NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUL 31 2024 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 22-50080
Plaintiff-Appellee, D.C. Nos. 2:19-cr-00282-RGK-7 v. 2:19-cr-00282-RGK-8 2:19-cr-00282-RGK-9 SCUDERIA DEVELOPMENT, LLC; 1001 2:19-cr-00282-RGK-10 DOUBLEDAY, LLC; VON-KARMAN - MAIN STREET, LLC; 10681 PRODUCTION AVENUE, LLC, MEMORANDUM*
Defendants-Appellants.
UNITED STATES OF AMERICA, No. 22-50081
Plaintiff-Appellee, D.C. No. 2:19-cr-00282-RGK-5 v.
PERFECTUS ALUMINIUM INC, AKA Perfectus Aluminium Inc,
Defendant-Appellant.
UNITED STATES OF AMERICA, No. 22-50082
Plaintiff-Appellee, D.C. No. 2:19-cr-00282-RGK-6
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. v.
PERFECTUS ALUMINUM ACQUISITIONS, LLC,
UNITED STATES OF AMERICA, No. 22-50103
Plaintiff-Appellant, D.C. Nos. 2:19-cr-00282-RGK-4 v. 2:19-cr-00282-RGK-5 2:19-cr-00282-RGK-6 ZHONGTIAN LIU, AKA Big Boss, AKA 2:19-cr-00282-RGK-7 Chairman, AKA UL, AKA Uncle Liu, AKA 2:19-cr-00282-RGK-8 Liu Zhongtian; CHINA ZHONGWANG 2:19-cr-00282-RGK-9 HOLDINGS; ZHAOHUA CHEN, AKA 2:19-cr-00282-RGK-10 Uncle Chen, AKA Chen Zhaohua; XIANG 2:19-cr-00282-RGK CHUN SHAO, AKA Johnson Shao,
Defendants,
and
PERFECTUS ALUMINIUM INC; PERFECTUS ALUMINUM ACQUISITIONS, LLC; SCUDERIA DEVELOPMENT, LLC; 1001 DOUBLEDAY, LLC; VON-KARMAN - MAIN STREET, LLC; 10681 PRODUCTION AVENUE, LLC,
Defendants-Appellees.
Appeal from the United States District Court for the Central District of California R. Gary Klausner, District Judge, Presiding
2 Argued and Submitted July 15, 2024 Pasadena, California
Before: PAEZ and SANCHEZ, Circuit Judges, and LYNN,** District Judge.
Defendants-Appellants appeal their jury convictions on 24 counts for
conspiring to commit wire fraud, customs fraud, and promotional money
laundering in violation of 18 U.S.C. § 371; wire fraud in violation of 18 U.S.C.
§ 1343; customs fraud in violation of 18 U.S.C. § 545; and money laundering in
violation of 18 U.S.C. § 1956(a)(2)(A). They also appeal the district court’s
restitution order, while the Government cross-appeals the court’s restitution
payment schedule. We have jurisdiction under 28 U.S.C. § 1291. We affirm
Defendants’ convictions and vacate the restitution order in part.
1. The district court did not err in denying Defendants’ motion to
dismiss. Because U.S. corporate Defendants’ wires originated or terminated in the
Central District of California, this case concerns domestic applications of the wire
fraud statute. See United States v. Hussain, 972 F.3d 1138, 1145 (9th Cir. 2020).
Further, the indictment adequately alleged the elements of customs fraud. The
indictment alleged that Defendants intended to defeat or avoid 2011
antidumping/countervailing duties (“AD/CVD”) orders by knowingly submitting
** The Honorable Barbara M. G. Lynn, United States District Judge for the Northern District of Texas, sitting by designation.
3 false documentation to U.S. Customs and Border Protection (“Customs”) asserting
that their aluminum pallets were “finished merchandise.” 18 U.S.C. § 545; see
United States v. Robinson, 147 F.3d 851, 853 (9th Cir. 1998) (explaining that
customs fraud occurs at the time of “the submission of false, forged or fraudulent
invoices” at the port of entry). The district court correctly denied Defendants’
motion to dismiss the indictment on these grounds.
