United States v. Ehab Ashoor ( 2011 )

REVISED MAY 23, 2011
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
April 29, 2011
No. 10-20354 Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA,
Plaintiff - Appellee
v.
EHAB ASHOOR,
Defendant - Appellant
Appeal from the United States District Court
for the Southern District of Texas
No. 4:09-CR-307-1
Before DAVIS, CLEMENT, and ELROD, Circuit Judges.
PER CURIAM:*
Ehab Ashoor entered into a contract with the Marines to sell them 200
genuine Cisco network cards at an average of $595 per card. Instead of
purchasing these cards from a Cisco distributor, Ashoor purchased the 200
network cards from an Ebay vendor in China at $25-26 each. These cards were
intercepted en route to Ashoor’s residence in Houston and confirmed to be
counterfeit. Ashoor was indicted and convicted of trafficking in counterfeit goods
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
No. 10-20354
under 18 U.S.C. § 2320(a). He appeals the district court’s rulings on his motion
in limine and his motion for judgment of acquittal. For the following reasons,
we AFFIRM.
I. Facts and Proceedings
Ehab Ashoor owned and operated CDS Federal, a business in Houston,
Texas. Ashoor and CDS Federal were authorized resellers in the “Cisco
Registered Partner Program” (“Program”). Cisco operates the Program as its
primary means of distributing its products, selling ninety percent of its products
through the Program. Authorized Cisco resellers are contractually obligated to
only sell Cisco products purchased from a list of authorized distributors who, in
turn, obtain their Cisco products directly from the company. The purpose of the
Program is to ensure that end users buy genuine Cisco products. In return, end
users who purchase from Cisco authorized resellers receive warranties and can
purchase enhanced customer support from Cisco.
Prior to starting CDS Federal, Ashoor had previously worked in sales at
another Texas company called PC Vision. PC Vision was a Cisco authorized
reseller. In 2004, PC Vision, through Ashoor, sold the City of Houston (“City”)
some Cisco network products. The City subsequently discovered that PC Vision
had not purchased the networking products from a Cisco authorized distributor.
Because PC Vision had violated its contractual obligation to sell only Cisco
products purchased from authorized distributors, Cisco terminated PC Vision’s
contract and removed PC Vision from the Program. Cisco did not determine if
PC Vision had sold counterfeit network products to the City.
In June 2008, the Marine Corps, looking to establish a computer network
in Iraq, posted a request for bids on two contracts to provide 100 network cards,
specifically gigabyte interface converters (“GBICs”). The Marines requested
genuine Cisco GBICs because they previously had experience with counterfeit
cards that provided inferior performance. Ashoor submitted bids for the
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contracts, quoting a price of $695 per unit for one set of 100 Cisco GBICs and
$495 per unit for the other set, for a total price of $119,000. After receiving
express assurances from Ashoor that he would provide genuine Cisco products,
the Marines awarded CDS Federal the contracts.
After he was awarded the contracts, Ashoor turned to a company known
to have sold counterfeit Cisco products in the past. Ashoor contacted the
company and requested a quote for 200 Cisco GBICs. The company’s
salesperson declined, stating that “Cisco is risky selling to the government due
to rep involvement.” The company instead offered to sell Ashoor non-Cisco
brand GBICs.
After his first inquiry was rebuffed, Ashoor turned to Ebay. Ashoor
contacted an Ebay seller named “Jason Sun,” requesting a quote for “genuine”
Cisco parts. Sun declined to sell Ashoor any parts, stating that “Sorry, you
should be aware that[] all the Cisco parts you bought from China and Hong Kong
sellers are not original. All these parts are made by a third party.”
