UNITED STATES DISTRICT COURT …

                      UNITED STATES DISTRICT COURT
                     EASTERN DISTRICT OF TENNESSEE
                              AT KNOXVILLE


UNITED STATES OF AMERICA,                          )
                                                   )
                 Plaintiff,                        )
                                                   ) No. 3:08-cr-69
v.                                                 )
                                                   ) (Varlan/Guyton)
J. REECE ROTH,                                     )
                                                   )
                 Defendant.                        )



                          GOVERNMENT'S TRIAL BRIEF




                              JAMES R. DEDRICK
                              United States Attorney



                            JEFFREY E. THEODORE
                                        and
                               A. WILLIAM MACKIE
                         Assistant United States Attorneys
                           800 Market Street, Suite 211
                                Knoxville, TN 37902
                                   865.545.4167
                                I. FACTUAL SUMMARY

       During the time period of May 2004 through June 2007, Atmospheric Glow

Technologies, Inc. (AGT) had two Small Business Innovative Research (SBIR) contracts

with the Air Force Research Lab-Munitions Directorate. The objective of both contracts

was to design plasma actuators as mechanisms or flight controls for a small unmanned air

vehicle (UAV).

       Between about May and October 2004, Professor J. Reece Roth at the University

of Tennessee (UT) Plasma Science Lab, along with Daniel Sherman and others at AGT,

discussed developing a work arrangement where Xin Dai, a Chinese foreign national and

graduate research assistant (GRA) working for Roth at UT, would work in some capacity

on a Phase II contract. On October 29, 2004, Roth e-mailed Sherman and AGT President

Kim Kelly-Wintenberg and proposed a Project Plan where he outlined a work plan between

two GRAs that he supervised at the UT Plasma Lab to work on the Phase II contract. Roth

noted in this Project Plan that the project was subject to export controls. Consulting with

Roth, Sherman later drafted and submitted on behalf of AGT a Project Proposal for the

Phase II contract to the Air Force Research Laboratory-Munitions Directorate. This

Proposal incorporated much of the Project Plan that Roth sent to Sherman. Sherman also

sent a Data Sheet form to the Air Force representing that AGT was not proposing to use

any non-United States citizen as part of any research and development work for the

contract.

       In January 2005, AGT received a tentative award letter for the Phase II contract.

This contract was titled "Augmented UAV Flight Performance Using Non-Thermal Plasma

Activators." A plasma actuator is a device used to produce atmospheric plasma for

                                            2
aerodynamic applications.      Sherman and Roth exchanged proposed drafts of a

subcontract, Task Order 102, between AGT and UT. Task Order 102 specifically names

Dai and Truman Bonds, another GRA, to the contract, but does not identify their

nationalities. On the final signature page Task Order 102 cites the AFMC-FAR clause

which explicitly stated "Export-Controlled Data Restrictions." Right below that clause, the

contract is signed by AGT President Kelly-Wintenberg, Roth as project manager, and a UT

representative.

      On May 13, 2005, Roth sent a letter to Dai assigning him to work on the Phase II

contract and explaining to Dai that the purpose of the project was to research and

implement this technology into a UAV for the Air Force. Later that month, Dai and Bonds

began working on the contract, with Dai working at the UT Plasma Lab and Bonds working

at AGT. AGT required Dai and Bonds to produce weekly r+eports on their research

progress. Data from tests of specific actuator designs was quantified and the weekly

reports were used to document the progress of the plasma actuator development. The

data from these weekly reports was directly incorporated into quarterly reports.

      In approximately July 2005, AGT, with the consent of Roth, directed Bonds to start

sharing his weekly reports with Dai. Thereafter, Bonds e-mailed every weekly report that

he produced to Dai, Roth, Sherman, and project manager Robert Briggs. Roth responded

to some of those weekly reports and further tasked Dai with additional research to verify

the results in Bond's weekly reports. Dai received and retained many of Bonds' weekly

reports containing technical data on his computer. Six of those weekly reports have been

certified by the State Department Directorate of Defense Trade Controls (DDTC) as



                                            3
defense articles, i.e., technical data, described on the U.S. Munitions List. The export of

those weekly reports is the basis for Counts 3-8 of the indictment.

