United States v. Jinian

• Decision Date: 23 July 2013
• Docket Number: No. 11–10593.,11–10593.
• Citation: 725 F.3d 954
• Parties: UNITED STATES of America, Plaintiff–Appellee, v. Ethan Farid JINIAN, aka Farid Khoujinian, Defendant–Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

725 F.3d 954

UNITED STATES of America, Plaintiff–Appellee,

v.Ethan Farid JINIAN, aka Farid Khoujinian, Defendant–Appellant.

No. 11–10593.

United States Court of Appeals,Ninth Circuit.

Argued and Submitted Oct. 18, 2012.

Filed March 26, 2013.

Amended July 23, 2013.

Benjamin L. Coleman, Coleman & Balogh LLP, San Diego, CA; and Ethan A. Balogh, Coleman & Balogh LLP, San Francisco, CA, for Defendant–Appellant.

Suzanne Miles, Assistant United States Attorney, San Francisco, CA, for Plaintiff–Appellee.

Appeal from the United States District Court for the Northern District of California, Jeffrey S. White, District Judge, Presiding. D.C. No. 3:09–cr–01103–JSW–1.

Before: DOROTHY W. NELSON, MARY H. MURGUIA, and MORGAN CHRISTEN, Circuit Judges.¹

ORDER

The Opinion filed March 26, 2013, appearing at 712 F.3d 1255, is amended as follows:

1. On page 7 of the slip opinion, first paragraph that begins on the previous page (712 F.3d at 1259), replace in the penultimate sentence “instruction's” with “instructions' ”. As amended, the new sentence is:

If the district court's instructions fairly and adequately covered the elements of the offense, then we review the instructions' “ ‘precise formulation’ for an abuse of discretion.” Id.

2. On page 13 of the slip opinion, first full paragraph (712 F.3d at 1263), replace the third and fourth sentences with

Similarly, “the execution of the scheme as conceived” by Jinian depended upon each check successfully clearing through the federal reserve because, if either bank had been left holding the dishonored check, Jinian's scheme would have been discovered. Id. at 715 .

As amended, the paragraph is:

We conclude that Jinian's conduct is more akin to the fraud perpetrated in Schmuck than in Kann. The scheme in Schmuck remained incomplete until the mailing activity, thereby rendering the mailing an “essential step in the successful passage of title,” occurred. Id. at 714 . Similarly, “the execution of the scheme as conceived” by Jinian depended upon each check successfully clearing through the federal reserve because, if either bank had been left holding the dishonored check, Jinian's scheme would have been discovered. Id. at 715 . As long as Bricsnet was the victim of his crime, Jinian could cover his tracks by giving false assurances to Brown.

3. Beginning on page 15 of the slip opinion (712 F.3d at 1264), second full paragraph, delete the second sentence and remainder of the paragraph. Add a new second sentence:

The wire transfer was necessary to complete the fraud because, until the checks cleared, Jinian could not be certain it would be Bricsnet that would be swindled.

On page 16 of the slip opinion, first full paragraph, replace from the first sentence “The government also” with “The government” and merge the remainderof the paragraph with the preceding paragraph. The new sentence is:

The government introduced evidence that Jinian directed Brown to issue multiple, smaller-denomination checks, rather than a large, lump-sum payment.⁶

As amended, the second full paragraph beginning on page 16 of the slip opinion is:

Here, the mere clearing of a check is enough because the interstate communication was necessary to complete and conceal Jinian's fraud. The wire transfer was necessary to complete the fraud because, until the checks cleared, Jinian could not be certain it would be Bricsnet that would be swindled. The government introduced evidence that Jinian directed Brown to issue multiple, smaller-denomination checks, rather than a large, lump-sum payment.⁶ Such conduct gives rise to inferences that Jinian intended to conceal his transactions entirely from detection by Bricsnet or structure the transactions in a manner that gave them the appearance of regular or necessary business expenditures. Jinian's conduct further suggests that depositing multiple, smaller-denomination checks insulated his conduct from suspicion by or scrutiny from Mechanics Bank about large-sum deposits. Thus, a rational jury could have concluded that Jinian utilized the interstate wires to structure, perpetuate, and conceal his fraudulent scheme.

4. On pages 26–29 of the slip opinion (712 F.3d at 1269–71), delete Judge Christen's concurrence.

With these amendments, the panel has voted to deny Appellant's petition for rehearing. Judge Murguia and Judge Christen vote to deny the petition for rehearing and Judge Nelson so recommends.

The full court has been advised of the petition for rehearing en banc and no judge has requested a vote on whether to rehear the matter en banc. Fed. R.App. P. 35.