Ashoor finally found Ingellen, a seller in Hong Kong. Ingellen had posted
an Ebay ad offering “10 pieces new bulk” GBICs for sale. The advertisement did
not state that it was offering Cisco parts and Ingellen is not a Cisco authorized
distributor. Ashoor contacted Ingellen specifying that he wanted 200 GBICs
without specifying that he wanted Cisco genuine parts. In response, Ingellen
asked Ashoor to supply an “exact order and which package you need.” Ashoor
replied, stating: “We prefer each GBIC should be in Cisco packaging.” On July
21, 2008, Ashoor purchased 200 GBICs from Ingellen at $25-26 per unit and
$400 in shipping costs, for a total of $5,500. Genuine Cisco GBICs cost
approximately $600-700 each when purchased from a Cisco authorized
distributor. As part of his shipping instructions, Ashoor specifically requested
individual (and not bulk) packaging.
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Ingellen shipped the GBICs, but the package was intercepted by Customs
Inspector Dan Nugent in Chicago, Illinois on July 28, 2008. Suspecting that the
Cisco parts were counterfeit, Nugent took photographs of the components and
forwarded the pictures to Cisco. Nugent also informed Immigration and
Customs Enforcement (“ICE”) Agent Corbin Wickman that he had encountered
a package of suspected counterfeit items. The next day, Cisco informed Nugent
that one of the components in the package was “non-genuine” because its serial
number did not exist in Cisco’s database. Nugent seized the package.
After receiving the tip from Nugent, Wickman contacted and interviewed
Ashoor. During the interview, Ashoor stated that he had purchased the 200
GBICs on Ebay and that he had paid $50 per unit for the GBICs. Ashoor also
stated that he knew that Cisco authorized resellers were contractually required
to purchase from authorized distributors and that he would have paid $300-400
per unit if he had purchased the GBICs through a Cisco authorized distributor.
Ashoor was arrested and charged with trafficking in counterfeit goods, in
violation of 18 U.S.C. § 2320(a). At trial, the Government introduced testimony
under Federal Rule of Evidence 404(b) showing that Cisco had previously
excluded PC Vision (and Ashoor) from the Program. The government argued
that the evidence was probative of Ashoor’s “knowledge and absence of mistake
concerning the Cisco Registered Partner Program and the significant risk that
purported Cisco products purchased outside that network may be counterfeit.”
Ashoor did not object to the introduction of this evidence. At the close of
evidence, Ashoor filed a motion for judgment of acquittal under Federal Rule of
Criminal Procedure 29, which the district court denied. On January 15, 2010,
the district court declared a mistrial because the jury could not come to a
unanimous verdict. The court immediately scheduled a second trial.
On January 18, 2010, Ashoor filed an Opposed Motion in Limine to bar the
Government and witnesses from making any reference to Ashoor’s involvement
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No. 10-20354
in PC Vision’s removal from the Program. Ashoor argued that his activities at
PC Vision were inadmissible extrinsic evidence of prior bad acts under both
Federal Rule of Evidence 404(b) and this court’s opinion in United States v.
Beechum, 582 F.2d 898 (5th Cir. 1978). Ashoor specifically requested that the
district court “articulate on the record its findings as to the Beechum probative
value/prejudice evaluation.” The next day, Ashoor’s second trial began. Before
voir dire, the district court explicitly adopted all of its rulings from the first trial.
Ashoor then asked about the motion in limine. The district stated that “my prior
rulings hold, including [the] 404(b)” ruling. At the close of evidence, Ashoor
reurged his motion for judgment of acquittal; the district court again denied the
motion.
On January 22, 2010, the jury found Ashoor guilty. Ashoor filed a motion
for a new trial in which he renewed his motion for judgment of acquittal. The
district court denied this motion and sentenced Ashoor to 51 months’
imprisonment. Ashoor timely appealed.
II. Discussion
A. Admission of Evidence under Federal Rule of Evidence 404(b)
Ashoor argues that the district court erred by admitting evidence of his
prior expulsion from the Program under Rule 404(b) without making the
requested on-the-record Beechum findings. He argues that the evidence carries
“little probative value as to whether or not Mr. Ashoor knew he was purchasing
counterfeit goods in June of 2008” and that it “served more to mislead the jury
into believing that goods purchased outside of the authorized sources are
counterfeit, when there was no evidence to support that conclusion.”1 The
1
Although Ashoor notes that there is “substantial uncertainty as to the correctness” of
the district court’s ruling, he does not argue that the court abused its discretion in admitting
the evidence. Even if we were to broadly construe Ashoor’s argument to include an attack on
the merits of the district court’s decision, this claim would fail. This court reviews a district
court’s decision to admit or exclude evidence under 404(b) for abuse of discretion. United States
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district court undisputedly failed to make on-the-record findings when it denied
Ashoor’s motion in limine.
