Trafficking in Narcotics—US Virgin Islands

Immigration and Customs Enforcement [hereinafter ICE] and DEA agents, along with officers of the US Virgin Islands Police Department, have seized more than 1,764 pounds of cocaine at the US Virgin Islands Port of St. Croix.^[1] According to ICE, the agents discovered the cache of narcotics hidden within the walls of the British-flagged vessel S/V/ Gio, a 49-foot sailboat that was docked at the Port of St. Croix.^[2]

The sailboat was intercepted by the US Coast Guard on May 11th, following a routine patrol off the coast of Antigua, and at that time, the vessel and its crew were escorted to the Port of St. Thomas after Coast Guard offices discovered 411 pounds of cocaine onboard.^[3] The recent cache was discovered during an inspection made by federal agents in preparation for the auctioning off of the vessel.^[4]

The crewmen, Jose Ganuza of Spain, and Andrea Mauro of Italy, have been in US Marshals custody since their arrest in May, and are currently being detained in Puerto Rico while they await trial.^[5]

Trafficking in Narcotics
Under 21 U.S.C. § 841 it is unlawful for a person to possess with intent to distribute a controlled substance.^[6] The punishment for violating this section with more than five kilograms (roughly 11 pounds) of cocaine,^[7] is imprisonment for no less than 10 years and no more than life, up to US$4,000,000 in fines, or both.^[8] 21 U.S.C. § 846 states that any person who attempts or conspires to commit any of the drug offenses will be punished as if he had committed the offense.21 U.S.C. § 952 states that it is unlawful for a person to import any controlled substance or narcotic drug into the United States. Punishment of section 952 falls within the rubric found in 21 U.S.C. § 960, which states that any person who knowingly imports more than one kilogram of heroin, can be punished with imprisonment for no less than 10 years and as much as life, a fine of up to $4,000,000, or both.^[9]

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[1] ICE, ICE Agents Seize More Than 1764 lbs. of Cocaine at the Port of St Croix, Oct. 20, 2005, available here.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] 21 U.S.C. § 841(a)(1).
[7] Id. § 841(b)(1)(A)(ii).
[8] Id. § 841(b)(1)(A).
[9] Id. § 960(b)(1)(A).

Arms Exports—George Charles Budenz II

George Charles Budenz II, a former Naval intelligence officer, has pleaded guilty to three counts of illegally exporting military aircraft parts.^[1] Mr. Budenz admitted that illegally exported engine parts for the US F-5 fighter jet, the T-38 military trainer jet (which is substantially the same aircraft), and Chinook military helicopters to Malaysia and Belgium without the required export license.^[2]

Mr. Budenz claims that he made the illegal exports at the direction of Arif Ali Durrani,^[3] whom we have previously discussed here. According to Immigration and Customs Enforcement [hereinafter ICE] officials, Mr. Budenz met Mr. Durrani in 1999, agreeing to become Mr. Durrani’s agent in the US.^[4]

Arms Export Control Act
The Arms Export Control Act is codified at 22 U.S.C. § 2778. Under this section it is illegal for a person to export articles which are designated on the US Munitions List without first obtaining a license or written authorization from the Department of State.^[5] The punishment for violating this section is a fine of up to $1,000,000, imprisonment for up to 10 years, or both.^[6]

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[1] Immigrations and Customs Enforcement, Ex-U.S. Navy Intelligence Officer Pleads Guilty in Arms Export Scheme, Oct. 19, 2005, available here.
[2] Id.
[3] Id.
[4] Id.
[5] 22 U.S.C. § 2778(b)(1)(A)(ii)(III).
[6] Id. § 2778(c).

McNabb on the Radio

Senior Principle Douglas McNabb is scheduled to be a guest on New York City's WWRL (1600 AM) today at 6:00 PM EST.

