403 F.

3d 123

UNITED STATES OF AMERICA, Appellant

v.
Stefan E. BRODIE.
No. 02-2662.

United States Court of Appeals, Third Circuit.

Argued October 26, 2004.
April 12, 2005.

COPYRIGHT MATERIAL OMITTED COPYRIGHT MATERIAL

OMITTED Joseph G. Poluka (Argued), Office of United States Attorney,
Philadelphia, PA, for Appellant.
Gregory B. Craig (Argued), William T. Burke, Williams & Connolly,
Washington, DC, for Appellee.
Before MCKEE, FISHER, and BECKER, Circuit Judges.
OPINION OF THE COURT
FISHER, Circuit Judge.

Defendant Stefan E. Brodie was found guilty by a jury of conspiring to trade

with Cuba in violation of the American Cuban embargo currently in place
under the provisions of the Trading with the Enemy Act of 1917 ("TWEA")
and the Cuban Assets Control Regulations ("CACRs"). The United States
District Court for the Eastern District of Pennsylvania, ruling on a previously
reserved motion for judgment of acquittal, thereafter acquitted the Defendant
on the ground that there was insufficient evidence of his knowing and willful
participation in the charged conspiracy to support conviction. United States v.
Brodie, 268 F.Supp.2d 408 (E.D.Pa.2002). After reviewing the government's
evidence against the Defendant, we conclude that the District Court erred in
entering the judgment of acquittal, and accordingly, we vacate the judgment,
reinstate the jury verdict, and remand for further proceedings which may, on
the present record, include a new trial.

I. BACKGROUND
A. The American Cuban Embargo
2

The backdrop for this appeal is the American Cuban embargo against trading
with Cuba which derives in the first instance from the TWEA, 50 U.S.C.App.
1 et. seq. The TWEA as originally enacted dealt only with the President's use of
economic powers in times of war, but was expanded in 1933 to deal with
national emergencies that arose during peacetime. See Regan v. Wald, 468 U.S.
222, 226 n. 2, 104 S.Ct. 3026, 82 L.Ed.2d 171 (1984). Section 5(b) of the
TWEA, in pertinent part, authorizes the President, through a designated agency,
to "investigate, regulate, ... or prohibit ... transactions involving, any property in
which any foreign country or a national thereof has any interest, by any person,
or with respect to any property, subject to the jurisdiction of the United States."
50 U.S.C.App. 5(b)(1)(B).1 Section 16, in turn, criminalizes willful violation
of any "order of the President issued in compliance with the provisions of th[e
TWEA]." 50 U.S.C.App. 16. Presidential authority under the TWEA has been
delegated to the Secretary of the Treasury, who has in turn delegated that
authority to the Office of Foreign Assets Control ("OFAC"). See Regan, 468
U.S. at 226 n. 2, 104 S.Ct. 3026 (citing Exec. Order No. 9193, 3 C.F.R. 1174,
1175 (1942) and Treasury Department Order No. 128 (Rev.1, Oct. 15, 1962)).
In 1963, the CACRs were promulgated pursuant to TWEA Section 5(b) to
impose an embargo against Cuba in an effort "to deal with the peacetime
emergency created by Cuban attempts to destabilize governments throughout
Latin America." Regan, 468 U.S. at 226, 104 S.Ct. 3026. The CACRs
incorporated and expanded upon prior economic sanctions already imposed
against Cuba. See id. at 226 & n. 4, 104 S.Ct. 3026.

Of particular importance to this appeal is CACR 515.201(b) which provides:

(b) All of the following transactions are prohibited except as specifically

authorized by the Secretary of the Treasury (or any person, agency, or
instrumentality designated by him) by means of regulations, rulings,
instructions, licenses, or otherwise, if such transactions involve property in
which any foreign country designated under this part,[2 ] or any national thereof,
has at any time on or since the effective date of this section had any interest of
any nature whatsoever, direct or indirect:

(1) All dealings in, including, without limitation, transfers, withdrawals, or

exportations of, any property or evidences of indebtedness or evidences of
ownership of property by any person subject to the jurisdiction of the United

States; and
6

(2) All transfers outside the United States with regard to any property or
property interest subject to the jurisdiction of the United States.

See 31 C.F.R. 515.201(b) (2005); see also 31 C.F.R. 515.201(b) (1992); 31

C.F.R. 515.201(b) (1993); 31 C.F.R. 515.201(b) (2000). As CACR
515.201(b) suggests, business transactions involving Cuba may be specifically
authorized by OFAC; here, however, it is uncontested that no such
authorization was ever obtained for the business transactions that gave rise to
the underlying prosecution.

The phrase "person subject to the jurisdiction of the United States" as used in
CACR 515.201(b) is defined in CACR 515.329, 31 C.F.R. 515.329,
which provided, at the time the conspiracy charged in this case was allegedly in
effect:

The term `person subject to the jurisdiction of the United States' includes:

10

(a) Any individual, wherever located, who is a citizen or resident of the United
States;

11

(b) Any person within the United States as defined in 515.330;

12

(c) Any corporation organized under the laws of the United States or of any
State, territory, possession, or district of the United States; and

13

(d) Any corporation, partnership, or association, wherever organized or doing

business, that is owned or controlled by persons specified in paragraphs (a) or
(c) of this section.

14

31 C.F.R. 515.329 (1993) (emphasis added); see also 31 C.F.R. 515.329

(2000); 50 Fed.Reg. 27435 (July 3, 1985).3 The critical phrase "owned or
controlled" in CACR 515.329(d) is not defined in the CACRs, but notably,
the CACRs have included a broad "person subject to the jurisdiction of the
United States" feature from their inception. See 28 Fed.Reg. 6974, 6978 (July
9, 1963) (CACR 515.329).

15

The effect of the prohibition against entities "owned or controlled by persons

specified in [31 C.F.R. 515.329(a) or (c)]" from undertaking any of the

transactions prohibited by CACR 515.201(b), was substantially muted in

prior years by a regulatory exemption permitting foreign subsidiaries of
companies owned or controlled by American citizens to trade with Cuba under
certain conditions, as well as liberal application of the licensing provision by
OFAC. See 31 C.F.R. 515.559 (1975); 40 Fed.Reg. 47108 (Oct. 8, 1975).4
See also Ralph H. Folsom, 1 INT'L BUS. TRANS. 18.4 (2d ed.2004); Harry
L. Clark, "Dealing with U.S. Extraterritorial Sanctions and Foreign
Countermeasures," 20 U. PA. J. INT'L ECON. L. 61, 66 & n. 14 (Spring 1999);
John Ellicott, "Between a Rock and a Hard Place: How Multinational
Companies Address Conflicts Between U.S. Sanctions and Foreign Blocking
Measures," 27 STETSON L.REV. 1365, 1368 (Spring 1998). Thus, in the latter
part of the 1970's and throughout the 1980's, "U.S. subsidiaries abroad
developed significant trade with Cuba." 1 INT'L BUS. TRANS. 18.4.
16

In 1992, Congress enacted the Cuban Democracy Act, Act of Oct. 23, 1992,
106 Stat. 2575, codified at 22 U.S.C. 6001-6010, which, inter alia, rescinded
OFAC's authority to issue licences for the export of goods to Cuba by "persons
subject to the jurisdiction of the United States." See 22 U.S.C. 6005(a)
(popularly known as the "Mack Amendment"). See also Clara David, "Trading
With Cuba: The Cuban Democracy Act and Export Rules," 8 FLA. J. INT'L
Law 385 (Fall 1993) (author, then a licensing officer for OFAC, stating that the
Cuban Democracy Act eliminated the prior exemption to the Cuban embargo
for trade by foreign subsidiaries of American firms). The Cuban Democracy
Act took effect on October 23, 1992, and the CACRs were subsequently
amended to reflect the Act's strict provisions. See 31 C.F.R. 515.559 (1993).5
In March 1996, Congress further strengthened the American Cuban embargo
by enacting the LIBERTAD. Pub.L. No. 104-114, 110 Stat. 785 (1996),
codified at 22 U.S.C. 6021-6091 (also known as the "Helms-Burton Act").
The LIBERTAD mandates that the American Cuban embargo, including all
restrictions imposed by the CACRs, "remain in effect" unless and until the
embargo is suspended or terminated in accordance with statutory procedures.
22 U.S.C. 6032(h) (cross-referencing 22 U.S.C. 6064 ("Termination of the
economic embargo of Cuba")). Such procedures, in turn, make suspension or
termination of the embargo contingent upon a change of political power in
Cuba. See 22 U.S.C. 6064; see also 22 U.S.C. 6065. Numerous countries,
including the European Union, Canada and Mexico, reacted to the
strengthening of the American Cuban embargo, and its purported application to
American subsidiaries abroad, by enacting countermeasures (often called
"blocking statutes" or "blocking orders"). See, e.g., Clark, "Dealing with U.S.
Extraterritorial Sanctions," 20 U. PA. J. INT'L ECON. L. at 81-87.6 With this
background, we turn now to the present appeal.

B. The Indictment
17

The Defendant Stefan E. Brodie and his brother Donald B. Brodie ("Don
Brodie") were co-owners of The Bro-Tech Corporation, an entity incorporated
in Delaware, which manufactured and sold ion exchange resins for industrial
use in water purification under the trade name "The Purolite Company." The
Bro-Tech Corporation was headquartered in Bala Cynwyd, Pennsylvania, and
had a manufacturing plant and warehouse facility located in Philadelphia,
Pennsylvania. The Defendant was the president of The Bro-Tech Corporation;
his brother Don Brodie was the vice-president. Purolite product was sold by
salesmen operating from sales offices located throughout North America,
including one in Ontario, Canada ("Purolite Canada") from which James E.
Sabzali ("Mr.Sabzali"), a Canadian citizen, worked from approximately 1990 to
1995 until promoted to a marketing position based in the Bala Cynwyd office.

18

The Defendant, Don Brodie and The Bro-Tech Corporation owned, in

approximately 1/3 shares, another corporation known as Bro-Tech Limited,
which was incorporated in the United Kingdom.7 Bro-Tech Limited was the
parent company of "Purolite International Limited," which was also
incorporated in the United Kingdom, and manufactured ion exchange resins at a
facility located in Pontyclun, South Wales. Purolite International Limited
(alternatively called "the U.K. entity" herein to differentiate it from "The
Purolite Company" or the "U.S. entity") had its own board of directors, sales
people, and finance department. The Brodie brothers, however, ultimately
owned and controlled the U.K. entities as well as the U.S. entities.

19

In late 1996-early 1997, the United States Customs Service (which investigates
illegal exports on behalf of OFAC) received information leading it to suspect
that The Purolite Company was trading in violation of the American Cuban
embargo. Customs agents thereafter met with a Purolite official at the Bala
Cynwyd office on February 5, 1997, and, following some initial exchange of
documents between the agents and the company, a prosecutor was assigned and
grand jury subpoenas were issued to the company. On October 5, 2000, a grand
jury indicted the Defendant, Don Brodie, The Bro-Tech Corporation d/b/a/
"The Purolite Company," and Mr. Sabzali on a single count of conspiracy to
violate 18 U.S.C. 371 (criminalizing the act of "conspir[ing] either to commit
any offense against the United States, or to defraud the United States, or any
agency thereof") and 18 U.S.C. 2 (criminalizing the act of "aid[ing] and
abet[ting] the commission of a crime against the United States") by engaging in
transactions involving property with Cuba in contravention of the TWEA, 50
U.S.C.App. 5(b) & 16,8 and CACR 515.201(b), 31 C.F.R. 515.201(b).
The conspiracy was alleged to have existed from approximately April 1993 to

May 2000. Overt acts in furtherance of the conspiracy were alleged to have
begun on or about June 21, 1994 and to have ended on or about July 31, 1999.
The overt acts involved the sale of ion exchange resins, payment for the
product, and the payment of expenses related to business travel undertaken by
Don Brodie, Mr. Sabzali and others to, from and within Cuba. Additionally, the
grand jury indicted Don Brodie, The Bro-Tech Corporation, and Mr. Sabzali
for 76 additional substantive violations of the TWEA and CACRs tied to
specific sales of Purolite product and expense-related transactions.9 The
Defendant was charged only with conspiracy to violate the TWEA and CACR
515.201(b) as alleged in the first count of the indictment.
C. Proceedings Below
20

The District Court denied numerous pre-trial defense motions to dismiss the
indictment. In particular, on August 14, 2001, the District Court denied motions
to dismiss the indictment based on (1) an alleged inconsistency between the
CACRs and Section 620(a) of the Foreign Assistance Act of 1961, 22 U.S.C.
2370, and President Kennedy's February 3, 1962 Proclamation 3447 (27
Fed.Reg. 1085); (2) an alleged failure of President Kennedy to declare a
national emergency with respect to Cuba; (3) an alleged unconstitutional
delegation of legislative powers to the Executive Branch by Section 5(b) of the
TWEA; and (4) an alleged termination of the President's authority under
Section 5(b) of the TWEA due to the fact that the exercise of that authority by
President George H.W. Bush on September 13, 1991, was not published in the
Federal Register until September 23, 1991. Additionally, on October 24, 2001,
the District Court denied motions to dismiss all or parts of the indictment based
on principles of international comity, the foreign sovereign compulsion
doctrine10 and lack of jurisdiction.

