Court Opinion

ID: 2745413
Source: CourtListenerOpinion
Date Created: 2014-10-24 16:00:55.216587+00
Date Added: 2024-06-11T10:12:46.846576
License: Public Domain

In the

      United States Court of Appeals
                  For the Seventh Circuit
Nos. 13-2662 & 13-2681

UNITED STATES OF AMERICA,
                                                    Plaintiff-Appellee,

                                   v.

MAZHER ALI KHAN AND
SHAKIL WAMIQ,
                                              Defendants-Appellants.

         Appeals from the United States District Court for the
                    Eastern District of Wisconsin.
               No. 12 CR 88 — Lynn Adelman, Judge.

    ARGUED FEBRUARY 24, 2014 — DECIDED OCTOBER 24, 2014

   Before FLAUM and ROVNER, Circuit Judges, and KENDALL,
District Judge.*
   KENDALL, District Judge. A jury convicted Shakil Wamiq of
four counts of knowingly shipping, transporting, receiving,
possessing, selling, distributing, or purchasing contraband

*
 The Honorable Virginia M. Kendall, District Judge for the United States
District Court, Northern District of Illinois, sitting by designation.
2                                      Nos. 13-2662 & 13-2681

cigarettes in violation of 18 U.S.C. § 2342(a) of the Contraband
Cigarette Trafficking Act (“CCTA”). The same jury convicted
Mazher Ali Khan, who acted independently of Wamiq, of three
counts of knowingly shipping, transporting, receiving, possess-
ing, selling, distributing, or purchasing contraband cigarettes
in violation of 18 U.S.C. § 2342(a). Both Wamiq and Khan
appeal their respective convictions, forfeitures, and denial of
their post-trial motions. Wamiq also appeals his sentence.
Finding no error, we affirm.
                               I
    In 2011, agents from the Bureau of Alcohol, Tobacco,
Firearms and Explosives ran a warehouse in Milwaukee,
Wisconsin as part of an undercover investigation into the
trafficking of contraband cigarettes. The Milwaukee warehouse
did not have any exterior signage. Nor was there any signage
inside the Milwaukee warehouse. The only warehouse
equipment inside the warehouse was a hand truck used to
move cases of cigarettes and some old pallets. Although there
was an office inside the Milwaukee warehouse, there were no
computers. Apart from some basic furnishings, the only piece
of office equipment in the Milwaukee warehouse was a money
counter.
   ATF agents purchased cigarettes from two tobacco compa-
nies. One company sold cigarettes, primarily Newport brand
cigarettes, to the ATF, while the other provided cigarettes,
primarily Marlboro and Parliament brand cigarettes, to the
ATF on consignment. The latter company simply accepted
whatever proceeds the ATF received from purchasers of the
cigarettes provided by that company as payment for its
Nos. 13-2662 & 13-2681                                          3

cigarettes. ATF used the Milwaukee warehouse to store and
sell the cigarettes they received from the tobacco companies.
ATF agents sold the cigarettes, none of which bore any
evidence of the payment of applicable State or local cigarette
taxes, to various purchasers, to include Wamiq and Khan.
    Khan first received cigarettes from the Milwaukee ware-
house in May 2011. Mohammad Uddin purchased ten cases of
Marlboro cigarettes from the Milwaukee warehouse on May
19, 2011. Each case contained sixty cartons of cigarettes; each
carton contained ten packs of cigarettes; and each pack of
cigarettes contained twenty cigarettes. He paid a total of
$15,000 in cash, cash he received from Khan, for the ten cases
of Marlboro cigarettes, which he placed in his silver Nissan.
After completing his purchase, Uddin met Khan a short
distance from the Milwaukee warehouse and transferred the
ten cases of Marlboro cigarettes to Khan’s blue minivan before
returning to the Milwaukee warehouse to purchase additional
cigarettes.
    Uddin returned to the Milwaukee warehouse on June 30,
2011, this time accompanied by Khan. Uddin drove Khan’s
blue minivan to the Milwaukee warehouse and purchased
twenty-six cases of cigarettes. He paid $39,000 in cash and then
he and Khan left the Milwaukee warehouse. A short while
later, Uddin returned to the Milwaukee warehouse in his silver
Nissan and purchased additional cigarettes.
    Uddin purchased cigarettes from the Milwaukee ware-
house for Khan three more times. Uddin paid $75,000 in cash
for fifty cases of cigarettes on July 8, 2011; $78,000 in cash for
fifty-two cases of cigarettes on July 15, 2011; and $75,000 in
4                                       Nos. 13-2662 & 13-2681

