Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-08-10149/USCOURTS-ca9-08-10149-0/pdf.json

Parties Involved:
Judy Green
Appellant
United States of America
Appellee

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA, 

No. 08-10149 Plaintiff-Appellee,

D.C. No.

v.  CR-05-0208-WHA

JUDY GREEN,

OPINION Defendant-Appellant. 

Appeal from the United States District Court

for the Northern District of California

William H. Alsup, District Judge, Presiding

Argued and Submitted

October 5, 2009—San Francisco, California

Filed January 22, 2010

Before: Pamela Ann Rymer and A. Wallace Tashima,

Circuit Judges, and Lynn S. Adelman,* District Judge.

Opinion by Judge Tashima

*The Honorable Lynn S. Adelman, United States District Judge for the

Eastern District of Wisconsin, sitting by designation. 

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COUNSEL

Phillip H. Stillman, Cardiff, California, for the defendantappellant.

Adam D. Hirsch, Antitrust Division, U.S. Department of Justice, Washington, DC, for the plaintiff-appellee.

OPINION

TASHIMA, Circuit Judge:

Depending on whose version of this case you hear, defendant Judy Green is either a dedicated public schoolteacher

who spent the years before her conviction working to help

impoverished schools across the country, or the mastermind

of a massive fraudulent scheme that bilked the federal government out of almost $60 million. The government takes the latter view, and charged Green with defrauding E-Rate, a

Federal Communications Commission (“FCC”) program that

funds technology projects at schools and libraries. Green

insists the former is true, maintaining that she is guilty of

nothing more than helping schools maximize their federal

funding by exploiting loopholes in the E-Rate rules and regulations. A jury eventually convicted Green of all twenty-two

counts brought against her: eleven counts of wire fraud (18

U.S.C. § 1343), nine counts of bid rigging (15 U.S.C. § 1),

one count of conspiracy to commit bid rigging (15 U.S.C.

§ 1), and one count of conspiracy to commit wire and mail

fraud (18 U.S.C. § 371). Because we conclude that Green’s

actions amounted to fraud on the federal government, we

affirm her conviction.

UNITED STATES v. GREEN 1315

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BACKGROUND

I. The E-Rate Program

At the center of this case is a part of the FCC’s Universal

Service program, known as the Schools and Libraries program, or E-Rate for short. Funded by a Universal Service fee

placed on telecommunications providers (and generally

passed along to consumers), the Universal Service program is

designed to promote telecommunications access for lowincome, rural, high-cost, or otherwise underserved communities. See 47 U.S.C. § 254. As its official name implies, E-Rate

uses its portion of Universal Service funding to finance telecommunications projects at school and libraries.

The Schools and Libraries Division (“SLD”) of the Universal Service Administrative Company (“USAC”)1

 is charged

with distributing E-Rate’s annual budget of $2.25 billion.

SLD accepts applications from schools for technology projects and subsidizes those projects on a sliding scale — from

20 percent to 90 percent of a project’s cost — determined by

the percentage of the school’s students that participate in the

National School Lunch Program. 47 C.F.R. § 54.505. SLD is

required to give funding priority to applications for the provision of “telecommunications services, voice mail, and Internet

access.” 47 C.F.R. § 54.507(g)(1). The most economically

disadvantaged schools have priority for the remainder of the

funds. Id.

As with any sizeable program, E-Rate is governed by a

complicated and, at times, less than clear set of rules and regulations. Two program rules are particularly relevant to this

case. First, SLD has detailed rules governing what equipment

and services may be purchased with E-Rate funds. In general

1USAC is a nonprofit corporation designated by the FCC as the administrator of the Universal Service Fund, the source of funding for E-Rate

and other Universal Service programs. See 47 C.F.R. §§ 54.5, 54.701-717.

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terms, SLD will subsidize the purchase and installation of

equipment needed to establish a school’s connectivity. Enduser devices that are needed to actually make use of that connectivity, such as computers, telephones, or fax machines, are

not eligible for a subsidy by SLD. In E-Rate jargon, these categories are referred to as “eligible” and “ineligible” equipment, respectively. 

Second, because E-Rate only subsidizes a portion of the

cost of eligible equipment and services, a school must have

the ability to cover the remaining balance of an E-Rate project’s costs. Thus, the school must be able to obtain any ineligible equipment that is necessary to make use of the project.

The school must also have the wherewithal to cover its copay, that portion of the project’s cost that will not be covered

by the E-Rate subsidy.

When a school wants to apply for E-Rate funds, it must

first fill out an FCC form, identifying the technology project

for which it seeks funding. The school provides this form to

SLD, which posts it on a website to solicit bids from vendors.

After the bidding is complete, the school selects the winning

bid. Based upon its chosen bid, the school submits a detailed

application for E-Rate funding to SLD, specifying the equipment and services to be purchased from each vendor. The

application requires the school to set out the total cost of the

project, the amount of eligible and ineligible equipment

included in that cost, the E-Rate subsidy rate for which the

school qualifies, and finally, based on the above information,

the ultimate amount of funding the school seeks from SLD.

