Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca11-13-12385/USCOURTS-ca11-13-12385-0/pdf.json

Parties Involved:
Isaac Feldman
Appellant
Stanislav Pavlenko
Appellant
Albert Takhalov
Appellant
United States of America
Appellee

Document Text:

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

________________________

No. 13-12385

________________________

D.C. Docket No. 1:11-cr-20279-RNS-2

UNITED STATES OF AMERICA, 

 Plaintiff-Appellee,

 versus

ALBERT TAKHALOV,

ISAAC FELDMAN,

STANISLAV PAVLENKO,

 Defendants-Appellants.

________________________

Appeals from the United States District Court

for the Southern District of Florida

________________________

(July 11, 2016)

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Before ED CARNES, Chief Judge, MARTIN, Circuit Judge, and 

THAPAR,∗ District Judge.

THAPAR, District Judge:

The wire-fraud statute, 18 U.S.C. § 1343 does not enact as federal law 

the Ninth Commandment given to Moses on Sinai.1

 For § 1343 forbids only 

schemes to defraud, not schemes to do other wicked things, e.g., schemes to 

lie, trick, or otherwise deceive. The difference, of course, is that deceiving 

does not always involve harming another person; defrauding does. That a 

defendant merely “induce[d] [the victim] to enter into [a] transaction” that 

he otherwise would have avoided is therefore “insufficient” to show wire

fraud. See United States v. Starr, 816 F.2d 94, 98 (2d Cir. 1987). 

Here, the defendants feared that the jury might convict them of wire 

fraud based on “fraudulent inducements” alone. Hence they asked the 

district court to give the jurors the following instruction: that they must 

acquit if they found that the defendants had tricked the victims into entering

a transaction but nevertheless gave the victims exactly what they asked for 

and charged them exactly what they agreed to pay. The district court 

refused to give that instruction, and the jury ultimately convicted the 

 ∗

Honorable Amul R. Thapar, United States District Judge for the Eastern District of 

Kentucky, sitting by designation.

1 See Exodus 20:16 (“Thou shalt not bear false witness against thy neighbor.”) (KJV).

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defendants of wire fraud and other crimes, most of which were predicated on 

the wire-fraud convictions. The question presented in this appeal is whether 

the district court abused its discretion when it refused to give the requested 

instruction. 

I.

A.

During the defendants’ trial, the parties disagreed about much of what 

happened in the clubs the defendants owned. But they did agree on one 

thing: that the defendants had tricked men to come into the defendants’ 

clubs. The government presented evidence that the defendants had hired 

Eastern European women—known as “Bar Girls” or “B-girls”—to pose as 

tourists, locate visiting businessmen, and lure them into the defendants’ bars 

and nightclubs. [DE 1121 at 39]. And the defendants did not seriously 

dispute that evidence: they admitted that they knew the B-girls concealed 

their relationship with the clubs to persuade the men to go to the clubs. 

Indeed, the defendants testified that they believed this scheme was a 

perfectly legitimate business model. [Id. at 59–60, 99].

The parties’ stories diverged, however, as to what happened after the 

men entered the clubs. In the government’s story, the defendants’ scheme 

began with the B-Girls’ lies but went far beyond that. Once inside the clubs, 

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employees would pour vodka in the men’s beer to get them drunker, 

misrepresent the prices of drinks, hide menus, cover up prices, and even 

forge the men’s signatures on credit-card receipts. [Id. at 40–42].

The defendants’ story, on the other hand, began and ended with the Bgirls. Yes, they admitted they knew the B-girls were posing as tourists to get 

the men to come to the clubs with them. From there, though, they proceeded 

to mount what one might call the Casablanca defense, arguing that they 

were “shocked, shocked” to learn that fraud was taking place within their 

South-Beach versions of Rick’s Café Américain.

2

 As for the swindling 

going on inside the clubs—the lying about prices, the forging of signatures, 

and so on—the defendants said that they knew nothing about it. Instead, the 

defendants testified, they were merely investors in the clubs—or in charge of 

the credit-card transactions—but were not involved in the day-to-day 

workings of the clubs. [See id. at 60, 69–70, 86, 103]. In the defendants’

story, none of these allegedly swindled men were truly victims: they 

knowingly entered the clubs, bought bottles of liquor, and drank them with 

 2 See generally Casablanca (Warner Brothers 1942) (“Rick: How can you close [up my 

bar]? On what grounds? Captain Renault: I'm shocked, shocked to find that gambling is 

going on in here! Croupier: Your winnings, sir.”)

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their female companions. Thus, in the defendants’ view, these men got what 

they paid for—nothing more, nothing less. [See id. at 62, 100–102].

B.

In addition to the factual dispute about what happened after the men 

came into the clubs, the parties also disagreed about the legal significance of 

the lies that the B-Girls used to get the men to come into the clubs in the first 

place. In the government’s view, the jury could convict the defendants of 

wire fraud based on those lies alone. [See DE 1121 at 39–40; R. 1154 at 63]. 

The defendants argued just the opposite—that “just because they have [used 

promoters to persuade men to come back to the respective establishments] 

does not constitute fraud with regard to the wire fraud or conspiracy to 

commit these frauds.” [DE 1152 at 285]. 

At the close of evidence, the defendants asked for a jury instruction to 

support this theory. Specifically, they asked the court to instruct the jury 

that “[f]ailure to disclose the financial arrangement between the B-girls and 

the Bar, in and of itself, is not sufficient to convict a defendant of any 

offense[.]” [DE 921 at 1]. The court denied that theory-of-the-defense 

instruction, however, because the court did not believe it was “an accurate 

statement of the law.” [DE 1152 at 285, 289].

