United States v. Hemant Patel, Raoji Patel, Bridgewater Development Co., and Pacific Food Beverages, Inc.

762 F.2d 784
CourtCourt of Appeals for the Ninth Circuit
DecidedJune 28, 1985
Docket84-1143 and 84-1146 to 84-1148
StatusPublished
Cited by54 cases

This text of 762 F.2d 784 (United States v. Hemant Patel, Raoji Patel, Bridgewater Development Co., and Pacific Food Beverages, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Hemant Patel, Raoji Patel, Bridgewater Development Co., and Pacific Food Beverages, Inc., 762 F.2d 784 (9th Cir. 1985).

Opinion

POOLE, Circuit Judge:

On November 9, 1983, appellants Hemant Patel, Raoji Patel, Bridgewater Development Company, and Pacific Food and Beverages were charged in a three-count indictment by the Federal Grand Jury in San Francisco. All appellants were charged in Count One with conspiracy to defraud the United States under 18 U.S.C. § 371 1 by failing to comply with the International Coffee Agreement of 1962, 14 U.S.T. 1911, T.I.A.S. No. 5505, 2 and in *787 Count Two with importation of coffee contrary to the provisions of that agreement, hence violating 18 U.S.C. § 545, the smuggling statute. 3 Appellants Raoji Patel and Bridgewater Development Company were charged in Count Three with false statements in violation of 18 U.S.C. § 1001. 4 Count Three was dismissed upon motion of the government.

The appellants pleaded not guilty to all charges. Venue was ordered changed to Guam on December 19, 1983. On March 21, 1984, a jury found appellants guilty of Counts One and Two.

Motions for judgment of acquittal or for new trial were denied. On May 14, 1984, Hemant Patel was sentenced to one year in prison and a $10,000 fine on Count One, to five years probation and a consecutive $10,-000 fine on Count Two, and was ordered to pay the costs of prosecution in the amount of $8,920.00. Raoji Patel was placed on five years probation and fined $20,000. The corporate defendants were each fined $20,000.

Appellants filed timely notices of appeal and we assumed jurisdiction under 28 U.S.C. § 1291. The cases were consolidated on appeal. We affirm.

I. FACTS

The importation of coffee into the United States is governed by the International Coffee Agreement (ICA), which Congress has implemented in 19 U.S.C. § 1356a. 5 Administration of the ICA is the responsibility of the International Coffee Organization (ICO), headquartered in London. The agreement regulates both the import and export coffee trade of all signatories to the document. The goals of the ICA are generally the achievement of a reasonable balance between world coffee supply and de *788 mand; avoidance of excessive fluxuations in the levels of world coffee supplies, stocks, and prices; development of coffee producing nations; promotion of coffee consumption; and furtherance of international cooperation in connection with world coffee problems. 6 Quotas are established to limit the amount of coffee sold for export to the United States and other member countries of the ICO. Coffee sold for export to nonmember countries is unlimited, but sells at a lower price than coffee exported to member countries. Guam is a nonmember country.

In July 1982, Hemant Patel approached Joseph McDonald, the Director of the Department of Commerce for the Territory of Guam, with a proposal to ship raw coffee beans to Guam for transshipment to the United States. Patel provided details concerning his processing plans and represented to the Guam government his intention to conduct an extensive coffee bean processing operation through February 1983.

Joseph McDonald advised the appellants that under Headnote 3(a) of 19 U.S.C. § 1202 of the United States Tariff Schedules, the coffee could enter the United States as a product of Guam if the beans were processed on Guam. As a product of Guam, the coffee would then be exempted from tariffs and duties, and other United States trade restrictions, since Guam is an “insular possession” of the United States whose goods qualify for the Headnote exemption.

On or about December 23, 1982, Hemant Patel purchased approximately 3,000 metric tons of processed coffee beans from Honduras and shipped them to Guam, allegedly for processing. Patel falsely represented to the Honduran coffee seller that the coffee was destined for Hong Kong, which, like Guam, is a nonmember country of the ICO. Patel was therefore able to purchase the coffee at $54 per bag instead of $120 per bag, which would have been the price had the coffee been billed for shipment to an ICO member country. A Certificate of Origin was forwarded to the ICO indicating that the shipment was destined for Hong Kong.

When the Honduran coffee arrived in Guam, Anil Patel explained to customs officials that the discrepancy between the country of origin noted on the ship manifest (Hong Kong) and the port clearance documents (Honduras) arose because a third buyer at sea had diverted the ship to Guam. Anil Patel also told the customs officials that the beans were being graded on Guam, and that the coffee had been inspected by Malaysian surveyors in Honduras. Neither statement was true.

Once in Guam, the coffee was off-loaded, tagged with a card reading “Processed in Guam, USA” and loaded onto a ship headed for the United States. By that time, Joseph McDonald was no longer employed by the government and had been retained by appellants as a consultant. In February 1983, McDonald obtained a Certificate of Origin from the Guam Customs Department for the Honduran coffee, which already was in transit to the United States. The Certificate of Origin identified the shipment as processed agricultural beans, rather than coffee.

When the coffee reached the United States, the Food and Drug Administration insisted that the Patels identify the bean by its Latin name before the product could be released. In response, Raoji Patel informed his import broker that the Latin name was “coffea.” This information was conveyed to the U.S. Customs Service, which then seized the coffee in March 1983. Proceedings were instituted to forfeit the illegally imported coffee and for civil penalities totaling $9,302,682.20.

II. DISCUSSION

Appellants raise three main arguments for reversal: insufficiency of the evidence to support the convictions, reversible error *789 in jury instructions, and prosecutorial misconduct during closing argument. Additionally, appellants challenge the propriety of the trial court’s assessment against Hemant Patel of the costs of transferring the case to Guam. We find no merit in any of the arguments for reversal nor any abuse of discretion in assessing costs.

A. Sufficiency of the Evidence

Appellants claim that the government failed to prove that the quotas imposed by the International Coffee Agreement were in effect at the time the coffee was imported into the United States.

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762 F.2d 784, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-hemant-patel-raoji-patel-bridgewater-development-co-ca9-1985.