IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 96-20483

UNITED STATES OF AMERICA, 

Plaintiff-Appellee,

versus

MOHAMMED SULTAN,

 Defendant-Appellant.

Appeal from the United States District Court

for the Southern District of Texas

June 10, 1997

Before DUHÉ, BENAVIDES, and STEWART, Circuit Judges.

CARL E. STEWART, Circuit Judge:

Mohammed Sultan (“Sultan”) appeals his conviction on counterfeit trafficking charges under

the Trademark Counterfeiting Act of 1984, codified at 18 U.S.C. § 2320 (“§ 2320”). His main

argument is that the evidence was insufficient to sustain his conviction. In addition, he asserts that

the district court erred in computing his sentence, failing to suppress statements he made while in

“constructive” custody, and failing to exclude expert witnesses from the courtroom during live

testimony. For the following reasons, we reverse Sultan’s conviction, vacate hissentence, and order

his immediate release from custody.

BACKGROUND

Sultan owned an auto parts surplus warehouse in Houston, Texas. He started the business in

1988, and named it Multiple Auto Parts Industries (“MAPI”). Sultan was an authorized General

Motors(“GM”) warehouse distributor (“WD”) who bought partsfromGM and othersuppliers, then
 

1

The two previously shared warehouse space at 10795 Hammerly Blvd. in Houston. We refer to this warehouse

as “Hammerly.”

2

resold those parts overseas to Saudi Arabian customers. Sultan moved into a warehouse at 6546A

Petropark (“Petropark”) in early 1992. Sultan shared warehouse space with Garbis Jerjerian

(“Jerjerian”), another auto parts dealer, at the Petropark location.1Jerjerian operated Sarine

Corporation (“Sarine”)fromthatsame warehouse. The businesses were kept separate and merely run

out of the same building, although Sultan bought a large amount of merchandise from Jerjerian. 

In April 1993, Sultan moved out of the Petropark warehouse into another warehouse on

Highway Six (“Highway Six”) in Houston. In late April of 1994, Sultan was notified that an alarm

had gone off at the Petropark warehouse. Although he no longer occupied that space, he was still

listed as a person to contact in the event the system went off. When Sultan arrived at Jerjerian’s

Petropark warehouse, he found customs Agents in the process of executing a warrant. The agents

discovered approximately one million dollars worth of counterfeit auto parts and thousands of

documents evidencing counterfeiting activity in the warehouse. They also found a back room in the

warehouse where evidence of counterfeiting activity was present. The evidence showed that

counterfeit GM markings were being applied to auto parts, and then placed in counterfeit GM boxes.

Sultan was not permitted to enter the warehouse, but he willingly spoke with agents at the scene and

answered their questions. Sultan claims that at one point, he thought the agents had finished asking

him questions, but that he was stopped and told to exit his car when he tried to leave. He was never

read his Miranda rights.

In May 1994, suspecting that Sultan was counterfeiting auto parts, GM conducted an audit

of MAPI. The contract between all WDs and GM entitled GM to conduct an audit of the WD’s

business at any time. The GM investigators confiscated several parts and boxes to examine whether

they were counterfeit or not. None of Sultan’s parts, however, were counterfeit. In September 1994,

Customs Agents executed a search warrant at Sultan’s warehouse on Highway Six. Sultan called his

attorney, but his attorney was unable to be present at the search. The attorney told Sultan not to
 

2

The parts found and relevant to this case are starters, alternators and brakes.

 

3

The packaging was evidently a very good replica of genuine GM packaging because even the GM auditors and

customs agents had a hard time figuring out which ones were real and which were fake.

3

answer any questions, and told the agents not to ask his client any questions. The agents questioned

Sultan anyway, and he answered those questions. Consistent with the GM audit, the agents did not

find any counterfeit auto parts in Sultan’s warehouse.

In the meantime, evidence was uncovered that Jerjerian obtained remanufactured auto parts2

from several companies, including Eveready Carburetor, AES and FASA, and would then alter the

parts by changing the serial numbers, repainting them or relabeling them to look like new GM parts.

He would then repackage them in counterfeit GM packaging and boxes3and resell the parts as

genuine GM parts.