       In October 2005, Project Manager Briggs e-mailed Dai, Roth, Bonds and others

quarterly reports I and II. These documents are specific deliverables under the Controlled

Data Requirements List (CDRL) of the Phase II contract and have been certified by the

DDTC as defense articles, i.e., technical data as defined in the U.S. Munitions List. The

export of those quarterly reports is the basis for Counts 9 and 10 of the indictment.

       In the fall of 2005, AGT installed at the UT Plasma Science Lab a piece of

specialized equipment called a "Force Stand," also known as a Displacement Sensing

Unstable Equilibrium Thrust (DUET) Stand.

       The Force Stand was specifically designed, funded and produced under the Phase

II contract and has been certified by the DDTC as a defense article on the munitions list.

The device was created for the singular purpose of taking sensitive measurements of the

forces produced by plasma actuators.

       During the fall of 2005, Dai began using the Force Stand installed at the UT plasma

lab. Under the supervision of Roth at the lab, Dai routinely used the device to test and

improve the plasma actuators, thereafter forwarding the test data to AGT via weekly

reports. This is the basis for Count 15 of the indictment which charges the export of a

defense service to a foreign national.

       On or about October 21, 2005, during Roth's Plasma Science Seminar, Sirous

Nourgostar, a citizen of Iran, was given a tour of the lab and shown the details of the

DUET Stand. This included a detailed explanation of the capabilities and operation of the

Force Stand. This is the basis for Count 16 of the indictment.

                                            4
      During January through March 2006, Roth began to encourage Dai to use

Nourgostar to help him with Phase II research, specifically by utilizing Nourgostar's

photography skills to photograph functioning actuators in February 2006. Dai produced a

weekly report which included a photograph of an actuator in operation taken by Nourgostar

in about April 2006.

      In the spring of 2006, Roth asked Nourgostar if he was interested in working on the

Phase II contract after Dai graduated that summer. On May 3, 2006, AGT, through Project

Manager Briggs, advised Roth that, "for obvious security reasons, your Iranian student is

not going to be acceptable" as a replacement for Dai. Roth responded that he did not feel

it was AGT's position to tell him who he could use on the project.

      On May 5, 2006, Roth met with Robin Witherspoon, the Contract Administrator and

Export Control Officer at UT, and attempted to add Nourgostar to the Phase II contract and

requested UT to seek an export license to accomplish this. Witherspoon then learned from

Roth that Chinese national Dai had been working on the Phase II project since May 2005

without a license from the State Department.        Three days later, on May 8, 2006,

Witherspoon e-mailed Roth advising him that the Phase II contract was export controlled

and providing him with the text of the clause so stating. She warned Roth to be cautious

about what he took with him on his forthcoming trip to China and not to disclose anything

about the Phase II project. Witherspoon called Roth on May 11, 2006, and advised him

that she spoke to the State Department and found out that both Iran and China are

prohibited countries for export control purposes.

      Witherspoon also contacted AGT regarding her discussions with Roth and her recent

discovery about foreign national Dai working on the Phase II contract. On May 12, 2006,

                                            5
AGT managers, including Kelly-Wintenberg, Sherman and Briggs, met with Roth and

advised him that they would no longer have involvement with foreign nationals on the

Phase II contract. They also warned Roth not to disclose Phase II research on his

upcoming trip to China. The following day, Roth departed for China where he lectured at

Fudan University in Shanghai and Tsinghua University at the Shenzhen campus. On about

May 15, 2006, while in China, Roth used the internet account of Fudan University Professor

S. D. Zhang and e-mailed Dai in Knoxville. Roth directed Dai to send him a copy of their

jointly-authored draft AIAA paper. Dai complied and attached a nearly final version of the

AIAA paper. The paper included technical data and diagrams taken directly from Dai's

weekly reports on the Phase II contract. This AIAA paper and Dai's research from his

weekly reports 31 and 32 contained therein have been certified by the DDTC as defense

articles, i.e., technical data as defined in the U.S. Munitions List. This export is the basis

for Counts 14 and 17 of the indictment.

