FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,  No. 07-30197

Plaintiff-Appellee, D.C. No.

v.  CR-05-00270-05-

RSL TUYET THI-BACH NGUYEN,

Defendant-Appellant. OPINION 

Appeal from the United States District Court

for the Western District of Washington

Robert S. Lasnik, District Judge, Presiding

Argued and Submitted

December 8, 2008—Seattle, Washington

Filed May 15, 2009

Before: Robert R. Beezer, Ronald M. Gould, and

Consuelo M. Callahan, Circuit Judges.

Opinion by Judge Gould;

Partial Concurrence and Partial Dissent by Judge Callahan

5867
COUNSEL

Sheryl Gordon McCloud, Law Offices of Sheryl Gordon

McCloud, Seattle, Washington, for appellant Tuyet Thi-Bach

Nguyen. 

UNITED STATES v. NGUYEN 5869
Jeffrey C. Sullivan and Susan Loitz, U.S. Attorney’s Office,

Seattle, Washington, for appellee United States of America.

OPINION

GOULD, Circuit Judge:

Tuyet Nguyen (“Nguyen”) appeals her jury conviction and

sentence for conspiracy to transport stolen property in interstate commerce in violation of 18 U.S.C. § 2314, for two

counts of the transportation of stolen property in interstate

commerce in violation of 18 U.S.C. § 2314, for three counts

of the introduction of misbranded medical devices into interstate commerce in violation of 18 U.S.C. § 352(a), and for

conspiracy to commit money laundering in violation of 18

U.S.C. § 1956. We have jurisdiction under 28 U.S.C. § 1291.

We affirm in part and reverse in part, and we remand for

retrial and resentencing.

I

On July 13, 2005, a grand jury returned an indictment

against Nguyen, her husband Phu Nguyen, their company

Columbia Medical Systems, Inc. (“CMS”), and Sess Merke

(“Merke”). The indictment alleged that Tuyet and Phu

Nguyen conspired with Merke, Robert Davies (“Davies”), and

others to steal and transport medical equipment from their former employer, ATL Philips Medical Systems (“Philips”). The

indictment alleged that Nguyen had conspired to sell stolen

ultrasound probes.1 The indictment alleged that the Nguyens

resold these stolen probes through their company, CMS, after

the probes were given new fake serial numbers. Merke and

Davies withdrew from the conspiracy in 2000, but the government alleged that the conspiracy continued until 2003. 

1An ultrasound probe is the part of the ultrasound machine that comes

in contact with the patient’s body. 

5870 UNITED STATES v. NGUYEN
Davies, an unindicted co-conspirator, testified under a grant

of immunity that Phu Nguyen, Appellant’s husband, asked

him to steal probes and sell them to CMS. With the help of

Davies, the conspiracy worked its fraud as follows: Davies

would tell Philips that a customer had a broken probe that

needed replacement, even though the probe was working.

Philips would send the new probe to the customer, expecting

that the customer would ship the broken probe back. Davies

would give Phu Nguyen the customer’s old but still functioning probe, and Phu would transfer the functioning probe’s

serial numbers onto one of the defective probes in the CMS

stockroom. Then, Davies would send the defective probe to

Philips. So, at Philips’s expense, Phu Nguyen and his company, CMS, would end up with functioning probes that were

in effect stolen by fraud, and CMS would have given up only

defective probes. 

The fraudulent conspiracy was also furthered by the deception of others. Co-conspirator Merke stole Philips’s inventory

from its stockrooms. At trial, Evalyn Thomas (“Thomas”), a

Philips data entry clerk who worked for Merke, testified that

Merke removed finished probes from the “Finished Goods”

inventory without adequate explanation several times.

Thomas explained that usually when an employee took material from the Finished Goods stockroom, they would fill out

a Material Transfer Form. That form tracked where the material went. Thomas testified that it was unusual for someone in

Merke’s position to be dealing directly with customers, and it

was also odd that Merke personally pulled the stock and completed the entire form himself. According to Thomas, when

the Material Transfer Form stated the employee was crediting

the taken material to their “wash account,” the new material

was being taken to replace some old, defective material.

Therefore, a Material Transfer Form that took six parts from

Finished Goods out of the stockroom and credited the “wash

account” should also show the same number of parts going

into the “Defective Material” stockroom. Thomas testified

that this full accounting of material did not occur on several

UNITED STATES v. NGUYEN 5871
of Merke’s Material Transfer Forms. Instead, many parts “disappeared,” including forty-six ultrasound probes. 

Another Philips employee, Dave Westrich (“Westrich”),

testified that Nguyen asked him to load some of Philips’s proprietary software onto a hard drive for her. Westrich refused

and told Nguyen not to call him again. The government contended that Nguyen must have obtained the software another

way because Don Davis, a CMS customer, testified that in

June 2001, Nguyen approached him with the suggestion that

she would give him access to Philip’s software if he agreed

to guarantee a certain level of business with CMS. 