SLD reviews this detailed application to ensure that it is in

compliance with E-Rate regulations. Occasionally, SLD conducts a follow-up review and asks a school to provide more

information about its application. Once it has completed its

review, SLD either approves or denies the school’s funding

request.

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II. The Fraudulent Scheme

Green first learned of E-Rate in the 1990s, after spending

more than thirty years as a public school teacher in New York

City and Los Angeles. She saw an opportunity in the E-Rate

program and, in 1998, left teaching to set up a consulting

business to help guide schools and school districts through ERate’s byzantine application process. Green marketed her services to the poorest of schools; almost all of her clients were

eligible for the maximum 90 percent E-Rate subsidy.

According to the evidence introduced at trial, much of

which was undisputed, Green obtained most of her clients by

approaching school administrators at conferences held by the

National Alliance of Black School Educators. At these conferences, Green, or one of her co-schemers, promised to help

school districts obtain E-Rate funding for significant technology projects. Even better, they promised that the schools

would be forgiven their 10 percent co-pay, and that the contractors would donate to the school districts thousands of dollars in “bonus” equipment — equipment, such as end-user

equipment, that was ineligible for E-Rate funds. Needless to

say, a number of school districts leapt on board.

Once hired as a consultant, Green helped her clients design

their technology projects and filled out the SLD forms to

solicit project bids from vendors. At the same time, Green

approached potential contractors to assemble a team capable

of performing the projects to her specifications. Green

decided what services and equipment the contractors would

supply, dictated the “bonus” items the contractors were

required to provide at no charge (to the school), and informed

the contractors that the schools would not be paying their

share of the projects’ costs. The contractors then submitted

bids based upon Green’s specifications.

After receiving the bids, the school districts chose Green’s

pre-selected contractors to implement their technology proj1318 UNITED STATES v. GREEN

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ects. Because Green had arranged the bids in advance, her

chosen contractors had inflated their bids to cover the costs of

the “bonus” equipment and services Green required them to

provide. One witness, for example, testified that the bid Green

arranged, and that his school district ultimately selected, was

three to four times higher than the other bids that the school

district received.

Finally, when the school districts submitted their funding

requests to SLD, Green took steps to ensure that SLD would

not ask questions about the projects. If SLD did ask questions,

Green took steps to ensure that it would be provided with

answers that minimized the chances it would follow up with

further review. For example, Green wrote equipment lists to

hide the fact that potentially ineligible equipment was

included within the projects’ scopes. She instructed the school

districts to tell SLD that they planned on paying their share

of the projects’ costs, even though they did not. And she

altered school budget information to show that the schools

could afford their co-pays. 

Green’s conduct was eventually discovered by USAC. She

was later indicted in a twenty-two count indictment. The first

twenty counts charged Green with wire fraud and bid rigging

in connection with completed E-Rate projects at eleven school

districts across the country.2 The final two counts were conspiracy counts based upon uncompleted technology projects

at an additional fifteen school districts.

Following a nineteen-day trial, a jury convicted Green of

all charges against her. The district court sentenced her to a

ninety-month term of imprisonment. This appeal followed.

2Green was charged with wire fraud for all eleven of these projects. She

was charged with collusion for only nine. 

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DISCUSSION

Green challenges her conviction, as well as her ninetymonth sentence. We affirm.

I. Wire Fraud Convictions

Green’s overarching contention on appeal is that her

actions were not fraudulent because they were not prohibited

by the rules and regulations that governed the E-Rate program

during the time period charged in the indictment. Specifically,

Green raises three challenges to her wire fraud convictions, all

of which are variations on this common theme: (1) the E-Rate

rules and regulations were so poorly set out during the relevant time period that her conviction violated her due process

right to fair warning that her conduct was criminal; (2) her

convictions relied on regulations that took effect after the conduct charged in the indictment, violating the Ex Post Facto

Clause of the Constitution; and (3) the district court’s instructions erroneously gave the jury unfettered discretion to decide

the legal question of which regulations were in effect during

Green’s purported fraud.

We review questions of law de novo. See United States v.

Kaczynski, 551 F.3d 1120, 1123 (9th Cir. 2009) (“We review

de novo questions of federal constitutional law . . . .”); United

States v. Romo-Romo, 246 F.3d 1272, 1274 (9th Cir. 2001)

(“Whether a jury instruction misstates elements of a statutory

crime is a question of law reviewed de novo.”). We conclude

that the offense of wire fraud does not require that Green’s

conduct violated a rule or regulation of the E-Rate program;

thus, her specific challenges fail.

Surprisingly, few courts have considered the precise issue

Green raises: whether actions that are not otherwise expressly

prohibited can nonetheless violate the federal fraud statutes.

