Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-18-50449/USCOURTS-ca9-18-50449-0/pdf.json

Parties Involved:
James Robert Miller
Appellant
United States of America
Appellee

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

JAMES ROBERT MILLER,

Defendant-Appellant.

Nos. 17-50338

18-50449

D.C. No.

2:14-cr-00471-GW-1

OPINION

Appeal from the United States District Court

for the Central District of California

George Wu, District Judge, Presiding

Argued and Submitted January 10, 2020

Pasadena, California

Filed March 20, 2020

Before: Paul J. Watford and Mark J. Bennett, Circuit 

Judges, and Jed S. Rakoff,

* District Judge.

Opinion by Judge Rakoff

* The Honorable Jed S. Rakoff, United States District Judge for the 

Southern District of New York, sitting by designation.

Case: 18-50449, 03/20/2020, ID: 11636042, DktEntry: 61-1, Page 1 of 24
2 UNITED STATES V. MILLER

SUMMARY**

Criminal Law

The panel affirmed a conviction for wire fraud and filing 

false tax returns in a case in which a jury found that the 

defendant embezzled over $300,000 from the company for 

which he served as manager and president.

Overruling prior decisions of this court in light of the 

Supreme Court’s intervening decision in Shaw v. United 

States, 137 S. Ct. 462 (2016), the panel held that wire fraud 

under 18 U.S.C. § 1343 requires the intent to deceive and

cheat — in other words, to deprive the victim of money or 

property by means of deception — and that the jury charge 

instructing that wire fraud requires the intent to “deceive or

cheat” was therefore erroneous. The panel nevertheless held 

that the erroneous instruction was harmless.

The panel wrote that it was deeply troubled by the 

disregard of elementary prosecutorial ethics by an Assistant 

U.S. Attorney from the Central District of California who, 

with a personal and financial interest in the outcome of this 

case, impermissibly tainted the prosecution by involving 

himself in the early stages of the investigation and then 

continuing to express interest even after the U.S. Attorney’s 

Office for the Central District recused itself from the matter. 

The panel held that the misconduct of the AUSA does not 

entitle the defendant to any relief because as soon as the 

Department of Justice became aware of the impropriety, it 

** This summary constitutes no part of the opinion of the court. It 

has been prepared by court staff for the convenience of the reader.

Case: 18-50449, 03/20/2020, ID: 11636042, DktEntry: 61-1, Page 2 of 24
UNITED STATES V. MILLER 3

took every necessary step to cure any resulting taint, 

including turning over the entire prosecution to disinterested 

prosecutors from the Southern District of California. 

The panel held that the district court correctly denied the 

defendant’s motion for a new trial, and did not abuse its 

discretion in denying his motion for an indicative ruling on 

additional discovery, based on a special agent’s failure to 

disclose his romantic relationship with an AUSA in the 

recused Central District office. The panel concluded that 

there was sufficient evidence to establish the interstate wire 

element of the wire fraud offenses.

COUNSEL

Katherine Kimball Windsor (argued), Law Office of 

Katherine Kimball Windsor, Pasadena, California, for 

Defendant-Appellant.

Rebecca Suzanne Kanter (argued), Assistant United States 

Attorney; Daniel E. Zipp, Special Attorney for the United 

States; Robert S. Brewer Jr., United States Attorney; 

William P. Barr, United States Attorney General; United 

States Attorney’s Office, San Diego, California; for 

Plaintiff-Appellee.

Case: 18-50449, 03/20/2020, ID: 11636042, DktEntry: 61-1, Page 3 of 24
4 UNITED STATES V. MILLER

OPINION

RAKOFF, District Judge:

A jury in the Central District of California convicted 

defendant-appellant James Miller of five counts of wire 

fraud and four counts of filing false tax returns, finding that 

he had embezzled over $300,000 from the company for 

which he served as managing member and president. Miller 

now appeals his conviction, as well as the district court’s 

denial of various pre- and post-trial motions seeking 

dismissal of the indictment, additional discovery, and other 

forms of relief.

This appeal presents two main questions. The first is 

whether the jury charge misstated the law by instructing that 

wire fraud under 18 U.S.C. § 1343 requires the intent to 

“deceive or cheat” rather than the intent to “deceive and

cheat.” We conclude that the charge was erroneous. Several 

other circuit courts have long held that the crime of wire 

fraud requires the specific intent to utilize deception to 

deprive the victim of money or property, i.e., to cheat the 

victim, and we now align the law of the Ninth Circuit with 

that of the other circuits and with recent Supreme Court 

precedent. Nevertheless, we find that the erroneous 

instruction was harmless in this case.

The second question here presented is whether an 

Assistant U.S. Attorney (AUSA) from the Central District of 

California who had a personal and financial interest in the 

outcome of this case impermissibly tainted the prosecution 

by involving himself in the early stages of the investigation 

and then continuing to express interest in the case even after 

the entire U.S. Attorney’s Office for the Central District of 

California recused itself from the matter. We are deeply 

troubled by this Assistant’s disregard of elementary 

Case: 18-50449, 03/20/2020, ID: 11636042, DktEntry: 61-1, Page 4 of 24
UNITED STATES V. MILLER 5

prosecutorial ethics. But we also note that as soon as the 

Department of Justice became aware of the impropriety, it 

took every necessary step to cure any resulting taint, 

including turning over the entire prosecution of the case to 

disinterested prosecutors from the Southern District of 

California. We therefore hold that the misconduct of the 

Central District Assistant does not entitle Miller to any relief.

