United States v. Alghazouli ( 2008 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA,  No. 06-50422
Plaintiff-Appellee,
v.  D.C. No.
CR-05-01148-JAH
AMAR ALGHAZOULI,
OPINION
Defendant-Appellant.

Appeal from the United States District Court
for the Southern District of California
John A. Houston, District Judge, Presiding
Argued and Submitted
July 11, 2007—Pasadena, California
Filed March 4, 2008
Before: Barry G. Silverman, William A. Fletcher, and
Richard R. Clifton, Circuit Judges.
Opinion by Judge William A. Fletcher
1941
1944 UNITED STATES v. ALGHAZOULI
COUNSEL
Amar Alghazouli, pro se, Taft, California, Benjamin L. Cole-
man, San Diego, California, for the appellant.
Melanie K. Pierson, Roger W. Haines, Jr., Office of the U.S.
Attorney, San Diego, California, for the appellee.
OPINION
W. FLETCHER, Circuit Judge:
Appellant Amar Alghazouli (“Alghazouli”) was convicted
by a jury on five counts arising out of unlawful importation
of R-12 freon, an ozone-depleting substance. Three counts
UNITED STATES v. ALGHAZOULI 1945
(Counts 1, 2, and 6) charged Alghazouli with violating 18
U.S.C. § 545. Section 545 prohibits fraudulent or knowing
importation of merchandise “contrary to law,” as well as the
receipt, concealment, or sale of merchandise, or the facilita-
tion of the transportation, concealment, or sale of merchan-
dise, which the defendant knows to have been imported
“contrary to law.” The fourth count (Count 8) charged Algha-
zouli with conspiring to violate two money laundering statutes
in violation of 18 U.S.C. § 1956(h). That count also charged,
as a predicate offense for the money laundering offenses, a
violation of 18 U.S.C. § 545. The fifth count (Count 15)
charged Alghazouli with violating 42 U.S.C. § 7413(c)(1),
based on his having knowingly violated a regulation prohibit-
ing the sale of R-12 freon to an improperly certified person.
Alghazouli makes four arguments on appeal.
First, he argues that the term “law,” as used in the phrase
“contrary to law” in § 545, does not include a “regulation.”
Because all of the violations of § 545 charged in Counts 1, 2,
6, and 8 were based on violations of a regulation, Alghazouli
argues that he did not violate § 545.
Second, he argues that even if a violation of “law” for pur-
poses of § 545 includes violation of a regulation, the jury was
improperly instructed as to the elements of the underlying
money laundering offenses that were the objects of the con-
spiracy charged in Count 8.
Third, he concedes that knowing violation of the regulation
at issue in Count 15 is criminal, but he argues that he did not
knowingly violate that regulation.
Fourth, he argues that the district court erroneously applied
18 U.S.C. § 3553(a) in imposing the sentence.
For the reasons that follow, we affirm Alghazouli’s convic-
tions and sentence.
1946 UNITED STATES v. ALGHAZOULI
I. Background
Alghazouli and his two brothers, Ahed and Omran, were
arrested and tried for activities involving the sale of R-12
freon unlawfully imported from Mexico. Alghazouli was tried
separately.
Witnesses at Alghazouli’s trial testified that R-12 freon was
purchased cheaply in Mexico, brought into the United States
without inspection, and then sold to automotive supply deal-
ers. There was evidence that Spanish text on the canisters
indicating their Mexican origin was removed before sale. One
witness testified that in 1999 a canister of R-12 freon could
be purchased in Mexico for between $150 and $185 and then
sold in the United States to automotive supply shops for $300
to $450, well below the standard American price of $850 to
$1200.
Alghazouli’s brother Ahed ran a wholesale automotive sup-
ply business. Evidence at trial showed that Ahed was involved
in the importation of R-12 freon from Mexico as part of his
business. The government presented evidence that Alghazouli
was responsible for various activities connected with Ahed’s
business, that each of the three brothers involved was referred
to as “Al,” and that all three carried business cards for
“United Auto Supply, Wholesale.” Four automotive shop
owners testified that Alghazouli was the “Al” from whom
they had purchased R-12 freon.
An undercover agent for the government testified that he
telephoned Alghazouli and requested R-12 freon, and that
Alghazouli did not ask if he had the certificate necessary to
purchase the freon. He testified that when Alghazouli deliv-
ered four canisters of R-12 freon to him, he explained to
Alghazouli that he did not have a license, and Alghazouli
responded, “Don’t worry about it. Just don’t mention any
licensing.” He testified that Alghazouli told him to “play
dumb” if anyone asked him about a license.
UNITED STATES v. ALGHAZOULI 1947
II. Standard of Review
We review de novo the meaning of the term “law” in § 545.
See Beeman v. TDI Managed Care Servs., 449 F.3d 1035,
1038 (9th Cir. 2006). Alghazouli’s Rule 29 motion was prem-
ised on an argument about the meaning of the term “law,” not
on sufficiency of the evidence grounds, requiring this de novo
review. See United States v. Baxley, 982 F.2d 1265, 1268 (9th
Cir. 1992).
We review for plain error the district court’s failure to
instruct on the elements of money laundering in Count 8
because Alghazouli did not object to the instructions in the
district court. See United States v. Ching Tang Lo, 447 F.3d
1212, 1228 (9th Cir. 2006).
We review de novo the meaning of the term “knowingly”
in 42 U.S.C. § 7413(c)(1). See United States v. Pasillas-
Gaytan, 192 F.3d 864, 868-69 (9th Cir. 1999).
Finally, we “review ‘the district court’s interpretation of the
Sentencing Guidelines de novo” and “the district court’s
application of the Sentencing Guidelines to the facts of [a]
case for abuse of discretion[.]’ ” United States v. Cantrell,
433 F.3d 1269, 1279 (9th Cir. 2006) (citation omitted).
III. Discussion
We consider in turn the four issues raised by Alghazouli in
this appeal.
