In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 13-2368

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

HAITHAM MOHAMED,

Defendant-Appellant.

____________________

Appeal from the United States District Court for the

Southern District of Indiana, Indianapolis Division.

No. 1:12-CR-00097-SEB-MJD — Sarah Evans Barker, Judge.

____________________

ARGUED APRIL 15, 2014 — DECIDED JULY 22, 2014

____________________

Before RIPPLE and WILLIAMS, Circuit Judges, and ST. EVE,

District Judge.*

ST. EVE, District Judge. On March 26, 2013, a jury convicted Haitham Mohamed of one count of knowingly transporting and possessing contraband cigarettes in violation of 

18 U.S.C. § 2342(a). Mr. Mohamed appeals his conviction, 

 

* The Honorable Amy J. St. Eve, District Judge for the United States District Court, Northern District of Illinois, sitting by designation.
2 No. 13-2368

claiming that the district court erred in denying his motions 

for judgment of acquittal pursuant to Federal Rule of Criminal Procedure 29. For the reasons set forth in the following 

opinion, we agree and reverse the district court’s decision.

BACKGROUND

On the evening of June 6, 2012, Officer Christopher 

Helmer, a patrolman with the Speedway Police Department, 

pulled over Mr. Mohamed for running a red light in Speedway, Indiana near Indianapolis. Upon searching Mr. Mohamed’s van,1 Officer Helmer found 1,170 packs of Newport-brand cigarettes (totaling 23,400 cigarettes) not bearing

Indiana tax stamps. A federal grand jury indicted Mr. Mohamed with one count of knowingly transporting and possessing contraband cigarettes in violation of section 2342(a) 

of the Contraband Cigarette Trafficking Act (“CCTA”), 

which makes it unlawful for “any person knowingly to ship, 

transport, receive, possess, sell, distribute, or purchase contraband cigarettes.” See 18 U.S.C. § 2342(a). The CCTA defines “contraband cigarettes” with reference to state law: 

“[C]ontraband cigarettes” means a quantity in excess 

of 10,000 cigarettes, which bear no evidence of the 

payment of applicable State or local cigarette taxes in 

the State or locality where such cigarettes are found, if 

the State or local government requires a stamp, impression, or other indication to be placed on packages 

or other containers of cigarettes to evidence payment 

of cigarette taxes, and which are in the possession of 

any person other than [certain exceptions].

 

1 Mr. Mohamed does not challenge the constitutionality of the search.
No. 13-2368 3

18 U.S.C. § 2341(2). Mr. Mohamed pleaded not guilty to the 

offense, and the case proceeded to trial.

The government called two witnesses at trial, Special 

Agent Daniel Neie of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) and Officer Helmer of the 

Speedway Police Department. Special Agent Neie explained 

to the jury how cigarette traffickers typically operate.2 Disparities in state cigarette tax rates, which range from $0.17 

per pack in Missouri to $4.35 per pack in New York, allow 

cigarette traffickers to profit by buying cigarettes in low-tax 

states and reselling them in high-tax states without paying 

the latter state’s taxes. As a result of the tax disparity, the 

cigarette trafficker can sell the cigarettes below the market 

price while still earning a profit; the greater the tax disparity, 

the greater the trafficker’s potential profits. The state in 

which the cigarette trafficker sells the cigarettes, meanwhile,

loses out on the tax revenue it would have received from a 

legal sale. Special Agent Neie testified that because retailers 

often limit the amount of cigarettes a customer can buy at 

one time to ensure that they will have sufficient inventory 

for other customers, traffickers often must travel from retailer to retailer until they accumulate the total number of cigarettes they want. Special Agent Neie further testified based 

on his training and experience that Marlboros and Newports

are the most frequently trafficked brands of cigarettes.

 

2 See generally U.S. DEP’T OF JUSTICE, OFFICE OF THE INSPECTOR GENERAL, I2009-005, THE BUREAU OF ALCOHOL, TOBACCO, FIREARMS AND EXPLOSIVES’

EFFORTS TO PREVENT THE DIVERSION OF TOBACCO i-ii (2009), available at 

http://www.justice.gov/oig/reports/ATF/e0905.pdf (last visited July 22, 

2014).
4 No. 13-2368

With respect to Mr. Mohamed in particular, Special 

Agent Neie testified that the cigarette tax rate in Kentucky, 

where Mr. Mohamed had bought the cigarettes at issue, is 

$0.60 per pack, whereas the cigarette tax rate in Indiana, 

where the cigarettes were found, is $0.995 per pack. Thus, if 

Mr. Mohamed sold all 1,170 packs in his possession in Indiana, he stood to make a profit of up to $462.15. Special Agent 

Neie acknowledged that many states—including New York 

($4.35 per pack) and Washington ($3.25 per pack)—had

higher cigarette taxes than Indiana, and Mr. Mohamed 

would have increased his potential profit by selling the cigarettes at issue in those states rather than Indiana. Finally, 

Special Agent Neie confirmed that none of the cartons of 

cigarettes found in Mr. Mohamed’s van was missing cigarettes; all 23,400 cigarettes were accounted for and remained 

in their original packs.