       On May 20, 2006, Roth presented a lecture at Fudan University titled "Subsonic

Plasma Aerodynamics for Flight Control of Aircraft."

       Upon reentry into the United States from China on May 26, 2006, Roth was

inspected at the Detroit International Airport by Customs and Border Protection. Roth had

the following items in hard copy in his possession:

       1. Dai's Phase II weekly report for the week ending May 9, 2006, marked
       "Property of AGT." This has been certified by the DDTC as being a defense
       article, i.e., technical data as defined in the U.S. Munitions List. This export
       is the basis for Count 14 of the indictment.

       2. A copy of Robin Witherspoon's aforementioned May 8, 2006, e-mail
       where she included the "Export-Controlled Data Restrictions."



                                              6
       That same night, Roth's laptop computer was seized when he arrived in Knoxville,

Tennessee. Found on his thumb drive storage device was Dai's Weekly Report from the

week ending November 28, 2005. Found on his laptop was the entire AGT Proposal to the

Defense Advanced Research Projects Agency (DARPA). The DARPA proposal and the

reports found on Roth's lap top computer have been certified as a defense articles, i.e.,

technical data as defined in the U.S. Munitions List. These exports are the basis for Counts

11 and12 of the indictment.

       In November 2006, Dr. Way Kuo, Dean of the UT School of Engineering, became

aware that Roth was considering submitting the aforementioned AIAA paper for publication.

Dr. Kuo advised Roth that he needed to conform to the requirements of the Phase II

contract, including the export controls. Specifically, he informed Roth that if he wished to

present Dai's research results he needed to get approval from UT. Roth never received

approval from UT to disclose or publish Dai's research. In August 2007, Iranian graduate

student Sirous Nourgostar informed Roth that he could no longer find his copy of the AIAA

paper that he previously possessed. Nourgostar requested another copy of the paper from

Roth. Despite the prior admonitions by the Dean Kuo, department head Wayne Davis,

Robin Witherspoon and the management at AGT, Roth e-mailed Nourgostar a copy of the

AIAA paper that same day without authorization. This is the basis for Count 17 of the

indictment




                                             7
                                        STATUTES

A.     Conspiracy

       Count One of the proposed indictment charges Roth and AGT with engaging in a

criminal conspiracy to export a defense article without a license in violation of 18 U.S.C. §

371. Section 371 provides:

              If two or more persons conspire either to commit any offense against
       the United States, or to defraud the United States, or any agency thereof in
       any manner or for any purpose, and one or more of such persons do any act
       to effect the object of the conspiracy, each shall be fined under this title or
       imprisoned not more than five years or both.

       To prove a violation of 18 U.S.C. § 371, the United States must prove: (1) the

conspiracy described in the indictment was willfully formed and was existing at or about the

time alleged; (2) that the accused willfully became a member of the conspiracy; (3) that

one of the conspirators thereafter knowingly committed at least one overt act charged in

the indictment at or about the time and place alleged; and (4) that such overt act was

knowingly done in furtherance of some object or purpose of the conspiracy. United States

v. Brown, 147 F.3d 477, 489 (6th Cir. 1998).

       The proof need not show a formal agreement; "a tacit or material understanding

among the parties" is sufficient. United States v. Martinez, 430 F.3d 317, 330.(6th Cir.

2005). Once a conspiracy is demonstrated, a defendant's connection to the conspiracy

"need only be slight" and may be inferred from circumstantial evidence and his actions. Id.

A conspiracy may be inferred from acts done with a common purpose; tacit approval or

mutual understanding between the parties is sufficient to show a conspiratorial agreement.

United States v. Hughes, 891 F.2d 597, 601 (6th Cir. 1989).



