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United States v. Helmy

filed: January 21, 1992.


Appeal from the United States District Court for the Eastern District of California. D.C. No. CR 88-0201-RAR. D.C. No. CR 88-0201-RAR. Raul A. Ramirez, District Judge, Presiding. Original Opinion Reported at,.

Before: Alfred T. Goodwin, David R. Thompson and Diarmuid F. O'Scannlain, Circuit Judges. Opinion by Judge Goodwin.

Author: Goodwin


GOODWIN, Circuit Judge:

Defendants-Appellants Dr. Abdelkader Helmy and James E. Huffman appeal their respective sentences. Helmy appeals his sentence of forty-six months in prison, a fine of $358,690.00, and a three year period of supervised release following his guilty plea to a one count violation of the Arms Export Control Act ("A.E.C.A."), 22 U.S.C. § 2778. Huffman appeals his sentence of forty-one months in prison, a fine of $7,500, and a three year period of supervised release following his guilty plea to a one count violation of conspiracy to export munitions items without the required license, 18 U.S.C. § 371. We affirm Helmy's sentence and vacate Huffman's.


A. Course of Proceedings

On June 9, 1989, Helmy pled guilty to illegally exporting 436 pounds of an ablative carbon composite fabric called MX-4926, a critical component in the construction of rocket nozzles, without a State Department license. On June 23, 1989, Huffman pled guilty to conspiracy to export MX-4926, an artificial rubber called HTPB, and two parabolic UHF band rocket antennae.

Both defendants were sentenced on December 5, 1989. The district court determined that both Helmy and Huffman deserved base offense levels of 22 because their crimes involved sophisticated weaponry. See United States Sentencing Guidelines ("U.S.S.G.") § 2M5.2 (1989). With respect to Helmy, the court gave him a three point upward adjustment for supervising a criminal activity involving five or more participants. The court also gave Helmy a two point downward adjustment for accepting responsibility, so that his final offense level was 23. Because Helmy had no prior criminal record, his criminal history category was I and his sentence of 46 months - in addition to his fine and period of supervised release - was the shortest possible under the guidelines.

With respect to Huffman, the court gave him a three point upward adjustment for managing a criminal activity involving five or more participants and a two point downward departure for accepting responsibility. The court also reduced Huffman's offense level by two additional points because it found that giving him three points for being a criminal manager overstated the seriousness of his involvement. Huffman's total offense level was thus 21. Because Huffman had no criminal record, his criminal history category was I and his sentence of 41 months - in addition to his fine and supervised release - was in the middle of the guideline range.

B. Statement of Facts

In 1984, Egypt's Ministry of Defense entered into an agreement with Iraq and Argentina to develop an intermediate range ballistic missile that would have a range and payload capacity similar to that of the Pershing missile. The missile, referred to as the Condor II, was to be funded by Iraq, tested in Argentina, and engineered by Egypt.

Helmy and Huffman first became acquainted in 1983 while Helmy was working for Teledyne, McCormick, Selph ("Teledyne") as the chief scientist on a gun project and Huffman was the company's midwest marketing representative. In July 1984, Helmy and Huffman went to Egypt, and Helmy arranged for Huffman to meet several Egyptian military officials. Khairat, the coordinator for the Condor II project and a colonel in the Egyptian military, talked with Huffman about purchasing inertial guidance systems for the Condor II.*fn1

In 1987 and 1988, Helmy and Huffman conspired to violate the A.E.C.A. and the Export Administration Act of 1979 ("E.A.A."), 50 U.S.C. §§ 2401-20, by attempting to ship commodities on the United States Munitions List, 22 C.F.R. § 121.1 (1989), to Egypt without first obtaining export licenses. The commodities included, inter alia, MX-4926, HTPB, and parabolic antennae, all of which are important components of tactical missile systems. In addition to the conspiracy charges, the government claims that certain other materials were purchased by Helmy and flown to Egypt in various shipments.

