U.S. v. Tuyet Thi-Bach Nguyen

• Decision Date: 15 May 2009
• Docket Number: No. 07-30197.,07-30197.
• Citation: 565 F.3d 668
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. TUYET THI-BACH NGUYEN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

565 F.3d 668

UNITED STATES of America, Plaintiff-Appellee, v. TUYET THI-BACH NGUYEN, Defendant-Appellant.

No. 07-30197.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted December 8, 2008.

Filed May 15, 2009.

Sheryl Gordon McCloud, Law Offices of Sheryl Gordon McCloud, Seattle, WA, for appellant Tuyet Thi-Bach Nguyen.

Jeffrey C. Sullivan and Susan Loitz, U.S. Attorney's Office, Seattle, WA, for appellee United States of America.

Appeal from the United States District Court for the Western District of Washington, Robert S. Lasnik, District Judge, Presiding. D.C. No. CR-05-00270-05-RSL.

Before: ROBERT R. BEEZER, RONALD M. GOULD, and CONSUELO M. CALLAHAN, Circuit Judges.

Opinion by Judge GOULD; Partial Concurrence and Partial Dissent by Judge CALLAHAN.

GOULD, Circuit Judge:

Tuyet Nguyen ("Nguyen") appeals her jury conviction and sentence for conspiracy to transport stolen property in interstate commerce in violation of 18 U.S.C. § 2314, for two counts of the transportation of stolen property in interstate commerce in violation of 18 U.S.C. § 2314, for three counts of the introduction of misbranded medical devices into interstate commerce in violation of 21 U.S.C. § 352(a), and for conspiracy to commit money laundering in violation of 18 U.S.C. § 1956. We have jurisdiction under 28 U.S.C. § 1291. We affirm in part and reverse in part, and we remand for retrial and resentencing.

I

On July 13, 2005, a grand jury returned an indictment against Nguyen, her husband Phu Nguyen, their company Columbia Medical Systems, Inc. ("CMS"), and Sess Merke ("Merke"). The indictment alleged that Tuyet and Phu Nguyen conspired with Merke, Robert Davies ("Davies"), and others to steal and transport medical equipment from their former employer, ATL Philips Medical Systems ("Philips"). The indictment alleged that Nguyen had conspired to sell stolen ultrasound probes.¹ The indictment alleged that the Nguyens resold these stolen probes through their company, CMS, after the probes were given new fake serial numbers. Merke and Davies withdrew from the conspiracy in 2000, but the government alleged that the conspiracy continued until 2003.

Davies, an unindicted co-conspirator, testified under a grant of immunity that Phu Nguyen, Appellant's husband, asked him to steal probes and sell them to CMS. With the help of Davies, the conspiracy worked its fraud as follows: Davies would tell Philips that a customer had a broken probe that needed replacement, even though the probe was working. Philips would send the new probe to the customer, expecting that the customer would ship the broken probe back. Davies would give Phu Nguyen the customer's old but still functioning probe, and Phu would transfer the functioning probe's serial numbers onto one of the defective probes in the CMS stockroom. Then, Davies would send the defective probe to Philips. So, at Philips's expense, Phu Nguyen and his company, CMS, would end up with functioning probes that were in effect stolen by fraud, and CMS would have given up only defective probes.

The fraudulent conspiracy was also furthered by the deception of others. Co-conspirator Merke stole Philips's inventory from its stockrooms. At trial, Evalyn Thomas ("Thomas"), a Philips data entry clerk who worked for Merke, testified that Merke removed finished probes from the "Finished Goods" inventory without adequate explanation several times. Thomas explained that usually when an employee took material from the Finished Goods stockroom, they would fill out a Material Transfer Form. That form tracked where the material went. Thomas testified that it was unusual for someone in Merke's position to be dealing directly with customers, and it was also odd that Merke personally pulled the stock and completed the entire form himself. According to Thomas, when the Material Transfer Form stated the employee was crediting the taken material to their "wash account," the new material was being taken to replace some old, defective material. Therefore, a Material Transfer Form that took six parts from Finished Goods out of the stockroom and credited the "wash account" should also show the same number of parts going into the "Defective Material" stockroom. Thomas testified that this full accounting of material did not occur on several of Merke's Material Transfer Forms. Instead, many parts "disappeared," including forty-six ultrasound probes.