Indeed, the government, while proclaiming that Green’s argu1320 UNITED STATES v. GREEN

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ments are obviously incorrect, has not cited a single case in

support of its position. 

[1] We have been unable to find a case in which a court has

considered the interplay between the fraud statutes3 and a federal rule or regulation. A number of courts, however, have

considered the related issue of whether the crime of wire

fraud must be predicated on a violation of state law. We have

addressed this issue, albeit briefly, on at least one prior occasion. In United States v. Louderman, 576 F.2d 1383 (9th Cir.

1978), we disposed of the argument in a single sentence:

“Furthermore, state law is irrelevant in determining whether

a certain course of conduct is violative of the wire fraud statute.” Id. at 1387; cf. United States v. Weyhrauch, 548 F.3d

1237, 1245 (9th Cir. 2008) (citing Louderman and concluding

in an honest services fraud case that “we have never limited

the reach of the federal fraud statutes only to conduct that violates state law”), cert. granted in part, 129 S. Ct. 2863 (2009).

The Eighth Circuit recently reached the same conclusion.

In United States v. Frost, 321 F.3d 738 (8th Cir. 2003), the

defendant, a certified public accountant, acted as one of two

trustees for a charitable trust. Id. at 740. At some point the

defendant began withdrawing money from the trust for his

personal use without the consent of the other trustee, placing

the other trustee’s name or initials on invoices or checks when

it was required. Id. He was convicted of both mail and wire

fraud. Id. at 739.

Frost appealed his conviction, arguing in part that his conduct was not fraudulent because Arkansas law permitted him

to “withdraw reasonable compensation from the Trust” without the other trustee’s consent. Id. at 740. Because the govern3

“It is well settled that cases construing the mail fraud and wire fraud

statutes are applicable to either.” United States v. Shipsey, 363 F.3d 962,

971 n.10 (9th Cir. 2004) (citing Carpenter v. United States, 484 U.S. 19,

25 n.6 (1987)). 

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ment could not prove that his actions were illegal, he argued,

his convictions for mail and wire fraud should be overturned.

Id. at 741. The Eighth Circuit rejected this argument, stating:

“We do not agree that the government, having proved beyond

a reasonable doubt each element of the offense, must also

prove a violation of Arkansas law.” Id.; see also United States

v. Williams, 545 F.2d 47, 50 (8th Cir. 1976) (per curiam) (“A

conviction for mail fraud does not depend upon a violation of

state law.”); United States v. Scallion, 533 F.2d 903, 910 (5th

Cir. 1976); United States v. Bush, 522 F.2d 641, 646 n.6 (7th

Cir. 1975).

[2] In a related context, the Supreme Court has also

rejected the argument that the elements of wire or mail fraud

include the violation of a separate law or regulation. In Schmuck v. United States, 489 U.S. 705 (1989), the defendant

was convicted of mail fraud based upon his scheme to roll

back the odometers on 150 automobiles and sell them to

dealerships in Wisconsin. Id. at 707, 711. On appeal, the

defendant argued that odometer tampering was a lesser

included offense to the mail fraud charge, and that the jury

should have therefore been given a lesser-included offense

instruction. Id. at 708-10. The Court rejected this argument,

concluding that the crime of mail fraud was a distinct crime

that did not rely on proof of odometer tampering:

Turning to the facts of this case, we agree with the

Court of Appeals that the elements of the offense of

odometer tampering are not a subset of the elements

of the crime of mail fraud. There are two elements

in mail fraud: (1) having devised or intending to

devise a scheme to defraud (or to perform specified

fraudulent acts), and (2) use of the mail for the purpose of executing, or attempting to execute, the

scheme (or specified fraudulent acts). The offense of

odometer tampering includes the element of knowingly and willfully causing an odometer to be

altered. This element is not a subset of any element

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of mail fraud. Knowingly and willfully tampering

with an odometer is not identical to devising or

intending to devise a fraudulent scheme.

Id. at 721-22.

[3] Based on the above, we believe it is settled that wire

fraud does not require proof that the defendant’s conduct violated a separate law or regulation, be it federal or state law.

Rather, wire fraud has only three elements: “(1) a scheme to

defraud; (2) use of the wires in furtherance of the scheme; and

(3) a specific intent to deceive or defraud.” United States v.

Shipsey, 363 F.3d 962, 971 (9th Cir. 2004). The scheme to

defraud must only include an “affirmative, material misrepresentation.” United States v. Benny, 786 F.2d 1410, 1418 (9th

Cir. 1986). A defendant’s conduct need not otherwise be illegal in the sense that the government must also prove that the

defendant’s conduct violated a specific statute or regulation.