A. The Meaning of the Term “Law” in § 545
Alghazouli was convicted on three counts of violating 18
U.S.C. § 545 and one count predicated on that violation. As
stated, § 545 provides that anyone who “fraudulently or
knowingly imports or brings into the United States, any mer-
chandise contrary to law, or receives, conceals, buys, sells, or
1948 UNITED STATES v. ALGHAZOULI
in any manner facilitates the transportation, concealment, or
sale of such merchandise after importation, knowing the same
to have been imported or brought into the United States con-
trary to law,” is subject to fine and imprisonment for up to
twenty years. 18 U.S.C. § 545, par. 2 (emphases added). See,
e.g., Roseman v. United States, 364 F.2d 18, 23-27 (9th Cir.
1966). All four counts were premised on Alghazouli’s viola-
tion of 40 C.F.R. § 82.4, a regulation promulgated under the
Clean Air Act, 42 U.S.C. §§ 7401 et seq. (“CAA”). Section
82.4 prohibits the importation of “class I” controlled sub-
stances. R-12 freon is a class I controlled substance. The
question before us is whether violation of 40 C.F.R. § 82.4 is
a violation of “law” within the meaning of § 545.
For the reasons that follow, we conclude that Congress
intended the term “law” in § 545 to include a regulation when,
but only when, a statute (a “law”) specifies that a violation of
that regulation constitutes a crime. We further conclude that
the CAA specifies that violation of § 82.4 is a crime. We
therefore affirm Alghazouli’s convictions on Counts 1, 2, and
6. We also affirm his conviction on Count 8, subject to our
analysis in the following section concerning the jury instruc-
tions for that count.
1. Plain Meaning of “Law”
[1] We begin with the text of § 545. See Carson Harbor
Village, Ltd. v. Unocal Corp., 270 F.3d 863, 877 (9th Cir.
2001) (en banc) (“ ‘[W]e look first to the plain language of
the statute . . . to ascertain the intent of Congress.’ ”) (cita-
tions omitted). In common usage, the term “law” does not
always, or perhaps even usually, include a “regulation.” The
2004 edition of Black’s Law Dictionary defines “law” nar-
rowly as “a statute.” But it also defines “law” more broadly
as “[t]he aggregate of legislation, judicial precedents, and
accepted legal principles; the body of authoritative grounds of
judicial and administrative action; esp., the body of rules,
standards, and principles that the courts of a particular juris-
UNITED STATES v. ALGHAZOULI 1949
diction apply[.]” Black’s Law Dictionary 900 (8th ed. 2004).
Definitions in earlier editions of Black’s are similar. See, e.g.,
Black’s Law Dictionary 796 (5th ed. 1979). Comparable defi-
nitions appear in Webster’s Third New International Dictio-
nary 1279 (1993). We therefore conclude that the term “law”
does not have a plain meaning that necessarily includes a
“regulation.”
2. History of § 545
[2] Because “law” does not have a single clear meaning
discernible from the text alone, we look to the history of
§ 545. “Where, as here, . . . different interpretations can be
reconciled with the statutory language, our duty is ‘to find
that interpretation which can most fairly be said to be imbed-
ded in the statute, in the sense of being most harmonious with
its scheme and with the general purposes that Congress mani-
fested.’ ” United States v. 594,464 Pounds of Salmon, 871
F.2d 824, 827 (9th Cir. 1989) (quoting Commissioner v.
Engle, 464 U.S. 206, 217 (1984) (further quotation marks and
citations omitted)); see also Edwards v. Aguillard, 482 U.S.
578, 594 (1987) (“The plain meaning of the statute’s words,
enlightened by their context and the contemporaneous legisla-
tive history, can control the determination of legislative pur-
pose.”). As the Supreme Court has stated, there is no “fixed
principle that a regulation can never be a ‘law’ for purposes
of criminal prosecutions. It may or may not be, depending on
the structure of the particular statute.” Singer v. United States,
323 U.S. 338, 345 (1945).
a. Meaning of “Law” in the 1866, 1922, and 1930
Tariff Acts
[3] Section 545 is the latest version of a provision that was
first enacted as Section 4 of the Tariff Act of 1866. Section
4 prohibited the fraudulent or knowing importation of mer-
chandise “contrary to law,” as well as the receipt, conceal-
ment, or sale of such merchandise or facilitating the
1950 UNITED STATES v. ALGHAZOULI
transportation, concealment, or sale knowing the merchandise
had been imported “contrary to law.”1 See, e.g., Von
Cotzhausen v. Nazro, 107 U.S. 215, 218-19 (1883) (quoting
the 1866 version of the statute).
[4] In the decades following the 1866 Tariff Act, the
Supreme Court made clear in two cases that a criminal con-
viction for violating a regulation is permissible only if a stat-
ute explicitly provides that violation of that regulation is a
crime. The first case, United States v. Eaton, 144 U.S. 677
(1892), involved a violation of the Oleomargarine Act of
1885. Section 18 of the Act provided criminal penalties for
anyone who “ ‘shall knowingly or willfully omit, neglect, or
refuse to do, or cause to be done, any of the things required
by law in the carrying on or conducting of his business[.]’ ”
Eaton, 144 U.S. at 685 (quoting the Act) (emphasis added).
The defendant, a wholesale oleomargarine dealer, was con-
victed of a crime under Section 18 based on his violation of
a bookkeeping regulation promulgated under Section 20 of
the Act, which did not specify that the violation of a regula-
tion promulgated thereunder was a crime. The government
argued that the word “law” in Section 18 included the book-
keeping regulation. The Court emphatically rejected the gov-
ernment’s argument, writing:
1
The full text of Section 4 provided as follows:
That if any person shall fraudulently or knowingly import or
bring into the United States, or assist in so doing, any goods,
wares, or merchandise, contrary to law, or shall receive, conceal,
buy, sell, or in any manner facilitate the transportation, conceal-
ment, or sale of such goods, wares, or merchandise, after their
importation, knowing the same to have been imported contrary
to law, such goods, wares, and merchandise shall be forfeited,
and he or she shall, on conviction thereof before any court of
competent jurisdiction, be fined in any sum not exceeding five
thousand dollars nor less than fifty dollars, or be imprisoned for
any time not exceeding two years, or both, . . .
