began in september two thousand and eight and in april two thousand and eleven during which they sold eight million on tax cigarettes and took a nine million on account of four dollars there was not nine million dollars in forfeitures the money wasn't  dance and what happened to it except portions operate that will forfeit it is not known my client was involved in about less than one tenth of the total cigarettes during this operation basically he bought cigarettes and june july and august of two thousand and nine had some kind of involvement in february of tan and then was arrested on eleven before another transaction took place the defense went to trial i want to stipulate a case because the issue that we were addressing was whether or not the a t f actions were are lawful under eighteen u s c twenty three forty one two d they have an exemption that allows them to possess on tax cigarettes it's against a lot of his ass sell distribute and so on on to twenty three forty two there are exemption is like the make controlled deliveries of pornography normally the way those cases happen is that the individual thinks they're buying something are actually going to the standard by boss they think they're selling something to another dealer and they're actually selling it to a federal agent as soon as the sale goes down if they get arrested as miller yes or is it your position does it make a difference that the cigarettes  i think that it excludes them so that when the a t f has them they have an exemption from the general prohibition that is consistent with all the other law enforcement agencies in dealing with contraband so it's not trivial i'm sorry it's not contraband while the a t f has possession i think it is contraband while they have it but i understand a statute to say that they have an exemption that makes it lawful them to possess it and they're not possessing contraband when they're doing it in the line of duty the same way the da gent who just bought a kilo of cocaine from the unsuspecting guy and arrest him that's still cocaine it's still illegal but he can have it and it's not against the law for him to have it or the secret service agents who bought the counterfeit money in miller they could buy it illegal to have it but it wasn't illegal for them to have it he isn't twenty three forty one two d definitional section it is a a definitional section of the statute not apply to twenty three forty two than i think it would and i would my position is as i indicated that the section creates an exemption if the exemption is under the postulate that you offer a definition that makes it non contraband back still doesn't allow the a i'm not sure i understand the distinction that you're trying to mint you've got a definitional section it says that the unlicensed cigarettes are not contraband in the hands of law enforcement officers and then you have twenty three forty two and allowing officials alone for seven officers to conduct undercover operations why would not the definitional exemption which makes the unlicensed cigarettes not contraband in their possession not extend to their undercover activities they can possess as all agents can contraband and if this is a definition one makes it non contraband to exempt them from criminal penalties when they take possession of it are such as seizure or when they buy it from unsuspecting counterfeit unlicensed tax untax cigarettes sellers which is the standard operation that's one thing none of that however  gives them the authority to sell and distribute and let major cigarettes walk up and down the east coast now because that section twenty three forty two make it unlawful for any person knowingly to ship transport  they're doing is they are selling what becomes contraband and allowing it to walk because as you indicated distribution is illegal and there's no exemption for that so if they're distributed and on that magic crossing of the line they become contraband then the a t f is letting contraband walk and they have sold it and they have let people who aren't licensed by it and they let it be distributed up and down the east coast and  furious they were watching sales they weren't selling us how'd you tell us how your argument about lending is contraband cigarette laws how does that help your client is criminal case because that is distribution in russell they provided to the drug makers a lawful chemical which was an illegal thing to do it and the green case where they ran the still for what two was the court went out its way to say that that individual had a callable claim of a due process violation how it helps my client is this the lower court ruled in footnote nine on page one sixty three of the appendix which is footnote not in his opinion that they don't need authorization that if they do something illegal in the line of duty it's ok no they're what they're doing is express lee sanctioned by the language of the statute which allows them down and distribute so for purposes of this provision unlicensed cigarettes are the functional equivalent of sugar they are legal in the ha distributors that make it contraband because they let it go there are no cases in the country that that you will find in any circuit are in any district court other than this one that i know of and i could be wrong because i'm wrong lots of times as you homegrown know but the point of it is that there's no case that has allowed them to distribute eight million units of contraband that become contraband when somebody takes it just like in the green case when they gave them the sugar the whiskey was illegal the circuit said you can't do that in a tweet case the third i'm sorry your honor it is the illegality occurred when they let it go and walk and make no effort to track it and allow it to float free in the community what they've done how can they sell are distributed without letting the way they do it in all kinds of drug cases gun cases machine gun cases silencer cases when the guy takes control over it cops come out of the woodwork and they get busted that's what they did in the godwin case with of pornography that was delivered that's the whole purpose that you have sanctioned anticipatory warrants what did you say when you did that you said we know they're going to get it we don't want the public to have it once we give it to them and they take it