cash for fifty cases of cigarettes on September 21, 2011. Uddin
drove Khan’s yellow conversion van to the Milwaukee
warehouse to make these three purchases and then returned
the van and the cigarettes to Khan. Neither Uddin nor Khan
received any receipts or invoices for these five purchases. After
each purchase, Khan transported the cigarettes purchased at
the Milwaukee warehouse to Illinois.
     Uddin also orchestrated four cigarette purchases from the
Milwaukee warehouse for Wamiq. Uddin’s first purchase for
Wamiq took place on October 26, 2011. The two met at a gas
station near the Milwaukee warehouse where Wamiq gave
Uddin the money necessary to purchase cigarettes from the
Milwaukee warehouse. Uddin then went to the Milwaukee
warehouse and used the money provided by Wamiq, $257,000,
to purchase 158 cases of cigarettes. After loading the cigarettes
into a rented truck, Uddin met up with Wamiq on the high-
way. Wamiq, Uddin, and Uddin’s brother then drove back to
Illinois as part of a three-vehicle convoy. Wamiq unloaded the
cigarettes from the rented truck at a warehouse in Illinois.
   Wamiq used Uddin to purchase cigarettes at the Milwaukee
warehouse three more times. Using money received from
Wamiq, Uddin paid $202,500 for 135 cases of cigarettes on
December 8, 2011; $273,000 for 182 cases of cigarettes on
December 21, 2011; and $132,000 for 88 cases of cigarettes on
February 14, 2012. Neither Uddin nor Wamiq received any
receipts or invoices for these four purchases.
   An indictment charged Uddin, Wamiq, and Khan with
conspiring to violate the CCTA. The indictment also charged
Uddin with nine counts of violating the CCTA; Wamiq with
Nos. 13-2662 & 13-2681                                          5

four counts of violating the CCTA; and Khan with five counts
of violating the CCTA. Uddin entered a plea agreement and
testified at trial against Wamiq and Khan. At trial, Uddin
explained his role in each of the purchases he made for Wamiq
and Khan.
   This was not the first undercover ATF investigation in
which Wamiq purchased cigarettes from an ATF warehouse.
A criminal complaint filed in the Northern District of Illinois
charged Wamiq with purchasing contraband cigarettes from an
ATF warehouse in Hickory Hills, Illinois. This criminal
complaint was dismissed.
    Prior to trial in this case, Wamiq moved to exclude any
evidence related to the criminal complaint filed in the Northern
District of Illinois under Fed. R. Evid. 403 and 404(b). The
district court denied Wamiq’s motion because it concluded that
the evidence was admissible to prove motive or plan. The
district court also concluded that Wamiq’s cigarette purchases
in the undercover ATF investigation in Illinois were direct
evidence of guilt to the extent that Wamiq claimed that he had
purchased enough tax stamps to apply to the cigarettes he
purchased in both Wisconsin and Illinois.
    A jury convicted Wamiq of four counts of knowingly
shipping, transporting, receiving, possessing, selling, distribut-
ing, or purchasing contraband cigarettes and convicted Khan
of three counts of knowingly shipping, transporting, receiving,
possessing, selling, distributing, or purchasing contraband
cigarettes. Following their convictions, Wamiq and Khan
separately moved for judgment of acquittal. The district court
denied both motions. Khan also moved to arrest judgment,
6                                        Nos. 13-2662 & 13-2681

which Wamiq joined. The district court denied this motion too.
The district court sentenced Wamiq to twenty-one months
imprisonment, three years of supervised release, ordered
restitution in the amount of $220,882.20, and forfeiture in the
amount of $472,993.20. The district court sentenced Khan to
two years probation, restitution in the amount of $58,150.00,
and forfeiture in the amount of $125,308.80, in addition to his
conversion van.
                                II
    The CCTA makes it a crime “for any person knowingly to
ship, transport, receive, possess, sell, distribute, or purchase
contraband cigarettes.” 18 U.S.C. § 2342(a). “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 govern-
ments each year and often serves as a source of illicit financing
for organized crime and terrorist organizations.” United States
v. Mohamed, No. 13-2368, slip op. at 9 (7th Cir. Jul. 22, 2014)
(citations omitted). 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.” 18 U.S.C.
§ 2341(2).
   But the CCTA’s definition of “contraband cigarettes” does
not apply to cigarettes in the possession of certain persons. See
18 U.S.C. §§ 2341(2)(A)–(D). For instance, the definition does
Nos. 13-2662 & 13-2681                                      7