[4] We reject Green’s contention that if we unmoor her

wire fraud conviction from the E-Rate rules and regulations,

her conviction will be based on nothing more than her having

deprived the federal government of its right to make an “informed decision.” To support this argument, Green invokes

the honest services fraud cases, which simply are inapplicable

to her case. Although the law of honest services fraud remains

unsettled, the debate over the reach of the crime of honest services fraud need not detain us. For at the heart of that debate

is the concern that honest services fraud does not require any

form of tangible harm; thus, it has been argued that there is

no principled limit to the reach of the statute. See, e.g., United

States v. Sorich, 523 F.3d 702, 707 (7th Cir. 2008) (“[G]iven

the amorphous and open-ended nature of § 1346, . . . courts

have felt the need to find limiting principles.”), cert. denied,

129 S. Ct. 1308 (2009); United States v. Urciuoli, 513 F.3d

290, 294 (1st Cir. 2008) (“The central problem is that the concept of ‘honest services’ is vague and undefined by the statute.”); see also Sorich v. United States, 129 S. Ct. 1308

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(2009) (Scalia, J., dissenting from denial of certiorari).4

 But

where, as here, financial harm to the victim is an integral part

of the offense, there has never been any suggestion that a further limitation on the fraud statutes is required.

[5] That Green’s E-Rate scheme involved millions of dollars in federal funds was sufficient to bring it squarely within

the heartland of the federal fraud statutes. In such a case, the

government needed only to prove a scheme to defraud; it was

not required to establish that the scheme separately violated

the E-Rate regulations. Accordingly, we reject Green’s contention that her conduct needed to violate a rule or regulation

of the E-Rate program in order to be fraudulent. Under wellestablished circuit precedent, as discussed in Part II, below,

proof of such a violation is not an element of the fraud

offense.

II. Sufficiency of the Evidence

Green also challenges the sufficiency of the evidence for all

but one of her counts of conviction. We review de novo sufficiency of the evidence claims. United States v. Overton, 573

F.3d 679, 685 (9th Cir. 2009). “Evidence is sufficient to support a conviction unless, viewing the evidence in the light

most favorable to sustaining the verdict, no rational trier of

fact could have found the essential elements of the crime

beyond a reasonable doubt.” Id.

A. Wire Fraud (Counts 1-11)

In order for the jury to convict Green of wire fraud, it had

to find: “(1) a scheme to defraud; (2) use of the wires in furtherance of the scheme; and (3) a specific intent to deceive or

4The Supreme Court has granted certiorari in three honest services

fraud cases this term to address the reach of the statute. See Skilling v.

United States, 130 S. Ct. 393 (2009); Weyhrauch v. United States, 129 S.

Ct. 2863 (2009); Black v. United States, 129 S. Ct. 2379 (2009). 

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defraud.” Shipsey, 363 F.3d at 971. On appeal, Green challenges the sufficiency of the evidence as to the first and third

elements. 

Green, however, did not challenge the sufficiency of the

evidence for her wire fraud convictions below. “[W]hen a

defendant does not preserve a claim of sufficiency of the evidence by failing to make a motion for acquittal at the close of

the evidence, the review is deferential, requiring reversal only

upon plain error or to prevent a manifest injustice.” United

States v. Delgado, 357 F.3d 1061, 1068 (9th Cir. 2004). Thus,

we review only for plain error. 

We find no such manifest injustice here. The government

introduced ample evidence of both a scheme to defraud and

intent to defraud, much of which was undisputed. Green’s coschemers, as well as representatives from the school districts

she worked with, testified that the school districts were promised that the entire project would be paid for out of E-Rate

funds, and that the school districts would obtain substantial

“bonus” items for free. These promises were never revealed

to SLD. Further, Green testified about her own role in the

scheme and admitted to much of the charged conduct. For

example, Green admitted to editing equipment lists to prevent

SLD from learning that the projects included potentially ineligible equipment. She also acknowledged that she took steps

to conceal from SLD the fact that the schools would not be

paying their co-pays.

In light of the fact that much of the evidence against her

was undisputed, Green’s sufficiency-of-the-evidence argument does not focus on the amount of evidence against her.

Rather, she challenges the interpretation of that evidence.

Green contends that there is an “innocent explanation” for her

conduct — that she was helping impoverished schools by getting contractors to donate equipment and to waive the portion

of the contract price that the school was required to pay. See

Delgado, 357 F.3d at 1068-69 (“[W]hen there is an innocent

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explanation for a defendant’s conduct as well as one that suggests that the defendant was engaged in wrongdoing, the Government must produce evidence that would allow a rational

jury to conclude beyond a reasonable doubt that the latter

explanation is the correct one.”). Because she was merely

exploiting loopholes in the E-Rate application process, Green

contends, her conduct was not criminal.

[6] We fail to see the “innocent” explanation that Green

describes. Even accepting that her ultimate motives were

laudable, she concealed material facts from the federal government in an attempt to induce it to fund her projects. That,

standing alone, is fraud.