Next, Officer Helmer testified about his June 6, 2012 traffic stop involving Mr. Mohamed. Officer Helmer testified 

that he pulled over Mr. Mohamed for running a red light at 

approximately 6:57 p.m. Mr. Mohamed, who lives in Indianapolis, informed Officer Helmer that he was returning home 

after visiting friends in Kentucky. When Officer Helmer

searched Mr. Mohamed’s van, he found 117 cartons (with 

ten packs per carton) of Newport cigarettes bearing Kentucky tax stamps. None of the cigarette packs had Indiana 

tax stamps evidencing the payment of Indiana’s cigarette 

tax. Officer Helmer also found in Mr. Mohamed’s van receipts showing purchases of Newport cigarettes from several 

Kentucky gas stations earlier that day and a black trash bag 

containing over $15,000 in cash. When Officer Helmer asked 

Mr. Mohamed how much he makes selling cigarettes, Mr. 

Mohamed answered “not much.”
No. 13-2368 5

The parties stipulated at trial that Mr. Mohamed did not 

fall within one of the exceptions contained in the CCTA’s 

definition of “contraband cigarettes.” See 18 U.S.C. 

§ 2341(2)(A)-(D). Specifically, the parties stipulated that the 

State of Indiana and the United States did not have any records indicating that, as of June 6, 2012, Mr. Mohamed held a 

permit as a manufacturer of tobacco products, an export 

warehouse proprietor, or a person operating a customs 

bonded warehouse; nor did they have records indicating 

that Mr. Mohamed ever served as an officer, employee, or 

other agent of the State of Indiana or the United States. The 

parties also stipulated that the State of Indiana had no records indicating that Mr. Mohamed was engaged in business 

as a common carrier or was licensed or otherwise authorized 

to account for and pay Indiana cigarette taxes as of June 6, 

2012.

At the close of the government’s evidence, Mr. Mohamed’s counsel moved for a judgment of acquittal under 

Federal Rule of Criminal Procedure 29. The district court denied the Rule 29 motion, finding that the government had 

presented sufficient evidence to allow a reasonable jury to 

conclude that Mr. Mohamed was guilty as charged. Mr. Mohamed elected not to call any witnesses or present any evidence in his defense, as is his right.

During closing arguments, defense counsel admitted that 

Mr. Mohamed had more than 10,000 cigarettes not bearing

Indiana tax stamps in his possession but argued that the 

government failed to prove that Indiana law required the 

cigarettes to bear Indiana tax stamps in order to make the 

cigarettes “contraband” under the CCTA. (R. 25 at 9-14.) Defense counsel asserted that the government presented no ev-
6 No. 13-2368

idence that the cigarettes had been “sold, used, consumed, 

handled, or distributed” within Indiana, and, therefore, the 

government failed to prove that Indiana’s cigarette tax applied to the cigarettes at the time of seizure. (Id. at 10–13.)

Moreover, defense counsel asserted, it made no economic 

sense for Mr. Mohamed to sell the cigarettes in Indiana, 

where he stood to gain only $462.15, minus the cost of gas, 

travel, and food. (Id. at 13.) On rebuttal, the government contended that it had proven everything necessary to convict 

Mr. Mohamed of the offense:

When Mr. Mohamed was arrested in Indiana, he stated in Indiana that he didn’t make much money buying these cigarettes. When he was arrested in Indiana, 

he had a bag full of cash in his car, in Indiana. And he 

had twice the legal limit of cigarettes from out of 

state. You can look at these facts and you can infer 

that everything that needs to be proven for this offense to be complete has, in fact, been proven, and 

that when Officer Helmer pulled Haitham Mohamed 

over, Haitham Mohamed was already committing the 

crime of knowingly transporting or possessing those 

cigarettes, and I ask you to find him guilty.

(Id. at 16.)

Following closing arguments, the district court instructed 

the jury on what constitutes “contraband cigarettes” under 

the CCTA and on the application of Indiana’s cigarette tax 

laws. The jury instruction on the definition of “contraband 

cigarettes” mirrored the CCTA’s definition of the term. See 

18 U.S.C. § 2341(2). The instruction regarding the applicability of Indiana’s cigarette tax stated as follows:
No. 13-2368 7

Indiana law requires a stamp to be placed on packages or other containers of cigarettes to prove that applicable taxes have been paid. Indiana’s cigarette taxes are levied on all cigarettes sold, used, consumed, 

handled, or distributed within the State of Indiana.

With respect to this law, the following definitions apply:

• to “sell” means the transfer of property for a 

price;

• to “use” means to bring or put into service or 

action;

• to “consume” means to possess for use or to 

use a cigarette or cigarettes for the purpose of 

smoking;

• to “handle” means to engage in selling, buying, 

or distributing; and 

• to “distribute” means to divide among several 

or many.

