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UNITED STATES v. OBIECHIE

July 1, 1993

UNITED STATES OF AMERICA, Plaintiff,
v.
JOSEPH DANLEY OBIECHIE, Defendant.


LINDBERG


The opinion of the court was delivered by: GEORGE W. LINDBERG

Defendant, Joseph Daniel Obiechie, is charged with unlawfully dealing in firearms and unlawfully exporting or attempting to export fifty (50) Beretta .25 caliber semi-automatic pistols and ninety (90) boxes of .25 caliber Remington ammunition from the United States to Nigeria during the period January 7, 1992 through May 5, 1992. Count I of the indictment charges defendant with knowingly and willfully engaging in the business of dealing in firearms without a license in violation of 18 USC § 922(a)(1)(A). Counts II through IV of the indictment charge defendant with knowingly and willfully exporting or attempting to export firearms and ammunition (defense articles on the U.S. Munitions List) without a license in violation of 22 USC § 2778.

 This matter was tried before the court in a three day bench trial. The evidence at trial established that defendant went to Shore Galleries, Inc. ("Shore") in Lincolnwood, Illinois in late 1991 to purchase firearms. Shore is one of Illinois' largest wholesale and retail firearms establishments. Defendant was advised that he had to possess an Illinois Firearms Owners Identification ("FOID") card in order to purchase firearms. Personnel at Shore assisted defendant in completing the application form and defendant subsequently received the card.

 Defendant returned to Shore on December 3, 1991 with his FOID card and purchased one .25 caliber Beretta handgun. Defendant, who is in the business of buying and exporting computer merchandise to Nigeria, subsequently traveled to Nigeria with both the Beretta and his computer merchandise in his luggage.

 Thereafter defendant made three more purchases at Shore: eight Berettas on January 2, 1992; 20 Berettas and 40 boxes of ammunition on April 15, 1992; and 21 Berettas and 50 boxes of ammunition on April 30, 1992. After each of the purchases, Shore enforced the three day waiting period required by Illinois law before delivery of the purchased firearms. Shore also completed and mailed the requisite Bureau of Alcohol, Tobacco and Firearms ("ATF") Forms 3310.4 and 4473 following each purchase.

 After examining the records of defendant's January 2, 1992 and April 15, 1992 multiple firearms purchases, an ATF agent suspected that defendant might be supplying firearms and ammunition to Chicago gangs. The ATF then requested Shore's cooperation in allowing an ATF agent to act as a salesperson to electronically record defendant's conversation when he returned to accept delivery of his April 30, 1992 order.

 Shore agreed to the request and ATF Special Agent Todd Reichert, wearing a body recorder and transmitter, waited on defendant when he returned on May 5, 1992 to accept delivery of 21 Berettas and 50 boxes of ammunition. When defendant left the store, Agent Reichert signaled to other agents and a detail of the Chicago Police gang crimes unit. The latter undertook a "traffic" stop of defendant when he entered the city limits of Chicago where it is illegal to possess an unregistered handgun.

 Defendant waived his Miranda rights and consented to a search of his vehicle. The firearms and ammunition were recovered from the trunk of defendant's car. Defendant was taken to a Chicago Police district station where he volunteered a consensual search of his Chicago apartment, which the police declined. Defendant was subsequently arrested for the following federal offenses.

 I. SECTION 922(a)(1)(A)

 Section 922(a)(1)(A) of the Gun Control Act of 1968 provides that it is unlawful for any person:

 
except a licensed importer, licensed manufacturer, or licensed dealer, to engage in the business of importing, manufacturing, or dealing in firearms, or in the course of such business to ship, transport, or receive any firearm in interstate or foreign commerce.

 18 USC § 922(a)(1)(A). The Act defines a dealer as "any person engaged in the business of selling firearms at wholesale or retail." 18 USC § 921(a)(11)(A). "Engaged in the business" is defined as:

 
a person who devotes time, attention, and labor to dealing in firearms as a regular course of trade or business with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms, but such term shall not include a person who makes occasional sales, exchanges, or purchases or firearms for the enhancement of a personal collection or for a hobby, or who sells all or part of his personal collection of firearms.

 18 USC § 921(a)(21)(C). The term "with the principal objective of livelihood and profit" means that "the intent underlying the sale or disposition of firearms is predominantly one of obtaining livelihood and pecuniary gain, as opposed to other intents, such as improving or liquidating a personal firearms collection." 18 USC § 921(a)(22). The government does not have to show, however, that defendant's primary business was dealing in firearms or that he made a profit from such dealing. See United States v Masters, 622 F.2d 83, 88 (4th Cir 1980).