Rule 404(b) states:
Evidence of other crimes, wrongs, or acts is not admissible to prove
the character of a person in order to show action in conformity
therewith. It may, however, be admissible for other purposes, such
as proof of motive, opportunity, intent, preparation, plan,
knowledge, identity, or absence of mistake or accident, provided that
upon request by the accused, the prosecution in a criminal case shall
provide reasonable notice in advance of trial, or during trial if the
court excuses pretrial notice on good cause shown, of the general
nature of any such evidence it intends to introduce at trial.
In Beechum, we held that Rule 404(b) mandates that the trial court engage
in a two-step analysis: “First, it must be determined that the extrinsic offense
evidence is relevant to an issue other than the defendant’s character. Second, the
evidence must possess probative value that is not substantially outweighed by
its undue prejudice and must meet the other requirements of rule 403.” 582
F.2d at 911. Furthermore, we have generally required “an on-the-record
articulation by the trial court of Beechum’s probative value/prejudice inquiry
when requested by a party.” United States v. Robinson, 700 F.2d 205, 213 (5th
Cir. 1983). A district court’s failure to make on-the-record findings and
conclusions necessitates remand “unless the factors upon which the probative
value/prejudice evaluation were made are readily apparent from the record, and
there is no substantial uncertainty about the correctness of the ruling.” Id.We hold that the district court’s Rule 404(b) ruling falls squarely in the
exception described in Robinson. First, the record clearly shows the factors upon
which the district court based its probative value/prejudice evaluation. The
Government filed an extensive Rule 404(b) motion before the first trial, arguing
v. Yi, 460 F.3d 623, 631 (5th Cir. 2006). As discussed below, the district court correctly
admitted the evidence because the probative value of the evidence outweighed its minimal
prejudicial effect.
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that evidence of Ashoor’s activities at PC Vision was “highly probative of
Ashoor’s knowledge and absence of mistake concerning the Cisco Registered
Partner Program and the significant risk that purported Cisco products
purchased outside that network may be counterfeit.” It also argued that
introducing the information would not be prejudicial because “purchasing
products outside of a company’s official network is not the type of conduct that
is inherently inflammatory.” Ashoor argued in his motion in limine that
Ashoor’s exclusion from the Program for purchasing goods from unauthorized
distributors carried “little probative value as to whether or not Mr. Ashoor knew
he was purchasing counterfeit goods in June of 2008.” He argued that the
information was prejudicial because “the jury might be mislead [sic] into
believing that the previous violation of Cisco’s rules put Mr. Ashoor on notice
that counterfeit products would be purchased if sourced from outside the
program’s distribution network.” The district court’s explicit reference to the
first trial in denying Ashoor’s motion in limine indicates that it based its
probative value/prejudice evaluation on the arguments presented by the
Government’s first motion and Ashoor’s motion in limine.
Second, there is no substantial uncertainty about the correctness of the
district court’s decision to admit the evidence. Ashoor argues that the evidence
of his 2004 expulsion from the Program carried little probative value as to
whether he knew that he was purchasing counterfeit goods in 2008 because
there was no evidence presented (1) that Ashoor purchased counterfeit goods in
2004 or (2) that goods purchased outside the Program are always counterfeit.
But the Government presented evidence that the Program was intended to
ensure that Cisco resellers sell genuine products and that there was a “thriving”
market for counterfeit Cisco products. Thus, even if Ashoor did not purchase
counterfeit goods in 2004, the proffered evidence was probative of his knowledge
of: (1) how to get authorized, non-counterfeit, products; (2) the fact that a
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product purchased outside of the Program may be counterfeit; and (3) the price
of genuine Cisco products. Presented with this knowledge, the jury could infer
that Ashoor knew that he was purchasing counterfeit goods when he purchased
Cisco network cards outside of the Registered Partner Program at less than ten
percent of the price of genuine products.