This case is reminiscent of United States v. Baum, 555 F.3d

1129 (10th Cir. 2009), in which the defendant was charged

with wire fraud based upon a complicated mortgage fraud

scheme: 

. . . Mr. Baum acted as the real-estate agent for the

buyer, who was seeking a home loan in the subprime

market because of weak credit. The buyer generally

could not afford the down payment required by the

lender (from 5% to 15% of the cost of the home), so

the buyer borrowed that money from Mr. Baum and

his associates. Mr. Baum’s client agreed to buy the

home at the seller’s listed price, which often had

been reduced over time as the home failed to sell;

but Mr. Baum and his client obtained the consent of

the seller and the seller’s agent to list an inflated

price on the purchase contract. The price inflation

did not benefit the seller because Mr. Baum prepared

an addendum to the purchase contract requiring the

seller to pay the excess over the listed price to a

named company for remodeling or repairing the

home. Apparently unbeknownst to the seller, the

company was merely a bank account used to funnel

the money to provide cash to the purchaser and to

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pay Mr. Baum and his associates for their services

and for advancing the down payment.

The mortgage lender, of course, was not informed of

the true nature of the transaction.

Id. at 1130.

Baum was convicted of mortgage fraud. One of his arguments for reversal on appeal was that “the failure to have

remodeling or repair work done on the homes . . . amounts

merely to breach of contract, not a crime.” Id. The Tenth Circuit disagreed: “The fraud . . . was that the mortgage lender

was led to believe that it was lending money to purchase a

home for $X, not to purchase a home for $X-$Y and then

undertake $Y worth of remodeling or repairs.” Id. at 1132.

[7] As in Baum, Green’s fraudulent scheme led SLD to

believe it was funding something other than what it was actually funding. The applications Green helped prepare did not

disclose the true nature of the agreements she had reached

with the vendors. Instead, they distorted the full scope of the

projects, concealing the added costs and the “bonus” equipment the school districts would receive. In Baum’s formulation, Green’s actions led SLD to believe it was funding the

listed equipment for $X, not $X-$Y with the school district

receiving $Y worth of extra equipment and was not funding

its own co-pay.

[8] There was ample evidence to support the wire fraud

convictions. No plain error occurred.

B. Conspiracy to Commit Mail and Wire Fraud (Count

22)

In order to convict Green of conspiracy to commit mail and

wire fraud, the jury had to find: “(1) an agreement to engage

in criminal activity, (2) one or more overt acts taken to impleUNITED STATES v. GREEN 1327

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ment the agreement, and (3) the requisite intent to commit the

substantive crime.” United States v. Montgomery, 384 F.3d

1050, 1062 (9th Cir. 2004). In a conspiracy charge, “[t]he

agreement need not be explicit; it is sufficient if the conspirators knew or had reason to know of the scope of the conspiracy and that their own benefits depended on the success of the

venture.” Id. The agreement may be inferred from circumstantial evidence. United States v. Hubbard, 96 F.3d 1223, 1226

(9th Cir. 1996).

The conspiracy count was based upon Green’s relationship

with Richard Favara. Favara was the owner of Expedition

Networks, a technology company that worked with Green to

bid on E-Rate projects. He also was the founder of the American Education Alliance (the “Alliance”), a nonprofit started

with the goal of providing computers to underprivileged

schools.

Favara testified that in 2002 he worked with Green to

secure fifteen E-Rate projects for Expedition Networks. As

part of this process, Favara agreed to allow Green to become

Director of Grants for the Alliance, despite the fact that it had

no assets. Green intended to use the Alliance to award bogus

grants to schools to strengthen their applications for E-Rate

funding. Under this scheme, the Alliance would purport to

make a grant to a poor school district so the district could

claim that it had the assets to make its co-pay. Green would

ensure that the school selected Expedition Networks to perform the project. Favara would then funnel a portion of the

contract payments from Expedition Networks to the Alliance,

which would use the money for the grant it had awarded to

the school district. Those funds would eventually be returned

to Expedition Networks in the form of the school’s co-pay.

To help Green convince the school districts to hire her,

Favara agreed to let Green post on the Alliance’s website a

falsified financial overview of the nonprofit. According to

Favara, Green wanted to post this information “to make the

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company look stronger when she was talking to schools.”

Favara agreed to Green’s request because Expedition needed

the business to “breathe financially.”

[9] This testimony established that both Green and Favara

were committed to the common goal of obtaining the fifteen

E-Rate contracts, and that both agreed to utilize false financial

information to achieve that goal. This is sufficient evidence

for the jury to find an agreement existed. See Montgomery,

384 F.3d at 1062-63.

[10] There was also sufficient evidence that Green had the

intent to defraud. Evidence introduced at trial established that

Green knew the Alliance had no assets, but that she nonetheless had Favara post the false financial information on its

website. Further, Green proposed to make grants to schools to

cover their co-pays out of the inflated profits that Expedition

Networks would receive from the E-Rate contracts it

received. She even submitted falsified letters to USAC

informing it of grants that the Alliance had awarded, even

though no such grants had been made. This was sufficient to

support the jury’s finding of intent to defraud.