An Act Further To Prevent Smuggling and for Other Purposes (Tariff
Act), 14 Stat. 178, 179 (1866) (emphases added).
UNITED STATES v. ALGHAZOULI 1951
It would be a very dangerous principle to hold that
a thing prescribed by the Commissioner of Internal
Revenue, as a needful regulation under the oleomar-
garine act, for carrying it into effect, could be con-
sidered as a thing “required by law” . . . in such
manner as to become a criminal offence punishable
under § 18 of the act, . . .
It is necessary that a sufficient statutory authority
should exist for declaring any act or omission a
criminal offence; and we do not think that the statu-
tory authority in the present case is sufficient.
Id. at 688; see also, e.g., Dimmick v. United States, 121 F.
638, 643 (9th Cir. 1903) (distinguishing its facts from those
in Eaton, where “there was no statutory authority for the par-
ticular regulation for the violation of which the defendant was
indicted”); Van Gesner v. United States, 153 F. 46, 53 (9th
Cir. 1907) (citing Eaton for the principle that “[i]t is quite true
. . . that no rule or regulation made by the Land Department
is a law in the sense that it can make that a crime which is not
made a crime by any statute of the United States”).
The second case, United States v. Grimaud, 220 U.S. 506
(1911), involved a regulation promulgated under the Forest
Reserve Act. The Act specified that the Secretary of Agricul-
ture “ ‘may make such rules and regulations . . . as will insure
the objects of such reservations; . . . and any violation of the
provisions of this act or such rules and regulations of the Sec-
retary shall be punished’ as is provided in § 5388 . . . of the
Revised Statutes.’ ” Id. at 515 (quoting the provision) (cita-
tions omitted; emphases added). The defendant had violated
a regulation promulgated under the Forest Reserve Act. He
argued, based on the Court’s decision in Eaton, that he could
not be convicted of a crime based on the violation of a regula-
tion. The Court disagreed, pointing out that, unlike in Eaton,
“the very thing which was omitted in the oleomargarine act
has been distinctly done in the forest reserve act” through the
1952 UNITED STATES v. ALGHAZOULI
“ ‘shall be punished’ ” language. Id. at 519; see also Loving
v. United States, 517 U.S. 748, 768 (1996) (quoting Grimaud,
220 U.S. at 518, to support the proposition that an agency can
be delegated the power to define criminal conduct if “Con-
gress makes the violation of regulations a criminal offense
and fixes the punishment, and the regulations ‘confin[e] them-
selves within the field covered by the statute.’ ”) (alteration in
Loving); Pappens v. United States, 252 F. 55, 56 (9th Cir.
1918) (applying the Grimaud approach).
In 1915, the Eighth Circuit affirmed a conviction under
Section 4 of the Tariff Act of 1866, noting that the relevant
statute criminalized violations of the regulation at issue. See
United States v. Estes, 227 F. 818, 821 (8th Cir. 1915). The
defendant had violated regulations promulgated under a stat-
ute governing the importation of livestock. The statute speci-
fied “ ‘[t]hat any person . . . knowingly violating the
provisions of this act or the orders or regulations made in
pursuance thereof . . . shall be punished by a fine of not less
than one hundred dollars nor more than one thousand dollars,
or by imprisonment not more than one year, or by both such
fine and imprisonment.’ ” Estes, 227 F. at 821 (quoting the
statute) (emphases added). The court performed a careful
analysis of Eaton and Grimaud, concluding that the defen-
dant’s violations were “contrary to law” within the meaning
of Section 4 of the 1866 Act:
[A]s these regulations were fully authorized by law,
and their violation made punishable by law . . . , it
must be held, we think, that it was proper to allege
in the indictment that the cattle in question had
theretofore been imported and brought into the
United States from the republic of Mexico contrary
to law, as specified in the indictment, so as to bring
the charge within the language [of Section 4 of the
1866 Tariff Act].
Id. at 821-22.
 UNITED STATES v. ALGHAZOULI 1953
[5] Section 4 of the 1866 Tariff Act was reenacted almost
verbatim in the Tariff Act of 1922 and again in the Tariff Act
of 1930.2 See, e.g., United States v. Mitchell, 39 F.3d 465, 469
(4th Cir. 1994) (describing the reenactment history); Gillespie
v. United States, 13 F.2d 736, 738 (2d Cir. 1926) (noting that
the 1866 and 1922 provisions are “substantially identical”).
Congress thus reenacted the provision that has become § 545
against the background of Eaton, Grimaud, and Estes. That is,
Congress reenacted the provision knowing that a criminal pro-
hibition against violating a “law” included a prohibition
against violating a regulation when, but only when, a statute
specified that a violation of that regulation was a crime.
b. Patriot Reauthorization Act
[6] In 2006, Congress enacted the USA PATRIOT
Improvement and Reauthorization Act of 2005, Pub. L. No.
109-177, 120 Stat. 192 (2006) (“Patriot Reauthorization Act”
or “Act”). Section 310 of the Act amended 18 U.S.C. § 545
by increasing the maximum sentence under § 545 from five
to twenty years, but otherwise left § 545 unchanged. Section
311(a) of the Act added an entirely new provision, now codi-
fied at 18 U.S.C. § 554. Unlike the newly amended § 545,
which still prohibits only violations of “law,” the newly
2
The relevant text of the 1922 and 1930 statutes reads as follows:
If any person fraudulently or knowingly imports or brings into
the United States, or assists in so doing, any merchandise[,] con-
trary to law, or receives, conceals, buys, sells, or in any manner
facilitates the transportation, concealment, or sale of such mer-
chandise after importation, knowing the same to have been
imported or brought into the United States contrary to law, such
merchandise shall be forfeited and the offender shall be fined in
any sum not exceeding $5,000 nor less than $50, or be impris-
oned for any time not exceeding two years, or both.