Sultan and Jerjerian were indicted for violating 18 U.S.C. § 2320(a), which prohibits

trafficking in counterfeit goods. Jerjerian fled the country before trial and was never tried. Sultan

was charged with six counts of trafficking in counterfeit goods for several shipments of auto parts

he made to Saudi Arabia between April 1993 and April 1994, and one count of aiding and abetting

Jerjerian with marketing counterfeit goods. Sultan was convicted on all counts. Sultan was

sentenced to 30 months’imprisonment per count, with the sentencesto run concurrently. He was also

ordered to pay restitution, a special assessment, and the costs of his imprisonment and supervised

release. Sultan appeals from that judgment.

STANDARD OF REVIEW

We review a challenge to the sufficiency of the evidence by viewing the evidence in the light

most favorable to the verdict. Jackson v. Virginia, 443 U.S. 307, 319 (1979). We affirm if a rational

trier of fact could have found all the essential elements of the crime beyond a reasonable doubt. Id.

“If a reasonable jurywould doubt whether the evidence proves an essential element, [this court] must

reverse.” U.S. v. Onick, 889 F.2d 1425, 1428 (5th Cir. 1989). All credibility determinations and

reasonable inferences are to be resolved in favor of the jury’s verdict. U.S. v. Nguyen, 28 F.3d 477,
4

480 (5th Cir. 1994). Thus, we do not concern ourselves with the correctness of the jury verdict;

rather, we must determine whether the finding of guilt is reaso nable under all the circumstances.

Jackson, 443 U.S. at 318-319.

DISCUSSION

The government bases its case on an inferential chain of events, from the purchase of

remanufactured and new non-GM auto parts to the al leged sale of counterfeit GM auto parts to

customers in Saudi Arabia. It is undisputed that Sultan was in the business of selling auto parts and

that he was engaging in such activities at all times relevant to this appeal. Sultan argues, however,

that the government has not proven that the parts he sold were counterfeit or that, if they were, he

knew theywere counterfeit. We need not address Sultan’sfirst contention because we conclude that,

after a thorough review ofthe record, the government failed to prove beyond a reasonable doubt that

Sultan knew he was purchasing and selling counterfeit parts.

At the outset, we note that in a case such as this—based wholly on circumstantial

evidence—we cannot indulge unreasonable inferences to bridge gaps in the government’s case. Our

review is limited to “whether the jury made a rational decision, not whether its verdict was correct

on the issue of guilt or innocence.” United States v. Dean, 59 F.3d 1479, 1484 (5th Cir. 1995).

“However, we must reverse a conviction ifthe evidence construed in favor ofthe verdict ‘gives equal

or nearly equal circumstantial support to a theory of guilt and a theory of innocence of the crime

charged.’” Id. (citing United States v. Jaramillo, 42 F.3d 920, 923 (5th Cir. 1995)).

To prove a violation of 18 U.S.C. § 2320 (a), the government must establish that: (1) the

defendant trafficked or attempted to traffic in goods or services; (2) such trafficking, or the attempt

to traffic, was intentional; (3) the defendant used a counterfeit mark on or in connection with such

goods or services; and (4) the defendant knew that the mark so used was counterfeit. The term

“traffic” means to transport, transfer, or otherwise dispose of, to another, as consideration for

anything of value, or make or obtain control of with intent so to transport, transfer or dispose of. 18

U.S.C. § 2320 (d)(2). A “counterfeit mark” is defined as a spurious mark used in connection with
 

4

To convict a defendant as an aider and abetter, the government must show that the defendant’s act contributed

to the execution of the criminal activity and that he intended to aid in its commission. United States v. Stovall, 825

F.2d 817, 827 (5th Cir. 1987). Plainly, if we conclude that the government did not prove beyond a reasonable doubt

that Sultan knew that he was purchasing and selling counterfeit parts, we must necessarily conclude that Sultan did

not aid and abet Jerjerian in counterfeiting. Accordingly, our discussion of the knowledge requirement in § 2320

necessarily applies to Sultan’s liability as an aider and abetter.