21

The four defendants, each separately represented by counsel, were then tried
together in a single trial. At the close of the government's evidence, the
Defendant made a motion pursuant to Fed.R.Crim.P. 29(a) for judgment of
acquittal. The District Court reserved the motion pursuant to Rule 29(b),11 and
the defense thereafter put on its case. In charging the jury, the District Court
gave a willful blindness instruction over the objection of the defense, thereby
instructing the jury that it could find the knowledge element of the crime to be
satisfied if it concluded beyond a reasonable doubt that the Defendant had
deliberately closed his eyes to what otherwise would have been obvious to him
concerning the facts in question.12 The jury then found all defendants guilty of
the conspiracy charge in Count I. Additionally, Don Brodie was found guilty of
33, The Bro-Tech Corporation of 44, and Mr. Sabzali of 20, of the separate
substantive counts related to specific sales of Purolite product and expense-

related transactions.13 The jury also found The Bro-Tech Corporation subject to
a forfeiture of $665,737.
22

Following post-trial briefing and oral argument, the District Court on May 31,
2002, granted the Defendant's motion for judgment of acquittal on the ground
that there was insufficient evidence from which the jury could have concluded
beyond a reasonable doubt that the Defendant had knowingly and willfully
participated in the conspiracy. 268 F.Supp.2d 408. In granting the motion, the
District Court reasoned that the government's evidence showed the Defendant
did not know it was unlawful under the CACRs for Purolite International
Limited, incorporated in and operating from the United Kingdom
("U.K.entity"), to trade with Cuba if The Purolite Company, incorporated in
and operating from the United States ("U.S.entity"), was not involved. See id. at
417. Additionally, the District Court reasoned that, to the extent the
government had proven that the U.S. entity was actually involved in particular
transactions, the evidence also showed the Defendant was unaware of such
involvement. See id. The government filed the present appeal.

23

Approximately a year later, the District Court denied the motions for judgment
of acquittal filed by Don Brodie, The Bro-Tech Corporation and Mr. Sabzali,
finding their convictions (including those for conspiracy to violate the TWEA
and CACRs) supported by sufficient evidence. United States v. Brodie, 268
F.Supp.2d 420, 423-424 (E.D.Pa.2003). However, in that same ruling, the
District Court also granted all four defendants a new trial on the ground that the
government had made certain improper and inflammatory comments and
argument during its opening and closing statements which prejudiced the jury.
See id. at 424-35. Importantly, the District Court granted a new trial for the
Defendant conditional on the outcome of the pending appeal. See id. at 436.
The government appealed also from the order granting a new trial, and that
appeal was consolidated by this Court with the present appeal. Thereafter, on
October 15, 2003, this Court granted the government's motion to remand the
appeal taken from the grant of a new trial to allow the District Court to consider
the guilty pleas of Don Brodie, The Bro-Tech Corporation and Mr. Sabzali.14
The District Court then dismissed all remaining counts of the indictment as to
these three defendants, and the government voluntarily dismissed its appeal of
the order granting a new trial. Thus, the only issue before this Court is the
propriety of the judgment acquitting the Defendant.

II. STANDARD AND SCOPE OF REVIEW

24

In ruling on a motion for judgment of acquittal made pursuant to Fed.R.Crim.P.

29, a district court must "`review the record in the light most favorable to the

prosecution to determine whether any rational trier of fact could have found
proof of guilty beyond a reasonable doubt based on the available evidence.'"
United States v. Smith, 294 F.3d 473, 476 (3d Cir.2002) (quoting United States
v. Wolfe, 245 F.3d 257, 262 (3d Cir.2001)). A finding of insufficiency should
be "`confined to cases where the prosecution's failure is clear.'" Smith, 294 F.3d
at 477 (quoting United States v. Leon, 739 F.2d 885, 891 (3d Cir.1984)). Courts
must be ever vigilant in the context of Fed.R.Crim.P. 29 not to usurp the role of
the jury by weighing credibility and assigning weight to the evidence, or by
substituting its judgment for that of the jury. See United States v. Jannotti, 673
F.2d 578, 581 (3d Cir.) (en banc) (trial court usurped jury function by deciding
contested issues of fact), cert. denied, 457 U.S. 1106, 102 S.Ct. 2906, 73
L.Ed.2d 1315 (1982); see also 2A Charles A. Wright, Fed. Prac. & Pro.
(Criminal 3d) 467 at 311 (2000) ("A number of familiar rules circumscribe
the court in determining whether the evidence is sufficient ... It is not for the
court to assess the credibility of witnesses, weigh the evidence or draw
inferences of fact from the evidence. These are functions of the jury."). On
appeal from the grant or denial of a motion for judgment of acquittal, this Court
exercises plenary review and independently applies the same standard as the
district court. See United States v. Coleman, 811 F.2d 804, 807 (3d Cir.1987);
Jannotti, 673 F.2d at 598. 15
25

Our scope of review is dictated by the procedural posture in which this case
comes before us. The Defendant moved for a judgment of acquittal at the close
of the government's case pursuant to Fed.R.Crim.P. 29(a), and the District
Court reserved decision on the motion under Fed.R.Crim.P. 29(b). Accordingly,
the District Court was required to, and properly did, determine whether an
acquittal was appropriate based solely on the evidence presented by the
government. See Fed.R.Crim.P. 29(b) ("[i]f the [trial] court reserves decision, it
must decide the motion on the basis of the evidence at the time the ruling was
reserved"). The Advisory Committee Notes to the 1994 Amendments to
Fed.R.Crim.P. 29 provide that an appellate court, reviewing a judgment of
acquittal under Fed.R.Crim.P. 29(b), is "similarly limited." Advisory
Committee Notes to 1994 Amendments. Thus, in reviewing the judgment of
acquittal entered below, we too will examine only to the evidence presented in
the government's case, which includes evidence elicited on cross-examination
of the government witnesses, but not evidence presented in the defense case.
See id.; see also United States v. Finn, 375 F.3d 1033, 1037 (10th Cir.2004).

26

The elements of conspiracy i.e., "an agreement, either explicit or implicit, to

commit an unlawful act, combined with intent to commit an unlawful act,
combined with intent to commit the underlying offense" can be proven
entirely by circumstantial evidence. United States v. Kapp, 781 F.2d 1008,

1010 (3d Cir.), cert. denied, 475 U.S. 1024, 106 S.Ct. 1220, 89 L.Ed.2d 330
(1986); see also Smith, 294 F.3d at 477 (listing requirements for conspiracy and
principle that they may be proven entirely by circumstantial evidence); United
States v. Fuentes-Coba, 738 F.2d 1191, 1196 (11th Cir.1984) (listing same
factors for conspiracy under the TWEA), cert. denied, 469 U.S. 1213, 105 S.Ct.
1186, 84 L.Ed.2d 333 (1985). Indeed, the very nature of the crime of
conspiracy is such that it often may be established only by indirect and
circumstantial evidence. See, e.g., Blumenthal v. United States, 332 U.S. 539,
557, 68 S.Ct. 248, 92 L.Ed. 154 (1947) (because "[s]ecrecy and concealment
are essential features of successful conspiracy," the law "rightly gives room for
allowing the conviction of those discovered upon showing sufficiently the
essential nature of the plan and their connections with it, without requiring
evidence of knowledge of all its details or of the participation of others"). Thus,
"[t]he existence of a conspiracy `can be inferred from evidence of related facts
and circumstances from which it appears as a reasonable and logical inference,
that the activities of the participants ... could not have been carried on except as
the result of a preconceived scheme or common understanding.'" Smith, 294
F.3d at 477 (quoting United States v. Gibbs, 190 F.3d 188, 197 (3d Cir.1999)
(quoting Kapp, 781 F.2d at 1010)) (ellipsis in the original).
27

We must, however, give "close scrutiny" to the sufficiency of the government's

evidence in a conspiracy case, see Coleman, 811 F.2d at 807, for the reasons
that "[s]light evidence of a defendant's connection with a conspiracy is
insufficient to support a guilty verdict," id. at 808, and "guilt must remain
personal and individual." United States v. Samuels, 741 F.2d 570, 575 (3d
Cir.1984). Conspiracy cannot be proven "by piling inference upon inference"
where those inferences do not logically support the ultimate finding of guilt.
Coleman, 811 F.2d at 808.

28

In conducting the sufficiency inquiry, we do not view the government's

evidence in isolation, but rather, in conjunction and as a whole. "The court must
determine `whether all the pieces of evidence, taken together, make a strong
enough case to let a jury find [the defendant] guilty beyond a reasonable
doubt.'" Coleman, 811 F.2d at 807 (quoting United States v. Allard, 240 F.2d
840, 841 (3d Cir.1957)). See also United States v. United States Gypsum Co.,
600 F.2d 414, 417 (3d Cir.1979) ("`[T]he character and effect of a conspiracy
(is) not to be judged by dismembering it and viewing its separate parts, but only
by looking at it as a whole.'") (quoting United States v. Patten, 226 U.S. 525,
33 S.Ct. 141, 57 L.Ed. 333 (1913)) (parenthesis in the original). "To sustain a
conspiracy conviction, the `contention that the evidence also permits a less
sinister conclusion is immaterial.... [T]he evidence need not be inconsistent
with every conclusion save that of guilt.'" Smith, 294 F.3d at 478 (quoting

United States v. Dent, 149 F.3d 180, 188 (3d Cir.1998)).

III. DISCUSSION
29

The bulk of the evidence presented by the government during the joint trial of
the Defendant and his three indicted co-conspirators did not directly involve the
Defendant's participation in the underlying conspiracy, but rather the
accomplishment of particular illegal acts by Don Brodie and Mr. Sabzali. The
District Court, in ruling on the Defendant's motion for judgment of acquittal,
noted that the Defendant and the government had agreed during oral argument
on the motion that:

30

a reasonable jury could find that [The] Bro-Tech [Corporation] made the
following sales to Cuba through intermediaries ...

31

1. From 1992 to 1993, four sales were made by Bro-Tech through a Canadian
company. The sales were booked at Bro-Tech, and the product was
manufactured by and shipped from Purolite International. These sales were not
charged in the indictment.

32

2. From 1994 to 1996, thirty-five sales were made by Bro-Tech through

intermediaries in Canada and Mexico. At times the product sold was
manufactured by and shipped from Bro-Tech, and at other times Purolite
International.

33

3. From 1997 to 1999, twenty-four sales were made by Bro-Tech through the
intermediary San Marco. All sales in this period were booked at Purolite
International, and the product was manufactured by and shipped from Purolite
International.

34

268 F.Supp.2d at 410-11. The fact that these sales transactions occurred, and
the manner in which they were booked, manufactured and shipped, is important
background to the evidence presented against the Defendant, but rather than set
forth the evidence which would support these facts, we too will incorporate this
list of proven transactions accepted by the District Court. See id.

35

Against the Defendant, the government presented what we will categorize as

six key pieces of circumstantial evidence: (1) the basic company structure; (2)
the "billing instruction," and series of events related to the 1992 audit of The
Bro-Tech Corporation; (3) the "our friends in the Caribbean" speech; (4) Mr.
Sabzali's 1995 performance review; (5) the pervasive use of "code words" for

Cuba by employees of The Bro-Tech Corporation d/b/a/ The Purolite

Company; and (6) several post-investigation events. This evidence is set forth
in Section III.A of this opinion. In Section III.B, because we recognize that
further proceedings on remand may include a new trial, we clarify the intent
requirement for conspiracy to violate the TWEA and CACRs, and address the
efficacy of the Defendant's intent-based defense which posited that he did not
understand it was unlawful for the U.K. entity to trade with Cuba and/or did not
know that the U.S. entity was actually involved in the trading. In Section III.C,
we assess the government's evidence against the Defendant as a comprehensive
whole and in the light most favorable to the government as required by the
governing standard.
A. The Evidence Against The Defendant
1. Basic company structure
36

As noted above, the Defendant was the President and co-owner with his brother
Don Brodie of The Bro-Tech Corporation, d/b/a "The Purolite Company."
Together with The Bro-Tech Corporation, the Defendant and Don Brodie also
owned, in approximately 1/3 shares, Bro-Tech Limited, which was incorporated
in the United Kingdom. Bro-Tech Limited, in turn, controlled Purolite
International Limited, which was also incorporated in the United Kingdom.
Both the U.S. and the U.K. entities were controlled by the Brodies. The BroTech Corporation made over $2.1 million dollars in gross income from its trade
with Cuba.

