United States Court of Appeals

For the First Circuit

No. 10-2091

UNITED STATES OF AMERICA,

Appellee,

v.

SENG TAN, a/k/a Seng Kim Srun, a/k/a Seng Srunk,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Richard G. Stearns, U.S. District Judge]

Before

Boudin, Stahl, and Thompson,

Circuit Judges.

Joshua L. Gordon, with whom Law Office of Joshua L. Gordon was

on brief, for appellant.

Jack W. Pirozzolo, First Assistant United States Attorney,

with whom Carmen M. Ortiz, United States Attorney, was on brief,

for appellant.

March 23, 2012
THOMPSON, Circuit Judge.

SETTING THE STAGE

A federal jury convicted James Bunchan and Seng Tan, a

husband and wife team, of numerous mail-fraud, money-laundering,

and conspiracy crimes committed in furtherance of a classic pyramid

scheme that swindled some 500 people out of roughly $20,000,000 in

the early to mid-2000s. See 18 U.S.C. §§ 1341, 1957, 371. Fellow

scammer Christian Rochon pled guilty to similar charges on the

first day of trial, and his testimony in the prosecution's case

helped seal the couple's fate. We affirmed Bunchan's convictions

in United States v. Bunchan, 580 F.3d 66, 67 (1st Cir. 2009), and

now affirm Tan's. Before we explain why, we present the facts in

the light most favorable to the verdict, see id., borrowing freely

from our earlier opinion in Bunchan.

THE SCHEME

Bunchan founded and owned two self-styled multi-level

marketing (MLM) companies – World Marketing Direct Selling (WMDS)

and Oneuniverseonline (1UOL) – that supposedly made a mint selling

health and dietary supplements. In a legit MLM venture – think

Avon, Mary Kay, Amway (companies Tan had worked for) – each person

who joins the sales force also becomes a recruiter who brings in

other persons underneath her. But the venture survives by making

money off of product sales, not off of new recruits. Not so with

WMDS and 1UOL. Neither sold much of anything, and both raised gobs

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of money almost exclusively by recruiting new investors, also

called members.

Here is how it all worked. Bunchan tasked Tan with

drumming up new members, something she was born to do, apparently. 

Both she and Bunchan are Cambodian émigrés. And they focused their

recruitment efforts primarily on Cambodians living here, many of

whom were first-generation Cambodian-Americans who had limited

educations and spoke little English. As "CEO Executive National

Marketing Director," Tan ran informational seminars for potential

investors, meeting them at hotels, their homes, and elsewhere. She

usually made quite an entrance, showing up in a chauffeur-driven

Mercedes. And she spoke to the attendees in their native language

(Khmer), stressing their common background too (including their

shared experiences living in Cambodia during the murderous reign of

the Khmer Rouge).

Tan's pitch was quite attractive. She and Bunchan were

millionaires, she said, and the "gods" had sent her to make "the

Cambodian people" millionaires too. She bragged about how

profitable both companies were thanks to high product sales, which

earned members at the "Distributor" level fantastic sales

commissions. But a member did not have to sell a single item to

make money, she explained. For a lump-sum payment of $26,347.86,

an investor could skip the Distributor level, become a "Director

I," and get an immediate "bonus" of $2,797, plus $300 every month

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for the rest of her life, her children's lives, their children's

lives, and so on. Promotional pamphlets also promised investors

that if they recruited more members and kicked in more money (any

where from $130,000-$160,000), they could become "Gold Directors"

and earn even higher never-ending monthly payouts (something like

$2,500 a month). And Tan urged persons short on cash to take out

second mortgages or home-equity loans or to borrow money from their

retirement accounts to finance their investments, and more than 150

people did. She even had members sign forms so that the loan

proceeds would be wired directly to WMDS or 1UOL.

When prospective investors asked her point-blank whether

they had to sell company merchandise to get money, Tan answered no. 

She and Bunchan reduced their promises to writing, with Tan even

signing letters guaranteeing monthly returns basically forever.1

Without correcting spelling or other errors, we quote from 1

a document covering the $26,347.86 lump-sum "investment" that

Bunchan created and Tan discussed with investors:

You will get $300.00 each and every month for the rest of

your life and pass on down to your children after your

death. . . . Our National Marketing Director of [WMDS]

knows exactly how you feel about your $26,347.86 which

becomes a permanent investment with [WMDS]. . . . You

should not be worry about loosing your one of a life time

$26,347.86 investment at all. [WMDS] has an absolute

responsibility to take care you and your family for life. 

