NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS APR 15 2025 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 21-10376
Plaintiff-Appellee, D.C. No. 5:18-cr-00172-BLF-1 v.
MICHAEL KAIL, MEMORANDUM*
Defendant-Appellant.
Appeal from the United States District Court for the Northern District of California Beth Labson Freeman, District Judge, Presiding
Argued and Submitted March 27, 2025 Pasadena, California
Before: BOGGS,** FRIEDLAND, and BRESS, Circuit Judges.
Defendant-Appellant Michael Kail was convicted on eighteen counts of wire
fraud, in violation of 18 U.S.C. §§ 1343, 1346; three counts of mail fraud, in
violation of 18 U.S.C. §§ 1341, 1346; and seven counts of money laundering, in
violation of 18 U.S.C. § 1957. After calculating $1,505,000 in actual losses, the
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Danny J. Boggs, United States Circuit Judge for the U.S. Court of Appeals for the Sixth Circuit, sitting by designation. district court sentenced Kail to thirty months per count to be served concurrently.
Kail now appeals his convictions and sentence. We have jurisdiction under
28 U.S.C. § 1291, and we affirm.
We review de novo whether an indictment was constructively amended.
United States v. Luong, 965 F.3d 973, 984 (9th Cir. 2020). We review the
“formulation of jury instructions for abuse of discretion, but review de novo
whether those instructions correctly state the elements of the offense and
adequately cover the defendant’s theory of the case.” United States v. Liew, 856
F.3d 585, 595-96 (9th Cir. 2017). When reviewing whether evidence was
sufficient to support a verdict, we “determine whether any rational trier of fact
could have found the essential elements of the crime beyond a reasonable doubt,”
United States v. McCarron, 30 F.4th 1157, 1162 (9th Cir. 2022) (emphasis
omitted) (quoting United States v. Nevils, 598 F.3d 1158, 1161 (9th Cir. 2010) (en
banc)), and “resolv[e] all conflicts in the evidence in favor of the prosecution,”
United States v. Rodriguez, 546 F.2d 302, 306 (9th Cir. 1976). We review de novo
Sixth Amendment public-trial claims. United States v. Allen, 34 F.4th 789, 794
(9th Cir. 2022). In determining whether the district court erred in sentencing, “we
review the district court’s interpretation of the Guidelines de novo, its application
of the Guidelines to the facts for abuse of discretion, and its factual findings . . . for
clear error.” United States v. Gadson, 763 F.3d 1189, 1219 (9th Cir. 2014).
2 1. Kail’s challenges to his convictions for wire or mail fraud all fail. As an
initial matter, Kail’s argument that the indictment was constructively amended to
add a property theory of liability misconstrues the wording of the indictment. The
indictment charged Kail with devising a scheme “to obtain money and property by
means of materially false and fraudulent pretenses, representations, promises, and
omissions,” which “deprived Netflix of . . . its money and property by enabling the
vendors to . . . negotiate more favorable contracts with Netflix than they would
have been able to obtain.” The indictment therefore gave Kail “fair notice of the
charges” brought under a property theory of liability. United States v. Holmes, 129
F.4th 636, 661 (9th Cir. 2025) (quoting Luong, 965 F.3d at 985).1
In any event, Kail’s fraud convictions can all be sustained under the honest-
services theory of liability, which the indictment also charged.2 Kail’s challenges
1 Kail argues that the Government’s decision to add the property fraud theory three weeks prior to trial was prejudicial because the Government had represented to Kail over almost three years that it was pursuing only an honest- services theory. But whether the Government’s strategy allegedly disrupted Kail’s preparation is irrelevant to the constructive-amendment issue, which in this case turns on the wording of the indictment on its face, not on the Government’s representations about what the indictment meant. See United States v. Bellot, 113 F.4th 1151, 1156 (9th Cir. 2024). Nor has Kail raised any other separate claim based on the Government’s claimed delay in notifying Kail that it was also pursuing a property fraud theory. 2 Because Kail’s fraud convictions can be affirmed under an honest-services theory, any instructional or sufficiency-of-evidence error pertaining to a property theory of liability was harmless. The jury here was asked to separately find whether Kail was guilty of Counts 1 to 22 under a property theory, under an
3 to the honest-services jury instructions fail. Kail first argues that the instructions
did not cover his defense theory because they allowed the jury to convict Kail for
receiving payment in exchange for lawful advising services. But, contrary to
Kail’s argument, the instructions provided that the Government must prove that
“the defendant knowingly devised or participated in a scheme or plan to defraud
Netflix, Inc. of its right to his honest services,” and that “to find the defendant
guilty of this offense, you must find that the defendant devised or participated in a
plan or course of action involving bribes or kickbacks given or offered to the
defendant.” The instructions further clarified that “[u]ndisclosed conflicts of
interest, secret payments or undisclosed self-dealing alone, is not sufficient to
constitute honest services mail fraud.” Taken as a whole, the instructions
adequately covered Kail’s defense theory because they made clear that merely
providing lawful advising services without disclosure to Netflix—though it would
be undisclosed self-dealing—would not be honest-services fraud.