37

In his capacity as President, the Defendant oversaw the finances of The BroTech Corporation and Purolite International Limited, had direct supervision of
Edward Grossman (who was The Bro-Tech Corporation's Chief Financial
Officer), and served as the primary contact for legal counsel to the company.
The Defendant also oversaw the European sales force, while Don Brodie
oversaw the North American sales force and Philadelphia manufacturing
facility. Edward Nace, a former products manager for The Purolite Company
from 1993 to 1997 who worked from the Bala Cynwyd office as a liaison
between sales and manufacturing, testified that both the Defendant and Don
Brodie reviewed on a "fairly frequent[ ]" basis the hard-copy log book of daily
purchase orders kept at the Bala Cynwyd office, which listed customer name,
type and quantity of product ordered. Later, when the company switched to a
computerized system, both brothers would review the daily "edit reports"
listing orders.

38

The office in Bala Cynwyd was located on one part of one floor in an office

38

The office in Bala Cynwyd was located on one part of one floor in an office
building that housed numerous other companies. Approximately 30 employees
worked in the Bala Cynwyd office, including both the Defendant and Don
Brodie over the course of the charged conspiracy, as well as Mr. Sabzali
beginning in early 1996. Mr. Sabzali and Don Brodie shared a secretary in the
Bala Cynwyd office, at least through early 1998, and the Defendant's secretary,
at least through early 1998, had her desk physically located directly outside of
Mr. Sabzali's office.

39

On cross-examination, Mr. Grossman testified that during the relevant time

period (1993 to 2000), the Defendant spent a "significant amount of time"
(estimated at 70 to 80%) away from the Bala Cynwyd office establishing new
manufacturing plants and sales offices in China and Romania.

40

2. The billing instruction, audit and related events

41

During 1992, from his office in Canada, Mr. Sabzali sold Purolite product
through the Canadian subsidiary ("Purolite Canada") in four transactions to
Galax, Incorporated ("Galax"). The product was booked and invoiced from the
Bala Cynwyd office, but manufactured by and shipped from the U.K. entity. In
1986, the United States Department of Treasury had designated Galax a
"specially designated national," i.e., a company with which American
companies were prohibited from transacting business because the designated
company was known to have ties with Cuba.16 While these 1992 transactions
with Galax were not charged in the indictment, they are important background
to much of the evidence presented against the Defendant because trial
testimony established that, in early 1993, the auditing firm of Deloitte &
Touche LLP conducted an audit of The Bro-Tech Corporation for the year 1992
and found reference to one of the 1992 sales to Galax. The auditor-in-charge,
Mr. Stephen Coulter, CPA, brought the reference directly to the Defendant's
attention, and this touched off a series of events, evidence of which forms the
basis for the linchpin inference urged by the government in this prosecution
i.e., that the Defendant knew his company was conducting illegal sales
transactions with Cuba and knew that the U.S. entity was involved, or was at
least willfully blind to that involvement. That the 1992 transaction with Galax
had occurred and how the auditor's concern about it was handled by the
Defendant are critical. While the trial testimony concerning this series of events
was often confusing and sometimes contradictory, we attempt to set it forth as
coherently as possible and in the light most favorable to the government.

42

We begin with the evidence related to what we will call "the billing
instruction." Mr. Grossman (former CFO of The Bro-Tech Corporation)

testified on direct examination that he was personally aware of a sales

transaction made to Galax in 1992. He explained how he came to possess that
knowledge:
43

Q: And how do you know that or how were you aware of it?...

44

A: Yes. During the year, in 1992 at some point, [the Defendant] called me into
his office and indicated that there had been an invoice, this Galax, and that it
had a reference to Cuba on there and that I should instruct the customer service
department, the billing department, to make certain that they don't include any
reference to Cuba in any future invoices on the face of the invoice.

45

Q: Was that in 1992?

46

A: I believe so.

47

Q: Did you give such an instruction to the billing department?

48

A: Yes, I did.

49

A. 716 (Grossman, direct).

50

Next is the evidence related to the audit. Deloitte & Touche had been
performing audits for The Bro-Tech Corporation since approximately 1988, and
for the year 1992, had been engaged to express an opinion on the combined
financial statements of The Bro-Tech Corporation and Bro-Tech Limited. In the
course of performing the 1992 audit early in 1993, the auditors "found a
shipment into Cuba on a sales transaction .... [in a] dollar amount ... between 2
and $300,000 ..." A. 304 (Coulter, direct). The occurrence of this transaction
was significant to the auditors because, as Mr. Coulter explained, "[w]e are
aware that U.S. companies were not supposed to be shipping goods into Cuba
because of the American boycott," and "to the extent a transaction is a potential
illegal act, the auditor is obligated to follow up on that transaction to determine
the potential consequences both from a financial reporting as well as a
disclosure point of view." A. 304-05 (Coulter, direct). The auditors were
concerned that The Bro-Tech Corporation would be subject to a monetary fine
for the Galax transaction, which, depending on the likelihood of assessment,
would have to be addressed in the audit in a particular fashion. In light of this
concern, Mr. Coulter spoke directly to the Defendant, as President of The BroTech Corporation, about the Galax transaction and its implications for the

audit. Mr. Coulter testified as to that conversation:

51

Q: Was that [conversation with the Defendant] on the telephone or face to face
or in what way?

52

A: Well, there were numerous discussions regarding the liability. Some were by
telephone, some were face to face and we did have discussions, in addition to
[the Defendant] had discussions with Ed Grossman.

53

...

54

Q: And when you talked to [the Defendant], what was his explanation
regarding this transaction? A: [The Defendant] indicated that the transaction
had been effected by a new salesman with the company and that it was one
transaction and he understood that they should not be doing this, and he was
going to take steps to insure that the company would detect any such proposed
transactions in the future.

55

A. 307 (Coulter, direct). Other testimony supported that the Galax sale under
discussion had been arranged by Mr. Sabzali operating from Canada, and that
he had been a salesman for the company since approximately 1990 i.e., two
to three years before the outlined conversation. Two "steps" were taken in the
wake of the conversation between the Defendant and Mr. Coulter concerning
the Galax transaction. We present these "steps" first as filtered through the eyes
of the auditors and then as they were "implemented" by The Bro-Tech
Corporation.

56

Subsequent to the conversation outlined above, the Defendant showed Mr.

Coulter a copy of the following memorandum written on Purolite letterhead:

57April 7, 1993
To: All Sales Offices
From: Steve Brodie
CC: Don Brodie/Ed Grossman

58

It has come to our attention, during the 1992 audit, that a sale was made to the
Canadian Company, Galax. The Galax credit was checked in our Philadelphia
office, and approved. Subsequent to the approval of the order, our shipping
department in the UK was ordered to drop-ship this order to Cuba.

59

While it is proper to ship this order from the UK in terms of UK law, it is

contrary to USA policy and law to ship material of any kind to the island nation
of Cuba in violation of the U.S. embargo. Brotech Corporation is a U.S.
Corporate citizen, and as such, has no intention of violating U.S. policy, now
nor in the future.

60

No shipment of Purolite merchandise is to be shipped to, redirected to, or transshipped to Cuba. Any requests to do so are to be reported to Don or me.

61/s/ Steve Brodie

62

A. 206 (Gov.Ex. 11) (hereinafter the "future policy memorandum") (emphasis

added). In addition to being the purported issuer of the future policy
memorandum, the Defendant had also signed it. Mr. Coulter, however, did not
find the memorandum helpful for deciding how to characterize the Galax
transaction for auditing purposes, and his reaction to the memorandum set off
another important response from the Defendant. As Mr. Coulter explained:

63

Q: When you saw this document, were you satisfied it took care of the
problem? A: No, we were not.

64

Q: And why not?

65

A: Well, essentially that was certainly appropriate going forward to insure that
there were no shipments to Cuba and we fully supported that, however, the fact
of the matter was that there was a shipment in 1992 to Cuba and we did not
know the legal ramifications of that. And we were requesting from the
company a legal opinion with respect to their exposure.

66

Q: And what was [the Defendant's] reaction when you told him you wanted a
legal opinion?

67

A: Well, again, because it was a single transaction performed by a salesman

that was new to the company, [the Defendant] felt like we were overreacting in
requesting a legal opinion and he did not want to incur the cost of a legal
opinion.

68

A. 314-15 (Coulter, direct) The legal opinion requested by Mr Coulter was

subsequently obtained, and Mr. Coulter participated in a telephone discussion
of that opinion with the attorney involved. Mr. Coulter testified that the legal
opinion, "together with management's representation that the transaction was

unintentional and inadvertent," were relied upon by the auditors in determining

that the possibility of a fine related to the transaction was "remote." A. 315
(Coulter, direct). The "remote" characterization was significant to the auditors
because, as Mr. Coulter explained, "`remote' mean[t that] it's less likely that a
liability [here, a fine] has been incurred, and in that instance there would be no
requirement to either disclose or record the liability" in the audit. A. 306-07
(Coulter, direct). When the 1992 audit report for The Bro-Tech Corporation
was subsequently issued in July 1993, Deloitte & Touche also sent a letter
addressed to the "directors of Bro-Tech Corporation trading as the Purolite
Company to the attention of [the Defendant], President," in which the auditors
characterized the legal opinion as they had understood and relied upon it in
issuing the 1992 audit:
69

The company inadvertently entered into a sales transaction with a new

customer that is listed by the U.S. Department of Treasury as a specially
designated national (SDN). Sales to SDN's are prohibited by law and carry
potential civil penalties which, depending on intent, could be significant. The
company's legal counsel has indicated based on very limited knowledge of the
transaction and the related federal laws that since the sale was unintentional, the
likelihood of fines and penalties being assessed is remote in this particular case.

70

A. 319 (Coulter, direct) (reading Gov. Ex. 4). Mr. Grossman testified that he
had received a copy of this letter most likely through the Defendant's secretary.

71

Prior to the issuance of the 1992 audit report in July 1993, another "step" was
taken in the wake of the auditors' concern with the Galax transaction. When
asked if the Defendant had made any other suggestions regarding what might
be done with the Galax transaction in terms of accounting, Mr. Coulter
testified:

72

A: At one point in the process of dealing with this issue, there was a suggestion
that the sale recorded in Bro-Tech Corporation's books be transferred to BroTech, Limited's [i.e., the U.K. entity's] books.

73

Q: And what was your response to that?

74

A: After considering it, we felt like we would still need a legal opinion because
the sales transaction was initially recorded in Bro-Tech Corporation's books to
begin with, and that even if it were transferred to Bro-Tech, Limited, we would
not know the legal implications of that either.

75

Q: Did that go any further, that suggestion?

76

A: I don't believe it did, no.

77

A. 320 (Coulter, direct).17 On cross-examination, Mr. Coulter explained that, in

addition to recommending that a legal opinion be obtained with respect to
treatment of the Galax transaction for audit purposes, Deloitte & Touche
recommended that a set of checks be instituted by the company to make certain
that SDNs would not become clients in the future. Someone from The BroTech Corporation although their identity is not clear told Mr. Coulter that
such checks would be implemented.18 A few months after the 1992 audit report
was issued in July 1993, someone from The Bro-Tech Corporation again
their identity is unclear informed Deloitte & Touche that it was being
replaced by Coopers and Lybrand.19 Mr. Coulter acknowledged on crossexamination that Coopers and Lybrand had already been performing audits for
Bro-Tech Limited. He also acknowledged that the Defendant had been upset
with the perceived untimeliness and expense of the 1992 audit report.

78

Mr. Grossman provided the view from inside The Bro-Tech Corporation
concerning how the "steps" identified by Mr. Coulter were actually
implemented by the company in the wake of the auditors' concern with the
Galax transaction. He testified that indeed a transfer of a Galax transaction to
the books of Bro-Tech Limited did occur, but his testimony was confusing as to
whether that transfer involved the 1992 Galax transaction found by Deloitte &
Touche or another Galax transaction in 1993. He testified:

79

Q: ... [Y]ou were aware of you testified you were aware of a Galax sale in
'92, but you're not sure if it's the same one that the auditors found?

80

A: Correct.

81

Q: What if any sales were you aware of to Galax in 1993?

82

A: I'm not aware of any sales certainly that were processed through the United
States office. Again, I believe I'm sorry, I think that there was a transaction
in 1993 that had initially been billed by the U.S. office and when this was found
a decision was made to in essence transfer the sale to so that it would come
through Purolite International Limited, monies that were collected in
connection with this sale were collected by the U.S. company and transferred to
Purolite International Limited.