2. The district court did not abuse its discretion in conducting voir dire.
Defendants’ claim that the district court was required to inquire about anti-Asian
and anti-Chinese bias rests on speculation about the COVID-19 pandemic and
general animosity toward China, but a “trial court may refuse questions which are
tied to prejudice only speculatively.” United States v. Anekwu, 695 F.3d 967, 978
(9th Cir. 2012) (cleaned up) (quoting United States v. Payne, 944 F.2d 1458, 1474
(9th Cir. 1991)). To the extent Defendants preserved their voir dire objection for
appeal, the district court exercised its “considerable discretion” by declining to ask
proposed questions that concerned the COVID-19 pandemic and were only
speculatively linked to any concerns about juror bias. United States v. Medina
Casteneda, 511 F.3d 1246, 1250 (9th Cir. 2008).
3. The Government did not commit a constructive amendment or
impermissible variance between the indictment and trial. The indictment alleges
that Defendants conspired to import aluminum extrusions tack-welded into the
4 shape of pallets and falsely represent to Customs that the aluminum pallets were
“finished merchandise” beyond the ambit of the 2011 AD/CVD orders. The
Government presented the same theory of customs fraud at trial. Government
witnesses testified that the pallets were not “finished merchandise” because they
lacked any “non-extruded aluminum,” evidence that is consistent with the
indictment’s charge that Defendants smuggled extruded aluminum into the United
States as “finished merchandise.” Nor was the Government’s proof at trial an
impermissible variance because the proven facts were not “materially different
from those alleged in the indictment.” United States v. Hartz, 458 F.3d 1011, 1020
(9th Cir. 2006) (quoting United States v. Von Stoll, 726 F.2d 584, 586 (9th Cir.
1984)).
4. The district court properly admitted co-conspirator statements. At
trial, the Government established the existence of a conspiracy to commit wire
fraud and customs fraud, and thus needed “only [to] present slight evidence
connecting the defendant to the conspiracy.” United States v. Crespo de Llano,
838 F.2d 1006, 1017 (9th Cir. 1987). Defendants’ challenged statements were
directly connected to and in furtherance of the proven conspiracy, and the court
correctly held them to be admissible under the co-conspirator hearsay exclusion of
Federal Rule of Evidence 801(d)(2)(E).
5. The district court correctly instructed the jury. The court properly
5 declined to give “entrapment-by-estoppel” and “mere-presence” defense
instructions because Defendants failed to present prima facie evidence such that a
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NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUL 31 2024 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 22-50080
Plaintiff-Appellee, D.C. Nos. 2:19-cr-00282-RGK-7 v. 2:19-cr-00282-RGK-8 2:19-cr-00282-RGK-9 SCUDERIA DEVELOPMENT, LLC; 1001 2:19-cr-00282-RGK-10 DOUBLEDAY, LLC; VON-KARMAN - MAIN STREET, LLC; 10681 PRODUCTION AVENUE, LLC, MEMORANDUM*
Defendants-Appellants.
UNITED STATES OF AMERICA, No. 22-50081
Plaintiff-Appellee, D.C. No. 2:19-cr-00282-RGK-5 v.
PERFECTUS ALUMINIUM INC, AKA Perfectus Aluminium Inc,
Defendant-Appellant.
UNITED STATES OF AMERICA, No. 22-50082
Plaintiff-Appellee, D.C. No. 2:19-cr-00282-RGK-6
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. v.
