NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA,

Plaintiff

- Appellee,

v. ANTHONY B. BRANDEL,

Defendant

- Appellant. No. 16

- 10363
D.C. No. 2:13

- cr - 00439

- KJD

- VCF

- 1

MEMORANDUM *

UNITED STATES OF AMERICA,

Plaintiff

- Appellee,

v. JAMES WARRAS,

Defendant

- Appellant. No. 19

- 10177

D.C. No. 2:13

- cr - 00439

- KJD

- VCF

- 3

Appeal from the United States District Court for the District of Nevada Kent J. Dawson, District Judge, Presiding Argued and Submitted March 8, 2021 Las Vegas, Nevada Before: CLIFTON, NGUYEN, and BENNETT, Circuit Judges.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36

- 3. 

# FILED

MAR 24 2021 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS2

In this consolidated appeal, Anthony B. Brandel (“Brandel”) and James
Warras (“Warras”) challenge their convictions for conspiracy, 18 U.S.C. § 371, wire fraud, 18 U.S.C. § 1343, and securities fraud, 15 U.S.C. § 78j(b). We have jurisdiction under 28 U.S. C. § 1291, and we affirm.
1. Brandel argues that t he jury instruction on securit ies fraud was fatally flawed because it failed to mention the disjunctive three factor test in Hocking v. Dubois , 885 F.2d 1449, 1460

- 61 (9th Cir. 1989) (adopting the test from
Wi lliamson v. Tucker , 64 5 F.2d 404 (5th Cir. 1981) )

. Brandel concedes that plain error review applies because he failed to raise this issue below. See United States v. Armstrong , 909 F.2d 1238, 124 4 (9th Cir. 1990) ( applying plain error review where the defendant fails to object before district court)

. Here, t he district court correctly provided the three

- prong definition of an “investment contract,” the relevant security type, f rom SEC v. W.J. Howey Co. ( Howey ), 328 U.S. 293, 298

- 99 (1946)

. Hocking ’s disjunctive three

- factor test is

an elaborat ion of the third Howey prong and wa s not plainly required

. The Hocking factors are needed when , “[o]n the face of a partnership agreement,” the investor maintains control , but the reality is different

. Koch v. Hankins , 928 F.2d 1471, 1477 (9th Cir. 1991) (quoting Williamson , 645 F.2d at 424)

. T he joint venture agreements in this case were not facially partnership agreements , despite the ir label

. In fact, t he agreements included a “No Partnership Relationship”3

clause.
Even assuming the district court erred in failing to explain the Hocking factors , th e absence of that instruction did not affect Brandel’s substantial rights

. United States v. Marcus, 560 U.S. 258, 262 (2010)

. T he joint venture agreements would clearly satisf

y the first disjunctive Hocking factor : that the agreement

“ leaves so little power in the hands of the partner or venturer that the arrangement in fact distributes power as would a limited partnership.” Hock ing , 885 F.2d at 1460 (quoting Williamson , 645 F.2d at 424 )

. Again, under the terms of the joint venture agreements here , the victims were not partners . Nor does Brandel dispute that in fact Malom Group AG (“Malom”) had the unilateral authority to decline , and always did decline , the victims’ investment proposals.
2. The evidence was sufficient for a rational juror to find the existence of an investment contract supporting Brandel and Warras’s securities fraud convictio n s. See United States v. Nevils , 598 F.3d 1158, 1163

- 64 (9th Cir. 2010) (en banc) (citing Jackson v. Virginia , 443 U.S. 307, 319 (1979))

. Both the joint venture agreements and the funding commitments satisfy the three Howey prongs for the existence of an investment contract

. As to the joint venture agreements, each victim “invest[ed] . . . money” with the expectation of financial gain. Howey , 328 U.S. at 298

- 99

. To the extent the joint venture agreement terms were confusing or contradictory as to whether the4

funds were a “fee” or an investment, t he standard of review compels resolution of the se conflicts in the prosecution’s favor

. Nevils , 598 F.3d at 1163

- 64 ; McDaniel
v. Brown , 558 U.S. 120, 133 (2010)

. The evidence wa s also sufficient for the j urors to find th at the victims who invested in the joint venture agreements expected to profit f

ro m the efforts of others. Howey , 328 U.S. at 298

- 99. A rational juror could conclude beyond a reasonable doubt that the victims were dependent on Brandel, Warras, or a “third party,” id. at 299, for the investment ideas and that th e victims’ ability to present investment ideas wa s not tantamount
to exercising the full powers of a general partner or joint venturer

. The evidence was also sufficient for a juror to conclude the f unding

c ommitments were investment contracts. Gianopoulos expected to be reimburse d for his $1.2 million “ underwriting fee , ” plus either $600,000 if the loan succeeded

or $50,000 if it failed

. Th us, th e jury could have concluded he expected to profit, Warfield v. Alaniz , 569 F.3d 1015, 1024 (9th Cir. 2009) , even if he also had other motivations to secure the loan