                                             8
B.     The Arms Export Control Act

       Counts 3 through 17 of the indictment charge unlawful exports of defense articles

and services. The Arms Export Control Act (AECA), 22 U.S.C. § 2778, regulates the export

from and import into the United States of "defense articles"1 and "defense services."2

       The State Department, Directorate of Trade Controls (DDTC), promulgates

regulations under the AECA, which are known as the International Traffic In Arms

Regulations (ITAR). 22 C.F.R. §§ 120-130. The ITAR contains the Munitions List, which

sets forth twenty-one categories of defense articles and services that are subject to export

licensing controls. Id. at § 121.1. Unless an exemption applies, the ITAR requires a

validated export license from the DDTC for the export of Munitions List articles and related

technical data3 to all destinations. See 22 C.F.R. §§ 123-125.

       1.     Illegal Exports

       There are three essential elements of an illegal export under the AECA: (1) the

defendant exported, or caused to be exported, from the United States an article listed on

the Munitions List or a technology relating to an article on the Munitions List; (2) the

defendant did not obtain a license or written approval for the export from the State




       1
       "Defense article" means, inter alia, any item or technical data designated on the
United States Munitions List.
       2
         "Defense services" means, inter alia, "the furnishing of assistance (including
training) to foreign persons whether in the United States or abroad, in the design,
development . . . testing, or use of defense articles . . . ."
       3
       "Technical data" means, inter alia, information which is required for the design,
development, production, testing or modification of defense articles.

                                             9
Department; and (3) the defendant acted willfully. See United States v. Reyes, 270 F.3d

1158, 1169 (7th Cir. 2001).

       The ITAR contains a specific definition of what constitutes the export of an item. The

following, inter alia, constitute an exportation: (1) sending or taking a defense article out of

the United States in any manner; or (2) disclosing (including oral or visual disclosure) or

transferring "technical data" to a foreign person, whether in the United States or abroad

(sometimes referred to as a "deemed export"). 22 C.F.R. § 120.17.

       2.     Scienter

       Criminal violations of the AECA require that the government prove that the

defendant acted with "willful" intent. There is a split between several circuits regarding the

definition of willful intent in export cases. A few other circuits have internally inconsistent

definitions of the phrase, and still other circuits, such as the Sixth Circuit, have not yet

made any pronouncements on the subject.

       In Bryan v. United States, 524 U.S. 184, 196 (1998), the Supreme Court held that

in order to establish "willful" intent with regard to a Title 18 firearms violation, the

government must prove that the defendant acted with knowledge that his conduct was

unlawful. The Supreme Court held that the willfulness requirement in the statute did not

carve out an exception to the traditional rule that ignorance of the law is no excuse, and

that knowledge that the conduct is unlawful is all that is required. Id. The Court also

distinguished two of its previous cases, Ratzlaf v. United States, 510 U.S. 135 (1994), and

Cheek v. United States, 498 U.S. 192 (1991), in which the Court interpreted "willfully" to

require a showing that the defendant was aware of the particular statute that he was

charged with violating. The Court held that Ratzlaf and Cheek involved "highly technical

                                              10
statues" that dealt with currency restructuring and tax. 524 U.S. at 194. The complexity

of these statutes presented the danger of ensnarling individuals engaged in innocent

conduct; a danger that the Court held was not a concern in Bryan. Id.

       The Department of Justice takes the position that the Supreme Court's decision in

Bryan concerning the "willfulness" requirement applies in all export control cases.

However, the Sixth Circuit has not specifically addressed the issue.

       (a) Circuits in Conformity with Bryan in Export Control Cases

       Of the nine circuits which have ruled concerning the government's burden to

establish willful intent in export control cases, five have ruled in accordance with the

holdings in Bryan that the government need only show that the defendant knew his acts

were illegal.

       The First Circuit, in United States v. Murphy, 852 F.2d 1 (1st Cir. 1998), found that

the defendant's "year-long clandestine efforts, covert acts, and subterfuges to purchase

weapons for shipment to Ireland for the IRA's uses" was enough to establish willful intent

under the AECA. See id. at 7. The Court held that the government needs only prove that

the defendant knew he had a legal duty not to export the items; the government was not

required to prove that the defendant knew the arms were on the United States Munitions

List. Id.