we want to be able to get in and snatch it up and that's what the anticipatory warrant is all about and that's why in the reverse thing in every bursting case the person thinks ah ha i'm getting the goods i've got a great price they take it they get busted and the stuff doesn't go anywhere and that's where they're wrong is in this case not the least of which to me at least as the nine million unaccounted for dollars we don't know where it went you know the case down in hampton just recently where like in this case they were married with local police they were working with local police some local policeman was doing who knows what with money so the a t f backed out now that was since our opening brief and we put it in our reply brief but who knows what happened here you know that the report said the money was given to a fairfax county police sergeant this was around the time of fast and furious we don't know what they're doing but whatever even if they're allowed to possession it's not contraband authorize them to sell and distribute because once they sell and distribute it becomes illegal and upon that act if it becomes illegal at that point then they are engaging and allowing crime to take place and therefore assuring it this isn't the undercover guy who is infiltrating the drug ring but he's not allowed if it's an extortion ring to beat people up if it's a pornography ring he's not allowed to film and distribute pornography he can be there and be the eyes and ears of the government as an agent archer cooperating individual but as you all know when you sign a cooperation agreement with a federal agency to be a cooperating in a visual a citizen you agree not to violate the law federal agents or allow to become distributors or aiding and abetting these distributors in this case even though my guy was a little is fry in the bunch of western one town if they're still aiding and abetting distribution they didn't follow it they didn't care where it went they didn't put be presented there's no g p s tracking they didn't have any idea what was going on with this stuff and there's been no case like that and that's where the problem is and when the court said in the lower court's decision that what they don't even need authorization because if they do it and the line of duty it's ok that's where they're dangerous and that's what this court recognized and milam counterfeit case for the printer that's what this third circuit recognized and twigs the ninth in green the supreme court and russell hampton doesn't count because that was an issue i'm sorry before your time spurs yes  if their distribution as you said judge is legal then what's happening is there's a legal commodity being distributed and it's being handled by my client and illegal way under ninety one it's the profit is for for the bill you can't have it both ways it's if it if he's handling a legal product in an illegal way then when he's doing that he is the plea is the core richard cook on the united states and was the court would like me to start with the due process issue i thought i'd start with before but your question where the laws somewhat less developed than on the due process question and the key issue here is there are two provisions and nine eighty one eighty two subsection a that applies to illegal goods and for that subsection you in calculating the surface appeal to the defendants a point of logistics or at a just in your way there somewhat there are some that it is a applies i think there is some surface appeal to the notion that will look cigarettes generally are legal products and so why isn't this governed by subsection b which is the lawful goods that are sold or provided in a legal manner and the answer to that is fairly straightforward i think and it follows from the language of eighteen u s c thirty two forty two a which is the stand that's the statute that prohibited the cigarette trafficking here and as the court was just discussing with the fence counsel when  and twenty three forty two a has a provision that covers receive a defendant who receives possesses sells distributes or purchases contraband cigarettes this  statue says receive contraband which means it must be contraband before their it in say possess and receive contraband it is not contraband until they possess it covers i think every part of of every part of this defendant's contact with these cigarettes because the statutory language covers specifically received possess sell the strip you or purchase and because the defendant doesn't have th express exemption from the definition of contraband cigarettes and twenty three forty two subsection two when he receives them he's not law enforcement and they are quantity of cigarettes that meets the standard for being ten thousand cigarettes that meets the standard for being contraband so as soon as he grabs on to him they are there he's receiving contrabands cigarettes an possessing them and then we have a fine from the district judge that they're sold up in new york you know aren't and it's actually with respect to both components the forfeiture compel due process component rise and fall together do they know that because it devolves to the definition of the term contraband which is inextricably linked to the possessor the saying it's a little bit unusual in that the same with that generally i mean i think if there is a subsidy a specific statutory authorization on the due process side use that still doesn't automatically equal a due process violation right there's another element and i was hoping you would address definition of it's not prohibited what they're doing is not an illegal act and then we have as the district court noted specific statutory  authorization for police for the a t f to conduct undercover operative ration is included in operating businesses and i think it's reasonable to conclude from that that undercover operations in this context  typically be dealing with people who are conducting criminal enterprises and so running a business dealing with an undercover operation is going to involve illegal conduct also i think in this context  what we're dealing with is is a crime that is at its core economic in nature and the government is trying to obtain and prevent attacks last trying to recoup money that's being lost to the state and you can against for those defendants ranging