in the united states court of appeals for the ninth ... · no. 17-50358 in the united states court...
TRANSCRIPT
No. 17-50358
IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
HEON-CHEOL CHI,
Defendant-Appellant.
Appeal from the United States District Courtfor the Central District of California
Honorable John F. Walter, District Judge Presiding
APPELLANT’S OPENING BRIEF
BENJAMIN L. COLEMANCOLEMAN & BALOGH LLP1350 Columbia Street, Suite 600San Diego, California 92101Telephone: (619) 794-0420
Attorneys for Appellant Heon-Cheol Chi
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TABLE OF CONTENTS
Table of authorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
Statement of jurisdiction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Bail status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Statement of the issues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Pertinent statutory provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Statement of the case. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Summary of argument. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Argument. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
I. The district court erred by failing to dismiss the indictment and ininstructing the jury because it misinterpreted “bribery of a public official”under 18 U.S.C. §§ 1956(c)(7)(B) and 1957 as only meaning Koreanbribery rather than requiring the generic federal definition... . . . . . . . . . . . . . . . . 11
A. Introduction and standard of review.. . . . . . . . . . . . . . . . . . . . . . . . . 11B. The statutes require generic federal bribery of a public official. . . . 14C. The jury instructions were erroneous, requiring a new trial. . . . . . . 21D. This Court should order dismissal of the indictment. . . . . . . . . . . . . 28
II. The district court incorrectly instructed the jury on the bribery offenseunderlying the 18 U.S.C. § 1957 violation, even if only Korean law wereapplicable.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
A. Introduction and standard of review.. . . . . . . . . . . . . . . . . . . . . . . . . 30B. The instruction failed to include corrupt and influence elements. . . 33C. Defective official act and public official elements.. . . . . . . . . . . . . . 35D. The error was not harmless beyond a reasonable doubt.. . . . . . . . . . 37
i
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III. The government presented insufficient evidence because it failedto prove beyond a reasonable doubt that the specific transaction allegedin the single count of conviction was traced to dirty funds as requiredunder 18 U.S.C. § 1957... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Certificate of related cases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Certificate of compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Certificate of service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ii
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TABLE OF AUTHORITIES
CASES
Arthur Andersen LLP v. United States,544 U.S. 696 (2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,25,34
Bond v. United States,134 S. Ct. 2077 (2014). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Buck v. Davis,137 S. Ct. 759 (2017). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,38
Burgess v. United States,553 U.S. 124 (2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,35
Descamps v. United States,570 U.S. 254 (2013). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,15
Dixon v. Williams,750 F.3d 1027 (9 Cir. 2014). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,35th
Esquivel-Quintana v. Sessions,137 S. Ct. 1562 (2017). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,17
Ho v. Carey,332 F.3d 587 (9 Cir. 2003). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,35th
Leocal v. Ashcroft,543 U.S. 1 (2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Man-Seok Choe v. Torres,525 F.3d 733 (9 Cir. 2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19th
Mathis v. United States,136 S. Ct. 2243 (2016). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,34
iii
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McDonnell v. United States,136 S. Ct. 2355 (2016). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
Neder v. United States,527 U.S. 1 (1999). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,37
Olivas-Motta v. Holder,746 F.3d 907 (9 Cir. 2013). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,20th
Perrin v. United States,444 U.S. 37 (1979). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Scheidler v. National Organization for Women, Inc.,537 U.S. 393 (2003). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Shafer v. South Carolina,532 U.S. 36 (2001). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,38
Sullivan v. Louisiana,508 U.S. 275 (1993). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,37
Taylor v. United States,495 U.S. 575 (1990). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,16
Torres v. Lynch,136 S. Ct. 1619 (2016). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
United States v. All Assets Held at Bank Julius Baer & Company, Ltd.,571 F. Supp. 2d 1 (D.D.C. 2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
United States v. Awan,459 F. Supp. 2d 167 (E.D.N.Y. 2006). . . . . . . . . . . . . . . . . . . . . . . . . . 19,20
United States v. Carll,105 U.S. 611 (1881). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
iv
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United States v. Caruto,532 F.3d 822 (9 Cir. 2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,38th
United States v. Chao Fan Xu,706 F.3d 965 (9 Cir. 2013). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,33th
United States v. Corona-Sanchez,291 F.3d 1201 (9 Cir. 2002) (en banc). . . . . . . . . . . . . . . . . . . . . . . . . . . . 14th
United States v. Cruz,554 F.3d 840 (9 Cir. 2009). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39th
United States v. DuBo,186 F.3d 1177 (9 Cir. 1999). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28th
United States v. Gaudin,515 U.S. 506 (1995). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
United States v. Goyal,629 F.3d 912 (9 Cir. 2010). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39th
United States v. Hess,124 U.S. 483 (1888). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
United States v. Jeong,624 F.3d 706 (5 Cir. 2010). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18th
United States v. Lazarenko,564 F.3d 1026 (9 Cir. 2009). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,18th
United States v. Leal-Del Carmen,697 F.3d 964 (9 Cir. 2012). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,38th
United States v. Loe,248 F.3d 449 (5 Cir. 2001). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,40th
v
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United States v. Munguia,704 F.3d 596 (9 Cir. 2012). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,33th
United States v. Nardello,393 U.S. 286 (1969). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
United States v. Omer,395 F.3d 1087 (9 Cir. 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,28th
United States v. One 1997 E35 Ford Van,50 F. Supp. 2d 789 (N.D. Ill. 1999). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
United States v. Pirro,212 F.3d 86 (2d Cir. 2000). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
United States v. Real Property Known as United 5B of the Onyx Chelsea,2011 WL 4151775 (S.D.N.Y. Aug. 26, 2011). . . . . . . . . . . . . . . . . . . . . . . 20
United States v. Resendiz-Ponce,549 U.S. 102 (2007). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
United States v. Rutgard,116 F.3d 1270 (9 Cir. 1997). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39th
United States v. Santos,553 U.S. 507 (2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
United States v. Sherbondy,865 F.2d 996 (9 Cir. 1988). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21th
United States v. Silver,864 F.3d 102 (2d Cir. 2017). . . . . . . . . . . . . . . . . . . . . . . . . . . 22,23,28,35,38
United States v. Steffen,687 F.3d 1104 (8 Cir. 2012). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29th
vi
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United States v. Sun-Diamond Growers of California,526 U.S. 398 (1999). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,26,33,35
United States v. Vazquez-Hernandez,849 F.3d 1219 (9 Cir. 2017). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,34th
United States v. Viayra,365 F.3d 790 (9 Cir. 2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39th
STATUTES
8 U.S.C. § 1101. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
18 U.S.C. § 201. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
18 U.S.C. § 981. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
18 U.S.C. § 1952. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
18 U.S.C. § 1956. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
18 U.S.C. § 1957. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
18 U.S.C. § 3231. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
28 U.S.C. § 1291. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RULES
Fed. R. App. P. 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Fed. R. Crim. P. 26.1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Fed. R. Crim. P. 29. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,8,39
vii
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MISCELLANEOUS
Black’s Law Dictionary.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,26
Convention on Combating Bribery of Foreign Public Officialsin International Business Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
H.R. Rep. No. 107-250. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,19
South Korea Criminal Code Article 129. . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
viii
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IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, ) U.S.C.A. No. 17-50358) U.S.D.C. No. 16CR00824-JFW
Plaintiff-Appellee, ) )
v. ))
HEON-CHEOL CHI, ))
Defendant-Appellant. )___________________________________ )
STATEMENT OF JURISDICTION
Appellant Heon-Cheol Chi appeals his conviction for engaging in a
monetary transaction in property derived from specified unlawful activity under 18
U.S.C. § 1957. The district court asserted jurisdiction pursuant to 18 U.S.C. §
3231 and entered the judgment on October 3, 2017. CR 202; ER 202. The notice1
of appeal was filed on October 13, 2017, ER 201, within the 14-day period in Fed.