(Jury Instruction No. 10.)3

The jury appears to have struggled in applying these instructions. During deliberations, the jury submitted three 

questions to the district court. First, the jury asked whether 

“more than 10,000 cigarettes being transported into Indiana 

from another state without paying [Indiana’s cigarette] tax 

[is] enough to be called contraband?” Second, the jury asked, 

“Is the question at hand just that [Mr. Mohamed] had 

10,000+ [cigarettes] and crossed state lines, or do we need to 

 

3 Neither party objected to these instructions at trial or argues on appeal 

that the instructions were erroneous.
8 No. 13-2368

consider intent of what he planned to do with them once he 

crossed the state line? Sell, distribute, etc.?” Third, the jury 

asked, “In the definition of ‘handled,’ is ‘buying’ applicable 

even if [the cigarettes] are bought in Kentucky? Can we see 

the entire copy of title 18 U.S. Code Section 2342(a)[?]” The 

district court judge responded to the jury’s questions in writing, informing the jurors that she could not provide the information they had requested. The judge instructed the jurors to review the jury instructions and the evidence at trial 

and discuss the issues they had raised with the court in their 

continued deliberations.

The jury ultimately found Mr. Mohamed guilty of knowingly transporting or possessing contraband cigarettes in violation of the CCTA. After the jury rendered its verdict, defense counsel renewed Mr. Mohamed’s Rule 29 motion for 

judgment of acquittal, which the district court again denied.

STANDARD OF REVIEW

We review de novo the district court’s denial of Mr. Mohamed’s Rule 29 motion for acquittal. See United States v. Foley, 740 F.3d 1079, 1082 (7th Cir. 2014); United States v. Seidling, 737 F.3d 1155, 1159 (7th Cir. 2013). Under Rule 29, 

“[a]fter the government closes its evidence or after the close 

of all the evidence, the court on the defendant’s motion must 

enter a judgment of acquittal of any offense for which the 

evidence is insufficient to sustain a conviction.” Fed. R. 

Crim. P. 29(a). “In considering challenges to the sufficiency 

of the evidence, we view the evidence in the light most favorable to the prosecution, and then ask whether any rational trier of fact could have found the essential elements of a 

crime beyond a reasonable doubt.” Foley, 740 F.3d at 1082–83 

(internal quotation marks omitted) (quoting United States v. 
No. 13-2368 9

Boender, 649 F.3d 650, 654 (7th Cir. 2011)). “[W]e ‘defer to the 

credibility determination of the jury[] and overturn a verdict 

only when the record contains no evidence, regardless of 

how it is weighed, from which the jury could find guilt beyond a reasonable doubt.’” United States v. Torres-Chavez, 744 

F.3d 988, 993 (7th Cir. 2014) (second alteration in original) 

(quoting United States v. Blassingame, 197 F.3d 271, 284 (7th 

Cir. 1999)).

ANALYSIS

I. The Contraband Cigarette Trafficking Act

Congress enacted the CCTA to enable federal enforcement agencies to assist states in curtailing interstate cigarette 

trafficking, which drains billions of dollars in tax revenues 

from state and local governments each year and often serves 

as a source of illicit financing for organized crime and terrorist organizations. See S. REP. 95-962 at 3–9 (1978), reprinted in 

1978 U.S.C.C.A.N. 5518; H.R. CONF. REP. 95-1778 at 7–9 

(1978), reprinted in U.S.C.C.A.N. 5535. Under the CCTA, it is 

unlawful for any person knowingly to ship, transport, receive, possess, sell, distribute, or purchase “contraband cigarettes.” See 18 U.S.C. § 2342(a). The CCTA defines “contraband cigarettes” as

a quantity in excess of 10,000 cigarettes, which bear 

no evidence of the payment of applicable State or local cigarette taxes in the State or locality where such 

cigarettes are found, if the State or local government 

requires a stamp, impression, or other indication to be 

placed on packages or other containers of cigarettes to 

evidence payment of cigarette taxes, and which are in 
10 No. 13-2368

the possession of any person other than [certain exceptions].

18 U.S.C. § 2341(2). Accordingly, to convict Mr. Mohamed of 

cigarette trafficking, the government needed to prove beyond a reasonable doubt that (1) Mr. Mohamed knowingly 

shipped, transported, received, possessed, sold, distributed, 

or purchased (2) more than 10,000 cigarettes (3) not bearing 

Indiana cigarette tax stamps (4) under circumstances in 

which Indiana law required the cigarettes to bear such

stamps, and (5) Mr. Mohamed is not an excepted person under 18 U.S.C. § 2341(2)(A)-(D). See 18 U.S.C. §§ 2341-42; see 

also City of New York v. Chavez, 944 F. Supp. 2d 260, 264 

(S.D.N.Y. 2013).

Mr. Mohamed does not challenge the sufficiency of the 

evidence with respect to the first, second, third, and fifth elements of the offense. The only issue before us is whether 

the government presented sufficient evidence to allow a rational trier of fact to find beyond a reasonable doubt that Indiana law required the cigarettes discovered in Mr. Mohamed’s van to bear Indiana cigarette tax stamps. To resolve 

this issue, we turn to Indiana state law.

II. Indiana’s Cigarette Tax Act

In construing Indiana’s Cigarette Tax Act, we must interpret the statute as we think the Indiana Supreme Court 

would interpret it. See Laborers Local 236, AFL-CIO v. Walker,

749 F.3d 628, 634 (7th Cir. 2014) (citing Brownsburg Area Patrons Affecting Change v. Baldwin, 137 F.3d 503, 507 (7th Cir. 