Kail next argues that the instructions omitted essential elements of honest-
services fraud by allowing conviction without proof of any misrepresentations
honest-services theory, or under both theories. Because the jury found Kail guilty under the honest-services theory for each count on which he was convicted, no wire or mail fraud conviction depended on the jury’s finding Kail guilty under the property theory. We may therefore affirm Kail’s wire or mail fraud convictions under an honest-services theory alone. See United States v. Pelisamen, 641 F.3d 399, 406 (9th Cir. 2011).
4 directed at Netflix. That argument is also unavailing. The district court instructed
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NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS APR 15 2025 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 21-10376
Plaintiff-Appellee, D.C. No. 5:18-cr-00172-BLF-1 v.
MICHAEL KAIL, MEMORANDUM*
Defendant-Appellant.
Appeal from the United States District Court for the Northern District of California Beth Labson Freeman, District Judge, Presiding
Argued and Submitted March 27, 2025 Pasadena, California
Before: BOGGS,** FRIEDLAND, and BRESS, Circuit Judges.
Defendant-Appellant Michael Kail was convicted on eighteen counts of wire
fraud, in violation of 18 U.S.C. §§ 1343, 1346; three counts of mail fraud, in
violation of 18 U.S.C. §§ 1341, 1346; and seven counts of money laundering, in
violation of 18 U.S.C. § 1957. After calculating $1,505,000 in actual losses, the
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Danny J. Boggs, United States Circuit Judge for the U.S. Court of Appeals for the Sixth Circuit, sitting by designation. district court sentenced Kail to thirty months per count to be served concurrently.
Kail now appeals his convictions and sentence. We have jurisdiction under
28 U.S.C. § 1291, and we affirm.
We review de novo whether an indictment was constructively amended.
United States v. Luong, 965 F.3d 973, 984 (9th Cir. 2020). We review the
“formulation of jury instructions for abuse of discretion, but review de novo
whether those instructions correctly state the elements of the offense and
adequately cover the defendant’s theory of the case.” United States v. Liew, 856
F.3d 585, 595-96 (9th Cir. 2017). When reviewing whether evidence was
sufficient to support a verdict, we “determine whether any rational trier of fact
could have found the essential elements of the crime beyond a reasonable doubt,”
United States v. McCarron, 30 F.4th 1157, 1162 (9th Cir. 2022) (emphasis
omitted) (quoting United States v. Nevils, 598 F.3d 1158, 1161 (9th Cir. 2010) (en
banc)), and “resolv[e] all conflicts in the evidence in favor of the prosecution,”
United States v. Rodriguez, 546 F.2d 302, 306 (9th Cir. 1976). We review de novo
Sixth Amendment public-trial claims. United States v. Allen, 34 F.4th 789, 794
(9th Cir. 2022). In determining whether the district court erred in sentencing, “we
review the district court’s interpretation of the Guidelines de novo, its application
of the Guidelines to the facts for abuse of discretion, and its factual findings . . . for
clear error.” United States v. Gadson, 763 F.3d 1189, 1219 (9th Cir. 2014).