not apply to a person “licensed or otherwise authorized by the
State where the cigarettes are found to account for and pay
cigarette taxes imposed by such State and who has complied
with the accounting and payment requirements relating to
such license or authorization with respect to the cigarettes
involved.” 18 U.S.C. § 2341(2)(C). Both Wamiq, who claims to
have been an agent of a licensed distributor in Illinois, and
Khan, who was a licensed distributor in Illinois, sought to
invoke this exception. But neither Wamiq nor Khan complied
with the accounting and payment requirements required under
the Illinois Cigarette Tax Act with respect to the cigarettes
purchased at the Milwaukee warehouse. As discussed infra,
neither received invoices for cigarettes purchased from the
Milwaukee warehouse, nor did they make their out-of-state
purchases from an approved cigarette distributor, maker,
manufacturer, or fabricator. The Illinois Cigarette Tax Act
required them to do both. There is no reason to allow Wamiq
or Khan to seek refuge under 18 U.S.C. § 2341(2)(C) when
neither did what Illinois law requires of one licensed or
otherwise authorized to possess unstamped cigarettes.
     On appeal, Wamiq and Khan challenge the constitutionality
of the CCTA. They claim that the CCTA violates the Tenth
Amendment and is void for vagueness. They also claim that
each should have been charged with a single count of violating
the CCTA. In addition, Wamiq challenges the admission of
evidence related to his purchase of unstamped cigarettes in
Illinois and the sufficiency of the evidence presented against
him.
  Wamiq and Khan also claim that the district court erred
when determining their respective forfeiture amounts. Wamiq
8                                         Nos. 13-2662 & 13-2681

alone challenges his sentence, which he claims resulted from
an unwarranted loss amount and the district court’s failure to
apply a two-level reduction for acceptance of responsibility.
Although unconvincing, the arguments presented by Wamiq
and Khan are not perfunctory and undeveloped. Accordingly,
we address each argument in turn.
                                 A
    The CCTA does not violate the Tenth Amendment because
it is a valid exercise of Congressional authority under the
Commerce Clause that neither interferes with the states’ ability
to tax or regulate cigarettes nor compels state action. Wamiq
and Khan mischaracterize the CCTA as an attempt by the
federal government to punish violations of state law. Although
they did not articulate this argument in the district court as
they have here, the record indicates that Wamiq and Khan
questioned whether the CCTA is an appropriate exercise of
Congressional authority. Accordingly, we will address their
Tenth Amendment argument on appeal. We review the
constitutionality of a federal statute de novo. United States v.
Goodwin, 717 F.3d 511, 516 (7th Cir. 2013), cert. denied, 134 S. Ct.
334, 187 L. Ed. 2d 234 (2013).
    Congress may regulate three categories of activity under
the Commerce Clause: (1) the use of channels of interstate
commerce; (2) the use of instrumentalities of interstate com-
merce, or persons or things in interstate commerce; and (3)
activities that have a substantial relation to interstate com-
merce. United States v. Stokes, 726 F.3d 880, 894 (7th Cir. 2013),
cert. denied, 134 S. Ct. 833, 187 L. Ed. 2d 573 (2013) (discussing
United States v. Lopez, 514 U.S. 549, 115 S. Ct. 1624, 131 L. Ed. 2d
Nos. 13-2662 & 13-2681                                             9