 As originally enacted, section 922(a)(1)(A) had no scienter or mens rea requirement. Unlicensed dealing in firearms was essentially a strict liability offense. Congress determined that the lack of a mens rea requirement could result in severe penalties for those who unintentionally violated firearms offenses and passed the Firearms Owners' Protection Act in 1986 which amended 18 USC § 924(a)(1)(D) to include the element of willfulness in the underlying offense:

 
Whoever . . . willfully violates any other provision of this chapter, shall be fined not more than $ 5000, imprisoned not more than five years, or both, and shall become eligible for parole as the Parole Commission shall determine.

 See United States v Collins, 957 F.2d 72, 74 (2d Cir 1992). By amending section 924(a)(1)(D), Congress added the element of willfulness to section 922(a)(1)(A) and the other firearms offenses of the Gun Control Act of 1968.

 Congress, however, failed to define "willfully" in the context of this Act. The Seventh Circuit's Committee on Federal Criminal Jury Instructions stated that as used in various criminal statutes, "willful" has been construed to mean:

 
an act done voluntarily as distinguished from accidentally, with bad purpose, without justifiable excuse, without grounds for believing it was lawful, or with careless disregard for whether or not one has the right so to act. See United States v. Murdock, 290 U.S. 389, 394-95, 78 L. Ed. 381, 54 S. Ct. 223 (1933).

 Federal Criminal Jury Instructions of the Seventh Circuit (1980), 6.03 at 83. The Committee also noted that an act has been defined as "willful" in tax prosecutions "if done voluntarily and intentionally with the purpose of avoiding a known legal duty." Id at 83, citing United States v Pomponio, 429 U.S. 10, 50 L. Ed. 2d 12, 97 S. Ct. 22 (1976); See Cheek v United States, 498 U.S. 192, 111 S. Ct. 604, 112 L. Ed. 2d 617 (1991).

 Few cases have construed the willfulness provision of section 924(a)(1)(D). The Fourth Circuit stated: "We express no opinion on the question of whether 'willfully' does indeed require proof that the defendant violated a known legal duty." United States v O'Conner, 915 F.2d 1566, 1990 U.S. App. LEXIS 18201, *4 (4th Cir Oct. 16, 1990). The Second Circuit rejected the argument that "willfully" requires the government to prove that the defendant had specific knowledge of the statute and intentionally violated it. United States v Collins, 957 F.2d 72, 75-76 (2d Cir 1992). After lengthy analysis of the legislative history, the Collins Court determined that the "willfulness" element was to be read broadly to require the government to prove only that "the defendant's conduct was knowing and purposeful and that the defendant intended to commit an act which the law forbids." Id at 76. The Second Circuit did not define willful to require proof that the defendant knew the relevant statute and purposely violated his legal duty thereunder. *fn1"

 This court does not believe that the definition of "willful" applicable to tax prosecutions should be extended to section 922(a)(1)(A). The Fourth Circuit in United States v Rogers, 962 F.2d 342, 344 (4th Cir 1992) reasoned that to require proof that defendant knew his actions were illegal was at odds with basic assumptions of criminal law. Where the law imposes criminal liability, the requirement that defendant's actions be "willful" generally "'means no more than that the person charged with the duty knows what he is doing. It does not mean that, in addition, he must suppose that he is breaking the law.'" Rogers at 344, citing United States v Scanio, 900 F.2d 485, 489 (2d Cir 1990), quoting American Surety Co. v Sullivan, 7 F.2d 605, 606 (2d Cir 1925). The Fourth Circuit explained:

 
This interpretation of "willful" [set forth by Judge Learned Hand in American Surety Co. v Sullivan, supra.] runs parallel to the rule that "ignorance of the law is no excuse." That rule is "deeply rooted in the American legal system," Cheek v. United States, 498 U.S. 192, 111 S. Ct. 604, 609, 112 L. Ed. 2d 617 (1991), and exceptions to it must not be casually created."

 Rogers at 344.

 In Cheek, the Supreme Court determined that proof that defendant knew his conduct was illegal was necessary due to the complexity of the federal tax code. Cheek, 111 S. Ct. at 609-610. This exception to the traditional definition of "willful" is not relevant in this case. Unlike the Internal Revenue Code, the Gun Control Act of 1968 is not unduly complex so that a person in the business of dealing in firearms for livelihood and profit would be unable to determine what the law requires. Neither the statutory language nor the legislative history compel the conclusion that Congress believed that defendant's knowledge of the illegality of his acts must be proven.