The prosecution introduced CMS business records to show

that CMS sold more probes than it purchased for 1999

through 2003. FDA Agent Borden also explained that many

Philips probes tied to CMS had false serial numbers. The

police seized several probes with false serial numbers when

executing a search warrant in December 2003. The testimony

tied other probes with false serial numbers to CMS based on

its invoices. 

The prosecution also presented witnesses who said that

having accurate serial numbers on ultrasound probes is important for FDA compliance, as well as for Philips’s inventory

management. In a contract with CMS, one company included

clauses emphasizing that CMS would only sell the company

ultrasound components with original serial numbers. Also, a

customer testified that he would return a product and refuse

to pay for it if he discovered that it did not bear the original

serial number. 

The government alleged that the Nguyens paid for these

stolen probes with cash to hide their origin. FDA Agent

Mahoney testified that the Nguyens had made out several

checks to cash with the notation “purchase probes Merke” and

“purchase probes.” These checks were drawn from CMS

accounts, and Nguyen signed and negotiated several checks.

5872 UNITED STATES v. NGUYEN
The jury heard evidence of Nguyen’s statement in which

she claimed that she and her husband did not buy any items

from Merke, and that Merke had never delivered probes to

her. Agent Borden also testified about statements that Merke

had made during Merke’s interrogation. The government elicited information about that statement on direct examination,

and Merke’s counsel elicited still more on cross-examination.

Agent Borden testified that Merke had stated that he had sold

stolen medical equipment to the Nguyens, and that he had

received money from the Nguyens, though he refused to estimate how much money. 

During closing arguments, Nguyen argued that the evidence did not establish whether she knew the probes were

stolen or that the serial numbers had been changed. 

On April 5, 2006, the jury found Nguyen guilty of conspiracy to transport stolen property in interstate commerce. The

jury convicted her of transportation of stolen property for the

shipment of probes on July 25, 2000, and August 15, 2000,

but acquitted her of those charges for the shipments occurring

on August 10, 2000, and April 3, 2002. The jury found her

guilty of introducing misbranded medical devices into interstate commerce for the shipments of probes occurring on July

25, 2000, August 10, 2000, and August 15, 2000, but acquitted her of those charges pertaining to shipments on June 18,

2001, April 3, 2002, and December 3, 2002. The jury acquitted Nguyen of all five counts of holding for sale misbranded

medical devices. Finally, the jury convicted her of conspiracy

to commit money laundering. 

The district court sentenced Nguyen to 48 months incarceration. 

II

A.

We review claims of a violation of the Confrontation

Clause de novo. United States v. Nielsen, 371 F.3d 574, 581

(9th Cir. 2004). 

UNITED STATES v. NGUYEN 5873
The parties dispute whether Nguyen preserved this claim of

error. Before trial, Nguyen made several motions in limine

and objected to the use of a statement Merke made to Agent

Borden, alleging that its admission would violate the Confrontation Clause. Nguyen objected to the admission of any

portion of Merke’s statement that alluded to her both in the

motion in limine and again at trial. The government argues

that Nguyen should have objected to Merke’s use of his own

statement when Merke’s counsel sent notice to all parties that

Merke would admit his statements. Nguyen argues that she

did not object because she understood Merke’s alert to mean

that Merke would testify, curing any Confrontation Clause

problem. Instead, Merke’s counsel elicited the statements for

which Nguyen had a continuing objection. After opening

statements at trial, the district court clarified that Nguyen did

not need to make further objection on this issue and that the

issue was preserved.2

We have held that “ ‘where the substance of an objection

has been thoroughly explored and the trial court’s ruling was

explicit and definitive, the issue is preserved for appeal.’ ”

United States v. Varela-Rivera, 279 F.3d 1174, 1177 (9th Cir.

2002) (quoting United States v. Palmer, 3 F.3d 300, 304 (9th

Cir. 1993). As we have explained, Nguyen brought the Confrontation Clause issue to the district court’s attention twice,

and the district court made a definitive ruling and then said

she did not need to object further to preserve the issue.

Accordingly, if there is Confrontation Clause error, we must

apply harmless error review. Nielsen, 371 F.3d at 581. 

2The district court stated that Nguyen “[did not] have to object to preserve [the issue].” 

The government also argues that we should apply plain error because

Nguyen did not move to sever Merke’s trial from her own. The key question, however, is whether the issue was “brought to the court’s attention.”

Fed. R. Crim. Pro. 52(b) (plain error standard). Nguyen objected before

and during trial, bringing her Confrontation Clause claim to the attention

of both the district court and the government. A motion to sever was not

necessary to avoid the plain error standard. 

5874 UNITED STATES v. NGUYEN
B

We turn to the issue of whether the Confrontation Clause

was offended by introduction of the statement made by Merke

as related by Agent Borden in her testimony. Agent Borden

testified that while at first Merke had said that he received

nothing more than lunch money, “he said a lot more things”

including that he actually had received other money from the

Nguyens, including money “that he had taken as a result of

selling equipment to them,” but he would not specify the

amount. She also testified that “equipment” included probes.