Further, the potential prejudicial effect of the evidence is low. Evidence
of Ashoor’s expulsion from the Cisco Registered Partner Program “is not of a
heinous nature; it would hardly incite the jury to irrational decision by its force
on human emotion.” Beechum, 582 F.2d at 917. This evidence “was no more
likely to confuse the issues, mislead the jury, cause undue delay, or waste time
than any other type of extrinsic offense evidence.” Id. Because “the factors upon
which the probative value/prejudice evaluation were made are readily apparent
from the record, and there is no substantial uncertainty about the correctness
of the ruling,” Robinson, 700 F.3d at 213, we decline to remand the case for on-
the-record Beechum findings.
B. Ashoor’s motion for judgment of acquittal
1. Standard of Review
We review “de novo the denial of a Rule 29 motion for a judgment of
acquittal.” United States v. Xu, 599 F.3d 452, 453 (5th Cir. 2010). In
determining if there was sufficient evidence to support a conviction, the
“relevant question is whether, after viewing the evidence in the light most
favorable to the prosecution, any rational trier of fact could have found the
essential elements of the crime beyond a reasonable doubt.” United States v.
Valle, 538 F.3d 341, 344 (5th Cir. 2008) (quoting Jackson v. Virginia, 443 U.S.
307, 319 (1979)) (internal quotation marks omitted) (emphasis in original). We
draw all reasonable inferences and make all credibility determinations in the
light most favorable to the verdict. United States v. Villarreal, 324 F.3d 319, 322
(5th Cir. 2003).
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2. 18 U.S.C. § 2320(a)
18 U.S.C. § 2320(a) punishes “[w]hoever intentionally traffics or attempts
to traffic in goods or services and knowingly uses a counterfeit mark on or in
connection with such goods or services.” To prove a violation of the statute, the
government must establish that:
(1) the defendant trafficked or attempted to traffic in goods or
services; (2) such trafficking, or the attempt to traffic, was
intentional; (3) the defendant used a counterfeit mark on or in
connection with such goods or services; and (4) the defendant knew
that the mark so used was counterfeit.
United States v. Yi, 460 F.3d 623, 629 (5th Cir. 2006) (quoting United States v.
Hanafy, 302 F.3d 485, 487 (5th Cir. 2002)).
Ashoor concedes (1) that he trafficked in goods and (2) that he intended to
traffic in goods. He argues that the evidence was insufficient to show (3) that he
“used” the counterfeit marks on the GBICs he purchased or (4) that he knew
that the marks on the GBICs were counterfeit.
a. Whether Ashoor “used” Cisco’s mark
Ashoor argues that the evidence did not show that he “used” Cisco’s
trademark. He argues that there was no evidence that: (1) he placed the marks
on the GBICs himself; (2) he had a prior relationship with Ingellen suggesting
that they normally used Cisco’s mark in their dealings; or (3) he directed
Ingellen to use Cisco’s mark. To support his third point, he argues that he
“merely requested to purchase Cisco products from an online vendor purporting
to sell such products,” and that “[a]t no time did he ever indicate that a Cisco
trademark should be placed on the products.” Although he acknowledges that
“he did request Cisco packaging,” he notes that “this request came after the
vendor asked him how he would like the products packaged.”
Ashoor’s argument fails because his proposed definition of “use” in § 2320
is too narrow. This court has never held that “use” under § 2320(a) requires the
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Government to prove that a defendant actively placed the counterfeit marks on
the goods himself or that he directed a vendor to place the marks on the goods.
On the contrary, this court has upheld convictions under § 2320 where the
defendant had no role in the manufacture or labeling of the counterfeit goods.