5

trafficking that is identical or indistinguishable from a registered trademark and the use of which is

likely to confuse, cause mistake, or deceive. 18 U.S.C. § 2320 (d)(1)(A)(I)(ii) and (iii).4

Section 2320(a) has two mental state requirements: “first, that the defendant ‘intends’ to

traffic in goods or services, and second, that he or she ‘knows’ that the goods or services are

counterfeit.” United States v. Baker, 807 F.2d 427, 429 (5th Cir. 1986) (quoting S.Rep. No. 526, 98

Cong., 2d Sess. 11 (1984), reprinted in 1984 U.S.Code Cong. & Ad.news 3627, 3637). Because the

fact of shipment is not in controversy we need only address Sultan’s knowledge as it relates to the

purchase and subsequent shipment of the parts purchased from Jerjerian.

The government’s proof of Sultan’s knowledge primarily rests on six points: (1) the jury

could have reasonably concluded that Sultan’s personality type would have put him on notice of the

counterfeiting; (2) Sultan made inconsistent and untruthful statements; (3) Sultan was shown a

counterfeit GM bag by Jerjerian; (4) Sultan shared warehouse space with Jerjerian when

counterfeiting activity was taking place; thus, he must have seen signs of counterfeiting; (5) Sultan

was an experienced WD, who was aware of industry practices regarding the acquisition and pricing

of GM parts; and (6) as a WD, Sultan was familiar with GM practices regarding its packaging. We

address each of these theories in turn.

1. Sultan’s Personality

The government contends that Sultan’s attention to detail and his penchant for thriftiness

should have put him on notice that the parts he received, at the prices he paid, were counterfeit.

Because of this personality trait, argues the government, the jury could have inferred Sultan knew

about the counterfeiting. Kinghorn testified that during his audit of Sultan he witnessed Sultan’s keen
6

awareness of his entire inventory. Prior to retrieving a container of auto parts for inspection, Sultan

would tell Kinghorn exactly what parts were contained inside, and each time he was correct. This

occurred approximately35 times. Also, AbrahimSafahieh, aninternationalfreightforwarder, testified

that Sultan would shop around for the best shipping price for his customers, and he would often use

a trucking company he knew rather than the one affiliated with the freight forwarder because the

other company was cheaper. Finally, Grundy testified that Sultan was quick to contact him if GM

made a shipping error. This testimony, as the government argues, reflected that Sultan closely

checked his deliveries.

We find the government’s arguments unpersuasive. A person running a one-man

operation—such as Sultan—is more likely to know the full extent of hisinventory, if for nothing else,

to efficiently run his business because there are no employees to rely upon. Further, Safahieh also

testified that Saudi Arabian customers liked to get the bottom line on costs—much like anyone

else—so Sultan’s price shoppingwas a normalbusiness procedure. Moreover, this fact could equally,

if not more than, prove that Sultan was trying to make a profit and keep customers as it could prove

Sultan’s knowledge that he was buying and selling counterfeit parts. Finally, it could hardly

be said that a sole proprietor’s recognition of shipping errors correlates with knowing parts are

counterfeit. Sultan would obviously know what parts he ordered and the quantity of each part, thus,

all it would take to discover an error would be to match the quantity of parts or type of partsreceived

with the purchase order. This procedure is not as novel as the government would have one believe.

All told, these tendencies are, of course, circumstantial evidence, but together they are not sufficient

to impute knowledge to Sultan beyond a reasonable doubt. Accordingly, we find these arguments

insufficient to establish knowledge.

2. Sultan’s inconsistent statements
 

5

Several non-criminal reasons could account for Sultan’s statement. Also, when viewed against the backdrop of

his overall sales, Sultan may have meant that as compared to his other sales, his purchases from Jerjerian were small.

The evidence adduced at trial showed that Sultan was doing a multimillion dollar a year business with GM, and he was

steadily increasing his sales each year. The invoices from Petropark that are tied to Sultan do not come close to

equaling Sultan’s GM sales. Thus, interpreted a different way, Sultan’s statement could actually be an accurate

depiction of his business with Jerjerian.

 

6

Though not dispositive, the defense also pointed out at oral argument that none of Sultan’s documents found at

Petropark, nor any documents found at his Highway Six warehouse, were computer generated. Thus, it is plausible

to infer that Sultan didn’t use his computer for all, or any, of his business needs. 

7

The government contends that Sultan made a number of untruthful statements to

investigators, and, based on these statements, the jury could have reasonably concluded he lied

because he had guilty knowledge. Specifically, the government argues that Sultan lied about the

amount of parts he was purchasing from Jerjerian and his ability to operate his computer. We cannot

conclude that this evidence shows beyond a reasonable doubt that Sultan knew about the

counterfeiting.

