United States v. Haitham Mohamed , 759 F.3d 798 ( 2014 )


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  •                                  In the
    United States Court of Appeals
    For the Seventh Circuit
    ____________________
    No. 13-2368
    UNITED STATES OF AMERICA,
    Plaintiff-Appellee,
    v.
    HAITHAM MOHAMED,
    Defendant-Appellant.
    ____________________
    Appeal from the United States District Court for the
    Southern District of Indiana, Indianapolis Division.
    No. 1:12-CR-00097-SEB-MJD — Sarah Evans Barker, Judge.
    ____________________
    ARGUED APRIL 15, 2014 — DECIDED JULY 22, 2014
    ____________________
    Before RIPPLE and WILLIAMS, Circuit Judges, and ST. EVE,
    District Judge. *
    ST. EVE, District Judge. On March 26, 2013, a jury convict-
    ed Haitham Mohamed of one count of knowingly transport-
    ing and possessing contraband cigarettes in violation of
    
    18 U.S.C. § 2342
    (a). Mr. Mohamed appeals his conviction,
    * The Honorable Amy J. St. Eve, District Judge for the United States Dis-
    trict Court, Northern District of Illinois, sitting by designation.
    2                                                         No. 13-2368
    claiming that the district court erred in denying his motions
    for judgment of acquittal pursuant to Federal Rule of Crimi-
    nal Procedure 29. For the reasons set forth in the following
    opinion, we agree and reverse the district court’s decision.
    BACKGROUND
    On the evening of June 6, 2012, Officer Christopher
    Helmer, a patrolman with the Speedway Police Department,
    pulled over Mr. Mohamed for running a red light in Speed-
    way, Indiana near Indianapolis. Upon searching Mr. Mo-
    hamed’s van, 1 Officer Helmer found 1,170 packs of New-
    port-brand cigarettes (totaling 23,400 cigarettes) not bearing
    Indiana tax stamps. A federal grand jury indicted Mr. Mo-
    hamed with one count of knowingly transporting and pos-
    sessing contraband cigarettes in violation of section 2342(a)
    of the Contraband Cigarette Trafficking Act (“CCTA”),
    which makes it unlawful for “any person knowingly to ship,
    transport, receive, possess, sell, distribute, or purchase con-
    traband cigarettes.” See 
    18 U.S.C. § 2342
    (a). The CCTA de-
    fines “contraband cigarettes” with reference to state law:
    “[C]ontraband cigarettes” means a quantity in excess
    of 10,000 cigarettes, which bear no evidence of the
    payment of applicable State or local cigarette taxes in
    the State or locality where such cigarettes are found, if
    the State or local government requires a stamp, im-
    pression, or other indication to be placed on packages
    or other containers of cigarettes to evidence payment
    of cigarette taxes, and which are in the possession of
    any person other than [certain exceptions].
    1 Mr. Mohamed does not challenge the constitutionality of the search.
    No. 13-2368                                                             3
    
    18 U.S.C. § 2341
    (2). Mr. Mohamed pleaded not guilty to the
    offense, and the case proceeded to trial.
    The government called two witnesses at trial, Special
    Agent Daniel Neie of the Bureau of Alcohol, Tobacco, Fire-
    arms, and Explosives (“ATF”) and Officer Helmer of the
    Speedway Police Department. Special Agent Neie explained
    to the jury how cigarette traffickers typically operate. 2 Dis-
    parities in state cigarette tax rates, which range from $0.17
    per pack in Missouri to $4.35 per pack in New York, allow
    cigarette traffickers to profit by buying cigarettes in low-tax
    states and reselling them in high-tax states without paying
    the latter state’s taxes. As a result of the tax disparity, the
    cigarette trafficker can sell the cigarettes below the market
    price while still earning a profit; the greater the tax disparity,
    the greater the trafficker’s potential profits. The state in
    which the cigarette trafficker sells the cigarettes, meanwhile,
    loses out on the tax revenue it would have received from a
    legal sale. Special Agent Neie testified that because retailers
    often limit the amount of cigarettes a customer can buy at
    one time to ensure that they will have sufficient inventory
    for other customers, traffickers often must travel from retail-
    er to retailer until they accumulate the total number of ciga-
    rettes they want. Special Agent Neie further testified based
    on his training and experience that Marlboros and Newports
    are the most frequently trafficked brands of cigarettes.
    2 See generally U.S. DEP’T OF JUSTICE, OFFICE OF THE INSPECTOR GENERAL, I-
    2009-005, THE BUREAU OF ALCOHOL, TOBACCO, FIREARMS AND EXPLOSIVES’
    EFFORTS TO PREVENT THE DIVERSION OF TOBACCO i-ii (2009), available at
    http://www.justice.gov/oig/reports/ATF/e0905.pdf (last visited July 22,
    2014).
    4                                                 No. 13-2368
    With respect to Mr. Mohamed in particular, Special
    Agent Neie testified that the cigarette tax rate in Kentucky,
    where Mr. Mohamed had bought the cigarettes at issue, is
    $0.60 per pack, whereas the cigarette tax rate in Indiana,
    where the cigarettes were found, is $0.995 per pack. Thus, if
    Mr. Mohamed sold all 1,170 packs in his possession in Indi-
    ana, he stood to make a profit of up to $462.15. Special Agent
    Neie acknowledged that many states—including New York
    ($4.35 per pack) and Washington ($3.25 per pack)—had
    higher cigarette taxes than Indiana, and Mr. Mohamed
    would have increased his potential profit by selling the ciga-
    rettes at issue in those states rather than Indiana. Finally,
    Special Agent Neie confirmed that none of the cartons of
    cigarettes found in Mr. Mohamed’s van was missing ciga-
    rettes; all 23,400 cigarettes were accounted for and remained
    in their original packs.