C. Bid Rigging (Counts 12-20)

Finally, Green challenges the sufficiency of the evidence

on the bid-rigging counts. Viewing the evidence in the light

most favorable to the government, we conclude that the evidence at trial easily supported the jury’s finding that Green

participated in multiple bid-rigging conspiracies.

Section 1 of the Sherman Act provides: “Every contract,

combination in the form of trust or otherwise, or conspiracy,

in restraint of trade or commerce among the several States, or

with foreign nations, is declared to be illegal.” 15 U.S.C. § 1.

The section does not prohibit all restraints of trade, but only

those that are unreasonable. United States v. Brown, 936 F.2d

1042, 1045 (9th Cir. 1991). Generally, the question whether

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a restraint of trade is unreasonable involves a detailed factual

inquiry. Id. This case-by-case analysis is unnecessary, however, “when the restraint falls into a category of agreements

which have been determined to be per se illegal. Such agreements are those that ‘always or almost always tend to restrict

competition and decrease output.’ ” Id. (quoting Northwest

Wholesale Stationers, Inc. v. Pac. Stationery & Printing Co.,

472 U.S. 284, 289-90 (1985)). 

Green does not dispute that bid rigging constitutes an

offense that is per se illegal. See United States v. Rose, 449

F.3d 627, 630 (5th Cir. 2006) (“[C]onspiracies to submit collusive, noncompetitive, rigged bids . . . are per se violations

of the Sherman Act.”); United States v. Reicher, 983 F.2d

168, 170 (10th Cir. 1992) (“Bid rigging is [a] per se violation

[of the Sherman Act].”). Instead, she claims that she did not

engage in bid rigging because the agreements she organized

were legitimate teaming agreements among companies that

were not competitors. See United States v. MMR Corp., 907

F.2d 489, 498 (5th Cir. 1990) (noting “unremarkable proposition that an agreement not to compete between two parties

who are not actual or potential competitors is not per se or

otherwise illegal because an agreement not to compete

between two parties who are not competitors is meaningless”); see also Northrop Corp. v. McDonnell Douglas Corp.,

705 F.2d 1030, 1050-54 (9th Cir. 1983) (concluding that

teaming agreement between government contractors warranted analysis under the rule of reason).

[11] The government’s evidence, however, was sufficient

to support the jury’s finding that Green engaged in bid rigging. To begin with, the evidence at trial established that

Green controlled the bidding process. She informed vendors

in advance that they would be selected for E-Rate projects,

dictated the contents of their bids, and orchestrated matters so

that school districts would award their contracts to her preselected vendors. These actions went beyond merely arranging a team of contractors to create a legitimate bid; they

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encouraged that team to fashion its bid without regard to the

competition. By interfering with the competitive bidding process in this way, there can be little doubt that Green’s actions

fell within the heart of the anticompetitive conduct prohibited

by the Sherman Act.

[12] The government’s evidence also established that

Green did more than just arrange “teams.” Green routinely

interfered with arm’s length negotiations between contractors,

dictating which vendors would act as subcontractors and what

portions of the projects they would perform. For example,

with respect to count twelve, a project for the West Fresno

School District, there was testimony that Green explicitly told

two vendors that they would act as subcontractors to her chosen contractor, as well as what portions of the project both

vendors would perform. Representatives from both subcontractors testified that their companies had planned to bid on

portions of the project directly to the school district until

Green told them to act as subcontractor. Thus, these companies were at least potential, if not actual, competitors. Similar

evidence supported counts thirteen and twenty. A rational jury

could conclude that Green’s actions were meant to subvert the

competition between these vendors.

The remaining counts all involved an agreement executed

between two vendors where the larger, NEC, would act as

prime contractor, and the smaller, VNCI, as subcontractor, on

all bids the two acquired. Green claims that VNCI and NEC

were not true competitors because VNCI was too small and

underfunded to act as the primary contractor. Yet there was

evidence introduced at trial that VNCI served as the prime

contractor on at least one other E-Rate project. From this evidence, a rational jury could have concluded that VNCI had

the capability of serving as the prime contractor, and thus was

a potential competitor, for this, as well as other projects.

[13] The above evidence was more than sufficient for a

rational trier of fact to convict Green of bid rigging. Accordingly, we affirm her conviction on those counts.

UNITED STATES v. GREEN 1331

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III. Vicarious Liability Instruction

Green also challenges the district court’s vicarious liability

instruction. The instruction read as follows:

For defendant to be guilty of an offense committed

by a coschemer in furtherance of the scheme, the

offense must be one that could be — could reasonably be foreseen as a necessary and natural consequence of the scheme to defraud.

Many of the faxes and e-mails alleged in the counts

to have been wirings were sent by individuals not

claimed to have been a coschemer. It is not necessary, however, that the government prove the sender

was a coschemer so long as the government proves

beyond a reasonable doubt that defendant or a coschemer knew or could have reasonably foreseen that

the e-mail or fax in question would be sent to carry

out an essential part of the alleged scheme.