The government had previously offered to redact the portion

of Merke’s statement where he referenced accepting money

from the Nguyens for stolen equipment to avoid any Confrontation Clause related errors, but Merke’s counsel elicited the

testimony anyway. 

[1] Our Confrontation Clause analysis does not change

because a co-defendant, as opposed to the prosecutor, elicited

the hearsay statement. The Confrontation Clause gives the

accused the right “to be confronted with witnesses against

him.” U.S. Const. amend. VI; Crawford v. Washington, 541

U.S. 36, 43 (2004). The fact that Nguyen’s co-counsel elicited

the hearsay has no bearing on her right to confront her accusers. See also United States v. Mayfield, 189 F.3d 895, 901 (9th

Cir. 1999) (finding reversible error where a co-defendant’s

counsel elicited hearsay statements in violation of the Confrontation Clause). 

[2] Only hearsay statements that are testimonial implicate

the Confrontation Clause. Crawford, 541 U.S. at 68. While

the Court in Crawford did not comprehensively define testimonial statements, it stated that statements to a police officer

during interrogations qualified. Id. at 52. Merke made his

statement during Agent Borden’s interrogation, and we conclude that it was testimonial. 

[3] This testimonial statement was hearsay. The government argues that Merke’s statement that he had sold the

UNITED STATES v. NGUYEN 5875
Nguyens scrap metal was admitted to show consciousness of

guilt. The testimony, however, was broader and Agent Borden

testified that Merke had sold the Nguyens medical equipment.

This statement does not show Merke’s consciousness of guilt,

nor is the statement “obviously false.” See, e.g., United States

v. Trala, 386 F.3d 536, 544-45 (3rd Cir. 2004) (holding in a

case where the government sought to prove bank robbery,

conflicting hearsay statements by a co-defendant regarding

the origin of the money were admitted to show consciousness

of guilt and were “obviously false”). Merke’s statement in

which he said that he had received some money from the

Nguyens but denied receiving half a million dollars was also

not “obviously false.” See id. The government even acknowledged that this statement raised potential Confrontation

Clause problems and offered to redact it. 

The government argues that Merke’s statement was not

inculpatory. But this is not controlling on the existence of

error. Crawford does not require that a statement inculpate a

defendant to trigger error under the Confrontation Clause.

Simply, Confrontation Clause error occurs at admission of a

testimonial statement without an opportunity to crossexamine. Crawford, 541 U.S. at 68-69. If the statement is not

inculpatory, that might be probative of the harmlessness of an

error, but not of the existence of a Confrontation Clause error.

[4] Because Merke’s statement was testimonial and admitted for its truth, we hold its admission at Nguyen’s trial was

error. 

C

[5] The prosecution bears the burden of proving the error

was harmless beyond a reasonable doubt. United States v. Gillam, 167 F.3d 1273, 1277 (9th Cir. 1999) (“Once we find a

[Confrontation Clause] error, the prosecution has the burden

of showing that the error was harmless beyond a reasonable

doubt.”); see also Chapman v. California, 386 U.S. 18, 24

5876 UNITED STATES v. NGUYEN
(1967). “An assessment of harmlessness cannot include consideration of whether the witness’ testimony would have been

unchanged, or the jury’s assessment unaltered, had there been

confrontation; such an inquiry would obviously involve pure

speculation, and harmlessness must therefore be determined

on the basis of the remaining evidence.” Coy v. Iowa, 487

U.S. 1012, 1021-22 (1988). “Whether an error is harmless

depends on a variety of factors, including whether the testimony was cumulative, the presence or absence of corroborating or contradicting the testimony on material points, the

extent of cross-examination, and of course, the overall

strength of the prosecution’s case.” Mayfield, 189 F.3d at 906

(citation and internal quotations omitted). 

The government argues that the error in admitting the hearsay statement was harmless.3

 It contends that the evidence

established that Merke had stolen probes from Philips, that

both Nguyens had signed checks to Merke, some of which

had “purchase probes Merke” on the memo line, that CMS

had sold more probes than it had bought, that Phu Nguyen had

solicited Davies to steal probes for CMS, that Tuyet Nguyen

had solicited Westrich to steal Philips software for CMS, and

that Tuyet Nguyen falsely denied doing any business with

Merke. The statement that Merke received money from the

Nguyens in exchange for medical equipment was the most

persuasive evidence that tied Tuyet Nguyen to the stolen

probes, and the only testimony that showed her knowledge

that the probes were stolen. 

3The government also argues that the limiting instruction that these

statements could only be used against Merke cured any error. In Bruton,

the Court held that a case of the admission of a confession that implicates

a co-defendant and where the co-defendant cannot cross examine the confessor was a situation “in which the risk that the jury will not, or cannot,

follow instructions is so great . . . that the practical and human limitations

of the jury system cannot be ignored.” Bruton v. United States, 391 U.S.