Trafficking in Wildlife—Honduran Lobsters

A Honduran businessman who was convicted in 2000 of smuggling lobsters into the United States from the Honduras will not be able to have it reversed.^[1] David Henson McNab was convicted in Mobile, Alabama, of violating the Lacey Act which prohibits people from importing plants and wildlife that were taken in violation of the laws of a foreign country.^[2] Mr. McNab lost his appeals even though the Honduras changed its laws and lobbied for Mr. McNab’s release.^[3] Even though the Honduran government worked closely with the United States during Mr. McNab’s prosecution, the Attorney General of that country now maintains that Mr. McNab broke no laws in that country and the key witness, the top lawyer for Honduras’ Ministry of Livestock and Agriculture, has recanted her testimony.^[4]

After losing an appeal to the Eleventh Circuit Court of Appeals, a petition for a writ of certiorari was denied at the Supreme Court of the United States. Mr. McNab then filed a writ of habeas corpus under 28 U.S.C. § 2255, arguing that “new evidence never before considered on the merits requires that his conviction be vacated,” that “the Eleventh Circuit violated his due process rights by refusing to apply a change … in the law,” that “his due process rights were violated by the trial court’s jury instructions with respect to a Honduran law not charged in the indictment,” and that “his sentence should be vacated based on the United States Supreme Court decision in Booker v. United States, 125 S. Ct. 738 (2005).”^[5]

In refusing to reverse Mr. McNab’s sentence, US District Judge Charles Butler, Jr. noted that Mr. McNab’s argument that “new evidence” does not meet the standard for a new trial based on newly discovered evidence because, “petitioner’s brief uses the term ‘new evidence’ as opposed to ‘newly discovered evidence.’”^[6] The Court also notes that Mr. McNab failed to demonstrate why this opinion could not have been obtained earlier, with the exercise of due diligence.^[7]

The Court also rejected Mr. McNab’s argument that the Eleventh Circuit violated his due process rights; it noted that the argument that the Honduras government changed its opinion of the law between the time that Mr. McNab’s trial ended and his appeal began, and that the Eleventh Circuit had already addressed that scenario.^[8]

On Mr. McNab’s third argument, that he was convicted on charges not included in the indictment, the Court noted that this, too, had been addressed by the Eleventh Circuit, and “simply found that it was not worthy of extensive discussion.”^[9]

Finally, regarding Mr. McNab’s Booker claim, the Court simply notes that “petitioner’s judgment became final prior to the Supreme Court’s decision in Booker,” and therefore that case’s holding did not apply to him.^[10]

Mr. McNab can now appeal the District Court’s denial of the writ of habeas corpus.

Lacey Act
Under 16 U.S.C. § 3372(a)(2)(A), it is unlawful for any person to import, export, transport, sell, receive, acquire, or purchase in interstate or foreign commerce any fish or wildlife taken, possessed, transported, or sold in violation of any law or regulation of any state or in violation of any foreign law.^[11]

The punishment for each violation of section 3372 is a fine of not more than $20,000, imprisonment for up 5 years, or both.^[12]

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[1] Judge Won’t Reverse Prison Term for Honduras Lobster Smuggler, Columbus Ledger-Enquirer, Oct. 19, 2005, available here.
[2] Id.
[3] Id.
[4] Id.
[5] United States v. McNab, No. 05-0107-CB at 6 (S.D. Ala. 2005).
[6] Id. at 9 n. 6.
[7] Id. at 9.
[8] Id. at 12.
[9] Id. at 12-13.
[10] Id. at 14.
[11] See also United States v. McNab, 324 F.3d 1266, __, 2003 U.S. App. LEXIS 5561 at *17 (11th Cir. 2003), available here (PDF).
[12] 16 U.S.C. § 3373(d)(1).

