United States v. Arvay

• Court: Court of Appeals for the Tenth Circuit
• Decided: June 29, 2026
• Docket: 24-1497
• Status: Unpublished

Opinion

Appellate Case: 24-1497 Document: 65-1 Date Filed: 06/29/2026 Page: 1 FILED United States Court of Appeals UNITED STATES COURT OF APPEALS Tenth Circuit

FOR THE TENTH CIRCUIT June 29, 2026 _________________________________ Christopher M. Wolpert Clerk of Court UNITED STATES OF AMERICA,

Plaintiff - Appellee,

v. No. 24-1497 (D.C. No. 1:23-CR-00222-GPG-2) JONATHAN ARVAY, (D. Colo.)

Defendant - Appellant. _________________________________

ORDER AND JUDGMENT * _________________________________

Before HOLMES, Chief Judge, BACHARACH and MORITZ, Circuit Judges. _________________________________

A jury convicted Jonathan Arvay of conducting an illegal gambling business

and conspiring to do the same. Arvay challenges three jury instructions on appeal,

primarily contending the district court erred by not instructing the jury that to

convict, it needed to find that Arvay knew his acts were ones “of participation in

gambling.” United States v. O’Brien, 131 F.3d 1428, 1430 (10th Cir. 1997). We

affirm Arvay’s convictions because the district court’s instructions were correct. And

even if we were to conclude otherwise, the purported errors did not affect the jury’s

verdict given the strength of the government’s evidence at trial.

This order and judgment is not binding precedent, except under the doctrines *

of law of the case, res judicata, and collateral estoppel. But it may be cited for its persuasive value. See Fed. R. App. P. 32.1(a); 10th Cir. R. 32.1(A). Appellate Case: 24-1497 Document: 65-1 Date Filed: 06/29/2026 Page: 2

Background

In 2021, the FBI and IRS began investigating illicit gambling establishments

across Colorado, all linked to a man named Nathan Sugar. The establishments shared

common characteristics, one of which was allowing players to obtain cryptocurrency

as a prize for playing games. Arvay co-owned one of these establishments: Player

One Arcade in Denver.

In January 2022, Joseph Fiedler, an FBI task-force officer, visited Player One

in an undercover capacity. A second undercover FBI agent accompanied him. The

pair approached Arvay and inquired about playing games at the arcade. Arvay

explained that the agents could earn points by playing games and then trade the

points for prizes, including a cryptocurrency called odacoin. Arvay informed the

agents that he could not give cash payouts because that would be “gambling,” and he

could not “do that . . . in the city of Denver.” Fiedler Body-Worn Camera Footage,

03:27–03:30. But, Arvay clarified, the agents could take the cryptocurrency prize to

the business next door and exchange it for cash there.

The business next door, however, was a “tiny little room” containing a

cryptocurrency teller machine (CTM) that allowed users to trade odacoin for cash.

R. vol. 8, 73. There were instructions above the CTM that advised users experiencing

issues with the machine to call Player One. And Arvay maintained the machine: he

cleared, and elicited help in clearing, CTM jams, he tried to keep the CTM filled with

fives and twenties, and he instructed employees on recording information from the

CTM.

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As part of their investigation, the agents played some of the games at Player

One. When the agents redeemed their points, Arvay directed them to the CTM and

gave Fiedler a handwritten card with login credentials to access the machine. Fiedler

exited Player One, entered the CTM room, and obtained cash from the CTM.

In July 2023, a grand jury charged Arvay in a superseding indictment with one

count of conducting, financing, managing, supervising, directing, or owning all or

part of an illegal gambling business, in violation of 18 U.S.C. § 1955, and one count

of conspiring to do the same, in violation of 18 U.S.C. § 371. 1 A jury convicted

Arvay on both counts, and the district court sentenced him to a year and a day in

prison, plus three years of supervised release. Arvay appeals his convictions.

Analysis

Arvay challenges three jury instructions: the elements instruction for the

illegal-gambling-business count, including the instruction’s definition of “gambling”;

the “knowingly” instruction; and the elements instruction for the conspiracy count.