123, 135 (1968). Therefore, we do not rely on the limiting instruction to

cure the error. 

UNITED STATES v. NGUYEN 5877
[6] We cannot say that the government carried its burden

of establishing this error was harmless beyond a reasonable

doubt. Specifically, the hearsay testimony supported the government’s case that Nguyen knew that the probes were stolen.

Her knowledge was an element of her convictions for the

transportation of stolen property and, therefore, necessary to

her conspiracy convictions. Nguyen’s closing argument to the

jury centered on her contention that she did not know the

probes were stolen. While the jury could have concluded that

she knew the probes were stolen absent the hearsay testimony,

the government has not proven that the jury would have so

concluded beyond a reasonable doubt. We reverse and

remand Nguyen’s convictions for conspiracy to transport

stolen property, conspiracy to commit money laundering, and

the transportation of stolen property because Nguyen was not

able to cross-examine Merke about his statement. This Confrontation Clause error does not affect her convictions for

introducing a misbranded medical device into interstate commerce.4

III

A.

We next address the conviction for felony misbranding of

medical devices. The problem before us here is that the jury

instruction that defined felony misbranding of medical

devices did not include a materiality element. Nguyen did not

4Merke’s statements do not affect the jury’s verdict that Nguyen introduced misbranded medical devices into interstate commerce. For the jury

to find that Nguyen committed this crime, it must find: that Nguyen (1)

introduced (2) a medical device that is (3) materially adulterated or misbranded, and (4) that she acted with intent to defraud or mislead. 21

U.S.C. § 331(a); see also United States v. Watkins, 278 F.3d 961, 964 (9th

Cir. 2002). Nguyen did not need to know the probes had been stolen to

commit this crime, only that their serial numbers had been altered. The

hearsay statements do not discuss the probes’ serial numbers. 

5878 UNITED STATES v. NGUYEN
object to the instruction and argues that we should apply plain

error review. 

The government to the contrary argues waiver and relies

upon the invited error doctrine, which in an appropriate case

allows us to decline to review instructions where a defendant

invited the error and relinquished a known right. See United

States v. Perez, 116 F.3d 840, 845 (9th Cir. 1997). As the

court in Perez stated, “[f]orfeited rights are reviewable for

plain error, while waived rights are not.” Id. (citation omitted). Waiver occurs where a defendant “considered the controlling law, or omitted element, and, in spite of being aware

of the applicable law, proposed or accepted a flawed instruction.” Id.

Nguyen proposed another instruction, Instruction 30, and

the government contends that this instruction shows that she

knew that materiality was an element of felony misbranding.

Instruction 30, however, only states that any omission must be

material, it does not say that an affirmative statement need be

material. Therefore, it is not clear that Nguyen considered the

controlling law and accepted the flawed instruction. We conclude that the waiver argument should be rejected and instead

we accept Nguyen’s argument that we should review the jury

instruction on felony misbranding of medical devices for plain

error.

B

To prevail on plain error review, Nguyen must show (1)

that the proceedings below involved error, (2) that the error

is plain, and (3) that the error affected the substantial rights

of the aggrieved party. See United States v. Olano, 507 U.S.

725, 732-35 (1993). In addition, a defendant must also show

that the error “ ‘seriously affect[s] the fairness, integrity or

public reputation of judicial proceedings’ before we will exercise our discretion pursuant to Rule 52(b) to correct the plain

error.” United States v. Alferahin, 433 F.3d 1148, 1154 (9th

UNITED STATES v. NGUYEN 5879
Cir. 2006) (en banc) (citing Olano, 507 U.S. at 736); see also

United States v. Hai Waknine, 543 F.3d 546, 551 (2008). 

[7] Materiality indisputably is an element of felony misbranding of medical devices. United States v. Watkins, 278

F.3d 961, 969 (9th Cir. 2002). It is thus somewhat surprising

that the government’s proposed instructions did not include

this element. The government concedes that Instruction 22 did

not include that element but argues that this omission was

cured by Instruction 30. That instruction stated: 

If any article is alleged to be misbranded because the

labeling or advertising is misleading, then in determining whether the labeling or advertising is misleading there shall be taken into account (among

other things) not only representations made or suggested by statement, word, design, device, or any

combination thereof, but also the extent to which the

labeling or advertising fails to reveal facts material

in the light of such representations or material with

respect to consequences which may result from the

use of the article to which the labeling or advertising

relates under the conditions of use prescribed in the

labeling or advertising thereof or under such conditions of use as are customary or usual. 

This instruction does not cure the lack of materiality element.

It states that the article could be misbranded because of a misstatement or a failure to state something that is material.

Therefore, we hold the government’s argument is unavailing

and that there was error. The instructions did not include the

materiality element, this was an error and it is as simple as

that.