Tariff Act of 1922, ch. 356, § 593(b), 42 Stat. 858, 982; Tariff Act of
1930, ch. 497, § 593(b), 46 Stat. 590, 751 (emphases added; brackets indi-
cate comma present only in the 1922 version).
1954 UNITED STATES v. ALGHAZOULI
enacted § 554 prohibits the violation of any “law or regula-
tion,” while otherwise tracking the language of § 545.3
[7] The amendment of § 545 by Section 310 and the simul-
taneous enactment of § 554 in Section 311 of the Patriot
Reauthorization Act indicate that Congress intended “law,” as
used in § 545, to include a regulation only if a statute speci-
fies that the violation of that regulation is a crime.
Sections 310 and 311 are closely related. Both were
enacted as part of the Patriot Reauthorization Act and both are
codified in Chapter 27 of Title 18 of the U.S. Code
(“Customs”). Both regulate movement across the borders of
the United States. Section 545 addresses “Smuggling goods
into the United States,” and § 554 addresses “Smuggling
goods from the United States.” Finally, § 554(b) cross-
references § 545, specifying that “the term ‘United States’ has
the meaning given that term in section 545.”
The close relationship between § 545 and § 554 suggests
that the term “law” in each has the same meaning. The statute
presents “a classic case for application of the normal rule of
statutory construction that identical words used in different
parts of the same act are intended to have the same meaning.”
Sullivan v. Stroop, 496 U.S. 478, 484 (1990) (internal quota-
tion marks and citations omitted). There is no indication that
3
Section 554(a) provides that:
Whoever fraudulently or knowingly exports or sends from the
United States, or attempts to export or send from the United
States, any merchandise, article, or object contrary to any law or
regulation of the United States, or receives, conceals, buys, sells,
or in any manner facilitates the transportation, concealment, or
sale of such merchandise, article or object, prior to exportation,
knowing the same to be intended for exportation contrary to any
law or regulation of the United States, shall be fined under this
title, imprisoned not more than 10 years, or both.
(Emphases added.)
UNITED STATES v. ALGHAZOULI 1955
these terms “are found in such dissimilar connections as to
warrant the conclusion that they were employed in the differ-
ent parts of the act with different intent.” Helvering v. Stock-
holms Enskilda Bank, 293 U.S. 84, 87 (1934).
Moreover, § 554 uses the phrase “law or regulation” twice.
The conjunction “or” indicates that “law” as used in § 554
does not include all regulations. If it did, the word “regula-
tion” in § 554 would be superfluous. See, e.g., Montclair v.
Ramsdell, 107 U.S. 147, 152 (1883) (“It is the duty of the
court to give effect, if possible, to every clause and word of
a statute, avoiding, if it may be, any construction which
implies that the legislature was ignorant of the meaning of the
language it employed.”). The logical conclusion, based on the
proximity of § 545 and § 554, is that the term “law” in § 545
is not the equivalent of the broader “law or regulation” phrase
in § 554. See also, e.g., Ariz. Elec. Power Co-op. v. United
States, 816 F.2d 1366, 1375 (9th Cir. 1987) (“When Congress
includes a specific term in one section of a statute but omits
it in another section of the same Act, it should not be implied
where it is excluded.”); 2A Sutherland, Statutory Construction
§ 46.6 (6th ed. 2006) (“[W]hen the legislature uses certain
language in one part of the statute and different language in
another, the court assumes different meanings were intend-
ed.”).
3. Conclusion
[8] We therefore conclude that the term “law” in § 545
does not include all regulations. The term includes a regula-
tion only if there is a statute (a “law”) that specifies that viola-
tion of that regulation is a crime. We note that the only other
modern court of appeals to consider the meaning of “law” in
§ 545 upheld a conviction for violation of a regulation, but on
a somewhat different rationale. It held that regulations qualify
as “law” only if they have “the force and effect of law.” See
Mitchell, 39 F.3d at 476 (applying a three-part test from
Chrysler Corp. v. Brown, 441 U.S. 281, 301-03 (1979)).
1956 UNITED STATES v. ALGHAZOULI
[9] Alghazouli was charged in Counts 1, 2, and 6 with vio-
lating 18 U.S.C. § 545. He was charged in Count 8 with con-
spiring to violate money laundering statutes, whose violation
was predicated on a violation of § 545. In all four counts, vio-
lation of § 545 was predicated on a violation of 40 C.F.R.
§ 82.4. Section 82.4 was promulgated under 42 U.S.C.
§ 7671c. Section 7671c, part of Title VI of the CAA, autho-
rizes the Administrator of the Environmental Protection
Agency to issue regulations to phase out the use of ozone-
depleting substances. Criminal enforcement of regulations
promulgated under § 7671c is explicitly granted in another
provision of the CAA, 42 U.S.C. § 7413(c)(1), which pro-
vides “a fine . . . or imprisonment for not to exceed 5 years,
or both” for “[a]ny person who knowingly violates . . . any
requirement or prohibition of . . . title VI (relating to strato-
spheric ozone control), including a requirement of any rule
. . . promulgated or approved under such sections or titles, .
. .” Therefore, a violation of § 82.4 is a violation of a “law”
within the meaning of § 545, and we affirm Alghazouli’s con-
victions on Counts 1, 2, 6, and 8.
B. Jury Instruction
Alghazouli contends the jury instructions for Count 8 were
fatally flawed. Count 8 charged Alghazouli with conspiring to
violate two money laundering statutes, 18 U.S.C.
§§ 1956(a)(1)(A)(i) and 1957(a), in violation of 18 U.S.C.