Your investment can be inherited to your children and

their generation to come. . . . Because you are the

owner of [WMDS] it is completely different from investing

in stock that will go up or down and loose money . . . . 

[WMDS] urges you to sign up now or you will miss your

best chance of fulfilling your American Dream.

(Capitalization in original removed.) And we offer this snippet

from one of Tan's many signed letters:

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One member who got cold feet and asked for her investment back

received a letter from Tan saying that she (Tan) would return her

money if WMDS went belly up. At trial Tan claimed that she never

made any promises like these, and when confronted on crossexamination with one of her many letters that showed just the

opposite, she claimed that she did not have her glasses on when she

signed it and so did not know what it said. 

The scheme started out swimmingly. WMDS and 1UOL used

newly-invested money to trick old investors into thinking that the

good times were here to stay. Not knowing any better, members were

ecstatic. Bunchan and Tan were too, obviously. And with cash

pouring in, the pair used the companies' coffers as their own

personal piggy bank. Bunchan lived lavishly – buying expensive

cars, a fancy yacht, and a home in Miami; jet-setting to exciting

vacation destinations; spending $150,000 on diamonds and $23,000 on

hairpieces; and dropping over $3,800,000 at casinos throughout the

country, including $238,370 in one day – mostly by siphoning money

from investor-funded company accounts. Tan was no slouch when it

came to blowing through investor money either (though she was not

quite in Bunchan's league), spending thousands on designer clothes,

In acceptance of $150,000 1UOL promises to remit to Wayne

Peterson the amount of $4400 beginning on October 15, 2005 and

continuing every month for [his] life . . . . Upon [his]

death . . . such payments shall be made to his estate.

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for example. Even the companies' "President," Christian Rochon,

got in on the act. 

2

But Tan's promises were too good to be true. She started

having trouble signing up new investors. So WMDS and 1UOL stopped

mailing out the monthly checks. Members revolted, naturally. Tan

tried to quell the uprising, blaming the "delay" on banking

glitches caused by Hurricane Katrina and telling members that they

would get their checks soon – out-and-out lies, the record reveals. 

Worse still, after getting an earful from irate investors, Tan flew

to Minnesota and raked in hundreds of thousands of dollars –

bilking her son-in-law out of $150,000 and his friend out of

$300,000 – making the same false promises of unending returns she

had made before. And she herself decided which lucky member would

get a check from the new money – an ill-conceived stopgap measure,

it turns out. 

By the time the scam imploded, roughly 500 investors had

lost a total of $20,000,000, give or take. Tan's actions led to

A high-school graduate, Rochon became president (in name 2

only, though) for one reason, and one reason only: Bunchan wanted

an "American face" for his companies, and his neighbor Rochon (a

Caucasian of Canadian decent) apparently fit the bill. And after

renting Rochon a suit jacket and taking him to a professional

photographer, Bunchan had Rochon's photo plastered all over the

companies' promotional pamphlets.

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her arrest and indictment, then to her trial and conviction, and

now to her appeal and this opinion.3

TAN'S APPEAL

Tan offers many reasons for reversing her judgment of

conviction. We group her various arguments into two broad

categories: claims of insufficient evidence on certain counts and

of a fatal variance between the conspiracy charged in the

indictment and the proof at trial. None of her arguments has any

merit, however.

(1)

The Sufficiency Issues

Challenging the sufficiency of the evidence is typically

an uphill battle, with a tough standard. A defendant who has

preserved the issue (like Tan) must convince us that even after

crediting the prosecution's witnesses and ceding all reasonable

inferences in its favor, no sensible jury could have convicted on

the evidence presented. See, e.g., United States v. Aranjo, 603

F.3d 112, 116 (1st Cir. 2010). And raising a plausible theory of

innocence does the defendant no good, because the issue is not

whether a jury rationally could have acquitted but whether it

rationally could have found guilt beyond a reasonable doubt. See,

e.g., United States v. Manor, 633 F.3d 11, 13-14 (1st Cir. 2011). 

A district judge sentenced Tan to 20 years in prison and 2

3

years of supervised release, and he also ordered her to pay

$19,103,121.73 in restitution, jointly and severally with Bunchan

and Rochon.