Because we also find Miller’s remaining arguments to be 

without merit, we affirm his conviction.

Background

Trial testimony established that, during the relevant time 

period, defendant-appellant James Miller served as the 

president and managing member of an online retail platform 

called MWRC Internet Sales, LLC. Some years earlier, an 

entrepreneur named Russell Lesser, who was Miller’s longtime friend, had founded MWRC and recruited Miller to 

work for the company. As he took on more senior roles, 

Miller’s job responsibilities grew to include management of 

MWRC’s day-to-day finances, with limited oversight by 

Russell Lesser.

In 2009, Miller, who was experiencing personal financial 

difficulties, began writing himself checks from one of 

MWRC’s bank accounts. He did so without the knowledge 

or consent of Russell Lesser or anyone else at MWRC. By 

the end of 2010, he had issued a total of about $130,000 to 

himself and had paid back roughly $30,000. In March 2011, 

Miller disclosed to Russell Lesser a hint of what he had done, 

but falsely told Lesser that he had only written himself 

checks totaling $30,000. Upon hearing this, Lesser told 

Miller, “you can’t do that. That is stealing.” Miller then 

expressed remorse and promised to never write himself 

checks again.

Case: 18-50449, 03/20/2020, ID: 11636042, DktEntry: 61-1, Page 5 of 24
6 UNITED STATES V. MILLER

Miller only kept this promise for two months. He then 

wrote himself another $3,000 check on April 29, 2011, and 

over the rest of 2011 and 2012, wrote himself around fifty 

additional checks from MWRC, totaling additional amounts 

of another $200,000 or so. To disguise his payments, Miller 

often listed them in MWRC’s ledger as internal transfers 

between the company’s two bank accounts. Russell Lesser 

eventually noticed that these ledger entries did not 

correspond to actual deposits into the purported recipient 

account. He then obtained bank records and cancelled 

checks, which led to his discovery of the continuing checkwriting fraud. By the time of this discovery, Miller had 

embezzled about $330,000 from MWRC.1 Miller had also 

failed to report any of this money as income on his tax 

returns.

Based on the foregoing, a grand jury indicted Miller on 

five counts of wire fraud in violation of 18 U.S.C. § 1343 

and four counts of filing false federal tax returns in violation 

of 26 U.S.C. § 7206(1). Miller pled not guilty on all counts 

and proceeded to trial in June 2017. His chief defense was 

that he always intended to (and eventually did) pay back the 

full amount he had taken from MWRC. He also argued that 

he always believed the funds to be loans that he was 

authorized to issue to himself. At the conclusion of trial, 

however, the jury convicted Miller on all counts.

On September 11, 2017, the trial court sentenced Miller 

to nine months’ imprisonment, to run concurrently on all 

counts, two years of supervised release, and a special 

1 At this point, Miller had repaid to MWRC about $95,000 of the 

embezzled funds. Of course, subsequent repayment is of itself no defense 

to embezzlement or wire fraud, though it may bear on the issue of intent.

Case: 18-50449, 03/20/2020, ID: 11636042, DktEntry: 61-1, Page 6 of 24
UNITED STATES V. MILLER 7

assessment of $900. Miller is on bail pending disposition of 

this appeal.

At trial, Miller requested a jury instruction stating that, 

to be guilty of wire fraud, he must have intended to “deceive 

and cheat” MWRC. The trial court, however, delivered the 

Ninth Circuit’s model jury instruction, which states that wire 

fraud instead requires only the intent to “deceive or cheat” 

(emphasis supplied) the victim. As his first issue on this 

appeal, Miller argues that this jury instruction misstated the 

law.

The facts that give rise to Miller’s second issue on appeal 

occurred early in the investigation of this case. Indeed, 

Miller goes so far as to speculate about whether law 

enforcement would even have investigated him in the first 

place were it not for the early involvement of Russell 

Lesser’s son, Gregory (“Greg”) Lesser, an AUSA in the U.S.

Attorney’s Office for the Central District of California and 

himself a 1.25% member of MWRC. Upon learning from his 

father of Miller’s embezzlement, Greg Lesser called a friend 

at the FBI to report Miller.2 This outreach, Miller argues, 

may well have expedited, or otherwise influenced, the 

agency’s decision to open an investigation and to begin 

coordinating with prosecutors in the Central District office. 

In addition, over the next three weeks, the FBI arranged a 

meeting at which Russell Lesser, wearing a wire, confronted 

2 Specifically, AUSA Lesser reached out to a friend at the FBI, who 

put the Lessers in touch with another agent. That agent in turn referred 

the case to Special Agent Joseph Swanson “to open an investigation.” 

Shortly thereafter, Swanson called Greg Lesser to inform him that the 

FBI would be reaching out to the U.S. Attorney’s Office about the Miller 

matter.