1998)). “In Indiana, the lodestar of statutory interpretation is 

legislative intent, and the plain language of the statute is the 

‘best evidence of ... [that] intent.’” Estate of Moreland v. Diet-
No. 13-2368 11

er, 576 F.3d 691, 695 (7th Cir. 2009) (alterations in original) 

(quoting Cubel v. Cubel, 876 N.E.2d 1117, 1120 (Ind. 2007)); 

see also Indiana Dep’t of Revenue v. United Parcel Serv., Inc., 969 

N.E.2d 596, 600 (Ind. 2012); Indiana Dep’t of State Revenue, Inheritance Tax Div. v. Estate of Parker, 924 N.E.2d 230, 233 (Ind. 

Tax Ct. 2010). Unless a statute indicates otherwise, we must 

give the words in the statute their plain and ordinary meaning, and we must examine the statute as a whole, “avoiding 

both excessive reliance on strict literal meaning and selective 

reading of individual words.” Estate of Moreland, 576 F.3d at 

695 (quoting Cubel, 876 N.E.2d at 1120); see also Scherr v. Marriott Int’l, Inc., 703 F.3d 1069, 1077 (7th Cir. 2013). When the 

language of a statute is clear, we must enforce the statute as 

written, and we “ha[ve] no power to construe the statute for 

the purpose of limiting or extending its operation.” See Estate 

of Parker, 924 N.E.2d at 233 (quoting In re Estate of Wilson, 822 

N.E.2d 292, 295 (Ind. Tax Ct. 2005)); see also Scherr, 703 F.3d 

at 1077 (“When the language of a statute is plain, we enforce 

it according to its terms.”). 

Indiana’s Cigarette Tax Act levies a tax on “all cigarettes 

sold, used, consumed, handled, or distributed” within the 

state. See Ind. Code § 6-7-1-1. For purposes of the Cigarette 

Tax Act, “consume” means to possess for use or use cigarettes for the purpose of smoking, see Ind. Code § 6-7-1-8; 

“handle” means “to trade in: engage in the buying, selling, 

or distributing of (a commodity),” Indiana Eby-Brown Co. v. 

Indiana Dep’t of State Revenue, 648 N.E.2d 401, 404 (Ind. Tax 

Ct. 1995) (quoting Webster’s Third New Int’l Dictionary 1027 

(1981)); and “distribute” means “to divide among several or 

many.” Id. (quoting Webster’s Third New Int’l Dictionary at 

660). All packages of cigarettes subject to Indiana’s cigarette 
12 No. 13-2368

tax must bear Indiana tax stamps evidencing payment of the 

tax. See Ind. Code § 6-7-1-14.

Mr. Mohamed argues that under the plain language of 

the Cigarette Tax Act, the cigarettes at issue were not subject 

to Indiana’s cigarette tax because, at the time of his arrest, 

the cigarettes had not yet been sold, used, consumed, handled, or distributed within Indiana. His argument raises two 

questions regarding Indiana’s cigarette taxation scheme: (1) 

when Indiana’s cigarette tax becomes due; and (2) whether 

Indiana’s cigarette tax applies to cigarettes possessed in Indiana but bought and intended for sale outside the state.

A. The Timing of Indiana’s Cigarette Tax

Mr. Mohamed argues that Indiana’s cigarette tax does 

not apply until disposal of the cigarettes. We disagree. Indiana technically imposes its cigarette tax on the retail purchaser or ultimate consumer “upon the sale, exchange, bartering, furnishing, giving away, or otherwise disposing of 

cigarettes within the state of Indiana.” See Ind. Code 

§ 6-7-1-12. The State, however, pre-collects the tax for convenience and facility from “the person who first sells, uses, 

consumes, handles, or distributes the cigarettes.” See id.

§ 6-7-1-1. The Cigarette Tax Act requires cigarette distributors and retailers,4 which act as agents of the State in collect-

 

4 Under the Cigarette Tax Act, “distributor” includes 

every person who sells, barters, exchanges, or distributes cigarettes in the state of Indiana to retail dealers for the purpose of 

resale, or who purchases cigarettes directly from a manufacturer 

of cigarettes, or who purchases for resale cigarettes directly from 

a manufacturer of cigarettes, or from a wholesaler, jobber, or distributor outside of the state of Indiana who is not a distributor 
No. 13-2368 13

ing the cigarette tax, see id. § 6-7-1-17(a), to prepay the tax 

and affix the required amount of tax stamps “upon receipt” 

of any unstamped cigarettes subject to the tax. See id.

§ 6-7-1-18. Distributors and retailers can then pass along the 

tax to retail purchasers or ultimate consumers by adding the 

tax to the price of the cigarettes.5 See id. § 6-7-1-1. Accordingly, under the plain language of the Cigarette Tax Act, read 

fairly and as a whole, if Indiana’s cigarette tax applies at all, 

it applies upon receipt of the cigarettes, even though the 

State technically does not levy the tax until disposal. See id.

§ 6-7-1-18.