2 1. Kail’s challenges to his convictions for wire or mail fraud all fail. As an
initial matter, Kail’s argument that the indictment was constructively amended to
add a property theory of liability misconstrues the wording of the indictment. The
indictment charged Kail with devising a scheme “to obtain money and property by
means of materially false and fraudulent pretenses, representations, promises, and
omissions,” which “deprived Netflix of . . . its money and property by enabling the
vendors to . . . negotiate more favorable contracts with Netflix than they would
have been able to obtain.” The indictment therefore gave Kail “fair notice of the
charges” brought under a property theory of liability. United States v. Holmes, 129
F.4th 636, 661 (9th Cir. 2025) (quoting Luong, 965 F.3d at 985).1
In any event, Kail’s fraud convictions can all be sustained under the honest-
services theory of liability, which the indictment also charged.2 Kail’s challenges
1 Kail argues that the Government’s decision to add the property fraud theory three weeks prior to trial was prejudicial because the Government had represented to Kail over almost three years that it was pursuing only an honest- services theory. But whether the Government’s strategy allegedly disrupted Kail’s preparation is irrelevant to the constructive-amendment issue, which in this case turns on the wording of the indictment on its face, not on the Government’s representations about what the indictment meant. See United States v. Bellot, 113 F.4th 1151, 1156 (9th Cir. 2024). Nor has Kail raised any other separate claim based on the Government’s claimed delay in notifying Kail that it was also pursuing a property fraud theory. 2 Because Kail’s fraud convictions can be affirmed under an honest-services theory, any instructional or sufficiency-of-evidence error pertaining to a property theory of liability was harmless. The jury here was asked to separately find whether Kail was guilty of Counts 1 to 22 under a property theory, under an
3 to the honest-services jury instructions fail. Kail first argues that the instructions
did not cover his defense theory because they allowed the jury to convict Kail for
receiving payment in exchange for lawful advising services. But, contrary to
Kail’s argument, the instructions provided that the Government must prove that
“the defendant knowingly devised or participated in a scheme or plan to defraud
Netflix, Inc. of its right to his honest services,” and that “to find the defendant
guilty of this offense, you must find that the defendant devised or participated in a
plan or course of action involving bribes or kickbacks given or offered to the
defendant.” The instructions further clarified that “[u]ndisclosed conflicts of
interest, secret payments or undisclosed self-dealing alone, is not sufficient to
constitute honest services mail fraud.” Taken as a whole, the instructions
adequately covered Kail’s defense theory because they made clear that merely
providing lawful advising services without disclosure to Netflix—though it would
be undisclosed self-dealing—would not be honest-services fraud.
Kail next argues that the instructions omitted essential elements of honest-
services fraud by allowing conviction without proof of any misrepresentations
honest-services theory, or under both theories. Because the jury found Kail guilty under the honest-services theory for each count on which he was convicted, no wire or mail fraud conviction depended on the jury’s finding Kail guilty under the property theory. We may therefore affirm Kail’s wire or mail fraud convictions under an honest-services theory alone. See United States v. Pelisamen, 641 F.3d 399, 406 (9th Cir. 2011).
4 directed at Netflix. That argument is also unavailing. The district court instructed
that an element of honest-services fraud is an “intent to defraud by depriving
Netflix, Inc. of the right of honest services,” and that to act with “intent to
defraud . . . means to act knowingly and with the specific intent to use false or
fraudulent pretenses, representations, promises or omissions to cause loss of honest
services.” The instructions further clarify: “What the government must prove is
that the defendant knowingly devised or participated in a scheme or artifice to
defraud Netflix, Inc. of its right to the defendant’s honest services through bribes
or kickbacks.” Read together, those instructions are best understood to require
proof that Kail made misrepresentations or omissions that were directed at Netflix.
Kail claims that the instructions “did not require proof of a material
misrepresentation or omission,” but he again reads the relevant instructions in
isolation rather than in context. As noted above, the instructions required Kail to
act with “the specific intent to use false or fraudulent pretenses, representations,
promises or omissions to cause loss of honest services.” The instructions further
required the jury to find that “Kail’s act was material; that is, the act had a natural
tendency to influence, or was capable of influencing, a person’s or entity’s acts.”