R. App. P. 4(b). This Court has jurisdiction under 28 U.S.C. § 1291.
BAIL STATUS
Dr. Chi is in custody as of the submission of this brief, but he is
scheduled for release on May 8, 2018.
“CR” refers to the Clerk’s Record. “ER” refers to the Excerpts of1
Record. “RT” refers to the Reporter’s Transcript of the trial.
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STATEMENT OF THE ISSUES
1. Whether the district court erred by failing to dismiss the indictment
and in instructing the jury because it misinterpreted “bribery of a public official”
under 18 U.S.C. §§ 1956(c)(7)(B) and 1957 as only meaning Korean bribery rather
than requiring the generic federal definition.
2. Whether the district court incorrectly instructed the jury on the
bribery offense underlying the 18 U.S.C. § 1957 violation, even if only Korean
law were applicable.
3. Whether the government presented insufficient evidence because it
failed to prove beyond a reasonable doubt that the specific monetary transaction
alleged in the single count of conviction was traced to “dirty” funds as required
under 18 U.S.C. § 1957.
PERTINENT STATUTORY PROVISIONS
18 U.S.C. § 1956(c)(7) provides:
the term “specified unlawful activity” means –* * *
(B) with respect to a financial transaction occurring in whole or in part inthe United States, an offense against a foreign nation involving – * * *
(iv) bribery of a public official, or the misappropriation, theft, orembezzlement of public funds by or for the benefit of a public official . . . .
2
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18 U.S.C. § 1957(a):
Whoever, in any of the circumstances set forth in subsection (d), knowinglyengages or attempts to engage in a monetary transaction in criminally deprivedproperty of a value greater than $10,000 and is derived from specified unlawfulactivity, shall be punished as provided in subsection (b).
STATEMENT OF THE CASE
Dr. Chi is a citizen and resident of South Korea who was a principal
researcher at the Korea Institute of Geoscience and Mineral Resources
(“KIGAM”) and had served as director of KIGAM’s Earthquake Research Center.
ER 193-94. In the wake of several devastating earthquakes and tsunamis in the
late 1990's and early 2000's, he developed and implemented Korea’s early warning
system. RT 742-45. He also served on a working group for the Comprehensive
Test-Ban Treaty Organization, which monitors for testing of nuclear weapons
around the world, including ascertaining when North Korea conducts such testing.
RT 185, 255-56.
In December 2016, a federal grand jury in the Central District of
California returned an indictment, which was eventually superseded and ultimately
charged Dr. Chi with six monetary transaction counts under § 1957. CR 6; ER
193-200. The indictment alleged that the unlawful activity underlying the
monetary transactions was bribery and that Dr. Chi violated Korean law because
3
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he “used his official position at KIGAM to provide business advantages” to a
British company and a California company, both of which manufactured and
distributed equipment used to detect earthquakes and other seismic events. ER
194-95.
The indictment alleged that, from 2012 to 2016, Dr. Chi engaged in six
monetary transactions with the proceeds of the alleged bribery by writing checks
ranging from $30,000 to $60,000 from a Bank of America account in Glendora,
California that were deposited into a Merrill Lynch brokerage account in New
York. ER 197-98. In particular, Count 6 alleged that, on November 22, 2016, a
check in the amount of $56,000 from the Bank of America account was deposited
into the Merrill Lynch brokerage account. ER 198.
Before trial, the parties disputed whether the indictment adequately
alleged the § 1957 offense. The government contended that the indictment alleged
a violation of Korean bribery law as the underlying specified unlawful activity and
that a violation of foreign law is all that is required in this context. CR 74, 98; ER
106. Dr. Chi, on the other hand, contended that the government had to allege and
prove at least a violation of generic federal bribery. CR 68, 98; ER 102-05. The
parties also disputed the elements of bribery under Korean law. CR 98; ER 99-
136, 524-92. The district court essentially sided with the government, as it found
4
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that only a violation of Korean bribery law was required and overruled various
objections by Dr. Chi regarding the definition of Korean bribery set forth in the
jury instructions. ER 3-5, 18-20, 52-96.
At trial, the government presented the testimony of Christopher Potts,
the current chairman of Guralp Systems, the British company alleged in the
indictment. Guralp sold sensitive equipment designed to detect earthquakes and
other seismic events, such as the testing of nuclear weapons. Potts testified that
Guralp is a private company that was started by Cansun Guralp and was eventually
taken over by Potts’ investment group. RT 228-31. In approximately September
2015, Potts noticed that payments totaling hundreds of thousands of dollars had
been made by Guralp to Dr. Chi over the course of approximately ten years. RT
236-39. After investigating, Potts discovered two contracts, a 2003 contract
between Guralp and KIGAM and a 2005 consulting or advice contract between
Guralp and Dr. Chi. Potts further discovered invoices reflecting payments to Dr.
Chi, a few early ones had been in cash and most were then sent to a bank in the
United States. RT 239-54.
Potts was concerned that the arrangement with Dr. Chi was illegal, and
therefore he terminated the payments. Potts met with Dr. Chi and traded emails
with him regarding the payments. In their communications, Dr. Chi stated that the
5
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payments were confidential, and he appeared to recognize that they were
inappropriate. When Potts informed Dr. Chi that Guralp would no longer make
payments to him under their contract, Dr. Chi attempted to arrange a new
arrangement where he would receive payments openly, but Potts refused. RT 259-
84.
The government also presented the testimony of Natalie Pearce, the
former sales director for Guralp. She testified that Dr. Chi was paid an advice fee
for helping Guralp win bids and sell equipment in Korea, including equipment to
KIGAM. Among other things, Dr. Chi would assist Guralp with the bidding
process and help it meet the specifications for the needed equipment. RT 408-32.
With respect to the second company alleged in the indictment, the
government introduced documents reflecting that, in 1999, Dr. Chi signed
“installation and maintenance” agreements on behalf of KIGAM with Kinemetrics,
Inc. (previously called Quanterra, Inc.), a Pasadena, California company that also
designed and sold equipment to detect seismic events. RT 347-48, 663-64. 2
Dr. Chi had also previously received a “technical advisor” agreement2
from the founder and president of the company in 1996 that provided forcompensation for his consultation services. CR 68-3. Although the partiesstipulated to the admissibility of the agreement as Government Exhibit 254 andDefense Exhibit 501, CR 114, 143, it does not appear that the document wasactually admitted at trial.
6
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Through the controller for Kinemetrics, Michelle Harrington, the government
introduced business records indicating that Kinemetrics paid various
“commissions” to Dr. Chi for the sales of equipment in Korea. RT 353-81.
Harrington, however, had never met, spoken with, or even communicated with Dr.
Chi. As a result, she could not provide any information regarding the
circumstances of the payments, and she could not definitively state whether the
payments were commissions as opposed to advice fees. RT 392-97.