. We need not analyze Glazebrook ’s f unding

c ommitment because he signed a joint venture agreement that contemplated sharing profits

. 3. The evidence was also sufficient to establish that Brandel and Warras possessed the requisite specific intent to defraud. See United States v. Kaplan , 836 F.3d 1199, 1212 (9th Cir. 2016) (conspiracy); United States v. Miller , 953 F.3d5

1095, 1101 (9th Cir. 2020 ) (wire fraud); United States v. Tarallo , 380 F.3d 1174, 1181 (9th Cir. 2004) (securities fraud)

. Brandel and Warras argue that they had a good

- faith belief in the legitimacy of their activities, but a r ational jury could have concluded otherwise

. Again, reasonable inference s must be drawn in the government’s favor. McDaniel , 558 U.S. at 133

. For instance, a rational jury could reasonably infer intent to defraud one victim from Appel lants’ activities in nearly i dentical setups with other victims. See United States v. Sullivan , 522 F.3d 967, 974 (9th Cir. 2008)

. The evidence was also sufficient for the jury to conclude Warras was part of the conspiracy from the beginning. He received funds in his account as early as January 2010, the same day a victim’ s funds were released from escrow, and in March 2010 , he sent a suspicious email voicing his concern about “someone fronting for some investigative agency.” A nd , a lthough Warras did not meet with victims before the y transferred funds, conspirators pursuing the “same criminal objective” need not agree “to co mmit or facilitate each and every part of the substantive offense.” Salinas v. United States , 522 U.S. 52 , 63 (1997). In several emails , Warras and the codefendants discuss proof of funds letters that proved to be fraudulent. The jury could also have co ncluded beyond a reasonable doubt that
Warras thought the “ Brazilian bonds ” were valueless

. For instance, in a July 2011 email , Warras instructed an attorney about the need to come up with a “story”6

about the Brazilian bonds and explain ed the joint venture agreement wa s a “file stuffer” with “meaningless” percentages

. The jury was free to disregard Warras’s explanations and could have reasonably concluded beyond a reasonable doubt that he possessed the requisite intent.
4. The g overnment did not violate Warras’s Fifth Amendment Due Process and Sixth Amendment right s to a fair trial by improperly shifting the burden of proof on the value of the Brazilian bonds. We review this question de
novo, United States v. Coutchavlis , 260 F.3d 1149, 1156 (9th Cir. 2001) , and conclude any constitutional mistake was harmless, Washington v. Recuenco , 548 U.S. 212, 218

- 19 (2006)

. The jury could infer from Warras’s suspicious behavior that he thought the bonds were of questionable value. Warras ignores that his suspicious conduct is itself highly suggestive of the bonds’ worthlessness, as was his apparent doctoring of a receipt to make the bonds appear legitimate , and his failure to explain persuasively why Malom’s bonds would be an exception to his general impression that 95 or 99% of old Brazilian bonds were fraudulent

. The government thus satisfied its initial burden to provide evidence permitting the jury to conclude beyond a reasonable doubt that the bonds wer e worthless

. 5. The district court also properly denied Warras an instruction that the jury had to unanimously find the overt act element of cons piracy and unanimously find that Warras did not have a good faith belief his actions were lawful. While the7

jur y must agree the overt act element is satisfied, it does not have to agree on the factual basis for that element. United States v. Gonzalez , 786 F.3d 714, 718

- 19 (9th Cir. 2015). The district court properly instructed the jury that it had to agree on the crime underlying the conspiracy

— either wire or securities fraud. As noted above, t he district court also correctly instructed the jury that good faith is a complete defense, and the government bears the burden of proving the lack of good faith.
6. The dis trict court’s forfeiture order did not violate Brandel or Warras’s Eighth Amendment rights under the Excessive Fines Clause . We review whether a fine is un constitutionally excessive de novo

. United States v. Bajakajian , 524 U.S. 321, 336 n.10 (1998). We assume , along with the parties , that the Eighth Amendment applies to the orders in this matter and that the in
personam forfeiture orders here are punitive. See United States v. Beecroft , 825 F.3d 991, 999

- 1000 , 999 n.8 (9th Cir. 2016)

. The d istrict court imposed forfeiture
amount s well below the U.S . Sentencing Guidelines recommended penalt ies , and the sums were not “grossly disproportional to the gravity of [the] defendant’s offense, ” United States v. $100,348.00 in U.S. Currency , 354 F.3d 1110, 112 1 (9th Cir. 2004) (citing Bajakajian , 524 U.S. at 334) , given the severity of the offenses and the extent of harm to victims. Id. at 1121

- 22

. Although the district court did not consider the extent of Brandel and Warras’s role s in the overall scheme relative8

to others, no “rigid” set of factors is required, and the district court properly analyze d the three other considerations often used to mea sure proportionality. United States v. Mackby , 339 F.3d 1013, 1016 (9th Cir. 2003 ).
AFFIRMED .