83

Q: Can you take a look, sir, at Government Exhibit 10? Do you recognize that
document?

84

A: Yes, I do.

85

Q: Is there a notation concerning something that you asked to be done?

86

A: It's dated March 31st, 1993. `Per Ed. G.,' which would be myself

87

...

88

Q: [ ] Do you want to tell us what this is all about?

89

A: Again, this is a handwritten note dated 3/31/93 and it says "Per Ed. G.,"
which is myself, "$330,103.20 sale to be reversed, cash to be reversed and
forwarded to Purolite International Limited," it says, "conversation" or
"conversion to be Bala's responsibility."

90

Q: Well, did you make who if anyone made that decision with you?

91

A: This decision would have been made in conjunction with [the Defendant], it
probably would have been a conversation that we had once we understood that
there was, you know, a transaction related to Cuba and that there would be
funds coming into Purolite Company as a result of that transaction.

92

Q: Is this at the time of the audit?

93

A: Yes. March 31st, '93, so the audit would have taken place either been
completed shortly before that or some time around that time frame.

94

A. 720-722 (Grossman, direct).

95

Mr. Grossman also testified regarding the future policy memorandum, a critical
piece of evidence for both the prosecution and the defense. Handwritten on the
copy of the future policy memorandum admitted at trial was a faxed notation,
indicating that the memorandum had been faxed as addressed on April 7, 1993,
to all sales offices, as well as to, inter alia, Don Brodie and Mr. Grossman. Mr.
Grossman testified that he received a copy; another salesman testified that he
did not. In addition to the memorandum itself constituting evidence, Mr.

Grossman testified that it was his understanding that the memorandum

encapsulated The Bro-Tech Corporation's policy regarding sales to Cuba in the
future. On direct examination, he testified:
96

Q: What if any decisions were made by [the Defendant] in response to the

Deloitte & Touche audit?

97

A: My understanding is that any any orders having to do with Cuba would

be processed through the U.K. company. My understanding at that time was
that they did not have the same restrictions on shipping to Cuba and this if
there, you know, was business having to do with that it would material
would not only be shipped from Purolite Limited, but it would be, you know,
billed by Purolite International Limited[ ].

98

A. 719 (Grossman, direct). Mr. Grossman provided further critical testimony

regarding the future policy memorandum on cross-examination, which we set
forth in full:

99

Q: As a result of [ ] those events [i.e., the audit events just discussed, having
occurred in early 1993], you indicated that [the Defendant] issued the
memorandum that you looked at dated April 7, 1993 [i.e., the future policy
memorandum], correct?

100 A: Correct.
101 Q: And as a result of those events the policy of Purolite in the U.S. going
forward was that if future materials were to be shipped to Cuba they would be
shipped from Purolite International in the United Kingdom and billed by
Purolite International in the United Kingdom, correct?
102 A: That was my understanding, yes.
103 Q: And that was different from what had happened in 1992, because in 1992 all
of the product had been manufactured and shipped from the United Kingdom,
[but] it was billed out of the United States entity, correct?
104 A: It was billed out of the United States entity. I can't say without a doubt that a
hundred percent of the material came from Purolite International Limited, I
don't know where all of the material came to fill those orders, I know that some
...

105 Q: Your understanding at the time was that it had come from Purolite
International, correct? A: At least primarily, yeah.
106 Q: Now, you understood at that time that it was lawful to ship product to Cuba
from the United Kingdom, did you not?
107 A: I understood, it was explained to me at some point in time that they did not
have the same prohibition in the United Kingdom as we have in the United
States.
108 Q: And [the Defendant] told you in 1993 that he understood that it was lawful
for entities in the United Kingdom to ship product to Cuba, correct?
109 A: Yes.
110 Q: Now, in light of that decision [i.e., in April 1993], your understanding of
what both Bro-Tech's finance department and Bro-Tech in the United States
should be doing generally was that there should not be any future transactions
involving Bro-Tech in the U.S. that involved the sale of product to Cuba,
correct?
111 A: Correct.
112 Q: And [the Defendant] told you as part of that decision [i.e., in 1993] that
future invoices coming out of Bro-Tech should not reflect sales to Cuba,
correct?
113 A: Correct.
114 Q: And that was because future sales were supposed to go out of Purolite
International in the United Kingdom, correct? A: This is after you're talking
about after the Deloitte & Touche
115 Q: After the Deloitte & Touche audit.
116 A: Correct.
117 Q: So your mission, as you understood it going forward from 1993, was to
ensure that your finance department was not causing transactions to be booked

out of the United States that involved sale of product to Cuba?

118 A: My understanding was that was not supposed to happen. It was [the
Defendant's] and Don Brodie's company, so it wasn't my decision as to you
know, to accept orders and to conduct commerce with Cuba, so my
understanding is that that wasn't going to happen and that any commerce with
Cuba would be transacted through Purolite International, Limited.
119 Q: ... You didn't receive any instruction at that time to delete or alter or destroy
any records that related to Cuba in 1993, did you?
120 A: That's correct.
121 Q: And you didn't give any such instructions to anyone within the finance
department, correct?
122 A: That's correct.
123 Q: So for the 1992 transactions that had happened with Galax, the documents
that related to those remained within the finance department of Bro-Tech,
correct?
124 A: That's correct [presumably, this suggests that, although the 1992 Galax sale
had been transferred to Purolite International's books, Bro-Tech in the United
States still had records relating to that sale and the fact that it had been
transferred].
125 ...
126 Q: Now, is it fair to say that in addition to the principle that sales would now be
booked out of the U.K., you were taking efforts to ensure that if anyone
affiliated with Bro-Tech traveled to Cuba that the expenses associated with that
travel would be borne by the United Kingdom entity?
127 A: Yes.
128 Q: And that was because based on your understanding the United States entity
was not to be involved in activity with respect to Cuba?
129 A: That's correct.

129 A: That's correct.

130 A. 747-49, 752 (Grossman, cross-examination).
131 3. The "Our friends in the Caribbean" speech
132 Craig Gentile, a regional salesman for The Bro-Tech Corporation from 1990 to
1997, testified that the company held biannual sales meetings in the spring and
fall. Asked whether Cuba or sales to Cuba were ever mentioned at those
meetings, he testified:
133 A: There was only one time that Cuba was ever mentioned in a sales meeting....
It was either fall of '91 or spring of '92. And we met at the manufacturing
facility in Philadelphia, downstairs, and everybody gave their presentation on
their sales and what they were going to do, projections for the next year or how
they had done previously. And Jim Sabzali got up to give his presentation and
during his presentation he said that this was the business that they were going
to be doing in Cuba and ...
134 Q: What happened then?
135 A: [The Defendant] jumped up, he was very excited I don't remember
exactly what he said, but [Mr. Sabzali] just smiled and said, ['] well I mean our
friends in the Caribbean.[']
136 ...
137 Q: What was your reaction to what happened?
138 A: I was surprised that [Mr. Sabzali] brought it up.
139 Q: What was the reaction of any other salespeople in the room?
140 A: I think everybody was surprised, it got very quiet. Then we proceeded.
141 A. 362-363 (Gentile, direct).
142 Mr. Gentile was questioned on cross-examination as to the date of this incident.
He had previously told the grand jury that the event occurred in 1993 and on
cross-examination at trial he acknowledged this previous testimony. A. 371

(Gentile, cross-examination) ("[Gentile]: I don't have the transcript, but if that's

what it says, that's what I said."). However, as set forth above, his trial
testimony placed the incident earlier in time, and before the events of the 1992
audit report.
4. Mr. Sabzali's 1995 performance review
143

Mr. Sabzali, who had arranged the transactions with Galax in 1992 from his
Canadian office and who had spoken of Cuban sales during the sales
presentation witnessed by Mr. Gentile, was promoted in 1995 to the position of
Director of Marketing for the North American operations of The Bro-Tech
Corporation, and reassigned as a result from Canada to the Bala Cynwyd office.
The basis for the promotion was summed up in a type-written performance
review dated May 16, 1995. Critically, the performance review took note of
Mr. Sabzali's development of the "Caribbean territory to make Purolite the
dominant player" and his procurement of "sales in Mexico as an adjunct to the
Caribbean." A. 207 (Gov.Ex. 14).20 Handwritten at the bottom of the
performance review was the notation: "New Position, Salary $102,000,
Effective 4/1/94." A related memorandum identified Mr. Sabzali's
responsibilities in the new position; importantly, however, he was to "continue
handling the Caribbean areas for North America." Mr. Grossman testified that
the handwritten notation at the bottom of the performance review "looks like
the handwriting of or the printing of [the Defendant]," A. 731 (Grossman,
direct),21 and another former employee, Daniel Opperman, testified that while
it was Don Brodie who had hired Mr. Opperman, it was the Defendant who
had promoted him.
5. Pervasive use of "code words" for Cuba

144 A number of former employees of The Bro-Tech Corporation testified that they
understood, at the time of their employment during the relevant time period,
that terms like "the Caribbean," "the island" and "that island" were used to refer
to Cuba. Specifically, Mr. Grossman testified that "Caribbean island was kind
of a code word for Cuba after Deloitte and Touche's findings in early 1993," A.
725 (Grossman, direct), and that "Caribbean meant Cuba." Id. at 728. Mr.
Sabzali's secretary in the Bala Cynwyd office from 1996 to early 1998 testified
that she recalled two conversations with Mr. Sabzali regarding Cuba, one of
which she described as a "sort of smiling conversation where he said, we refer
to it as the island, not by its formal name." A. 1302 (Lenton, direct). Ms.
Graves, a former customer services employee in charge of processing sales
orders for The Purolite Company at the Bala Cynwyd office from
approximately 1995 until her retirement in January 1999, testified that she and

her counterpart in the Canada office would frequently talk about shipments to
Cuba, but specified that in so doing, "[w]e didn't refer to them as shipments to
Cuba, but ... as shipments to that island." A. 880 (Graves, direct). Mr. Nace
testified that he had told Mr. Sabzali that he was uncomfortable receiving faxes
from Sabzali openly referring to Cuba and as a result, Mr. Sabzali referred to
Cuba, at least in dealings with Mr. Nace, as the Caribbean. Mr. Carlos Lugo,
who operated as a salesman of The Purolite Company in Mexico from May
1996 to 2000,22 testified with reference to an expense report that he had turned
in to the Bala Cywyd office related to travel through January 1998 that "Mr. Ed
Grossman called me and said to me that that report had to be redone because I
stated that I was going to Havana and the name Havana could not be in the
report." A. 601 (Lugo, direct). There was also testimony that words like
Havana and Cuba were sometimes used rather openly in transaction and
expense-related documentation.
6. Post-investigation events
145 On February 5, 1997, and pursuant to an earlier telephone conversation,
Customs agents visited the Bala Cynwyd office and met with Mr. Dolan. At
that meeting, an agent "apprised Mr. Dolan that we [Customs] had an
investigation and it appeared, based on records that I had in my possession and
confidential source information, that there were violations of illegal exports
relative to the OFAC regulations." A. 1447 (McCrosson, direct). According to
the agent, Mr. Dolan responded that he had "researched [the company's] files
based on the previous phone call and said he could only locate one document
relative to the names I had provided him." Id. Mr. Dolan then showed the
agents a copy of the future policy memorandum, which purported to state as a
matter of company policy that the U.S. entity was not to be involved in any
sales to Cuba. With this background, we present the evidence related to the
post-investigation events.
146 a. The Sabzali memoranda
147 The government introduced three memoranda written by Mr. Sabzali in the
weeks following the Customs agents' visit. The first, dated February 28, 1997,
and addressed to Pilar Guzman, a woman through whom Purolite product was
sold to Cuban end-users, provided in pertinent part: "Please note that pricing to
San Marco will change slightly for the four orders being ready, as well as for
future orders. The reason is that we now have to ship products from U.K., and
the easiest method would be to ship directly to Havana, and not to Tampico."
A. 1310-11 (Lenton, direct, reading from Gov. Ex. 77) (emphasis added). The
first memorandum did not identify the Defendant as someone intended to

