NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ______________
No. 16-3768 ______________
UNITED STATES OF AMERICA
v.
YUJIE DING,
Appellant ______________
On Appeal from the United States District Court for the Eastern District of Pennsylvania (District Court Crim. No. 2-15-cr-00035-001) Honorable Harvey Bartle, III, District Judge ______________
Submitted under Third Circuit LAR 34.1(a) November 6, 2018
BEFORE: HARDIMAN, KRAUSE, and GREENBERG, Circuit Judges
(Filed: November 19, 2018) ______________
OPINION* ______________
GREENBERG, Circuit Judge.
I. INTRODUCTION
____________________
*This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not constitute binding precedent. This matter comes on before this Court on an appeal in a criminal case from a
conviction and sentence following a jury trial in the Eastern District of Pennsylvania for
wire fraud. See 18 U.S.C. § 1343. Defendant-Appellant, Yujie Ding, challenges the
District Court’s denial of his motion for acquittal. Ding contends that the evidence at the
trial was insufficient to support the verdict. For the reasons stated below, we will affirm.
II. FACTUAL BACKGROUND
We set forth the germane facts but note that the District Court set them forth at
greater length in its comprehensive opinion denying the motion for acquittal. See United
States v. Ding, No. 15-cr-0035, slip op. at 2-37 (E.D. Pa. entered April 22, 2016) (App. 8-
21). The case arises from Ding’s efforts to secure federal funding to develop a sensor to
detect atmospheric gases in space. Arklight, a company that Ding owned, applied for a
research grant from NASA under its Small Business Innovation Research (“SBIR”)
Program. The SBIR program exclusively funds small businesses, which are defined as
for-profit entities with less than 500 employees. The goal of the program is to spur
innovation in the private sector, particularly among minority-owned small businesses.
Thus, large entities such as universities are ineligible for the program, and grant
recipients are required to perform a majority of the funded work by themselves, not
through subcontractors.
Ding was a well-respected and long-time professor of electrical engineering at
Lehigh University. His wife, codefendant Yuliya Zotova (“Zotova”), the president of
Arklight, was a scientist with a Ph.D. in nonlinear optics and optoelectronics. In an
2 application to obtain SBIR funding for Arklight, Ding and Zotova certified that Zotova
would be the principal investigator for the project, and she, along with an optical engineer
to be hired, would perform a majority of the funded work. The principal investigator is
the individual mainly responsible for carrying out the project for which funding is sought.
The application represented that a minority portion of the project would be subcontracted
out to Lehigh University, specifically to the research lab that Ding headed at the
university. Based in part on the certification, NASA awarded Arklight research grants to
develop the sensor.
The evidence showed, however, that Zotova did little or no work for Arklight.
Instead, graduate students and research fellows at Ding’s lab performed almost all of the
work to develop the sensor. Indeed, the evidence did not show that Arklight actually
hired an optical engineer for the project as it stated was its intention in its application.
The indictment was based on the theory that but for Arklight’s false promise to perform a
majority of the work, NASA would not have awarded Arklight the research grants and
reimbursed its costs. The indictment included ten counts of wire fraud, each
corresponding to separate invoices that Arklight submitted electronically to NASA for
reimbursement of costs. 1 In essence, the government contended that Arklight was simply
a shell company to pass the funding to Ding’s research lab at the university. Witnesses
from NASA testified that without a doubt a small business would not have received SBIR
funding absent certification that it was responsible for a majority of the development
1 NASA also required the same work certification to be attached to each invoice submitted and Arklight did so for all but two of the invoices. 3 work. The jury convicted Ding and Zotova on six of the ten counts of wire fraud but
acquitted them on the other counts.
After the jury returned partial guilty verdicts against both defendants, Ding filed a
motion for entry of a judgment of acquittal arguing that (1) by finding him guilty on only
six of ten counts, the jury’s verdict was inconsistent, thus requiring an acquittal on all
counts, and (2) evidence at the trial was insufficient to support the guilty verdict. 2 The
District Court denied the motion. On this appeal Ding only raises the sufficiency of
evidence argument as he claims that the evidence “was insufficient to convict [him]
because the errors and or misstatements in the [grant] proposed . . . were not material to
the awarding of the contract.” Appellant’s br. 3.
The District Court sentenced Ding to a one-year and one-day term of incarceration
followed by a one-year term of supervised release and a fine of $3,000. In addition, it
required him to make restitution of $72,000 and to pay a special assessment. The Court
sentenced Zotova to a lesser term. Only Ding has appealed. The District Court had
jurisdiction under 18 U.S.C. § 3231 and we have jurisdiction under 28 U.S.C. § 1291.
III. DISCUSSION
The fraud statute, 18 U.S.C. § 1343, makes it a crime to
devise[] or intend[] to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, [by] transmit[ing] or caus[ing] to be transmitted by means of wire, radio, or television communication in
2 Zotova also unsuccessfully moved for a judgment of acquittal but inasmuch as she has not appealed, we confine our discussion to Ding’s case. 4 interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice.