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During closing argument, the government argued exactly what the 

defendants had expected it would argue: that the B-girls’ concealment of 

their bar-affiliation to the men were material misrepresentations sufficient to 

constitute fraud. [DE 1154 at 63 (“The first lie was by the girls to get them 

to come to the clubs by not telling them that they work for the clubs and got 

a percentage and this was material. This was important because, as even the 

defendant’s own witness told you, had they known that these women worked 

for the clubs they likely wouldn’t have even gone.”)]. When defense 

counsel stood up to make their closing arguments, they did so in front of a 

jury that had just heard that the B-girls’ lies were material and had never 

received an instruction to the contrary. Perhaps for this reason, defense 

counsel focused their efforts elsewhere, arguing that there was not enough 

evidence to connect the defendants to the other fraudulent activities at the 

clubs. Specifically, the defendants argued that they were not involved in the 

alleged fraud that took place within the clubs, [id. at 147–48, 183, 191, 214–

15], and that they did not believe they were doing anything illegal. [Id. at 

147–48, 170–71, 201–02]. Following closing arguments, the jury convicted 

the defendants on several counts, including multiple counts of wire fraud

and money laundering. [D.E. 954; D.E. 956; D.E. 957]. This appeal 

followed.

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II.

We review for an abuse of discretion a district court’s refusal to give a 

requested jury instruction. United States v. Dohan, 508 F.3d 989, 993 (11th 

Cir. 2007). 

A.

To show that the district court abused its discretion when it refused to 

give a proposed jury instruction, a defendant must first show that the 

requested instruction was a correct statement of the law. United States v. 

Eckhardt, 466 F.3d 938, 947–48 (11th Cir. 2006). “We review the legal 

correctness of a [requested] jury instruction de novo.” Fid. Interior Const., 

Inc. v. Se. Carpenters Reg'l Council of United Bhd. of Carpenters & Joiners 

of Am., 675 F.3d 1250, 1259 (11th Cir. 2012). 

1.

The law in question here is the wire-fraud statute, which makes 

criminal any “scheme or artifice to defraud.”3

 18 U.S.C. § 1343. The 

statute itself, however, does not explain what constitutes such a scheme or 

artifice. United States v. Bradley, 644 F.3d 1213, 1240 (11th Cir. 2011). 

 3 The statute also includes a jurisdictional provision, namely that the schemer must 

transmit the fraudulent statements “by means of wire, radio, or television communication 

in interstate or foreign commerce.” 18 U.S.C. § 1343. That provision is not relevant to 

this appeal. 

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Thus, the meaning of the phrase “scheme to defraud” has been “judicially 

defined.” United States v. Pendergraft, 297 F.3d 1198, 1208 (11th Cir. 

2002). And that definition is a broad one, “broad[er] . . . than the common 

law definition of fraud.” Id. It is a “reflection of moral uprightness, of 

fundamental honesty, fair play and right dealing in the general and business 

life of members of society.” Gregory v. United States, 253 F.2d 104, 109 

(5th Cir. 1958). 

“[D]espite its breadth,” however, “the judicial definition” of a 

“scheme to defraud” has some limits. Bradley, 644 F.3d at 1240. The most 

important limit is obvious from the statute itself: the scheme must be a 

scheme to defraud rather than to do something other than defraud. For 

Congress could have made criminal any “scheme” simpliciter, but chose not 

to do so. The first question presented in this case, then, is what the word 

“defraud” means.

To answer that question, we turn first to the dictionaries. For “[t]he 

ordinary-meaning rule is the most fundamental semantic rule of 

interpretation.” Antonin Scalia & Bryan A. Garner, Reading Law 69 (2012). 

And “to determine the common usage or ordinary meaning of a term, [we] 

often turn to dictionary definitions for guidance.” CBS Inc. v. PrimeTime 24 

Joint Venture, 245 F.3d 1217, 1223 (11th Cir. 2001); see also Stein v. 

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Paradigm Mirasol, LLC, 586 F.3d 849, 854 (11th Cir. 2009) (noting that 

“[a] term that is undefined in a statute carries its ordinary meaning” and 

turning first to the dictionary to determine that meaning). Black’s defines 

the word “defraud” as “[t]o cause injury or loss to (a person or organization) 

by deceit.” Black’s Law Dictionary 516 (10th ed. 2014.). Webster’s says 

much the same. Webster’s Third New International Dictionary 593 (2002)

(defining the word “defraud” as “to take or withhold from (one) some 

possession, right, or interest by calculated misstatement or perversion of 

truth, trickery, or other deception”).

These definitions make clear that there is a difference between 

deceiving and defrauding: to defraud, one must intend to use deception to 

cause some injury; but one can deceive without intending to harm at all. See 

Black’s at 492 (defining the word “deception” as “[t]he act of deliberately 

causing someone to believe that something is true when the actor knows it to 

be false”); Webster’s at 585 (defining the word “deception” as “the act of 

deceiving, cheating, hoodwinking, misleading, or deluding”). Thus, 

deceiving is a necessary condition of defrauding but not a sufficient one. 

Put another way, one who defrauds always deceives, but one can deceive 

without defrauding. 

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For this reason, the law in the Eleventh Circuit makes clear that a 

defendant “schemes to defraud” only if he schemes to “depriv[e] [someone] 

of something of value by trick, deceit, chicane, or overreaching.” Bradley, 

644 F.3d at 1240. But if a defendant does not intend to harm the victim—

“to obtain, by deceptive means, something to which [the defendant] is not 

entitled”—then he has not intended to defraud the victim. Id.

From that conclusion, a corollary follows: a schemer who tricks

someone to enter into a transaction has not “schemed to defraud” so long as 

he does not intend to harm the person he intends to trick. And this is so even 

if the transaction would not have occurred but for the trick. For if there is no 

intent to harm, there can only be a scheme to deceive, but not one to defraud. 

Consider the following two scenarios. In the first, a man wants to 

exchange a dollar into four quarters without going to the bank. He calls his 

neighbor on his cell phone and says that his child is very ill. His neighbor 

runs over, and when she arrives he asks her to make change for him. She 

agrees; the quarters pass to the man; the dollar passes to the woman; and 

they part ways. She later learns that the child was just fine all along. The 

second scenario is identical to the first, except that instead of giving the 

woman a true dollar, he gives her a counterfeit one. 