Green takes issue with two aspects of this instruction. She

argues that the instruction: (1) erroneously stated that the wire

transmission need not have been sent by a co-schemer; and

(2) erroneously failed to restrict Green’s criminal liability to

what was reasonably foreseeable to her. We review de novo

“the question whether a trial court’s jury instruction omitted

or incorrectly described an element of the offense.” United

States v. Thongsy, 577 F.3d 1036, 1040 (9th Cir. 2009).

Green’s first point is incorrect. The Supreme Court long

ago foreclosed the argument that the wire must be sent by a

member of the scheme to defraud. In Pereira v. United States,

347 U.S. 1 (1954), the defendant seduced and married a

wealthy woman by purporting to be “the owner and operator

of several profitable hotels.” Id. at 3-5. After the wedding, the

defendant convinced his new wife to lend him $35,000 that he

claimed he would use as an advance on the purchase price of

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a new hotel. Id. at 5. Once he received the check, the defendant cashed it and fled. Id.

[14] The defendant was convicted of mail fraud, but challenged his conviction on the ground that he had not made any

mailing; the mailing underlying his conviction was a check

sent from a bank in El Paso, Texas, to a bank in Los Angeles.

Id. at 8. The Supreme Court rejected his argument: “To constitute a violation of these provisions, it is not necessary to

show that petitioners actually mailed or transported anything

themselves; it is sufficient if they caused it to be done.” Id. at

8; see also id. at 8-9 (“Where one does an act with knowledge

that the use of the mails will follow in the ordinary course of

business, or where such use can reasonably be foreseen, even

though not actually intended, then he ‘causes’ the mails to be

used.”); Schmuck, 489 U.S. at 711-712 (affirming conviction

for mail fraud where mailing was sent by defrauded car

dealerships).

[15] Green’s second point is more viable. A participant in

a scheme to defraud is liable for “acts of mail or wire fraud

committed by co-schemers,” provided those acts took place

“during the life of the scheme and . . . were reasonably foreseeable as a necessary and natural consequence of the fraudulent scheme.” United States v. Stapleton, 293 F.3d 1111,

1118-19 (9th Cir. 2002). In the mail and wire fraud context,

we have not previously articulated the standard for “reasonable foreseeability.” We agree with Green that foreseeability

must be evaluated according to the facts that were known to

the defendant.

We have been unable to find a case that reaches this conclusion in the wire fraud context. In the related realm of conspiracy, however, it appears to be an established rule,

although it is rarely discussed. See, e.g., United States v.

Casiano, 113 F.3d 420, 427 (3d Cir. 1997) (“Thus, the issue

is whether there was sufficient evidence that Casiano could

have reasonably foreseen the use of a gun by his coUNITED STATES v. GREEN 1333

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conspirators.”); United States v. Hernandez, 509 F.3d 1290,

1298 (10th Cir. 2007) (“It is well established that, ‘[u]pon

[his] conviction of conspiracy to possess with intent to distribute [marijuana], [Mr. Hernandez] was accountable for that

drug quantity which was within the scope of the agreement

and reasonably foreseeable to [him].’ ” (quoting United States

v. Arias-Santos, 39 F.3d 1070, 1078 (10th Cir. 1994)) (alterations in original)). 

We implicitly reached this conclusion while discussing coconspirator liability in United States v. Castaneda, 9 F.3d 761

(9th Cir. 1993), overruled on other grounds by United States

v. Nordby, 225 F.3d 1053, 1059 (9th Cir. 2000). Castaneda

involved a conspiracy to distribute cocaine and heroin in

which Uriel Castaneda was a supplier, and his wife, Leticia

Castaneda, held a minor role. Id. at 763. Leticia Castaneda,

like the other members of the conspiracy, was prosecuted for

seven counts of possessing a firearm in connection with a

drug-trafficking crime. Id. at 763-64; see also 18 U.S.C.

§ 924(c). The predicate offense for one of these counts was

the overarching conspiracy to distribute drugs itself; the

remaining counts were based upon other conspiracy members’ use of firearms at the time they possessed drugs with

intent to distribute. Id. at 764-66.

Although we affirmed the possession convictions of the

other defendants, we concluded that Leticia Castaneda had

such a “marginal role” in the conspiracy that she could not

reasonably have foreseen the details of her co-conspirators’

actions: “[G]iven Leticia’s lack of participation in the conspiracy and her lack of involvement with the predicate offenses,

the use of firearms by the other conspirators in relation to

these offenses was not reasonably foreseeable to her.” Id. at

767-68. We therefore vacated all of her convictions except the

one that had as its predicate offense the conspiracy as a

whole. Id.