Through an FBI forensic accountant, the government introduced various
bank records for Dr. Chi’s account with Bank of America. The documents showed
that, on November 9, 2015 and December 11, 2015, Dr. Chi received wires of
$66,500 and $21,100 from Kinemetrics. On November 22, 2016, he wrote a check
in the amount of $56,000 to his Merrill Lynch account. RT 514-17, 541, 570-71;
Gov. Ex. 25.
After the government presented its case-in-chief, the defense moved for
a judgment of acquittal under Fed. R. Crim. P. 29, and the district court reserved
ruling on the motion. ER 31. The defense then presented the testimony of several
witnesses who worked with Dr. Chi at KIGAM. A principal researcher at KIGAM
testified that approximately 60% of the funding for KIGAM comes from the
government while 40% comes from the private sector. RT 692-96. He also
7
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testified that KIGAM encouraged its employees to seek consulting work with
private companies and that he himself had done so. RT 696-97. A KIGAM
employee could freely contract with private companies to engage in such work,
and it wasn’t until 2015 that an employee had to obtain approval of the contract
from a supervisor. RT 698-700. Both the current and past directors of KIGAM
testified and confirmed that employees could also have contracts with private
companies, and the current director previously had contracts with private
companies and did not tell others at KIGAM about the payments he received. RT
741, 771, 789-92, 804-07. Similarly, the head of the audit division at KIGAM
testified that employees were free to have consulting agreements with private
companies and that KIGAM did not tighten its rules regarding such agreements
until 2012, but the rules were not retroactive. RT 845-51.
At the conclusion of the trial, the district court denied Dr. Chi’s Rule 29
motion. ER 25-29. Over Dr. Chi’s objections, the district court instructed the jury
on bribery under Korean law as the unlawful activity underlying the monetary
transaction charges. ER 4-5. The jury deadlocked on Counts 1-5 but convicted on
Count 6. CR 162, 171. The district court ultimately imposed a sentence of 14
months in custody, one year of supervised release, and a $15,000 fine. CR 202;
ER 202-03.
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SUMMARY OF ARGUMENT
First, “an offense against a foreign nation involving” “bribery of a
public official” for purposes of 18 U.S.C. §§ 1956(c)(7)(B) and 1957 requires at
least generic federal bribery of a public official. The plain language of the
statutory definition uses the term “offense,” which signals a generic-crime
approach, as the Supreme Court and this Court have stated on numerous
occasions. When construing related statutes, the Supreme Court has repeatedly
stated that the generic definition controls. Congress added the bribery language
after the United States signed a treaty requiring such an addition to the money
laundering statutes, and the treaty reflects that bribery should be defined under the
same terms as American bribery. The jury instructions given by the district court
were erroneous because they did not set forth generic bribery, particularly the
“official act” and corrupt influence elements. Recent Supreme Court precedent
demonstrates that the instructional error was not harmless, and the circumstances
of this case, including the jury’s deadlock on five of six counts, reflects that the
government’s case was not overwhelming and the error was prejudicial. In any
event, there was also structural error, as the indictment should have been
dismissed because the government conceded that the grand jury only alleged a
watered-down bribery offense under Korean law, not generic bribery.
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Second, even if Korean bribery law were the only relevant standard for
purposes of §§ 1956(c)(7)(B) and 1957, the jury instructions were still defective.
The district court recognized that Korean bribery requires a corrupt quid pro quo,
and the government conceded that an improper payment was required. Yet, the
instructions failed to set forth the corrupt and influence elements of bribery.
Furthermore, the expansive instruction that an “official duty” “includes” acts that
an official is “customarily responsible for” was overbroad, and it was likewise
error to instruct the jury that Dr. Chi was a public official as a matter of law.
Third, the evidence supporting the sole count of conviction was
insufficient. To sustain a § 1957 violation, this Court requires the government to
“trace” the specific monetary transaction supporting the count of conviction to
“dirty” funds. The funds that were deposited into Dr. Chi’s account before the
alleged transaction supporting Count 6 were sent from Kinemetrics. The
government, however, failed to present a single witness with personal knowledge
who could testify about the circumstances of the deposits. Furthermore, the only
evidence introduced at trial demonstrated that the relevant deposit from
Kinemetrics was not for equipment sold to KIGAM. Accordingly, the government
failed to present sufficient evidence that the transaction underlying Count 6 was
“traced” to “dirty” funds.
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ARGUMENT
I. The district court erred by failing to dismiss the indictment and ininstructing the jury because it misinterpreted “bribery of a public official”under 18 U.S.C. §§ 1956(c)(7)(B) and 1957 as only meaning Korean briberyrather than requiring the generic federal definition.
A. Introduction and standard of review
The indictment alleged violations of § 1957, which provides: “Whoever
. . . knowingly engages or attempts to engage in a monetary transaction in
criminally deprived property of a value greater than $10,000 and is derived from
specified unlawful activity, shall be punished as provided in subsection (b).” 18
U.S.C. § 1957(a). As relevant here, “specified unlawful activity” is defined as “an
offense against a foreign nation involving . . . bribery of a public official, or the
misappropriation, theft, or embezzlement of public funds by or for the benefit of a
public official . . . .” 18 U.S.C. § 1956(c)(7)(B)(iv). For the specified unlawful
activity, the indictment alleged violations of Article 129 of South Korea’s
Criminal Code, which provides that “a public official who receives, demands, or
promises to accept a bribe in connection with his duties shall be punished by
imprisonment . . . .” ER 194-95, 198, 222.
Before trial, Dr. Chi moved to dismiss the indictment, arguing that the
specified unlawful activity must include the generic federal definition of bribery;
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he also contended that the jury had to be instructed accordingly. CR 68, 98; ER
102-16. In response, the government conceded that the indictment did not allege a
violation of generic bribery: “As set forth in the government’s opposition to
defendant’s motion to dismiss, the specified unlawful activity alleged in this case
is a matter of Korean, not United States law. The grand jury has not alleged a
specified unlawful activity other than Article 129, thus, the jury need not and
should not be instructed on any others.” ER 106. Thus, with respect to the
instructions, the government contended that the jury should only be charged on
Korean law, not generic bribery. ER 102-16.
The district court denied Dr. Chi’s motion to dismiss, reasoning that the
indictment did not have to allege all of the elements of the underlying specified
unlawful activity. ER 188. The district court found that only bribery under
Korean law was applicable, overruled Dr. Chi’s objections regarding the jury
instructions, ER 64-93, and charged the jury as follows:
In order to establish that the property involved in the monetarytransaction was derived from bribery of a public official inviolation of Article 129 of South Korea’s Criminal Code, theGovernment must prove each of the following elementsbeyond a reasonable doubt:
(1) The defendant is a public official for the purposes ofArticle 129; and
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(2) The defendant received, demanded, or promised to accepta payment in exchange for exercising his official duties, or inother words, as a quid pro quo for exercising his official duties.
I instruct you as a matter of law that a director or researcher atthe Korea Institute of Geoscience and Mineral Resources(“KIGAM”) is a public official for purposes of Article 129.
“Official duties” include duties for which the public official isresponsible under the law, acts closely related to such duties,acts that the public official is practically or customarilyresponsible for, and acts that may influence decision-makers.
ER 4-5.
During deliberations, the jury sent two notes asking how to “determine
if bribery occurred under Korean law” and how it was “determined that a ‘director
or researcher is a public official under Korean law.’” CR 165, 167. The district
court referred the jury back to the instruction quoted above. ER 7-12. The jury
ultimately deadlocked on the first five counts and convicted on Count 6. CR 162,
171.