PERFECTUS ALUMINUM ACQUISITIONS, LLC,
UNITED STATES OF AMERICA, No. 22-50103
Plaintiff-Appellant, D.C. Nos. 2:19-cr-00282-RGK-4 v. 2:19-cr-00282-RGK-5 2:19-cr-00282-RGK-6 ZHONGTIAN LIU, AKA Big Boss, AKA 2:19-cr-00282-RGK-7 Chairman, AKA UL, AKA Uncle Liu, AKA 2:19-cr-00282-RGK-8 Liu Zhongtian; CHINA ZHONGWANG 2:19-cr-00282-RGK-9 HOLDINGS; ZHAOHUA CHEN, AKA 2:19-cr-00282-RGK-10 Uncle Chen, AKA Chen Zhaohua; XIANG 2:19-cr-00282-RGK CHUN SHAO, AKA Johnson Shao,
Defendants,
and
PERFECTUS ALUMINIUM INC; PERFECTUS ALUMINUM ACQUISITIONS, LLC; SCUDERIA DEVELOPMENT, LLC; 1001 DOUBLEDAY, LLC; VON-KARMAN - MAIN STREET, LLC; 10681 PRODUCTION AVENUE, LLC,
Defendants-Appellees.
Appeal from the United States District Court for the Central District of California R. Gary Klausner, District Judge, Presiding
2 Argued and Submitted July 15, 2024 Pasadena, California
Before: PAEZ and SANCHEZ, Circuit Judges, and LYNN,** District Judge.
Defendants-Appellants appeal their jury convictions on 24 counts for
conspiring to commit wire fraud, customs fraud, and promotional money
laundering in violation of 18 U.S.C. § 371; wire fraud in violation of 18 U.S.C.
§ 1343; customs fraud in violation of 18 U.S.C. § 545; and money laundering in
violation of 18 U.S.C. § 1956(a)(2)(A). They also appeal the district court’s
restitution order, while the Government cross-appeals the court’s restitution
payment schedule. We have jurisdiction under 28 U.S.C. § 1291. We affirm
Defendants’ convictions and vacate the restitution order in part.
1. The district court did not err in denying Defendants’ motion to
dismiss. Because U.S. corporate Defendants’ wires originated or terminated in the
Central District of California, this case concerns domestic applications of the wire
fraud statute. See United States v. Hussain, 972 F.3d 1138, 1145 (9th Cir. 2020).
Further, the indictment adequately alleged the elements of customs fraud. The
indictment alleged that Defendants intended to defeat or avoid 2011
antidumping/countervailing duties (“AD/CVD”) orders by knowingly submitting
** The Honorable Barbara M. G. Lynn, United States District Judge for the Northern District of Texas, sitting by designation.
3 false documentation to U.S. Customs and Border Protection (“Customs”) asserting
that their aluminum pallets were “finished merchandise.” 18 U.S.C. § 545; see
United States v. Robinson, 147 F.3d 851, 853 (9th Cir. 1998) (explaining that
customs fraud occurs at the time of “the submission of false, forged or fraudulent
invoices” at the port of entry). The district court correctly denied Defendants’
motion to dismiss the indictment on these grounds.
2. The district court did not abuse its discretion in conducting voir dire.
Defendants’ claim that the district court was required to inquire about anti-Asian
and anti-Chinese bias rests on speculation about the COVID-19 pandemic and
general animosity toward China, but a “trial court may refuse questions which are
tied to prejudice only speculatively.” United States v. Anekwu, 695 F.3d 967, 978
(9th Cir. 2012) (cleaned up) (quoting United States v. Payne, 944 F.2d 1458, 1474
(9th Cir. 1991)). To the extent Defendants preserved their voir dire objection for
appeal, the district court exercised its “considerable discretion” by declining to ask
proposed questions that concerned the COVID-19 pandemic and were only
speculatively linked to any concerns about juror bias. United States v. Medina
Casteneda, 511 F.3d 1246, 1250 (9th Cir. 2008).
3. The Government did not commit a constructive amendment or
impermissible variance between the indictment and trial. The indictment alleges
that Defendants conspired to import aluminum extrusions tack-welded into the
4 shape of pallets and falsely represent to Customs that the aluminum pallets were
“finished merchandise” beyond the ambit of the 2011 AD/CVD orders. The
Government presented the same theory of customs fraud at trial. Government
witnesses testified that the pallets were not “finished merchandise” because they
lacked any “non-extruded aluminum,” evidence that is consistent with the
indictment’s charge that Defendants smuggled extruded aluminum into the United
States as “finished merchandise.” Nor was the Government’s proof at trial an
impermissible variance because the proven facts were not “materially different
from those alleged in the indictment.” United States v. Hartz, 458 F.3d 1011, 1020
(9th Cir. 2006) (quoting United States v. Von Stoll, 726 F.2d 584, 586 (9th Cir.