Case: 18-50449, 03/20/2020, ID: 11636042, DktEntry: 61-1, Page 7 of 24
8 UNITED STATES V. MILLER

Miller about his check-writing, leading to some admissions 

from Miller.3

It was not until approximately three weeks after he had 

first called his friend in the FBI that Greg Lesser reported his 

obvious conflict-of-interest in the Miller case to his 

supervisor in the Central District. At that point the supervisor 

recused the entire office and turned over the matter to the 

U.S. Attorney’s Office for the Southern District of 

California.4 However, unbeknownst to the Southern District 

prosecutors, Greg Lesser continued for a while to maintain a 

tangential but still inappropriate level of involvement in the 

case. For example, as detailed below, AUSA Lesser had 

additional direct and indirect contact with Special Agent 

Swanson concerning the progress of the case.

The Government disclosed all of this to Miller well in 

advance of trial, at which point Miller filed a motion for 

additional discovery into Greg Lesser’s involvement in the 

case. The district court denied this motion except to order the 

Government to produce the grand jury testimony from 

Miller’s indictment proceedings in order to confirm that the 

grand jury was not presented with testimony that was tainted 

by Greg Lesser’s involvement. After the Government 

produced the grand jury transcripts, Miller filed a motion to 

dismiss the indictment with prejudice on two grounds. First, 

Miller moved to dismiss the indictment under the Due 

3 At this meeting, Lesser asked, “[D]o you admit that’s money that’s 

been stolen?” and Miller replied, “Yes. Well . . . [w]ith an intention to 

repay.” Miller also acknowledged that he had used some of the money 

to make payments on his personal mortgage and credit card debt.

4 The Southern District prosecutors who handled the matter still, of 

course, prosecuted the case in the Central District, where most of the 

underlying events occurred.

Case: 18-50449, 03/20/2020, ID: 11636042, DktEntry: 61-1, Page 8 of 24
UNITED STATES V. MILLER 9

Process Clause of the Fifth Amendment or, alternatively, 

under the trial court’s supervisory powers, because of Greg 

Lesser’s role as an interested prosecutor. See United States 

v. Restrepo, 930 F.2d 705, 712 (9th Cir. 1991). Second, 

Miller moved to dismiss the indictment under the Due 

Process Clause because of allegedly false testimony that was 

presented to the grand jury. The district court denied both 

grounds, leading to Miller’s second main issue on this 

appeal.

Discussion

I. The Jury Instructions

At trial, the Government requested that the court charge 

the jury that, to be guilty of wire fraud, a defendant must 

have acted with the intent to “deceive or cheat.” As thus 

stated in the alternative, Miller could theoretically have been 

convicted of deceiving MWRC (as, for example, through the 

false ledger entries), even if he had no intent to cheat 

MWRC, that is to, “deprive [MWRC] of something valuable 

by the use of deceit or fraud,” Merriam-Webster’s Collegiate 

Dictionary, 10th ed. (1997). The defense, based on its view 

that Miller’s alleged belief that his withdrawals were simply 

“loans” meant that he lacked an intent to cheat, requested an 

instruction that wire fraud requires the intent to “deceive and

cheat.” Over the defense’s objection, but in line with existing 

Ninth Circuit pattern instructions, the district court gave the 

Government’s proposed instruction, and Miller now appeals 

his conviction on the ground that this instruction misstated 

the law.

We review de novo whether a trial court’s jury 

instructions correctly stated the elements of a crime, United 

States v. Anguiano-Morfin, 713 F.3d 1208, 1209 (9th Cir. 

2013), and we have no trouble concluding that this 

Case: 18-50449, 03/20/2020, ID: 11636042, DktEntry: 61-1, Page 9 of 24
10 UNITED STATES V. MILLER

instruction was erroneous. Like the mail fraud statute from 

which it is derived, the wire fraud statute, in plain and simple 

language, criminalizes the use of interstate wires to further, 

not mere deception, but a scheme or artifice to defraud or 

obtain money or property, i.e., in every day parlance, to 

cheat someone out of something valuable. It follows that to 

be guilty of wire fraud, a defendant must act with the intent 

not only to make false statements or utilize other forms of 

deception, but also to deprive a victim of money or property 

by means of those deceptions. In other words, a defendant 

must intend to deceive and cheat.

This has long been the law of several other circuits. For 

example, in United States v. Walters, 997 F.2d 1219 (7th Cir. 

1993), the court reviewed the conviction for mail fraud5 of a 

sports agent who had defrauded the NCAA, not by stealing 

its property, but by inducing college athletes to sign secret 

representation contracts in violation of the Association’s 

rules. In other words, Walters had deceived, but not cheated, 

his victim. The Seventh Circuit reversed Walters’

conviction, holding that the statute requires “a scheme to 

obtain money or other property from the victim,” and that 

“[l]osses that occur as byproducts of a deceitful scheme do 

not satisfy the statutory requirement.” Id. at 1227.

Other circuits have held similarly. The Second Circuit 

had already concluded as much some two decades before 

Walters, holding in United States v. Regent Office Supply 

Co., 421 F.2d 1174, 1180 (2d Cir. 1970) that “the 

5 Although Walters was prosecuted under the mail fraud statute, 

18 U.S.C. § 1341, courts typically interpret the mail and wire fraud 

statutes the same way, as their language is largely identical. See, e.g., 

United States v. Kuecker, 740 F.2d 496, 504 (7th Cir. 1984); United 

States v. Greenberg, 835 F.3d 295, 305 (2d Cir. 2016).