To prove that a defendant committed a crime under this statute, the government must
establish “(1) the defendant's knowing and willful participation in a scheme or artifice to
defraud, (2) with the specific intent to defraud, and (3) the use of . . . interstate wire
communications in furtherance of the scheme.” United States v. Andrews, 681 F.3d 509,
518 (3d Cir. 2012) (alteration in original) (internal quotation marks omitted) (quoting
United States v. Antico, 275 F.3d 245, 261 (3d Cir. 2001)). In addition, “materiality is an
element of the federal . . . wire fraud . . . statute[].” United States v. McLaughlin, 386
F.3d 547, 553 (3d Cir. 2004) (citing Neder v.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ______________
No. 16-3768 ______________
UNITED STATES OF AMERICA
v.
YUJIE DING,
Appellant ______________
On Appeal from the United States District Court for the Eastern District of Pennsylvania (District Court Crim. No. 2-15-cr-00035-001) Honorable Harvey Bartle, III, District Judge ______________
Submitted under Third Circuit LAR 34.1(a) November 6, 2018
BEFORE: HARDIMAN, KRAUSE, and GREENBERG, Circuit Judges
(Filed: November 19, 2018) ______________
OPINION* ______________
GREENBERG, Circuit Judge.
I. INTRODUCTION
____________________
*This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not constitute binding precedent. This matter comes on before this Court on an appeal in a criminal case from a
conviction and sentence following a jury trial in the Eastern District of Pennsylvania for
wire fraud. See 18 U.S.C. § 1343. Defendant-Appellant, Yujie Ding, challenges the
District Court’s denial of his motion for acquittal. Ding contends that the evidence at the
trial was insufficient to support the verdict. For the reasons stated below, we will affirm.
II. FACTUAL BACKGROUND
We set forth the germane facts but note that the District Court set them forth at
greater length in its comprehensive opinion denying the motion for acquittal. See United
States v. Ding, No. 15-cr-0035, slip op. at 2-37 (E.D. Pa. entered April 22, 2016) (App. 8-
21). The case arises from Ding’s efforts to secure federal funding to develop a sensor to
detect atmospheric gases in space. Arklight, a company that Ding owned, applied for a
research grant from NASA under its Small Business Innovation Research (“SBIR”)
Program. The SBIR program exclusively funds small businesses, which are defined as
for-profit entities with less than 500 employees. The goal of the program is to spur
innovation in the private sector, particularly among minority-owned small businesses.
Thus, large entities such as universities are ineligible for the program, and grant
recipients are required to perform a majority of the funded work by themselves, not
through subcontractors.
Ding was a well-respected and long-time professor of electrical engineering at
Lehigh University. His wife, codefendant Yuliya Zotova (“Zotova”), the president of
Arklight, was a scientist with a Ph.D. in nonlinear optics and optoelectronics. In an
2 application to obtain SBIR funding for Arklight, Ding and Zotova certified that Zotova
would be the principal investigator for the project, and she, along with an optical engineer
to be hired, would perform a majority of the funded work. The principal investigator is
the individual mainly responsible for carrying out the project for which funding is sought.
The application represented that a minority portion of the project would be subcontracted
out to Lehigh University, specifically to the research lab that Ding headed at the
university. Based in part on the certification, NASA awarded Arklight research grants to
develop the sensor.
The evidence showed, however, that Zotova did little or no work for Arklight.
Instead, graduate students and research fellows at Ding’s lab performed almost all of the
work to develop the sensor. Indeed, the evidence did not show that Arklight actually
hired an optical engineer for the project as it stated was its intention in its application.
The indictment was based on the theory that but for Arklight’s false promise to perform a
majority of the work, NASA would not have awarded Arklight the research grants and
reimbursed its costs. The indictment included ten counts of wire fraud, each
corresponding to separate invoices that Arklight submitted electronically to NASA for
reimbursement of costs. 1 In essence, the government contended that Arklight was simply
a shell company to pass the funding to Ding’s research lab at the university. Witnesses
from NASA testified that without a doubt a small business would not have received SBIR
funding absent certification that it was responsible for a majority of the development
1 NASA also required the same work certification to be attached to each invoice submitted and Arklight did so for all but two of the invoices. 3 work. The jury convicted Ding and Zotova on six of the ten counts of wire fraud but
acquitted them on the other counts.
After the jury returned partial guilty verdicts against both defendants, Ding filed a
motion for entry of a judgment of acquittal arguing that (1) by finding him guilty on only
six of ten counts, the jury’s verdict was inconsistent, thus requiring an acquittal on all
counts, and (2) evidence at the trial was insufficient to support the guilty verdict. 2 The
District Court denied the motion. On this appeal Ding only raises the sufficiency of
evidence argument as he claims that the evidence “was insufficient to convict [him]
because the errors and or misstatements in the [grant] proposed . . . were not material to
the awarding of the contract.” Appellant’s br. 3.