626 (1995)). The CCTA fits comfortably within the second and
third categories. See, e.g., United States v. Abdullah, 162 F.3d 897
(6th Cir. 1998) (contraband cigarettes have a substantial effect
on interstate commerce). Therefore, the CCTA is a valid
exercise of Congressional authority under the Commerce
Clause.
    Further, the CCTA does not violate the principles of
federalism contained in the Tenth Amendment. The CCTA
does not interfere with the states’ ability to tax or regulate
cigarettes. Cf. N. Ill. Chapter of Associated Builders & Contractors,
Inc. v. Lavin, 431 F.3d 1004, 1006 (7th Cir. 2005) (“The national
government lacks the authority to regulate how states behave;
it cannot direct them to pass or enforce laws.”). Nor does the
CCTA compel or commandeer the states to do anything. See
United States v. Kenney, 91 F.3d 884, 891 (7th Cir. 1996) (proper
exercise of authority under the Commerce Clause that does not
compel state action does not violate the Tenth Amendment).
    And, contrary to Wamiq and Khan’s suggestion, the CCTA
does not punish violations of state law. Rather, the CCTA
reflects “the well-established principle that Congress may
regulate conduct even though that conduct already violates
state law … .” See United States v. Wilson, 73 F.3d 675, 684 (7th
Cir. 1995). The CCTA is a federal criminal statute that targets
interstate cigarette trafficking. Its existence distinguishes this
case from United States v. Constantine, 56 S. Ct. 223, 80 L. Ed.
233 (1935), which is the primary authority Wamiq and Khan
cite for their argument. The Supreme Court held in Constantine
that Congress could not impose a $1000 sanction for the
violation of a state liquor law. See id. at 224; see also United
States v. Butler, 56 S. Ct. 312, 321, 80 L. Ed. 477 (1936) (discuss-
10                                         Nos. 13-2662 & 13-2681

ing Constantine). The authority for the $1000 sanction, which
the government unsuccessfully argued was a tax, was the
Eighteenth Amendment. Constantine, 56 S. Ct. at 227. But the
federal government lost the authority to impose the $1000
sanction with the repeal of the Eighteenth Amendment, which
allowed the federal government to enforce nation-wide
prohibition. Id. at 227. In other words, the state law alone was
not enough to warrant a federal penalty. That is not the case
here, as the CCTA provides an independent federal basis for
any penalties imposed for violations of the CCTA.
                                  B
     The CCTA also does violate the void-for-vagueness
doctrine. The void-for-vagueness doctrine ensures that statutes
provide fair notice of proscribed conduct and protects against
the arbitrary or discriminatory enforcement of statutes. See
F.C.C. v. Fox Television Stations, Inc., 132 S. Ct. 2307, 2317, 183 L.
Ed. 2d 234 (2012); see also United States v. Tichenor, 683 F.3d 358,
363–64 (7th Cir. 2012) (“It is settled that, as a matter of due
process, a criminal statute that fails to give a person of ordi-
nary intelligence fair notice that his contemplated conduct is
forbidden by statute, or is so indefinite that it encourages
arbitrary and erratic arrests and convictions is void for vague-
ness.”) (quoting Colautti v. Franklin, 439 U.S. 379, 390, 99 S. Ct.
675, 58 L. Ed. 2d 596 (1979)). Courts evaluate vagueness
challenges in view of the facts of a particular case. United States
v. Jones, 689 F.3d 696, 702 (7th Cir. 2012), cert. denied, 133 S. Ct.
895, 184 L. Ed. 2d 695 (2013). This is an issue we review de novo.
United States v. Hausmann, 345 F.3d 952, 958 (7th Cir. 2003).
     Wamiq and Khan’s vagueness challenge rests on the
Nos. 13-2662 & 13-2681                                         11

reference to state “accounting and payment requirements” in
18 U.S.C. § 2341(2)(C)(ii). They claim that someone licensed or
otherwise authorized under the Illinois Cigarette Tax Act to
possess unstamped cigarettes would not know whether they
are in violation of the CCTA at any given time. There is no
merit to this argument.
    In Illinois, stamps affixed to original packages of cigarettes
show that the required taxes have been paid on those ciga-
rettes. 35 ILCS 130/2. Only licensed distributors and transport-
ers may possess unstamped original packages of cigarettes. 35
ILCS 130/3. To become a licensed distributor, one must submit
an application to the Illinois Department of Revenue. 35 ILCS
130/4. A licensed distributor “who purchases cigarettes for
shipment into Illinois from a point outside this State” must
obtain “invoices in duplicate covering each such shipment.” 35
ILCS 130/12. Licensed distributors must “preserve and keep
within Illinois at his licensed address all invoices, bills of
lading, sales records, copies of bills of sale … and other
pertinent papers and documents relating to the manufacture,
purchase, sale or disposition of cigarettes.” 35 ILCS 130/11.
There is nothing vague about these requirements, as they
provide fair notice of the “accounting and payment require-
ments” Illinois requires of licensed distributors.
    Neither Wamiq nor Khan asked for or received invoices for
any of the purchases made at the Milwaukee warehouse.
Without invoices for their Milwaukee warehouse purchases,
neither Wamiq nor Khan could comply with the Illinois
accounting and payment requirements for licensed distribu-
tors. As a result, neither could qualify for the exception
provided in 18 U.S.C. § 2341(2)(C)(ii).
12                                      Nos. 13-2662 & 13-2681