Case: 18-50449, 03/20/2020, ID: 11636042, DktEntry: 61-1, Page 10 of 24
UNITED STATES V. MILLER 11

government can[not] escape the burden of showing that 

some actual harm or injury [to the victim’s money or 

property] was contemplated by the schemer.” See also

United States v. Starr, 816 F.2d 94, 101 (2d Cir. 1987) (“[I]t 

is error for a trial judge to charge a jury that contemplated 

harm is not an element of fraudulent intent.”). The D.C. 

Circuit has also agreed, at least in dicta. United States v. 

Lemire, 720 F.2d 1327, 1335–36 (D.C. Cir. 1983) (“[T]here 

is judicial consensus about certain requisite elements of a 

scheme to defraud. . . . [T]he scheme to defraud must 

threaten some cognizable harm to its target. . . .”). See also, 

e.g., United States v. Allen, 491 F.3d 178, 187 (4th Cir. 2007) 

(upholding a jury instruction that, for the purposes of the 

wire fraud statute, to act with the intent to defraud means “to 

act knowingly and with the specific intent to deceive, for the 

purposes of causing some financial or property loss to 

another”); 2 Sand et al. Modern Federal Jury Instructions, 

Instruction 44-5 (2019) (“‘Intent to defraud’ means to act 

knowingly and with the specific intent to deceive, for the 

purpose of causing some financial or property loss to 

another.”).

The Ninth Circuit, on the other hand, employs the 

“deceive or cheat” language in its model jury instruction on 

wire fraud, Manual of Modern Criminal Jury Instructions 

for the District Courts of the Ninth Circuit § 8.124 (2019), 

and this court has upheld this instruction on at least three 

occasions in the past. United States v. Shipsey, 363 F.3d 962, 

967 (9th Cir. 2004); United States v. Treadwell, 593 F.3d 

990, 998–99 (9th Cir. 2010); see United States v. Livingston, 

725 F.3d 1141, 1148 (9th Cir. 2013). Nor is this the only 

circuit that uses the “deceive or cheat” language. See 

Treadwell, 593 F.3d at 999 (citing the model instructions of 

the Third, Fifth, Sixth, Tenth, and Eleventh Circuits as 

support for the “deceive or cheat” formulation).

Case: 18-50449, 03/20/2020, ID: 11636042, DktEntry: 61-1, Page 11 of 24
12 UNITED STATES V. MILLER

But we think that these holdings are no longer tenable in 

light of the Supreme Court’s intervening ruling in Shaw v. 

United States, 137 S. Ct. 462 (2016). Indeed, another panel 

of this court has already acknowledged as much in a nonprecedential memorandum disposition. United States v. 

George, 713 F. App’x 704, 705 (9th Cir. 2018).6 In Shaw, 

the Supreme Court considered a jury instruction defining 

“scheme to defraud” for the purpose of the bank fraud 

statute7 as “any deliberate plan of action or course of conduct 

by which someone intends to deceive, cheat, or deprive a 

financial institution of something of value.” Id. at 469. The 

Court cast serious doubt on the accuracy of this instruction 

on the ground that “the scheme must be one to deceive the 

bank and deprive it of something of value.”8 Id. We think 

that this language and reasoning clearly control here. 

Although the wording of Shaw’s instruction was not 

identical to Miller’s, both arguably allowed a jury to convict 

“if it found no more than that [the defendant’s] scheme was 

one to deceive the [victim] but not to ‘deprive’ the [victim] 

of anything of value.” Id. In light of Shaw, we therefore 

overrule our prior cases on this question and hold that wire 

fraud requires the intent to deceive and cheat — in other 

6 But see United States v. Stewart, 728 F. App’x 651, 653 (9th Cir. 

2018) (affirming the “deceive or cheat” instruction without analyzing it 

in light of Shaw).

7 18 U.S.C. 1344(1). Because the bank, mail, and wire fraud statutes 

all use highly similar language, we take the Supreme Court’s reasoning 

in Shaw to apply to the wire fraud statute as well.

8 The Court remanded the case to the Ninth Circuit for us to 

determine whether the instruction was lawful. 137 S. Ct. at 470. On 

remand, a panel of this court held that this argument was not properly 

preserved below, and, in any case, any error in the instruction was 

harmless. United States v. Shaw, 885 F.3d 1217 (9th Cir. 2018).

Case: 18-50449, 03/20/2020, ID: 11636042, DktEntry: 61-1, Page 12 of 24
UNITED STATES V. MILLER 13

words, to deprive the victim of money or property by means 

of deception.

Despite this error in the jury charge, however, we affirm 

Miller’s conviction on the ground that the error was 

harmless. See United States v. Wilkes, 662 F.3d 524, 544 (9th 

Cir. 2011). It is true that the Government emphasized the 

“deceive or cheat” distinction in its summation, arguing to 

the jury that Miller’s false checkbook entries were sufficient 

to demonstrate intent to deceive, and therefore sufficient 

evidence that Miller had the mens rea for wire fraud.9

Nevertheless, we still find beyond a reasonable doubt that 

the jury would have convicted Miller even if it had been 

properly instructed, for two reasons: 

First, Miller’s primary defense — that he was not guilty 

of wire fraud because he intended to pay back the funds he 

deceptively obtained from MWRC — is not a defense at all. 