    Next, Officer Helmer testified about his June 6, 2012 traf-
    fic stop involving Mr. Mohamed. Officer Helmer testified
    that he pulled over Mr. Mohamed for running a red light at
    approximately 6:57 p.m. Mr. Mohamed, who lives in Indian-
    apolis, informed Officer Helmer that he was returning home
    after visiting friends in Kentucky. When Officer Helmer
    searched Mr. Mohamed’s van, he found 117 cartons (with
    ten packs per carton) of Newport cigarettes bearing Ken-
    tucky tax stamps. None of the cigarette packs had Indiana
    tax stamps evidencing the payment of Indiana’s cigarette
    tax. Officer Helmer also found in Mr. Mohamed’s van re-
    ceipts showing purchases of Newport cigarettes from several
    Kentucky gas stations earlier that day and a black trash bag
    containing over $15,000 in cash. When Officer Helmer asked
    Mr. Mohamed how much he makes selling cigarettes, Mr.
    Mohamed answered “not much.”
    No. 13-2368                                                  5
    The parties stipulated at trial that Mr. Mohamed did not
    fall within one of the exceptions contained in the CCTA’s
    definition of “contraband cigarettes.” See 
    18 U.S.C. § 2341
    (2)(A)-(D). Specifically, the parties stipulated that the
    State of Indiana and the United States did not have any rec-
    ords indicating that, as of June 6, 2012, Mr. Mohamed held a
    permit as a manufacturer of tobacco products, an export
    warehouse proprietor, or a person operating a customs
    bonded warehouse; nor did they have records indicating
    that Mr. Mohamed ever served as an officer, employee, or
    other agent of the State of Indiana or the United States. The
    parties also stipulated that the State of Indiana had no rec-
    ords indicating that Mr. Mohamed was engaged in business
    as a common carrier or was licensed or otherwise authorized
    to account for and pay Indiana cigarette taxes as of June 6,
    2012.
    At the close of the government’s evidence, Mr. Mo-
    hamed’s counsel moved for a judgment of acquittal under
    Federal Rule of Criminal Procedure 29. The district court de-
    nied the Rule 29 motion, finding that the government had
    presented sufficient evidence to allow a reasonable jury to
    conclude that Mr. Mohamed was guilty as charged. Mr. Mo-
    hamed elected not to call any witnesses or present any evi-
    dence in his defense, as is his right.
    During closing arguments, defense counsel admitted that
    Mr. Mohamed had more than 10,000 cigarettes not bearing
    Indiana tax stamps in his possession but argued that the
    government failed to prove that Indiana law required the
    cigarettes to bear Indiana tax stamps in order to make the
    cigarettes “contraband” under the CCTA. (R. 25 at 9-14.) De-
    fense counsel asserted that the government presented no ev-
    6                                                  No. 13-2368
    idence that the cigarettes had been “sold, used, consumed,
    handled, or distributed” within Indiana, and, therefore, the
    government failed to prove that Indiana’s cigarette tax ap-
    plied to the cigarettes at the time of seizure. (Id. at 10–13.)
    Moreover, defense counsel asserted, it made no economic
    sense for Mr. Mohamed to sell the cigarettes in Indiana,
    where he stood to gain only $462.15, minus the cost of gas,
    travel, and food. (Id. at 13.) On rebuttal, the government con-
    tended that it had proven everything necessary to convict
    Mr. Mohamed of the offense:
    When Mr. Mohamed was arrested in Indiana, he stat-
    ed in Indiana that he didn’t make much money buy-
    ing these cigarettes. When he was arrested in Indiana,
    he had a bag full of cash in his car, in Indiana. And he
    had twice the legal limit of cigarettes from out of
    state. You can look at these facts and you can infer
    that everything that needs to be proven for this of-
    fense to be complete has, in fact, been proven, and
    that when Officer Helmer pulled Haitham Mohamed
    over, Haitham Mohamed was already committing the
    crime of knowingly transporting or possessing those
    cigarettes, and I ask you to find him guilty.
    (Id. at 16.)
    Following closing arguments, the district court instructed
    the jury on what constitutes “contraband cigarettes” under
    the CCTA and on the application of Indiana’s cigarette tax
    laws. The jury instruction on the definition of “contraband
    cigarettes” mirrored the CCTA’s definition of the term. See
    
    18 U.S.C. § 2341
    (2). The instruction regarding the applicabil-
    ity of Indiana’s cigarette tax stated as follows:
    No. 13-2368                                                              7
    Indiana law requires a stamp to be placed on packag-
    es or other containers of cigarettes to prove that ap-
    plicable taxes have been paid. Indiana’s cigarette tax-
    es are levied on all cigarettes sold, used, consumed,
    handled, or distributed within the State of Indiana.
    With respect to this law, the following definitions ap-
    ply:
    •   to “sell” means the transfer of property for a
    price;
    •   to “use” means to bring or put into service or
    action;
    •   to “consume” means to possess for use or to
    use a cigarette or cigarettes for the purpose of
    smoking;
    •   to “handle” means to engage in selling, buying,
    or distributing; and
    •   to “distribute” means to divide among several
    or many.
