United States v. Chao Fan Xu
| Decision Date | 03 January 2013 |
| Docket Number | D.C. No. 2:02-CR-00674-PMP-LRL-2,D.C. No. 2:02-CR-00674-PMP-LRL-1,No. 09-10201,D.C. No. 2:02-CR-00674-PMP-LRL-3,No. 09-10189,D.C. No. 2:02-CR-00674-PMP-LRL-4,No. 09-10202,No. 09-10193,09-10189,09-10193,09-10201,09-10202 |
| Parties | UNITED STATES OF AMERICA, Plaintiff-Appellee, v. CHAO FAN XU, Defendant-Appellant. UNITED STATES OF AMERICA, Plaintiff-Appellee, v. YING YI YU, Defendant-Appellant. UNITED STATES OF AMERICA, Plaintiff-Appellee, v. GUO JUN XU, Defendant-Appellant. UNITED STATES OF AMERICA, Plaintiff-Appellee, v. WAN FANG KUANG, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
FOR PUBLICATION
OPINIONAppeal from the United States District Court
for the District of Nevada
and Mary H. Murguia, Circuit Judges.
Opinion by Judge Goodwin
SUMMARY*
Criminal Law
The panel affirmed the convictions and vacated the sentences of four Chinese nationals who participated in a scheme to steal funds from the Bank of China and to escape prosecution and retain the proceeds by illegal transfers of funds and by immigration fraud.
The panel held that the defendants' RICO conspiracy convictions are not the result of an improper extraterritorial application of 18 U.S.C. § 1962(d) because the defendants' criminal enterprise involved both bank fraud and immigration fraud centered on stealing money from the Bank of China and traveling freely with the stolen money in the United States.
Explaining that conspiracy does not require completion of the substantive crime, the panel held that there was sufficient evidence to support the defendants' money laundering conspiracy convictions under 18 U.S.C. § 1956(h), and that 18 U.S.C. § 1957(d)'s jurisdictional requirement is met because the transactions took place in the United States. The panel likewise held that there was sufficient evidence to support the defendants' convictions for conspiracy to transport stolen money under 18 U.S.C. § 2314.
The panel held that the district court did not plainly err in its treatment of videotaped testimony at trial, that the defendants' Confrontation Clause rights were not violated,and that the district court did not abuse its discretion in limiting the testimony of the defendants' expert witnesses.
The panel rejected as meritless the defendants' jury instruction challenges related to burden shifting, Chinese law, fatal variance/constructive amendment, theory of defense, aiding and abetting, the definition of "on or about," and the incomprehensibility of the numerous Chinese names presented to the jury.
The panel held that the district court did not violate the Ex Post Facto Clause by applying the 2007 Sentencing Guidelines to a conspiracy that did not end until the defendants' 2004 arrest.
The panel remanded for resentencing under U.S.S.G. § 2S1.1(a)(2) because the district court improperly relied on the defendants' foreign conduct to meet the requirements of U.S.S.G. § 2S1.1(a)(1)(A). The panel rejected as meritless an objection to an abuse of trust enhancement under U.S.S.G. § 3B1.3, and deemed waived an objection to an enhancement for relocation to avoid law enforcement under U.S.S.G. § 2B1.1(b)(9)(A).
Because the district court did not provide sufficient grounds to support the $482 million restitution order, the panel remanded for reconsideration regarding its legal and factual basis.
Mario D. Valencia, Henderson, Nevada, for Defendant-Appellant Chao Fan Xu; Marc Picker, Reno Nevada, for Defendant-Appellant Guo Jun Xu; Loren Graham, Stateline, Nevada, for Defendant-Appellant Ying Yi Yu; Chad A. Bowers, Las Vegas, Nevada, for Defendant-Appellant Wan Fang Kuang.
Krista Tongring, United States Department of Justice, Organized Crime and Gang Section, Washington, D.C.; Ronald L. Cheng, United States Department of Justice, Organized Crime and Gang Section, Los Angeles, California, for Plaintiff-Appellee.
Four Chinese nationals appeal their convictions and sentences for federal crimes that they committed as part of a scheme to steal funds from the Bank of China, where two of the defendants were high-level employees, and to escape prosecution and retain the proceeds by illegal transfers of funds and by immigration fraud. We affirm the convictions, and vacate the sentences and remand for resentencing.
("Wanfang")1 (collectively, "Defendants"), challenge the application of the Racketeer Influenced and Corrupt Organizations Act ("RICO") to extraterritorial conduct which occurred in China, as well as various rulings on evidence and defense motions. They also challenge their sentences.