1984)).
4. The district court properly admitted co-conspirator statements. At
trial, the Government established the existence of a conspiracy to commit wire
fraud and customs fraud, and thus needed “only [to] present slight evidence
connecting the defendant to the conspiracy.” United States v. Crespo de Llano,
838 F.2d 1006, 1017 (9th Cir. 1987). Defendants’ challenged statements were
directly connected to and in furtherance of the proven conspiracy, and the court
correctly held them to be admissible under the co-conspirator hearsay exclusion of
Federal Rule of Evidence 801(d)(2)(E).
5. The district court correctly instructed the jury. The court properly
5 declined to give “entrapment-by-estoppel” and “mere-presence” defense
instructions because Defendants failed to present prima facie evidence such that a
jury “could rationally sustain the defense.” United States v. Kayser, 488 F.3d
1070, 1076 (9th Cir. 2007) (quoting United States v. Jackson, 726 F.2d 1466, 1468
(9th Cir. 1984) (per curiam)). The district court correctly instructed the jury on the
law regarding the AD/CVD orders and the Department of Commerce’s 2017 scope
ruling and did not usurp the jury’s fact-finding role. Because each object of the
conspiracy was legally sufficient, the district court did not abuse its discretion by
using a general verdict form.
6. The Government presented sufficient evidence of customs fraud and
wire fraud to support the jury’s verdict. The Government provided ample evidence
of Defendants’ willful acts and intent to engage in customs fraud, as well as
evidence of Defendants’ deliberate misrepresentations to investors for the wire
fraud counts. Viewing the evidence in the light most favorable to the prosecution,
any rational juror “could have found the essential elements of the crime beyond a
reasonable doubt.” Jackson v. Virginia, 443 U.S. 307, 319 (1979).
7. Finally, the district court properly ordered restitution of
$1,836,244,745 to Customs for unpaid duties under the Mandatory Victims
Restitution Act (“MVRA”) and properly found all Defendants jointly and severally
liable. See United States v. Gagarin, 950 F.3d 596, 609 (9th Cir. 2020).
6 The court erred, however, in imposing the restitution payment schedule
without resolving the parties’ dispute concerning the value of the Warehouse
Defendants’ assets. The MVRA “requires both that a district court set forth its
reasons in resolving a dispute over restitution and that a restitution award . . . be
adequately supported by evidence in the record.” United States v. Tsosie, 639 F.3d
1213, 1222 (9th Cir. 2011) (emphasis added). “By its use of the ‘all property or
rights to property’ language, Congress has made quite clear that the totality of
defendants’ assets will be subject to restitution orders.” United States v. Novak,
476 F.3d 1041, 1046 (9th Cir. 2007) (en banc) (internal citation omitted) (quoting
18 U.S.C. § 3613(a)). The district court did not hold an evidentiary hearing or
resolve the parties’ dispute over the value of the warehouses before determining
that Defendants lacked the ability to pay restitution and ordering a nominal
payment schedule. This finding was “without support in inferences that may be
drawn from the facts in the record.” United States v. Martinez-Lopez, 864 F.3d
1034, 1043 (9th Cir. 2017) (en banc) (quoting United States v. Hinkson, 585 F.3d
1247, 1263 (9th Cir. 2009) (en banc)).
Defendants’ convictions AFFIRMED. Restitution order VACATED and
REMANDED.1
1 Defendants’ motion to take judicial notice of polling data on the COVID-19 pandemic and U.S.-China relations, (Dkt. 14), is DENIED as “not relevant to the disposition of this appeal.” Cuellar v. Joyce, 596 F.3d 505, 512 (9th Cir. 2010).