United States v. Tat

15 F.4th 1248

UNITED STATES of America, Plaintiff-Appellee,

v.Vivian TAT, aka Vivian Lnu, Defendant-Appellant.

No. 19-50034

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 4, 2021

Submission Withdrawn April 7, 2021

Resubmitted October 14, 2021 Pasadena, California

Filed October 21, 2021

Erwin Chemerinsky (argued), University of California, Berkeley School of Law, Berkeley, California; David K. Willingham, King & Spalding LLP, Los Angeles, California; Michael V. Schafler and Allysa D. Bell, Cohen Williams LLP, Los Angeles, California; for Defendant-Appellant.

Bram Alden (argued), Deputy Chief, Criminal Appeals Section; L. Ashley Aull, Chief, Criminal Appeals Section; Tracy L. Wilkison, Acting United States Attorney; United States Attorney's Office, Los Angeles, California; for Plaintiff-Appellee.

Before: Susan P. Graber and Eric D. Miller, Circuit Judges, and Timothy Hillman,^* District Judge.

GRABER, Circuit Judge:

Defendant Vivian Tat aided a money-laundering scheme involving cashier's checks while she managed a branch of East West Bank in San Gabriel, California. A jury convicted her on one count of conspiring to launder money, in violation of 18 U.S.C. § 1956(h), and on two counts of making false entries in the bank's records, in violation of 18 U.S.C. § 1005. She timely appeals. In this opinion, we address her argument that insufficient evidence supported the false-entry convictions.¹ Reviewing de novo, United States v. Rocha , 598 F.3d 1144, 1153 (9th Cir. 2010), we agree with her only in part: sufficient evidence supported one of the convictions but not the other. We therefore reverse the unsupported conviction and remand the case for resentencing.

BACKGROUND

This appeal stems from a sting operation to uncover money laundering near Los Angeles. In 2014, the government indicted Ruimin Zhao; Raymond Tan, who is Zhao's husband; and Defendant for conspiring to launder $25,500 in 2009. Four years later, the government added two counts that accused Defendant Tat of making false entries in the bank's records.

The scheme went this way: Jimmy Yip, the government's informant and a former racketeer, persuaded Tan to convert proceeds from Yip's purported drug sales into cashier's checks. Yip's money actually came from the Federal Bureau of Investigation ("FBI"). In exchange, Yip would pay Tan $4500. Tan said that he was the man for the job because his wife knew an insider at a local bank: Defendant. Tan and Yip agreed that the checks would be made out to a fictitious "Oscar Santana."

Defendant, meanwhile, knew that one of her customers sought a way to withdraw a large amount of cash without showing the withdrawal on her account. (The customer wanted to shield it in her divorce proceedings.) Defendant proposed a trade: if the customer drew $25,500 in three cashier's checks from her account, Defendant knew someone who would pay off-the-books cash for them. The customer agreed.

Yip, wearing a secret camera, met the coconspirators in one of the bank's conference rooms on December 14, 2009. Yip's money was counted, the cashier's checks were signed, and all sides went on their way. But Defendant's customer thought something felt off—why did she have to make the checks out to an Oscar Santana? She asked Defendant to reverse the transactions.

The bank's logs, presented as Exhibit 48 at trial, document both the checks’ purchase and their return. The logs record that, on December 14, the customer purchased three cashier's checks worth a combined $25,500 and then reversed those transactions. At trial, the government elicited testimony that (1) Yip gave the customer $25,500; (2) the customer drew $25,500 in cashier's checks from her account; (3) Defendant gave those cashier's checks to Yip; and (4) Defendant reversed the transactions at the customer's request.

Timothy Truong, the bank's custodian of records, testified that, although the logs contained in Exhibit 48 can show the account from which the cashier's checks were drawn, those logs cannot show the source of any simultaneously received cash that the customer did not deposit. In other words, Truong testified that those logs could not disclose Yip's involvement.

After the original checks were returned, Tan and Zhao, working with Defendant, obtained replacement cashier's checks in their own names. One of those replacement checks was documented in the bank's logs, which the government introduced as Exhibit 47 at trial. That log shows that, on December 14, Zhao drew a $7500 cashier's check payable to "Oscar Santana" from the account of her facial and massage business. At trial, the government elicited testimony that Zhao went to the bank; deposited $7500 in cash; purchased a cashier's check for $7500 with a check from her business account; and then gave that cashier's check to Tan, who gave it to Yip. Zhao's account lacked sufficient funds to cover the cashier's check before her deposit of Yip's money.