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The first scenario is not wire fraud; the second one is.4 Although the 

transaction would not have occurred but-for the lie in the first scenario—the 

woman would have remained home except for the phony sickness—the man 

nevertheless did not intend to “depriv[e] [the woman] of something of value 

by trick, deceit, [and so on].” Bradley, 644 F.3d at 1240. But in the second 

scenario he did intend to do so. 

More specifically, the difference between the scenarios is that, in the 

first scenario, the man did not lie about the nature of the bargain: he 

promised to give the woman a true dollar in exchange for the quarters, and 

he did just that. In the second, he lied about the nature of the bargain: he 

promised to give her a true dollar but gave her a fake one instead. 

Now imagine another, more common scenario: a young woman asks a 

rich businessman to buy her a drink at Bob’s Bar. The businessman buys the 

drink, and afterwards the young woman decides to leave. Did the man get 

what he bargained for? Yes. He received his drink, and he had the 

opportunity to buy a young woman a drink. Does it change things if the 

woman is Bob’s sister and he paid her to recruit customers? No; regardless 

 4 This assumes, of course, that the man’s cell-phone signal travels across state lines, thus 

constituting a “wire, radio, or television communication in interstate or foreign 

commerce.” 18 U.S.C. § 1343.

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of Bob’s relationship with the woman, the businessman got exactly what he 

bargained for. If, on the other hand, Bob promised to pour the man a glass 

of Pappy Van Winkle5 but gave him a slug of Old Crow6 instead, well, that 

would be fraud. Why? Because the misrepresentation goes to the value of 

the bargain.

Thus, a “scheme to defraud,” as that phrase is used in the wire-fraud 

statute, refers only to those schemes in which a defendant lies about the 

nature of the bargain itself. That lie can take two primary forms: the 

defendant might lie about the price (e.g., if he promises that a good costs $10 

when it in fact costs $20) or he might lie about the characteristics of the 

good (e.g., if he promises that a gemstone is a diamond when it is in fact a 

cubic zirconium). In each case, the defendant has lied about the nature of 

the bargain and thus in both cases the defendant has committed wire fraud. 

But if a defendant lies about something else—e.g., if he says that he is the 

long-lost cousin of a prospective buyer—then he has not lied about the 

 5 “Pappy’s,” as it is often called, is a particularly rare bourbon varietal: nearly impossible 

to find, and nearly impossible to afford when one finds it. 

6 Although Old Crow has a venerable pedigree—reportedly the go-to drink of Mark 

Twain, Ulysses S. Grant, Hunter Thompson, and Henry Clay—it is not Kentucky’s mostexpensive liquor. Its “deluxe” version, “Old Crow Reserve,” retails for approximately 

$15 per bottle. 

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nature of the bargain, has not “schemed to defraud,” and cannot be convicted 

of wire fraud on the basis of that lie alone. 

The Second Circuit has interpreted the wire-fraud statute in precisely 

this way. Their cases have “drawn a fine line between schemes that do no 

more than cause their victims to enter into transactions that they would 

otherwise avoid—which do not violate the mail or wire fraud statutes—and

schemes that depend for their completion on a misrepresentation of an 

essential element of the bargain—which do violate the mail and wire fraud 

statutes.” United States v. Shellef, 507 F.3d 82, 108 (2d Cir. 2007); see also 

United States v. Starr, 816 F.2d 94, 98 (2d Cir. 1987) (“Misrepresentations 

amounting only to a deceit are insufficient to maintain a mail or wire fraud 

prosecution. Instead, the deceit must be coupled with a contemplated harm 

to the victim [that] affect[s] the very nature of the bargain itself. Such harm 

is apparent where there exists a discrepancy between benefits reasonably 

anticipated because of the misleading representations and the actual benefits 

which the defendant delivered, or intended to deliver.”) (internal quotation 

marks omitted); United States v. Regent Office Supply Co., 421 F.2d 1174, 

1182 (2d Cir. 1970) (“[W]e conclude that the defendants intended to deceive 

their customers but they did not intend to defraud them, because the falsity 

of their representations was not shown to be capable of affecting the 

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customer’s understanding of the bargain nor of influencing his assessment of 

the value of the bargain to him, and thus no injury was shown to flow from 

the deception.”). 

Moreover, the Second Circuit’s interpretation of the wire-fraud statute

is not a parochial interpretation of an ambiguous provision of federal law. 

Their interpretation follows as a matter of logic from Congress’s decision to 

use the phrase “scheme to defraud” rather than “scheme” or “scheme to 

deceive.” We therefore adopt that interpretation as our own. A jury cannot 

convict a defendant of wire fraud, then, based on “misrepresentations 

amounting only to a deceit.” Shellef, 507 F.3d at 108. Thus, even if a 

defendant lies, and even if the victim made a purchase because of that lie, a 

wire-fraud case must end in an acquittal if the jury nevertheless believes that 

the alleged victims “received exactly what they paid for.” Id.

2.

Here, the defendants asked the district court to instruct the jury that 

“[f]ailure to disclose the financial arrangement between the B-girls and the 

Bar, in and of itself, is not sufficient to convict a defendant of any 

offense[.]” R. 921 at 1; see also R. 1152 at 285 (“So [Pavlenko’s] theory of 

defense is just because [the defendants used the B-girls to lure men into the 

clubs without disclosing their financial arrangement] does not constitute 

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fraud with regard to the wire fraud or conspiracy to commit these frauds.”). 

If the jury believed that the defendants had deceived the victims only about 

the B-girls’ pay arrangement, then the jury would likewise believe that the 

defendants’ misrepresentations “amount[ed] only to deceit” and that the 

victims “received exactly what they paid for.” Shellef, 507 F.3d at 108. 

Thus, “failure to disclose the financial arrangement between the B-girls and 

the Bar” was not “in and of itself” sufficient to convict the defendants of 

wire fraud. The defendants’ requested instruction therefore seems like a 

correct statement of the law. 