Dr. Chi contends that the district court erred by denying the motion to
dismiss because the indictment failed to allege the requisite elements and thereby
state an offense given the government’s explicit concession that the grand jury did
not charge generic bribery as the specified unlawful activity. Furthermore, the
jury instructions failed to convey the critical elements that constitute generic
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bribery. Dr. Chi will first establish that generic bribery is required and then
demonstrate that the jury instructions were flawed before returning to the
dismissal of the indictment question. This Court conducts de novo review. See,
e.g., United States v. Munguia, 704 F.3d 596, 598 (9 Cir. 2012) (juryth
instructions); United States v. Omer, 395 F.3d 1087, 1088 (9 Cir. 2005)th
(dismissal of indictment).
B. The statutes require generic federal bribery of a public official
Under the relevant provisions of §§ 1956 and 1957, the specified
unlawful activity must involve at least generic bribery of a public official. The
plain language of the statutes, relevant precedent, legislative history, and policy
considerations all support this construction.
This Court begins with the language of the statute, see Leocal v.
Ashcroft, 543 U.S. 1, 8 (2004), which applies to “an offense against a foreign
nation involving . . . bribery of a public official . . . .” 18 U.S.C. §
1956(c)(7)(B)(iv). As explained in Leocal, the use of the word “offense” signals
the elements of a generic definition of a crime. See Leocal, 541 U.S. at 7; United
States v. Corona-Sanchez, 291 F.3d 1201, 1205 (9 Cir. 2002) (en banc) (use ofth
the word “offense” is meant to incorporate a “generic” definition); see also Mathis
v. United States, 136 S. Ct. 2243, 2248 (2016); Descamps v. United States, 570
14
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U.S. 254, 257 (2013); Taylor v. United States, 495 U.S. 575, 590-92 (1990).
Furthermore, the use of the word “involving” after the word “offense” does not
alter the generic-crime approach. See, e.g., Olivas-Motta v. Holder, 746 F.3d 907,
915 (9 Cir. 2013).th
Over the course of several decades, the Supreme Court has confirmed
this approach when interpreting related statutes that have used non-federal
offenses as underlying criminal activity. First, in United States v. Nardello, 393
U.S. 286 (1969), the Court considered the Travel Act, 18 U.S.C. § 1952, which,
like §§ 1956 and 1957, is contained in Chapter 95 of Title 18. The Court
concluded that the underlying offense of “extortion” under state law meant
“generic” extortion, which was the government’s interpretation of the statute. Id.
at 290, 296. Ten years later, the Court relied on Nardello to reach a similar
conclusion that an underlying state offense of “bribery” under the Travel Act
meant “the generic definition of bribery . . . .” Perrin v. United States, 444 U.S.
37, 49 (1979). More recently, in Scheidler v. National Organization for Women,
Inc., 537 U.S. 393, 409-10 (2003), the Court followed cases like Nardello and
Taylor and held that “extortion” under state law for purposes of the RICO statutes,
which are also contained in Chapter 95, means “generic” extortion.
These cases make it clear that if § 1956(c)(7)(B) were worded, “an
15
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offense against a [State] involving bribery of a public official,” the relevant
definition would require generic federal bribery of a public official, not the
definition of bribery in that individual State. See, e.g., Taylor, 495 U.S. at 590-92.
The fact that “foreign nation” is what appears in the brackets should not in any
way alter the reading of the language of the statutes. Other similarly worded
statutes also include foreign offenses, see 8 U.S.C. § 1101(a)(43); Torres v. Lynch,
136 S. Ct. 1619, 1623 (2016), and yet the generic-definition approach still applies.
See, e.g., Esquivel-Quintana v. Sessions, 137 S. Ct. 1562, 1568 (2017). The fact
that a foreign offense is involved would seem to be all the more reason to apply a
generic-crime approach given the greater potential for substantial deviations by
foreign criminal justice systems.
The government contended below that the language in § 1956(c)(7)(B)
demonstrates that the generic definition of bribery does not apply because some of
the offenses listed in that subsection reference specific federal statutes, and §
1956(c)(7)(B)(iv) did not reference 18 U.S.C. § 201(b), the federal bribery statute.
But the generic approach still applies when Congress has used both statutory
descriptors and common law or other descriptors in the same statute. For example,
8 U.S.C. § 1101(a)(43) lists offenses that have a common law description and
regulatory offenses that are more easily identified by referencing a specific statute;
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nonetheless, the generic approach still applies to the common law offenses or
offenses that are not otherwise described by a specific federal statute. See, e.g.,
Esquivel-Quintana, 137 S. Ct. at 1568. There is no reason why a different
interpretation should apply here.
While this Court has not explicitly addressed the issue presented, the
only two Ninth Circuit cases that have discussed § 1956(c)(7)(B) support Dr.
Chi’s construction. In United States v. Lazarenko, 564 F.3d 1026, 1038-39 (9th
Cir. 2009), this Court looked to the common law and federal statutes to determine
the meaning of extortion in the context of a foreign extortion allegation being used
as an underlying offense pursuant to § 1956(c)(7)(B). Similarly, in United States
v. Chao Fan Xu, 706 F.3d 965, 986 (9 Cir. 2013), abrogated on other grounds byth
RJR Nabsico, Inc. v. European Community, 136 S. Ct. 2090 (2016), this Court
looked to “American law” when assessing the meaning of “fraud” under §
1956(c)(7)(B) and rejected the defendants’ challenge because their “fraudulent
acts are unlawful in both the United States and China.” Id. at 986 (emphasis
added). Thus, Lazarenko and Chao Fan Xu support Dr. Chi’s position that
“bribery of a public official” means generic federal bribery for purposes of §
1956(c)(7)(B).
While the language of the statute and the relevant controlling precedent
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supports Dr. Chi’s position that “bribery of a public official” under §
1956(c)(7)(B) means generic bribery, the legislative history also supports his
construction. Congress added the bribery provision to § 1956(c)(7)(B) in 2001,
see Lazarenko, 564 F.3d at 1038, shortly after the United States signed the
Convention on Combating Bribery of Foreign Public Officials in International
Business Transactions. See United States v. Jeong, 624 F.3d 706, 709-10 (5 Cir.th
2010) (South Korea is also a party). Article 7 of the Convention provides: “Each
Party which had made bribery of its own public official a predicate offence for the
purpose of the application of its money laundering legislation shall do so on the
same terms for the bribery of a foreign public official, without regard to the place
where the bribery occurred.” Thus, bribery of a foreign official requires the “same
terms” as bribery of an American official. See Bond v. United States, 134 S. Ct.
2077, 2087 (2014) (looking to international treaty when interpreting federal
criminal statute).
In the district court, the government pointed to a brief comment in H.R.
Rep. No. 107-250 (Oct. 17, 2001) regarding the 2001 amendment, which stated:
“This amendment enlarges the list of foreign crimes that can lead to money
laundering prosecutions in this country when the proceeds of additional foreign
crimes are laundered in the United States. The additional crimes include all
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crimes of violence, public corruption, and offenses covered by existing bilateral
extradition treaties.” While this language does not speak directly to the issue
presented, it certainly does not undermine Dr. Chi’s construction because it
demonstrates that the amendment was designed to include offenses covered by
bilateral extradition treaties, which typically require dual criminality, meaning that
the conduct charged must be a crime in both the United States and the foreign
country. See, e.g., Man-Seok Choe v. Torres, 525 F.3d 733, 737 (9 Cir. 2008). th
The government also pointed to brief language in the same House Report related
to the forfeiture statute, but that language similarly failed to address the issue
presented, and the forfeiture statute actually demonstrates that the conduct
described in § 1956(c)(7)(B) must also constitute a violation of American law.