“We review jury instructions as a whole ‘de novo in the context of the entire trial to

determine if they accurately state the governing law and provide the jury with an

accurate understanding of the relevant legal standards and factual issues in the case.’”

United States v. Flechs, 98 F.4th 1235, 1250–51 (10th Cir. 2024) (quoting United

1 The indictment also charged Sugar and one other individual with a variety of crimes. Sugar remains a fugitive, and the other individual reached a diversion agreement with the government. The indictment also named, but did not charge, four other coconspirators, some of whom reached prosecution-protection agreements with the government. 3 Appellate Case: 24-1497 Document: 65-1 Date Filed: 06/29/2026 Page: 4

States v. Jean-Pierre, 1 F.4th 836, 846 (10th Cir. 2021)). When an appellant

preserves their objection to a district court’s decision to give, or refuse to give, a

particular instruction, we review for abuse of discretion. United States v. Bedford,

536 F.3d 1148, 1152 (10th Cir. 2008). “A district court abuses its discretion when its

decision is arbitrary, capricious[,] or whimsical or falls outside the bounds of

permissible choice in the circumstances.” United States v. Woodmore, 127 F.4th 193,

209 (10th Cir. 2025) (cleaned up) (quoting United States v. Olea-Monarez, 908 F.3d

636, 639 (10th Cir. 2018)).

But our inquiry into preserved instructional errors doesn’t end there. When a

district court instructs the jury incorrectly, we review for harmless error. United

States v. Kahn, 58 F.4th 1308, 1317–18 (10th Cir. 2023). The government bears the

burden of showing harmlessness, United States v. McGirt, 71 F.4th 755, 760 (10th

Cir. 2023), but the applicable harmlessness standard “depend[s] upon whether the

error is of constitutional dimension,” United States v. Rivera, 900 F.2d 1462, 1469

(10th Cir. 1990). For constitutional errors, we ask whether “it appears beyond a

reasonable doubt that the error complained of did not contribute to the verdict

obtained.” McGirt, 71 F.4th at 760 (quoting Neder v. United States, 527 U.S. 1, 15

(1999)). For nonconstitutional errors, we consider whether the error “had a

‘substantial influence’ on the outcome or leaves one in ‘grave doubt’ as to whether it

had such effect.” Rivera, 900 F.2d at 1469 (quoting Kotteakos v. United States, 328

U.S. 750, 765 (1946)).

For unpreserved instructional objections, appellants must meet our stricter

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plain-error test. United States v. Buntyn, 104 F.4th 805, 814 (10th Cir. 2024); see

also United States v. Brown, 128 F.4th 1358, 1366 (10th Cir. 2025) (stating appellant

bears burden). “Plain error occurs when there is (1) error, (2) that is plain, which

(3) affects substantial rights, and which (4) seriously affects the fairness, integrity, or

public reputation of judicial proceedings.” United States v. Paycer, 154 F.4th 1261,

1271 (10th Cir. 2025) (quoting United States v. Frost, 684 F.3d 963, 971 (10th Cir.

2012)), cert. denied, No. 25-6953, 2026 WL 1052080 (Apr. 20, 2026).

Arvay first challenges the instruction setting out the elements of conducting an

illegal gambling business in violation of § 1955. Broadly, this instruction listed the

three elements of the offense, defined the terms “conduct” and “gambling,” explained

the government’s burden of proof regarding knowledge, and provided the relevant

Colorado gambling law. For context, we set out most of the instruction here:

To find the defendant guilty of this crime, you must be convinced that the government has proved each of the following beyond a reasonable doubt:

First: The defendant and four or more persons knowingly conducted, financed, managed, supervised, directed, or owned all or part of a gambling business;

Second: The gambling business was conducted in, and violated the law of, the state of Colorado . . . ; and

Third: The gambling business either was in substantially continuous operation for more than 30 days or had a gross revenue of $2,000 or more on any single day.

A person “conducts” a gambling business if he participates in the operation of the gambling business in some function necessary to the operation of the gambling business. A mere bettor or customer is not involved in the “conduct” of the business.

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The government is not required to prove that the defendant knew the gambling business involved five or more people, had a gross revenue of $2,000 or more on any single day, or remained in operation for more than 30 days. The government is also not required to prove that the defendant knew that the gambling business violated Colorado law.