    (Jury Instruction No. 10.) 3
    The jury appears to have struggled in applying these in-
    structions. During deliberations, the jury submitted three
    questions to the district court. First, the jury asked whether
    “more than 10,000 cigarettes being transported into Indiana
    from another state without paying [Indiana’s cigarette] tax
    [is] enough to be called contraband?” Second, the jury asked,
    “Is the question at hand just that [Mr. Mohamed] had
    10,000+ [cigarettes] and crossed state lines, or do we need to
    3 Neither party objected to these instructions at trial or argues on appeal
    that the instructions were erroneous.
    8                                                  No. 13-2368
    consider intent of what he planned to do with them once he
    crossed the state line? Sell, distribute, etc.?” Third, the jury
    asked, “In the definition of ‘handled,’ is ‘buying’ applicable
    even if [the cigarettes] are bought in Kentucky? Can we see
    the entire copy of title 18 U.S. Code Section 2342(a)[?]” The
    district court judge responded to the jury’s questions in writ-
    ing, informing the jurors that she could not provide the in-
    formation they had requested. The judge instructed the ju-
    rors to review the jury instructions and the evidence at trial
    and discuss the issues they had raised with the court in their
    continued deliberations.
    The jury ultimately found Mr. Mohamed guilty of know-
    ingly transporting or possessing contraband cigarettes in vi-
    olation of the CCTA. After the jury rendered its verdict, de-
    fense counsel renewed Mr. Mohamed’s Rule 29 motion for
    judgment of acquittal, which the district court again denied.
    STANDARD OF REVIEW
    We review de novo the district court’s denial of Mr. Mo-
    hamed’s Rule 29 motion for acquittal. See United States v. Fo-
    ley, 
    740 F.3d 1079
    , 1082 (7th Cir. 2014); United States v. Seid-
    ling, 
    737 F.3d 1155
    , 1159 (7th Cir. 2013). Under Rule 29,
    “[a]fter the government closes its evidence or after the close
    of all the evidence, the court on the defendant’s motion must
    enter a judgment of acquittal of any offense for which the
    evidence is insufficient to sustain a conviction.” Fed. R.
    Crim. P. 29(a). “In considering challenges to the sufficiency
    of the evidence, we view the evidence in the light most fa-
    vorable to the prosecution, and then ask whether any ration-
    al trier of fact could have found the essential elements of a
    crime beyond a reasonable doubt.” Foley, 740 F.3d at 1082–83
    (internal quotation marks omitted) (quoting United States v.
    No. 13-2368                                                    9
    Boender, 
    649 F.3d 650
    , 654 (7th Cir. 2011)). “[W]e ‘defer to the
    credibility determination of the jury[] and overturn a verdict
    only when the record contains no evidence, regardless of
    how it is weighed, from which the jury could find guilt be-
    yond a reasonable doubt.’” United States v. Torres-Chavez, 
    744 F.3d 988
    , 993 (7th Cir. 2014) (second alteration in original)
    (quoting United States v. Blassingame, 
    197 F.3d 271
    , 284 (7th
    Cir. 1999)).
    ANALYSIS
    I.      The Contraband Cigarette Trafficking Act
    Congress enacted the CCTA to enable federal enforce-
    ment agencies to assist states in curtailing interstate cigarette
    trafficking, which drains billions of dollars in tax revenues
    from state and local governments each year and often serves
    as a source of illicit financing for organized crime and terror-
    ist organizations. See S. REP. 95-962 at 3–9 (1978), reprinted in
    1978 U.S.C.C.A.N. 5518; H.R. CONF. REP. 95-1778 at 7–9
    (1978), reprinted in U.S.C.C.A.N. 5535. Under the CCTA, it is
    unlawful for any person knowingly to ship, transport, re-
    ceive, possess, sell, distribute, or purchase “contraband ciga-
    rettes.” See 
    18 U.S.C. § 2342
    (a). The CCTA defines “contra-
    band cigarettes” as
    a quantity in excess of 10,000 cigarettes, which bear
    no evidence of the payment of applicable State or lo-
    cal cigarette taxes in the State or locality where such
    cigarettes are found, if the State or local government
    requires a stamp, impression, or other indication to be
    placed on packages or other containers of cigarettes to
    evidence payment of cigarette taxes, and which are in
    10                                                 No. 13-2368
    the possession of any person other than [certain ex-
    ceptions].
    
    18 U.S.C. § 2341
    (2). Accordingly, to convict Mr. Mohamed of
    cigarette trafficking, the government needed to prove be-
    yond a reasonable doubt that (1) Mr. Mohamed knowingly
    shipped, transported, received, possessed, sold, distributed,
    or purchased (2) more than 10,000 cigarettes (3) not bearing
    Indiana cigarette tax stamps (4) under circumstances in
    which Indiana law required the cigarettes to bear such
    stamps, and (5) Mr. Mohamed is not an excepted person un-
    der 
    18 U.S.C. § 2341
    (2)(A)-(D). See 
    18 U.S.C. §§ 2341-42
    ; see
    also City of New York v. Chavez, 
    944 F. Supp. 2d 260
    , 264
    (S.D.N.Y. 2013).
    Mr. Mohamed does not challenge the sufficiency of the
    evidence with respect to the first, second, third, and fifth el-
    ements of the offense. The only issue before us is whether
    the government presented sufficient evidence to allow a ra-
    tional trier of fact to find beyond a reasonable doubt that In-
    diana law required the cigarettes discovered in Mr. Mo-
    hamed’s van to bear Indiana cigarette tax stamps. To resolve
    this issue, we turn to Indiana state law.
    II.      Indiana’s Cigarette Tax Act
    In construing Indiana’s Cigarette Tax Act, we must inter-
    pret the statute as we think the Indiana Supreme Court
    would interpret it. See Laborers Local 236, AFL-CIO v. Walker,
    
    749 F.3d 628
    , 634 (7th Cir. 2014) (citing Brownsburg Area Pa-
    trons Affecting Change v. Baldwin, 
    137 F.3d 503
    , 507 (7th Cir.