§ 1956(h). Alghazouli argues that the jury instructions for
Count 8 did not sufficiently inform the jury about the nature
of the offenses proscribed in these underlying money launder-
ing statutes. The government contends that Alghazouli was
not entitled to an instruction describing the elements of the
underlying money laundering offenses prohibited in
§§ 1956(a)(1)(A)(i) and 1957(a). In the alternative, the gov-
ernment contends that the elements of the underlying offenses
were sufficiently described in the special verdict form read to,
and provided to, the jury.
UNITED STATES v. ALGHAZOULI 1957
Because Alghazouli did not object to the jury instructions
for Count 8, we review them for plain error. United States v.
Marsh, 894 F.2d 1035, 1039 (9th Cir. 1989), cert. denied, 493
U.S. 103 (1990). He must show (1) that there was error, (2)
that the error was plain, and (3) that the error affected his sub-
stantial rights. Ching Tang Lo, 447 F.3d at 1228. Even if he
makes all three of these showings, we should exercise our dis-
cretion to reverse his conviction “only if the error seriously
affects the fairness, integrity, or public reputation of judicial
proceedings.” Id.
We conclude that the district court erred by not providing
in the jury instructions the elements of the two money laun-
dering offenses that were the objects of the conspiracy with
which Alghazouli was charged in Count 8. However, we con-
clude that this was not “plain error.” The error was not plain
in the sense of obvious. Further, because the elements of the
money laundering offenses were included in the jury verdict
form, the error did not adversely affect Alghazouli’s substan-
tial rights. We therefore affirm Alghazouli’s conviction on
Count 8.
1. Error
Count 8 charged Alghazouli with conspiracy under 18
U.S.C. § 1956(h). That section provides that “[a]ny person
who conspires to commit any offense defined in this section
or section 1957 shall be subject to the same penalties as those
prescribed for the offense the commission of which was the
object of the conspiracy.” Count 8 charged that the objects of
the conspiracy were the two money laundering offenses set
forth in §§ 1956(a)(1)(A)(ii) and 1957(a).
[10] It is well-established that a trial court errs if it fails to
instruct the jury on an element of a charged offense. See, e.g.,
United States v. Gaudin, 515 U.S. 506, 509-11 (1995). It is
also well-established that a trial court errs in a conspiracy case
if it fails to instruct the jury on an element of the crime that
1958 UNITED STATES v. ALGHAZOULI
is the object of the conspiracy. That is, if a jury is asked to
determine whether a defendant conspired to commit an
offense, the jury needs to know the elements of that offense.
See, e.g., Ingram v. United States, 360 U.S. 672, 678 (1959);
Ching Tang Lo, 447 F.3d at 1231-32; Evanchyk v. Stewart,
340 F.3d 933, 941-42 (9th Cir. 2003); United States v. Kim,
65 F.3d 123, 126 (9th Cir. 1995); see also United States v.
Lake, 472 F.3d 1247, 1263 (10th Cir. 2007); United States v.
Smithers, 27 F.3d 142, 146-47 (5th Cir. 1994); United States
v. Winfield, 997 F.2d 1076, 1081 (4th Cir. 1993); United
States v. Vaglica, 720 F.2d 388, 391 (5th Cir. 1983). We note
that, although the model jury instructions in the Ninth Circuit
do not address the point, the model instructions of several of
our sister circuits do. See Pattern Crim. Jury Instr. 6th Cir.
3.01A (2005) (“If the object offense is not charged and
defined elsewhere in the instructions, it must be defined at
some point in the conspiracy instructions.”); Pattern Crim.
Jury. Instr. 5th Cir. 2.20 (2001) (similar); Modern Federal
Jury Instructions-Criminal § 70.5 (similar, for the Eleventh
Circuit).
[11] In this case, the jury instructions for Count 8 informed
the jury of the elements of a conspiracy under 18 U.S.C.
§ 1956(h). But the instructions omitted any description of the
two underlying money laundering crimes that were charged as
the objects of the conspiracy. Further, the instructions omitted
a description of the nature of the underlying crime from which
the laundered money was derived, even though convictions
under §§ 1956(a)(1)(A)(i) and 1957(a) require that a defen-
dant know that the money used in a money laundering con-
spiracy derived from an illegal activity. We therefore hold
that it was error for the trial court not to instruct the jury as
to the elements of these underlying crimes.
2. Plain Error
[12] Where jury instructions fail to describe an element of
the offense — here, the elements of the offense underlying the
UNITED STATES v. ALGHAZOULI 1959
conspiracy — the error is plain. See, e.g., United States v.
Fuchs, 218 F.3d 957, 962 (9th Cir. 2000). The facts of the
case before us, however, are somewhat different. The district
court did not read to the jury, as part of the formal jury
instructions for Count 8, any description of the money laun-
dering offenses charged under §§ 1956(a)(1)(A)(i) and
1957(a). But, as described in the next subsection, the court did
read and provide to the jury a special verdict form for Count
8, which contained the substance of those two provisions.
[13] As we have stated in a somewhat different context,
“Verdict forms are, in essence, instructions to the jury.”
United States v. Reed, 147 F.3d 1178, 1180 (9th Cir. 1998).
In the circumstances of the case before us, where the sub-
stance of the two money laundering offenses was contained in
the special verdict form that was read and provided to the
jury, we are unwilling to conclude that the district court com-
mitted plain error in omitting this information from the formal
jury instructions. While it was error to include the information
in the special verdict form rather than the formal jury instruc-
tions, it was not plain error.
Because in this case the question of whether the error was
“plain” overlaps to some degree with the substantial rights
question, we proceed to the third stage of the plain error
inquiry.
3. Affecting Substantial Rights
“In the context of plain error review, for an error to affect
substantial rights, ‘in most cases it means that the error must
have been prejudicial.’ ” United States v. Perez, 116 F.3d 840,
847 (9th Cir. 1997) (quoting United States v. Olano, 507 U.S.
725, 734 (1993)). The prejudice requirement applies in review
for nonstructural error. United States v. Dominguez Benitez,
542 U.S. 74, 81-82 (2004). To show prejudice, an appellant
must show “ ‘a reasonable probability that, but for [the error
claimed], the result of the proceeding would have been differ-
1960 UNITED STATES v. ALGHAZOULI
ent.’ ” Id. at 82 (quoting United States v. Bagley, 473 U.S.