The scheme involved diverting bank funds from the Bank of China to a holding company in Hong Kong. Defendants were charged with manipulating auditing controls to conceal their diversion of bank funds, and using the funds to speculate in foreign currency, to make fraudulent loans, to purchase real estate in Asia and North America, and to finance gambling trips to Las Vegas and other casino venues. As an essential part of the scheme, each of the Defendants entered into a fraudulent marriage with a spouse who held valid United States immigration status. After the Bank of China discovered their scheme, Defendants fled to the United States using their falsified immigration documents. Defendants were arrested and brought to trial in the United States District Court for the District of Nevada.
We have jurisdiction under 28 U.S.C. § 1291 and 18 U.S.C. § 3742.
Guojun and Yingyi were legally married in China in 1985. Chaofan and Wanfang were legally married in China in 1992. Chaofan was employed by the Bank of China from 1982 through 2001. The Bank of China is a state-ownedbank that is headquartered in Beijing. It operates throughout China through a series of provincial branches, second-level branches, and sub-branches. In 1992, Chaofan was promoted to president/general manager of the Kaiping sub-branch in Guangdong province, and he served in that position until August 1998. Guojun was hired in 1994 as head of accounting at the Kaiping sub-branch. In August 1998, Chaofan was promoted, and unindicted co-conspirator Yu Zhendong ("Zhendong") became president/general manager of the Kaiping sub-branch. When Zhendong was promoted in May 2000, Guojun took over at the Kaiping sub-branch and served as president/general manager until the Bank of China discovered the fraud in October 2001.
During their management of the Kaiping sub-branch, the three managers engaged in three types of fraud: (1) foreign exchange speculation, resulting in a loss to the Bank of China of approximately $147 million; (2) "out-of-book" loans, which are loans that were not properly recorded in the bank's accounting system, resulting in a loss of approximately $181 million; and (3) false loans, in which loans totaling $90-95 million were entered into the bank's accounts, but the proceeds from the loans were diverted into a Hong Kong conduit company named Ever Joint.
In 1995, the Bank of China conducted a foreign exchange audit including the Kaiping sub-branch. To avoid discovery of the foreign currency exchange losses, Chaofan, Guojun, and Zhendong directed Kaiping sub-branch employees to falsify bank records. These efforts succeeded. The three managers were able to pass subsequent audits by the Bank of China in the same way.
During the course of the fund diversions, Chaofan, Guojun, Wanfang, and Yingyi entered into false marriages with spouses who held valid United States immigration status. The purpose of the false marriages was to gain residency status in the United States to avoid Chinese Law enforcement.
During the time alleged in the indictment, Chaofan, Guojun, Wanfang, and Yingyi made numerous gambling trips to Macao, Australia, Malaysia, and the Philippines. These trips were financed with wire transfers totaling more than $80 million from Ever Joint accounts. Using counterfeit visas and passports, the group also traveled to Las Vegas in 2000 and 2001, where they stayed at casino hotels and spent substantial sums playing baccarat. The gambling money was arranged through intermediaries who used cashier's checks drawn from Ever Joint accounts to set up credit lines at the casinos. The Las Vegas gambling money included wire transfers totaling over $2 million from Ever Joint accounts that resulted in checks being issued by the casinos to the intermediaries to facilitate the return of the funds to Defendants for their personal use.
On October 12, 2001, due to a change in accounting procedures, the Bank of China discovered a $482 million discrepancy in bank records that was attributed to the Kaiping sub-branch. Chaofan and Guojun fled to Hong Kong. Using their fraudulent passports and visas, they flew to Vancouver, British Columbia, and continued on to Las Vegas. Chaofan and Guojun then discovered that Chinese authorities had frozen the $8 million that they had transferred to Caesars Palace casino for their personal use. Wanfang and Yingyi fled separately to Vancouver and then to the United Statesusing their fraudulently obtained immigration status. The United States does not have an extradition treaty with China.
Zhendong was arrested in Los Angeles on December 19, 2002. Zhendong pleaded guilty to federal charges and agreed to return to China. He cooperated with the FBI in the investigation and prosecution of Defendants. Id. Guojun and Yingyi were arrested in Wichita, Kansas, on September 22, 2004. Chaofan and Wanfang were arrested in Edmond, Oklahoma, on October 6, 2004.
In the second superseding indictment, Defendants were charged with RICO conspiracy in violation of 18 U.S.C. § 1962(d) (count one), money laundering conspiracy in violation of 18 U.S.C. § 1956(h) (count two), conspiracy to transport stolen money in violation of 18...
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