See 18 U.S.C. § 981(a)(1)(B)(iii).
Faced with a wall of authority supporting the generic crime approach,
the government cited a handful of district court opinions, which generally did not
address the issue presented. In United States v. One 1997 E35 Ford Van, 50 F.
Supp. 2d 789, 802 (N.D. Ill. 1999), the court found that the language “offense
against a foreign nation” did not require that the offense “be committed against a
public official or government entity” and therefore did not address the question
presented in this case. In United States v. Awan, 459 F. Supp. 2d 167, 183
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(E.D.N.Y. 2006), the defendant contended that the word “involving” in §
1956(c)(7) rendered the statute unconstitutionally vague; the opinion did not
address the issue presented here, and, as mentioned, the word “involving” is
consistent with a generic-crime approach. See, e.g., Olivas-Motta, 746 F.3d at
915. And, in United States v. All Assets Held at Bank Julius Baer & Company,
Ltd., 571 F. Supp. 2d 1, 10 (D.D.C. 2008), the court addressed whether §
1956(c)(7)(B) could apply retroactively in a civil forfeiture proceeding, again far
afield from the issue here.
The only case cited by the government that arguably addressed the
instant claim is an unpublished report and recommendation by a magistrate judge
that was rejected by the district judge. See United States v. Real Property Known
as United 5B of the Onyx Chelsea Condominium, No. 10 Civ. 5390, 2011 WL
4151775, at *6 (S.D.N.Y. Aug. 26, 2011), rejected, 2011 WL 4359924 (Sep. 19,
2011). The brief analysis in the unpublished and rejected recommendation did not
address the wealth of authority cited by Dr. Chi.
Finally, interpreting § 1956(c)(7)(B) to require generic bribery makes
sense from a policy perspective. While a judge may sometimes be required to
decide questions of foreign law, see Fed. R. Crim. P. 26.1, the statute should be
interpreted so as to avoid, as much as possible, burdening district judges with
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having to fashion jury instructions based on foreign law. Putting aside the
difficulties with interpreting unfamiliar statutes and precedent translated from a
foreign language, many countries do not utilize standardized jury instructions
(some may not even require trial by jury) or set forth their crimes with distinctly
defined elements that can be readily conveyed to a jury. ER 74-76. Instructing
juries with a comprehensible definition of American laws is often difficult enough,
and this jury was puzzled by the task of evaluating Korean bribery law. CR 165,
167; ER 7-12. By interpreting the statute to require generic bribery, district judges
will be able to utilize traditional jury instructions and thereby avoid these
problems. Only in those cases where the foreign bribery offense is more narrow
than the generic definition will foreign law become relevant. To the extent there is
any doubt, the Rule of Lenity supports a construction of the statute that requires at
least generic bribery rather than allowing convictions based on watered-down
foreign definitions. See, e.g., United States v. Santos, 553 U.S. 507, 514-15
(2008) (relying on Rule of Lenity in interpreting definitions in § 1956); United
States v. Sherbondy, 865 F.2d 996, 1009 (9 Cir. 1988) (relying on Rule of Lenityth
to adopt generic elements-based approach).
C. The jury instructions were erroneous, requiring a new trial
The jury instructions given by the district court failed to convey the
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essential ingredients of generic federal bribery. As an initial matter, the
instructions defined the required element of an official act much more broadly
than the element defined under 18 U.S.C. § 201 and the Supreme Court’s recent
decision in McDonnell v. United States, 136 S. Ct. 2355 (2016).
The instruction described the element as “official duties,” which it
stated “include duties for which the public official is responsible under the law,
acts closely related to such duties, acts that the public official is practically or
customarily responsible for, and acts that may influence decision-makers.” ER 5.
The change from “act” to “duty” was erroneously expansive, and the definition is
problematic because it begins with the word “include,” which is “a term of
enlargement, and not of limitation.” Burgess v. United States, 553 U.S. 124, 131
n.3 (2008). While the instruction did not cabin the definition, constituting error in
and of itself, see United States v. Silver, 864 F.3d 102, 118 (2d Cir. 2017) (holding
that instruction with enlarging language was erroneous under McDonnell), the
descriptions listed were deficient and did not convey the requisite conduct.
The “customarily responsible for” language in the instruction is nearly
identical to the language that the Supreme Court found to be erroneous in
McDonnell. See McDonnell, 136 S. Ct. at 2373-74. While this is a significant
error alone, the definition also did not provide any of the “guts” of the official act
22
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definition, which is “any decision or action on any question, matter, cause, suit,
proceeding or controversy, which may at any time be pending, or which may by
law be brought before any public official, in such official’s official capacity, or in
such official’s place of trust or profit.” 18 U.S.C. § 201(a)(3).
This definition requires a “focused and concrete” “formal exercise of
governmental power” regarding a matter similar to a proceeding or controversy
that is pending or could be brought as a specific agenda item before the public
official. McDonnell, 136 S. Ct. at 2369. The public official also “must make a
decision or take an action on that question or matter, or agree to do so.” Id. at
2370 (emphasis in original). Far different from these requirements, the definition
given by the district court allowed the jury to find an official duty if Dr. Chi took
any action that was related to his duties, which was clearly inadequate and actually
far more defective than the instruction given in McDonnell. See McDonnell, 136
S. Ct. at 2366 (setting forth district court’s erroneous official-act instruction);
Silver, 864 F.3d at 118-19.
The definition of an official act set forth in § 201 and explained in
McDonnell constitutes the generic federal definition. The Supreme Court
explained that a more expansive definition of an official act “would raise
significant constitutional concerns.” McDonnell, 136 S. Ct. at 2372. Broader
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definitions have the potential for chilling protected activity and also run into
constitutional vagueness problems. Id. at 2372-73. Particularly given these
concerns, it is clear that the definition set forth in the federal bribery statute and
recently explicated by the Supreme Court is the generic definition, and, for this
reason alone, the jury instructions erroneously failed to set forth the elements of
generic bribery.
In addition to the erroneous articulation of the official act element, the
instructions also failed to convey the essence of bribery, which requires the
official to have a “corrupt” intent to be “influenced.” 18 U.S.C. § 201(b)(2); see
United States v. Sun-Diamond Growers of California, 526 U.S. 398, 404 (1999).
Rather than including these basic elements of the offense, the instructions only
required the jury to find that “[t]he defendant received, demanded, or promised to
accept a payment in exchange for exercising his official duties, or in other words,
as a quid pro quo for exercising his official duties.” ER 4.
The instructions did not even use the key term “influence,” nor did they
mention anything about the requisite “corrupt” intent, which requires the
defendant’s conduct to be “wrongful, immoral, depraved, or evil.” Arthur
Andersen LLP v. United States, 544 U.S. 696, 705 (2005). “[T]he jury instructions
at issue simply failed to convey the requisite consciousness of wrongdoing.
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Indeed, it is striking how little culpability the instructions required.” Id. at 706.
The instruction’s definition of bribery basically applied to any
governmental employee who collects a paycheck because it simply required the
defendant to receive a payment in exchange for exercising his official duties. In
other words, a prosecutor who collects a paycheck for writing an appellate brief
urging affirmance of a conviction would be guilty of bribery under the
instructions, as he received a payment in exchange for exercising his official
duties. Without the “corrupt” intent and “influence” requirements of bribery, the
instructions failed to distinguish between a crime and completely lawful behavior.