This construction is consistent with the Cigarette Tax 

Act’s “intent and purpose” to pre-collect the cigarette tax

from the person who first sells, uses, consumes, handles, or 

distributes the cigarettes. See id. § 6-7-1-1. It is also consistent 

with the Indiana Tax Court’s interpretation of the Cigarette 

Tax Act and, as the Tax Court recognized, the State’s interest 

 

holding a registration certificate issued under [the Cigarette Tax 

Act]. 

Id. § 6-7-1-6. “Retailer” means “every person, other than a distributor, 

who purchases, sells, offers for sale, or distributes cigarettes, to consumers or to any person for any purpose other than resale, irrespective of 

quantity or amount, or the number of sales.” Id. § 6-7-1-7. If Mr. Mohamed intended to sell the cigarettes in his possession in Indiana, he 

would qualify as either a distributer or retailer under the Cigarette Tax 

Act.

5 Although the Cigarette Tax Act does not specify when persons other 

than distributors and retailers must pay the cigarette tax, this is not surprising given that Indiana requires all cigarettes sold within the state to 

be sold through cigarette distributors or retailers. See id. § 24-3-6-11(a)-

(f). 
14 No. 13-2368

in protecting itself from revenue losses due to cigarette trafficking: 

To hold that the [cigarette] tax is due only when cigarettes are “sold, bartered, exchanged, etc.” defeats the 

purpose for the distributor to pay the tax and affix 

stamps upon receipt—the purpose being that because 

cigarettes are a major source of revenue for Indiana, 

the state has an interest in protecting the cigarettes 

from “bootleggers” who seek to bypass the conventional methods of cigarette distribution and, consequently, payment of the tax.

The most effective way for the state to protect its cigarette revenue is to impose upon distributors the duty 

to pay the tax on all cigarettes at the earliest possible 

point, which the statute defines as receipt. This method nearly guarantees that the tax is always collected

... . Had the legislature intended that the tax be paid 

only on those cigarettes that are sold, the legislature 

would not have mandated that distributors affix the 

stamps upon receipt as evidence the tax has been paid.

Indiana Eby-Brown Co., 648 N.E.2d at 405 (footnote omitted; 

emphasis in original). We therefore reject Mr. Mohamed’s 

argument that Indiana’s cigarette tax does not apply until 

the cigarettes are sold, used, consumed, handled, or distributed as contrary to Indiana law. We instead find that Indiana’s cigarette tax applies upon receipt of cigarettes subject to 

the tax.

B. The Scope of Indiana’s Cigarette Tax

Next, we consider the scope of Indiana’s cigarette tax. On 

its face, the Cigarette Tax Act applies only to cigarettes sold, 
No. 13-2368 15

used, consumed, handled, or distributed within Indiana. See 

Ind. Code § 6-7-1-1 (“It is the intent and purpose of this 

chapter to levy a tax on all cigarettes sold, used, consumed, 

handled or distributed within this state ... .” (emphasis added)); id. § 6-7-1-12(a) (imposing Indiana’s cigarette tax only 

“upon the sale, exchange, bartering, furnishing, giving away, 

or otherwise disposing of cigarettes within the state of Indiana” (emphasis added)). The Cigarette Tax Act does not tax 

cigarettes possessed in Indiana merely for the purpose of interstate commerce; nor does it require cigarettes passing 

through the state in interstate commerce to bear Indiana tax 

stamps. See id. § 6-7-1-18 (“Any distributor engaged in interstate business[] shall be permitted to set aside such part of 

his stock as may be necessary for the conduct of such interstate business without affixing the stamps required by this 

chapter.”); see also 45 Ind. Admin. Code § 8.1-1-28 (“Distributors need not affix tax stamps to the individual packages of 

cigarettes that are sold and shipped outside the State.”); Indiana Eby-Brown Co., 648 N.E.2d at 404 n.3 (“Eby-Brown need 

not ... stamp cigarettes that are to be shipped in interstate 

commerce.”).

Because Indiana does not tax all cigarettes possessed 

within the state, the government needed to prove more than 

Mr. Mohamed’s possession of unstamped cigarettes in Indiana to convict him of violating the CCTA. Rather, the government needed to prove that Mr. Mohamed possessed the 

cigarettes for the purpose of selling, using, consuming, handling, or distributing them within Indiana in order to establish that they were subject to Indiana’s cigarette tax. See Ind. 

Code §§ 6-7-1-1, 6-7-1-12(a); 18 U.S.C. § 2341(2).
16 No. 13-2368

The government argues that “[t]he larger context of Indiana’s cigarette taxation statutes” establishes that the cigarettes found in Mr. Mohamed’s van were subject to Indiana’s 

cigarette tax at the time of his arrest. (See Appellee Br. at 9-

11.) The government cites two provisions of the Cigarette 

Tax Act in support of this argument. First, under Indiana 

Code section 6-7-1-19.5, all persons transporting unstamped 

cigarettes over Indiana highways, except licensed distributors, common carriers, and state or federal employees performing their official duties, must carry invoices or delivery 

tickets stating the quantity and brand of the cigarettes and 

the names and addresses of the seller, purchaser, and the 

person ultimately liable for the state’s cigarette tax. See Ind. 