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With this in mind, we turn to Tan's sufficiency claims, which we

review de novo. See, e.g., id. at 13. 

(a)

Knowledge

As is fairly common in cases of this kind, see United

States v. Griggs, 569 F.3d 341, 343 (7th Cir. 2009) (Posner, J.),

Tan insists that she did not know that she was participating in a

pyramid scam. And, she says, because she had no knowledge of

Bunchan's double-dealing, the evidence could not support her

conspiracy, mail-fraud, and money-laundering convictions.4

Relying principally on her testimony at trial, Tan's noknowledge argument runs something like this. She neither owned nor

ran WMDS or 1UOL. She was not involved in their day-to-day

operations either: she did not set company policy, signed no

company checks, and had no access to company financials – all of

which shows that her "CEO" title was nothing more than an

honorific. She may have had a hand in deciding "which checks went

out from WMDS/1UOL," but she did not have any say in who got

"checks forming the mail fraud convictions." Also, she had married

Bunchan because she was lonely, not because she wanted in on his

con game. And because of cultural taboos, she never discussed

Guilty knowledge is a state-of-mind requirement for each of 4

these crimes. See United States v. Yefsky, 994 F.2d 885, 890 (1st

Cir. 1993) (conspiracy); United States v. Pimental, 380 F.3d 575,

584 (1st Cir. 2004) (mail fraud); United States v. Bucci, 582 F.3d

108, 116 (1st Cir. 2009) (money laundering).

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company "issues" with him. Ultimately, she had no reason to

suspect that anything was "rotten" at either company, and she was

as much a victim as the poor investors her husband had duped. Or

so she argues.

But Tan's theory does not hold together, given the

government-friendly standard of review. Witness after witness

testified that Tan was the one who had met them at their homes and

other locales; who had bedazzled them into believing that their

lump-sum investments would get them and their heirs monthly checks

till the end of time, all without their ever having to market or

sell a single company product; who had tried to bluff them into

thinking that everything was and would remain just great, even as

she knew that the companies could not write them checks; and who

had then scammed other innocents out of serious money using the

same phony come-on – a desperate bid to pull the companies out of

their death spiral. At least that is what a levelheaded jury could

have concluded. And a large amount of documentary evidence –

including documents that Tan herself either prepared or signed –

backed up the witnesses' account and undermined Tan's. Critically,

the jury also heard from Tan how honest MLM outfits pay persons for

making sales, not just for recruiting new members – the exact

opposite of WMDS/1UOL's business model. Critically too, Rochon

told the jury that in the companies' last days Tan herself picked

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which members would get checks from any money she pulled in from

her last-gasp recruitment efforts.

Obviously, the jury did not believe Tan's no-knowledge

defense. And having heard her and the other witnesses' testimony,

observed their demeanor, and gauged their truthfulness, the jury

was free to make that call. Tan basically wants us to re-do the

jury's work. But that is not our job. See, e.g., Manor, 633 F.3d

at 14 (collecting cases). And after doing what is our job –

viewing the record in the light most flattering to the government,

accepting all credibility choices and "reasonable inferences from

the evidence (whether or not inevitable)" that tend to support the

government's theory of the case, United States v. Lara, 181 F.3d

183, 200 (1st Cir. 1999) – we hold without difficulty that a

rational jury could have found not only that Tan knew the material

facts of this scam but also that she played a key role in it. So

her no-knowledge argument goes nowhere.5

The government also argues that the evidence supports an 5

inference that Tan deliberately closed her eyes to the true facts

– ostrich-like behavior that also supports an inference of actual

knowledge. See, e.g., United States v. Azubike, 564 F.3d 59, 66

(1st Cir. 2009) (discussing a willful-blindness scenario). But

because there was sufficient evidence that Tan had actual

knowledge, we can skip over that issue.

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(b)

Money Laundering

Tan has two more insufficient-evidence claims, both of

which target her money-laundering convictions under 18 U.S.C.

§ 1957. Neither persuades, however. 6

Section 1957 criminalizes "knowingly engag[ing] . . . in

a monetary transaction" involving "property of a value greater than

$10,000" that was "criminally derived" from certain specified

offenses, including mail fraud. See id. § 1957(a), (f)(2)-(3); id.