    1998)). “In Indiana, the lodestar of statutory interpretation is
    legislative intent, and the plain language of the statute is the
    ‘best evidence of … [that] intent.’” Estate of Moreland v. Diet-
    No. 13-2368                                                     11
    er, 
    576 F.3d 691
    , 695 (7th Cir. 2009) (alterations in original)
    (quoting Cubel v. Cubel, 
    876 N.E.2d 1117
    , 1120 (Ind. 2007));
    see also Indiana Dep’t of Revenue v. United Parcel Serv., Inc., 
    969 N.E.2d 596
    , 600 (Ind. 2012); Indiana Dep’t of State Revenue, In-
    heritance Tax Div. v. Estate of Parker, 
    924 N.E.2d 230
    , 233 (Ind.
    Tax Ct. 2010). Unless a statute indicates otherwise, we must
    give the words in the statute their plain and ordinary mean-
    ing, and we must examine the statute as a whole, “avoiding
    both excessive reliance on strict literal meaning and selective
    reading of individual words.” Estate of Moreland, 
    576 F.3d at 695
     (quoting Cubel, 876 N.E.2d at 1120); see also Scherr v. Mar-
    riott Int’l, Inc., 
    703 F.3d 1069
    , 1077 (7th Cir. 2013). When the
    language of a statute is clear, we must enforce the statute as
    written, and we “ha[ve] no power to construe the statute for
    the purpose of limiting or extending its operation.” See Estate
    of Parker, 
    924 N.E.2d at 233
     (quoting In re Estate of Wilson, 
    822 N.E.2d 292
    , 295 (Ind. Tax Ct. 2005)); see also Scherr, 703 F.3d
    at 1077 (“When the language of a statute is plain, we enforce
    it according to its terms.”).
    Indiana’s Cigarette Tax Act levies a tax on “all cigarettes
    sold, used, consumed, handled, or distributed” within the
    state. See 
    Ind. Code § 6-7-1-1
    . For purposes of the Cigarette
    Tax Act, “consume” means to possess for use or use ciga-
    rettes for the purpose of smoking, see 
    Ind. Code § 6-7-1-8
    ;
    “handle” means “to trade in: engage in the buying, selling,
    or distributing of (a commodity),” Indiana Eby-Brown Co. v.
    Indiana Dep’t of State Revenue, 
    648 N.E.2d 401
    , 404 (Ind. Tax
    Ct. 1995) (quoting Webster’s Third New Int’l Dictionary 1027
    (1981)); and “distribute” means “to divide among several or
    many.” 
    Id.
     (quoting Webster’s Third New Int’l Dictionary at
    660). All packages of cigarettes subject to Indiana’s cigarette
    12                                                           No. 13-2368
    tax must bear Indiana tax stamps evidencing payment of the
    tax. See 
    Ind. Code § 6-7-1-14
    .
    Mr. Mohamed argues that under the plain language of
    the Cigarette Tax Act, the cigarettes at issue were not subject
    to Indiana’s cigarette tax because, at the time of his arrest,
    the cigarettes had not yet been sold, used, consumed, han-
    dled, or distributed within Indiana. His argument raises two
    questions regarding Indiana’s cigarette taxation scheme: (1)
    when Indiana’s cigarette tax becomes due; and (2) whether
    Indiana’s cigarette tax applies to cigarettes possessed in In-
    diana but bought and intended for sale outside the state.
    A.      The Timing of Indiana’s Cigarette Tax
    Mr. Mohamed argues that Indiana’s cigarette tax does
    not apply until disposal of the cigarettes. We disagree. Indi-
    ana technically imposes its cigarette tax on the retail pur-
    chaser or ultimate consumer “upon the sale, exchange, bar-
    tering, furnishing, giving away, or otherwise disposing of
    cigarettes within the state of Indiana.” See 
    Ind. Code § 6-7-1-12
    . The State, however, pre-collects the tax for con-
    venience and facility from “the person who first sells, uses,
    consumes, handles, or distributes the cigarettes.” See 
    id.
    § 6-7-1-1. The Cigarette Tax Act requires cigarette distribu-
    tors and retailers, 4 which act as agents of the State in collect-
    4 Under the Cigarette Tax Act, “distributor” includes
    every person who sells, barters, exchanges, or distributes ciga-
    rettes in the state of Indiana to retail dealers for the purpose of
    resale, or who purchases cigarettes directly from a manufacturer
    of cigarettes, or who purchases for resale cigarettes directly from
    a manufacturer of cigarettes, or from a wholesaler, jobber, or dis-
    tributor outside of the state of Indiana who is not a distributor
    No. 13-2368                                                              13
    ing the cigarette tax, see id. § 6-7-1-17(a), to prepay the tax
    and affix the required amount of tax stamps “upon receipt”
    of any unstamped cigarettes subject to the tax. See id.
    § 6-7-1-18. Distributors and retailers can then pass along the
    tax to retail purchasers or ultimate consumers by adding the
    tax to the price of the cigarettes. 5 See id. § 6-7-1-1. According-
    ly, under the plain language of the Cigarette Tax Act, read
    fairly and as a whole, if Indiana’s cigarette tax applies at all,
    it applies upon receipt of the cigarettes, even though the
    State technically does not levy the tax until disposal. See id.
    § 6-7-1-18.