Code § 6-7-1-19.5. Transporting unstamped cigarettes in Indiana without proper documentation constitutes a misdemeanor under Indiana law. See id. § 6-7-1-23. Second, under 

Indiana Code section 6-7-1-24, the possession of more than 

1,500 cigarettes in packages not bearing Indiana tax stamps 

by any person other than a distributor, common carrier, or 

state or federal employee constitutes “prima facie evidence 

that the cigarettes are possessed for the purpose of sale.” Id.

§ 6-7-1-24(d).

Mr. Mohamed acknowledges on appeal that he was 

transporting the cigarettes at issue over Indiana highways 

without proper documentation in violation of Indiana Code 

section 6-7-1-19.5, and, as a result, the State could have 

charged him with a misdemeanor. (See Appellee Reply Br. at 

3.) He argues, however, that this misdemeanor violation 

does not amount to a violation of the CCTA. Additionally, 

Mr. Mohamed argues that even if his possession of more 

than 1,500 cigarettes without Indiana tax stamps creates a 

presumption that he possessed the cigarettes for the purpose 
No. 13-2368 17

of sale, the presumption “stands only until it is destroyed by 

the facts.” (Id. at 4.) According to Mr. Mohamed, the evidence at trial and the government’s position during sentencing—i.e., that the district court should calculate the amount 

of loss using New York’s cigarette tax rate, rather than Indiana’s tax rate—demonstrate that Mr. Mohamed intended to 

sell the cigarettes outside Indiana, thus destroying any presumption that he intended to sell them within the state. (Id.)

The strongest support for the government’s position is 

United States v. Boggs, 775 F.2d 582 (4th Cir. 1985). In Boggs,

federal agents arrested the defendant in West Virginia carrying over 60,000 cigarettes not bearing West Virginia tax 

stamps. The parties stipulated that the defendant had purchased the cigarettes in North Carolina and was transporting 

them through West Virginia to resell them in Michigan. After a bench trial based on stipulated facts, the district court 

found the defendant guilty of trafficking and conspiring to 

traffic contraband cigarettes in violation of the CCTA. See id.

at 583.

On appeal, the defendant argued that because he had 

purchased the cigarettes outside the state and intended to 

sell them outside the state, West Virginia’s cigarette tax did 

not apply, and, thus, the cigarettes did not qualify as contraband under the CCTA even though they lacked West Virginia tax stamps. The Fourth Circuit disagreed. A majority of 

the panel determined that West Virginia’s tax statutes gave 

the State authority to apply its cigarette tax to “people such 

as [the defendant] unless the cigarettes they possess are being 

legitimately transported in commerce, in which event exception is made.” See id. at 584.
18 No. 13-2368

The majority relied on two provisions of West Virginia’s 

tax statutes in drawing this conclusion. First, the court found 

that the defendant’s possession of more than twenty packages of cigarettes not bearing West Virginia tax stamps created 

a presumption under West Virginia law that the defendant 

possessed the cigarettes “for the purpose of evading the 

payment of taxes imposed or due thereon.” See id. (quoting 

W. Va. Code § 11-17-19(b)(6)). Second, the court determined 

that the defendant’s intent to sell the cigarettes in Michigan 

rather than West Virginia did not rebut the presumption that 

he possessed the cigarettes for the purpose of evading West 

Virginia’s cigarette tax because the defendant had not complied with the State’s requirements regarding the transportation of unstamped cigarettes. See id. at 585 (quoting W. Va. 

Code § 11-17-20). Like Indiana, West Virginia requires persons transporting unstamped cigarettes across the state to 

have in their possession invoices or delivery tickets bearing 

certain information about the buyer and seller of the cigarettes. See W. Va. Code § 11-17-20. The defendant stipulated 

at trial that he did not have the required invoices or delivery 

tickets for the cigarettes in his possession. See Boggs, 775 F.2d 

at 585. As a result, the majority held that West Virginia 

“would have been perfectly justified in imposing upon [the 

defendant] its excise tax on account of his failure to comply 

with this rather simple and unburdensome requirement of 

West Virginia law or to subject [the defendant] to criminal 

penalties for his failure to comply therewith.” Id.

In United States v. Skozcen, 405 F.3d 537 (7th Cir. 2005), we 

faced a situation analogous to the one addressed in Boggs.

The defendant in Skozcen was arrested in Illinois with 

325,000 packs of unstamped cigarettes in his possession. Id.

at 541. The defendant argued that because the cigarettes 
No. 13-2368 19

“were to be sold out of the state and never within Illinois,” 

they were not subject to Illinois’s cigarette tax, and, therefore, the cigarettes were not required to bear Illinois tax 

stamps. See id. at 547. We ultimately did not need to decide 

whether the defendant’s intention to sell the cigarettes outside Illinois foreclosed his conviction under the CCTA, however, because we found that the cigarettes at issue had become subject to Illinois’s cigarette tax even before they came 

into the defendant’s possession. See id.