from about seven million to nine million for each of the states where or for the states where they were depriving them of tax revenue so and the money being seized at the very end of the operation when they arrest everyone and there's the defendant show up with cash to buy cigarettes and those cigarette sales are completed and they have the cash seize that is being applied to the states so this is not a an operation where it's just like a big money making venture for the a t f i mean the defendant says other making profit the district court ultimately didn't make a finding one way or the other about whether this was whether the f was making a profit but from a grand the big picture stepping back with the a t f is trying to do is make an investment and enforcement program that at the end of the day on balance is going to process question i understand the duca process allegation to derive from the previous supreme court suggestion that conduct law enforcement agen can be so outrageous as to bar the government from seeking from invoking traditional processes to to taint conviction in that the seminal case that the defendant i believe referred to there was a challenge to the actions of an undercover agent who supplied the defendant with a key ingredient for the making of investment as i'm sure you know couldn't i think that is the argument that mr assange is making and i was hoping he would respond directly to that sure i think why in your view that level of didn't rise to the level of due process violation and then in the hampton case that came after russell the supreme court said in a fractured opinion that involved there was actually in fact dispute about whether an informant or an agent you know a person who wasn't a law enforcement officer but working on behalf of the government whether that person had actually supplied heroin but the case as it was decided and supreme court there was an assumption that in fact what happened is the that a person working on behalf of the government had provided heroin that was then sold and the supreme court held that that also was not a due process violation and there was a difference and between justice rehnquist opinion for three justices and justice howells opinion concurring with the concurring opinion by justice powell generally treated as as the controlling opinion in that case and and just powell writing concluded that there was still room for a due process violation and i think this court's cases since then have continued to say there is a you know a possibility of being able to bring a claim of the due process clause saying that the government's conduct was so outrageous but the courts have consistently said both supreme court in this corridor and other courts that simply supplying contraband doesn't rise to the level of a due process violation there are cases involving you know agents who have gotten involved and improper relationships with defendants and that sort of thing that have come closer to due process violations but conducting undercover sting operations with contraband as as a never and this court of the supreme court been deemed a due process violation you know is lop on the fact that they could conduct undercover operations would be broad enough to include what we have here is they're actually selling it correct right what if you if you base it on that  hypothetical if they decide in this operation that is very likely that people involved in selling and buying the cigarettes would know agents that they would have to use someone who's otherwise sells these cigarettes as a go between could they give it to a third party and let that third parties sell would it be contraband then if a third party is selling it to  i think that would be a closer question there's an a calm range of context the issue of when somebody is a government agent for example under the fifth or sixth amendment and interrogation contacts or  and in the context of deciding whether the violation of a constitutional right there is often a very fact intensive inquiry about whether to kill a person is becoming a government agent point and so i think that similarly in this context whether somebody was truly essentially deputized by the government for the purposes of the government's exercise of its powers would depend on the circumstances or whether that person is somebody who is essentially a coconspirator who's going to have to depend on the government to you know the green not to prosecute them basically for having  gauged and criminal conduct and it's often the case that you'll have somebody who's participating in a scheme and they're arrested perhaps on other charges and they the you know tell the government what they've done in this other schemas as it's cooperation and effort and leniency in their prior conduct of course that would not be something that would be deemed you know authorized by the government but if they were then you know given a wire and and senate and completed deal then i think that it could very well be deemed a government agent situation and in that hypothetical it would raise questions with respect to the liability of the intermediary would it raise questions with respect to the liability of the ultimate purchaser no i don't think so because they are there don't have any authorization here at all i mean i think that one simple analogy to that makes the it seem a little less strange that you have this dividing line of where soon as the cigarettes leave the city the a t f hands and then after the hands of the defendants that it's illegal you know you could have a warehouse owned by philip morris with cigarettes in it they've got permission of course those are contraband and so it's it's you know this is not an unusual i think what you suggested at all stolen goods a contraband well i mean here we've got a definition of contraband cigarettes that's dealing specifically with with cigarettes and so i wouldn't say that you know stereos or televisions or that kind of thing is necessarily going to straightforwardly work through the same you know analytical structure we're here for afford it and judge didn't order it the other people's restitution is never going to be paid the government's never going to pay the tax authorities involved had no contact with them whatsoever and made no effort to let them know what was going on in so far as