C

It remains to be determined whether this error requires

relief under the plain error standard. We believe that the first

5880 UNITED STATES v. NGUYEN
element of that standard is met. An error is plain when it is

“clear” or “obvious” under the law. Olano, 507 U.S. at 734.

We have held that “a district court’s error is plain when its

jury instructions fail to incorporate an element that has been

clearly established by Ninth Circuit precedent.” Alferahin,

433 F.3d at 1157 (citation omitted). We hold that disregard of

the materiality element for felony misbranding of medical

devices is a plain error. 

[8] We turn next to the third element of the plain error standard, whether substantial rights are affected, and it is here that

Nguyen’s appeal falters. “[T]he omission of an element from

jury instructions does not always ‘affect’ a defendant’s substantial rights.” Id. (citing United States v. Neder, 527 U.S. 1,

15 (1999)). Nguyen’s closing statement to the jury did not

argue that the changed serial numbers were immaterial—it

focused on the point that the numbers may have been changed

by someone else and that Nguyen may have not known about

it. Moreover, the government presented plenty of evidence to

support a finding of materiality. Two customers testified that

they would not buy ultrasound probes without original serial

numbers. One of CMS’s customers included a clause in its

contract stating that all probes would have original serial

numbers. The testimony also demonstrated that the probes’

original serial numbers were critical for FDA compliance and

in the event of a recall. Thus, there was overwhelming evidence of the materiality of the altered serial numbers and very

little evidence that these changes were unimportant.5

5Nguyen argues that there was conflicting and slim evidence regarding

serial numbers’ materiality. She states that there has never been a recall

of ultrasound probes and that some evidence demonstrated that serial numbers were not unique to individual probes. She argues that serial numbers

were for inventory control above anything else. But it is a sufficient

answer that a recall could have occurred, and the serial numbers, whether

unique or not, would have aided customers in identifying whether their

probes were recalled. 

UNITED STATES v. NGUYEN 5881
[9] Because of the strong evidence on materiality and

because Nguyen did not contest materiality of altered serial

numbers in her presentations to the jury, we hold that this

error did not affect Nguyen’s substantial rights.

IV

[10] For the forgoing reasons, we conclude that Nguyen’s

Confrontation Clause rights were violated and we REVERSE

her convictions for conspiracy to transport stolen property, the

transportation of stolen property, and conspiracy to commit

money laundering. Her remaining convictions for felony misbranding of medical devices are AFFIRMED. We REMAND

for retrial, if the government wishes to pursue the charges that

we reverse, and for resentencing. 

REVERSED IN PART, AFFIRMED IN PART, and

REMANDED.

CALLAHAN, Circuit Judge, concurring in part and dissenting in part: 

I agree with the majority that Tuyet Nguyen (“Nguyen”)

adequately preserved in the district court her claim that the

admission of the statement by Sess Merke to Agent Borden

violated the Confrontation Clause. I also agree that the admission of Merke’s statement offended the Confrontation Clause.

I disagree, however, with the majority’s conclusion that this

error was not harmless beyond a reasonable doubt. For this

reason, I dissent in part from the majority’s opinion and

would affirm Nguyen’s convictions for conspiracy to transport stolen property, conspiracy to commit money laundering,

and transportation of stolen property.1

1

I agree with the majority’s conclusion that Nguyen’s conviction for felony misbranding of medical devices should not be disturbed. Maj. Op.

5878-82. 

5882 UNITED STATES v. NGUYEN
I.

Confrontation Clause errors are subject to harmless error

review. United States v. Schoneberg, 396 F.3d 1036, 1044

(9th Cir. 2005). “[A]n otherwise valid conviction should not

be set aside if the reviewing court may confidently say, on the

whole record, that the constitutional error was harmless

beyond a reasonable doubt.” Delaware v. Van Arsdall, 475

U.S. 673, 681 (1986). To assess the harmlessness of an error,

we inquire “whether, assuming that the damaging potential of

the cross-examination were fully realized,” we “might nonetheless say that the error was harmless beyond a reasonable

doubt.” Id. at 684. Harmlessness is determined on the basis of

the remaining evidence, Coy v. Iowa, 487 U.S. 1012, 1022

(1988), and we consider a number of factors including “the

importance of the witness’ testimony in the prosecution’s

case, whether the testimony was cumulative, the presence or

absence of evidence corroborating or contradicting the testimony of the witness on material points, the extent of crossexamination otherwise permitted, and, of course, the overall

strength of the prosecution’s case.” Van Arsdall, 475 U.S. at

684. 

The majority initially asserts that “the most persuasive evidence that tied Tuyet Nguyen to the stolen probes, and the

only testimony that showed her knowledge that the probes

were stolen” was Merke’s statement, as related by Agent Borden, that Merke received money from the Nguyens in

exchange for medical equipment.2 Maj. Op. at 5877. The

2The panel majority and I have a difference of opinion regarding the

persuasiveness of the evidence in the record. Although the majority finds

Merke’s hearsay statement to be the most persuasive evidence in the

record, other evidence in the record, including significant circumstantial

evidence, establishes the harmlessness of the Confrontation Clause error.