Agent Sult testified that Sultan arrived at Petropark on the night of the April 1994 search and

he then later made the statement that he purchased small quantities of shocks and other parts from

Jerjerian. On cross-examination, however, he admitted that at the time Sultan made that statement

he was neither the focus of the investigation, nor was he tied to Jerjerian for the purpose of the

search. Therefore, any inconsistent statement made by Sultan was not necessarily due to the pressure

of being under investigation as the government implies. To conclude as the government does, we

would have to assume that Sultan knew that he would later come under investigation and that he

knew the government would not find out the extent of his purchasesfromJerjerian.5 The government

offered no evidence that would permit a reasonable jury to draw these two inferences.

The government’s argument that Sultan’s statement about his inability to operate his computer

issimilarly without merit. Although Rick Grundy testified that he saw Sultan operating his computer

at Sultan’s Highway Six warehouse, that still does not, by itself, impute knowledge to Sultan.

Without evidence establishing that what Grundy saw was Sultan working on something relevant to

his auto parts inventory, we simply cannot make the leap that this inconsistent statement points to

guilt.6 In order to agree with the government’s argument, we would have to assume that what
 

7

The government argues that invoices and shipping documents dated in April 1993, which state Sultan’s address

as Petropark, were evidence that he was still there when counterfeiting is known to have taken place. This argument

fails because the government’s own Exhibit # 63 shows several invoices from Sultan to Jerjerian showing the

Hammerly warehouse address as Sultan’s and dated after Sultan was known to be at Highway Six.

8

Grundy saw was pertinent to Sultan’s purchases with Jerjerian, then infer that based on Sultan’s

statement to investigators, Sultan was hiding his guilt. Again, the government did not offer any

evidence that would permit a reasonable jury to make any of these inferences.

3. The counterfeit bag incident.

Ginger Gaman testified that on one occasion she accompanied Jerjerian to Sultan’s Highway

Six warehouse. She had earlier given Jerjerian a counterfeit GM bag, and he was going to show

Sultan the bag. When they arrived at the warehouse, Gaman was close enough to hear Jerjerian and

Sultan talking; however, because they were talking in Arabic, she could not understand what they

were saying. When Jerjerian returned to the car, he said, “he could not tell the difference.” The

government contendsthat this could reasonably be interpreted to mean that Sultan was being shown

the quality of Gaman’s work to get his approval. 

This incident, standing alone, cannot sufficiently establish Sultan’s knowledge in order to

sustain a conviction beyond a reasonable doubt. This incident could have easily been interpreted, as

the defense suggests, as Jerjerian going to Sultan to see if he could fool him with the counterfeit bag

to ensure that he would not suspect he was not receiving genuine GM parts. With these diverging

interpretations, we simply cannot say that this incident alone establishes knowledge beyond a

reasonable doubt.

4. The sharing of warehouse space

The government claimsthat Sultan’s knowledge may be inferred because Sultan and Jerjerian

shared warehouse space and he should have seen signs of counterfeiting. The parties dispute whether

Jerjerian was counterfeiting while he and Sultan shared warehouse space.7 Roger Stephen, FASA’s

managing director, t estified that he sold unassembled brake sets to Jerjerian from 1992-94 and
 

8

The government also tries to implicate Sultan by arguing that during a April 27, 1993 investigation of Jerjerian,

Customs agents went to Petropark and saw Jerjerian’s and Sultan’s cars and saw Jerjerian himself and another person

they imply was Sultan. Both agents, however, could not positively identify Sultan as the other man they saw on that

day; they could only confirm that they saw Sultan’s and Jerjerian’s car. Regardless, the agents only observed the men

outside or near the entrance of the warehouse; thus, there was no way for them to determine whether Sultan was still

housed there or not.

9

delivered the shipment to the Petropark warehouse. Ginger Gamen, outside sales representative for

Industrial, testified that she started calling on Jerjerian in August 1992, and remembered seeing the

counterfeit room. She also remembered seeing Sultan when she visited, but then she stopped seeing

him after a while.