§ 1956(c)(7)(A). This proviso makes bank dealings risky business

for persons who have scored money from certain illegal schemes – if

they make a "deposit, withdrawal, [or] transfer" with this loot

they will have broken that law too. See id. § 1957(f)(1) (defining

"monetary transaction" broadly).

For starters, Tan argues that the underlying illegal

activity here was mail fraud "for sending checks" to some of the

persons cheated by the scammers. Oversimplifying slightly, the

essential elements for mail fraud are a scheme to defraud that

involves a use of the mail for the purpose of furthering the

scheme. See, e.g., United States v. Stergios, 659 F.3d 127, 132-33

Section 1957 has the title "Engaging in monetary 6

transactions in property derived from specified unlawful activity." 

For easy reading, we will keep calling this crime a moneylaundering crime, even though there is a separate federal crime for

"[l]aundering of monetary instruments." See 18 U.S.C. § 1956; see

generally United States v. Castellini, 392 F.3d 35, 45-46 (1st Cir.

2004) (labeling § 1957 a money-laundering statute).

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(1st Cir. 2011) (providing a more detailed analysis). Jumping off

from there, Tan says that a dividend payment cannot constitute

criminally-derived proceeds – only getting "money can result in a

proceed," she says. And so, she claims, "sending mail cannot form

the predicate convictions from which money laundering proceeds can

be derived."

Tan is wrong on a couple of levels. For one thing, her

description of the record is not quite right. Her mail-fraud

convictions were not limited to checks sent by mail – no, the jury

also convicted her on multiple mail-fraud counts involving letters

sent to investors in the hopes of keeping them from catching on to

the fraud, e.g., communiqués promising members who had been stiffed

out of their monthly checks that they could count on getting their

money soon. For another thing, her argument clashes with the

statutory mosaic because it confuses two concepts: a mailing in

furtherance of a fraud and the proceeds of a fraud. The checks and

letters that the scammers mailed to investors surely helped further

the fraud, which made them the specified illegal activity required

for a § 1957 conviction. And the proceeds of the fraud – the

"criminally derived property," in § 1957 speak – were the millions

upon millions of dollars that scammed investors handed over to the

scammers. An IRS special agent traced millions of these millions

to WMDS/1UOL bank accounts – accounts that the scammers raided for

their own personal needs, which were the "transaction[s]" in mail-

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fraud proceeds needed to cinch Tan's § 1957 conviction. 

Ultimately, then, this phase of her sufficiency offensive is a lost

cause.

Tan does no better with her next attack – one that takes

aim at her conviction on a money-laundering count involving a

$255,090 check, dated December 10, 2004, written on a 1UOL account

and payable to a Caesars casino. We will call this the "Caesarscheck count" for simplicity. Tan's argument has three steps. 

First, Bunchan was a casino high-roller, but, she says, the

evidence showed that she had nothing to do with his gambling or

with his trips to Las Vegas. Second, the IRS special agent

testified that Tan had not signed any of the WMDS or 1UOL checks

that he had reviewed. And, finally, Bunchan had signed the check

to Caesars, and there was nothing on that check "connecting" her to

it. Adding everything together, she writes, leads to one

conclusion – "no evidence" supports the guilty verdict on the

Caesars-check count.

We see things differently. True, Rochon testified that

Tan did not gamble, and the government tells us that "no financial

evidence" tied her "directly" to the use of investor funds on

gambling. Perhaps that is why the jury acquitted her on every

other money-laundering count involving a check paid to a casino. 

But the evidence on the Caesars-check count was different. 

Consider what happened just days before Caesars deposited the

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$255,090 check into its account. In early December 2004, Tan

coaxed an investor into writing two checks, one for $131,933 and

the other for $300,000. The $300,000 check was unusual because it

was a loan to 1UOL, apparently – we say "apparently" because the

investor made the check out to 1UOL but added "For S. Tan" on the

memo line. In any event, Tan offered the investor $7,000 if he

would make the loan. Happy to oblige, the investor overnighted the

checks to 1UOL on December 13. 1UOL's bank posted the checks to

1UOL's account on December 14. Without these two checks, 1UOL's

account balance was $268,813.99, enough – but barely enough – to

cover the $255,090 check to Caesars. With them, the account had

plenty of money to cover that check, which Caesars then deposited

on December 18.