The government responds in a few ways. First, it argues that the 

Second Circuit cases have not “been applied in this Circuit.” United States

Br. at 43. True, but neither have we rejected the Second Circuit’s 

interpretation; we simply have never considered the question they answered. 

And the “law” at issue is the proper interpretation of the federal statute itself, 

not some common-law creature unique to the Second Circuit. After all, the 

defendants’ argument is not that the Eleventh Circuit is bound by the 

opinions of the Second Circuit. The argument is that the Second Circuit’s 

interpretation of the statute is the right interpretation. Thus, the defendants

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argue, their proposed jury instruction was a correct statement of “the law,” 

i.e., the statute. We have already explained why we agree.

7

Second, the government argues that the proposed instruction “was 

incorrect legally, because it proposed to tell the jury that [the] defendants’ 

conduct was outside the reach of the wire fraud statute.” United States Br. at 

54. No, it did not. It proposed only to tell the jury what portion of the 

defendants’ conduct could be criminal under the statute and what portion 

could not. 

Third, the government argues that “Pavlenko’s instruction was 

incorrect in its portrayal of the charges” because the government “never 

described the [defendants’] scheme” as one “to have attractive women 

induce patrons to purchase and consume alcoholic beverages under the 

 7 The government argues in passing that the Second Circuit’s holding in Regent “conflicts 

directly” with our holding in United States v. Svete, 556 F.3d 1157 (11th Cir. 2009) (en 

banc). United States Br. at 39. We disagree. In Regent, the Second Circuit held that a 

jury may convict a defendant of wire fraud only if the defendant lied about the nature of

the bargain itself. See Regent, 421 F.2d at 1182. In Svete, by contrast, we held that a jury 

may convict a defendant of wire fraud even if the scheme in question would not have 

deceived a person of at least ordinary prudence. See Svete, 556 F.3d at 1165. There—

like in Regent, and like here—the defendants had made false statements to induce the 

victims into entering into a transaction. Id. at 1160. But there—unlike in Regent and 

unlike here—those false statements were about the nature of the bargain. Id. (noting that 

the defendants’ sales agents had made false statements about, among other things, “the 

risks associated with the [victims’] investments”). Svete is therefore distinguishable from 

Regent—and from this case. The Eleventh Circuit simply has not addressed—in Svete or 

elsewhere—the precise question that the Second Circuit considered in Regent and that is 

presented here. 

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illusion that the patron may later persuade the women to have sexual 

relations.” United States Br. at 55. Fair enough. But the question at hand is 

a purely legal one: whether the defendants’ proposed instruction was a 

correct statement of the law. And the government’s characterization of the 

defendants’ scheme has no bearing on the answer to that question. 

Finally, the government argues that the instruction “was incorrect in 

its depiction of the facts” because “[t]he evidence showed convincingly that 

the conspirators . . . intoxicated patrons without their knowledge or knowing 

consent, forcing liquor onto patrons, adulterating beverages, and physically 

pouring it down victims’ throats in some instances.” United States Br. at 

55–56. Again, fair enough. But, again, totally irrelevant. What “the 

evidence showed”—even “showed convincingly”—simply has no bearing 

on whether the defendants’ proposed instruction was a correct statement of 

the law. 

In sum, the defendants asked the district court to tell the jurors that 

they could convict only if they found that the defendants had schemed to lie

about the quality or price of the goods sold to the victims. And § 1343, 

which we interpret de novo, requires the jury to make just such a finding

before convicting a defendant of wire fraud. Thus, the proposed instruction 

was a correct statement of the law. 

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B.

To show an abuse of discretion, however, a defendant must show 

more than just that the requested instruction was a correct statement of the 

law. He must also show that the instruction dealt with a sufficiently 

important point raised during trial. Eckhardt, 466 F.3d at 947–48. 

Here, the defendants’ case theory seemed to go as follows: yes, we 

knew that the B-girls were tricking the victims into coming to the bar by 

posing as tourists, but we nevertheless did not commit wire fraud because 

we gave the victims exactly what they ordered—i.e., absurdly expensive 

drinks at the bar—and thus any lies about the B-girls’ employment status did 

not misrepresent the value of the bargain.8

 The government’s position was 

that, although there was evidence that the defendants did far more than just 

trick the victims into coming to the bar, the jury could convict based on that 

trickery alone. 

Given the positions that the government and defendants took during 

trial, the defendants’ proposed instruction—that “[f]ailure to disclose the 

 8 The government of course argued that, in addition to tricking the victims into entering 

the bar, the defendants also charged them exorbitant drink-prices that the menus nowhere 

advertised. But all that shows is that the defendants’ case theory required the jury to find 

that the defendants did not monkey with the prices. And that is a perfectly valid defense 

theory. 

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financial arrangement between the B-girls and the Bar, in and of itself, is not 

sufficient to convict a defendant of any offense”—certainly “dealt with some 

point in the trial so important that failure to give the requested instruction 

seriously impaired the defendant’s ability to conduct his defense.” 

Eckhardt, 466 F.3d at 947–48. After all, if the jurors believed that they 

could convict based only on the B-girls’ failure “to disclose the financial 

arrangement between the B-girls and the Bar,” then the defense’s theory 

would have collapsed entirely.

C.

Finally, to show that the district court abused its discretion by refusing 

to give a proposed instruction, a defendant must show that the proposed 

instruction “was not substantially covered by a charge actually given.” 

Eckhardt, 466 F.3d at 948. Here, the district court gave the jury an 

instruction as to the elements of the offense that in relevant part provided:

A defendant can be found guilty of [wire fraud] only if all of 

the following facts are proved beyond a reasonable doubt: 1. 

The defendant knowingly devised or participated in a scheme to 

defraud or to obtain money by false pretenses, representations 

or promises. 2. The false pretenses, representations or promises 

were about a material fact. 3. The defendant acted with the 

intent to defraud and; 4. The defendant transmitted or caused to 

be transmitted by wire some communication in interstate 

commerce to help carry out the scheme to defraud. 