The government is not required to prove knowledge by direct evidence,

and may rely on circumstantial evidence. See United States v. Santos, 128

S. Ct. 2020, 2029 (2008) (plurality) (stating that knowledge “must almost

UNITED STATES v. NGUYEN 5883
majority’s subsequent discussion is more nuanced and determines that, absent the hearsay testimony, the government has

not proven that the jury would have concluded beyond a reasonable doubt that Nguyen knew the probes were stolen.3

 Id.

at 5878. 

I respectfully disagree. Based on all of the remaining evidence in the record, I conclude that any reasonable jury would

have connected Nguyen to the stolen probes and determined

that Nguyen knew the probes were stolen, even without

Merke’s hearsay statement. The record demonstrates that

Merke stole the probes, sold and transferred them to Nguyen

and her company, Columbia Medical Systems, Inc. (“CMS”),

and that Nguyen then sold the probes in interstate commerce.

Evidence in the record indicates that Merke stole functional

probes from Philips and sold them to CMS and Nguyen. Documentary evidence and the testimony of Evalyn Thomas, a

Philips data entry clerk, establish that equipment, including

forty-six ultrasound probes, “disappeared” and could not be

accounted for while Merke was in charge of Philips’s Defective Materials storeroom and Finished Goods storeroom. See

Maj. Op. at 5871-72. Also, documentary evidence in the form

always” be proven by circumstantial evidence); Desert Palace, Inc. v.

Costa, 539 U.S. 90, 100 (2003) (“[W]e have never questioned the sufficiency of circumstantial evidence in support of a criminal conviction, even

though proof beyond a reasonable doubt is required.”); United States v.

Wright, 215 F.3d 1020, 1028 (9th Cir. 2000) (stating that the government

need not prove defendant’s knowledge of the objective of a conspiracy

with direct evidence, and that inferences based on circumstantial evidence

would sustain the conspiracy conviction); cf. United States v. Santos, 527

F.3d 1003, 1009 (9th Cir. 2008) (“The government is not required to produce direct evidence of the defendant’s intent; rather, it may provide circumstantial evidence from which the district court can draw reasonable

inferences.”). 

3An element of the crime of interstate transportation of stolen goods

under 18 U.S.C. § 2314 is knowledge of the stolen nature of the transported goods. 

5884 UNITED STATES v. NGUYEN
of shipping-related documents indicates that Merke repeatedly

shipped packages to CMS and/or Tuyet Nguyen. The record

contains numerous shipping invoices, logs, and waybills that

connect Merke to Nguyen and CMS. 

Furthermore, the government presented evidence of CMS’s

practice of using checks made payable to “Cash” to purchase

probes and other ultrasound equipment, and testimony that

this was an unusual practice in the industry given that it signaled potential illegal conduct. Of these checks payable to

“Cash” on CMS’s account, 112 of them, totaling roughly

$512,000, include a notation “Purchase probes (Merke)” or

some similar descriptor. Tuyet Nguyen signed forty-nine of

these 112 checks.4 This evidence overwhelmingly links

Nguyen to the probes, and to Merke. The evidence of the

checks payable to “Cash” and referencing both probes and

Merke also directly contradicts Nguyen’s statement during a

police interview that she had never purchased or taken delivery of any items, including probes, from Merke. 

The government also produced evidence that CMS sold

many more ultrasound probes than it recorded as purchased.

For example, a comparison of CMS’s purchase and sales

reports for specific, relevant equipment models indicates that

for the year 1999, CMS purchased nine items and sold sixty

items. For the year 2000, there were seven purchases and

eighty-three sales. In 2001, there were four purchases and

forty sales. In 2002, CMS purchased thirty-three items and

sold fifty-four items. In 2003, there were no purchases, yet

fifty-eight sales.5

4Altogether, the record contains evidence of over one million dollars

worth of checks payable to “Cash” and cashier’s checks, all of which were

drawn on CMS’s accounts and bore some notation related to the purchase

of equipment. 

5The illegality of the operation is supported by the testimony of FDA

Agent Borden that, based on a comparison of physical evidence obtained

during the execution of a search warrant and documentary evidence from

CMS, many Philips probes tied to CMS had false serial numbers. 

UNITED STATES v. NGUYEN 5885
In addition, the government produced evidence of the

Nguyens’ other attempts to facilitate their criminal scheme.

First, as the majority notes, Phu Nguyen, Tuyet Nguyen’s

husband and business partner in CMS, solicited Robert

Davies, a Philips employee, to steal ultrasound probes for

CMS. See Maj. Op. at 5870-71. Second, Tuyet Nguyen solicited Dave Westrich, her former colleague from Philips, to

steal Philips’s proprietary software for her or CMS’s use. 