Illinois subjects all cigarettes sold or otherwise disposed 

of within the state to its cigarette tax and requires those cigarettes to bear stamps evidencing payment of the tax. See 35 

ILCS 130/2-3. Because the defendant in Skozcen had purchased the cigarettes at issue in Illinois, the cigarettes had 

become subject to Illinois’s cigarette tax at the time of that

purchase (at the latest). See Skozcen, 405 F.3d at 547. Accordingly, the unstamped cigarettes were “contraband” under 

the CCTA regardless of what the defendant did with the cigarettes after purchasing them. See id. Under these circumstances, we held that the defendant’s intention to sell the 

cigarettes outside Illinois was irrelevant to his conviction 

under the CCTA. Id. We did not address, however, whether 

a defendant’s intention to sell cigarettes outside the state in 

which the cigarettes were found would be relevant where, as

here, the cigarettes were not already subject to the state’s 

cigarette tax. Because the CCTA incorporates state law in defining contraband cigarettes, the resolution of this issue necessarily rests on the applicable state’s laws.

We are not persuaded that Mr. Mohamed’s violation of 

Indiana’s requirements for transporting unstamped cigarettes over Indiana highways alone is sufficient to support 
20 No. 13-2368

his conviction for violation of the CCTA. As an initial matter, 

unlike in Boggs, the government cannot rely on the evidentiary presumption created by state law here. Under Indiana 

Code section 6-7-1-24(d),

[t]he possession of more than [1,500] cigarettes in 

packages not bearing Indiana tax stamps by any person other than a distributor, a common carrier, or an 

employee of the state or federal government performing his official duties in the enforcement of this chapter constitutes prima facie evidence that the cigarettes 

are possessed for the purpose of sale.

Ind. Code § 6-7-1-24(d). Read fairly, this provision creates a 

presumption that a person (apart from the three listed exceptions) possessing more than 1,500 cigarettes not bearing Indiana tax stamps has the cigarettes available and intended 

for sale within the state.6 The jury instructions, however, 

made no mention of the presumption, and the government 

never argued at trial that it applied. Had the government actually relied on the presumption at trial, Mr. Mohamed may 

have elected to present evidence rebutting the presumption, 

rather than rest his defense without presenting affirmative 

evidence. Thus, unlike in Boggs, the government cannot use 

the presumption to its advantage on appeal.

Without the benefit of the presumption, the government 

has not presented sufficient evidence to allow a reasonable 

trier of fact to determine that Mr. Mohamed intended to sell, 

distribute, or otherwise dispose of the cigarettes within Indiana. Although Mr. Mohamed acknowledges on appeal that 

 

6 Mr. Mohamed does not challenge whether this state-law presumption 

applies in federal court, so we will assume that it does. 
No. 13-2368 21

he violated Indiana’s requirements for transporting unstamped cigarettes across the state, the CCTA does not make 

every violation of a state’s cigarette taxation laws a federal 

crime. See 18 U.S.C. § 2341(2); see also United States v. Wilbur,

674 F.3d 1160, 1173–74 (9th Cir. 2012) (“The CCTA, however, 

does not make cigarettes ‘contraband’ under federal law 

simply because they are contraband under state law.”). Only 

cigarettes that “bear no evidence of the payment of applicable State or local cigarette taxes in the State or locality where 

such cigarettes are found” qualify as contraband cigarettes

under the CCTA. See 18 U.S.C. § 2341(2); Wilbur, 674 F.3d at 

1174. If Congress had intended to make all cigarettes transported in violation of state law “contraband,” it could have 

done so. Congress, however, chose to limit the definition of 

“contraband cigarettes” to cigarettes that fail to bear evidence of applicable state or local cigarette taxes, and we 

must enforce the statute according to its plain terms. See 

Sebelius v. Cloer, --- U.S. ---, 133 S. Ct. 1886, 1896, 185 L. Ed. 

2d 1003 (2013) (“[W]hen [a] statute’s language is plain, the 

sole function of the courts—at least where the disposition 

required by the text is not absurd—is to enforce it according 

to its terms.” (internal quotation marks and citation omitted)). Accordingly, under the CCTA’s plain language, “[i]f 

there are no ‘applicable State or local cigarette taxes,’ cigarettes are not contraband, regardless of whether they were 

transported in violation of state law.” Wilbur, 674 F.3d at 

1173–74.

The legislative history of the CCTA provides further 

support for this interpretation of its terms. As the legislative 

history establishes, Congress intended the CCTA to supplement, but not supplant, states’ enforcement of their own cigarette tax statutes. See S. REP. 95-962 at 3-9. In enacting the
22 No. 13-2368

CCTA, Congress sought to help states avoid large-scale revenue losses and prosecute major cigarette traffickers while 

ensuring that the primary efforts to stop cigarette smuggling

remained with the states. See id. at 9. With these goals in 

mind, it makes sense that Congress would focus federal efforts under the CCTA on prosecuting offenders who skirt 

applicable state and local cigarette taxes while leaving enforcement of other aspects of states’ cigarette taxation 

schemes to the states themselves.

We, therefore, find that Mr. Mohamed’s violation of Indiana’s requirements regarding the transportation of unstamped cigarettes alone cannot serve as the basis for his

conviction. This, however, does not end our inquiry. We 

must first determine whether the government presented sufficient evidence at trial to prove that Mr. Mohamed possessed the cigarettes at issue for the purpose of selling, using, consuming, handling, or distributing them within Indiana—not just that he failed to comply with Indiana’s requirements for transporting unstamped cigarettes across the 

state.

