United States v. Hasan

Citations: 846 F. Supp. 2d 541; 2012 U.S. Dist. LEXIS 26505; 2012 WL 681628Docket: Criminal No. 1:11cr503

Court: District Court, E.D. Virginia; February 28, 2012; Federal District Court

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Defendant Nawaf M. Hasan was charged with conspiracy and multiple substantive counts related to the purchase, possession, and distribution of contraband cigarettes, following an extensive undercover investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Hasan moved to dismiss the indictment or exclude evidence, arguing that the length and nature of the ATF operation violated his due process rights. The court denied his motion, emphasizing that each state independently sets its cigarette tax rates, leading to disparities that facilitate the illegal trafficking of cigarettes that lack evidence of tax payment. The ATF's two-year investigation was deemed necessary to understand the conspiracy's scope and identify its members. Evidence showed that Hasan purchased large quantities of untaxed cigarettes from undercover agents and transported them interstate for distribution in New York, where taxes are higher. The first transaction occurred on June 4, 2009, involving 1,500 cartons, with subsequent purchases made in cash.

On August 9, 2009, Hasan purchased 110 cases (6,600 cartons) of untaxed cigarettes from undercover agents for $164,920. Over time, he and his co-conspirators acquired over 27,000 cartons of unstamped cigarettes in Virginia for distribution in New York, evading more than $1.1 million in state tax revenue. Hasan was arrested on April 27, 2011, in Virginia while attempting to buy an additional 15,000 cartons from undercover ATF agents. He faced a six-count federal indictment, including conspiracy to purchase, possess, transport, and distribute contraband cigarettes (Count One) and five counts of related substantive offenses (Counts Two through Six).

Hasan moved to dismiss the indictment or exclude evidence, arguing that the undercover operation's length and scope violated his due process rights due to outrageous government conduct. However, the court found his motion meritless. The analysis referenced the legal framework for due process claims concerning outrageous government conduct, initially established in United States v. Russell (1973), where the Supreme Court ruled that a law enforcement agent's limited participation in illegal activities for investigation purposes was constitutional. The court noted that while it may eventually encounter egregious cases of government conduct, Russell's circumstances did not qualify. Additionally, in Hampton v. United States (1976), the Supreme Court upheld that a defendant's predisposition to commit a crime negated a due process violation claim, even when the government supplied the illegal substance involved.

A divided court rejected the defendant's argument regarding outrageous government conduct, clarifying that the Due Process Clause of the Fifth Amendment applies only when government actions infringe upon a protected right of the defendant. The Hampton plurality explained that if government actions induce an innocent person to commit an offense, the defense of entrapment applies, not a dismissal based on police misconduct. Courts have reaffirmed that claims of due process violations due to outrageous government conduct are rare and have not led to reversals or evidence suppression in the Fourth Circuit. The court defines "outrageous government conduct" narrowly, requiring it to be shocking or offensive to fundamental fairness, and clarifies that such a label cannot be applied simply due to sting operations involving contraband. In Hasan's case, the court found no element of the ATF's undercover operation to be outrageous or unfair, asserting that the ATF acted within its lawful authority granted by Congress to conduct such operations, including selling untaxed cigarettes as part of the investigation. Hasan's claim that ATF agents engaged in illegal trafficking of contraband cigarettes by distributing them was deemed incorrect.

Hasan is charged under a criminal statute that makes it illegal to handle contraband cigarettes, but the statute exempts cigarettes in the possession of law enforcement officers conducting official duties. This exemption acknowledges that law enforcement may need to engage in actions that would otherwise violate the law during their operations. In this case, the undercover ATF agents possessed and distributed untaxed, unstamped cigarettes as part of their official duties, which aligns with the statute's provisions and does not constitute a criminal violation. 

Hasan's argument that the agents "let the cigarettes walk" does not alter this analysis. Courts have consistently rejected similar arguments in cases involving government agents distributing illegal narcotics during undercover operations without immediate recovery. The First Circuit case of United States v. Santana illustrates this principle, where a significant amount of heroin provided by an undercover agent was never recovered, yet the argument of outrageous conduct was dismissed. The court recognized the necessity for undercover operations to supply contraband to build trust with targets.

Furthermore, Hasan's claims regarding the length of the undercover operation do not establish outrageous conduct either, as lengthy investigations into complex criminal enterprises are common and have typically been upheld by courts. Hasan has not presented any legal precedent to support his argument regarding the operation's duration. Overall, the agents' conduct in allowing the distribution of contraband cigarettes does not warrant dismissal of the indictment.

The duration of the undercover ATF operation was deemed reasonable and necessary for thoroughly investigating the conspiracy and identifying its members and financiers. Hasan's claims of outrageous conduct by the ATF were rejected, as the investigation did not violate notions of fundamental fairness that would justify dismissing the indictment. Furthermore, the evidence against Hasan was not subject to exclusion or suppression, as the exclusionary rule applies to specific constitutional violations rather than broad claims of rights. The Supreme Court has cautioned against expanding this rule, emphasizing its negative impact on truth-seeking and law enforcement. Hasan's allegations did not meet the burden required for applying the exclusionary rule. Additionally, contraband cigarettes are defined by statute, particularly in relation to the significant tax differences between New York and Virginia, leading to potential profits from illegal trafficking. Hasan's pretrial motions for discovery and to present government agent testimonies were denied after consideration during a pretrial hearing. Relevant case law supports that government involvement in certain stings does not constitute outrageous conduct.

Law enforcement conduct must adhere to the principles of fundamental fairness as outlined by the Due Process Clause of the Fifth Amendment, but it has been established that such conduct does not necessarily violate these principles unless it is deemed "outrageous" or "shocking to the universal sense of justice." The Attorney General is authorized under 28 U.S.C. § 533 to appoint officials for the detection and prosecution of federal crimes, including the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Under P.L. 102-395, resources may be allocated for undercover operations, allowing agencies like the FBI and DEA to establish proprietary businesses for investigative purposes, with proceeds offsetting operational costs. P.L. 112-55 extends these provisions to the ATF without fiscal year limitations for necessary undercover operations.

It is acknowledged that law enforcement may engage in actions that are illegal for ordinary citizens, as part of their crime-fighting efforts, without requiring specific statutory authorization. Case law supports this, as seen in United States v. Valona and United States v. Buishas, where the courts found no misconduct in the government distributing controlled substances during undercover operations. Profits from such operations are expected and permissible under federal regulations, serving to reduce taxpayer burdens.

Hasan argues that tobacco should be treated similarly to controlled substances due to its health risks, claiming that cigarettes are more dangerous than narcotics based on health statistics.

Hasan's observations and arguments are deemed irrelevant to the current federal criminal prosecution, as they pertain to policy issues best directed at Congress and state legislatures. In a supplemental brief, Hasan sought dismissal of the indictment based on claims of "selective prosecution." However, this argument lacks merit; the doctrine of selective prosecution does not apply to the case's facts. The Fourth Circuit requires that a defendant prove both discriminatory effect and purpose to establish a selective prosecution claim. Specifically, the defendant must show that similarly situated individuals of a different race were not prosecuted and that the decision to prosecute was made in bad faith. No allegations of race-based discrimination have been made in this case, leading to the rejection of Hasan's selective prosecution claim.