Opinion ID: 814677
Heading Depth: 3
Heading Rank: 2

Heading: Jury Instruction Based on Chinese Law

Text: Over Defendants’ objection, the district court gave the following jury instruction: “You are instructed that fraud, or a scheme or attempt to defraud the Bank of China is a felony under foreign Chinese law.” Defendants argue that this instruction was improper because it: (1) took away from the jury the ability to find an essential element of the alleged crimes, (2) interpreted and sought to enforce unsettled Chinese law that is different from law applied in the United States, and (3) based its conclusions on extradition case law, UNITED STATES V . XU 35 which liberally construes criminality in violation of the rule of lenity. We review de novo all determinations of foreign law under Rule 26.1 of the Federal Rules of Criminal Procedure. See United States v. Fowlie, 24 F.3d 1059, 1064 (9th Cir. 1994). Rule 26.1 gives the district court broad discretion in considering evidence to make determinations of foreign law.8 See United States v. Mitchell, 985 F.2d 1275, 1280 (4th Cir. 1993). To support a conviction on the RICO conspiracy charge in count one and the money laundering conspiracy charge in count two, the government was required to prove that the property at issue (the funds from the Bank of China) was derived from a specified unlawful activity. The specified unlawful activity the government identified was an offense against a foreign nation involving “fraud, or any scheme or attempt to defraud, by or against a foreign bank.” See 18 U.S.C. §§ 1956(c)(7)(B) & (B)(iii), 1957(a). Defendants cite no case law in support of their challenge to the district court’s authority to determine foreign law as a predicate to jury determination of guilt on a substantive offense. Given Rule 26.1’s express grant of authority to the district court, “[i]t has long been thought . . . that the jury is not the appropriate body to determine issues of foreign law.” United States v. McClain, 593 F.2d 658, 669 n.17 (5th Cir. 1979) (internal quotation marks omitted). The challenged 8 In relevant part, Rule 26.1 states, “[i]ssues of foreign law are questions of law, but in deciding such issues a court may consider any relevant material or source--including testimony--without regard to the Federal Rules of Evidence.” Fed. R. Crim. P. 26.1. 36 UNITED STATES V . XU instruction here does not impinge on the jury’s fact finding because the jury was still charged with determining beyond a reasonable doubt whether the underlying fraud actually took place. Defendants’ other challenges based on the “unsettled” nature of Chinese law and the district court’s reliance on extradition cases are similarly unavailing. It is true that extradition treaties are construed liberally, see United States v. Kin-Hong, 110 F.3d 103, 109 (1st Cir. 1997); however, the rule of lenity is not helpful to Defendants because the rule applies where there is ambiguity concerning the applicability of criminal statutes. See Liparota v. United States, 471 U.S. 419, 428 (1985); United States v. Gonzalez-Mendez, 150 F.3d 1058, 1061 (9th Cir. 1998) (“[W]e resort to the rule of lenity only if the statute is ‘truly ambiguous.’”). No such ambiguity exists here. American law provides a straightforward definition of common fraud as, “wronging one in his property rights by dishonest methods or schemes, and usually signif[ies] the deprivation of something of value by trick, deceit, chicane or overreaching.” See McNally v. United States, 483 U.S. 350, 359 (1987) (citation and internal quotation marks omitted), superseded on other grounds by statute, Anti-Drug Abuse Act of 1988, Pub. L. No. 100-690, § 7603, codified at 18 U.S.C. § 1346, as recognized in United States v. Stoneman, 870 F.2d 102, 105 n.2 (3d Cir. 1989). Chinese law is equally clear in prohibiting fraudulent acts. Articles 192 and 382 of the Criminal Law of the People’s Republic of China unambiguously criminalize Defendants’ UNITED STATES V . XU 37 fraudulent acts against the Bank of China.9 Not incidentally, four other articles in the Chinese criminal code would equally cover the Defendants’ convicted conduct.10 Consequently, Defendants’ arguments based on the shortcomings of the Chinese criminal justice system fail because Defendants’ fraudulent acts are unlawful in both the United States and China. Defendants’ alternative argument that the government impermissibly seeks to enforce Chinese law is meritless. The Supreme Court has upheld criminal convictions based on interpretations of foreign law where the foreign violations are simply a means to violate United States laws. See Pasquantino v. United States, 544 U.S. 349, 369 (2005). In this case, Defendants’ foreign fraud was a means to violate United States laws. The challenged instruction incorporates 9 Article 192, in relevant part, provides that “[w]hoever, for the purpose of illegal possession, unlawfully raises funds by means of fraud shall be [guilty of a crime].” Crim. L. PRC art. 192 (adopted by the Fifth Nat’l People’s Cong., July 1, 1979, revised Mar. 14, 1997) (China) available at http://www.cecc.gov/pages/newLaws/criminalLawENG.php. Article 382, in relevant part, provides that “[a]ny state functionary, who, by taking advantage of his office, appropriates, steals or swindles public money or property or by other means illegally takes it into his own possession shall be regarded as being guilty of embezzlement.” Crim. L. PRC art. 382 (adopted by the Fifth Nat’l People’s Cong., July 1, 1979, revised M ar. 14, 1997) (China) available at http://www.cecc.gov/pages/newLaws/criminalLawENG.php. 10 See Crim. L. PRC arts. 193–95, 266 (adopted by the Fifth Nat’l People’s Cong., July 1, 1979, revised Mar. 14, 1997) (China) (criminalizing fraud against banks and financial institutions regarding loans, financial bills, and letters of credit, as well as criminalizing s w i n d l i n g o f p u b l i c o r p r iv a te m o n e y) a v a il a b l e a t http://www.cecc.gov/pages/newLaws/criminalLawENG.php. 38 UNITED STATES V . XU Chinese law only as a predicate to enforcement of the money laundering statute.