This case comes before this court for Kim Tae Sung's ("Kim") resentencing based on the Seventh Circuit's remand in U.S. v. Sung, 87 F.3d 194, 1996 WL 334219 (7th Cir. 1996). The Seventh Circuit directed this court to consider two issues, whether: 1) the evidence establishes "with reasonable certainty" that Kim intended to sell 240,000 bottles of counterfeit products, and 2) Kim "was about to complete all [necessary] acts but for apprehension."
After reviewing the record, this Court again finds that the evidence establishes with "reasonable certainty" that Mr. Kim intended to sell 240,000 bottles of counterfeit Soft Sheen products. Regarding the second issue, while this court respectfully disagrees with the Seventh Circuit's interpretation of "about to complete...but for apprehension," this court will comply with the Seventh Circuit's directive and finds that Mr. Kim had not yet completed all necessary acts but for apprehension. Based on these findings, this court sentences Mr. Kim to 41 months imprisonment.
Given this case's long procedural history, this court will only provide a brief summary of the underlying facts in this case. Kim was convicted of selling imitation Soft Sheen hair care products with counterfeit trademarks in violation of 18 U.S.C. § 2320(a). Specifically, Kim counterfeited bottles of Soft Sheen Wave Nouveau Finishing Mist, which had a retail value of four dollars a bottle. At that time of his apprehension, Kim had filled 17,600 bottles; however, he had in his possession 68,000 bottles, 20,600 spray bottle caps, and 20,000 shipping cartons. Each of these cartons could hold twelve bottles. Based on these figures, this court sentenced Mr. Kim to 48 months imprisonment.
The Seventh Circuit affirmed Mr. Kim's conviction but remanded the case for resentencing. U.S. v. Sung, 51 F.3d 92 (7th Cir. 1995). After this court sentenced Kim to the same sentence, he again appealed his sentence. The Seventh Circuit reviewed the sentence and again remanded for resentencing, directing this court to make explicitly two findings.
A. "Reasonable certainty"
United States Sentencing Guidelines ("U.S.S.G.") § 2X1.1(a) allows this court to adjust the base offense level for "any intended offense conduct that can be established with reasonable certainty." The Seventh Circuit remanded after concluding that this court failed to make a "reasonable certainty" finding. This court believes that it made such a finding during its resentencing but reiterates its reasoning with greater specificity.
This court again finds that Mr. Kim intended to sell 240,000 bottles of counterfeit Soft Sheen products. As the evidence presented during trial and sentencing demonstrates, this intent has been established with reasonable certainty. Kim purchased 20,000 boxes, at a cost of over $ 4,200. As this court previously determined, it is illogical to believe that Kim would purchase such a large lot without any intent to use them. During the first appeal, the Seventh Circuit expressed its concern that Mr. Kim had simply purchased 20,000 boxes because this was the standard lot. On remand, the government presented this court with the affidavit of Andrew Choi, Vice President of Hoover Containers, the company which manufactured the boxes Kim purchased. Mr. Choi's affidavit stated that the company's minimum order was 1,000 boxes and that additional boxes could be ordered in any increment. Even if Kim realized a discount by purchasing such a large amount of boxes, the savings would not be worth the additional expenditure if Kim did not intend to use the 20,000 boxes.
Kim's purchase of 20,000 boxes, therefore, indicates that it was his intent to sell 240,000 bottles of counterfeit Soft Sheen products. He was working towards this goal by purchasing enough fluid to fill 17,600 bottles, 68,000 bottles and over 20,000 spray bottle caps. While the number of components on hand did not equal the 240,000 units available in the boxes, it is easier to store and maintain a large amount of boxes than bottles or caps, which necessitate more space. The evidence demonstrated that Kim had begun to establish a network of retailers who were willing to purchase his counterfeit product. There is no reason to believe that Kim could not have quickly obtained the additional bottles or bottle caps if one of these retailers had placed a large order.
Furthermore, there was no evidence that Kim had limited the scope of his plan or had stopped trying to sell the counterfeit product. Similarly, there was no indication that Kim intended to stop production or sale of the counterfeit products before he filled 240,000 bottles. Indeed, Kim continued to sell his product even after being observed by Soft Sheen's investigators. Neither was there any evidence that Kim intended to use these 20,000 boxes for another purpose. This court concludes that if Kim had not been apprehended, he clearly intended to complete his plan to manufacture 240,000 bottles; the fact that Kim did not have that number bottles or bottle caps on hand is not determinative of his intent. Accordingly, this court finds that Kim's intent to produce and sell 240,000 units has been established with reasonable certainty.
B. "But for apprehension"
Since Kim did not actually sell 240,000 bottles, pursuant to U.S.S.G. § 2X1.1.(b), this court should reduce by three the loss enhancement figure:
unless the defendant completed all the acts the defendant believed necessary for successful completion of the substantive offense or the circumstances demonstrate that the defendant was about to complete all such acts but for apprehension or interruption by some similar event beyond the defendant's control.
The Seventh Circuit has made it clear that this court should grant Kim this three level reduction. While simply concluding that this court had "made no finding it all," the appellate court sought to guide this court's reduction analysis. Questioning whether Kim "was about to complete all [necessary] acts but for apprehension," the Seventh Circuit noted that:
Kim lacked the materials to fill more than 17,600 bottles. The record suggests that during the four months proceeding his apprehension, Kim had neither sold any counterfeit hair care products nor ordered the materials necessary to manufacture more. Kim had not only the law but also the market to contend with. His initial customers were displeased with the product's quality; their complaints set off both private and public investigation. Any finding that Kim was just about to fill and sell another 222,400 bottles when he was nabbed would be clearly erroneous.