The fact that the instructions contained the Latin phrase “quid pro quo”
does not overcome these basic defects, as the phrase was not linked to corruption.
See McDonnell, 136 S. Ct. at 2372 (bribery is “quid pro quo corruption”). Under
the instructions, “nearly anything a public official accepts . . . counts as a quid;
and nearly anything a public official does . . . counts as a quo.” Id. at 2372.
Without the “corruptly” and “influence” elements, the Latin phrase simply failed
to do enough work, as the definition of the phrase contains no element of
corruption: “What for what; something for something. Used in law for the giving
one valuable thing for another. It is nothing more than the mutual consideration
which passes between the parties to a contract, and which renders it valid and
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binding.” Black’s Law Dictionary, at 1248 (6 ed.). th
A juror could not be expected to read the corrupt and influence elements
of bribery into the Latin phrase. See United States v. Vazquez-Hernandez, 849
F.3d 1219, 1225-26 and n.3 (9 Cir. 2017). In essence, without linking the quidth
pro quo language to the corrupt intent and influence requirements, the instructions
did not even set forth a lesser gratuity offense, which is an improper “reward for
some future act that the public official will take (and may already have determined
to take), or for a past act that he has already taken.” Sun-Diamond Growers of
California, 526 U.S. at 405; see 18 U.S.C. § 201(c). At the very least, the
instructions were unconstitutionally ambiguous and confusing. See Dixon v.
Williams, 750 F.3d 1027, 1032-33 (9 Cir. 2014); Ho v. Carey, 332 F.3d 587, 592th
(9 Cir. 2003). th
The instructions’ failure to convey the essential ingredients of generic
bribery requires reversal of the sole count of conviction. The Supreme Court has
held that an instructional error as to a single element of the offense is subject to
harmless error analysis. See Neder v. United States, 527 U.S. 1, 9-10 (1999).
Here, however, the instructions were erroneous as to multiple elements of bribery,
essentially nullifying the jury’s verdict and constituting structural error. See
Sullivan v. Louisiana, 508 U.S. 275 (1993).
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Even if harmless error review were applicable, the error was certainly
not harmless beyond a reasonable doubt. As explained by the Supreme Court in
McDonnell: “Because the jury was not correctly instructed on the meaning of
‘official act,’ it may have convicted . . . for conduct that is not unlawful. For that
reason, we cannot conclude that the errors in the jury instructions were ‘harmless
beyond a reasonable doubt.’” McDonnell, 136 S. Ct. at 2375.
While McDonnell should end the harmless error inquiry, other
circumstances demonstrate that the government cannot meet its heavy burden of
showing harmlessness beyond a reasonable doubt. The jurors sent notes asking
about the elements of bribery, reflecting that they were confused by the vague and
watered-down standard contained in the instructions. See Shafer v. South
Carolina, 532 U.S. 36, 52-53 (2001); see also Buck v. Davis, 137 S. Ct. 759, 776
(2017); United States v. Caruto, 532 F.3d 822, 832 (9 Cir. 2008). The jury alsoth
deadlocked on five of the six counts, indicating that the government did not
present an overwhelming case and that the error was not harmless. See, e.g.,
United States v. Leal-Del Carmen, 697 F.3d 964, 971, 976 (9 Cir. 2012). th
While Dr. Chi maintains later in this brief that the evidence supporting
the sole count of conviction was legally insufficient, it was at least very thin. The
alleged bribery underlying Count 6 was for funds received from Kinemetrics.
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However, the only Kinemetrics witness was essentially a document custodian who
had absolutely no personal knowledge of the circumstances surrounding the
specific payment, or any of the payments to Dr. Chi for that matter. It is far from
clear that the specific payment was for an “official act,” let alone with the requisite
corrupt intent to influence and pursuant to a corrupt quid pro quo. Accordingly,
the instructional error was not harmless beyond a reasonable doubt. See Silver,
864 F.3d at 119-24 (finding harmful error for erroneous instruction under
McDonnell and analyzing specific official acts implicated).
D. This Court should order dismissal of the indictment
This Court should also order the district court to dismiss the indictment.
Because Dr. Chi made a timely pretrial motion to dismiss, this Court must reverse
for structural error if the indictment was defective. See Omer, 395 F.3d at 1088;
United States v. DuBo, 186 F.3d 1177, 1179-81 (9 Cir. 1999). In other words,th 3
harmless error analysis does not apply. If this Court agrees that § 1956(c)(7)(B)
requires generic bribery, then the indictment was defective and should have been
dismissed because it did not allege a valid specified unlawful activity.
This Court’s rule is consistent with long-established Supreme Court3
precedent. See United States v. Hess, 124 U.S. 483 (1888); United States v. Carll,105 U.S. 611 (1881); see also United States v. Resendiz-Ponce, 549 U.S. 102, 116-17 (2007) (Scalia, J., dissenting).
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The district court denied the motion to dismiss, reasoning that the
indictment did not have to allege all of the elements of the underlying specified
unlawful activity. ER 188. This reasoning misses the point. The government
conceded in its pretrial pleadings that the indictment did not allege a violation of
generic bribery: “[T]he specified unlawful activity alleged in this case is a matter
of Korean, not United States law. The grand jury has not alleged a specified
unlawful activity other than Article 129 . . . .” ER 106. The government clearly
conceded that the indictment only alleged Korean bribery, which it maintained
was a watered-down version of generic bribery, as discussed above.
Thus, even assuming the indictment did not have to allege the elements
of generic bribery, it at least had to allege a valid specified unlawful activity,
which it failed to do. Furthermore, the government’s concessions in response to
the motion to dismiss are conclusive that the indictment failed to allege a valid
specified unlawful activity and was therefore defective. See United States v.
Steffen, 687 F.3d 1104, 1115 (8 Cir. 2012) (affirming dismissal of indictmentth
based on government’s concession in response to motion to dismiss indictment);
United States v. Pirro, 212 F.3d 86, 94-95 (2d Cir. 2000) (same). Accordingly,
this Court should reverse Dr. Chi’s conviction and instruct the district court to
dismiss the indictment.
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II. The district court incorrectly instructed the jury on the bribery offenseunderlying the 18 U.S.C. § 1957 violation, even if only Korean law wereapplicable.
A. Introduction and standard of review
Even if the relevant definition of bribery of a public official for purposes
of § 1956(c)(7)(B) is limited to foreign law, and particularly Article 129 of South
Korea’s Criminal Code, the district court still erred in instructing the jury.
Because the district court determined that Korean bribery law, rather than generic
federal bribery, was the only relevant standard, the parties produced conflicting
experts and voluminous materials, including case law, regarding Korean law.4
Dr. Chi requested that the district court instruct the jury in accordance
with generic federal bribery, and, with respect to Korean law, he requested an
instruction that the jury had to find that an “improper payment was given in
exchange for exercising his official duties” and that the jury had to agree on what
he “intended to do in return for the payment.” ER 101-05, 112-14, 120-26.
Regarding whether the payment was related to Dr. Chi’s official duties, the
Those materials are included in the Excerpts of Record, although the4
original Korean language and some extraneous pages have been removed in aneffort to condense the volume, if at least slightly. ER 212-627. As one mightexpect with translations of foreign legal documents, they are not the easiest read,providing further support for interpreting § 1956(a)(7)(B) as requiring genericfederal bribery.