Truong testified that the logs shown in Exhibit 47 do not allow the bank's employees to list the source of a purchaser's funds. In other words, Truong testified that the logs can show that a customer paid for the cashier's check in cash, but they cannot show that cash's source. The government also presented evidence that the check from Zhao's business account, used to draw the cashier's check, featured Defendant's handwriting.

Tan pleaded guilty to conspiring to launder money. Defendant and Zhao went to trial. The jury convicted them both of conspiring to launder money, 18 U.S.C. § 1956(h), and it convicted Defendant of two counts (Counts 2 and 3) of making a false entry in a bank's records, 18 U.S.C. § 1005.

DISCUSSION

Defendant argues that insufficient evidence supports her false-entry convictions.

We "must consider the evidence presented at trial in the light most favorable to the prosecution." United States v. Nevils , 598 F.3d 1158, 1164 (9th Cir. 2010) (en banc). We then "must determine whether this evidence, so viewed, is adequate to allow ‘any rational trier of fact [to find] the essential elements of the crime beyond a reasonable doubt.’ " Id. (alteration in original) (emphasis omitted) (quoting Jackson v. Virginia , 443 U.S. 307, 319, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979) ). If the evidence fails at that second step, we must reverse. Id. at 1165.

Our analysis of a criminal statute begins with its text. United States v. Price , 980 F.3d 1211, 1218 (9th Cir. 2019). As relevant here, § 1005 criminalizes:

mak[ing] any false entry in any book, report, or statement of such bank, company, branch, agency, or organization with intent to injure or defraud such bank, company, branch, agency, or organization, or any other company, body politic or corporate, or any individual person, or to deceive any officer of such bank, company, branch, agency, or organization, or the Comptroller of the Currency, or the Federal Deposit Insurance Corporation, or any agent or examiner appointed to examine the affairs of such bank, company, branch, agency, or organization, or the Board of Governors of the Federal Reserve System[.]

§ 1005 (emphases added). Thus, the government must prove that "(1) [D]efendant made a false entry in bank records, caused it to be made, or aided and abetted its entry; (2) [D]efendant knew the entry was false when it was made; and (3) [D]efendant intended that the entry injure or deceive a bank or public official." United States v. Wolf , 820 F.2d 1499, 1504 (9th Cir. 1987). The parties dispute only whether the government proved falsity.

The Supreme Court held, more than a century ago, that "the making of a false entry is a concrete offense, which is not committed where the transaction entered actually took place, and is entered exactly as it occurred." Coffin v. United States , 156 U.S. 432, 463, 15 S.Ct. 394, 39 L.Ed. 481 (1895). But courts have expanded the reach of § 1005 (and its predecessor, 12 U.S.C. § 592) beyond literal falsity; "material omissions are false statements for the purposes of" the statute. United States v. Ely , 142 F.3d 1113, 1119 (9th Cir. 1997) ; see United States v. Darby , 289 U.S. 224, 226, 53 S.Ct. 573, 77 L.Ed. 1137 (1933) (holding that § 592's "aim was to give assurance that upon an inspection of a bank, public officers and others would discover in its books of account a picture of its true condition").

In the context of fraudulent loans, such an omission might include "focus[ing] on whether the transaction is real and substantial as opposed to merely formal." United States v. Krepps , 605 F.2d 101, 109 (3d Cir. 1979). That reasoning makes sense with respect to loans—where the concern is that hiding information from officials prevents them from assessing a bank's exposure. See id. (holding that "those who are charged by law with the examination of these records have a significant interest in obtaining a full picture of the bank's actual condition"). For example, we held that a bank executive caused a false entry under § 592 when he directed an uncompensated straw man to obtain a loan—disbursed as a cashier's check—because that straw man (1) was unqualified for the loan; (2) had no plans to repay the loan; and (3) immediately gave the cashier's check to the defendant. Hargreaves v. United States , 75 F.2d 68, 70–71 (9th Cir. 1935). Because the transaction was "fictitious," the bank's "records would not indicate the true nature of the transaction" and, thus, contained a false entry.

Id. at 72. Likewise, § 1005 criminalizes the omission of one's true purpose in seeking a loan. Wolf , 820 F.2d at 1503–04.

But we agree with the Fifth Circuit that the same reasoning does not necessarily apply to banks’ accurate records of customers’ withdrawals. In United States v. Manderson , 511 F.2d 179 (5th Cir. 1975), the defendant was an employee of a mortgage company who sought to extort a contractor before releasing the payment for a home's repairs. Id. at 180. The contractor, knowing extortion when he saw it, contacted the mortgage company's...