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The term “scheme to defraud” includes any plan or course of 

action intended to deceive or cheat someone out of money or 

property by using false or fraudulent pretenses, representations 

or promises. 

A “material fact” is an important fact that a reasonable person 

would use to decide whether to do or not do something. A fact 

is material if it has the capacity or natural tendency to influence 

a person’s decision. It does not matter whether the decisionmaker actually relied on the statement or knew or should have 

known that the statement was false.

The intent to defraud is the specific intent to deceive or cheat 

someone, usually for personal financial gain or to cause 

financial loss to someone else.

R. 1154 at 25–26 (emphasis added). Nowhere in that instruction—or 

anywhere else—did the district court tell the jurors that “[f]ailure to disclose 

the financial arrangement between the B-girls and the Bar, in and of itself, is 

not sufficient to convict a defendant of any offense[.]” Nor did the district 

court say anything like that. Thus, it would seem that the district court’s 

instructions did not “substantially cover” the defendants’ requested 

instruction. 

In response, the government argues that the district court’s “goodfaith instruction” was enough. Specifically the government points out that 

the court told the jury that: 

Good faith is a complete defense to a charge that requires intent 

to defraud. A defendant is not required to prove good faith. 

The Government must prove intent to defraud beyond a 

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reasonable doubt. An honestly held belief or an honestly 

formed belief cannot be fraudulent intent even if the opinion or 

belief is mistaken. Similarly, evidence of a mistake in 

judgment, an error in management, or carelessness cannot 

establish fraudulent intent. [The defense is not applicable if] 

the defendant or other coconspirator, with the defendant’s 

knowledge, knowingly made false or fraudulent representations 

to others with the specific intent to deceive them.

R. 1154 at 37–38. That instruction, the government argues, “substantially 

covered” the defendants’ requested one. 

The government’s argument simply misunderstands the defendants’ 

case theory. They did not argue that they lacked the specific intent to 

deceive the victims; indeed they admitted that they fervently hoped to do 

just that. The defendants instead argued that they had intended to deceive 

the victims in only one way—by tricking them into coming to the bars—and 

that such a deception was not wire fraud. Put another way, the defendants 

did not dispute that they lacked specific-enough intent; they argued that what 

they specifically intended to do was not a crime. The district court’s goodfaith instruction concerned only what it meant for the defendants to have a 

specific intent to deceive. It said nothing about what kind of deception

could constitute wire fraud. Thus, the good-faith instruction did not 

“substantially cover” the defendants’ requested instruction. 

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One might also argue (though the government does not) that the 

district court’s definition of “scheme to defraud” substantially covered the 

proposed instruction. This is a more difficult argument to answer. After all, 

the court told the jurors that they could convict only if they found that the 

defendants intended to “deceive or cheat someone out of money or 

property.” And if someone is lured to a bar under false pretenses but 

nevertheless gets precisely what he pays for, he has hardly been “deceive[d] 

or cheat[ed] out of money or property.” Thus, under the given instructions,

it would have been hard for the jury to convict if they found only that the 

defendants lured the victims into the bar under false pretenses. To the 

contrary, to convict under the given instructions, the jury would have needed 

to find—as a matter of logic—that the defendants cheated the victims out of 

money or property, e.g., by running up fake bills on the victims’ credit cards 

and charging absurd drink prices that the menus nowhere advertised. 

The question before us, however, is not whether the proposed 

instruction was “logically entailed” by the given instruction, but whether it 

was “substantially covered”; and those are meaningfully different concepts. 

After all, the average juror is not Mr. Spock. If he were, then a trial-court 

judge’s job would be much easier. He could instruct the jury in broad 

strokes—instructing only as to the bare elements of the crime, perhaps—and 

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be confident that the jury would deduce all of the finer-grained implications 

that must logically follow. As it stands, however, the vast majority of 

American juries are composed exclusively of humans. And humans, unlike 

Vulcans, sometimes need a bit more guidance as to exactly what the court’s 

instructions logically entail.

For that reason, this case is distinguishable from other Eleventh 

Circuit cases holding that a given instruction substantially covered a 

requested one—even the two cases that are most difficult for the defendants, 

Martinelli and Hill. The difference between those cases on the one hand, 

and this case on the other, is the size of the logical leap that a juror would 

need to make to get from the instruction the court gave to the instruction the 

defendant requested. 

In Martinelli, the court instructed the jury that the defendant was 

guilty of money laundering only if he knew that the money was derived from 

felonious activities. The defendant in turn asked the court to instruct the 

jury that the defendant was not guilty if he thought the money-producing 

business was a legitimate one. United States v. Martinelli, 454 F.3d 1300, 

1315–16 (11th Cir. 2006). Thus, to get from the given instruction to the 

requested one, the jury needed to infer only one thing: that “legitimate 

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businesses” do not engage in “felonious activities.” We have no doubt that a 

juror can bridge that logical gap all on her own. 

Similarly, in Hill, the court instructed the jury that the defendant was 

guilty of credit-application fraud only if he made false statements to the 

bank knowingly and willfully. The defendant asked the court to instruct the 

jury that he was not guilty if he believed the statements were true. United 

States v. Hill, 643 F.3d 807, 852–54 (11th Cir. 2011). Thus, to get from the 

given instruction to the requested one, the jury needed to infer only one 

thing: that a person cannot lie “knowingly and willfully” if he speaks what is 

in his view the truth. That inference, too, hardly requires Holmesian feats of 

deduction.

9

In contrast, the court here instructed the jury that the defendants were 

guilty of wire fraud only if they intended to “deceive or cheat someone out 

of money or property.” The defendants asked the court to instruct the jury 

that they were not guilty if they merely used lies to lure the victims into an 

otherwise-legitimate transaction. To get from the given instruction to the 

requested one, the jury needed to make the following inference: that a person 

is not “deceived or cheated out of money or property” if he gets exactly what 

 9 Sherlock or Oliver Wendell: either Holmes will do here.

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he paid for even though he is deceived into paying in the first place. Suffice 

it to say that, if a juror is going to make that kind of logical inference, he is 

probably going to need some guidance from the district court. 