Based on the entire record, I conclude that the Confrontation Clause error was harmless beyond a reasonable doubt. As

the Supreme Court recognized in Santos, knowledge “must

almost always” be proven by circumstantial evidence. 128

S. Ct. at 2029. It is unlikely that the government would have

ever been able to get Nguyen to confess outright that she

knew the probes were stolen. But such a confession was not

required to convict Nguyen. The jury could, and I believe

would, draw inferences from the evidence presented to establish the connection between Nguyen and the probes, and to

establish Nguyen’s knowledge of the stolen nature of the

probes that CMS had acquired and sold. Accordingly, I would

find that the Confrontation Clause error here was harmless

beyond a reasonable doubt.

II.

Because I would affirm the jury’s verdict in its entirety, I

proceed to address Nguyen’s remaining substantive challenges on appeal.6

 These challenges to her money laundering

conspiracy conviction, which she did not raise in the district

court, are subject to plain error review. “Under plain-error

review, reversal is permitted only when there is (1) error that

6The majority opinion does not address these remaining issues, which

relate to Nguyen’s conviction for conspiracy to launder money, because

its reversal on the Confrontation Clause issue obviates the need to do so.

Nonetheless, as the issues have been briefed and argued, an evaluation of

their merits may assist the district court should the matter be retried. 

5886 UNITED STATES v. NGUYEN
is (2) plain, (3) affects substantial rights, and (4) seriously

affects the fairness, integrity, or public reputation of judicial

proceedings.” United States v. Cruz, 554 F.3d 840, 845 (9th

Cir. 2009) (citations and internal quotations omitted). “An

error is plain if it is ‘contrary to the law at the time of appeal

. . . .’ ” United States v. Mejia, 559 F.3d 1113, 1115 (9th Cir.

2009) (quoting Johnson v. United States, 520 U.S. 461, 468

(1997)). To be plain, the error must be “clear-cut” or “obvious.” See United States v. Zalapa, 509 F.3d 1060, 1064 (9th

Cir. 2007).)

A.

On appeal, Nguyen contends that the district court improperly instructed the jury with respect to the charge of conspiracy to launder money in violation of 18 U.S.C.

§§ 1956(a)(1)(A), 1956(a)(1)(B), and 1956(h). She argues that

although the district court’s instruction containing the elements of the money laundering conspiracy offense, Instruction 20, correctly stated that it is a specific intent crime, the

district court committed reversible error by providing a subsequent instruction regarding knowledge, Instruction 25.

Instruction 25 allegedly “eviscerated” the specific intent element stated in Instruction 20. Instruction 20 states, in relevant

part, that the government must prove that:

(2) the defendant knew that the property represented the proceeds of interstate transportation of

stolen property; and 

(3) the defendant knew the transaction was

designed in whole or in part to conceal or disguise

the nature, source, ownership, or control of the proceeds of interstate transportation of stolen medical

devices, or the defendant acted with the intent to promote the carrying on of interstate transportation of

stolen medical devices . . . . 

UNITED STATES v. NGUYEN 5887
Instruction 25, however, states: “An act is done knowingly if

the defendant is aware of the act and does not act through

ignorance, mistake, or accident. You may consider evidence

of the defendant’s words, acts, or omissions, along with all

the other evidence, in deciding whether the defendant acted

knowingly.” Thus, Nguyen asserts that Instruction 25 negated

the specific intent requirement by allowing the jury to determine that she acted “knowingly” through “ignorance, mistake

or accident.” 

Nguyen’s claim of error is based on our decision in United

States v. Stein, where we held that a jury instruction on general knowledge that followed a correct money laundering

instruction rendered the instructions, as a whole, erroneous

because they effectively omitted an element of the offense.

See 37 F.3d 1407, 1410 (9th. Cir. 1994). However, unlike

Instruction 25 in this case, the general knowledge instruction

in Stein contained a second sentence, which rendered the Stein

instructions problematic. There, the general knowledge

instruction stated that “an act is done knowingly if the defendant is aware of the act and doesn’t act through ignorance,

mistake or accident. The Government is not required to prove

that the defendant knew his act or omissions were unlawful.”

Id. at 1410 (emphasis added). The second sentence was the

basis of the Stein court’s conclusion that the jury could have

convicted Stein without finding he knew the predicate acts

were unlawful. Id. Because Instruction 25 does not contain

the language that provided the taint in Stein, there was no

error. Moreover, even if there was some error, it was not plain

error; any possible error was not “so clear-cut, so obvious, a

competent district judge should be able to avoid it without

benefit of objection.” Zalapa, 509 F.3d at 1064 (citation and

quotation marks omitted). Accordingly, I would find no

instructional error.