    Further, contrary to Wamiq and Khan’s claim, a conviction
under the Illinois Cigarette Tax Act is not a necessary predicate
to a violation of the CCTA. See United States v. Skoczen, 405 F.3d
537, 547 (7th Cir. 2005) (“The federal statute does not require
the person possessing contraband to be the one in violation of
the state law.”); see also, e.g., Young v. United States, 124 F.3d
794, 800 (7th Cir. 1997) (“Many statutes build on predicate
offenses whether or not the defendant is or has been convicted
of the other crimes.”). Rather, the CCTA requires only that the
government prove beyond a reasonable doubt that (1) the
defendant knowingly shipped, transported, received, pos-
sessed, sold, distributed or purchased (2) more than 10,000
cigarettes (3) not bearing Illinois cigarette tax stamps (4) under
circumstances in which Illinois law required the cigarettes to
bear such stamps, and (5) the defendant is not an excepted
person under 18 U.S.C. §§ 2341(2)(A)–(D). See Mohamed, No.
13-2368, slip op. at 10 (applying CCTA in context of Indiana’s
Cigarette Tax Act).
    In Illinois, licensed distributors may possess unstamped
original packages of cigarettes. 35 ILCS 130/3. They can either
apply tax stamps to those unstamped original packages of
cigarettes, provided they received those unstamped original
packages of cigarettes from another in-state licensed distribu-
tor or from an out-of-state permit holder, or ship the unstamp-
ed original packages of cigarettes out of state. Id. Here, the
cigarettes purchased at the Milwaukee warehouse were sold
by an undercover ATF agent—an out-of-state source who did
not hold a permit under the Illinois Cigarette Tax Act . Yet the
evidence established that both Wamiq and Khan intended to
sell the cigarettes purchased from the Milwaukee warehouse
Nos. 13-2662 & 13-2681                                        13

in Illinois. Consequently, even if Wamiq and Khan purchased
the cigarettes at the Milwaukee warehouse with the intention
of stamping them as they claim, they could not have done so
lawfully because they purchased the cigarettes from an
unapproved, out-of-state source.
                               C
    The indictment properly charged Wamiq and Khan with a
violation of the CCTA for each discrete purchase at the
Milwaukee warehouse. Wamiq and Khan both argue that they
each should have been charged with one count of violating the
CCTA. They claim that they could not have violated the CCTA
until they failed to comply with the Illinois Cigarette Tax Act’s
accounting and payment requirements. In other words, Wamiq
and Khan claim that the cigarettes they purchased from the
Milwaukee warehouse were not contraband on the dates they
purchased them. This argument ignores their respective
failures to ask for or receive invoices for their
purchases—purchases involving an unapproved, out-of-state
source. By failing to adhere to these requirements, the ciga-
rettes Wamiq and Khan purchased from the Milwaukee
warehouse were contraband at the time of purchase.
   Moreover, we agree with the district court that the CCTA
applies to each transaction involving contraband cigarettes. To
ascertain whether a particular course of conduct involves one
or more distinct offenses under a statute, courts must deter-
mine the allowable unit of prosecution under the statute.
United States v. Cureton, 739 F.3d 1032, 1041 (7th Cir. 2014). A
unit of prosecution is “the minimum amount of activity for
which criminal liability attaches.” Id.
14                                        Nos. 13-2662 & 13-2681

