United States v. Jinian, No. 11-10593 (9th Cir. 2013)
Annotate this CaseDefendant was charged with fourteen counts of wire fraud in violation of 18 U.S.C. 1343 stemming from his scheme to defraud his employer. On appeal, defendant contended that the district court erred in denying his motions for judgment of acquittal, a new trial, and for an arrest of judgment. The court rejected defendant's argument that routine transmissions occurring during the interbank collection process were not made for the purpose of executing a scheme to defraud or in furtherance thereof; the district court erred in the jury instructions; there was insufficient evidence; and the wire fraud statute was unconstitutional. Accordingly, the court affirmed the conviction and sentence.
Court Description: Criminal Law. The panel affirmed a defendant’s conviction and sentence on thirteen counts of wire fraud in violation of 18 U.S.C. § 1343 stemming from a scheme to defraud his employer, Bricsnet FM America, Inc., by diverting part of the company’s profits to a shell company through which the defendant and other employees distributed the diverted profits in the form of salaries, dividends, and bonuses. The defendant asserted that routine wire communications between two California banks and the Federal Reserve Bank in Dallas occurred after the defendant deposited the monies into his Mechanics Bank account and, as a result, were neither initiated for the purpose of defrauding Bricsnet nor related to his scheme to defraud. The panel disagreed because the defendant conducted an ongoing scheme to defraud Bricsnet, and even if each check the defendant deposited is viewed as a discrete fraudulent scheme, the interstate wire communications were necessary to complete the fraud. The panel rejected the defendant’s arguments that his conviction should be overturned because there was insufficient evidence to prove that his use of an interstate wire communication was reasonably foreseeable and because the jury should have been instructed to find the same. The panel wrote that no mens rea requirement exists with regard to the jurisdictional, interstate nexus of the defendant’s actions under § 1343, which requires only that the defendant used – or caused the use of – interstate wires in furtherance of his scheme to defraud Bricsnet. The panel held that § 1343 is a valid extension of congressional power under the Commerce Clause, and that since Congress enacted the statute based upon a constitutionally enumerated power, analysis of the statute under the Necessary and Proper Clause is inappropriate. The panel also held that because § 1343 is a valid exercise of powers delegated to Congress by the Commerce Clause, the defendant’s Tenth Amendment challenge to the statute fails. Concurring, Judge Christen wrote separately to emphasize the attribute of the defendant’s fraudulent scheme that is fatal to his argument that his crime was complete upon the deposit of each check into his account at Mechanics Bank. She wrote that when the identity of the ultimate victim matters to the perpetrator’s ability to repeat an ongoing scheme, the crime is not complete until the intended victim is swindled.
The court issued a subsequent related opinion or order on July 23, 2013.
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