Indeed, the government still refuses to make that inference without 

some judicial “guidance.” The prosecution repeatedly argued below that the 

B-Girls’ lies about their employment status was enough to convict the 

defendants of wire fraud. See, e.g., R. 663 at 3–4; R. 1121 at 39–40; R. 

1154 at 63. And even before this court, the government argues that “[t]here 

is no reason that deceiving victims about the girls’ relationship to the clubs 

would not be enough to sustain a wire-fraud conviction[.]” United States Br. 

at 39. Although the government’s argument might be a reason to hold that 

the defendants’ requested instruction was not a “correct statement of a 

law”—an argument that we rejected above—it also shows that the given 

instructions did not “substantially cover” the requested one. After all, if 

even the government’s attorneys did not believe that the court was 

instructing the jury that “deceiving victims about the girls’ relationship to 

the clubs would not be enough to sustain a wire-fraud conviction,” then why

would a jury composed exclusively of lay people? 

In sum, a district court does not need to tell a jury that proceeds from 

a felony are not proceeds from a legitimate business. Nor does a court need 

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to tell a jury that a person does not lie willfully if he thinks he is telling the 

truth. The jurors will figure those things out on their own. But a court does

need to tell a jury that a scheme to trick patrons to come into a bar—without 

more—is not wire fraud. That is not the sort of thing that we can expect 

jurors to simply infer. The district court’s elements-of-the-crime instruction 

therefore did not “substantially cover” the defendants’ requested instruction.

D.

We recognize that the district court presided over a complex criminal 

trial that took many months to complete. And the court did an admirable job 

in overseeing those proceedings. Indeed, we commend the court, whose 

evidentiary and other legal rulings were, in our view, nearly flawless. 

Nevertheless, the district court refused to give a jury instruction that was a 

correct statement of the law, was critical to the defense’s case theory, and

was not substantially covered by other instructions. Thus, as a matter of 

law, the district court abused its discretion by refusing to give that 

instruction. The question, then becomes whether this error requires reversal

or whether it was instead harmless. 

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III.

A.

This would have been an easy case to decide during the Kennedy 

administration. Under the Supreme Court’s NASA-era jurisprudence, the 

rules were clear with respect to botched jury instructions. If a trial judge 

gave two instructions—and one turned out to be improper—then the 

appellate court would reverse the conviction so long as “it [wa]s impossible 

to say under which [instruction] the conviction was obtained.” Stromberg v. 

California, 283 U.S. 359, 368 (1931); see also Yates v. United States, 354 

U.S. 298, 311–12 (1975). Under that test, the defendants here would surely 

be entitled to a new trial. After all, the district court provided the jury with 

multiple paths by which they could arrive at a guilty verdict. One of those 

paths—as we have explained above—was an impermissible one. It is of 

course “impossible to say” which path the jury proceeded down. And thus it 

is likewise “impossible to say” whether the jury would have nevertheless 

arrived at the same destination—a conviction—if the trial court had 

restricted the jury to the proper route.

Things are harder now. In 1967, the Supreme Court announced its 

decision in Chapman v. California, 386 U.S. 18 (1967), which held that 

even constitutional errors might, in certain situations, still be harmless ones. 

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“In a series of post-Chapman cases,” the Court “concluded that various 

forms of [jury-instruction] error[s] are not structural”—i.e., they do not 

automatically require reversal, no questions asked—but are instead “subject 

to harmless-error review.” Hedgpeth v. Pulido, 555 U.S. 57, 60 (2008). 

And although those cases “did not arise in the context of a jury instructed on 

multiple theories of guilt, one of which is improper,” the Court made clear 

that the same harmless-error standard would apply in cases, like the one 

here, in which a jury could have convicted based on an erroneous 

instruction. Id. at 61.

That standard was framed most clearly—and most recently—in Neder 

v. United States, 527 U.S. 1 (1999). There, the government indicted a man 

named Ellis Neder for tax fraud. “According to the Government, Neder 

failed to report more than $1 million in income in 1985 and more than $4 

million in income for 1986, both amounts reflecting profits Neder obtained 

from [various] fraudulent[ly] [obtained] real estate loans.” Id. at 6. He was 

therefore indicted for two counts of filing a false income tax return, in 

violation of 26 U.S.C. § 7206(1). Id. To convict Neder of violating that 

section of the Internal Revenue Code, the government needed to prove that 

he had willfully “ma[de] and subscrib[ed]” a “return, statement, or other 

document, which contains or is verified by a written declaration that it is 

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made under the penalties of perjury, and which he does not believe to be true 

and correct as to every material matter.” 26 U.S.C. § 7206(1) (emphasis 

added). 

Encouraged by then-existing circuit precedent, the district court 

glossed over this “every material matter” language and instructed the jury 

that it “need not consider the materiality of any false statements even though 

that language [was] used in the indictment.” Neder, 527 U.S. at 6 (internal 

quotation marks omitted). “The question of materiality, the [district] court 

instructed, ‘is not a question for the jury to decide.’” Id. By the time the 

case arrived at the Supreme Court, the parties agreed that the district court 

had made a mistake when it gave that instruction. Id. at 8. After all, the 

statute did not forbid a taxpayer from making any false statements on his tax 

return; it forbade him only from making material false statements. 

The question before the Court was what to do about the error. 

“Unlike such defects as the complete deprivation of counsel or trial before a 

biased judge,” the Court held, “an instruction that omits an element of the 

offense does not necessarily render a criminal trial fundamentally unfair[.]” 

Id. at 9. The Court then imported the Chapman standard and thus framed 

the harmless-error standard—at a high level of generality—as follows: the 

question is whether “it appears beyond a reasonable doubt that the error 

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complained of did not contribute to the verdict obtained.” Id. at 15 (internal 

quotation marks omitted). 

In addition to this general rule—framed, as it were, as a wide-angle 

shot—the Neder Court also zoomed in to give additional guidance as to 

exactly when an error would be harmless beyond a reasonable doubt. 