On cross-examination, however, Stephen stated that several of Jerjerian’s orders were

delivered to third parties, who most likely assembled the brakes for Jerjerian. Thus, the likelihood of

Sultan noticing anything suspicious was less apparent. Both AES and Eveready representatives

testified that they started shipping parts around the same time (April 1993) that Sultan moved to

Highway Six, so it is likely he never saw these other shipments. On direct-examination, Gaman was

asked whether she recalled when she became aware of the counterfeit room and she responded, “not

specifically.” Further, Gaman testified on cross-examination that she never saw Sultan in the

counterfeit room. 

Finally, Benjamin Uzick, a real estate broker, testified that he had shown Sultan various

properties and wasinstrumental in helping Sultan purchase the Highway Six warehouse. Prior to that

time, he remembered going to the Petropark warehouse and observing Jerjerian and Sultan stocking

the warehouse of their inventory. He noticed that Sultan would only unload to one side and Jerjerian

would only unload to the other. This testimony would support Sultan’s contention that, although he

was housed in the same warehouse, his inventory was segregated from Jerjerian’s. 

Without any additional evidence implicating Sultan based on his co-tenancy with Jerjerian,

all the government has is a mere presence case.8 We have held that mere presence in a climate of

criminal activity or association with participants in criminal activity, without more, cannot serve as

the basis for a conviction. See, e.g., United States v. Ross, 58 F.3d 154, 160 (5th Cir. 1995)
10

(reversing a defendant’s conviction for drug conspiracy when the defendant was observed making

change with another drug dealer selling at same location); compare United States v. Ismoila, 100

F.3d 380 (5th Cir. 1996) (affirming a defendant’s conviction for wire fraud and money laundering

when evidence established that defendant was more than just “merely present” during criminal

activity).

We have previously considered an argument concerning whether a person’s presence during

criminal activity was enough to convict under § 2320. In United States v. Yamin, 868 F.2d 130 (5th

Cir. 1989), the defendant, Yamin, asserted that the evidence presented against him merely showed

that he associated with persons engaged in criminal activity. The evidence adduced, however, painted

a different picture. Defendant was a co-owner of a jewelry store which was suspected of selling

counterfeit watches. A witnesstestified that on three separate occasionsshe purchased watchesfrom

Yamin’s co-defendant at Yamin’s apartment. There was also evidence that Yamin sold counterfeit

watches, and that he was present when his co-defendant was negotiating the sale of counterfeit

watches under circumstances from which Yamin’s knowledge could be inferred. Thus, we held that

the evidence wassufficient for the juryto find beyond a reasonable doubt Yamin’s active participation

in the conspiracy. Id. at 135.

Unlike Yamin, the facts adduced in the instant case do not directly implicate Sultan, nor has

the government presented sufficient circumstantial evidence to infer that Sultan knowingly

participated in or acquiesced in Jerjerian’s activity. We therefore hold that the sharing of warehouse

space evidence was insufficient to prove Sultan’s knowledge of the counterfeiting activity.

5. Sultan’s familiarity with GM pricing

The government relies on Sultan’s experience as a WD to argue that it wasreasonable for the

jury to infer that he had to know that the low prices he was paying Jerjerian for the large quantities

of parts he was buying could not have been for genuine GM parts. Rodney Kinghorn, senior

administrator ofinvestigationsfor GM, testified that it would be impossible for anyone to consistently

get genuine GM parts—at least alternators, starters, and brakes—below the WD price in the
 

9Kinghorn stated that alternators,starters, and brakes—the partsrelevant to this case—are not sold in the bulk sales

program, but he did concede that sub-componentsto these parts are sold in the program. He further conceded that these

sub-components could be assembled to produce the actual part.

11

quantities Sultan was purchasing from Jerjerian. Rick Grundy, GM account sales manager, testified

that he supplied Sultan with bulletins containing WD pricing information; thus, Sultan was apprised

of the price he would have to pay as a WD. 

On cross-examination, however, Kinghorn acknowledged that there are severalwaysthe WD

price can be undercut. He mentioned a bulk sales program,9bankruptcy sales, dealerships going out

of business, foreign sources, and discounts for WDs. He did not feel, though, that any of these

sources could consistently provide the parts Sultan was buying and in the quantity that Sultan was

purchasing from Jerjerian. Nevertheless, he had to concede that WDs do not corner the market on

GM parts as far as the price or quantity is concerned. David Fleishman, owner of a surplus business

called World Trading, testified that he knew of at least four waysto purchase various manufacturers’

genuine parts for, in some cases, five to ten cents on the dollar. He mentioned purchasing through

excess, obsolescence, change-overs, or packaging changes. Although he never purchased GM parts

through these means, he acknowledged that GM parts could be purchased this way.