667, 682 (1985)).
When determining prejudice, we do not examine jury
instructions in isolation. In some circumstances special ver-
dict forms can cure problems created by defective instruc-
tions. See Reed, 147 F.3d at 1180 (“[T]he propriety of using
a special verdict should be determined according to ‘the par-
ticular circumstances of [each] case.’ ”) (quoting United
States v. O’Looney, 544 F.2d 385, 392 (9th Cir. 1976)); Mad-
dox v. City of Los Angeles, 792 F.2d 1408, 1418 (9th Cir.
1986) (jury instructions, when combined with the special ver-
dict form, adequately set forth the relevant elements of a neg-
ligence charge).
Count 8 charged a conspiracy to engage in money launder-
ing in violation of two substantive provisions, §§ 1956(a)(1)
(A)(i) and 1957(a). Section 1956(a)(1)(A)(i) provides:
Whoever, knowing that the property involved in a
financial transaction represents the proceeds of some
form of unlawful activity, conducts or attempts to
conduct such a financial transaction which in fact
involves the proceeds of specified unlawful activity
— with the intent to promote the carrying on of
specified unlawful activity . . . , shall be sentenced
to [a fine or imprisonment].
The corresponding language of the special verdict form,
which was read to the jury at the end of the jury instructions
and was sent into the jury room afterwards, was as follows:
[D]o you find beyond a reasonable doubt that the
object of the conspiracy was to, one, promote the
carrying on of the unlawful activity, the sale of mer-
chandise imported contrary to law, knowing the
property involved in the financial transactions repre-
UNITED STATES v. ALGHAZOULI 1961
sented the proceeds of some form of unlawful activ-
ity?
Section 1957(a) provides:
Whoever, in any of the circumstances set forth in
subsection (d),[4] knowingly engages or attempts to
engage in a monetary transaction in criminally
derived property of a value greater than $10,000 and
is derived from specified unlawful activity, shall be
punished [as provided, infra].
The corresponding language of the special verdict form was
as follows:
[Do you find beyond a reasonable doubt that the
object of the conspiracy was to,] two, knowingly
engage in monetary transactions in criminally-
derived property of a value greater than $10,000 and
is derived from the unlawful sale of merchandise
imported contrary to law?
In determining whether the special verdict form adequately
informed the jury of the elements of the two underlying
money laundering offenses, we must perform a two-part anal-
ysis. This two-part analysis is necessitated by the fact that the
conspiracy statute depends on the money laundering crimes
that are the object of the conspiracy. The money laundering
statutes, in turn, depend on the crime from which the laun-
dered money was derived.
First, we must perform the analysis required in any conspir-
acy case. That is, we must decide whether the special verdict
forms adequately described the elements of the offenses that
4
Section 1957(d) provides that the offense must take place in a geo-
graphical location subject to the jurisdiction of the United States. This ele-
ment of § 1957(a) was not in dispute in this case.
1962 UNITED STATES v. ALGHAZOULI
were the object of the conspiracy, to the degree that those ele-
ments are set forth in the text of the statute whose violation
is charged as the object of the conspiracy. In this case, those
statutes were §§ 1956(a)(1)(A)(i) and 1957(a). As is apparent
from a comparison of the language of these statutes and the
language of the special verdict form, the elements set forth in
the texts of §§ 1956(a)(1)(A)(i) and 1957(a) were sufficiently
described in the special verdict forms.
Second, we must decide whether the special verdict forms
adequately described the nature of the underlying crime from
which the laundered money was derived, and whether the
forms adequately specified the mens rea of the defendant with
respect to that underlying crime. Both of the money launder-
ing offenses that were charged as the object of the conspiracy
require that the money be derived from illegal sources. Sec-
tion 1956(a)(1)(A)(i) specifies that the money be “proceeds of
unlawful activity”; § 1957(a) specifies that the money be
“criminally derived property” and the product of “unlawful
activity.” Both sections also require that the defendant have
some knowledge of the illegality of the activity. Section
1956(a)(1)(A)(i) requires that the defendant be “knowing”;
§ 1957(a) requires that defendant act “knowingly.”
It is obvious that a jury must be informed, in some manner,
of the criterion or criteria for determining the illegality of the
conduct from which the money is derived. If the jury is not
so informed, there is a danger that the jury might be per-
suaded to convict even though the “laundered” money was, in
fact, derived from legal activity. Yet it is equally obvious that
a full explanation of every element of the underlying crime
that produced the money will not always be necessary. For
example, in United States v. Golb, 69 F.3d 1417 (9th Cir.
1995), we held in a money laundering case that the jury did
not need to be given an instruction on every element of the
underlying crime from which the money was derived. We
wrote, “The jury was instructed ‘as a matter of law that the
manufacture, importation, and distribution of controlled sub-
UNITED STATES v. ALGHAZOULI 1963
stances is a specified unlawful activity,’ and that the govern-
ment had to prove that at least some of the funds involved
represented the proceeds of the ‘manufacture, importation and
distribution of controlled substances.’ . . . [T]he jury did not
need to be further instructed.” Id. at 1429.
[14] In this case, it is clear that the jury was adequately
informed, both of the illegality of the underlying conduct and
of the requirement that Alghazouli knew of its illegality.
There was no instruction directed to Count 8 comparable to
the instruction in Golb. But such an instruction was not neces-
sary, for the underlying crime from which the money was
derived was a violation of 18 U.S.C. § 545. Violating § 545
was directly charged in Counts 1, 2, and 6. The jury was prop-
erly instructed on those counts, and it found Alghazouli
guilty. Thus, when the jury found Alghazouli guilty of con-
spiracy to engage in money laundering, it was well aware of
the nature of the illegal activity from which the money was
derived, because it already had convicted Alghazouli for that
activity. Further, given the mens rea requirement for a convic-
tion under § 545, the jury concluded, when it convicted
Alghazouli on Counts 1, 2, and 6, that he knew that the
money was derived from illegal activity (indeed, his own ille-
gal activity), thus satisfying the mens rea requirements of
§§ 1956(a)(1)(A)(i) and 1957(a).