twenty three forty one day is concerned i think if we read the second part of the last part of that sentence what sad is that possession which is exempt if they're having possession of them in connection with the performance of their duty so they law are not contraband if they're being possessed for that purpose when they change in their mind the attitude and the intent and the goal from possession in the performance of their duty to distribution even before they pick them up and sell them at that point they become contraband because there's no exemption for distribution whatsoever they may only possess and so once they determine that they're going to distribute then that becomes a criminal act it's either direct criminal act a conspiracy or aiding and abetting other people involved in crime itself let's assume is correct how does it help your client unless you can convince us that the very act is aggrieved as in you when you had an opportunity to make that argument was it seemed to be you were going down the path of because what they did cigarettes kill four hundred fifty thousand people a year more than heroin crack p c p sure side murder guns cars everything all combined and they let eight million of them loose facilitated criminal conduct in twig when they gave him a farmhouse that wasn't a crime and they gave him glassware that wasn't a crime when they gave him chemicals that wasn't a crime but in twigg the third circuit said look what they're doing is fostering criminal conduct and they can't go that far the same thing happened in green the same thing was opined by this court for the printer in the milan conference counterfeiting case the guys like milan and piri on how who were going to buy the counterfeit that's different than the printer where the government was cost ring the criminal conduct there is a limit and this case shows that limit if this this isn't a sample this is a long term operation to distribute millions where the government cannot fausto or criminal conduct just to foster criminal conduct and that's what they did here but we don't do that through entrapment protection when you don't make that claim you do know this is not entrapment that is why and there are three cases third ninth and fourth that i cite that recognize any non entrapment cases there is a due process component which courts can and should apply and this court is one of those courts that recognize it and set it and they set it in a case where the defendant to whom it applied was not even in the appeal because he did not appeal and the supreme court said so on russell hampton it isn't i don't think a pleasurable because if you read it the defense issue was entrapment and it wasn't entrapment and that's not what we're raising here we're saying that under due process of law if you go back to almost sad when the government engages in illegal conduct and the government sets the example of criminal conduct is ok dad i commend what you're dealing with here were fairfax county police and a t f and so what you're dealing is there distributor if they had bothered to follow them if they had done as they do it in any old chemical cases for p c p and that would it would have changed anything that your client is it doesn't change what my client did the due process argument isn't that the defendant is blameless the due process argument is that the government has crossed the line if this doesn't cross the line and you read footnote nine written by the judge as to what can be done and these kinds of cases he says and the government argues and they want you to endorse that even if they do not have a fart and they're caught their conduct would otherwise be unlawful of committed by ordinary citizens there is no need for them to have specific authority as is present here in order for those office to engage in acts during the course of their official duties that would otherwise amount to criminal conduct that's the promise that the government is urging that's what they want you to endorse this was a criminal conspiracy created and operated by the government they didn't want to go up the chain to the money they didn't want to go down the to the sellers they didn't care where when our who got it cigarettes are controlled by the f d a cigarettes sixteen year old kid i can't give a sixteen year old kid a carton of cigarettes i give my sixteen year old  the flap of the tap and colorado let him so marijuana cause it's legal in colorado and washington state the whole concept here is that they went over the line in the size of their operation in the scope of it in the way they handled it and they fostered a distribution conspiracy that they created that they fostered that they put out they put out the cards they put out the advertising in yonkers they took people then they moved it down to virginia and they advertised and they said they wanted to do this business and that's what they did that's not lawful that's the government setting the example of criminality and parsing the statute from where i said and way i read it is possession while in possession ok for agents when they change their mind to distribution it's not covered even if i'm wrong in that which i don't think i am with all due respect to judge duncan the point of it is that they can't do this kind of conduct the courts have to say no this defendant no guns no drugs nothing just cigarettes there were five defendants in a two year operation they didn't get to that though day goes on the little shops that sold it they didn't get to the money people either before for sure thing if it's legal for me to have it and has legal and i can give it to you and that's not a crime then when i get it if i don't get the tax stamp that's when i commit the crime and i handed it legally if i bought it from them with a cheap price and then i go get the tax stamp let's say haasan did that then when he got the tax stamp it became legal so it's a legal product handle illegally by not getting the tax stamp on it which he could have done in new york so we're in a dangerous situation in this case and the precedent that you cite is going to be very well considered by law enforcement how far can they go and what can they do and there's got to be a limit and in this case they crossed it is just huge and long term and no control thank you thank you very much will come down a great council