    This construction is consistent with the Cigarette Tax
    Act’s “intent and purpose” to pre-collect the cigarette tax
    from the person who first sells, uses, consumes, handles, or
    distributes the cigarettes. See id. § 6-7-1-1. It is also consistent
    with the Indiana Tax Court’s interpretation of the Cigarette
    Tax Act and, as the Tax Court recognized, the State’s interest
    holding a registration certificate issued under [the Cigarette Tax
    Act].
    Id. § 6-7-1-6. “Retailer” means “every person, other than a distributor,
    who purchases, sells, offers for sale, or distributes cigarettes, to consum-
    ers or to any person for any purpose other than resale, irrespective of
    quantity or amount, or the number of sales.” Id. § 6-7-1-7. If Mr. Mo-
    hamed intended to sell the cigarettes in his possession in Indiana, he
    would qualify as either a distributer or retailer under the Cigarette Tax
    Act.
    5 Although the Cigarette Tax Act does not specify when persons other
    than distributors and retailers must pay the cigarette tax, this is not sur-
    prising given that Indiana requires all cigarettes sold within the state to
    be sold through cigarette distributors or retailers. See id. § 24-3-6-11(a)-
    (f).
    14                                                   No. 13-2368
    in protecting itself from revenue losses due to cigarette traf-
    ficking:
    To hold that the [cigarette] tax is due only when ciga-
    rettes are “sold, bartered, exchanged, etc.” defeats the
    purpose for the distributor to pay the tax and affix
    stamps upon receipt—the purpose being that because
    cigarettes are a major source of revenue for Indiana,
    the state has an interest in protecting the cigarettes
    from “bootleggers” who seek to bypass the conven-
    tional methods of cigarette distribution and, conse-
    quently, payment of the tax.
    The most effective way for the state to protect its ciga-
    rette revenue is to impose upon distributors the duty
    to pay the tax on all cigarettes at the earliest possible
    point, which the statute defines as receipt. This meth-
    od nearly guarantees that the tax is always collected
    … . Had the legislature intended that the tax be paid
    only on those cigarettes that are sold, the legislature
    would not have mandated that distributors affix the
    stamps upon receipt as evidence the tax has been paid.
    Indiana Eby-Brown Co., 
    648 N.E.2d at 405
     (footnote omitted;
    emphasis in original). We therefore reject Mr. Mohamed’s
    argument that Indiana’s cigarette tax does not apply until
    the cigarettes are sold, used, consumed, handled, or distrib-
    uted as contrary to Indiana law. We instead find that Indi-
    ana’s cigarette tax applies upon receipt of cigarettes subject to
    the tax.
    B.     The Scope of Indiana’s Cigarette Tax
    Next, we consider the scope of Indiana’s cigarette tax. On
    its face, the Cigarette Tax Act applies only to cigarettes sold,
    No. 13-2368                                                  15
    used, consumed, handled, or distributed within Indiana. See
    
    Ind. Code § 6-7-1-1
     (“It is the intent and purpose of this
    chapter to levy a tax on all cigarettes sold, used, consumed,
    handled or distributed within this state … .” (emphasis add-
    ed)); 
    id.
     § 6-7-1-12(a) (imposing Indiana’s cigarette tax only
    “upon the sale, exchange, bartering, furnishing, giving away,
    or otherwise disposing of cigarettes within the state of Indi-
    ana” (emphasis added)). The Cigarette Tax Act does not tax
    cigarettes possessed in Indiana merely for the purpose of in-
    terstate commerce; nor does it require cigarettes passing
    through the state in interstate commerce to bear Indiana tax
    stamps. See id. § 6-7-1-18 (“Any distributor engaged in inter-
    state business[] shall be permitted to set aside such part of
    his stock as may be necessary for the conduct of such inter-
    state business without affixing the stamps required by this
    chapter.”); see also 45 Ind. Admin. Code § 8.1-1-28 (“Distribu-
    tors need not affix tax stamps to the individual packages of
    cigarettes that are sold and shipped outside the State.”); Indi-
    ana Eby-Brown Co., 
    648 N.E.2d at
    404 n.3 (“Eby-Brown need
    not … stamp cigarettes that are to be shipped in interstate
    commerce.”).
    Because Indiana does not tax all cigarettes possessed
    within the state, the government needed to prove more than
    Mr. Mohamed’s possession of unstamped cigarettes in Indi-
    ana to convict him of violating the CCTA. Rather, the gov-
    ernment needed to prove that Mr. Mohamed possessed the
    cigarettes for the purpose of selling, using, consuming, han-
    dling, or distributing them within Indiana in order to estab-
    lish that they were subject to Indiana’s cigarette tax. See 
    Ind. Code §§ 6-7-1-1
    , 6-7-1-12(a); 
    18 U.S.C. § 2341
    (2).
    16                                                 No. 13-2368
    The government argues that “[t]he larger context of Indi-
    ana’s cigarette taxation statutes” establishes that the ciga-
    rettes found in Mr. Mohamed’s van were subject to Indiana’s
    cigarette tax at the time of his arrest. (See Appellee Br. at 9-
    11.) The government cites two provisions of the Cigarette
    Tax Act in support of this argument. First, under Indiana
    Code section 6-7-1-19.5, all persons transporting unstamped
    cigarettes over Indiana highways, except licensed distribu-
    tors, common carriers, and state or federal employees per-
    forming their official duties, must carry invoices or delivery
    tickets stating the quantity and brand of the cigarettes and
    the names and addresses of the seller, purchaser, and the
    person ultimately liable for the state’s cigarette tax. See 
    Ind. Code § 6-7-1-19
    .5. Transporting unstamped cigarettes in In-
    diana without proper documentation constitutes a misde-
    meanor under Indiana law. See 
    id.