C. “Knowingly” under 42 U.S.C. § 7413(c)(1)
[15] Alghazouli was convicted on Count 15 under 42
U.S.C. § 7413(c)(1) for violating 40 C.F.R. § 82.154(m). As
we noted, supra, the Clean Air Act specifies in § 7413(c)(1)
that “[a]ny person who knowingly violates . . . any require-
ment or prohibition of . . . subchapter VI of this chapter (relat-
ing to stratospheric ozone control)” is guilty of a crime.
Section 82.154(m) is a regulation relating to stratospheric
ozone control within the meaning of § 7413(c)(1). Subject to
exceptions not relevant here, it provides that “[n]o person may
sell or distribute, or offer for sale or distribution, any sub-
1964 UNITED STATES v. ALGHAZOULI
stance that consists in whole or in part of a class I or class II
substance for use as a refrigerant to any person.” Alghazouli
was charged with violating this regulation by selling a class
I substance to an uncertified individual for use in a motor
vehicle. The district court instructed the jury as follows: “To
establish a knowing violation of a requirement of the strato-
spheric ozone regulations, the government need only prove
that the defendant had knowledge of the facts that constitute
the offense; not that the defendant knew his acts were unlaw-
ful.”
Alghazouli contends that he did not violate § 7413(c)(1)
because he did not know that his conduct was illegal under
§ 82.154(m). The government disagrees, contending that
§ 7413(c)(1) requires only that Alghazouli have known the
facts that constitute the offense. For the reasons that follow,
we conclude that the jury was properly instructed. We there-
fore affirm Alghazouli’s conviction on Count 15.
[16] The Second, Fifth, and Sixth Circuits have held that
§ 7413(c)(1) requires only that the defendant have knowledge
of the facts that constituted the offense. See United States v.
Ho, 311 F.3d 589, 605-06 (5th Cir. 2002) (“knowingly” in
§ 7413(c)(1) “means knowledge of underlying facts, not law,”
particularly in the context of “hazardous substances”); United
States v. Weintraub, 273 F.3d 139, 147 (2d Cir. 2001) (the
phrase “knowingly violates” in § 7413(c)(1) “requires knowl-
edge of facts and attendant circumstances that comprise a vio-
lation of the statute, not specific knowledge that one’s
conduct is illegal”); United States v. Buckley, 934 F.2d 84, 88
(6th Cir. 1991) (the prohibition in the version of § 7413(c)(1)
preceding the 1990 CAA Amendments “requires knowledge
only of emissions themselves, not knowledge of the statute or
of the hazards that emissions pose”).
In Weintraub, 273 F.3d at 146-47, the Second Circuit relied
on the Supreme Court’s decision in United States v. Interna-
tional Minerals & Chemical Corp., 402 U.S. 558 (1971), in
UNITED STATES v. ALGHAZOULI 1965
which a public welfare statute provided criminal penalties for
anyone shipping acids who “ ‘knowingly violates any . . . reg-
ulation’ ” governing such transportation. See id. at 559 (quot-
ing 18 U.S.C. § 834(f)). The Court held that the statute did not
require knowledge of the regulation. Rather, the Court held,
the statute required only knowledge of the fact that the
shipped substance was acid. See id. at 563 (“[W]e decline to
attribute to Congress the inaccurate view that that Act
requires proof of knowledge of the law, as well as the facts,
and that it intended to endorse that interpretation by retaining
the word ‘knowingly.’ ”). The Court reached this conclusion
in part because where “dangerous or deleterious devices or
products or obnoxious waste materials are involved, the prob-
ability of regulation is so great that anyone who is aware that
he is in possession of them or dealing with them must be pre-
sumed to be aware of the regulation.” Id. at 565.
[17] We have not previously addressed the “knowingly”
requirement in § 7413(a)(1), but we have interpreted an analo-
gous provision in the Clean Water Act, 33 U.S.C. §§ 1251 et
seq. (“CWA”). In United States v. Weitzenhoff, 35 F.3d 1275
(9th Cir. 1994) (as amended), we held that “knowingly” in 33
U.S.C. § 1319(c)(2) does not require that the defendants
“knew that their acts violated the permit [at issue] or the
CWA.” Id. at 1286. Instead, the term “knowingly” requires
only that the defendants knew the facts that constituted the
violation. In so holding, we relied on the Court’s decision in
International Minerals, just as the Second Circuit did in
Weintraub. We wrote that the CWA is a “public welfare stat-
ute[ ],” a category that, in general, does not require knowl-
edge of the law for its violation. Id. at 1284; see also, e.g.,
United States v. Lynch, 233 F.3d 1139, 1143 (9th Cir. 2000)
(interpreting the phrase “knowingly violate” in the Archeo-
logical Resources Protection Act as not requiring knowledge
of the law, but only “knowledge of the facts that make a tres-
pass a felony”).
Alghazouli contends that the Supreme Court’s recent deci-
sion in Arthur Andersen LLP v. United States, 544 U.S. 696
1966 UNITED STATES v. ALGHAZOULI
(2005), undermines the decisions of the three circuits that
have held that the “knowingly violates” language in
§ 7413(c)(1) requires only knowledge of the facts constituting
the violation, as well as our analogous decision in Weitzen-
hoff. In Arthur Andersen, the Court interpreted a witness-
tampering statute providing that “anyone who knowingly . . .
corruptly persuades another person . . . with intent to . . .
cause” that person to withhold or alter documents used in an
“official proceeding” commits a crime. 18 U.S.C.