[16] Castaneda therefore established that vicarious liability must be predicated on acts that were reasonably foresee1334 UNITED STATES v. GREEN

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able to the defendant. Although it was decided in the context

of a conspiracy, we believe its holding applies equally in the

context of mail and wire fraud. Indeed, courts have long

remarked upon the similarities between a conspiracy and the

“scheme to defraud” element of mail fraud. See, e.g., Stapleton, 293 F.3d at 1116-17; United States v. Lothian, 976 F.2d

1257, 1262-63 (9th Cir. 1992).

[17] Under this standard, the district court’s foreseeability

instruction was incorrect. As is plain from the instruction, the

jury was allowed to convict Green based upon what was reasonably foreseeable not only to her, but also to her coschemers. No portion of the district court’s instructions corrected this error.

[18] Although the instruction was erroneous, that is not the

end of our inquiry. We must next determine whether the error

was harmless. See Hedgpeth v. Pulido, 129 S. Ct. 530, 530-32

(2008) (per curiam) (holding instructional error is subject to

harmless error review); United States v. Smith, 561 F.3d 934,

938 (9th Cir. 2009) (en banc) (holding instructional error to

be “[n]on-structural constitutional error[ ]” and “therefore

subject to harmless error review”). As the trial court noted,

and as detailed below, the evidence was overwhelming that

Green was at the center of each of the fraudulent schemes.

Unlike in Castaneda, Green’s involvement in the schemes

was not “marginal.” She was aware of and intricately

involved in every scheme charged in the indictment. Further,

each of the wires identified in the indictment were routine

emails or faxes made in furtherance of the schemes; they fell

well within the range of ordinary communications to be

expected in the course of bidding on and procuring a government contract.

[19] Accordingly, while the district court’s instruction may

have misstated the proper standard of reasonable foreseeability, any error was harmless beyond a reasonable doubt. See

United States v. Anchrum, 2009 WL 5125788, *4 (9th Cir.

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2009) (“A jury instruction error is harmless if it is ‘ “clear

beyond a reasonable doubt that a rational jury would have

found the defendant guilty absent the error.” ’ ” (quoting

United States v. Gracidas-Uliberry, 231 F.3d 1188, 1197)

(9th Cir. 2001) (quoting Neder v. United States, 527 U.S. 1,

(1999))).

IV. Ninety-Month Sentence

Green’s final contention is that her ninety-month sentence

was “unreasonable and unconstitutionally disparate from that

of similarly situated defendants.” Given that Green has not

alleged that her sentencing suffered from any procedural

error, we review for “substantive reasonableness, considering

the totality of the circumstances.” United States v. HigueraLlamos, 574 F.3d 1206, 1211 (9th Cir. 2009). 

[20] The district court’s ninety-month sentence was well

within the range of reasonableness. There was ample justification for Green receiving a more severe sentence than her coschemers. The evidence produced at trial established that

Green was the ringleader and driving force behind the fraudulent schemes: she approached the school districts, she orchestrated the bidding process, and she dictated the equipment that

would be included in the projects. At sentencing, Green even

conceded a four-point organizer enhancement. This was sufficient to justify her more severe sentence. See, e.g., United

States v. Carter, 560 F.3d 1107, 1121 (9th Cir. 2009) (finding

that disparities in sentences among co-conspirators did not

make sentences unreasonable because the defendants were not

similarly situated).

[21] We also reject Green’s argument that her sentence was

unreasonable in light of her age and background; the trial

judge expressly took those circumstances into account when

imposing her sentence. Despite the fact that he believed a sentence in the Guidelines range of 97-121 months was appropriate for the crimes Green committed, he departed downward in

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light of both of the above factors. Further, the trial judge had

already been lenient in his Guidelines calculations, resulting

in a Guidelines range that was significantly lower than that

which Green may have deserved. In short, the trial judge

fairly and carefully crafted Green’s sentence, taking into consideration the circumstances Green raises on appeal.

Finally, Green’s contention that her sentence was more

severe than those received by defendants in other E-Rate

cases also does not render her sentence unreasonable. Indeed,

her sentence was below the low-end of the Guidelines range,

and the Guidelines range exists to ensure national uniformity

in sentencing. United States v. Saeteurn, 504 F.3d 1175, 1181

(9th Cir. 2007); see also United States v. Becerril-Lopez, 541

F.3d 881, 895 (9th Cir. 2008) (“[W]e have trouble imagining

why a sentence within the Guidelines range would create a

disparity, since it represents the sentence that most similarly

situated defendants are likely to receive.”); United States v.

Carty, 520 F.3d 984, 988 (9th Cir. 2008) (en banc) (“[W]e

recognize that a correctly calculated Guidelines sentence will

normally not be found unreasonable on appeal.”).

The record reveals that the experienced trial judge conducted a detailed examination of the Sentencing Guidelines

and carefully considered Green’s particular circumstances

before imposing sentence. We therefore conclude that Green’s

sentence was not unreasonable.

CONCLUSION

For the foregoing reasons, the judgment of conviction and

the sentence are AFFIRMED.

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