       The Second Circuit, citing Bryan, approved a district court's jury instruction on

willfulness under the IEEPA which required only a showing that the defendant knew his

actions, which involved transferring funds to Iran, were illegal. United States v. Home Int'l

Trading Corp., 387 F.3d 144, 147 (2d Cir. 2004). In addition, the Court ruled that the

evidence of the defendant's willful intent was sufficient, and highlighted the fact that banks

                                             11
refused to complete his transactions on two occasions, the defendant was alerted in writing

to the embargo's regulations, and the defendant conducted his transactions using stealth.

Id. According to the Court, "this activity clearly confirms that [the defendant] knew his

activities ran afoul of the law."4 Id.

       The Third Circuit similarly has held that the government must show only that the

defendant knew the export was unlawful. United States v. Brodie, 403 F.3d 123, 147 (3d

Cir. 2005) (involving TWEA); United States v. Tsai, 954 F.2d 155, 162 (3d Cir. 1992)

(involving AECA).

       The Fourth Circuit has rejected the argument that a jury could not find a defendant

acted willfully under the AECA because the government presented no evidence that the

defendant knew certain encryption devices were covered by the Munitions List or designed

for military use. United States v. Hsu, 364 F.3d 192, 198 n.2 (4th Cir. 2004). Citing the


       4
         Another recent case suggests that the Second Circuit may require a reduced
showing by the government regarding intent for certain charges that frequently
accompany export cases such as making false statements on export declarations in
violation of 18 U.S.C. § 1001. See infra page 67. In United States v. George, 386 F.3d
383 (2d Cir. 2004), the defendant was convicted of willfully making false statements in a
passport application in violation of 18 U.S.C. § 1542. 383 F.3d at 387. A Second
Circuit panel stated that "the Second Circuit has held that the term `willfully' in criminal
statutes typically does not require the government to prove the defendant's specific
intent to violate the particular criminal statute in question." Id. at 393. However, the
court went even further and held that:

       [B]ecause no conceivable meritorious reason exists for knowingly
       submitting false information on a passport application, conviction under
       § 1542 does not require a finding that the defendant acted with an
       awareness of the generally unlawful nature of his or her conduct, an
       improper purpose, or an "evil-meaning mind" as required in Bryan.
       Moreover, the defendant need not be cognizant of the particular illegality
       of his or her conduct under the statute. . . .

Id. at 395.

                                            12
First Circuit's decision in Murphy, the court stated that "[w]hatever specificity on `willfulness'

is required, it is clear that this extremely particularized definition finds no support in the

case law." Id.; see also United States v. Bursey, 416 F.3d 301, 309 (4th Cir. 2005) (holding

that in prosecution under statute which prohibited willfully and knowingly entering or

remaining in an area protected by Secret Service, defendant "need not have known of the

Statute itself (nor, for that matter, the Regulations) in order to possess the requisite intent

to violate it"); but see United States v. Mitchell, 993 F.2d 229 (4th Cir. 1993) (unpublished)

("we assume without deciding that the more stringent . . . standard for willfulness applies

to § 2778").

       The Seventh Circuit, in United States v. Beck, 615 F.2d 441 (7th Cir. 1980), held that

the government was required to show only that the defendant knew his conduct was illegal,

not that the defendant knew he needed an export license pursuant to the AECA. See 615

F.2d at 450-51. The Court found that the defendant's experience in the arms business,

evidence that he was aware of the arms embargo at issue, his acts of subterfuge, and other

evidence, constituted enough evidence of intent to support the jury's guilty verdict. See id.

at 451-52. In another AECA case, the Seventh Circuit held that the government must

prove that the defendant knew that making a false statement or misrepresentation or

omission of a material fact on a waybill was illegal. United States v. Muthana, 60 F.3d 1217

(7th Cir. 1995). More recently, the Seventh Circuit held that evidence pertaining to a

defendant's general knowledge that his shipment of aircraft parts to Iran was prohibited by

federal law, along with more specific evidence that the defendant was aware of the




                                               13
Munitions List and licensing requirement was "more than sufficient grounds for the jury's

finding of a willful violation of the AECA."5 Reyes, 270 F.3d at 1169 (emphasis added).