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defense argued that, unlike politicians and law enforcement officials, non-
traditional public officials like a researcher were given more flexibility under
Korean law to enter into private contracts in their field of expertise. Dr. Chi
therefore requested that the jury be instructed to consider various factors,
including whether there was a “third party contract,” whether services were
provided in his “private or official capacity,” and whether he “exercised any
improper influence on behalf of the party providing payments” or “influence[d] an
official decision.” ER 121. He also requested that the district court instruct the
jury that it was “not a violation of Korean law merely for a researcher or director
at KIGAM to enter into an independent contract with a third party to provide
technical advice or services for pay.” ER 121.
The district court concluded that it would not instruct on generic federal
bribery but acknowledged that the traditional definition of bribery requires a
corrupt payment and stated that Korean law was similar. ER 64-65. Defense
counsel argued that the instructions at least had to include “corruptly” language so
that the jurors could determine “whether or not the payment is a bribe or the
payment is for some legitimate service” and “differentiate between conduct that is
intended to influence wrongly, as opposed to allowing a researcher to trade on
their expertise.” ER 78-81. After the district court announced its proposed
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instruction, the defense expert emphasized that the court’s quid pro quo language
was lacking an “influential” element, which was “important.” ER 90. The district
court, however, ultimately rejected these objections, ER 18, and instructed that, for
Korean bribery, the jury had to find that “[t]he defendant received, demanded, or
promised to accept a payment in exchange for exercising his official duties, or in
other words, as a quid pro quo for exercising his official duties.” ER 4.
The district court also mostly rejected the defense’s arguments regarding
the definition of “official duties” and instructed the jury that “‘[o]fficial duties’
include duties for which the public official is responsible under the law, acts
closely related to such duties, acts that the public official is practically or
customarily responsible for, and acts that may influence decision-makers.” ER 5.
The district court instructed the jury, over objection, that, “as a matter of law . . . a
director or researcher at [KIGAM] is a public official for the purposes of Article
129.” ER 4.
During deliberations, the jury sent notes asking how it could determine
bribery under Korean law and how it was determined that a researcher was a
public official. CR 165, 167. The district court referred the jury back to the
instructions quoted above. ER 7-12. The jury ultimately deadlocked on the first
five counts and convicted on Count 6. CR 162, 171.
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Dr. Chi contends that, even if Korean bribery is the only applicable
standard, the instructions were flawed in at least two general respects: (1) as
argued in the preceding claim, they failed to convey the requisite corrupt and
influence elements of bribery under Korean law; and (2) they incorrectly set forth
the official act and public official elements. This Court again applies de novo
review. See, e.g., Chao Fan Xu, 706 F.3d at 986; Munguia, 704 F.3d at 598.
B. The instructions failed in include corrupt and influence elements
Article 129 provides that a “public official . . . who receives, demands,
or promises to accept a bribe in connection with his duties shall be punished by
imprisonment for not more than five years . . . .” ER 194-95, 222 (emphasis
added). As explained above, the essence of a “bribe” is a corrupt intent to be
influenced, see 18 U.S.C. § 201(b)(2); Sun-Diamond Growers of California, 526
U.S. at 404, and the district court appeared to recognize that there was no reason
to think that Korean law dispensed with these essential elements of bribery. ER
65. Furthermore, the government conceded that Korean bribery required an
improper benefit. ER 527. Despite the government’s concession and the specific
objections of defense counsel and the defense expert that the instructions did not
convey a corrupt intent and influence requirements, the district court failed to
include these essential elements in its instruction.
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As explained earlier, the instructions failed to convey the the “requisite
consciousness of wrongdoing” for corrupt intent, and “it is striking how little
culpability the instructions required.” Arthur Andersen LLP, 544 U.S. at 705-06.
The instructions did not even require an improper benefit, which the government
conceded was applicable, and the definition given for bribery was so watered
down that it could cover any governmental employee who collects a paycheck.
The Latin phrase “quid pro quo” did not overcome these basic defects, as the
phrase was not linked to corruption. See McDonnell, 136 S. Ct. at 2372. A juror
could not be expected to read the corrupt and influence elements of bribery into
the Latin phrase. See Vazquez-Hernandez, 849 F.3d at 1225-26 and n.3.
The government contended below that Korean bribery did not require
the corrupt and influence requirements but could not point to anything specific in
Korean law to support such an argument. ER 80-81. Essentially, the government
contended that Article 129 is a watered-down gratuity offense, not a bribery
offense. As the government appeared to acknowledge, however, a gratuity5
offense requires an improper discharge of official duty, see 18 U.S.C. § 201(c)(1);
The government’s position again demonstrates why a generic-crime5
approach should apply. The fact that a foreign country “labels” an offense“bribery” does not make it bribery as that term is understood under §1956(c)(7)(B). See, e.g., Mathis, 136 S. Ct. at 2251.
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Sun-Diamond Growers of California, 526 U.S. at 405, and the purported Korean
bribery instructions did not even convey that requirement. For all of these
reasons, the instructions were erroneous and at least unconstitutionally ambiguous,
see Dixon, 750 F.3d at 1032-33; Ho, 332 F.3d at 592, even if only Korean law
were applicable.
C. Defective official act and public official elements
The district court instructed the jury that “‘[o]fficial duties’ include
duties for which the public official is responsible under the law, acts closely
related to such duties, acts that the public official is practically or customarily
responsible for, and acts that may influence decision-makers.” ER 5. Even if
Korean law does not require an “official act” as defined by § 201(a) and
McDonnell, the instruction on “official duties” was still erroneous. As mentioned,
an initial defect is that the definition erroneously began with the word “include,”
which is “a term of enlargement, and not of limitation[,]” Burgess, 553 U.S. at 131
n.3, and therefore the instruction did not cabin the definition. See Silver, 864 F.3d
at 118.
Furthermore, the “customarily responsible for” language was overbroad,
see McDonnell, 136 S. Ct. at 2373-74 (rejecting this language), even under Korean
law. The district court failed to address Korean cases cited by Dr. Chi
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demonstrating that the language was defective in this specific context. For
example, the Supreme Court of Korea held that a professor and doctor at a national
medical school and hospital did not commit bribery when he was hired by an
outside party to diagnose and render an opinion regarding a patient who was not
being treated at his hospital. ER 426-27. Although there could be little question
that what the defendant did was the type of duty that he was “customarily
responsible for,” the court nonetheless held that a defendant did not commit
bribery in this context.
Similarly, Dr. Chi cited a recent Korean decision holding that a research
director at a national university did not commit bribery when he entered into a
contract for a consulting fee with a private company to perform a study that was
related to another study that he was conducting on for the university. Once again,
although there could be little question that the researcher was paid for performing
a duty that he was “customarily responsible for,” the court nonetheless held that he
did not commit bribery. ER 517-21.
Thus, the use of the “customarily responsible for” language was
overbroad and erroneous, at least in the context of researchers at public Korean
institutions who only maintain the “legal fiction” of a public official for purposes
of the bribery statute. ER 224-30. This erroneous language was exacerbated by
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the district court’s decision to instruct the jury, as a matter of law, that a director or
researcher at KIGAM was a public official for the purposes of Article 129. Under
United States v. Gaudin, 515 U.S. 506, 511-14 (1995), it was error to instruct the
jury as a matter of law on such a mixed question of law and fact, particularly when
the question of whether Dr. Chi was a public official for purposes of Article 129
was wrapped up in the question of whether he was formally engaging in official
duties.