Specifically, the Court held that the question was “whether the record 

contains evidence that could rationally lead to a contrary finding with 

respect to the omitted element,” id. at 19—i.e., whether a properly instructed 

jury could have “reasonably f[ound]” the defendant not guilty, id. at 16. If 

not, the Court held, then a jury-instruction error is harmless. Answering this 

question as to Neder himself, the Court held that “no jury could reasonably 

find that Neder’s failure to support [some $5 million] of income on his tax 

returns was not ‘a material matter.’” Id. And thus the Court concluded that 

it was “beyond cavil” that “the error ‘did not contribute to the verdict 

obtained.’” Id. at 17 (quoting Chapman, 386 U.S. at 24). 

The general question presented in this case is therefore as follows: 

whether “it appears beyond a reasonable doubt that the [faulty jury 

instruction] did not contribute to the verdict obtained.” See id. at 15 

(internal quotation marks omitted). The more specific question is this: does 

“the record contain[] evidence that could rationally lead” a jury to find that 

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the defendants lacked the intent to defraud? See id. at 19. If so, the 

defendants are entitled to a new trial. If not, the failure to give the requested 

instruction was harmless. Id. 

B.

1.

Here, the record contains sufficient evidence such that, had the 

requested instruction been given, a rational jury could find that the 

defendants lacked the intent to defraud on almost all of the wire-fraud 

counts. At trial, the defendants each testified that they were aware that the 

B-girls concealed their relationship to the clubs. See D.E. 1147 at 187

(Pavlenko testimony); D.E. 1149 at 95 (Feldman testimony); D.E. 1151 at 

34, 38, 88, 213 (Takhalov testimony).10 However, they each also testified 

that they did not intend to defraud any customers and that they were not 

aware of any (other) illicit activity by the B-girls. See, e.g., D.E. 1146 at 

 10 The government argues that the defendants denied knowing that the B-girls concealed 

their relationship to the clubs. Even if this were true, a jury is not bound either to believe 

or not believe a witness’s testimony as a whole. Rather, juries can find one part of a 

witness’s testimony credible while not believing another part of the testimony. See, e.g., 

Elwet v. United States, 231 F.2d 928, 934 (9th Cir. 1956) (“The jury may conclude a 

witness is not telling the truth as to one point, is mistaken as to another, but is truthful and 

accurate as to a third.”). So the jury could choose not to believe the defendants about 

knowing the B-girls concealed their relationships to the clubs, but still believe the 

defendants when they testified that they knew nothing about hiding prices, lying about 

prices, spiking drinks, etc.

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119–20 (Pavlenko testimony); D.E. 1147 at 31–32 (same); D.E. 1149 at 44–

47, 109, 181, 184, 223–24 (Feldman testimony); D.E. 1151 at 38–39, 143, 

184 (Takhalov testimony). Had the requested instruction been given, a

rational jury certainly could have chosen to believe the defendants’ 

testimony that they did not intend to defraud customers. And in fact, the 

record suggests the jury did believe the defendants, at least in part—the jury 

acquitted the defendants on the majority of the counts in the indictment. 

D.E. 954; D.E. 956; D.E. 957; see United States v. Thomson, 473 F.3d 1137, 

1142 (11th Cir. 2006) (“The jury gets to make any credibility choices, and 

we will assume they made them all in the way that supports the verdict.”).

Regardless of the verdict, though, “[i]t is not for us to decide which 

witnesses we find more believable—credibility choices lie within the 

province of the jury.” United States v. Johnson, 713 F.2d 654, 661 (11th 

Cir. 1983) (internal quotation marks omitted). As such, the defendants’ 

testimony provided sufficient evidence for a rational jury to find that the 

defendants lacked the intent to defraud.

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The government makes four arguments in response.

11 First, the 

government explains that the defendants’ fraud scheme had many 

components, and the government never told the jury to convict the 

defendants solely on their failure to disclose the B-girls’ relationship to the 

clubs. True. But regardless of whether the government told the jury convict 

on this basis, the jury still could have convicted the defendants on the wire 

fraud counts solely on this basis. To convict the defendants of wire fraud, 

the jury had to find, in part, that (1) the defendants “knowingly devised or 

participated in a scheme to defraud or to obtain money by false pretenses, 

representations or promises,” and (2) these “false pretenses, representations 

or promises were about a material fact.” D.E. 1154 at 25 (jury instructions). 

In the government’s closing, the government argued that the concealment of 

the B-girls’ relationship to the clubs was a “material” misrepresentation. Id.

at 63. As such, even if the jury did not believe that the defendants made any 

other material misrepresentations, the jury still could have convicted the 

defendants because the government proved that the defendants made false 

representations about a material fact: the B-girls’ relationship to the clubs. 

 11 The government also claims that district court’s instructions as a whole show that the 

absence of the proposed instruction was harmless. The Court addressed this argument in 

full in Part II of this opinion, supra. 

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Second, the government argues that it presented “overwhelming 

evidence” that the defendants were guilty of wire fraud beyond their failure 

to disclose the B-girls’ relationship. While this may be correct, it does not

change the outcome here. The question is not whether the jury could still 

have convicted the defendants if the instruction had been given. The 

question is whether the jury could have acquitted them. And the evidence 

against the defendants here was not so overwhelming that an acquittal would 

have been irrational. 

Third, the government asserts that “if the jury was truly under the 

‘mistaken’ impression that simply concealing the girls’ relationship to the 

clubs was sufficient to convict, there would have been no acquittals 

whatsoever on the substantive fraud counts.” United States Supp. Br. at 11. 

It is true that the jury acquitted the defendants on some of the substantive 

fraud counts. This does not mean that the jury did not have the ‘mistaken 

impression’ that concealing the girls’ relationship to the club was, on its 

own, fraud. Maybe the jury did not believe the government proved the

defendants’ involvement in those counts, or maybe the jury reached 

inconsistent verdicts. Regardless, the Court will not read into the split 

verdict to determine whether or not the jury believed the concealment of the 

B-girls’ relationship was sufficient to prove fraud. See United States v. 