     The CCTA makes it unlawful for any person knowingly to
ship, transport, receive, possess, sell, distribute, or purchase
contraband cigarettes. 18 U.S.C. § 2342(a). Thus, shipping,
transporting, receiving, possessing, selling, distributing, or
purchasing contraband cigarettes qualifies as an allowable unit
of prosecution under the statute provided there is some
meaningful difference in the charged conduct. This means that
purchasing contraband cigarettes, transporting those cigarettes
to another location, and then selling those cigarettes to some-
one else within a matter of days would not support three
violations of the CCTA because the transport and sale involved
the same cigarettes and occurred soon after the purchase. See
Cureton, 739 F.3d at 1041 (“when ‘Congress does not fix the
punishment for a federal offense clearly and without ambigu-
ity, doubt will be resolved against turning a single transaction
into multiple offenses.’ ”) (quoting Bell v. United States, 349 U.S.
81, 84, 75 S. Ct. 620, 620 (1955)). But that is not what happened
here. Wamiq and Khan made multiple purchases of contra-
band cigarettes over a four-month period; Wamiq from
October 2011 to February 2012 and Khan from May 2011 to
September 2011. These distinct purchases qualify as separate
transactions, each sufficient to support a violation of the
CCTA.
                                D
    The district court did not abuse its discretion by admitting
evidence of Wamiq’s purchases of unstamped cigarettes from
a confidential informant in Lombard, Illinois and from an ATF
warehouse in Hickory Hills, Illinois. “While evidence of
another ‘bad act’ is ‘not admissible to prove a person’s charac-
ter in order to show that on a particular occasion the person
Nos. 13-2662 & 13-2681                                          15

acted in accordance with the character,’ it is admissible to
prove motive, opportunity, preparation, plan, knowledge,
identity, absence of mistake, lack of accident, or intent.” United
States v. Causey, 748 F.3d 310, 317 (7th Cir. 2014) (citing Fed. R.
Evid. 404(b)). We apply a four-part test to determine if evi-
dence of another bad act is admissible: (1) the evidence is
directed towards establishing a matter other than the defen-
dant’s propensity to commit the crimes charged; (2) the other
act is similar and close enough in time to be relevant; (3) the
evidence is sufficient to support a jury finding that the defen-
dant committed the other act; and (4) the probative value of the
evidence is not substantially outweighed by the danger of
unfair prejudice.” Id. We review challenges to the district
court’s evidentiary rulings for an abuse of discretion. United
States v. Howard, 692 F.3d 697, 703 (7th Cir. 2012).
     Here, the district court concluded that evidence of Wamiq’s
Illinois purchases were directed toward Wamiq’s motive and
plan to purchase unstamped cigarettes so that he could sell
them at a lower cost and thereby undercut his competition. The
district court also concluded that Wamiq’s Illinois purchases
were direct evidence of guilt because they rebutted Wamiq’s
claims that he purchased sufficient tax stamps to apply to the
cigarettes he purchased in Illinois and Wisconsin. After
concluding that Wamiq’s Illinois activity was similar to and
close enough in time to the charged conduct, the district court
determined that the evidence related to Wamiq’s Illinois
activity was sufficient to support a jury finding that Wamiq
made the Illinois purchases. After concluding that the danger
of unfair prejudice did not substantially outweigh the proba-
tive value of the evidence, the district court allowed evidence
16                                       Nos. 13-2662 & 13-2681

related to Wamiq’s Illinois purchases.
    Wamiq argues that the district court should not have
allowed evidence of his Illinois purchases because the evidence
was “extraordinarily prejudicial,” and confused and misled the
jury. We disagree. “Evidence is unfairly prejudicial only to the
extent that it will cause the jury to decide the case on improper
grounds.” United States v. Richards, 719 F.3d 746, 762–63 (7th
Cir. 2013). Generally, our tolerance for the risk of prejudice
created by evidence is directly proportional to the probative
value of the evidence. See United States v. Earls, 704 F.3d 466,
471 (7th Cir. 2012) (discussing Fed. R. Evid. 403).
    Wamiq does not challenge the district court’s determination
that evidence of the Illinois purchases were directed toward
Wamiq’s motive and plan, both of which are permitted uses
under Fed. R. Evid. 404(b). Given Wamiq’s principle defense
that he was authorized to purchase unstamped cigarettes
provided he account for and pay taxes on those cigarettes,
evidence of Wamiq’s purchases of unstamped cigarettes from
unapproved sources is highly probative of his plan to profit
from the sale of contraband cigarettes. As the district court
noted, Wamiq’s defense placed whether he purchased enough
tax stamps to place stamps on all of the cigarettes he purchased
at issue.
   The risk of unfair prejudice, however, is not as high. Wamiq
did not deny that he purchased unstamped cigarettes from the
undercover ATF operations in Illinois and Wisconsin. And the
charges based on Wamiq’s Illinois purchases were dismissed.
This supports an inference that Wamiq did not violate the
CCTA when he purchased unstamped cigarettes in Illinois as
Nos. 13-2662 & 13-2681                                        17