In United States v. Treadwell, this court already considered 

and rejected the argument that the wire fraud statute requires 

an intent to permanently deprive a victim of money or 

property.10 593 F.3d at 996–98 (citing with approval United 

States v. Hamilton, 499 F.3d 734, 736 (7th Cir. 2007) (“If 

you embezzle from your employer you are not excused just 

because you had an honest intention of replacing the money, 

9 The falsified ledger entries were, to be sure, also strongly probative

of Miller’s intent to cheat, and the jury may properly have considered 

them in that light.

10 To be clear, we overrule Treadwell in part, insofar as we hold that 

the “deceive or cheat” instruction misstates the requirement that wire 

fraud requires the intent to deprive a victim of money or property, at least 

momentarily. But nothing in Shaw compels us to go so far as to hold that 

wire fraud requires an intent to permanently deprive the victim of 

property. We know of no cases that so hold, and appellant cites none.

Case: 18-50449, 03/20/2020, ID: 11636042, DktEntry: 61-1, Page 13 of 24
14 UNITED STATES V. MILLER

maybe with interest . . . .”). Intent to repay, therefore, is not 

a defense to wire fraud.

Second, Miller’s only other material defense was that, at 

the very time he obtained the funds, he believed the funds to 

be bona fide loans that he was fully authorized to issue to 

himself, albeit by means of the deceptive ledger entries. This 

defense did, in effect, raise the claim that Miller, while 

intending to deceive, did not intend to cheat. But we are 

persuaded, based on other language in the jury instructions, 

that there is no way the jury made this determination. Most 

importantly, the district court’s instruction on the “scheme 

to defraud” element of the wire fraud counts told the jury 

that it must find that Miller “knowingly engaged in a scheme 

or plan to defraud or obtain money or property by means of 

false or fraudulent pretenses, representations, or promises.” 

If the jury had believed that there was any inconsistency 

between this language and the subsequent language about 

“deceive or cheat,” they undoubtedly would have sought 

further instruction, which they did not. Further, any notion 

that the jury thought that Miller was guilty of deception, but 

not cheating, because he allegedly had permission to give 

himself loans from company funds is flatly contradicted by 

the jury’s conviction on all the tax counts. This is because 

the jury was expressly instructed that “[t]he proceeds of a 

loan are not taxable income,” and that Miller could not be 

convicted of filing a false tax return unless he did so 

“willfully.” So instructed, the jury could only have convicted 

Miller of the tax counts if they found beyond a reasonable 

doubt that he did not really believe that the funds he took 

from the company were bona fide loans. For these reasons, 

we hold that the error in the jury instructions was harmless.

Case: 18-50449, 03/20/2020, ID: 11636042, DktEntry: 61-1, Page 14 of 24
UNITED STATES V. MILLER 15

II. The Interested Prosecutor

“A prosecutor has the responsibility of a minister of 

justice and not simply that of an advocate.” Model Rules of 

Professional Conduct Rule 3.8 Cmt. 1. She represents not 

her own interest but “the interest of society as a whole.” 

Ferri v. Ackerman, 444 U.S. 193, 202–03 (1979). For this 

very reason, the Department of Justice holds United States 

Attorneys and their Assistants to exacting ethical standards, 

not least with respect to actual and apparent conflicts of 

interest. See, e.g., U.S. Attorneys’ Manual § 1-4.320(F) 

(“Employees may not engage in outside activities that create 

or appear to create a conflict of interest with their official 

duties. Such a conflict exists when the outside activity would 

. . . create an appearance that the employee’s official duties 

were performed in a biased or less than impartial manner.”). 

Moreover, federal law itself contains a criminal prohibition 

on prosecutors and other government employees 

“participat[ing] personally and substantially” in a “judicial 

or other proceeding” in which they have an interest. 

18 U.S.C. § 208.

AUSA Greg Lesser’s role in the Miller prosecution, 

however limited, was a clear violation of his ethical and 

professional duties. Nothing, of course, prevented his father 

from reporting the embezzlement to the FBI, as through a 

public tip line or the like. But it was totally inappropriate for 

AUSA Lesser to, at a minimum, create the appearance of 

having used his personal contacts in the Bureau as a means 

to pull strings in favor of an investigation.11 See U.S. 

11 We observe, as does Miller, that the FBI did not produce any 

“302 reports” detailing its contacts with Greg Lesser, as it would 

typically have done to memorialize contacts with a complaining witness. 

Case: 18-50449, 03/20/2020, ID: 11636042, DktEntry: 61-1, Page 15 of 24
16 UNITED STATES V. MILLER

Attorneys’ Manual § 9-27.260(A)(3) (“In determining 

whether to commence or recommend prosecution or take 

other action against a person, the attorney for the 

government should not be improperly influenced by . . . [t]he 

possible affect [sic] of the decision on the attorney’s own 

professional or personal circumstances.”). And his errors 

compounded: after helping to initiate the Miller 

investigation, Lesser faced an obvious duty to report his 

conflict of interest (and presumptive recusal) to his 

supervisor as soon as possible. See U.S. Attorney’s Manual 

§ 3-2.170 (“A United States Attorney who becomes aware 

of circumstances that might necessitate his or her recusal or 

that of the entire office, should promptly notify [the general 

counsel’s office] to discuss whether a recusal is required.”) 

