Case 1:11-cr-20161-KMM Document 12 Entered on FLSD Docket 03/03/2011 Page 6 of 12
Case: 11-13585 Date Filed: 02/22/2013 Page: 24 of 26
4,676 kg of dairy products from shipment BFV -0153541-8 after receiving notice that the qairy
products tested positive for E. coli, Staphylococcus aureus, and Salmonella.
5. On or about April 1, 2009, YURI IZURIETA, ANNERI IZURIETA, and
NA VER TRADING, CORP. imported and caused to be imported a shipment with entry number
BYV -0093 762-9.
6. On or about April 6, 2010, YURI IZURIETA, ANNERI IZURIETA, and
NA VER TRADING, CORP. failed to redeliver, export and destroy 1,027 kg of dairy products
from shipment BYV -0093762-9 after receiving a notice from the FDA refusing their admission
due to a concern of adulteration with Salmonella.
7. On or about July 17, 2010, YURI IZURIETA, ANNERI IZURIETA, and
NAVER TRADING, CORP. imported and caused to be imported a shipment with entry number
BYV -0004364-2.
8. On or about December 7, 2010, YURI IZURIETA, ANNERI IZURIETA, and
NAVER TRADING, CORP. failed to redeliver, export, and destroy 96 boxes of dairy products
from shipment BYV -0004364-2 after receiving notice from the FDA that the dairy products
tested positive for Staphylococcus aureus and Salmonella.
9. On or about December 18, 2010, YURI IZURIETA, ANNERI IZURIETA, and
NA VER TRADING, CORP. imported and caused to be imported a shipment with entry number
BYV -0004551-4.
6
Case 1:11-cr-20161-KMM Document 12 Entered on FLSD Docket 03/03/2011 Page 7 of 12
Case: 11-13585 Date Filed: 02/22/2013 Page: 25 of 26
10. On or about December 23,2010, YURI IZURIETA, ANNERI IZURIETA~ and
NAVER TRADING, CORP. arrived at a refrigerated warehouse to distribute 158 boxes of
dairy products from shipment BYV -0004551-4 without declaring them on entry paperwork and
without making them available for an FDA examination.
All in violation of Title 18, United States Code, Section 371.
COUNTS2-7
Smuggling Goods into the United States
(18 u.s.c. § 545)
1. Paragraphs 1 though 10 of the General Allegations section of this Indictment are
realleged and incorporated by reference as though set forth fully herein.
2. On or about the dates specified below with respect to each Count, in Miami-Dade
County, in the Southern District of Florida, and elsewhere, the defendants,
YURI IZURIET A,
ANNERI IZURIET A,
and
NA VER TRADING, CORP.,
did fraudulently and knowingly import and bring into the United States any merchandise
contrary to law, as set forth below:
....
= Approximate
=
0
u Date
Entry Number General Description
Failure to redeliver, export, and destroy with FDA
2 09/09/2007 BFV-0143458-8
supervision approximately 4,434 kg of dairy products
Failure to hold and make available for examination, and
failure to redeliver, export, and destroy with FDA
3 2/8/2008 WIG-2045735-2
supervision approximately 84 cartons of bread and
dairy products
Failure to redeliver, export, and destroy with FDA
4 6/12/2008 BFV-0153541-8
supervision approximately 4,676 kg of dairy products
7
Case 1:11-cr-20161-KMM Document 12 Entered on FLSD Docket 03/03/2011 Page 8 of 12
Case: 11-13585 Date Filed: 02/22/2013 Page: 26 of 26
....
=
=
Approximate
Entry Number General Description
=
u Date
Failure to redeliver, export, and destroy with FDA
5 7/17/2008 WIG-2045978-8
supervision approximately 2,576 kg of dairy products
Failure to redeliver, export, and destroy with FDA
6 4/6/2010 BYV-0093762-9
supervision approximately 815 kg of dairy products
Failure to redeliver, export, and destroy with FDA
7 12/7/2010 B YV -0004364-2
supervision approximately 96 boxes of dairy products
In violation of Title 18, United States Code, Sections 545 and 2.
A TRUEBILL
F('fl(EPERSON
A. RAICH
STANT UNITED STATES ATTORNEY
8