much as it does a propensity inference, and thereby reduces
the risk of unfair prejudice. To avoid the latter inference, the
district court issued a proper limiting instruction to the jury
explaining that it could only consider Wamiq’s Illinois pur-
chases for purposes of motive and plan. See Richards, 719 F.3d
at 763 (“Properly administered limiting jury instructions cure
the danger of unfair prejudice unless the jury could not follow
the court’s limiting instruction.”) (quotation omitted). The
district court’s limiting instruction made clear that Wamiq was
not on trial for the purchases he made in Illinois, thereby
further mitigating any possible prejudice or confusion. As a
result, the risk of unfair prejudice did not substantially
outweigh the probative value of Wamiq’s Illinois purchases.
Consequently, the district court did not err in allowing
evidence of Wamiq’s Illinois purchases.
                               E
    There was sufficient evidence to support Wamiq’s convic-
tions as to counts thirty, thirty-four, thirty-seven, and thirty-
eight. “We review challenges to the sufficiency of the evidence
deferentially.” United States v. Bey, 725 F.3d 643, 649 (7th Cir.
2013). We will reverse a conviction due to insufficient evidence
only if the record, viewed in the light most favorable to the
government, lacks evidence from which a jury could find guilt
beyond a reasonable doubt. United States v. Tucker, 737 F.3d
1090, 1092 (7th Cir. 2013).
   As discussed supra, the CCTA requires only that the
government prove beyond a reasonable doubt that (1) the
defendant knowingly shipped, transported, received, pos-
sessed, sold, distributed or purchased (2) more than 10,000
18                                      Nos. 13-2662 & 13-2681

cigarettes (3) not bearing Illinois cigarette tax stamps (4) under
circumstances in which Illinois law required the cigarettes to
bear such stamps, and (5) the defendant is not an excepted
person under 18 U.S.C. §§ 2341(2)(A)–(D). Wamiq does not
dispute the sufficiency of the evidence with respect to the first
four elements. Nor could he, as the record shows that he
purchased 158 cases of cigarettes from the Milwaukee ware-
house on October 26, 2011; 135 cases of cigarettes from the
Milwaukee warehouse on December 8, 2011; 182 cases of
cigarettes from the Milwaukee warehouse on December 21,
2011; and 99 cases of cigarettes from the Milwaukee warehouse
on February 14, 2012. The record also shows that Illinois law
required all of these cigarettes to bear tax stamps, but none of
them did.
     Wamiq argues only that the evidence was insufficient to
show that he was not an excepted person under 18 U.S.C. §
2341(2)(C). Wamiq claims that he was not responsible for the
accounting and payment requirements related to cigarette
purchases he made for his employer, Good Deal Wholesale,
Inc. According to Wamiq, his employer, as the licensed
distributor, should have filed the appropriate forms with the
Illinois Department of Revenue. But this argument ignores
testimony from Michael Hoff that Wamiq admitted that he was
responsible for Good Deal Wholesale and that the listed owner
of the company played no part in its operation. Viewed in the
light most favorable to the government, a jury could find that
Wamiq was responsible for the accounting and payment
requirements related to cigarette purchases he made for Good
Deal Wholesale. Therefore, there was sufficient evidence to
support Wamiq’s convictions.
Nos. 13-2662 & 13-2681                                          19