       (b) Circuits Moving Toward Bryan

       Four other circuits have addressed the issue of intent in export cases. Although their

holdings are not entirely clear, the general trend appears to be toward the adoption of the

Bryan standard.

       Prior to Bryan, two Eleventh Circuit export control cases required that the

government establish more than simply the defendant's knowledge that his acts were

illegal. See United States v. Adames, 878 F.2d 1374, 1377 (11th Cir. 1989) (involving

AECA); United States v. Frade, 709 F.2d 1387, 1392 (11th Cir. 1983) (involving TWEA);

see also United States v. Fuentes-Coba, 738 F.2d 1191, 1196 (11th Cir. 1984) (stating that

"government must prove that the regulatory provisions were both `actually known' and

`deliberately violated' by the defendant," but approving district court's jury instruction on

intent similar to Bryan standard). A post-Bryan case, however, suggests that these

holdings may no longer be valid. In United States v. Starks, 157 F.3d 833 (11th Cir. 1998),

the Court considered the meaning of the term "willfully" in the context of the Anti-Kickback

Statute, 42 U.S.C. § 1320a-7b(b). 157 F.3d at 837. At issue was the trial court's jury

instructions, which defined "willfully" to mean "the act was committed voluntarily and


       5
        Similarly, in United States v. Malsom, 779 F.2d 1228 (7th Cir. 1985), the Court
upheld the conviction of the defendants for shipments to Libya in violation of the EAA
and AECA. The Court held that because the defendants had been warned "on
numerous occasions" that they needed export licenses prior to overseas shipment, the
government had established the requisite intent. Id. at 1234. The court also noted that
the circuitous shipping route (to Libya via West Germany and to Italy via West
Germany) suggested that the "defendants were doing all in their power to avoid
detection." Id.

                                             14
purposely, with the specific intent to do something the law forbids, that is with a bad

purpose, either to disobey or disregard the law." Id. at 838. In support of their arguments,

the defendants relied "heavily" on a prior Eleventh Circuit opinion, United States v.

Sanchez-Corcino, 85 F.3d 549 (11th Cir. 1996), which addressed the meaning of "willfully"

in the context of firearm licensing statutes. Id. Sanchez-Corcino, in turn, relied partly on

the two export control cases mentioned above in reaching the conclusion that "for the

Government to prove the offense of willfully dealing in firearms without a license . . . it must

prove that the defendant acted with knowledge of the licensing requirement." 85 F.3d at

553 n.2. "The Starks court, however, explicitly rejected our decision in Sanchez-Corcino."

157 F.3d at 838. The Eleventh Circuit's recognition that Bryan "clearly refutes" Sanchez-

Corcino calls into question the validity of the export control cases upon which it rested. See

id. A recent district court decision in Florida further supports the view that courts in the

Eleventh Circuit are no longer relying on circuit precedent that was rejected by Bryan. In

United States v. Al-Arian, 308 F. Supp. 2d 1322 (M.D. Fla. 2004), the court, without citing

any of the prior Eleventh Circuit export control opinions, applied Bryan in an IEEPA case

and stated that "[w]hile knowledge of IEEPA, the Executive Order, or the regulations

thereunder is not necessary to support a conviction, some `bad purpose' must be

demonstrated by the government." Id. at 1340.

       The Ninth Circuit, in United States v. Lizarraga-Lizarraga, 541 F.2d 826 (9th Cir.

1976) (an AECA case), reversed the decisions of a district judge, which had ruled that the

government need not prove that the defendant knew his actions were illegal. See id. at

827. In holding that specific intent was required, the Ninth Circuit held that "the government

must prove that the defendant voluntarily and intentionally violated a known legal duty not

                                              15
to export the proscribed articles." Id. at 829. The Court did not mention whether the

government needed to prove that the defendant knew that the articles were listed in the

regulations, but both the Seventh Circuit in Beck and the First Circuit in Murphy read the

Ninth Circuit's opinion as supportive of their position that such a showing was not required.