     § 6-7-1-23. Second, under
    Indiana Code section 6-7-1-24, the possession of more than
    1,500 cigarettes in packages not bearing Indiana tax stamps
    by any person other than a distributor, common carrier, or
    state or federal employee constitutes “prima facie evidence
    that the cigarettes are possessed for the purpose of sale.” Id.
    § 6-7-1-24(d).
    Mr. Mohamed acknowledges on appeal that he was
    transporting the cigarettes at issue over Indiana highways
    without proper documentation in violation of Indiana Code
    section 6-7-1-19.5, and, as a result, the State could have
    charged him with a misdemeanor. (See Appellee Reply Br. at
    3.) He argues, however, that this misdemeanor violation
    does not amount to a violation of the CCTA. Additionally,
    Mr. Mohamed argues that even if his possession of more
    than 1,500 cigarettes without Indiana tax stamps creates a
    presumption that he possessed the cigarettes for the purpose
    No. 13-2368                                                 17
    of sale, the presumption “stands only until it is destroyed by
    the facts.” (Id. at 4.) According to Mr. Mohamed, the evi-
    dence at trial and the government’s position during sentenc-
    ing—i.e., that the district court should calculate the amount
    of loss using New York’s cigarette tax rate, rather than Indi-
    ana’s tax rate—demonstrate that Mr. Mohamed intended to
    sell the cigarettes outside Indiana, thus destroying any pre-
    sumption that he intended to sell them within the state. (Id.)
    The strongest support for the government’s position is
    United States v. Boggs, 
    775 F.2d 582
     (4th Cir. 1985). In Boggs,
    federal agents arrested the defendant in West Virginia carry-
    ing over 60,000 cigarettes not bearing West Virginia tax
    stamps. The parties stipulated that the defendant had pur-
    chased the cigarettes in North Carolina and was transporting
    them through West Virginia to resell them in Michigan. Af-
    ter a bench trial based on stipulated facts, the district court
    found the defendant guilty of trafficking and conspiring to
    traffic contraband cigarettes in violation of the CCTA. See 
    id. at 583
    .
    On appeal, the defendant argued that because he had
    purchased the cigarettes outside the state and intended to
    sell them outside the state, West Virginia’s cigarette tax did
    not apply, and, thus, the cigarettes did not qualify as contra-
    band under the CCTA even though they lacked West Virgin-
    ia tax stamps. The Fourth Circuit disagreed. A majority of
    the panel determined that West Virginia’s tax statutes gave
    the State authority to apply its cigarette tax to “people such
    as [the defendant] unless the cigarettes they possess are being
    legitimately transported in commerce, in which event excep-
    tion is made.” See 
    id. at 584
    .
    18                                                  No. 13-2368
    The majority relied on two provisions of West Virginia’s
    tax statutes in drawing this conclusion. First, the court found
    that the defendant’s possession of more than twenty packag-
    es of cigarettes not bearing West Virginia tax stamps created
    a presumption under West Virginia law that the defendant
    possessed the cigarettes “for the purpose of evading the
    payment of taxes imposed or due thereon.” See 
    id.
     (quoting
    
    W. Va. Code § 11-17-19
    (b)(6)). Second, the court determined
    that the defendant’s intent to sell the cigarettes in Michigan
    rather than West Virginia did not rebut the presumption that
    he possessed the cigarettes for the purpose of evading West
    Virginia’s cigarette tax because the defendant had not com-
    plied with the State’s requirements regarding the transporta-
    tion of unstamped cigarettes. See 
    id. at 585
     (quoting 
    W. Va. Code § 11-17-20
    ). Like Indiana, West Virginia requires per-
    sons transporting unstamped cigarettes across the state to
    have in their possession invoices or delivery tickets bearing
    certain information about the buyer and seller of the ciga-
    rettes. See 
    W. Va. Code § 11-17-20
    . The defendant stipulated
    at trial that he did not have the required invoices or delivery
    tickets for the cigarettes in his possession. See Boggs, 
    775 F.2d at 585
    . As a result, the majority held that West Virginia
    “would have been perfectly justified in imposing upon [the
    defendant] its excise tax on account of his failure to comply
    with this rather simple and unburdensome requirement of
    West Virginia law or to subject [the defendant] to criminal
    penalties for his failure to comply therewith.” 
    Id.
    In United States v. Skozcen, 
    405 F.3d 537
     (7th Cir. 2005), we
    faced a situation analogous to the one addressed in Boggs.
    The defendant in Skozcen was arrested in Illinois with
    325,000 packs of unstamped cigarettes in his possession. 
    Id. at 541
    . The defendant argued that because the cigarettes
    No. 13-2368                                                   19
    “were to be sold out of the state and never within Illinois,”
    they were not subject to Illinois’s cigarette tax, and, there-
    fore, the cigarettes were not required to bear Illinois tax
    stamps. See 
    id. at 547
    . We ultimately did not need to decide
    whether the defendant’s intention to sell the cigarettes out-
    side Illinois foreclosed his conviction under the CCTA, how-
    ever, because we found that the cigarettes at issue had be-
    come subject to Illinois’s cigarette tax even before they came
    into the defendant’s possession. See 
    id.
    Illinois subjects all cigarettes sold or otherwise disposed
    of within the state to its cigarette tax and requires those ciga-
    rettes to bear stamps evidencing payment of the tax. See 35
    ILCS 130/2-3. Because the defendant in Skozcen had pur-
    chased the cigarettes at issue in Illinois, the cigarettes had
    become subject to Illinois’s cigarette tax at the time of that
    purchase (at the latest). See Skozcen, 
    405 F.3d at 547
    . Accord-
    ingly, the unstamped cigarettes were “contraband” under
    the CCTA regardless of what the defendant did with the cig-
    arettes after purchasing them. See 
    id.