Thus, when read in context, the jury instructions required the jury to find that
Kail’s misrepresentations or omissions were material to Netflix.
Sufficient evidence also supported Kail’s convictions under an honest-
5 services theory.3 Although Kail observes that “every vendor witness . . . testified
under oath that they had no [quid pro quo] agreement” with Kail, the Government
presented evidence to the contrary. As the district court explained, “[w]hile
witnesses implicated in the scheme unsurprisingly distanced themselves from the
bribes and kickbacks during live testimony, there was ample contemporaneous
documentary evidence that illustrated a quid pro quo scheme.” Our independent
review of the record confirms this. “[R]esolving all conflicts in the evidence in
favor of the prosecution,” we conclude that a rational juror could have found
beyond a reasonable doubt that Kail had a quid pro quo with each relevant vendor.
Rodriguez, 546 F.2d at 306.
2. The district court did not err in instructing the jury that, as to the money-
laundering counts, “[t]he government is not required to prove that Mr. Kail knew
that his acts or omissions were unlawful.” Although an essential element of money
laundering is the defendant’s knowledge that the transactions at issue involved
criminally derived property, see United States v. Lonich, 23 F.4th 881, 899 (9th
Cir. 2022), overruled on other grounds by United States v. Lucas, 101 F.4th 1158
3 Kail only challenges whether sufficient evidence supported the existence of a quid pro quo between Kail and each of the relevant vendors. Any other sufficiency-of-evidence challenge pertaining to the honest-services theory is not “clearly and distinctly” raised in the opening brief and is deemed forfeited. See Avila v. L.A. Police Dep’t, 758 F.3d 1096, 1101 (9th Cir. 2014) (quoting McKay v. Ingleson, 558 F.3d 888, 891 n.5 (9th Cir. 2009)).
6 (9th Cir. 2024), the defendant need not know whether the act of money laundering
itself is unlawful. See 18 U.S.C. § 1957(a); United States v. Stein, 37 F.3d 1407,
1410 (9th Cir. 1994). The jury instructions stated that “[i]n regard to Counts 23
through 29, charging Money Laundering . . . [t]he government is not required to
prove that Mr. Kail knew that his acts or omissions were unlawful.” The specific
reference to the money-laundering counts, in addition to a later instruction that
“[t]he government must prove that Mr. Kail knew that the property involved in the
monetary transaction constituted, or was derived from, proceeds obtained by some
criminal offense,” correctly stated the knowledge element of money laundering.
United States v. Knapp, 120 F.3d 928, 932 (9th Cir. 1997).
3. The district court did not err—let alone plainly err—in closing the
courtroom.4 A total courtroom closure is permitted when the closure is narrowly
tailored to serve an overriding interest. Allen, 34 F.4th at 797. Here, the
courtroom closure served the overriding interest of limiting the spread of COVID
and was narrowly tailored because, consistent with Allen, the district court
provided adequate “alternatives” to a public trial by granting all specific requests
for in-person attendance. Id. at 799. In addition, a live audio feed and trial
transcripts were made available to the public. See United States v. Hougen, 76
4 We review the district court’s courtroom closure for plain error because Kail’s request that certain parties attend his trial in person did not constitute a timely objection to the issue he now presses on appeal.
7 F.4th 805, 811 (9th Cir. 2023). Thus, Kail has not shown error in the courtroom
closures.
4. The district court did not err in its sentencing calculation. The district
court calculated $1,505,000 in actual losses—$120,000 from a contract with
Docurated and $1,385,000 from a contract with Vistara. Record evidence supports
those factual findings. As to Docurated, there was evidence that Docurated “was
not ever a good fit for Netflix because [Docurated’s product] did not work
with . . . [Netflix’s] Mac products” and that Netflix’s in-house products could
perform the same function. And as to Vistara, there was evidence that the Vistara
product was never rolled out, that Vistara “was never trusted,” and that “Netflix
had other technology that was already doing a better job.” Although Kail points to
countervailing evidence in the record suggesting that Netflix received at least some
value from the contracts with Docurated and Vistara, that countervailing evidence
does not show that the district court clearly erred in finding the Government’s
evidence more compelling.
AFFIRMED.