(emphasis supplied); id. § 3-2.220 (same recusal rules apply 

to AUSAs). Instead, inexplicably, he waited three weeks to 

disclose his conflict, even while his father was, at the behest 

of the FBI, secretly recording a conversation with Miller.

Just as concerning are AUSA Lesser’s apparent 

continued attempts to involve himself in the Miller case even 

after the Central District’s recusal. For example, in January 

2013, AUSA Lesser called Special Agent Swanson to 

inquire, “in his capacity as part-owner (or part-shareholder) 

of MWRC,” about the status of the case.12 At some point 

after that, Greg Lesser solicited his colleagues’ help through 

his work e-mail to track down information on Mr. Miller’s 

employment history. These attempts represented a 

This implies that the FBI agents viewed Greg Lesser, at least initially,

not as a witness, but as the prosecutor.

12 Special Agent Swanson merely replied that the investigation was 

ongoing.

Case: 18-50449, 03/20/2020, ID: 11636042, DktEntry: 61-1, Page 16 of 24
UNITED STATES V. MILLER 17

continuing violation of Greg Lesser’s ethical obligations as 

an Assistant United States Attorney.

The question before us, however, is not whether AUSA 

Lesser acted improperly, which is clear. Our question is 

whether Lesser’s ethical and professional lapses entitle 

Miller to dismissal of the indictment. We review the district 

court’s denial of Miller’s motion to dismiss on Due Process 

grounds de novo, and we review for abuse of discretion the 

district court’s decision not to dismiss the indictment under 

its supervisory powers. United States v. Barrera-Moreno, 

951 F.2d 1089, 1091 (9th Cir. 1991); United States v. 

Restrepo, 930 F.2d 705, 712 (9th Cir. 1991).

Although we have held that a prosecutor may violate a 

defendant’s Due Process rights through conduct that “is so 

grossly shocking and so outrageous as to violate the 

universal sense of justice,” Restrepo, 930 F.2d at 712 

(quoting United States v. O’Connor, 737 F.2d 814, 817 (9th

Cir. 1984)), we think that the facts of this situation do not 

rise to that level, chiefly because the prosecutorial 

improprieties had no material effect on the case and because 

the Department of Justice took every step it could reasonably 

have been expected to take to cleanse the Miller prosecution 

of any possible taint from AUSA Lesser’s involvement. 

Most significantly, after the Central District of California 

recused itself from any further involvement in the 

prosecution, an AUSA from the Southern District of 

California took over the case. She had no contact with Lesser 

whatsoever, and she came to an independent decision on 

whether and how to charge Miller. And although AUSA 

Lesser’s limited attempts to involve himself in the case after 

the Central District’s recusal were more than sufficient to 

create an appearance of impropriety, there is no indication 

that Lesser in any way influenced the prosecutor who was 

Case: 18-50449, 03/20/2020, ID: 11636042, DktEntry: 61-1, Page 17 of 24
18 UNITED STATES V. MILLER

actually in charge of the case at that time. Further, even 

during the three weeks before the Central District’s recusal, 

there is no evidence that AUSA Lesser himself, rather than 

Special Agent Swanson, was directing the investigation of 

Miller.

On the same analysis, the facts of this situation do not 

implicate the Supreme Court’s holding in Young v. U.S. ex 

rel. Vuitton et Fils S.A., 481 U.S. 787 (1987), the chief case 

on which Miller relies. In Young, the Court exercised its 

supervisory powers to reverse the criminal contempt 

convictions of four defendants because the prosecutor who 

prosecuted the case and obtained those convictions was 

conflicted. Indeed, the conflict was extreme, as the 

prosecutor, specially appointed by the district court, was also 

serving as counsel to the party that was the beneficiary of the 

injunction that defendants were being prosecuted for civilly 

violating. Id. at 790. By contrast, AUSA Lesser was not in 

any material respect Miller’s prosecutor. At most, AUSA 

Lesser may have induced the FBI to look at the case more 

closely than it might otherwise have in the case’s early 

stages. In any event, given the blatant evidence of 

embezzlement, it would not have taken much to catch the 

FBI’s attention if, instead, it had been reported by Russell 

Lesser instead of Greg Lesser, as it most likely would have 

been. And all the crucial decisions in the investigation and 

prosecution were made by Special Agent Swanson and the

Southern District AUSA who took over the case from the 

Central District. The district court therefore did not abuse its 

discretion in denying Miller’s motion to dismiss the 

indictment under the court’s supervisory powers.13

13 For the same reasons, the district court also did not abuse its 

discretion in denying Miller’s motion for additional discovery beyond 

Case: 18-50449, 03/20/2020, ID: 11636042, DktEntry: 61-1, Page 18 of 24
UNITED STATES V. MILLER 19