The government also argues that the prices were so far below the WD price that Sultan had

to know that he was purchasing counterfeit parts. Government Exhibits 82-93, reflect the differences

in price between the parts purchased from Jerjerian and the WD price for the same part. However,

as Sultan points out in his brief, the prices he paid Jejerian were usually 80-90% ofthe WD price, and

only twice did the difference fall below 70% of the WD price. In actuality, it was Jerjerian who was

gaining the most from the salesto Sultan, asreflected in the exhibits. Further, Kinghorn testified that

there was nothing wrong with a WD buying GM partsfromothersuppliers and paying below the WD

price. It would appear then, that the government’s argument is based solely upon Sultan making a

profit from his transactions with Jerjerian. 

Thus, in order to piece together this aspect of the government’s case, we must first assume

(1) that Sultan was not aware of other sources of genuine GM parts, or (2) that there was no way
12

Jerjerian could buy from these sources, or (3) that these sources in the aggregate could not supply

Jerjerian with the quantity of parts needed to sell to Sultan. Next, assuming those sources were not

available, on the basis of the prices he paid, we still must infer that Sultan knew he was purchasing

counterfeit parts. Accepting this argument requires nothing less than stacking assumption upon

inference and inference upon mere inference—wholly insufficient evidence to sustain a conviction

beyond a reasonable doubt.

6. Sultan’s familiarity with GM packaging

The government next contends that Sultan’s knowledge as a WD should have caused him to

be aware that Jerjerian was not legally in possession of “GM” packaging. In addition, Kinghorn

testified that GM stopped selling its packaging separately in 1984, thus, there was no way for a

person to get genuine GM packaging without the parts. Further, he said that if he was a WD he

would be “outraged” and would notify the authorities if he saw GM packaging in a warehouse he

shared with a non-GM dealer. Donald Webb, owner of Webb packaging, testified that his company

delivered large quantities of “GM” packaging to the Petropark warehouse and he would see the

packaging himself when he visited. Similarly, Gaman, testified that when she would call on Jerjerian

at the Petropark warehouse she would see numerous different size boxes “that [were] just auto

parts.”

The government’s argument, however,requires amyriad ofinferencesto get to the conclusion

that Sultan possessed knowledge. There was no evidence establishing that Sultan was aware that the

stored packaging was “GM” packaging,muchless counterfeit packaging. Webb himself admitted that

of all the times he went to the Petropark warehouse he never once saw Sultan. Even more compelling

is that Webb stated that certain type boxes he shipped to Jerjerian were packaged in “a plain brown

box.” Further, he never conclusivelystated that a personwould know specificallywhat was contained

in the shipment by just looking at it. Gaman stated that she saw Sultan, but she remembers seeing

him in “a little room off of the front office.” Thus, it is entirely possible that Sultan did not know that

the packaging in the warehouse was for counterfeit GM products. This conclusion, is even more
13

plausible when we consider the earlier testimony of Uzick concerning the segregated nature of

Jerjerian’s and Sultan’s inventory within the Petropark warehouse. Accordingly, we cannot say that

this evidence establishes Sultan’s knowledge beyond a reasonable doubt.

In sum, we hold that the evidence presented by the government on the issue of knowledge

falls short of the requisite evidence from which a conviction could be sustained beyond a reasonable

doubt. The government’s case against Sultan, however, goes beyond making reasonable inferences

and requires making unreasonable leaps to bridge the gaps in the evidence. Thus, we conclude that

the government has failed to sufficiently prove that Sultan knew he purchased and sold counterfeit

GM parts—the fourth element under § 2320.

CONCLUSION

After reviewing the record and all of the evidence in the light most favorable to the verdict;

we find insufficient evidence to support the jury’s finding that the government proved beyond a

reasonable doubt that Sultan knew he was purchasing and selling counterfeit parts. Accordingly, we

REVERSE the conviction, VACATE the sentence, and ORDER Sultan’s immediate release from

custody.