[Elements of Colorado law from Colo. Rev. Stat. § 18-10.5-102 and -103, relevant to the second element above, including the definition of a “simulated gambling device.”]

....

“Gambling” means risking any money, credit, deposit, or other thing of value for gain contingent in whole or in part upon lot, chance, the operation of a gambling device, or the happening or outcome of an event, including a sporting event, over which the person taking a risk has no control.

R. vol. 1, 441–42.

Although this instruction is consistent with our pattern instruction, see Tenth

Cir. Crim. Pattern Jury Instrs. § 2.72 (2023), Arvay challenges the instruction’s

presentation of the required mens rea. As quoted above, the instruction states that a

defendant need not know that his conduct violated Colorado law. But according to

Arvay, this is incomplete because the district court should have also instructed the

jury that the government needed to prove Arvay knew his “act was one of

participation in gambling.” O’Brien, 131 F.3d at 1430. The parties dispute whether

Arvay presented this objection to the district court and preserved the issue for appeal.

But we need not decide preservation because Arvay’s argument fails under any

standard of review.

In O’Brien, we discussed the mens rea requirement for a § 1955 conviction in

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the context of a sufficiency challenge. Id. at 1429–30. We observed that § 1955 is not

a specific-intent statute, which means “a defendant need not know that the gambling

business involved five or more people, remained in operation for thirty days, or was

violative of state law.” Id. at 1430. Instead, the statute requires a general intent,

“which is satisfied whenever the defendant knowingly does an act made unlawful by

the statute.” Id. We noted, however, that “[t]o say that the statute requires knowledge

. . . does not answer the ‘question of what level of knowledge suffices.’” Id. (cleaned

up) (quoting Staples v. United States, 511 U.S. 600, 621 (1994) (Ginsburg, J.,

concurring)). Thus, we clarified that “the government must demonstrate that a

defendant knew that his . . . act was one of participation in gambling.” Id. We found

that requirement satisfied in O’Brien by evidence that the defendants “knowingly

conducted, financed, managed, supervised, directed, or owned all or a part of the . . .

gambling business.” Id. (emphasis added).

Here, the district court instructed the jury that to convict Arvay of conducting

an illegal-gambling-business, it needed to find that Arvay “knowingly conducted,

financed, managed, supervised, directed, or owned all or part of a gambling

business.” R. vol. 1, 441 (emphasis added). Simply put, this instruction directly

aligns with O’Brien’s articulation of the level of knowledge required for a § 1955

offense. See O’Brien, 131 F.3d at 1430.

Moreover, the instructions capture the additional language in O’Brien that

Arvay argues the district court should have included—“that [Arvay] knew that his

. . . act was one of participation in gambling.” O’Brien, 131 F.3d at 1430. In the very

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same instruction, the district court instructed the jury that “conducts” means

participating in the operation of a gambling business “in some function necessary to

the operation of the gambling business.” R. vol. 1, 441. So to find that Arvay

“knowingly conducted” the gambling business, the jury would necessarily have to

conclude that he knowingly participated in the operation of the business in an

essential capacity. For these reasons, the district court did not abuse its discretion or

plainly err in instructing the jury on the illegal-gambling-business count. 2

Arvay relatedly relies on O’Brien to challenge the district court’s “knowingly”

instruction, which stated:

When the word “knowingly” is used in these instructions, it means that the act was done voluntarily and intentionally, and not because of mistake or accident. Although knowledge on the part of the defendant cannot be established merely by demonstrating that the defendant was negligent, careless, or foolish, knowledge can be inferred if the defendant deliberately blinded himself to the existence of a fact. Knowledge can be inferred if the defendant was aware of a high probability of the existence of his participation in a business that had the features making it a gambling business, unless the defendant did not actually believe he was participating in a business that had those features.

