Court Opinion

ID: 4683892
Source: CourtListenerOpinion
Date Created: 2021-05-04 20:00:51.592619+00
Date Added: 2024-06-11T08:04:18.167619
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        MAY 4 2021
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,                       No.    19-50215

                Plaintiff-Appellee,             D.C. No.
                                                2:15-cr-00475-DSF-4
 v.

DALIANG GUO, AKA David Guo,                     MEMORANDUM*

                Defendant-Appellant.

                   Appeal from the United States District Court
                      for the Central District of California
                    Dale S. Fischer, District Judge, Presiding

                       Argued and Submitted April 14, 2021
                              Pasadena, California

Before: PAEZ and VANDYKE, Circuit Judges, and KORMAN,** District Judge.

      Daliang Guo (“Guo”) appeals his conviction for one count of conspiracy to

commit wire fraud in violation of 18 U.S.C. § 371 and nine counts of wire fraud in

violation of 18 U.S.C. § 1343, stemming from his role as an investor and promoter

in a multi-level marketing company, Cyber Kids Best (“CKB”). Although CKB

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The Honorable Edward R. Korman, United States District Judge for
the Eastern District of New York, sitting by designation.
advertised itself as an educational company, it sold its educational games only in

conjunction with an “investment” in the company. Guo and his co-defendants

falsely promised investors that the company would go public and enrich all who

had invested in the company. We have jurisdiction under 28 U.S.C. § 1291. We

affirm.

       1. Guo argues that his conviction for conspiracy, Count One, and six of the

wire fraud convictions, Counts Three, Six, Seven, Nine, Eleven, and Twelve, for

which the government relied on co-conspirator liability, are not supported by

sufficient evidence of an agreement during the relevant time period. When

reviewing a challenge to a conviction for insufficiency of the evidence, we first

view the evidence “in the light most favorable to the prosecution,” United States v.

Nevils, 598 F.3d 1158, 1164 (9th Cir. 2010) (en banc), which includes “draw[ing]

all reasonable inferences favorable to the government,” United States v. Tabacca,

924 F.2d 906, 910 (9th Cir. 1991). Second, we must “determine whether th[e]

evidence, so viewed, is adequate to allow ‘any rational trier of fact [to find] the

essential elements of the crime beyond a reasonable doubt.’” Nevils, 598 F.3d at

1164 (quoting Jackson v. Virginia, 443 U.S. 307, 319 (1979) (emphasis in

original)).

       “Mere association and activity with a conspirator” is insufficient to prove the

existence of a conspiracy, United States v. Espinoza-Valdez, 889 F.3d 654, 657

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(9th Cir. 2018) (quoting United States v. Lapier, 796 F.3d 1090, 1095 (9th Cir.

2015)), but “[a] tacit agreement may be inferred from the conspirators’ conduct as

well as other circumstantial evidence,” such as “a common motive, joint action in

pursuit of a common objective, and a coordinated cover-up,” United States v.

Gonzalez, 906 F.3d 784, 792 (9th Cir. 2018). To rely on co-conspirator liability

under Pinkerton v. United States, 328 U.S. 640 (1946), a co-conspirator must have

committed the substantive offense while the defendant was a member of the

conspiracy. See United States v. Garcia, 497 F.3d 964, 967 (9th Cir. 2007).

      The government presented evidence of a tacit agreement by the time of the

six challenged substantive offenses. All the named co-conspirators were Guo’s

downlines, and Guo and his downlines had a common motive to recruit new

investors, as Guo received a commission on each of the sales made by his

downlines. Guo coached his downlines on tactics to recruit new investors, and

several of his co-conspirators (along with Guo) would arrange and present at

events together to promote the company to prospective investors. Guo and the

others attempted to cover-up their actions once the Securities and Exchange

Commission began investigating CKB. In light of this evidence, a reasonable trier

of fact could have found that Guo was a member of the conspiracy at the time of

the substantive offenses. See Nevils, 598 F.3d at 1164.