Another Philips employee, Dave Westrich ("Westrich"), testified that Nguyen asked him to load some of Philips's proprietary software onto a hard drive for her. Westrich refused and told Nguyen not to call him again. The government contended that Nguyen must have obtained the software another way because Don Davis, a CMS customer, testified that in June 2001, Nguyen approached him with the suggestion that she would give him access to Philip's software if he agreed to guarantee a certain level of business with CMS.

The prosecution introduced CMS business records to show that CMS sold more probes than it purchased for 1999 through 2003. FDA Agent Borden also explained that many Philips probes tied to CMS had false serial numbers. The police seized several probes with false serial numbers when executing a search warrant in December 2003. The testimony tied other probes with false serial numbers to CMS based on its invoices.

The prosecution also presented witnesses who said that having accurate serial numbers on ultrasound probes is important for FDA compliance, as well as for Philips's inventory management. In a contract with CMS, one company included clauses emphasizing that CMS would only sell the company ultrasound components with original serial numbers. Also, a customer testified that he would return a product and refuse to pay for it if he discovered that it did not bear the original serial number.

The government alleged that the Nguyens paid for these stolen probes with cash to hide their origin. FDA Agent Mahoney testified that the Nguyens had made out several checks to cash with the notation "purchase probes Merke" and "purchase probes." These checks were drawn from CMS accounts, and Nguyen signed and negotiated several checks.

The jury heard evidence of Nguyen's statement in which she claimed that she and her husband did not buy any items from Merke, and that Merke had never delivered probes to her. Agent Borden also testified about statements that Merke had made during Merke's interrogation. The government elicited information about that statement on direct examination, and Merke's counsel elicited still more on cross-examination. Agent Borden testified that Merke had stated that he had sold stolen medical equipment to the Nguyens and that he had received money from the Nguyens, though he refused to estimate how much money.

During closing arguments, Nguyen argued that the evidence did not establish whether she knew the probes were stolen or that the serial numbers had been changed.

On April 5, 2006, the jury found Nguyen guilty of conspiracy to transport stolen property in interstate commerce. The jury convicted her of transportation of stolen property for the shipment of probes on July 25, 2000, and August 15, 2000, but acquitted her of those charges for the shipments occurring on August 10, 2000, and April 3, 2002. The jury found her guilty of introducing misbranded medical devices into interstate commerce for the shipments of probes occurring on July 25, 2000, August 10, 2000, and August 15, 2000, but acquitted her of those charges pertaining to shipments on June 18, 2001, April 3, 2002, and December 3, 2002. The jury acquitted Nguyen of all five counts of holding for sale misbranded medical devices. Finally, the jury convicted her of conspiracy to commit money laundering.

The district court sentenced Nguyen to 48 months incarceration.

II

A.

We review claims of a violation of the Confrontation Clause de novo. United States v. Nielsen, 371 F.3d 574, 581 (9th Cir.2004).

The parties dispute whether Nguyen preserved this claim of error. Before trial, Nguyen made several motions in limine and objected to the use of a statement Merke made to Agent Borden, alleging that its admission would violate the Confrontation Clause. Nguyen objected to the admission of any portion of Merke's statement that alluded to her both in the motion in limine and again at trial. The government argues that Nguyen should have objected to Merke's use of his own statement when Merke's counsel sent notice to all parties that Merke would admit his statements. Nguyen argues that she did not object because she understood Merke's alert to mean that Merke would testify, curing any Confrontation Clause problem. Instead, Merke's counsel elicited the statements for which Nguyen had a continuing objection. After opening statements at trial, the district court clarified that Nguyen did not need to make further objection on this issue and that the issue was preserved.²

We have held that "`where the substance of an objection has been thoroughly explored and the trial court's ruling was explicit and definitive, the issue is preserved for appeal.'" United States v. Varela-Rivera, 279 F.3d 1174, 1177 (9th Cir. 2002) (quoting United States v. Palmer, 3 F.3d 300, 304 (9th Cir.1993)). As we have explained, Nguyen brought the Confrontation Clause issue to the district court's attention twice, and the district court made a definitive ruling and then said she did not need to object further to preserve the issue. Accordingly, if there is Confrontation Clause error, we must apply harmless error review. Nielsen, 371 F.3d at 581.

B

We turn to the issue of whether the Confrontation Clause was offended by introduction of the statement made by Merke as related by Agent Borden in her testimony. Agent Borden testified that while at first Merke had said that he received nothing more than lunch money, "he said a lot more things" including that he actually had received other money from the Nguyens,...