Apr
10
Email: A Prosecutor’s Best Friend
Posted by Clif Burns at 7:32 am on April 10, 2009
Category: BIS • China • Criminal Penalties
ABOVE: Everjet HQ, allegedly
According to a Department of Justice press release, a federal grand jury indicted a California man and two of his companies — Fushine Technology, Inc., a California corporation, and Everjet Science and Technology Company, which is based in the PRC — for unlicensed exports of controlled microwave equipment to China.
Export prosecutions require proof that the defendant understood that the exports in question were illegal. Since there is often little dispute as to whether the exported item required a license or that a license was not obtained, this makes this scienter element the most important and interesting element of each case. Here the press release contains allegations that, if true, might go a long way towards showing the scienter element:
The indictment further alleges that the defendants knew about the licensing restrictions and specifically sought to circumvent them. The indictment quotes from an internal company e-mail in which an Everjet employee told a Fushine employee, “Since these products are a little bit sensitive, in case the maker ask you where the location of the end user is, please do not mention it is in China.†The indictment also quotes from another e-mail in which Lu advises a subordinate to pretend that the intended end-user for an item is in Singapore rather than China.
It seems to me that recent press releases, instead of merely focusing on the allegedly grave impact of the particular export on national security, have begun to provide much more information revealing the prosecution’s case for its claims that the exporter knew the export was illegal. And often the case revolves around emails sent to and from the exporter. Back in the days when exporters and their foreign customers communicated mostly by telex finding such proof was no doubt more difficult. But now the evidence may come, as allegedly it did in this case, wrapped up in a little gift package with a nice decorative bow on top and a subject line reading “Don’t tell anybody this chip is going to China.”
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6 Comments:
Clif: With respect, I guess I’m just a bit uncomfortable with the statement “there is often little dispute as to whether the exported item required a license” not because of anything in the rest of your analysis but because of the position that the government has taken in the past year that the prosecution and not the court has not just the final but the only say as to whether a license was required, and that the court, not even the judge let alone the jury, has no authority to question the licensing determination made by the government, even when that determination is not made until after acusation is made. I can well understand why anyone would not want to admit the end-user for anything was in China, knowing that if someone in the U.S. Department of Justice didn’t like you, your national origin or your university affiliation, they could and do just decide that an item is licensable after they detain or search you.
For example, in U.S. v. Alavi, after the federal public defender filed a motion to dismiss on the basis that the computer program in question was exempt from IEEPA under the Berman Amendment because BIS had already issued CCAT classifying it as EAR99, Justice pressed BIS to reclassify the program as controlled, and BIS happily obliged. Justice then argued to the judge that the BIS post-indictment classification determination that was made solely as an expedient way to overcome an inconvenient motion to dismisss, was a “political question” not subject to question, and the judge bought the argument based on some 9th Circuit precedent that I think is highly questionable after US v. Mead.
As the Court of International Trade has stated in many, many cases involving classfication under HTS, classification of products is a two step process that is part a determination of law and a determination of fact. The legal question is what do the words of the classifcation description mean, the fact question is whether a particular thing is described by those words as interpreted by the court. While the decision to control an item or a generic class of items might have political consequences that should be subject to only agency discretion, the question of whether a thing is fairly described by the words that the bureaucrats used is not a political question subject to agency discretion, its a classic legal question. Given that both Commerce and State habitually violate the APA by issuing regulations without opportunity for public comment, there is even less reason to give deference to agency licensing determinations.
When I said classification wasn’t often at issue, I didn’t mean it was never at issue. I agree that there have been prosecutions where there were significant issues regarding classification and where the prosecutors wrongly hid behind the argument that classification decisions were not subject to judicial review.
Oh, and thanks for the update on the Alavi case. I hadn’t checked that docket for a while. That sounds like something worth a future post.
Clif –
You’re absolutely right, today’s email environment makes it much easier for investigators to locate communications that can provide evidence of knowledge and intent.
In the old days of telex and fax communications, investigators had to hope that (a) suspects and other parties to transactions kept copies and (b) that those copies could be obtained either by use of a search warrant or in response to grand jury or administrative subpoenas. I remember one search warrant I execute where we found incriminating telexes in the very last drawer of the very last file cabinet we searched, as we were preparing to leave the company’s premises after being there over 8 hours executing a warrant.
In today’s automated environment, emails are routinely stored on computer hard drives. Each of the investigating agencies (FBI, ICE, OEE) has agents specially trained and equiped to batch-copy hard drives on site during a warrant, to include recovering system-stored “copies” of deleted emails and other materails.
Emails can also at times be obtained from third parties, including those on distribution, those who may receive forwarded copies of emails, and from the service providers.
The odds are higher today that pertinent email communications and other electronic documents can be recovered in these ways, even when parties have taken steps to delete them; rather than hoping that parties didn’t shred them or hide ’em in the rafters.
Mike Turner
It is not only the email communications of the target of the investigation. I work for a freight forwarder, and twice in the last three years we’ve had our email records subpoenaed for investigations of other parties.
I think I’ll stop using the term “pretend export” in my emails when I want to ask someone to show me what they would do if a certain sitation arose, or when I’m creating training examples.