 To establish a violation of 18 USC § 922(a)(1)(A), the government must prove: (1) that defendant was not a licensed dealer, and (2) willfully engaged in the business of dealing in firearms. The evidence established that defendant did not possess a license to deal in firearms and was engaged in the business of dealing in firearms for livelihood and profit. Given defendant's tape recorded conversation, there was substantial evidence that defendant intended to sell the 21 Beretta pistols purchased on May 5, 1992 in Nigeria. Defendant's taped statements further established a reasonable inference that he had previously sold the other 29 Beretta pistols for profit in Nigeria.

 Much of counsels' argument was directed to defendant's tape recorded conversation with Agent Reichert at Shore Galleries. The court was attentive to the context in which defendant made statements on the tapes played to the court. The court finds the following statements were incriminating on the issue of whether defendant intended to sell or sold the Berettas for profit in Nigeria or whether he gave them away to the "Chief" as defendant testified at trial:

 
"Big risk factor." T.14
 
"In terms of the government, you know, um, even if you have a license, you're not allowed to take more than two [firearms into Nigeria]." T.14
 
and,
 
"They don't know I buy and sell guns [in the context of instructing Agent Reichert not to tell other Nigerians who may come to the store about defendant]." T.15 (Emphasis added.)
 
"I sell guns for protection to governors, commissioners." T.15 (Emphasis added.)
 
"See they [government civilians in Nigeria] don't have access to buy." T.17 (Emphasis added.)
 
"That's why I make forty percent." T.17

 This evidence established beyond a reasonable doubt that defendant was engaged in the business of buying (from Shore) and selling (in Nigeria) firearms based upon his repetitive purchases of multiple numbers of firearms. Nor can there be any doubt that he did so for profit given his taped admission of a forty percent return on his investment. 18 USC 921(a)(21)(C).

 II. 22 USC § 2778(b)

 Section 2778(a)(1) of the Arms Export Control Act sets forth the purpose behind government regulation of the importation and exportation of American-made military firearms and ammunition:

 
In furtherance of world peace and the security and foreign policy of the United States, the President is authorized to control the import and the export of defense articles and defense services and to provide foreign policy guidance to persons of the United States involved in the export and import of such articles and services. The President is authorized to designate those items which shall be considered as defense articles and defense services for the purposes of this section and to promulgate regulations for the import and export of such articles and services. The items so designated shall constitute the United States Munitions List.

 22 USC § 2778(A)(1). Section 2778(b)(2) of the Act provides:

 
Except as otherwise specifically provided in regulations issued under subsection (a)(1) of this section, no defense articles or defense services designated by the President under subsection (a)(1) of this section may be exported or imported without a license for such export or import, issued in accordance with this chapter and regulations issued under this chapter, except that no license shall be required for exports or imports made by or for an agency of the United States Government (A) for official use by a department or agency of the United States Government, or (B) for carrying out any foreign assistance or sales program authorized by law and subject to the control of the President by other means.

 22 USC § 2778(b)(2). The Act provides that defense articles enumerated in the United States Munitions List may not be exported without a license unless the official use or foreign assistance exceptions set forth in Sections 2778(b)(2)(A) or (B) are met. Semi-automatic firearms to caliber .50 and all component parts and ammunition for said firearms are designated as "significant military equipment" on the Munitions List. 22 CFR § 121.1(a) and (b) (Category I--Firearms (a)) (Category III--Ammunition (a)) (1992). *fn2" The regulations define "significant military equipment" as articles for which "special export controls are warranted because of their capacity for substantial military utility or capability." 22 CFR § 120.19 (1992).

 Before exporting any defense article on the Munitions List, an individual must apply for an export license from the State Department's Office of Munitions Control. The application requires a description of the defense articles, their ultimate destination and their intended use. 22 CFR §§ 123.1, 123.9 (1992). If the State Department grants the license, the individual must present it to the Customs Service at the time of export. 22 CFR § 123.25 (1992).

  The Act prohibits the issuance of export licenses to foreign persons. 22 USC § 2778(g)(5). The State Department's Office of Munitions Controls is also prohibited at times from issuing licenses for the export of arms to certain countries. See United States v Beck, 615 F.2d 441, 451 (7th Cir 1980) (export of arms to South Africa illegal pursuant to President Carter's arms embargo); United States v Schwartz, 924 F.2d 410, 416 (2d Cir 1991) (during period in question, the Munitions Control Office was prohibited by law from issuing licenses for the export of arms to Argentina; it was also the office's policy to deny all applications for shipments to the Soviet Union, Poland, East Germany and Iraq).

