United States v. Holden

908 F.3d 395
CourtCourt of Appeals for the Ninth Circuit
DecidedJuly 26, 2018
DocketNo. 16-30186
StatusPublished
Cited by22 cases

This text of 908 F.3d 395 (United States v. Holden) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Holden, 908 F.3d 395 (9th Cir. 2018).

Opinion

GRABER, Circuit Judge:

*398The opinion filed July 26, 2018, and published at 897 F.3d 1057, is amended by the opinion filed concurrently with this order.

With these amendments, Appellee's petition for rehearing is DENIED . No further petitions for rehearing or rehearing en banc may be filed.

A jury convicted Defendant Jack Holden of mail and wire fraud, conspiracy to commit mail and wire fraud, and several money laundering offenses. Defendant appeals his convictions for mail and wire fraud, arguing that the district court misinstructed the jury on the elements of those crimes. Defendant also challenges the two-level "organizer" sentencing enhancement applied by the district court and the district court's restitution schedule. We reject Defendant's arguments concerning the jury instructions, but we vacate both his custodial sentence and the restitution portion of the judgment and remand for further proceedings.1

FACTUAL AND PROCEDURAL HISTORY

In the fall of 2007, Defendant and his associate, Lloyd Sharp, met with a group of investors from the Portland, Oregon, area to discuss the possibility of investing in a biofuel operation in Ghana.2 Defendant and Sharp had known each other for a long time, but they had reconnected and entered into a joint venture agreement only recently. The joint venture agreement provided that Defendant and Sharp would work together to start refining biofuel in Ghana. Sharp's company was supposed to invest in the refining operation. Defendant's company was responsible for getting the refinery up and running. At the time he signed the joint venture agreement, Defendant was already engaged in the biofuel business in Ghana, but he had not done any large-scale refining; his operations were limited to planting the jatropha plant,3 the seeds of which eventually would be used to create biofuel.

At the meetings with the investors, Defendant suggested that the Ghana biofuel operation was on the verge of going online; all that was needed was a refinery to start producing fuel. Defendant and Sharp sought $350,000 from the investors to initiate operations at the refinery, and they made specific representations (based on the joint venture agreement) about how that $350,000 would be used. The investors eventually decided to put their money into the project in early 2008. Defendant never completed the purchase of the refinery. Much of the money that he and Sharp received from the investors was not spent on the Ghana refinery project but was, instead, used to pay personal expenses or funneled to family members.

*399In 2008 and 2009, Defendant began to concentrate his efforts on various biofuel projects in Chile. Defendant conveyed to investors-some of whom had already invested in the Ghana project-that the Chile projects would lead to quick profits that could then be poured back into the Ghana venture. After receiving money from the investors, Defendant again failed to spend the money as he had promised. Defendant's offices in Chile were shut down in mid-2009.

Defendant continued to seek investments for the Ghana project throughout the next couple of years. He consistently told investors that he just needed a little more money in order to get the operation up and running. But Defendant never purchased the refinery, never launched a full-scale biofuel operation in Ghana, and never earned any profits for his investors.

In September 2013, Defendant and Sharp were indicted on one count of conspiracy to commit mail and wire fraud, six counts of wire fraud, three counts of mail fraud, six counts of money laundering, and one count of conspiracy to commit money laundering. Sharp pleaded guilty. Defendant went to trial and was convicted on all counts for which he was indicted except for one mail fraud count, which was dismissed at the Government's request. He was sentenced to 87 months in prison, ordered to pay more than $1.4 million in restitution, and ordered to forfeit more than $1.4 million. He timely appeals.

DISCUSSION

A. Mail and Wire Fraud Instructions

Defendant challenges the mail and wire fraud jury instructions given by the district court. We review de novo whether a jury instruction correctly stated the elements of a crime. United States v. Kilbride , 584 F.3d 1240, 1247 (9th Cir. 2009). At bottom, though, Defendant's beef is not with the instructions, which accurately reflected our caselaw, but with our circuit's longstanding construction of the mail and wire fraud statutes. Defendant argues that our "interpretations" of those statutes are not interpretations at all, but instead amount to judicially created crimes in violation of separation-of-powers principles. We review de novo such constitutional issues. United States v. Kuchinski , 469 F.3d 853, 857 (9th Cir. 2006).

The mail fraud instruction4 given by the district court reads as follows:

In order for the Defendant to be found guilty of [mail fraud], the government must prove each of the following elements beyond a reasonable doubt:
First , the Defendant knowingly participated in, devised or intended to devise a scheme or plan to defraud, or a scheme or plan for obtaining money or property by means of false or fraudulent statements, representations, promises, or omissions of material facts, or the Defendant knowingly aided and abetted Lloyd Sharp in doing so;
Second , the statements, representations, or promises made or facts omitted as part of the scheme were material; that is, they had a natural tendency to influence, or were capable of influencing, a person to part with money or property;
Third , the Defendant acted with the intent to defraud; that is, the intent to deceive or to cheat; and
Fourth , the Defendant used, or caused to be used, the mails to carry out an essential part of the scheme, or the Defendant knowingly aided and abetted Lloyd Sharp in doing so ....

*400Under our longstanding precedent, "anyone who knowingly and intentionally participates in the execution of [a] fraudulent scheme comes within the prohibition of the mail and wire fraud statutes regardless of whether the defendant devised the scheme." United States v. Manion , 339 F.3d 1153, 1156 (9th Cir.

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908 F.3d 395, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-holden-ca9-2018.