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United States v. Jawad

United States Court of Appeals, Eighth Circuit

March 27, 2017

United States of America Plaintiff- Appellee
Yahya Jawad Defendant-Appellant

          Submitted: January 9, 2017

         Appeal from United States District Court for the Northern District of Iowa - Cedar Rapids

          Before RILEY, [1] Chief Judge, LOKEN and BENTON, Circuit Judges.


         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 the district court[2] 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 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 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.

         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 ...

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