                                F
    Wamiq and Khan challenge the district court’s forfeiture
order as unsupported by the evidence. Specifically, Wamiq and
Khan claim that the district court used “grossly insufficient
‘estimates’ ” to calculate the profits Wamiq and Khan derived
from the conduct that resulted in their respective convictions.
We review the district court’s calculation, which is a factual
determination, for clear error. United States v. Ali, 619 F.3d 713,
720 (7th Cir. 2010).
    Neither Wamiq nor Khan challenge the propriety of a
forfeiture order in this case. Property that constitutes or is
derived from “specified unlawful activity” as defined in 18
U.S.C. § 1956(c)(7) is subject to forfeiture. 18 U.S.C. §
981(a)(1)(C). Trafficking in contraband cigarettes in violation
of 18 U.S.C. § 2342 is one of many offenses that fall within the
meaning of “specified unlawful activity.” See 18 U.S.C. §
1956(c)(7)(A); see also 18 U.S.C. § 1961(1).
    Instead, Wamiq and Khan claim that the district court failed
to account for pricing variables that affect the wholesale
cigarette market, such as discounts and promotions offered to
licensed distributors. The district court used the difference
between what Wamiq and Khan actually paid for the cigarettes
at the Milwaukee warehouse, approximately $25 per carton,
and what they would have paid had they purchased the
cigarettes from the manufacturer, approximately $39 per
carton. The district court then multiplied this difference, $14,
by the number of cartons of contraband cigarettes Wamiq and
Khan purchased at the Milwaukee warehouse. The only
evidence presented concerning any manufacturer’s discount or
20                                      Nos. 13-2662 & 13-2681

promotions was a $2.10 credit that lowered the price of a
carton of Marlboro’s to $36.70. But neither Wamiq nor Khan
presented any evidence that they would have received this
discount, or that otherwise undermined the information
received from the manufacturers concerning what they charge
licensed dealers. Because Wamiq and Khan offer nothing but
speculation to rebut the pricing evidence credited by the
district court, we cannot say that the district court’s calcula-
tions of Wamiq’s and Khan’s forfeiture amounts were clearly
erroneous.
                               G
    Wamiq challenges the district court’s findings as to the loss
amount caused by Wamiq’s unlawful conduct and Wamiq’s
acceptance of responsibility. The government must show the
loss amount caused by the conduct of conviction and other
relevant unlawful conduct by a preponderance of the evidence.
United States v. Orillo, 733 F.3d 241, 244 (7th Cir. 2013). We
review the district court’s finding of loss amount for clear
error, meaning that the “district court’s calculation was not
only inaccurate but outside the realm of permissible
computations.” Id. (quoting United States v. Severson, 569 F.3d
683, 689 (7th Cir. 2009)).
    In determining the loss amount, the district court sub-
tracted the number of tax stamps purchased during the
relevant period by the company Wamiq admitted he ran, Good
Deal Wholesale, from the total number of cigarettes Good Deal
Wholesale purchased during that period. The district court
then multiplied the difference, 225,390, by the cost of a tax
stamp, 98 cents, to arrive at a loss amount of $220,882.20. This
Nos. 13-2662 & 13-2681                                          21

was a permissible computation, particularly as there was no
evidence to suggest that Wamiq or Good Deal Wholesale ever
purchased tax stamps to cover the difference. In fact, the
district court’s computation was lenient in that it credits
Wamiq with applying tax stamps to unstamped original
packages of cigarettes purchased from an unapproved source
even though he could not lawfully do so under 35 ILCS 130/3.
    We also review the district court’s denial of an adjustment
for acceptance of responsibility for clear error. United States v.
Ali, 619 F.3d 713, 720 (7th Cir. 2010). It is true that a defendant
who exercises his or her constitutional right to a trial may, in
rare situations, demonstrate acceptance of responsibility.
United States v. DeLeon, 603 F.3d 397, 407 (7th Cir. 2010)
(discussing U.S.S.G. § 3E1.1 cmt. 2). But those “rare situations”
do not include situations in which the defendant contests his
or her factual guilt. U.S.S.G. § 3E1.1 cmt. 2. Here, Wamiq
challenged whether he qualified as a person licensed or
otherwise authorized by Illinois to have unstamped cigarettes,
which is a factual matter. Therefore, the district court was
correct to deny Wamiq acceptance of responsibility under §
3E1.1.
                                III
    For the foregoing reasons, we AFFIRM Wamiq’s convic-
tions, sentence, and forfeiture amount, and AFFIRM Khan’s
conviction and forfeiture amount.