     Under these circum-
    stances, we held that the defendant’s intention to sell the
    cigarettes outside Illinois was irrelevant to his conviction
    under the CCTA. 
    Id.
     We did not address, however, whether
    a defendant’s intention to sell cigarettes outside the state in
    which the cigarettes were found would be relevant where, as
    here, the cigarettes were not already subject to the state’s
    cigarette tax. Because the CCTA incorporates state law in de-
    fining contraband cigarettes, the resolution of this issue nec-
    essarily rests on the applicable state’s laws.
    We are not persuaded that Mr. Mohamed’s violation of
    Indiana’s requirements for transporting unstamped ciga-
    rettes over Indiana highways alone is sufficient to support
    20                                                    No. 13-2368
    his conviction for violation of the CCTA. As an initial matter,
    unlike in Boggs, the government cannot rely on the eviden-
    tiary presumption created by state law here. Under Indiana
    Code section 6-7-1-24(d),
    [t]he possession of more than [1,500] cigarettes in
    packages not bearing Indiana tax stamps by any per-
    son other than a distributor, a common carrier, or an
    employee of the state or federal government perform-
    ing his official duties in the enforcement of this chap-
    ter constitutes prima facie evidence that the cigarettes
    are possessed for the purpose of sale.
    
    Ind. Code § 6-7-1-24
    (d). Read fairly, this provision creates a
    presumption that a person (apart from the three listed excep-
    tions) possessing more than 1,500 cigarettes not bearing In-
    diana tax stamps has the cigarettes available and intended
    for sale within the state. 6 The jury instructions, however,
    made no mention of the presumption, and the government
    never argued at trial that it applied. Had the government ac-
    tually relied on the presumption at trial, Mr. Mohamed may
    have elected to present evidence rebutting the presumption,
    rather than rest his defense without presenting affirmative
    evidence. Thus, unlike in Boggs, the government cannot use
    the presumption to its advantage on appeal.
    Without the benefit of the presumption, the government
    has not presented sufficient evidence to allow a reasonable
    trier of fact to determine that Mr. Mohamed intended to sell,
    distribute, or otherwise dispose of the cigarettes within Indi-
    ana. Although Mr. Mohamed acknowledges on appeal that
    6 Mr. Mohamed does not challenge whether this state-law presumption
    applies in federal court, so we will assume that it does.
    No. 13-2368                                                    21
    he violated Indiana’s requirements for transporting un-
    stamped cigarettes across the state, the CCTA does not make
    every violation of a state’s cigarette taxation laws a federal
    crime. See 
    18 U.S.C. § 2341
    (2); see also United States v. Wilbur,
    
    674 F.3d 1160
    , 1173–74 (9th Cir. 2012) (“The CCTA, however,
    does not make cigarettes ‘contraband’ under federal law
    simply because they are contraband under state law.”). Only
    cigarettes that “bear no evidence of the payment of applica-
    ble State or local cigarette taxes in the State or locality where
    such cigarettes are found” qualify as contraband cigarettes
    under the CCTA. See 
    18 U.S.C. § 2341
    (2); Wilbur, 
    674 F.3d at 1174
    . If Congress had intended to make all cigarettes trans-
    ported in violation of state law “contraband,” it could have
    done so. Congress, however, chose to limit the definition of
    “contraband cigarettes” to cigarettes that fail to bear evi-
    dence of applicable state or local cigarette taxes, and we
    must enforce the statute according to its plain terms. See
    Sebelius v. Cloer, --- U.S. ---, 
    133 S. Ct. 1886
    , 1896, 
    185 L. Ed. 2d 1003
     (2013) (“[W]hen [a] statute’s language is plain, the
    sole function of the courts—at least where the disposition
    required by the text is not absurd—is to enforce it according
    to its terms.” (internal quotation marks and citation omit-
    ted)). Accordingly, under the CCTA’s plain language, “[i]f
    there are no ‘applicable State or local cigarette taxes,’ ciga-
    rettes are not contraband, regardless of whether they were
    transported in violation of state law.” Wilbur, 
    674 F.3d at
    1173–74.
    The legislative history of the CCTA provides further
    support for this interpretation of its terms. As the legislative
    history establishes, Congress intended the CCTA to supple-
    ment, but not supplant, states’ enforcement of their own cig-
    arette tax statutes. See S. REP. 95-962 at 3-9. In enacting the
    22                                                  No. 13-2368
    CCTA, Congress sought to help states avoid large-scale rev-
    enue losses and prosecute major cigarette traffickers while
    ensuring that the primary efforts to stop cigarette smuggling
    remained with the states. See id. at 9. With these goals in
    mind, it makes sense that Congress would focus federal ef-
    forts under the CCTA on prosecuting offenders who skirt
    applicable state and local cigarette taxes while leaving en-
    forcement of other aspects of states’ cigarette taxation
    schemes to the states themselves.
    We, therefore, find that Mr. Mohamed’s violation of In-
    diana’s requirements regarding the transportation of un-
    stamped cigarettes alone cannot serve as the basis for his
    conviction. This, however, does not end our inquiry. We
    must first determine whether the government presented suf-
    ficient evidence at trial to prove that Mr. Mohamed pos-
    sessed the cigarettes at issue for the purpose of selling, us-
    ing, consuming, handling, or distributing them within Indi-
    ana—not just that he failed to comply with Indiana’s re-
    quirements for transporting unstamped cigarettes across the
    state.