receive a copy he was not, in other words, "carbon copied" on the first
memorandum. The second memorandum, also dated February 28, 1997, was
addressed to an Italian representative of The Purolite Company, and provided,
in pertinent part: "For future reference, please note that orders will be sent from
Milan to Pontyclun, but invoicing will be done directly from Ponty to the
customer in the Caribbean." A. 1313 (Lenton, direct, reading from Gov. Ex.
78) (emphasis added). The subject line on the second memorandum referenced
"four orders for the Caribbean." Id. The Defendant was carbon copied on this
second memorandum, and the secretary who faxed it testified that he would
have received his copy in the Bala Cynwyd office. The third memorandum,
dated March 3, 1997, and carbon copied to the Defendant, provided further
details regarding the "Caribbean orders," confirmed that the sales would be
handled entirely through Purolite International Limited, and openly listed the
place of shipment as Havana, Cuba.
148 b. Telephone calls
149 The government offered testimony related to two telephone calls made by the
Defendant after the investigation which lead to the indictment was underway.
In September 1999, months after she had retired from The Purolite Company,
Ms. Graves, the former sales processing clerk, received a telephone call from
the Defendant at her home. She testified:
150 A: He asked me if I had been contacted by anyone from the Government
regarding the Cuba sales.
151 Q: And what did you say?
152 A: I said yes, I had, and then he I mentioned that I had been questioned
about, I believe it was the shipments for Galax, and I mentioned that there were
other shipments after those, and I said but I can't remember the name of the
company.
153 Q: Shipments where?
154 A: To Cuba. And he said ['] well, if you can't remember the name, then you
don't have anything to tell them.[']
155 A. 881 (Graves, direct). As noted above, the Defendant agreed during oral
argument on the motion for acquittal that other evidence in the government's

case would support a finding that "from 1994 to 1996, thirty-five sales were
made by Bro-Tech through intermediaries in Canada and Mexico." See supra.
at 20-21. The intermediary in Mexico was an entity known as Ingenieria y
Mantenimiento Industrial (or "IMI") and shipments to IMI occurred after the
Galax sales. Ms. Graves testified that, as a former sales processing clerk, she
knew of the sales through IMI. On cross-examination, Ms. Graves
acknowledged that the Defendant had expressed "interest and curiosity" about
the subject matter of the government investigation during their telephone
conversation, and that she knew at the time she was interviewed by the
government that the company had legal counsel whom she did not advise of the
interview. Additionally, she testified that she had reported the telephone call to
the government and agreed to have a wire installed on her phone to record any
future calls from the Defendant, but he never called again.
156 The second telephone call identified by the government was purportedly made
by the Defendant to Mr. Lugo, the Purolite salesman in Mexico. Mr. Lugo
testified that he had met someone at the United States Embassy in Mexico City
at the request of the United States government sometime after December 1997
or 1998.23 There, he was asked "some questions regarding why I went to Cuba
.... if I go to Cuba for business or anything." A. 607 (Lugo, direct). Subsequent
to that meeting, Mr. Lugo reported on it at Mr. Sabzali's request to Mr. Dolan.
Mr. Lugo testified that he then received a telephone call from the Defendant:
157 Q: What if any conversations did you have with [the Defendant] about your
embassy visit?
158 A: After my visit, [the Defendant] called me and said to me not to do it again
with[out] inform informing before.
159 Q: Not to do what again?
160 A: To go to the [United States] embassy.
161 A. 612 (Lugo, direct). On cross-examination, Mr. Lugo acknowledged that he
knew at the time of his interview at the United States Embassy that the
company was represented by counsel and under investigation for trading with
Cuba. He also acknowledged that he had previously testified before the grand
jury that the embassy visit occurred sometime in April or May 1999, and that it
was Mr. Sabzali, not the Defendant, who informed him following that visit that
the Defendant did not want him to go to the embassy again without informing
the company.

B. The Intent Requirement

162 On appeal, the Defendant argues in support of a separate ground for affirming
the judgment of acquittal specifically, that the government was required and
failed to show that the Defendant had knowledge of the specific CACR or
licensing provision which he and his co-conspirators were found to have
violated. This argument relies on an inaccurate statement of the law, which we
find necessary to correct in order to guide the District Court on remand should
there be a new trial.
163 The Defendant was indicted for conspiracy to violate Section 16 of the TWEA
and CACR 515.201(b), and accordingly the government, in proving a
conspiracy under 18 U.S.C. 371, was required to prove at least the degree of
criminal intent necessary for the underlying substantive offense of violating the
American Cuban embargo. See United States v. Feola, 420 U.S. 671, 686, 95
S.Ct. 1255, 43 L.Ed.2d 541 (1975). To prove conspiracy to violate the TWEA
and the CACRs, the government is required to show "specific intent." See
Fuentes-Coba, 738 F.2d at 1196 (prosecution for violating the American
Cuban embargo); United States v. Macko, 994 F.2d 1526 (11th Cir.1993)
(same); see also United States v. Tooker, 957 F.2d 1209 (5th Cir.) (prosecution
for violating American embargo on trading with Vietnam), cert. denied, 506
U.S. 864, 113 S.Ct. 187, 121 L.Ed.2d 131 (1992); United States v. Dien Duc
Huynh, 246 F.3d 734 (5th Cir.2001) (same).
164 In the context of the TWEA, the specific intent requirement demands that the
government prove that a defendant had general knowledge of the law which
forbade his actions and acted with the specific intent to circumvent that law.
See Tooker, 957 F.2d at 1214. But the government need not prove the defendant
had knowledge of the specific regulation governing the conduct engaged in
in other words, a defendant "cannot `avoid prosecution by claiming that [he or
she] had not brushed up on the law.'" Id. (quoting Hamling v. United States,
418 U.S. 87, 123, 94 S.Ct. 2887, 41 L.Ed.2d 590 (1974)). See also Bryan v.
United States, 524 U.S. 184, 118 S.Ct. 1939, 141 L.Ed.2d 197 (1998)
(conviction for "willfully" violating federal statute prohibiting sale of firearm
without license requires a showing that the defendant knew his conduct was
unlawful, not that he was aware of the particular licensing requirement); id. at
196, 118 S.Ct. 1939 ("Thus, the willfulness requirement of 924(a)(1)(D) does
not carve out an exception to the traditional rule that ignorance of the law is no
excuse; knowledge that the conduct is unlawful is all that is required");
Liparota v. United States, 471 U.S. 419, 434, 105 S.Ct. 2084, 85 L.Ed.2d 434
(1985) (explaining in the context of prosecution for acquiring possession of
food stamps in a manner unauthorized by statute or regulations that the

government need not show "knowledge of specific regulations governing food

stamp acquisition or possession."); United States v. Tsai, 954 F.2d 155, 162 (3d
Cir.) (stating in context of conviction for violating Arms Export Control Act, "
[i]f the defendant knew that the export was in violation of the law, we are hard
pressed to say that it matters what the basis of that knowledge was."), cert.
denied, 506 U.S. 830, 113 S.Ct. 93, 121 L.Ed.2d 54 (1992). "Rather, the
government must prove only that the defendant[ ] knew that [his] planned
conduct was legally prohibited and that [he] therefore acted with an `evilmeaning mind.'" Tooker, 957 F.2d at 1214 (quoting Morissette v. United States,
342 U.S. 246, 251, 72 S.Ct. 240, 96 L.Ed. 288 (1952)). A jury may infer a
willful violation of a known legal obligation from the facts and circumstances
surrounding the case. See Tooker, 957 F.2d at 1214 (citing Liparota); Macko,
994 F.2d at 1535 (concluding "the evidence was sufficient for a reasonable jury
to find beyond a reasonable doubt that [the defendants] knew about the Cuban
trade embargo and deliberately violated it through their own conduct or by
aiding and abetting other individuals."); Dien Duc Huynh, 246 F.3d at 743
(same in context of the Vietnam embargo); see also United States v.
Covarrubias, 94 F.3d 172, 175-76 (5th Cir.1996) (finding, in context of
prosecution for exporting weapons into Mexico, sufficient evidence to support
jury's conclusion that defendant knew that either a license or some other form
of authorization was required to lawfully transport weapons).
165 Of course, in this criminal conspiracy case, like any other, the government must
prove that the defendant had knowledge of the facts that constitute the offense
and of the illicit purpose of the conspiracy. See, e.g., United States v. Idowu,
157 F.3d 265, 267 (3d Cir.1998) (explaining, in the context of a challenge to
the sufficiency of the evidence for a conspiracy conviction, that "the
government is obliged to prove beyond a reasonable doubt that the defendant
had knowledge of the particular illegal objective contemplated by the
conspiracy"); United States v. Pearlstein, 576 F.2d 531, 540-41 (3d Cir.1978)
(stating, in the context of reversing conviction for mail fraud, that "the evidence
must indicate that the defendants had knowledge of the fraudulent nature of the
[ ] operation and wilfully participated in the scheme with the intent that its illicit
objectives be achieved"); see also Bryan, 524 U.S. at 193, 118 S.Ct. 1939
("`knowingly' merely requires proof of knowledge of the facts that constitute
the offense"). The knowledge element of a crime such as the one charged here
may be satisfied upon a showing beyond a reasonable doubt that a defendant
had actual knowledge or "deliberately closed his eyes to what otherwise would
have been obvious to him concerning the fact in question." United States v.
Stewart, 185 F.3d 112, 126 (3d Cir.1999). To find knowledge premised on the
latter "willful blindness" theory, the jury must be able to conclude that "the
defendant himself was objectively aware of the high probability of the fact in

question, and not merely that a reasonable man would have been aware of the
probability." United States v. Caminos, 770 F.2d 361, 365 (3d Cir.1985).
Willful blindness is not to be equated with negligence or lack of due care, and
does not allow a conviction simply because the defendant "should have known
of facts of which he or she was unaware." United States v. Wert-Ruiz, 228 F.3d
250, 255 (3d Cir.2000) (willful blindness is a "subjective state of mind that is
deemed to satisfy the scienter requirement of knowledge"); see also United
States v. Sharma, 190 F.3d 220, 231 (3d Cir.1999) (purpose of a willful
blindness instruction is to "ensure[ ] that a juror who believed that a defendant
turned a blind eye towards his co-defendant's conduct would not vote to acquit
the willfully blind defendant"). As noted, the government pursued the willful
blindness theory of knowledge at trial and the District Court provided a correct
willful blindness instruction to the jury.
166 The indictment and the evidence presented by the government in this case
naturally tended to divide the overt acts in furtherance of the conspiracy into
two time frames: (1) 1994 (when the first overt act was alleged to have
occurred) through late 1996, and (2) early 1997 (when Customs agents first
visited the Bala Cynwyd office) to May 2000 (the end of the alleged
conspiracy).24 We understand the defense to have incorporated these two time
frames into its argument as to why the government failed to prove that the
Defendant acted with the requisite intent. He argues on appeal that the evidence
"is consistent with the fact that [he] did not know that any transactions with
Cuba were being carried out unlawfully through the United States. Rather, he
believed that all transactions with Cuba were being handled lawfully by entities
in Canada and the United Kingdom without United States involvement." Brief
of Appellee at 11. In other words, the Defendant contends that he believed at
all times pertinent to the charged conspiracy that trading with Cuba was lawful
so long as conducted through the U.K. entity without the participation of the
U.S. entity. To the extent that the evidence showed the U.S. entity was actually
involved in the transactions from 1994 through 1996 (which, as noted above,
the Defendant agreed the evidence could prove), then Defendant posits that he
did not know of that involvement, and hence could not have willfully violated
the law. As for the transactions which occurred from early 1997 through the
end of the charged conspiracy, the Defendant posits that he did not know that
trading with Cuba through a foreign subsidiary owned or controlled by a
American citizen was illegal, and hence could not have acted with intent to
violate the law.
167 Implicit in this defense strategy (and indeed obvious from the face of the future
policy memorandum that the Defendant purportedly wrote and relies heavily
upon for his defense) is an admission that the Defendant understood that the

U.S. entity was prohibited from trading with Cuba, and indeed, that was a
correct interpretation of the law. To the extent that the Defendant also believed
it was lawful for the U.K. entity to trade with Cuba so long as the U.S. entity
was not involved, his interpretation of the law was incorrect, because as
written, the CACRs prohibit entities which are "owned or controlled" by
American citizens from trading with Cuba. See 31 C.F.R. 515.201(b),
515.329(a), (c). 25 We do not find it necessary, however, to determine whether
the Defendant's mistaken understanding of the law as it related to trade
conducted solely through the U.K. entity in the latter time period should negate
a finding of specific intent and thereby support acquittal because, for reasons
that will become clearer as we examine the reasonable inferences that arise
from the government's evidence below, we conclude that a reasonable jury
could find that the Defendant actually knew of, or was willfully blind to, the
involvement of the U.S. entity in the transactions conducted in 1994-1996.26
Such a conclusion would by itself support a conviction for conspiracy, as it is
not necessary for the government to prove anything related to the latter time
period. However, we also conclude that a reasonable juror could conclude on
the evidence that the Defendant knew or was willfully blind to the fact that the
U.S. entity was still involved (albeit to a much lesser degree) in the transactions
that occurred in the latter time frame.27 We now explore how these conclusions
may be reached on the evidence as a whole.
C. The Evidence as a Whole
168 We will by necessity segregate our discussion in terms of the six key pieces of
evidence identified above, but one should not miss the forest for the trees. The
inferences against the Defendant urged by the government depend for their
reasonableness on viewing the evidence as a whole, and while the Defendant
disputes the existence of nearly every tree, we conclude that a reasonable jury
could find beyond a reasonable doubt that the Defendant did conspire to violate
the American Cuban embargo.
1. Basic company structure
169 We begin with the evidence related to the basic structure of The Bro-Tech
Corporation d/b/a/ The Purolite Company, not because it was the most critical,
but because a rational jury could legitimately use it as a prism through which to
assess all of the other circumstantial evidence presented against the Defendant
in this case. We believe, moreover, that this evidence is particularly revealing
when considered under the willful blindness instruction given by the District
Court.