As explained above, the government did not rely on the 

presumption under Indiana Code section 6-7-1-24(d) at trial.

We must therefore decide whether, absent the presumption, 

the jury could have reasonably inferred from the evidence at 

trial that Mr. Mohamed possessed the cigarettes at issue for 

sale, use, consumption, handling, or distribution in Indiana.

See United States v. Jones, 713 F.3d 336, 340 (7th Cir. 2013) (“A 

Rule 29 motion calls on the court to distinguish between reasonable inferences and speculation.”). The government’s evidence at trial was sufficient to give rise to an inference that 

Mr. Mohamed was trafficking cigarettes when Officer 
No. 13-2368 23

Helmer pulled him over. Mr. Mohamed had in his possession over 23,000 Newport cigarettes purchased from various 

gas stations in Kentucky, a low-tax state, along with a trash 

bag containing over $15,000 in cash. Special Agent Neie testified that cigarette traffickers typically travel from retailer to 

retailer purchasing cigarettes—like Mr. Mohamed had—

because of restrictions retailers place on the amount of cigarettes a customer can purchase at one time. Special Agent 

Neie also testified that Newports are one of the two most 

frequently trafficked brands of cigarettes. Furthermore, 

when Officer Helmer asked Mr. Mohamed how much money he makes selling cigarettes, Mr. Mohamed answered “not 

much,” effectively admitting that he does in fact sell cigarettes for profit. This evidence is more than sufficient to 

show that Mr. Mohamed was engaged in cigarette trafficking and that he intended to sell the cigarettes at issue in a 

state with higher cigarette taxes than Kentucky.

The government’s evidence at trial, however, was not 

sufficient to show that Mr. Mohamed intended to sell the 

cigarettes in Indiana. Thirty-eight states had higher cigarette 

taxes than Kentucky in 2012, and, as Special Agent Neie testified, Mr. Mohamed could have made a profit selling the 

cigarettes in any one of those states. The government presented no evidence that Mr. Mohamed had taken any steps 

to sell, distribute, or otherwise dispose of the cigarettes in 

Indiana, and although Mr. Mohamed admitted to Officer 

Helmer that he sells cigarettes, he gave no indication of

where he sells them. The government’s evidence and arguments at trial simply did not focus on whether Mr. Mohamed intended to sell the cigarettes in Indiana, and the jury’s questions to the district court understandably reflected 

their confusion over this issue. Significantly, during sentenc-
24 No. 13-2368

ing, the government took the position that Mr. Mohamed 

intended to sell the cigarettes in New York, where he stood 

to make substantially more profit than selling them in Indiana due to New York’s $4.35 per pack tax rate.

We do not believe that Mr. Mohamed’s possession of cigarettes in Indiana under these circumstances is sufficient to 

support a finding, beyond a reasonable doubt, that Mr. Mohamed intended to sell, distribute, or otherwise dispose of 

the cigarettes in Indiana. See United States. v. Katz, 582 F.3d 

749, 752 (7th Cir. 2009) (“A jury cannot speculate its way out 

of reasonable doubt.”); see also United States v. Griffin, 684 

F.3d 691, 698 (7th Cir. 2012) (evidence that the defendant had 

easy access to firearms and could have possessed them in a 

matter of seconds was not sufficient to prove that he intended to exercise control over them); Piaskowski v. Bett, 256 F.3d 

687, 692–93 (7th Cir. 2001) (evidence that the defendant was 

present at the site of a murder and later referred to “shit going down” was insufficient to prove that he participated in 

the murder directly or as a conspirator); United States v. Harris, 942 F.2d 1125, 1129–30 (7th Cir. 1991) (reversing the defendant’s conviction where the evidence was “as consistent 

with an inference of innocence as one of guilt”). Without evidence that Mr. Mohamed intended to sell or otherwise dispose of the cigarettes in Indiana, the government failed to 

prove beyond a reasonable doubt that Indiana law required 

the cigarettes to bear Indiana tax stamps. Mr. Mohamed’s 

conviction, therefore, cannot stand.7

 

7 This does not mean that Mr. Mohamed’s conduct necessarily must go 

unpunished. As Mr. Mohamed has acknowledged, the State could have 

charged him with a misdemeanor for violating Indiana’s requirements 

for transporting unstamped cigarettes. See Ind. Code § 6-7-1-19.5. The 
No. 13-2368 25

CONCLUSION

For the foregoing reasons, we REVERSE the decision of 

the district court and REMAND with instructions to enter a 

judgment of acquittal.

 

CCTA, moreover, contains recordkeeping and reporting requirements 

that apply to the shipment, sale, or distribution of more than 10,000 cigarettes in a single transaction, see 18 U.S.C. § 2343, and violations of those 

requirements also may result in criminal liability. See 18 U.S.C. § 2344(b). 

We make no comment on whether the government’s evidence at trial 

would have been sufficient to convict Mr. Mohamed under Indiana state 

law or under other provisions of the CCTA. We hold only that the evidence at trial was not sufficient to support a conviction for violation of 18 

U.S.C. § 2342(a).