Miller also argues that the district court erred in denying 

his motion to dismiss on the ground that the grand jury 

received materially false testimony.14 “[T]he Due Process 

Clause of the Fifth Amendment is violated when a defendant 

has to stand trial on an indictment which the government 

knows is based partially on perjured testimony, when the 

perjured testimony is material, and when jeopardy has not 

attached.” United States v. Basurto, 497 F.2d 781, 785 (9th 

Cir. 1974). But here, the false testimony Miller cites — a 

statement by an FBI agent that Russell Lesser was the 

majority shareholder of MWRC (while, in reality, Russell 

Lesser was simply a plurality shareholder, owning an 18% 

interest in the company) — was not remotely material.15 The 

defense argues that the testimony was material because it 

gave the impression that Russell Lesser had total authority 

over MWRC, thus potentially leading the grand jury to 

discount the idea that Miller believed he was authorized to 

lend himself company money. But the grand jury also heard 

testimony that Miller had admitted to Lesser that he had 

taken the funds without authorization. Moreover, the petit 

jury also considered and rejected this defense at trial, 

therefore rendering any error in the grand jury testimony 

harmless. United States v. Bingham, 653 F.3d 983, 998 (9th 

that discussed below. See United States v. Mazzarella, 784 F.3d 532, 537 

(9th Cir. 2015).

14 The district court ordered the Government to produce these 

transcripts so that the defense could examine “if, for example, Lesser 

was creating false evidence or something of that sort.”

15 Miller also points to testimony heard by the grand jury that he had 

only paid back $40,000 of the roughly $330,000 he took from MWRC, 

while in fact he eventually paid back the entire amount. This is also 

immaterial, however, because failure to repay is not an element of wire 

fraud, and intent to repay is not a defense. See supra pp. 13–14.

Case: 18-50449, 03/20/2020, ID: 11636042, DktEntry: 61-1, Page 19 of 24
20 UNITED STATES V. MILLER

Cir. 2011) (holding that, after a petit jury convicted the 

defendant on all counts, “any error in the grand jury 

proceeding connected with the charging decision is deemed 

harmless beyond a reasonable doubt”) (quoting People of 

Guam v. Muna, 999 F.2d 397, 399 (9th Cir. 1993)). The 

district court accordingly did not err in rejecting this Due 

Process claim.

III. Additional Arguments

Miller raises two additional arguments, but both are 

unpersuasive and do not provide a basis for reversal.

First, Miller challenges the district court’s denial of his 

post-conviction motion for an indicative ruling on additional 

discovery and/or a new trial based on the disclosure of a 

romantic relationship between Special Agent Swanson and 

an AUSA in the recused Central District office.16 Defense 

counsel argues that such evidence would have been material 

at trial and speculates that “[t]he relationship may also have 

16 In October 2017, after Miller’s conviction and sentencing, the 

U.S. Attorney’s Office for the Southern District of California learned of 

an investigation by the Justice Department’s Office of Professional 

Responsibility (OPR) into this previously-undisclosed relationship. The 

Southern District prosecutors on the Miller case informed defense 

counsel of this development about a month later, as this appeal was 

pending. In response, Miller requested discovery from the Government 

including the name of the AUSA; any communications between this 

AUSA, Swanson, and/or Greg Lesser concerning the Miller case; and 

any reports or conclusions from the OPR investigation. The Government 

voluntarily provided the name of the AUSA, told defense counsel that 

there were no such communications on their respective government 

email accounts and that this AUSA had not worked on the Miller case, 

and noted that the OPR investigation into Swanson had been closed. The 

district court later denied the motion.

Case: 18-50449, 03/20/2020, ID: 11636042, DktEntry: 61-1, Page 20 of 24
UNITED STATES V. MILLER 21

resulted in a significant breach of the recusal order” by 

creating a back channel to Greg Lesser.

Even if we apply de novo review,17 we hold that the 

district court correctly denied Miller’s motion for a new trial 

because Special Agent Swanson’s failure to disclose his 

relationship with an AUSA is not sufficiently material to 

warrant relief. This would have served as impeachment 

evidence at most, and even if the jury had deeply discounted 

Swanson’s testimony, we are convinced that they still would 

have convicted Miller. It is true that Swanson was an 

important Government witness; perhaps most significantly, 

Swanson testified that Miller had admitted to the FBI that he 

knew that writing himself checks from MWRC’s account 

was wrong. But this testimony was far from the only 

evidence establishing Miller’s guilt. Not least among the 

other evidence, the jury still had the wire recording of the 

November 28, 2012 conversation between Russell Lesser 

and Miller, in which Miller admits to Lesser’s 

characterization of his activities as stealing and 

embezzlement, albeit “[w]ith an intention to repay” (which, 

as noted, is no defense). The jury also heard Lesser’s 

testimony about Miller’s 2011 confession and subsequent 

17 As a threshold matter, the parties disagree on how to characterize 

Miller’s claim. The defense argues that it is a motion for a new trial based 

on a Brady violation, see Brady v. Maryland, 373 U.S. 83 (1963), while 

the Government argues that it is a Fed. R. Crim. P. 33 motion for a new 

trial based on newly-discovered evidence. The parties would therefore 

have us apply different standards of review: we would review the district 

court’s denial of a motion for a new trial based on a Brady violation de 

novo, United States v. Pelisamen, 641 F.3d 399, 408 (9th Cir. 2011), 

while we would review the district court’s denial of a motion for a new 

trial based on newly discovered evidence for abuse of discretion, United 

States v. Hinkson, 585 F.3d 1247, 1259 (9th Cir. 2009). For the sake of 

argument, we apply the standard more favorable to the defense.