See, e.g., Yi, 460 F.3d at 630 (affirming § 2320(a) conviction for store owner who
imported counterfeit goods); United States v. Garrison, 380 F. App’x 423, 424-26
(5th Cir. 2010) (same); United States v. Dahab, 348 F. App’x 943, 944-45 (5th
Cir. 2009) (same). In United States v. Diallo, the Third Circuit addressed the
term “use” in § 2320 and held that the jury could find that Diallo “used”
handbags with counterfeit “LV” (Louis Vuitton) labels when he was transporting
the bags to his store to sell. 575 F.3d 252, 261-62 (3d Cir. 2009). Thus, “Diallo
admitted that the handbags, which bore the counterfeit ‘LV’ logos, were for his
store in Indianapolis. Though packaged in plastic bags during transit, the
marked handbags were part of Diallo’s inventory and he was able to enjoy the
benefits of the counterfeit ‘LV’ marks that were on the handbags.” Id. at 262.
Here, there was ample evidence for the jury to find that Ashoor “used” the
Cisco mark. The GBICs that he ordered were undisputedly non-Cisco network
cards individually packaged with Cisco’s logo. Although Ashoor had not
received the GBICs, they were part of his inventory and he planned on enjoying
the benefits of the counterfeit “Cisco” marks on the GBICs—by selling the parts
to the Marines at over 2,000% profit.
Furthermore, there was substantial evidence that Ashoor “used” Cisco’s
mark by directing Ingellen to put the marks on the GBICs. The government
presented evidence that Ashoor purchased the GBICs from Ingellen in response
to an Ebay ad advertising bulk GBICs without specifying that the parts were
Cisco genuine parts (the ad did not specify which brand the parts were). The
Ingellen representative did not mention Cisco in any way until Ashoor specified
that “[w]e prefer each GBIC should be in Cisco packaging.” After receiving an
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invoice, which did not mention that he was purchasing Cisco products, Ashoor
asked the Ingellen representative “What will the packing [sic] for these items?
We need these (individual) 200 pieces in a CISCO sealed bag.” The Cisco
trademark consists of the company name in all capital letters. Furthermore,
Cisco does not typically sell its products in bulk. Ingellen subsequently shipped
Ashoor counterfeit GBICs individually packaged with the Cisco logo. A jury
could easily infer from this evidence that Ashoor instructed Ingellen to place the
Cisco trademark on the GBICs as part of his packaging instructions. There was
sufficient evidence to support the jury’s finding that Ashoor “used” Cisco’s mark
as required for conviction under 18 U.S.C. § 2320(a).
b. Whether Ashoor knew that the GBICs were counterfeit
Ashoor also argues that the evidence did not show that he knew that the
GBICs were counterfeit. He argues that “[b]y never receiving, possessing, or
even seeing the goods and the spurious mark and with no other indication from
the vendor that the mark would be counterfeit, [he] had no way of knowing the
mark used was indeed counterfeit.”
We disagree. There was ample evidence by which a jury could conclude
that Ashoor knew that the GBICs he ordered were counterfeit, even though he
had never seen the network cards. Ashoor indisputably ordered the GBICs and
knew that the shipment contained GBICs in Cisco individual packaging. The
jury could easily infer that Ashoor knew the parts were counterfeit because he
was purchasing them at a dramatically lower price than genuine parts
purchased from an authorized distributor ($25-26 compared to $600-700).
Further, a jury could also infer Ashoor’s knowledge of the counterfeit nature of
the GBICs from: (1) the fact that he responded to an ad for bulk GBICs and
asked for the parts to be individually packaged, even though Cisco does not sell
parts in bulk; (2) the fact that he first attempted to purchase the GBICs from a
known counterfeiter who refused to sell him the products due to “rep
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involvement”; and (3) the fact that he was warned that parts from China were
likely to be counterfeit. Because there was sufficient evidence to support
Ashoor’s conviction under 18 U.S.C. § 2320(a), the district court properly denied
Ashoor’s Rule 29 motion for a judgment of acquittal.
III. Conclusion
For the foregoing reasons, we AFFIRM Ashoor’s conviction.
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