In early 1988, Col. Khairat arranged to have $1,000,000 wired to Helmy's California bank account to pay for the materials Helmy was purchasing. When Helmy was informed that the procurement effort was proceeding too slowly, he suggested using Huffman to help export the materials because of Huffman's prior experience and earlier efforts on behalf of the Egyptian government. Helmy and Huffman reached an agreement whereby Helmy would cover all the expenses, and Huffman would receive 10% of the gross profits while Helmy would retain 5% of such profits. Huffman, in turn, would be responsible for ordering the materials and arranging for their transportation.

The government claims the shipping method used by Helmy and Huffman was specifically designed to circumvent United States customs laws.*fn2 By May 1, 1988, Huffman had contacted suppliers of the materials designated by Helmy (including MX-4926 and HTPB), obtained price quotations, and formulated a purchasing plan. Shortly thereafter, Huffman contacted DeLong, the owner of D & N Packing, about receiving, storing, and reshipping several items. Huffman never divulged the identity of the ultimate consignee, and he asked that several items be consolidated into unmarked boxes and that chemical drums be painted black to conceal their identifying markings. When D & N Packing workers refused to paint over the labels, Huffman's son did so. Huffman then mailed nine drums of chemicals aboard Egyptian military transports.

In coordinating the shipment of these materials, Huffman worked with members of the Egyptian Military Attache's Office and the Egyptian Procurement Office ("EPO"). On June 1, 1988, Huffman went to Admiral Abd Elrahin Elgohary, the head of the EPO, to discuss further shipments. Elgohary pointed out the problems inherent in concealing the materials and shipping them without export licenses. After Huffman called Helmy to explain the problem, Helmy spoke with Elgohary and agreed to provide fraudulent invoices to cover the materials.

Helmy then contacted Col. Khairat to discuss the problem. Helmy explained that although Elgohary had tried to insist on export licenses, the desired items were controlled and could not be exported outside the United States. Helmy further stated that if government authorities knew that he was buying the desired items for export purposes, he would be incarcerated. Helmy then explained to Col. Khairat the care he and Huffman had taken to conceal their exports.

Among the critical needs for the Condor II project was a large quantity of the carbon phenolic fabric MX-4926, which is manufactured by the Fiberite Corporation. Helmy intended to obtain this material for use in manufacturing the flexible rocket nozzles that the Condor II missile required for maneuverability. Although appellants claim that certain carbon composite materials are used in a wide variety of contexts, the government contends that the only practical use of MX-4926 is in the construction of rocket nozzles.

Helmy made the initial contacts with Fiberite in early April 1988, and he then asked for information on ablative components. After a meeting with Helmy, Huffman assumed responsibility for obtaining the phenolic fabric. On May 4, 1988, Huffman ordered 436 pounds of MX-4926 from Fiberite; soon thereafter, Huffman mailed a check for $20,949.80 to cover the cost of the material.

In June 1988, Fiberite shipped the material to D & N Packing. The bill of lading that accompanied the fabric and the shipping containers were stamped with notices stating that the contents were subject to export controls. Helmy and Huffman then had several Discussions concerning how they were going to smuggle the MX-4926 past Customs and their fears of detection.

Customs agents delivered the MX-4926 to D & N Packing on June 14, 1988. Because the material had to be refrigerated and D & N Packing had no cold storage facilities, Huffman asked DeLong to locate a suitable facility nearby. Upon arrival of the MX-4926, D & N Packing employees took the material to a beer dock. After his initial attempts to arrange for a refrigerated truck to transport the MX-4926 failed, Huffman successfully had the materials delivered to Maryland on June 23, where they were placed in the D.F. Young warehouse. On June 25, D.F. Young employees took the boxes containing the MX-4926 and other materials to a waiting Egyptian C-130 aircraft for loading. Customs agents then seized the materials and arrested Helmy and Huffman.*fn3


With respect to Helmy, we consider four issues. First, was U.S.S.G. § 2M5.2, which at the time of appellants' sentencing specified a base offense level of 22 where "sophisticated weaponry was involved [in illegal export]," unconstitutionally vague? Second, should this court employ a de novo standard when reviewing the district court's application of the guidelines? Third, did the district court abuse its discretion in finding that "fiberite carbonite fabric" is a sophisticated weapon under U.S.S.G. § 2M5.2? Fourth, does the rule of ...

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