Case: 18-50449, 03/20/2020, ID: 11636042, DktEntry: 61-1, Page 21 of 24
22 UNITED STATES V. MILLER

continued check-writing, as well as Miller’s handwritten 

ledger entries that disguised his payments to himself as 

transfers from one of MWRC’s bank accounts to another. All 

of this evidence was highly probative of Miller’s guilt, and 

we accordingly do not find a “reasonable probability” that 

the jury would have acquitted Miller if it had heard the 

impeachment evidence about Swanson.18 Kyles v. Whitley, 

514 U.S. 419, 421–22 (1995).

On the same analysis, we hold that the district court did 

not abuse its discretion in denying Miller’s motion for 

additional discovery, since any such discovery would not 

have produced evidence material to the outcome of the trial. 

See United States v. Rivera-Relle, 333 F.3d 914, 918 (9th 

Cir. 2003). Finally, any suggestion that the Central District 

AUSA was serving as a conduit for nefarious 

communications between Special Agent Swanson and Greg 

Lesser is pure speculation by defense counsel and does not 

merit relief.

18 The parties’ dispute about whether Miller has stated a Brady claim 

also impacts the materiality standard that we apply. Brady evidence is 

material if the admission of the suppressed evidence would result in a 

“reasonable probability” of an acquittal. Kyles, 514 U.S. at 421–22, i.e., 

“a probability sufficient to undermine confidence in the outcome of the 

trial.” United States v. Price, 566 F.3d 900, 911 (9th Cir. 2009) (citing 

United States v. Bagley, 473 U.S. 667, 682 (1985) (plurality)) (internal 

quotation marks omitted). In contrast, the bar for materiality in a Rule 33 

claim is higher. To win a new trial based on newly-discovered evidence, 

the defendant must show, among other requirements, that “the new 

evidence is not merely . . . impeaching;” and that it “would probably 

produce an acquittal.” United States v. Jackson, 209 F.3d 1103, 1106 

(9th Cir. 2000). We need not reach the question of whether Miller has 

demonstrated Brady suppression; since we hold that the evidence is not 

material under the Brady standard, a fortiori it is also not material under 

the Rule 33 standard.

Case: 18-50449, 03/20/2020, ID: 11636042, DktEntry: 61-1, Page 22 of 24
UNITED STATES V. MILLER 23

Second, Miller appeals the district court’s denial of his 

motion under Fed. R. Crim. P. 29(c) for a judgment of 

acquittal on the wire fraud counts based on insufficient 

evidence of an interstate wire communication. Rule 29(c) 

requires a trial court to enter a judgment of acquittal if the 

Government fails to present sufficient evidence to sustain a 

conviction. Sufficient evidence is that which, “view[ed] . . .

in the light most favorable to the prosecution, any rational 

trier of fact could have found the essential elements of the 

crime beyond a reasonable doubt.” United States v. Dearing, 

504 F.3d 897, 900 (9th Cir. 2007) (internal quotation marks 

and citations omitted). Because defense counsel made this 

motion at the close of the Government’s evidence and then 

renewed the motion after the verdict, this Court reviews the 

district court’s ruling de novo. Id.

We are satisfied that the Government introduced more 

than sufficient evidence for a rational juror to conclude that 

Miller utilized at least one interstate wire communication in 

furtherance of his scheme. The Government called Lynn 

Flanagan, the former operations manager at the bank where 

MWRC maintained the account from which Miller 

fraudulently withdrew funds. She testified that all checks 

deposited into or drawn out of accounts at the bank are 

processed via interstate wires, either through the Federal 

Reserve Bank in Atlanta or Kansas City or through a clearing 

bank in Wisconsin called FCN.19 This testimony is sufficient 

19 Defense counsel makes much of the fact that Flanagan’s

testimony as to the location of FCN was, read literally, ambiguous. 

Referring to FCN (the “Fiserv Clearing Network”), the Government 

asked Flanagan, “Where is Five Serve [sic] located,” and Flanagan 

answered Wisconsin. But since Flanagan never explicitly defined the 

acronym FCN, defense counsel argues that a rational juror might have 

concluded that FCN and “Five Serve” were different entities and that 

FCN might have been located within California. We think, though, that 

Case: 18-50449, 03/20/2020, ID: 11636042, DktEntry: 61-1, Page 23 of 24
24 UNITED STATES V. MILLER

evidence to establish the interstate wire element of the 

§ 1343 offenses beyond a reasonable doubt.

Conclusion

We have considered Miller’s remaining arguments and 

find them totally without merit. Accordingly, for the 

foregoing reasons, the judgment of the district court is 

AFFIRMED.

the correct meaning was obvious from the context. Moreover, the overall 

thrust of Flanagan’s testimony was that all checks drawn on an account 

at this bank travelled via interstate wire. For example, when asked 

whether “that transaction that you just described [would] still happen 

even though both the banks are in California,” Flanagan replied, “[y]es, 

it would. We did not have direct clearing.”

Case: 18-50449, 03/20/2020, ID: 11636042, DktEntry: 61-1, Page 24 of 24