Considering the evidence in the light most agreeable to

the prosecution (as we must), we are confident that a rational jury

could have found Tan guilty on the Caesars-check count, violating

the money-laundering statute, at least as an aider and abetter if

not as a principal. One who participates in a criminal venture and

seeks by her actions to make it succeed can be convicted under an

aiding-and-abetting theory. See, e.g., United States v. BristolMártir, 570 F.3d 29, 39 (1st Cir. 2009) (explaining the concept);

see also 18 U.S.C. § 2 (deeming aiders and abettors punishable as

principals under federal criminal law). As a knowing member of

this scam, Tan participated in a criminal adventure, and she aided

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and abetted Bunchan's money laundering too, beguiling a member out

of a pile of cash to help her husband pay off his Caesars debt with

the $255,090 check. Importantly, the judge had instructed the jury

on the aiding-and-abetting theory of conviction, and, not

surprisingly, the government plays up that theme here. But Tan

says nothing about aiding and abetting in her brief, giving us no

reason why that doctrine should not apply. The upshot of all this

is that this aspect of her insufficiency argument misfires, just

like the others.

(2)

The Variance Issue

With the sufficiency protests out of the way, we turn to

Tan's claim that a prejudicial variance existed between indictment

and proof on the mail-fraud-conspiracy count. Her argument is

simple. That count, she says, only charged her with "receiv[ing]"

items through the mail as part of the conspiracy, not with sending

them. But the trial evidence, she quickly adds, focused on an

exactly opposite theory – that she had only "sent" items through

the mail, not "received" them. And, she continues, the jury

convicted her on the substantive mail-fraud counts for "putting

things in the mail, not taking them out . . . ." For that point,

she relies on the verdict form, which shows "guilty" on the

substantive mail-fraud counts involving letters "mailed from 1UOL,"

"from WMDS," or "from 1UOL and WMDS." Reaching her ultimate

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crescendo, she insists that this discrepancy between the charge

(receiving) and the evidence (sending) requires reversal.

A variance arises when what was alleged in the indictment

differs materially from what was proved at trial. See, e.g.,

United States v. Yelaun, 541 F.3d 415, 419 (1st Cir. 2008). Not

every variance calls for reversal, however. See id. A defendant

must show that the variance prejudiced her first – say, by leaving

her so in the dark about the charge against her that she could not

prepare a defense or plead double jeopardy to stop a second

prosecution for the same crime. Id. Variance arguments are often

made but seldom succeed. And Tan's must overcome a significant

obstacle: because she has débuted it here, our review is limited

to plain error. See United States v. Edelkind, 467 F.3d 791, 796

(1st Cir. 2006). Plain error, of course, requires an appellant to

"show (1) error, (2) plainness, (3) prejudice, and (4) an outcome

that is a miscarriage of justice or akin to it." Id. at 797. 

Proving plain error is incredibly difficult, see United States v.

Shoup, 476 F.3d 38, 43 (1st Cir. 2007), and Tan cannot come close

to proving it here.

Tan's prejudice theory turns entirely on her belief that

the variance crippled her ability to defend against the charge. 

But in what way? Tan does not say. And we do not think that she

was caught off guard in any way, given that the substantive mailfraud counts (which carried higher penalties than the mail-fraud-

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conspiracy count) charged her with both sending and receiving items

via the mail. The bottom line: even if there were a material

variance here – something we need not and do not decide – it did

not prejudice Tan's substantial rights, much less do so plainly.7

Consequently, her variance claim collapses.

SUMMING UP

Our review complete, we affirm Tan's judgment of

conviction in all respects.

Tan also hints at a variance between the indictment and the 7

jury charge, noting that the judge told the jurors that the mailfraud statute "prohibits the use of the mails," conceding that the

instruction was literally correct as far as it went, but

nevertheless blasting him for not differentiating "between the two

directions – sending and receiving." Her argument misses the mark

for several reasons. Our review of the instructions reveals that

the judge explained to the jurors that the government had to prove

beyond a reasonable doubt "that the use of the mail, on or about

the dates alleged, was closely related to the scheme because [Tan]

either received something in the mail or caused it to be mailed in

an attempt to carry out or execute the scheme." Also, Tan offers

no assurance that she took the necessary steps below to preserve

her point and provides no developed argument (i.e., no discussion

of on-point authority, for example) as to why this was error, let

alone plain error. We need say no more on this subject. See,

e.g., United States v. González-Mercado, 402 F.3d 294, 301-02 (1st

Cir. 2005).

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