170 From the facts related to the basic company structure, the government urged an
inference that the Defendant, as President of The Bro-Tech Corporation, knew
that the sales involving Cuba were occurring and critically, that they involved
the U.S. entity, or was at the very least willfully blind to that fact. The District
Court was "very reluctant in a criminal conspiracy case, where the required
mental state is knowledge and willfulness, to give any weight to these points,"
268 F.Supp.2d at 420, and moreover, took explicit note of testimony elicited on
cross-examination that, during the period of the charged conspiracy, the
Defendant "spent 70-80% of his time out of the country opening plants in
Romania and China." Id. We conclude, however, that the District Court
usurped the role of the jury in its handling of this evidence.
171 In our view, it would be reasonable for a jury to give weight indeed,
substantial weight to the fact that the Defendant was the President of The
Bro-Tech Corporation; this, in turn, would support the critical inference that he
knew of the sales to Cuba and of the U.S. entity's involvement therein. This
inference is only strengthened when other basic facts pertaining to the corporate
structure are added into the mix. While The Bro-Tech Corporation had offices
and operations in various parts of the world, it was not a large company as
evidenced by the fact that its main office was housed on one floor of a suburban
Pennsylvania office building and that the men most intimately involved in the
prohibited sales Don Brodie and later, Mr. Sabzali had their offices in
that building in close proximity to the Defendant's office. The illegal sales to
Cuba, moreover, which grossed approximately $2.1 million, were not so
minuscule as to reasonably escape the notice of the company's president.
Finally, the testimony tended to paint the Defendant as an active participant in
company affairs, not as a corporate figurehead whom a jury might more readily
infer was ignorant of the actions of his fellow officers and subordinates.
172 A rational jury, moreover, could legitimately consider the relationship between
the Brodies in drawing reasonable inferences about the Defendant's knowledge
and intent. While guilt for conspiracy cannot be proven solely by familial
relationships, see e.g., United States v. Williams-Hendricks, 805 F.2d 496, 502503 (5th Cir.1986), it is not the bare fact of kinship that drives the inference
sought by the government in this case, but rather the additional facts that the
brothers owned the entities involved, were active participants in company
affairs, and appear to have communicated with one another on business-related
issues, including Mr. Sabzali's promotion. There is no proscription against a
jury considering and drawing reasonable adverse inferences from such facts.
See United States v. Warshawsky, 20 F.3d 204, 209 n. 2 (6th Cir.1994) (noting
in context of prosecution for conspiracy to transport stolen parts that "the jury
could properly consider the fact that the defendants were both brothers and

business partners, which raises a permissible inference that they might share
information concerning their business activities"); United States v. Investment
Enterprises, Inc., 10 F.3d 263, 267 n. 4 (5th Cir.1993) (noting in context of
prosecution of company president for interstate transportation of obscene
materials that "[c]lose relationships can be part of the circumstantial evidence
from which a jury may infer that the defendant knew of a conspiracy"); see also
United States v. Loscalzo, 18 F.3d 374, 382 (7th Cir.1994) (rejecting corporate
president's effort to paint his participation in context of conviction for
conspiracy to defraud the United States and mail fraud as that of the "ignorant
partner" where evidence showed his financial benefit from the problematic
arrangement and his overall position of responsibility).
173 As was the case with various testimony elicited on cross-examination of the
government's witnesses, the testimony concerning the Defendant's lengthy
absences from the Bala Cynwyd office while pursuing business elsewhere may
be said to weaken the inference of knowledge or willful blindness to the
participation of the U.S. entity, but it does not completely erase that inference or
render it unreasonable. Given the fact that this same evidence portrays the
Defendant as an active participant in his company's affairs (he was, after all, out
of the office actively pursuing business on behalf of his company), a juror
might reasonably infer that he was not completely disconnected from events
concerning his company, even while physically absent from his office. The
weight and relevance of such evidence is to be assessed by the jury; it is not to
be deemed of overriding importance by the court.
174 2. The billing instruction, audit and related events
175 The government and the defense each had their own theory as to what the series
of events concerning the 1992 Galax transaction and the audit revealed about
the state of the Defendant's knowledge of the illegality of the sales to Cuba and
of the U.S. entity's involvement therein. The basic thrust of the government's
theory was that, as revealed by the billing instruction, the Defendant already
knew about the 1992 Galax transaction before it was brought to his attention by
the auditors and that his actions related to the billing instruction and the audit in
the period of 1992 and 1993 reveal two things: one, that he was attempting to
conceal his knowledge of any and all Cuba-related transactions that had already
occurred and of the U.S. entity's involvement therein, and two, that he expected
and intended future transactions to occur. This global inference is tied to a
series of interconnected supporting inferences, each of which we believe a
rational jury could make on the evidence presented.
176 The first major supporting inference is tied to the billing instruction. The

District Court, noting that Mr. Grossman testified that the billing instruction
was given before the events of the audit, concluded that a "permissible
inference from [Mr. Grossman's] testimony is that [the Defendant] gave the
instructions he did to Mr. Grossman to conceal sales to Cuba." 268 F.Supp.2d
at 418. We agree, and further believe that a rational jury who concludes that the
billing instruction was given in 1992 could also infer therefrom that the
Defendant desired those sales to continue. In our view, a rational jury viewing
the evidence as a whole could conclude that it was this action by the Defendant
which dictated how sales to Cuba were handled by the company in the 19941996 time-frame before the investigation began. At the very least this evidence
suggests that the Defendant was willfully blind to the actions of the U.S. entity
in the 1994-1996 period.
177 The second major supporting inference is tied to the events concerning the
audit. While the District Court did not specifically explain why it rejected the
government's inferences from this evidence, we conclude that it must have done
so and did so improperly. A rational jury, especially one that has already
indulged a negative inference against the Defendant in relation to the 1992
billing instruction, could infer that the Defendant (1) feigned ignorance to the
auditor who discovered the Galax sale in 1993; (2) deliberately characterized
Mr. Sabzali as a new employee (when he knew differently28) and initially
resisted the need for a legal opinion on the effect of the Galax transaction, both
in an effort to downplay the significance of the transaction; and (3) fired the
auditors who discovered the Galax transaction, not out of dissatisfaction with
their services, but rather because of their knowledge of that transaction. A jury
that has indulged these reasonable inferences could also infer that the
Defendant knew the U.S. entity was violating the law and was taking steps to
ensure that future transactions would go unquestioned.
178 The third major supporting inference is tied to the future policy memorandum,
which purported to set forth company policy regarding future sales to Cuba.
This document was key to the both sides' theory of the case. The government
urged one of two characterizations either the document was a "sham" in that
it was shown to the auditors but not actually issued to the salesman, or it was
"window-dressing" i.e., a policy statement to which the company could
point while simultaneously engaging in transactions with Cuba with the
participation of the U.S. entity. The defense, on the other hand, pointed to the
future policy memorandum as setting forth the Defendant's good-faith belief
that the U.K. entity could trade with Cuba so long as the U.S. entity was not
involved, and as evidence that, far from violating the law, he was trying to
abide by it. 29 The District Court rejected the sham characterization, see 268
F.Supp.2d at 418, and we agree there was insufficient evidence to support it.

The District Court also rejected the window-dressing characterization, and it is

here that we part company.
179 Attempting to understand the testimony related to the 1992 billing instruction in
light of the future policy memorandum, the District Court appears to have
viewed the latter as establishing a "new policy with respect to Cuba" i.e., one
that would counteract the 1992 billing instruction. 268 F.Supp.2d at 418.
Further, the District Court concluded there was "simply no evidence to support"
the window-dressing characterization, and that "[t]he fact that during the period
1994 through 1996, there were sales to Cuba that at times involved the United
States is not evidence that the [D]efendant intended the memorandum as a
cover when there is not other evidence that he knew about the sales. Nor was
there any evidence that [the Defendant] or anyone else followed up the
memorandum with either written or oral instructions that it was to be ignored."
Id. In our view, however, a rational jury viewing the evidence as a whole could
draw the inference that the future policy memorandum was window dressing.
180 The window dressing inference depends for its reasonableness on all of the
evidence put forth by the government in its case against the Defendant. It is not
a strong inference, but a jury that has indulged adverse inferences against the
Defendant related to the basic facts of the company, the billing instruction and
the events of the audit (as well as from the "our friends in the Caribbean
speech," the Sabzali performance review, the use of code words, and the postinvestigation events, all of which we examine below), it would not be
unreasonable to further infer that the future policy memorandum was intended
to put a public face on a behind-the-scenes agreement by the principal actors to
pursue sales to Cuba in violation of a known prohibition. While the District
Court placed significant emphasis on Mr. Grossman's cross-examination
testimony, such presented Grossman's understanding of the future policy
memorandum; it would be up to the jury to square his testimony with all of the
other evidence in determining if Grossman's understanding could be said to
reflect the Defendant's intent. To our mind, there are a number of ways to read
Mr. Grossman's testimony; to conclude that it may be read only to negate a
finding of intent by the Defendant is to overstep the judicial role. The court's
obligation in the context of Fed.R.Crim.P. 29 is to ensure that any inferences
arising from circumstantial evidence are reasonable, and we believe the
window dressing inference is that.
181 3. The "Our friends in the Caribbean" speech
182 Each side urged a different inference from the incident in which Mr. Sabzali,
following a whispered comment by the Defendant during a sales presentation,

substituted a reference to "the Caribbean" in place of his previous reference to

Cuba. The government offered this evidence to show the Defendant engaged in
an act of concealment from which one could infer guilty knowledge. The
defense countered that any adverse inferences were unreasonable given the
uncertainly as to what the Defendant said to Mr. Sabzali and when the incident
occurred. Instead, the defense urged an inference that the event, if it occurred in
1993 (i.e., after the issuance of the future policy memorandum), merely showed
the Defendant trying to comply with the law as he understood it and had
directed it be followed in the future policy memorandum. The District Court
rejected the inferences favored by either side as illogical, and moreover,
deemed them both speculative due to the uncertainty of the Defendant's
statement, his motive in speaking to Mr. Sabzali, and the date of the incident.
268 F.Supp.2d at 419.
183 The District Court's handling of this circumstantial evidence, which we believe
a rational jury could view as particularly strong against the Defendant, again
invaded the province of the jury. While one does not know exactly what the
Defendant said to Mr. Sabzali, a rational jury could reasonably infer the content
of that statement based on the reaction of both men. A rational jury viewing the
evidence as a whole could also draw a reasonable adverse inference as to the
Defendant's motive in speaking to his subordinate. Such inferences are not
merely speculative, but have a logical and convincing connection.
184 Additionally, the weight and value of this evidence should not have been
discounted due to uncertainty over when the incident occurred. A rational juror,
by choosing to believe Mr. Gentile's testimony as given at trial or as given
before the grand jury (and referenced during cross-examination at trial), could
have accepted that this event occurred in 1992 before the audit and related
events or in 1993 after the issuance of the future policy memorandum.
Critically, we believe that an inference of concealment would be reasonable in
conjunction with either date when put in the context of the evidence as a whole.
Furthermore, the inference of concealment becomes even more reasonable
when Mr. Sabzali's use of "Caribbean" during this incident as apparently
prompted by the Defendant30 is considered in light of the fact that many
other employees of The Bro-Tech Company, at the time of the speech or later,
understood "Caribbean" to be a code word for Cuba.
4. Mr. Sabzali's performance review
185 The government urged a number of related inferences from the evidence of Mr.
Sabzali's performance review and promotion mainly, that the Defendant was
aware of and approved of Mr. Sabzali's sales to Cuba, wanted to reward him for