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Powell, 469 U.S. 57, 64–65 (1984) (“[W]here truly inconsistent verdicts 

have been reached, the most that can be said . . . is that the verdict shows 

that either in the acquittal or the conviction the jury did not speak their real 

conclusions, but that does not show that they were not convinced of the 

defendant’s guilt.” (internal quotations omitted)).

Fourth, the government states that the defendants did not argue their 

proposed defense theory—that the concealment of the B-girls’ relationship 

did not constitute fraud—in closing. Thus, the government claims, we 

cannot find that the jury convicted the defendants solely on the concealment 

of the B-girls’ relationship to the clubs. But the government does not point 

the Court to a single case that requires a defendant to raise a defense theory 

in closing arguments after that the trial court rejected that theory. And, even 

if such a case existed, the government’s logic is flawed. Imagine that the 

defendants had argued in closing that the concealment of the B-girls’ 

relationship did not constitute fraud. Without an instruction supporting the 

defendants’ theory, the jury was not required to believe this theory. Instead, 

the jury could believe what the government argued in its closing: that the

concealment was material and the defendants acted with the intent to deceive 

or cheat the victims. Thus, even if the defendants had argued their theory in 

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closing, the jury still could have convicted the defendants of fraud based on 

the concealment of the B-girls’ relationship.

The government has not presented the court with sufficient evidence

showing the trial court’s error was harmless as to the wire-fraud counts and 

conspiracy-to-commit-wire-fraud counts.

12 And it is the government’s 

burden to demonstrate that the error was harmless. United States v. Robison, 

505 F.3d 1208, 1222–23 (11th Cir. 2007). The defendants’ convictions with 

respect to those counts are therefore reversed. 

2.

The defendants also argue that their convictions on the moneylaundering counts, Count 29 and Count 39, should be reversed because the 

missing instruction tainted these counts as well. [Pavlenko Initial Brief at 

24.] Count 29 charged all three defendants with conspiracy to violate two 

provisions of the money-laundering statute: money laundering by 

concealment and money laundering by international promotion. D.E. 953 at 

20–21.13 Count 39 also charged Takhalov with conspiracy to commit money 

laundering by concealment. Id. at 32–33. Although money laundering by 

 12 The defendants were convicted of wire-fraud-related Counts 1, 6–8, 13, 18–21, 30, 34–

35, and 37.

13 The jury convicted Takhalov of money laundering by concealment, and Pavlenko and 

Feldman of money laundering by international promotion. D.E. 954; D.E. 956; D.E. 957.

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concealment and money laundering by international promotion involve 

different elements, both offenses criminalize transactions that promote an 

underlying criminal activity. 18 U.S.C. § 1956(a). But to prove either 

offense, the government does not have to prove that the defendant 

committed the underlying criminal activity. Id.; see also United States v. 

Martinelli, 454 F.3d 1300, 1311 (11th Cir. 2006). Instead, for money 

laundering by concealment, the government has to prove that the defendant 

knew: (1) that the proceeds of the transaction involved proceeds of an 

unlawful activity, and (2) that the transaction was designed to conceal some 

aspect of those proceeds. 18 U.S.C. § 1956(a)(1). And for money 

laundering by international promotion, the government has to prove that the 

defendant engaged in the transaction “with the intent to promote the carrying 

on of [a] specified unlawful activity.” Id. § 1956(a)(2)(A). 

Here, the government charged two specified unlawful activities: wire 

fraud, in violation of 18 U.S.C. § 1343, and misuse of a visa document, in

violation of 18 U.S.C. § 1546. D.E. 953 at 21, 33.14 The first problem for 

the government is that it did not provide us any evidence to show that the 

 14 The defendants do not challenge the validity of the “misuse of a visa document” 

activity, so this was a proper theory of prosecution. They do, however, challenge the 

validity of the money-laundering counts based on wire fraud. 

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jury would have convicted the defendants of money laundering based on 

misuse of a visa document. Chapman, 38 U.S. at 828 (Harmless-error 

analysis puts “the burden on the beneficiary of the error either to prove that 

there was no injury or to suffer a reversal of [the] erroneously obtained 

judgment.”); United States v. Fern, 155 F.3d 1318, 1327 (11th Cir. 1998) 

(“Here, the government’s burden, more precisely stated, is to show that the 

guilty verdict against [the defendant] was ‘surely unattributable’ to the 

incorrect jury instruction[.]”). And the Court’s review of the record does not 

reveal sufficient evidence for such a finding. In fact, in the government’s 

opening statement—a roadmap of the government’s case—the government 

did not mention anything about money laundering related to misuse of a visa 

document. See D.E. 1121. Instead, the government expressly tied the 

money-laundering counts only to wire fraud, stating that the defendants 

engaged in money laundering “because the wire fraud was being concealed.” 

Id. at 51. This brings us to the second problem: we cannot be sure that a 

properly instructed jury would have found that the specified unlawful 

activity of wire fraud actually occurred. See supra Part III.B.1. And, 

without that, we cannot conclude beyond a reasonable doubt that the jury 

would have convicted the defendants of money laundering. See United 

States v. Neder, 197 F.3d 1122, 1129 (11th Cir. 1999) (“[T]he government 

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39

must show that the evidence [of the proper theory of guilt] is so 

overwhelming . . . that no rational jury, properly instructed . . ., could have 

acquitted [the defendants] on that count.”). As such, the defendants’

convictions for conspiracy to commit money laundering, Count 29 and 

Count 39, must be reversed.

IV.

The remaining conviction against Takhalov, Count 38 for conspiracy 

to defraud the United States Department of Homeland Security, remains

because it was unrelated to wire fraud. D.E. 953 at 30–32. Finding no other

errors that would justify reversal on Count 38, we reverse on all but Count 

38, and remand to the district court for further proceedings consistent with 

this opinion. 

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