 Section 2778(c) imposes criminal sanctions on persons who "willfully" violate the Arms Export Control Act. 22 USC § 2778(c). In United States v Lizarraga-Lizarraga, 541 F.2d 826, 827 (9th Cir 1976), the Ninth Circuit analyzed the "willful" requirement as follows:

 
Two features of 22 USC § 1934 [the predecessor statute to 22 USC § 2778] strongly indicate that Congress used the term "willful" to require a showing of specific intent. First, the statute prohibits exportation of items listed by administrative regulation, not by the statute itself. Second, upon referring to the pertinent regulation, 22 C.F.R. part 121, we find that the regulation contains an exhaustive list of items including amphibious vehicles, pressure-breathing suits, aerial cameras, "privacy devices," and concealment equipment (including paints). Unlike those substances which are known generally to be controlled by government regulation, such as heroin or like drugs, these items might be exported or imported innocently. Under such circumstances, it appears likely that Congress would have wanted to require a voluntary, intentional violation of a known legal duty not to export such items before predicating criminal liability.
 
. . .
 
As additional authority for our holding today that the term "willful" in § 1934 requires a showing of specific intent, we rely upon the interpretation by courts of the term "willful" in the Revenue Acts. See 26 U.S.C. §§ 7201-07.

 The Seventh Circuit adopted the Ninth Circuit's "willfulness" standard and held that the government must prove that defendant voluntarily and intentionally violated a known legal duty. Beck at 450. The Ninth Circuit's analysis has been adopted by other circuits. See United States v Davis, 583 F.2d 190, 193 (5th Cir 1978); United States v Gregg, 829 F.2d 1430, 1436 (8th Cir 1987); United States v Murphy, 852 F.2d 1, 6 (1st Cir 1988); United States v Adames, 878 F.2d 1374, 1377 (11th Cir 1989).

 The Seventh Circuit has held that "willfulness" does not apply to the licensing requirement although it incorrectly attributed the resolution of this issue to Lizarraga. Beck, 615 F.2d at 450 ("defendant need not know that he is specifically required to have an export license"). The Second Circuit has also held that the government need not prove defendant's knowledge of the Munitions List or its content. See Murphy at 7.

 Given the stated purpose of the Arms Export Control Act -- to further "world peace and the security and foreign policy of the United States," it is surprising that the Ninth Circuit and other circuits have determined the unlawful exportation of military hardware to be a specific intent rather than a general intent crime. To convict, the government must show a specific intent to violate the Act and prove that defendant violated a known legal duty not to export military firearms and ammunition without a license. Although the Ninth Circuit stated that many items on the Munitions List might be exported innocently, this court's review of the list shows virtually all the items to be either military hardware or have a military application. The list includes firearms, howitzers, flamethrowers, rockets, bombs, grenades, torpedoes, mines, launch vehicles, missile and anti-missile systems, warships, tanks, military aircraft, antisubmarine warfare trainers, military body armor, missile tracking and guidance systems, night viewing equipment, bombing computers, military infrared, nerve gas, nuclear weapons and nuclear testing equipment. (See Appendix 1 for Munitions List). Despite world peace and national security being at stake, the courts have allowed the unlawful exportation of military hardware to be excused under an "ignorance of the law" defense.

 Contrary to the Ninth Circuit's assertion that firearms are not "known generally to be controlled by government regulation" [Lizarraga at 827], firearms are regulated at the federal, state and local levels. *fn3" Given these laws, individuals are aware that serious consequences may result from having a firearm in one's house or on one's person without a license -- much less exporting firearms and ammunition outside the United States without a license.

 The Ninth Circuit in Lizarraga specifically relied on the Supreme Court's definition of "willful" for tax prosecutions and extended that definition to Section 2778 cases. However, in recently affirming this definition of "willfulness" in tax cases, the Supreme Court emphasized that exceptions to the rule that "ignorance of the law is no excuse" should not be created casually. See Cheeks, 111 S. Ct. at 609. Contrary to the tax code, the Arms Export Control Act lacks the complexity to justify an "ignorance of the law" defense for individuals illegally engaged in the arms trade.

 Because the district court is constrained by Seventh Circuit precedent, it must construe the Act as a specific intent crime. In sum, to establish a violation under Section 2778(b)(2), the government must prove that defendant: (1) exported; (2) defense articles on the ...


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