See Murphy, 852 F.2d at 7; Beck, 615 F.2d at 450.6 Similarly, a more recent Ninth Circuit

opinion characterized Lizarraga-Lizarraga as holding that the government need only

present "proof that a defendant was aware of the unlawfulness of the conduct." United

States v. Henderson, 243 F.3d 1168, 1172 (9th Cir. 2001). In a recent opinion from a

district court in the Ninth Circuit the Court, citing the Fourth Circuit case Hsu, 364 F.3d 192,

197, stated, "[i]n the AECA context, a willful violation occurs where a defendant knows his

or her conduct violates the law." United States v. Qing Li, ­ F. Supp. ­, 2008 WL 789899

(S.D. Cal. 2008).

       The Fifth Circuit, in United States v. Davis, 583 F.2d 190 (5th Cir. 1978), claimed to

adopt the Ninth Circuit's holdings in Lizarraga-Lizarraga, but nevertheless reversed the

defendant's convictions in part because the district court failed to instruct the jury that

ignorance of the law was a defense to crimes charged under the AECA's predecessor

statute. Id. at 194. Subsequent Fifth Circuit cases interpreted this to mean that the

government is required to prove that the defendant "knew that either a license or other form

of authorization was required in order to export prohibited items." Covarrubias, 94 F.3d at




       6
        The Beck Court mischaracterized Lizarraga-Lizarraga by stating that the case
"held that the defendant need not know that he is specifically required to have an export
license." See Beck, 615 F.2d at 450. As noted above, the Ninth Circuit was not
presented with, and never addressed, that issue.

                                              16
175 (involving AECA); see also United States v. Hernandez, 662 F.2d 289, 292 (5th Cir.

1981) (requiring instruction on defendant's ignorance of the AECA).

       However, the Fifth Circuit has articulated a different definition of willfulness in two

cases involving the TWEA. In these cases, the Court stated that the government "need not

show that appellants had knowledge of the specific regulations governing [the]

transactions," but must prove "only that the defendants knew that their planned conduct

was legally prohibited and that they therefore acted with an `evil-meaning mind.'" Dian Duc

Huynh, 246 F.3d at 742 (quoting Tooker, 957 F.2d at 1214). According to the Court,

defendants "cannot avoid prosecution by claiming that they had not brushed up on the law."

Tooker, 957 F.2d at 1214.

       Like the Ninth and Fifth Circuits, the intent requirement in the Eighth Circuit is open

to interpretation. In United States v. Gregg, 829 F.2d 1430 (8th Cir. 1987), the Eighth

Circuit upheld the defendants' conviction under the EAA, AECA, and several other statutes.

One of the defendants argued that it was error not to admit as exhibits to the jury the

AECA, the EAA and the implementing regulations because they were relevant to the

specific intent issue. Id. at 1436. In rejecting this argument, the Court stated that "the

crucial issue is not whether the jury would be confused by these massive legislative and

bureaucratic artifacts but whether [the defendant] was confused by them."            See id.

(emphasis in original). The Court noted that the defendant gave lectures and published

newsletters on the subject of export law. See id. In its discussion of another argument

raised by the defendant (a vagueness challenge), the court stated that the government

must prove "the necessary intent and knowledge." See id. at 1437. In an explanatory

footnote, the Court seemed to endorse the more strenuous specific intent requirement,

                                             17
stating that "[t]he trial court's charge . . . plainly directed acquittal if the jury was not

satisfied beyond a reasonable doubt that the defendant knew that the items exported were

on the Munitions List and required a license." See id. at 1437 n.14.7

       The Gregg court's emphasis on whether the defendant was confused by the statutes

and regulations, along with its footnote on the trial court's specific intent instruction,

suggests that the Eighth Circuit may be in accord with the Fifth Circuit's position.

Nevertheless, the First Circuit in Murphy concluded that the Gregg court had not endorsed

the most stringent standard. The Murphy court said that it "d[id] not read [the Gregg]

footnote as requiring proof that the defendant knew that the arms are on the United States

Munitions List," and claimed that Gregg simply required the "same level of proof as the 7th

and 9th Circuits." Murphy, 852 F.2d at 7. That level of proof, according to the court,

requires "the `government [to] prove that the defendant voluntarily and intentionally violated

a known legal duty not to export the proscribed articles.'" Id. (citing Lizarraga-Lizarraga, 541

F.2d at 828-29, and Beck, 615 F.2d at 450). The Court offered as support for its reading

of Gregg only the sentence in the text from which the footnote sprung, which states in

relevant part that the government must prove "the necessary intent and knowledge."