§ 1512(b)(2). The Court held that the phrase “knowingly . . .
corruptly persuades” requires that the petitioner Arthur
Andersen not only knew that it was persuading someone, but
also that it was doing so “corruptly,” with knowledge of the
wrongfulness of its conduct. The Court wrote:
[T]he natural meaning of these terms provides a
clear answer. “[K]nowledge” and “knowingly” are
normally associated with awareness, understanding,
or consciousness. “Corrupt” and “corruptly” are nor-
mally associated with wrongful, immoral, depraved,
or evil. Joining these meanings together here makes
sense both linguistically and in the statutory scheme.
Only persons conscious of wrongdoing can be said
to “knowingly . . . corruptly persuad[e].”
Arthur Andersen, 544 U.S. at 705 (citations omitted; first
alteration added).
For three reasons, we do not agree that Arthur Andersen
undermines our sister circuits’ decisions interpreting
§ 7413(c)(1) or our decision in Weitzenhoff interpreting the
CWA. First, as the Court emphasized in Arthur Andersen, the
phrase “knowingly . . . corruptly persuades” indicates that
Congress intended to punish criminally only a person who
knows that he or she is acting corruptly. By contrast, the
phrase “knowingly violates” does not necessarily indicate
anything more than that the defendant must know what he or
she is doing. The phrase does not necessarily indicate that the
UNITED STATES v. ALGHAZOULI 1967
defendant also must know that what he or she is doing is ille-
gal.
Second, unlike the statute at issue in Arthur Andersen, the
CAA is a public welfare statute dealing with harmful sub-
stances. As discussed above, the Court in International Min-
erals sustained a conviction for shipping a harmful substance
in violation of a public welfare statute. By contrast, the Court
in Arthur Andersen noted that the “act underlying the convic-
tion — ‘persua[sion]’ — is by itself innocuous,” making
“ ‘restraint in assessing the reach of a federal criminal stat-
ute’ ” “particularly appropriate.” 544 U.S. at 703 (citation
omitted; bracket in original).
[18] Third, the legislative history supports a reading of
§ 7413(c)(1) that requires a defendant only to have knowledge
of the facts. Cf. Weitzenhoff, 35 F.3d at 1283 (“turn[ing] . . .
to the legislative history of the provision at issue to ascertain
what Congress intended”); United States v. Johal, 428 F.3d
823, 826 (9th Cir. 2005) (“In determining what mental state
is required to prove a violation of the statute, we look to its
words and the intent of Congress.”). The October 1990 Con-
gressional Record contains a Conference Committee report
read into the record by Senators Chafee and Baucus, stating:
Indeed, the criminal provisions that are introduced in
section 113(c) are largely modeled upon those con-
tained in the CWA and [Resource Conservation
Recovery Act], and we expect them to operate in the
same fashion as those have operated. In particular, it
is our intention that — with the exception only of the
crimes of knowing and negligent endangerment —
crimes under these new criminal provisions shall be
crimes of general intent, rather than crimes of spe-
cific intent.
136 Cong. Rec. S16895-01 (daily ed. Oct. 27, 1990) (Chafee-
Baucus statement of Senate Managers, S. 1630, Clean Air Act
Amendments of 1990).
1968 UNITED STATES v. ALGHAZOULI
D. Sentencing
Finally, Alghazouli argues that the district court erred in
sentencing by failing to apply properly the factors enumerated
in 18 U.S.C. § 3553(a). We disagree. The district court’s
explanation of its sentence survives any standard of appellate
review for reasonableness, and we therefore affirm Algha-
zouli’s sentence.
[19] Alghazouli argues that the district court “incorrectly
believed that if it determined that the advisory guideline range
was reasonable, then that was the sentencing range that should
govern.” But the district court did not state that it was bound
by the Guidelines. Instead, it discussed at length the factors
enumerated in § 3553(a) and their application to Alghazouli’s
case. The court explained that “I look to the factors in section
3553(a) to determine a reasonable sentence in your case” and
“I look at all these factors, . . . having benefit of hearing the
evidence at trial with respect to . . . the circumstances of this
offense.” The court concluded, after a detailed account of its
reasoning, that, “[h]aving considered all these factors, the
court finds that the guideline range reflects a reasonable range
for sentencing in your case.” The court then chose, in its
words, “the low end of the guideline range,” sentencing
Alghazouli to forty-one months in custody.
[20] Recent decisions support the conclusion that the
court’s sentencing decision was reasonable. See Gall v.
United States, 128 S. Ct. 586, 591 (2007) (“[C]ourts of
appeals must review all sentences — whether inside, just out-
side, or significantly outside the Guidelines range — under a
deferential abuse-of-discretion standard.”); Rita v. United
States, 127 S. Ct. 2456, 2468 (2007) (“[W]hen a judge
decides simply to apply the Guidelines to a particular case,
doing so will not necessarily require lengthy explanation.”);
United States v. Mix, 457 F.3d 906, 912 (9th Cir. 2006);
United States v. Menyweather, 447 F.3d 625, 634-35 (9th Cir.
UNITED STATES v. ALGHAZOULI 1969
2006); United States v. Knows His Gun, 438 F.3d 913, 918
(9th Cir. 2006).
Conclusion
We hold that the term “law” in 18 U.S.C. § 545 includes a
“regulation” when, but only when, a statute (a “law”) speci-
fies that violation of the regulation is a crime. We therefore
affirm Alghazouli’s convictions on Counts 1, 2, and 6. We
hold that the court erred in failing to instruct the jury on the
elements of the underlying substantive money laundering
offenses that were the object of the charged conspiracy, but
that the error was not plain and that it did not affect Algha-
zouli’s substantial rights. We therefore affirm Alghazouli’s
conviction on Count 8. We hold that the term “knowingly” in
42 U.S.C. § 7413(c) requires only that the defendant know the
facts constituting the violation. We therefore affirm Algha-
zouli’s conviction on Count 15. Finally, we hold that the dis-
trict court properly applied the § 3553(a) sentencing factors.
We therefore affirm Alghazouli’s sentence.
AFFIRMED.