Immigration Fraud—Seattle

Six Koreans have been indicted for allegedly orchestrating a scheme to lure Korean investors to the United States to receive janitorial franchises and lawful immigration status.^[1] According to Immigration and Customs Enforcement [hereinafter ICE], the individuals invested tens of thousands of dollars in the scheme but did not receive the promised proceeds; instead, they were put to work cleaning offices under the guise of receiving “training.”^[2]

Last month, Kook Jin Kim and his wife Yung Jung Lee were arrested in Seattle by ICE agents on charges that included visa fraud and identity fraud.^[3] A few days ago, Jung Kwang Kim (aka Danny Kim, who is the suspected ringleader) and his wife, Hoo Yun Lee were arrested in Moreno Valley, California on an indictment from the Western District of Washington; also named in the indictment are Hee Soon Kim and Mun Goo Lee, who are still at large and are being sought by federal authorities.^[4]

According to ICE, Danny Kim “used word-of-mouth and advertisements in South Korean newspapers to sell janitorial franchises purportedly giving buyers exclusive cleaning contracts for major commercial buildings” in the Seattle area; at least one “investor” was contractually promised $33,000 a month in income.^[5] The advertisements also promised legal permanent residency in the US.^[6]

Danny Kim is charged with three counts of wire fraud, and one count each of visa fraud, identity fraud, and making a false statement; Hoo Yun Lee is charged with one count each of false statements, visa fraud, and identity fraud.^[7]

Visa Fraud
Under 18 U.S.C. § 1546(a), it is a crime for a person to knowingly counterfeit, alter, or falsely make any immigrant visa for entry into the United States. It is also a crime to use, possess, obtain, accept, or receive such a visa, knowing it to have been procured by fraudulent means.

The punishment for a violation of section 1546 is a fine, and, in this scenario, up to 10 years in prison, or both.^[8]

Identity Fraud
Under 18 U.S.C. § 1028(a)(1), it is a crime for a person to knowingly and without lawful authority produce an identification document or a false identification document if the document is or appears to be issued by the United States.

The punishment for violating section 1028(a)(1) is a fine, imprisonment for up to 15 years, or both.^[9]

False Statements and Wire Fraud
We have previously discussed making false statements here, and we have discussed wire fraud here.

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[1] Immigration and Customs Enforcement, Press Release: Five Members of Seattle Family Among Six Charged in Financial and Immigration Fraud Scheme, Oct. 17, 2005, available here.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Id.
[8] If the offense is committed to carry out an act of international terrorism, the sentence can be as high as 25 years. If it is committed to facilitate a drug trafficking crime, the sentence can be as high as 20 years, and if it is neither of those situations, nor is it a first or second offense, then the prison sentence can be as high as 15 years.
[9] 18 U.S.C. § 1028(b)(1).

Health Care Fraud—AIDS Drugs

The Swiss corporation Serono has agreed to pay a US$136.9 million criminal fine in connection with “illegal schemes to promote, market and sell its drug, Serostim.”^[1] Serostim is used to treat AIDS wasting, which is a condition involving the involuntary loss of weight in AIDS patients.^[2] In addition to the criminal fine, Serono will pay US$567 million to settle civil claims.^[3]

Serono pleaded guilty to conspiring with medical device manufacturer RJL Sciences to market “bioelectrial impedance analysis (BIA) computer software packages for use in calculating body cell mass and diagnosing AIDS wasting.”^[4] The device has not been approved by the Food and Drug Administration for these uses, and Serono Labs conspired with RJL to increase the market for the devices/software in order to increase the market for Serostim.^[5] Serono employees also administered BIA test to patients “to induce doctors to prescribe Serostim and to get Medicaid agencies and other payers to reimburse for the drug.”

Finally, “Serono Labs agreed to plead guilty to offering physicians an all expense-paid trip to a medical conference in Cannes, France in return for the doctors writing up to 30 new prescriptions of Serostim, which cost [US]$21,000 per course of treatment, for a total value of [US]$630,000 per doctor.”^[6]

As part of the plea agreement, Serono will be excluded from all federal health care programs for at least the next five years, and the corporation will be subject to a “stringent Corporate Integrity Agreement” during that time period.^[7]

Health Care Fraud
We have previously discussed health care fraud here.

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[1] US Department of Justice, Press Release: Serono to Pay [US]$704 Million for the Illegal Marketing of AIDS Drug, Oct. 17, 2005, available here.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Id.