## Facts

- Steven M. Hale owned and operated a warehouse business that bought and resold consumer products, including health-and-beauty and over-the-counter drug items.
- The government alleged Hale participated in an organized retail-theft operation: professional shoplifters (“boosters”) stole goods from retail stores, sold them to “first-level fences,” and those fences resold the goods to Hale as a “second-level fence.”
- Hale’s warehouse functioned as a resale point for the merchandise, including shipments sent out of state (including to a buyer in Florida), forming the basis for interstate-transport charges.
- Investigators observed merchandise being delivered to Hale’s warehouse in trash bags, storage bins, and boxes, rather than through ordinary commercial shipping channels.
- Inside the warehouse, agents found large quantities of packaged retail goods, along with a “cleaning station” and materials used to remove store stickers, security sensors, and residue.
- Evidence showed Hale bought merchandise at prices well below wholesale, supporting an inference that the goods were not legitimately sourced.
- A controlled transaction and subsequent shipment interception tied marked items sold through the fencing chain to a shipment originating from Hale’s warehouse, with some goods still bearing store identifiers and active security devices.
- After learning law enforcement was investigating, Hale took steps that the government characterized as consciousness of guilt, including attempts to influence what others told officers and financial and paperwork moves aimed at avoiding seizure.
- A federal jury convicted Hale of transporting stolen goods in interstate commerce, knowing the goods were stolen, and conspiring to do so; other counts in the case included tax-related offenses and obstruction allegations.
- Hale appealed, arguing (among other claims) that the evidence did not justify a willful-blindness instruction and did not support the jury’s finding that he knew the goods were stolen.

## Issues

1. Whether the district court erred by giving a willful-blindness (deliberate-ignorance) instruction on the “knowledge” element for transporting stolen goods in interstate commerce and conspiracy.
2. Whether the evidence was sufficient for a rational jury to find Hale knew (or was willfully blind to the fact) that the goods he bought and resold were stolen.
3. Whether the district court committed reversible error in challenged evidentiary rulings and other jury instructions raised on appeal.

## Decision

- The Fourth Circuit affirmed the district court’s judgment.
- The court held the evidence supported giving a willful-blindness instruction and supported the jury’s finding that Hale knew the goods were stolen.
- The court rejected Hale’s remaining claims of trial error (including evidentiary and instruction challenges) as insufficient to warrant reversal.

## Legal Principles

- A willful-blindness instruction is proper when the evidence permits a finding that the defendant suspected a high probability of an illegal fact and took steps to avoid confirming it.
- Knowledge that goods are stolen may be proven by circumstantial evidence, including unusually low prices, suspicious delivery methods, removal of store identifiers or security devices, and efforts to conceal activity after learning of an investigation.
- Appellate review of a district court’s decision to give a willful-blindness instruction is deferential and focuses on whether the trial record supports the instruction.
- A conviction will be upheld against a sufficiency challenge if, viewing the evidence in the light most favorable to the government, a rational jury could find the elements beyond a reasonable doubt.
- Trial courts have broad discretion on evidentiary rulings, and reversal requires a showing that any error affected substantial rights.

## Conclusion

In *United States v. Hale*, the Fourth Circuit affirmed Hale’s convictions arising from an organized retail-theft fencing scheme, concluding that the trial evidence—such as suspicious sourcing and handling of retail goods, below-market pricing, and post-investigation conduct—supported both a willful-blindness instruction and the jury’s finding that Hale knew the merchandise he transported and sold was stolen, and that the additional asserted trial errors did not justify reversal.


United States v. Hale, 857 F.3d 158 (2017)