D. The error was not harmless beyond a reasonable doubt
Once again, the instructions’ failure to convey the essential ingredients
of bribery requires reversal of the sole count of conviction. While instructional
error as to a single element of the offense is subject to harmless error analysis, see
Neder, 527 U.S. at 9-10, the erroneous instructions on multiple elements of bribery
essentially nullified the jury’s verdict and constituted structural error. See
Sullivan, 508 U.S. 275. Accordingly, automatic reversal is required.
Even if harmless error review were applicable, the error was not
harmless beyond a reasonable doubt under McDonnell because the jury “may have
convicted . . . for conduct that is not unlawful.” McDonnell, 136 S. Ct. at 2375.
The jurors sent notes expressing confusion about applying Korean bribery law and
how to determine whether Dr. Chi was a public official, reflecting that they were
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confused by the vague and watered-down standard contained in the instructions.
See Shafer, 532 U.S. at 52-53; see also Buck, 137 S. Ct. at 776; Caruto, 532 F.3d
at 832. The instructional error was particularly prejudicial because the jurors
could not have been expected to be familiar with Korean law, and an unexplained
Latin phrase did not clarify the governing principles.
The jury also deadlocked on five of the six counts, indicating that the
government did not present an overwhelming case and that the error was not
harmless. See, e.g., Leal-Del Carmen, 697 F.3d at 971, 976. Indeed, the evidence
supporting the sole count of conviction was insufficient, and at least exceedingly
thin. The alleged bribery underlying Count 6 was for funds received from
Kinemetrics, but no witness with personal knowledge testified about the
circumstances surrounding the specific payment, or any other payments to Dr. Chi
from Kinemetrics. It is far from clear that the specific payment was for an
“official duty,” let alone with the requisite corrupt intent to influence and pursuant
to a corrupt quid pro quo. For all of these reasons, the government has not
satisfied its heavy burden of demonstrating that the instructional error was
harmless beyond a reasonable doubt. See Silver, 864 F.3d at 119-24.
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III. The government presented insufficient evidence because it failed to provebeyond a reasonable doubt that the specific transaction alleged in the singlecount of conviction was traced to dirty funds as required under 18 U.S.C. §1957.
Dr. Chi made a motion for a judgment of acquittal pursuant to Rule 29
as to all elements of all counts at the close of the government’s case-in-chief. The
district court reserved ruling and then denied the motion when Dr. Chi renewed it
at the end of the trial. ER 21-31. The district court erred because the government
presented insufficient evidence to satisfy the “tracing” requirement for § 1957 as
to Count 6. This Court conducts de novo review, see United States v. Goyal, 629
F.3d 912, 914 (9 Cir. 2010); United States v. Viayra, 365 F.3d 790, 793 (9 Cir.th th
2004), and is limited to the evidence that the government presented in its case-in-
chief because the district court reserved ruling on the motion at that time. See
United States v. Cruz, 554 F.3d 840, 844 n.4 (9 Cir. 2009).th
Unlike § 1956, this Court has held that to sustain a § 1957 conviction,
the government must specifically trace the funds at issue to “dirty” money. See
United States v. Rutgard, 116 F.3d 1270, 1290-93 (9 Cir. 1997). Under theth
tracing requirement, “where an account contains clean funds sufficient to cover a
withdrawal, the Government cannot prove beyond a reasonable doubt that the
withdrawal contained dirty money.” United States v. Loe, 248 F.3d 449, 467 (5th
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Cir. 2001). Thus, the question is whether the government proved beyond a
reasonable doubt that Dr. Chi’s Bank of America account lacked sufficient clean
funds to cover the $56,000 check that was written on November 22, 2016, as
alleged in Count 6. ER 198.
The bank records introduced by the government reflect that as of the
beginning of November 2015, Dr. Chi’s account balance was approximately
$20,000. On November 9, 2015, he received a $66,500 wire from Kinemetrics,
and, on December 11, 2015, he received another $21,100 wire from Kinemetrics.
With the exception of what appears to be a small refund from hotels.com, no other
deposits were made into the account thereafter. As alleged in Count 6, he wrote a
$56,000 check on November 22, 2016. See Gov. Ex. 25; RT 514-17, 541, 570-71.
Because the $66,500 wire from Kinemetrics was sufficient to cover the check, the
government had to prove beyond a reasonable doubt that those particular funds
were dirty.6
The government introduced virtually no evidence regarding the
circumstances of that wire. No witness from Kinemetrics, or any other witness for
Dr. Chi maintains that the government did not prove beyond a6
reasonable doubt that any of the specific funds in the account at the time weredirty. The insufficiency of the evidence is most clearly shown with respect to the$66,500 wire, however, and therefore that is the focus of the text.
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that matter, testified about the circumstances of the payment. Nobody with
personal knowledge testified about what the payment was for, nor what official
action Dr. Chi took in a purported corrupt quid pro quo for the payment. The only
evidence in the record about the payment is a business record reflecting that Dr.
Chi received a purported commission (although the custodian who testified could
not even confirm that it was a commission) for equipment sold by Kinemetrics; the
documents reflects that the customer for the particular sale was not KIGAM. Gov.
Ex. 255; RT 353, 392-97.
Given these circumstances, the government did not meet its burden of
proving beyond a reasonable doubt that the $66,500 payment was dirty. Due to
the lack of evidence regarding the circumstances of the particular payment, the
government failed to prove that the funds were dirty even if a watered-down
theory of Korean bribery were all that were required. As a result, the government
failed to prove that the subsequent $56,000 check was traced to dirty funds.
Accordingly, this Court should vacate the conviction on Count 6 and order the
district court to enter a judgment of acquittal.
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CONCLUSION
For the foregoing reasons, this Court should reverse Dr. Chi’s
conviction. This Court should order the district court to enter a judgment of
acquittal on Count 6 and to dismiss the indictment. Alternatively, this Court
should order a new trial.
Respectfully submitted,
s/Benjamin L. Coleman
Dated: March 26, 2018 BENJAMIN L. COLEMANCOLEMAN & BALOGH LLP1350 Columbia Street, Suite 600San Diego, California 92101Telephone: (619) 794-0420Attorneys for Appellant Heon-Cheol Chi
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CERTIFICATE OF RELATED CASES
Counsel is not aware of any related cases that should be considered
with this appeal.
Respectfully submitted,
s/Benjamin L. Coleman
Dated: March 26, 2018 BENJAMIN L. COLEMANCOLEMAN & BALOGH LLP1350 Columbia Street, Suite 600San Diego, California 92101Telephone: (619) 794-0420
Attorneys for Appellant Heon-Cheol Chi
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CERTIFICATE OF COMPLIANCE
Pursuant to Fed. R. App. P. 32(a)(7) and Ninth Circuit Rule 32-1, the
attached Appellant’s Opening Brief is:
Proportionately spaced, has a typeface of 14 points ormore, and contains 9,281 words.
Date: March 26, 2018 s/Benjamin L. Coleman BENJAMIN L. COLEMAN
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CERTIFICATE OF SERVICE
I, hereby certify that on March 26, 2018, I electronically filed the
foregoing Appellant’s Opening Brief with the Clerk of the Court for the United
States Court of Appeals for the Ninth Circuit by using the appellate CM/ECF
system.
I certify that all participants in the case are registered CM/ECF users
and that service will be accomplished by the appellate CM/ECF system.
Dated: March 26, 2018 s/Benjamin L. Coleman BENJAMIN L. COLEMAN
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