IT IS ORDERED denying the petition for panel rehearing and the petition for rehearing en banc (Doc. 40). “No further petitions for rehearing or rehearing en banc will be entertained in this case.”

OPINION

MURGUIA, Circuit Judge:

Ethan Farid Jinian was charged with fourteen counts of wire fraud in violation of 18 U.S.C. § 1343 stemming from his scheme to defraud his employer. Jinian contends that the district court erred in denying his motions for judgment of acquittal, a new trial, and for an arrest of judgment. Specifically, he argues that (1) routine transmissions occurring during the interbank collection process are not made for the purpose of executing a scheme to defraud or in furtherance thereof, (2) the jury should have been instructed that it was necessary to find that the interstate nature of the wire communications was reasonably likely or foreseeable, (3) there was insufficient evidence to establish that an interstate wire communication was reasonably foreseeable between two California banks, and (4) the wire fraud statute is unconstitutional as applied to him. We reject these arguments and affirm Jinian's conviction and sentence.

I. FACTUAL AND PROCEDURAL BACKGROUND

From 2004 until 2008, Jinian served as the chief executive officer (“CEO”) of Bricsnet FM America, Inc. (“Bricsnet”), a company that developed and sold software. As CEO, Jinian was authorized to spend Bricsnet monies to further its business operations and make executive and financial decisions. He was also responsible for reviewing the company's daily expenditures.Briscnet's board of directors and a majority of its investors were located in Europe, enabling Jinian to control Briscnet's operations from the company's San Francisco, California office with limited daily oversight.

In 2006, Jinian informed Leon Brown, Bricsnet's finance manager, that the company's chairman of the board of directors authorized Jinian to receive compensation in excess of his annual salary and to draw advances on that compensation. Unbeknownst to Brown, Jinian never received any such authorization. Nevertheless, Brown, in reliance upon Jinian's representations, began issuing to Jinian checks from Bricsnet's account at Silicon Valley Bank in Santa Clara, California. Jinian deposited these checks into his account at Mechanics Bank in Hercules, California.

Jinian instructed Brown to issue multiple, small-denomination checks instead of a single, lump-sum payment. Between November 2006 and September 2008, Jinian obtained from Brown nearly 100 checks, ranging in monthly amounts from $25,000 to over $60,000. The checks were issued regularly, some within days of each other. In total, Jinian improperly obtained over $1.5 million from Bricsnet.

Jinian was indicted on fourteen counts of wire fraud, which corresponded to fourteen Bricsnet checks Jinian deposited into his Mechanics Bank account. At trial, the government presented evidence showing that Mechanics Bank utilized the Federal Reserve Bank as an intermediary between it and Silicon Valley Bank to process the checks for payment. Howard Ng, an internal auditor for the Federal Reserve Bank, testified about the process through which checks were cleared. Ng explained that, when Jinian deposited a check into his Mechanics Bank account, Mechanics Bank sent an electronic image of the check via wire communication to the Federal Reserve Bank, which utilized an image server located in Dallas, Texas to sort and process the check. Once the check was processed in Dallas, Ng testified, the Federal Reserve Bank wired an image of the check to Silicon Valley Bank to be negotiated and paid. Ng testified that these wire communications facilitated the check clearing process by ensuring that the appropriate accounts were debited and credited.

At the close of the government's case and the close of all evidence, Jinian moved, pursuant to Federal Rule of Criminal Procedure 29, for a judgment of acquittal, arguing that the government failed to prove each element of wire fraud beyond a reasonable doubt. The district court denied Jinian's motion, and the jury returned a guilty verdict on thirteen of fourteen counts charged in the indictment.

Following his conviction, Jinian renewed his motion for judgment of acquittal. Jinian also moved for a new trial and for an arrest of judgment pursuant to Federal Rules of Criminal Procedure 33 and 34, respectively, arguing, among other things, that there was insufficient evidence that he knew—or knew it was reasonably likely—that interstate wires would be used to further the fraudulent scheme. The district court again denied Jinian's motions and affirmed the jury's convictions. It then sentenced Jinian to sixty-four months imprisonment, three years of supervised release, and ordered him to pay restitution of $1,587,860.04.

Jinian timely appealed. We have jurisdiction pursuant to 28 U.S.C. § 1291.

II. STANDARD OF REVIEW

We review de novo a district court's interpretation of a criminal statute, United States v. Dahl, 314 F.3d 976, 977 (9th Cir.2002), and denial of a motion for judgment of acquittal, United States v. Anaya–Acosta, 629 F.3d 1091, 1093 (9th Cir.2011). Sufficient evidence to support a conviction exists if, “after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.” Jackson v....