      2. Additionally, Guo argues there was insufficient evidence that the wire

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transfer at issue in Count Three—concerning a $47,000 wire transfer from Kiki Lin

to a CKB account in Hong Kong—was made in furtherance of the conspiracy. To

rely on a theory of Pinkerton liability, the government had to prove that the

substantive offense was in furtherance of the conspiracy. Garcia, 497 F.3d at 967.

      A rational finder of fact could have reasonably inferred that Lin transferred

the money in furtherance of the conspiracy. Other co-conspirators testified that

CKB promoters took money from new investors and purchased “business packs”

for $1,380—CKB’s base-level investment product—on their behalf, rather than

having investors purchase them directly from CKB. Some of the deposits made to

Lin’s account prior to the transfer matched the cost of a business pack, or a

multiple of that amount. And Lin was a major promoter, operating a pyramid that

netted $37 million.

      3. Guo argues that the district court erroneously instructed the jury on

Pinkerton’s requirement that a defendant be a member of the conspiracy at the time

the substantive offense was committed by modifying the text from Ninth Circuit

Model Jury Instruction 8.25 (2010 ed.). We review for plain error, as Guo failed to

object on this ground.1 United States v. Del Toro-Barboza, 673 F.3d 1136, 1152

1
  At the district court, Guo objected to giving both Pinkerton and aiding and
abetting instructions, arguing that allowing jurors to consider both theories of
liability could result in a non-unanimous verdict in violation of the Sixth
Amendment. Guo did not challenge the content of the Pinkerton instruction.

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(9th Cir. 2012). Specifically, Guo argues that the revised instruction eased the

government’s burden, as it allowed the government to only prove that he was a

member of the conspiracy at the time any single one of the substantive offenses

was committed, and not necessarily at the time of the substantive offense forming

the basis for the specified count. But as Guo acknowledges, the revised instruction

could also be read to require that Guo be a member of the conspiracy at the time of

all substantive offenses in order to be convicted on any one of the counts. Because

any error was not “clear or obvious” and instead “subject to reasonable dispute,”

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

States, 556 U.S. 129, 135 (2009)), this claim does not survive plain error review.

      4. Guo argues that the district court abused its discretion in excluding a

statement made by co-defendant Toni Chen when she was arrested. Chen

exclaimed to the arresting agent that Howard Shern, CKB’s co-founder, should be

arrested instead of her. Non-constitutional evidentiary error is subject to harmless

error review, United States v. Gonzalez-Flores, 418 F.3d 1093, 1099 (9th Cir.

2005), and here any error is harmless because “it is more probable than not that the

error did not materially affect the verdict,” United States v. Seschillie, 310 F.3d

1208, 1214 (9th Cir. 2002) (quoting United States v. Morales, 108 F.3d 1031, 1040

(9th Cir. 1997) (en banc)). Other evidence established that Shern was at the top of

the CKB pyramid, and Shern’s high level of culpability did not lessen Guo’s own

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role in the scheme.

      5. Finally, Guo argues that the district court erred in imposing a four-level

organizer/leader enhancement pursuant to Sentencing Guidelines § 3B1.1. We

review for abuse of discretion the district court’s application of a Sentencing

Guidelines provision to the facts of a case. United States v. Gasca-Ruiz, 852 F.3d

1167, 1170 (9th Cir. 2017) (en banc). Application of a four-level enhancement

under § 3B1.1 requires “some degree of control or organizational authority over

others.” United States v. Avila, 95 F.3d 887, 890 (9th Cir. 1996) (quoting United

States v. Mares-Molina, 913 F.2d 770, 773 (9th Cir. 1990)). Although Guo did not

have formal control over his downlines, the district court did not abuse its

discretion in applying the enhancement because Guo exercised significant

organizational authority within his pyramid.

      AFFIRMED.

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