C.     Wire Fraud

       Count 17 charges wire fraud under the theory that Roth's scheme deprived the State

of Tennessee of its intangible right to honest services by its employee.

       The statute in question, 18 U.S.C. § 1343, in pertinent part, provides:

       Whoever, having devised or intending to devise any scheme or artifice to
       defraud, or for obtaining money or property by means of false or fraudulent


       7
        The trial court used similar language in its EAA jury charge. Id.

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       pretenses . . . for the purpose of executing such scheme or artifice, shall be
       fined under this title or imprisoned not more than five years, or both. . . .

       To obtain a conviction for wire fraud, the government must prove: (1) a scheme or

artifice to defraud; (2) use of interstate wire communications in furtherance of the scheme;

and (3) intent to deprive a victim of money or property. United States v. Daniel, 329 F.3d

480, 485 (6th Cir. 2003).

       The term "scheme or artifice to defraud" includes a scheme or artifice to deprive

another of the intangible right of honest services. 18 U.S.C. § 1346. This includes honest

and impartial government. United States v. Frost, 125 F.3d 346, 364 (6th Cir. 1997). In

Frost, 125 F.3d 346, the Sixth Circuit found that the defendant professor breached a

fiduciary duty to the university employer which had the right to his honest services. The

Court found that this was a valid basis for a wire fraud conviction under 18 U.S.C. §§ 1343

and 1346. Id. at 367-68.

       Unlike the mail fraud statute, the fraud by wire statute makes no reference to the

venue of the offense. Accordingly, the provisions of § 3237(a) apply, and prosecutions may

be instituted in any district in which an interstate or foreign transmission was issued or

terminated. See United States v. Goldberg, 830 F.2d 459, 465 (3d Cir. 1987).

                              State Department Certifications

       The determination by the Department of State that a particular item is a defense

article, pursuant to the AECA and ITAR, and thus is on the Munitions List and subject to

export controls, is not subject to judicial review. United States v. Martinez, 904 F.2d 601,

602-03 (11th Cir. 1990); Karn v. United States Dep't of State, 925 F. Supp. 1, 8 (D.D.C.

1996); 22 U.S.C. § 2778(h).



                                            19
       The government will establish that an item is covered by the Munitions List by

testimony from two witnesses: an official from the DDTC and a technical expert. The

technical expert is called upon to establish what the item is, and the DDTC witness will

testify as to whether the item is on the list.

       The government will also introduce documents from the United States Department

of State, Bureau of Political-Military Affairs, Directorate of Defense Trade Controls,

containing the seal of the Department of State stating that the items and documents at

issue in this case are technical data and defense articles listed in the United States

Munitions List.

       These documents are self-authenticating pursuant to Federal Rule of Evidence

902(1) as domestic public documents under seal. Further, they are exceptions to the

hearsay rule under Federal Rule of Evidence 803(7).

       Respectfully submitted this the 22nd day of August 2008.

                                     James R. Dedrick
                                     United States Attorney

                             By:     s/Jeffrey E. Theodore
                                     Jeffrey E. Theodore
                                     Assistant U.S. Attorney

                                     s/A. William Mackie
                                     A. William Mackie
                                     Assistant U.S. Attorney




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                                CERTIFICATE OF SERVICE

       I hereby certify that on August 22, 2008, a copy of the foregoing motion was filed
electronically. Notice of this filing will be sent by operation of the Court's electronic filing
system to all parties indicated on the electronic filing receipt. Opposing counsel may
access this filing through the Court's electronic filing system. Any counsel not named as
being served electronically will be served by regular U.S. mail or facsimile.


                                    s/Jeffrey E. Theodore
                                    Jeffrey E. Theodore
                                    Assistant United States Attorney
                                    800 Market Street, Suite 211
                                    Knoxville, TN 37902
                                    865.545.4167




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