5888 UNITED STATES v. NGUYEN
B.

Nguyen belatedly challenges the sufficiency of evidence

supporting her conviction for conspiracy to launder money,

relying on the United States Supreme Court’s recent decision

in United States v. Santos, 128 S. Ct. 2020 (2008) (plurality).7

Although the panel majority does not reach this issue, I conclude that the error alleged by Nguyen was not plain error. 

In Santos, the Court considered “whether the term ‘proceeds’ used in the federal money-laundering statute, 18

U.S.C. § 1956(a)(1), means ‘receipts’ or ‘profits.’ ” 128 S. Ct.

at 2022. Santos involved the operation of a criminal lottery,

and Santos was convicted of money laundering based on his

payments of money to lottery winners and employees. See id.

at 2022-23. Four Justices found that the term “proceeds” was

ambiguous and, applying the rule of lenity, concluded that the

term “proceeds” in 18 U.S.C. § 1956(a)(1) universally means

“profits,” and not “gross receipts.” See id. at 2023-25. Under

the plurality’s view, “to establish the proceeds element under

the ‘profits’ interpretation, the prosecution needs to show . . .

that a single instance of specified unlawful activity was profitable and gave rise to the money involved in a charged transaction.” Id. at 2029. 

However, Justice Stevens, whose separate concurrence provided the fifth vote in Santos, took the narrower view that

Congress could have intended the term “proceeds” to have

different meanings in different contexts and, as a result, “proceeds” might mean “profits” in the illegal lottery context, but

might not have that meaning in the context of another predi7Nguyen waited until November 24, 2008, just prior to oral argument,

to raise this argument. Although the Supreme Court decided Santos on

June 2, 2008, Nguyen did not raise the Santos issue in her reply brief,

which was filed on August 5, 2008. Nonetheless, no authority appears to

preclude consideration of this issue in light of the intervening decision by

the Supreme Court. 

UNITED STATES v. NGUYEN 5889
cate crime. Id. at 2031-32 (Stevens, J., concurring) (“[T]his

Court need not pick a single definition of ‘proceeds’ applicable to every unlawful activity, no matter how incongruous

some applications may be.”). Thus, Justice Stevens, agreeing

with the analysis of four dissenting Justices, stated that “the

legislative history of § 1956 makes it clear that Congress

intended the term ‘proceeds’ to include gross revenues from

the sale of contraband and the operation of organized crime

syndicates involving such sales.” Id. at 2032; see also id. at

2035 & n.1 (Alito, J., dissenting). Although Justice Stevens

and the plurality contest the stare decisis effect of his opinion,

the plurality recognizes that Justice Stevens’s narrower concurrence limits the Court’s holding. Compare id. at 2031, with

id. at 2034 n.7. 

Based on the plurality’s opinion in Santos, Nguyen argues

that the record does not support her conviction for conspiracy

to launder money because it does not contain evidence demonstrating that she used profits to further or conceal the conspiracy. 

Two aspects of the Santos decision indicate that any

alleged error in this case is not so clear-cut or obvious as to

render it “plain error.” First, the multiple opinions in Santos

do not conclusively define “proceeds.” Justice Stevens’s concurring opinion suggests that “proceeds” does not mean “profits” in the context of the sale of contraband and the operation

of a criminal organization, which is at issue here. Moreover,

his view is consistent with the views of four dissenting Justices. Thus, the district court’s definition of “proceeds,” if

error, cannot be considered plain error. See United States v.

Fernandez, 559 F.3d 303, 316 (5th Cir. 2009) (“While Justice

Stevens and the plurality disagreed over the precise precedential effect of his statement, the uncertainty renders any error

here not ‘plain.’ ”); accord United States v. Brown, 553 F.3d

768, 785 (5th Cir. 2008); see also Ninth Circuit Model Jury

Instruction 8.120 Financial Transaction to Promote Unlawful

Activity, Comment (Mar. 2009) (“Whether the instruction

5890 UNITED STATES v. NGUYEN
must now be modified in all or some other cases to define

‘proceeds’ to mean ‘profits’ pursuant to Santos is unclear.”).

Second, neither the Santos plurality or Justice Stevens’s

concurring opinion addressed the quantum of evidence

required to support a conviction for the charge of conspiracy

to launder money, which is at issue here, as opposed to a conviction for money laundering. See Santos, 128 S. Ct. at 2023

n.1. The plurality specifically stated that it was not addressing

the possibility that the convictions for conspiracy to launder

money at issue there would stand in light of its holding

regarding the meaning of “proceeds.” Id. 

Accordingly, despite the Supreme Court’s opinion in Santos, the definition of proceeds under which Nguyen was convicted, if erroneous, was not plain error.

* * *

Based on the foregoing, I respectfully dissent in part. I

would find that the violation of the Confrontation Clause was

harmless error, and that Nguyen’s conviction for conspiracy

to launder money did not involve plain error. Nguyen’s convictions should be affirmed in their entirety.

UNITED STATES v. NGUYEN 5891