The District Court sentenced Ding to a one-year and one-day term of incarceration
followed by a one-year term of supervised release and a fine of $3,000. In addition, it
required him to make restitution of $72,000 and to pay a special assessment. The Court
sentenced Zotova to a lesser term. Only Ding has appealed. The District Court had
jurisdiction under 18 U.S.C. § 3231 and we have jurisdiction under 28 U.S.C. § 1291.
III. DISCUSSION
The fraud statute, 18 U.S.C. § 1343, makes it a crime to
devise[] or intend[] to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, [by] transmit[ing] or caus[ing] to be transmitted by means of wire, radio, or television communication in
2 Zotova also unsuccessfully moved for a judgment of acquittal but inasmuch as she has not appealed, we confine our discussion to Ding’s case. 4 interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice.
To prove that a defendant committed a crime under this statute, the government must
establish “(1) the defendant's knowing and willful participation in a scheme or artifice to
defraud, (2) with the specific intent to defraud, and (3) the use of . . . interstate wire
communications in furtherance of the scheme.” United States v. Andrews, 681 F.3d 509,
518 (3d Cir. 2012) (alteration in original) (internal quotation marks omitted) (quoting
United States v. Antico, 275 F.3d 245, 261 (3d Cir. 2001)). In addition, “materiality is an
element of the federal . . . wire fraud . . . statute[].” United States v. McLaughlin, 386
F.3d 547, 553 (3d Cir. 2004) (citing Neder v. United States, 527 U.S. 1, 119 S.Ct. 1827
(1999)). “[T]he well-settled meaning of ‘fraud’ require[s] a misrepresentation or
concealment of material fact.” Neder, 527 U.S. at 22, 119 S.Ct. at 1840 (emphasis in
original). And in this context, a particular misrepresentation is “material if it has ‘a
natural tendency to influence or [is] capable of influencing, the decision of the decision-
making body to which it was addressed.’” Id. at 16, 119 S.Ct. at 1837 (alteration in
original) (quoting United States v. Gaudin, 515 U.S. 506, 509, 115 S.Ct. 2310, 2313
(1995)).
Ding argues that the District Court erred in denying his motion for acquittal,
contending that there was insufficient evidence at trial to establish that his falsehood,
namely the fraudulent representation of how Arklight would perform its work, was
material, i.e., that rather than performing the work in-house it was performed by students.
When we consider this contention we remember that “[w]e apply a ‘particularly
5 deferential’ standard of review to a challenge to the sufficiency of evidence supporting a
jury verdict.” United States v. Gonzalez, 905 F.3d 165, 179 (3d Cir. 2018) (quoting
United States v. Peppers, 302 F.3d 120, 125 (3d Cir. 2002)). “Under this standard, we
will affirm the verdict ‘if any rational juror could have found the challenged elements
beyond a reasonable doubt, viewing the evidence in the manner that is most favorable to
the government, neither reweighing evidence, nor making an independent determination
as to witnesses’ credibility.’” Id. (quoting Peppers, 302 F.3d at 125).
Ding’s argument is puzzling because there was clear affirmative evidence of
materiality. NASA witnesses testified that a small business only can receive SBIR
funding by certifying it would perform majority of the work. Ding’s misrepresentation
with respect to Zotova’s anticipated participation in the project as principal investigator,
therefore was most definitely material because without it, Arklight would not have
received SBIR funding. In order to accept Ding’s argument, we would have to conclude
that NASA witnesses greatly overstated the importance of the certification with respect to
Zotova’s anticipated functioning, which we will not do on appellate review.
We realize that Ding argues:
The work was performed. The payments were within the scope of the program. Even if the defendants, through Arklight, were just a ‘pass through’ to obtain funding, the principal goals of the project and the SBIR program were accomplished. In short, Arklight was a small business who submitted and executed valid proposals with NASA through the SBIR program.
Appellant’s br. 17. When we consider his argument generously we treat Ding as not
actually challenging the materiality of his misrepresentation—rather, he essentially is
6 challenging the verdict with respect to his intent to defraud. In effect, he argues that he
had no motive to lie, because he received little to no financial gain from the alleged fraud,
nor did he ever intend to receive any financial gain at all. As such, he contends that
without evidence of motive, the government failed to prove intent. There is some factual
basis for his argument because evidence supported his lack of financial gain from the
fraud. In this regard, even though Arklight was awarded $700,000 in total funding, the
District Court required that he pay only a small fraction of that amount in restitution,
because most of the funds advanced in the grant actually were used to develop the sensor.
See App. 1748, 1752. But still we have no trouble finding that there was ample evidence
of Ding’s intent to defraud. After all, Ding was seeking a source of funds for his research
and his misrepresentation made this possible. To the government, it was highly material
who would perform the work. Thus, the fact that the work was done did not establish
that any default with respect to who performed the work was not material.
The order of April 22, 2016, and the judgment of conviction and sentence entered
September 29, 2016, will be affirmed.