    As explained above, the government did not rely on the
    presumption under Indiana Code section 6-7-1-24(d) at trial.
    We must therefore decide whether, absent the presumption,
    the jury could have reasonably inferred from the evidence at
    trial that Mr. Mohamed possessed the cigarettes at issue for
    sale, use, consumption, handling, or distribution in Indiana.
    See United States v. Jones, 
    713 F.3d 336
    , 340 (7th Cir. 2013) (“A
    Rule 29 motion calls on the court to distinguish between rea-
    sonable inferences and speculation.”). The government’s ev-
    idence at trial was sufficient to give rise to an inference that
    Mr. Mohamed was trafficking cigarettes when Officer
    No. 13-2368                                                   23
    Helmer pulled him over. Mr. Mohamed had in his posses-
    sion over 23,000 Newport cigarettes purchased from various
    gas stations in Kentucky, a low-tax state, along with a trash
    bag containing over $15,000 in cash. Special Agent Neie testi-
    fied that cigarette traffickers typically travel from retailer to
    retailer purchasing cigarettes—like Mr. Mohamed had—
    because of restrictions retailers place on the amount of ciga-
    rettes a customer can purchase at one time. Special Agent
    Neie also testified that Newports are one of the two most
    frequently trafficked brands of cigarettes. Furthermore,
    when Officer Helmer asked Mr. Mohamed how much mon-
    ey he makes selling cigarettes, Mr. Mohamed answered “not
    much,” effectively admitting that he does in fact sell ciga-
    rettes for profit. This evidence is more than sufficient to
    show that Mr. Mohamed was engaged in cigarette traffick-
    ing and that he intended to sell the cigarettes at issue in a
    state with higher cigarette taxes than Kentucky.
    The government’s evidence at trial, however, was not
    sufficient to show that Mr. Mohamed intended to sell the
    cigarettes in Indiana. Thirty-eight states had higher cigarette
    taxes than Kentucky in 2012, and, as Special Agent Neie tes-
    tified, Mr. Mohamed could have made a profit selling the
    cigarettes in any one of those states. The government pre-
    sented no evidence that Mr. Mohamed had taken any steps
    to sell, distribute, or otherwise dispose of the cigarettes in
    Indiana, and although Mr. Mohamed admitted to Officer
    Helmer that he sells cigarettes, he gave no indication of
    where he sells them. The government’s evidence and argu-
    ments at trial simply did not focus on whether Mr. Mo-
    hamed intended to sell the cigarettes in Indiana, and the ju-
    ry’s questions to the district court understandably reflected
    their confusion over this issue. Significantly, during sentenc-
    24                                                      No. 13-2368
    ing, the government took the position that Mr. Mohamed
    intended to sell the cigarettes in New York, where he stood
    to make substantially more profit than selling them in Indi-
    ana due to New York’s $4.35 per pack tax rate.
    We do not believe that Mr. Mohamed’s possession of cig-
    arettes in Indiana under these circumstances is sufficient to
    support a finding, beyond a reasonable doubt, that Mr. Mo-
    hamed intended to sell, distribute, or otherwise dispose of
    the cigarettes in Indiana. See United States. v. Katz, 
    582 F.3d 749
    , 752 (7th Cir. 2009) (“A jury cannot speculate its way out
    of reasonable doubt.”); see also United States v. Griffin, 
    684 F.3d 691
    , 698 (7th Cir. 2012) (evidence that the defendant had
    easy access to firearms and could have possessed them in a
    matter of seconds was not sufficient to prove that he intend-
    ed to exercise control over them); Piaskowski v. Bett, 
    256 F.3d 687
    , 692–93 (7th Cir. 2001) (evidence that the defendant was
    present at the site of a murder and later referred to “shit go-
    ing down” was insufficient to prove that he participated in
    the murder directly or as a conspirator); United States v. Har-
    ris, 
    942 F.2d 1125
    , 1129–30 (7th Cir. 1991) (reversing the de-
    fendant’s conviction where the evidence was “as consistent
    with an inference of innocence as one of guilt”). Without ev-
    idence that Mr. Mohamed intended to sell or otherwise dis-
    pose of the cigarettes in Indiana, the government failed to
    prove beyond a reasonable doubt that Indiana law required
    the cigarettes to bear Indiana tax stamps. Mr. Mohamed’s
    conviction, therefore, cannot stand. 7
    7 This does not mean that Mr. Mohamed’s conduct necessarily must go
    unpunished. As Mr. Mohamed has acknowledged, the State could have
    charged him with a misdemeanor for violating Indiana’s requirements
    for transporting unstamped cigarettes. See 
    Ind. Code § 6-7-1-19
    .5. The
    No. 13-2368                                                               25
    CONCLUSION
    For the foregoing reasons, we REVERSE the decision of
    the district court and REMAND with instructions to enter a
    judgment of acquittal.
    CCTA, moreover, contains recordkeeping and reporting requirements
    that apply to the shipment, sale, or distribution of more than 10,000 ciga-
    rettes in a single transaction, see 
    18 U.S.C. § 2343
    , and violations of those
    requirements also may result in criminal liability. See 
    18 U.S.C. § 2344
    (b).
    We make no comment on whether the government’s evidence at trial
    would have been sufficient to convict Mr. Mohamed under Indiana state
    law or under other provisions of the CCTA. We hold only that the evi-
    dence at trial was not sufficient to support a conviction for violation of 
    18 U.S.C. § 2342
    (a).