those sales, and wanted such sales to continue as evidenced by the fact that,
despite being promoted to a marketing position, Mr. Sabzali was to continue
handling "the Caribbean sales." The defense pointed to testimony in the
government's case tending to undercut the reasonableness of such inferences
mainly, that Don Brodie, not the Defendant, was in charge of North American
affairs, thus making it more reasonable to infer that Don alone was responsible
for Mr. Sabzali's promotion, and that Mr. Opperman was promoted by the
Defendant to an international position, thus making it unreasonable to infer that
the Defendant had a hand in a North American-related promotion like Mr.
Sabzali's. In ruling on the motion for acquittal, the District Court acknowledged
that a rational juror could conclude that the reference to "Caribbean" in the
performance review meant Cuba, and that the Defendant read the performance
review, saw the reference and knew therefrom that The Bro-Tech Corporation
was selling product to Cuba. 268 F.Supp.2d at 419. However, the District Court
rejected any inference that the Defendant also knew, as a result, that the U.S.
entity (as opposed to solely the U.K. entity) was actually involved in those
sales. See id.
186 We agree that the evidence related to Mr. Sabzali's performance review would
support the inferences identified by the District Court, but believe there are
additional ones that might be drawn by a rational jury from the evidence as a
whole. Specifically, we believe a jury could reasonably infer that the Defendant
not only read the performance review, but approved of the underlying
promotion, knew it was based on Mr. Sabzali's success in transacting business
with Cuba, and intended to reward and thereby incentivize such sales in the
future. We further part company with the District Court in terms of what this
evidence may suggest about the Defendant's knowledge of the involvement of
the U.S. entity in such sales. As all the evidence suggests that Mr. Sabzali was a
star salesman in "the Caribbean," it would be not be an impermissible leap to
infer that an involved president of the company would know why that was so
and how it was occurring.
5. Use of code words
187 The government evidence shows a corporate culture pervaded by the use of
code words for Cuba, and such naturally gives rise to an inference of
concealment. See Macko, 994 F.2d at 1535 ("The one aspect of the operation
that they kept secret was the Cuban connection. A jury could reasonably
conclude that the defendants' secrecy about this single fact resulted from their
knowledge of the Cuban embargo"). Importantly, the use of code words was
attributed at least twice to the Defendant. First, in issuing the billing instruction
to Mr. Grossman (whether that occurred in 1992 or 1993, after or in

conjunction with the events of the audit), the Defendant asked Mr. Grossman to
instruct the billing department not to include any reference to Cuba on the face
of future invoices, and that instruction was given. A jury could reasonable
conclude that this instruction either instigated or at least contributed to an
overall corporate culture of deceit concerning transactions with Cuba. Second, it
was the Defendant whose actions before a room of subordinate salesmen
appear to have prompted Mr. Sabzali to refer to "Caribbean" instead of to Cuba.
Again, we believe that a rational jury could conclude that the Defendant's
reaction to Mr. Sabzali's use of the word Cuba either instigated or at least
attributed to the overall corporate culture of deceit. Both were actions of the
company's president, not some low-level employee whose behavior might be
less influential. The use of code words, when viewed in conjunction with the
other evidence in this case, tends to strengthen the overall inference that the
Defendant was a knowing and willful participant in the conspiracy to trade with
Cuba and understood that the U.S. entity was involved.
188 In an attempt to undermine the rationality of any adverse inference from the use
of code words, the defense pointed to the fact that there was, simultaneously,
rather open use of "Cuba" or "Havana" in company memorandum, sales
documents and expense reports. There was also testimony elicited on crossexamination from a former product manager for The Purolite Company to the
effect that he asked Mr. Sabzali not to use the word Cuba on anything sent to
him. Finally, there was testimony from Mr. Grossman that The Bro-Tech
Corporation had other customers in the Caribbean, although he could only
recall one. Again, this evidence does tend to weaken the inference of
concealment, but critically, does not render it completely unreasonable. The
weight to be assigned the use of code words in this prosecution on
circumstantial evidence is for the jury.
6. Post-investigation events
189 The government urged that the Sabzali memorandum of February 28, 1997,
showed that transactions involving Cuba conducted before the Customs agents'
visit a few weeks prior involved the U.S. entity. In other words, there would be
no need to explain in that memorandum "we now have to ship products from
U.K." if such had already been the procedure. Similarly, there would be no
need to explain that invoicing to the "customer in the Caribbean" would now be
done directly "from Ponty" unless prior procedure had involved the U.S. entity.
This memo was not carbon copied to the Defendant, but the government
contended that a reasonable juror viewing the evidence as a whole could infer
the Defendant's knowledge of its underlying premise (i.e., that sales before the
investigation were conducted with the participation of the U.S. entity). From

the fact that the Defendant was carbon-copied on Mr. Sabzali's February 28,
1997 and March 3, 1997 memoranda, the government urged an inference that
the Defendant read these documents and thereby knew of the continued
participation of the U.S. entity in the sales occurring in early 1997 from the fact
that Mr. Sabzali was now directing sales in "the Caribbean" from his office in
Bala Cynwyd. The participation of the U.S. entity was certainly less (or at least
on the decline) at this point, but as evidenced by these memoranda, still
involved the U.S. entity's Bala Cynwyd office. The District Court never
addressed whether any reasonable inferences against the Defendant arise from
this evidence, having merely noted in a footnote the existence of the two
memoranda carbon copied to the Defendant. Again, however, we believe that a
rational jury viewing the evidence as a whole could use them to draw adverse
inferences against the Defendant.
190 From the evidence of the Defendant's phone call to Ms. Graves, the government
urged an inference of concealment and therefore of knowledge of past
wrongdoing. The defense sought to undercut any adverse inference by noting a
lack of evidence to suggest that the Defendant knew Ms. Graves would be
interviewed by the government again and by urging that the critical statement
"if you can't remember the name, then you don't have anything to tell them"
be taken at face value as merely an innocent observation. In ruling on the
motion, the District Court acknowledged that the government's inference as to
the call to Ms. Graves was a "fair one," but ultimately assigned it no value,
reasoning: "[This] inference does not shed any light on whether the defendant
knew about the 1994 to 1996 shipments before or at the time they were
occurring. This conversation took place two years after the government had
started its investigation. [The Defendant] surely would have known about the
shipments at that point..." 268 F.Supp.2d at 419. We agree that an inference of
concealment is reasonable and further conclude that a rational jury viewing the
evidence as a whole could further infer, as the impetus for the act of calling
Ms. Graves, that the Defendant knew of the illegal sales activity during the
relevant time frame. It is just as reasonable (if not more so) to infer that the
Defendant was seeking to conceal illegal activity involving the U.S. entity that
predated the investigation of which he knew at the time he called Ms. Graves
than it is to conclude he was seeking to conceal acts which he now understood
to have been illegal. The mere fact that he chose to contact Ms. Graves in 1999
a woman who, by virtue of her former position as a customer sales
representative processing orders, might have seen orders involving transactions
with Cuba is itself important. Moreover, a rational jury viewing the
evidence as a whole could certainly decline to interpret the Defendant's advice
to Ms. Graves as benign, and instead view it as another instance of the
Defendant attempting to conceal the Cuban transactions.

191 The government also urged an inference of concealment from the Defendant's
reaction to Mr. Lugo's visit to the U.S. embassy. The District Court stated
unequivocally that "a rational juror could not make a negative inference here"
because "[t]he defendant was telling an employee to let him know if he is
called in again to the U.S. Embassy because of a concern `that U.S. officials
would be asking [Lugo] questions without company counsel present.'" 268
F.Supp.2d at 419-20 (emphasis added, brackets in the original). See also id. at
420 ("The Lugo discussion adds very little, if anything, to the government's
case."). We acknowledge the uncertainty on the record about the timing of Mr.
Lugo's visit to the embassy and whether the Defendant relayed his reaction
thereto directly to Mr. Lugo, or through Mr. Sabzali. For present purposes,
however, it is the reaction itself, coming sometime after the investigation was
underway and presumably known to the Defendant, that is the key to the
inference of concealment. A rational jury viewing the evidence as a whole need
not have accepted the Defendant's explanation that the instruction to Mr. Lugo
was borne solely of a concern with having counsel present. Instead, one could
reasonably conclude that, like the veiled instruction given to Ms. Graves, the
instruction to Mr. Lugo was motivated by a desire to conceal past wrongdoing.
D. Willful Blindness
192 As explained above, we are satisfied that a reasonable jury could conclude
beyond a reasonable doubt that the Defendant had actual knowledge of the law
violated, the facts constituting the offense and the illicit purpose of the
conspiracy. We also conclude that a reasonable jury could find the knowledge
requirements of the crime met on a theory of willful blindness. Overall, the
government's evidence paints a convincing picture of the Defendant as a
company president who deliberately stuck his head in the sand regarding the
involvement of the U.S. entity in the prohibited transactions. In particular, the
evidence related to the billing instruction could be viewed as the Defendant
trying to ensure that he never saw a direct reference to Cuba again, despite
intending the transactions to continue. The corporate culture wherein Cuba was
referred to by "code words," which a reasonable jury could attribute at least in
part to the conduct of the Defendant, only aided him in his effort to ignore what
should have been obvious. And while the Defendant repeatedly argues that the
future policy memorandum and the events of the audit show him trying to
discern and comply with the law, a jury might reasonably take note of the
Defendant's failure to ask the "natural follow-up question[s]" when, for
example, he did not question the reference to "Caribbean" on Mr. Sabzali's
performance review, and never instigated any follow-up to the events of the
1992 audit report (as he suggested to Mr. Coulter that he would) or to his own
instruction in the future policy memorandum, to ensure that his company was

not transacting business with SDNs or with Cuba. See Wert-Ruiz, 228 F.3d at
257 (stating, in context of conviction for money laundering, that "the fact that
[defendant] did not ask the natural follow-up question to determine the source
of those funds could be reasonably considered by a jury to be evidence of
willful blindness, especially when combined with the additional evidence").
The basic facts of the company structure also strengthen the willful blindness
inference in that it would not be unreasonable for a jury to infer that the
Defendant was motivated to deliberately avoid learning the facts related to his
company's trade with Cuba due to its profitability or his brother's involvement.
As in Stewart, where this Court concluded that a jury could have found that a
defendant former law partner, who argued that he lacked the intent to defraud
since he relied on solvency findings by third-party investigators, "could have
recognized the likelihood of insolvency yet deliberately avoided learning the
true facts," 185 F.3d at 126, we conclude that the Defendant in this case could
have recognized the likelihood that the U.S. entity was involved in illegal
transactions with Cuba "yet deliberately avoided learning the true facts."
IV. CONCLUSION
193 Deciding a motion for judgment of acquittal in a conspiracy case built entirely
on circumstantial evidence is not an easy task, and was made all the more
difficult in this case by the complexities of the underlying substantive law and
voluminous record. Nonetheless, we conclude that because each of the
interconnected inferences urged by the government is reasonable on the
evidence as a whole, the District Court erred in entering the judgment of
acquittal, and accordingly we will vacate that judgment and reinstate the jury
verdict subject to the District Court's conditional grant of a new trial.31

Notes:
1

TWEA Section 5(b) was amended in 1977 to limit the President's authority
once again to times of war, but the same law containing that limitation (i.e.,
The International Emergency Economic Powers Act ("IEEPA")) also grandfathered existing exercises of the President's national emergency authority
(including the American Cuban embargo) and permitted the President to extend
their exercise in one year intervals where in the national interest. The Cuban
Liberty and Democratic Solidarity Act (popularly known as LIBERTAD),
enacted in 1996, continued the Cuban embargo indefinitely and effectively
suspended the IEEPA's requirement that the President revisit the basis for the
American Cuban embargo each yearSee 22 U.S.C. 6021-6091; see also
United States v. Plummer, 221 F.3d 1298, 1307-1308 & n. 6 (11th Cir.2000)

(reviewing this history).

2

CACR 515.201(d) provides:

For the purposes of this part, the term `foreign country designated under this
part' and the term `designated foreign country' mean Cuba and the term
`effective date' and the term `effective date of this section' mean with respect to
Cuba, or any national thereof, 12:01 a.m., e.s.t., July 8, 1963.

31
3

C.F.R. 515.201(d) (2005)

Effective March 24, 2003, CACR 515.329 was revised to provide:
(c) Any corporation, partnership, association, or other organization organized
under the laws of the United States or of any State, territory, possession, or
district of the United States; and
(d) Any corporation, partnership, association, or other organization, wherever
organized or doing business, that is owned or controlled by persons specified in
paragraphs (a) or (c) of this section.

31

C.F.R. 515.329 (2005) (emphasis added)

The regulatory exemption was contained in CACR 515.559 ("Transactions by

American-owned or controlled foreign firms with Cuba") which provided:
(A) Specific licenses will be issued in appropriate cases for certain categories of
transactions between U.S.-owned or controlled firms in third countries and
Cuba, where local law requires, or policy in the third country favors, trade with
Cuba. The categories include: [listing categories] ...