2 Arvay also argues that the district court should have instructed the jury that the definition of “gambling” in this instruction does not include a game of skill. But the statute and pattern instruction that Arvay relies on don’t apply in this case, which involves not straightforward gambling but simulated gambling devices. Compare Colo. Rev. Stat § 18-10-102(2)(a) (excluding “[b]ona fide contests of skill” from definition of “gambling”), and Colo. Jury Instrs. Crim. § F:160.2 (2023) (“‘Gambling’ does not include[] bona fide contests of skill . . . .”), with Colo. Rev. Stat. § 18-10.5-102(3.5) (stating “that, for purposes of [the definition of gambling as used in ‘simulated gambling’ or ‘simulated gambling device’], the exception set forth in [§] 18-10-102(2)(a) does not apply”), and Colo. Jury Instrs. Crim. § F:160.25 (2023) (excluding “bona fide business transactions” but not games of skill from definition of “gambling” for purposes of simulated-gambling-device offense). So there is simply no error on this basis. 8 Appellate Case: 24-1497 Document: 65-1 Date Filed: 06/29/2026 Page: 9

Id. at 445 (emphasis added). This instruction is also consistent with our pattern

instruction. See Tenth Cir. Crim. Pattern Jury Instrs. § 1.37 (2023). Nevertheless,

Arvay contends that the italicized language is at odds with O’Brien because it

“allowed the jury to find lack of knowledge only if Arvay did not believe ‘he was

participating in a business that had . . . features [of a gambling business].’” Aplt. Br.

19 (quoting R. vol. 1, 445). Arvay also contends that the language allowed the jury to

infer knowledge if Arvay was aware of the existence of his participation in a business

that had features making it a gambling business, whereas O’Brien requires that a

defendant know that their act was one of participation in gambling. Neither argument

establishes any error.

As the government recognizes, the challenged language identified one instance

where the jury could infer knowledge. The instruction did not identify the only

instance where the jury could find that Arvay lacked knowledge. Further, we discern

no difference between a defendant’s knowledge that they were participating in a

business that had features making it a gambling business and their knowledge that

their act was participation in gambling. So the “knowingly” instruction was not

erroneous.

But even if the district court erred in instructing the jury on mens rea or the

definition of knowingly, the errors were harmless. 3 The government presented

3 Though the parties do not thoroughly analyze whether the purported errors were constitutional or nonconstitutional, we need not decide this issue because the errors were harmless even under the stricter test for constitutional errors. 9 Appellate Case: 24-1497 Document: 65-1 Date Filed: 06/29/2026 Page: 10

evidence that placed Arvay’s knowledge that he was participating in gambling

beyond a reasonable doubt. Arvay recognized what constituted gambling: he told the

undercover agents that he could not “give out any cash payouts ever” because that

would be “gambling,” which he could not do “in the city of Denver.” Fiedler Body-

Worn Camera Footage, at 03:24–03:30. Yet Arvay offered cryptocurrency as an

arcade prize and told the agents that they could exchange the cryptocurrency for cash

at the CTM next door. And Arvay’s statement that the CTM was its own business is

controverted by overwhelming evidence: he had access to the CTM and maintained

it, wrote out the username and password necessary for Fiedler to access the CTM,

cleared CTM jams himself or asked for help in clearing them, instructed an employee

on recording information from the CTM, and tried to keep the CTM full of cash.

Further, a notice above the CTM instructed users to call Player One if they

experienced issues. In sum, the evidence revealed that Arvay knew giving customers

cash as a prize would be illicit gambling, but he did so anyway by offering

cryptocurrency as a prize and facilitating cryptocurrency-to-cash exchanges through

the CTM. On these facts, we are certain beyond a reasonable doubt that the purported

errors did not contribute to the jury’s verdict on count one and were therefore

harmless.

As a final matter, Arvay challenges the elements instruction for the conspiracy

count, arguing that the alleged errors on the illegal-gambling-business and knowingly

instructions tainted the conspiracy instruction. As above, we need not decide whether

Arvay preserved this challenge because it fails under any standard. There were no

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errors on the illegal-gambling-business and knowingly instructions, as we have

already explained, that could have carried over to the conspiracy instruction. Thus,

the district court did not err in giving the conspiracy instruction.

Conclusion

Arvay fails to show that the district court’s instructions were erroneous, and

any purported errors were harmless beyond a reasonable doubt. We affirm.

Entered for the Court

Nancy L. Moritz Circuit Judge