31

C.F.R. 515.559 (1975)

CACR 515.559 currently provides, in pertinent part:

(a) Effective October 23, 1992, no specific licenses will be issued pursuant to
paragraph (b) of this section for transactions between U.S.-owned or controlled
firms in third countries and Cuba for the exportation to Cuba of commodities
produced in the authorized trade zone or for the importation of goods of Cuban
origin into countries in the authorized trade zone, unless, in addition to meeting
all requirements of paragraph (b), one or more of the following conditions are

satisfied:
(1) The contract underlying the proposed transaction was entered into prior to
October 23, 1992;
(2) The transaction is for the exportation of medicine or medical supplies from
a third country to Cuba, which shall not be restricted [except under certain laws
or in certain cases];
(3) The transaction is for the exportation of telecommunications equipment
from a third country, when the equipment is determined to be necessary for
efficient and adequate telecommunications service between the United States
and Cuba.
(b) Specific licenses will be issued in appropriate cases for certain categories of
transactions between U.S.-owned or controlled firms in third countries and
Cuba, where local law requires, or policy in the third country favors, trade with
Cuba. The categories include [listing categories]....
31

C.F.R. 515.559 (2005)

The American Cuban embargo's purported extraterritorial reach has been

criticized by numerous commentatorsSee, e.g., Clark, "Dealing with
Extraterritorial Sanctions," 20 U. PA. J. INT'L ECON. L. 61; Ellicott, "Between
a Rock and a Hard Place," 27 STET. L.REV. 1465; Kam S. Wong, "The Cuban
Democracy Act of 1992: The Extraterritorial Scope of Section 1706(a)," 14 U.
PA. J. INT'L BUS. L. 651 (Winter 1994).

Together, the Defendant, Don Brodie and The Bro-Tech Corporation owned
95% of the shares in Bro-Tech Limited; 5% of the shares were owned by a
third-party

Section 16 of the TWEA provides:

Whoever shall willfully violate any of the provisions of this Act [sections 1 to
6, 7 to 39 and 41 to 44 of this Appendix] or of any license, rule, or regulation
issued thereunder, and whoever shall willfully violate, neglect, or refuse to
comply with any order of the President issued in compliance with the
provisions of the Act [said sections] shall, upon conviction, be fined not more
than $1,000,000, or if a natural person, be fined not more than $100,000, or
imprisoned for not more than ten years, or both; and the officer, director, or

agent of any corporation who knowingly participates in such violation shall,

upon conviction, be fined not more than $100,000 or imprisoned for not more
than ten years or both.
50 U.S.C.App. 16(a) (West 2004) (brackets in the original).
9

A fifth defendant, John H. Dolan, former director of purchasing for The

Purolite Company with whom the Customs agents met in the Bala Cynwyd
office in February 1997, was also indicted for one count of making false
statements to government officials in violation of 18 U.S.C. 1001(a). Mr.
Dolan's trial was severed from that of his co-defendants, and he later pleaded
guilty to a superceding information charging one count of concealing
information on imported articles and containers in violation of 19 U.S.C.
1304(a). Mr. Dolan was sentenced to six months probation and fined $2,000

10

See Mannington Mills, Inc. v. Congoleum Corp., 595 F.2d 1287, 1293 (3d
Cir.1979) (explaining, in the context of an antitrust action, that "[t]he sovereign
compulsion defense is not principally concerned with the validity or legality of
the foreign government's order, but rather with whether it compelled the
American business to violate American antitrust law.").

11

Fed.R.Crim.P. 29(b) provides:

Reserving Decision. The court may reserve decision on the motion, proceed
with the trial (where the motion is made before the close of all the evidence),
submit the case to the jury, and decide the motion either before the jury returns
a verdict or after it returns a verdict of guilty or is discharged without having
returned a verdict. If the court reserves decision, it must decide the motion on
the basis of the evidence at the time the ruling was reserved.

12

See United States v. Stewart, 185 F.3d 112, 126 (3d Cir.1999).

13

Don Brodie, The Bro-Tech Corporation and Mr. Sabzali were acquitted on all
counts involving sales made in the time period of 1997-1999, four of the sales
made in 1996 and three of the sixteen counts involving expense-related
transactions

14

Subsequently, Don Brodie pleaded guilty to Count 36 of the indictment

(involving his approval of expenditures in the amount of $4,187 for Mr.
Sabzali's Cuba-related travel) and was sentenced to one year probation and
fined $10,000. The Bro-Tech Corporation also pleaded guilty to Count 36 of
the indictment, and was fined $250,000. Mr. Sabzali pleaded guilty to a
superceding information charging a violation of 18 U.S.C. 2 (aiding and

abetting) and 545 (smuggling goods into the United States), and was
sentenced to one year probation and fined $10,000
15

The Defendant urges this Court not to view the evidence in the light most
favorable to the government in conducting our review due to the prosecutorial
misconduct which,inter alia, gave rise to the grant of a new trial. We reject this
invitation as based on a fundamental misunderstanding of the standard, as this
Court is not viewing the evidence in the light most favorable to the jury verdict
entered below.

16

A senior enforcement investigations officer of OFAC, testifying for the

government, explained the term SDN, that Galax was an SDN, and that it had
been so designated in 1986See 31 C.F.R. 500.306 (defining "specially
designated national"); see also 31 C.F.R. Ch. V, App. A (2005) (listing Galax,
Inc. as an SDN).

17

But see infra. at 32-34, reviewing Grossman's testimony about transferring the
sale to the U.K. entity's books.

18

Also on cross-examination, Mr. Coulter explained that he had participated in a

telephone conversation during this same time period related to the Galax
transaction with someone at Coopers and Lybrand, which was then performing
audits for Bro-Tech Limited in the United Kingdom. The impetus for the
conversation was Deloitte & Touche's engagement to express a combined audit
for The Bro-Tech Corporation and Bro-Tech Limited for 1992, and Deloitte &
Touche's concern that there may be additional shipments to Cuba relevant to
the combined audit

19

This fact was important to the government, which urged an inference that the
switch in auditors was undertaken to punish Deloitte & Touche for finding and
focusing on the problematic Galax transaction and/or to ensure that The BroTech Corporation was not being serviced by auditors already aware of and
therefore more prone to scrutinize the company's transactions for Cuban ties

20

As explainedinfra.,"Caribbean" was generally understood and used by many

Bro-Tech/Purolite employees to refer to Cuba. On direct examination, Mr.
Grossman testified that he could recall only one other customer in the
Caribbean, and that he too understood Caribbean to mean Cuba.

21

As the District Court pointed out, 268 F.Supp.2d at 416 n. 3, there were
problems with Mr. Grossman's testimony in that he did not specifically clarify
that he had ever seen the Defendant's handwriting, and the defense was
apparently caught off-guard by the government's elicitation of this lay opinion
testimony on handwriting during the trial. However, because no objection to

this testimony was made at trial, we, like the District Court, will consider it
legitimate evidence for the jury to consider
22

Mr. Lugo testified that in September 1995, he was contacted by someone he

characterized as the international manager of the Purolite Company based in
Bala Cynwyd, and asked to help incorporate an arm of the Purolite Company in
Mexico. In 1996, Mr. Lugo "started as an employee of the Mexican entity"
which was owned "when it was created ... 50 percent by Mr. Don Brodie and
50 percent by [the Defendant]." A. 580 (Lugo, direct). Later, according to Mr.
Lugo, "98 percent of the shares were transferred to The Bro-Tech
Corporation."Id.

23

It is unclear from the record, and apparently unclear to Mr. Lugo himself,
exactly why he was contacted by the United States and asked to visit the
Embassy in Mexico City. He had, however, previously had two boxes of Cuban
cigars confiscated from him by the United States Customs Service in
Washington, D.C

24

Indeed as the Defendant states in his brief on appeal, "[t]he government

introduced evidence that, from 1994-1996, [The] Bro-Tech [Corporation]
engaged in transactions that ultimately involved Cuba. From 1997-1999,
however, [The] Bro-Tech [Corporation] did not engage in sales to Cuba.
Rather, sales to Cuba in 1997-1999 were handled by PIL [Purolite International
Limited] in the United Kingdom, without United States involvement." Brief of
Appellee at 10

25

The Defendant informs us in a footnote in his brief on appeal that "evidence in

the defense case demonstrated that [the Defendant] tolerated these transactions
only because he believed based on information from the British government
and Bro-Tech's outside counsel, Morgan Lewis [ & Bockius LLP] that it
would be illegal in Canada and in the United Kingdom to halt all such
transactions in deference to the United States embargo." Brief of Appellee at
12. As explained above, we do not review any evidence in the defense case in
assessing the propriety of the judgment of acquittal. However, we take note of
this footnote and of the fact (revealed to us by the government) that the Brodies
and The Bro-Tech Corporation have pending a legal malpractice action against
Morgan, Lewis & Bockius LLP, to stress that we appreciate the broad context
of this case, but do not deem it relevant to the present decision

26

The District Court also recognized that the evidence "establishe[d] that [the
Defendant] did know that it was illegal for the U.S. company to be involved in
sales to Cuba." 268 F.Supp.2d at 417. The District Court further reasoned that "
[i]f there were evidence ... that [the Defendant] knew about the involvement of

the U.S. company in some of the sales from 1994 through 1996, the Court will
assume that a rational jury could find that he knowingly and willfully joined the
conspiracy."Id. at 417. The District Court found insufficient evidence to
support the inference of such knowledge; examining the same evidence,
however, we find it sufficient to support that critical inference.
27

Additionally, although the government urges the inference that the Defendant
actually knew of the participation of the U.S. entity in the transactions
conducted by the U.K. entity and we find that inference reasonable, we believe
that a rational jury might also conclude from the evidence as a whole that the
Defendant's actions belie a good faith belief in the legality of the "trading
though the U.K. is ok" policy which he espoused as the basis for his defense

28

The District Court, finding "no evidence that Mr. Sabzali had been with the
company since 1990," emphatically rejected any inference that the Defendant
lied or somehow misrepresented the truth to the auditors in 1993 when he
characterized Mr. Sabzali as a "new" employeeSee 268 F.Supp.2d at 418 n. 6.
Such evidence is in the record however. Mr. Grossman testified on direct
examination that, by the time Mr. Grossman began his employment with the
company in January 1991, Mr. Sabzali was already working in the Canada
office. Additionally, the following exchange occurred during the crossexamination of Ms. Graves:
Q: ... From about 1990 until 1996, Mr. Sabzali was the sales manager at the
Purolite Canada office, is that correct?
A: Yes.
A. 906 (Graves, cross-examination). If a jury found on the basis of this
evidence that Mr. Sabzali had been with the company since at least 1990, it
would be no leap to infer that the Defendant, as an active participant in
company affairs, knew that Mr. Sabzali was not a "new" employee but
deliberately characterized him as such to downplay the significance of the
uncovered Galax transaction (in other words, to perhaps insinuate that Mr.
Sabzali did not know any better and the illegal transaction would not reoccur).

29

We believe that the text of the future policy memorandum reasonably could be
viewed by a jury as refuting the Defendant's claim that he did not know it was
illegal to ship Purolite product from the U.K. entity. It provides, in pertinent
part: "While it is proper to ship this order from the UK in terms of UK law, it is
contrary to USA policy and law to ship material of any kind to the island nation
of Cuba in violation of the U.S. embargo.... No shipment of Purolite

merchandise is to be shipped to, redirected to,or trans-shipped to Cuba."

(emphasis added). The term "transship" means "to transfer for further
transportation from one ship or conveyance to another." WEBSTER'S THIRD
NEW INTERNATIONAL DICTIONARY (G. & C. Merriam Co.1981). One
could infer that shipments of Purolite product, to the extent they were
physically shipped from the U.K. entity but otherwise handled in some manner
by the U.S. entity (i.e., through sales, processing, etc.), were "transshipped" and
hence under the proscription of both the future policy memorandum and the
American Cuban embargo.
30

We are not ourselves usurping the jury's role by insinuating that the Defendant
actually told Mr. Sabzali during the whispered conversation to use the term
Caribbean; we are merely suggesting that a rational juror could so infer or at
least infer that the Defendant said something less direct but equally meaningful
to Mr. Sabzali, who then himself chose the term Caribbean

31

Where a defendant has been acquitted on the ground of insufficient evidence to

support the conviction, and this Court vacates the judgment of acquittal, the
proper procedure is to reinstate the jury verdictSee Coleman, 811 F.2d at 805;
United States v. Dixon, 658 F.2d 181 (3d Cir.1981). We do so here, although
we recognize that the District Court has already granted the Defendant a new
trial pending the outcome of this appeal. If the Defendant is retried following
our reinstatement of the verdict, "it will be the result of his own motion for a
new trial, and not a process imposed upon him by the Government or this
court," Dixon, 658 F.2d at 187, and thus there will be no issue of double
jeopardy.