Court Opinion

ID: 2669623
Source: CourtListenerOpinion
Date Created: 2014-04-11 17:21:12.058609+00
Date Added: 2024-06-11T13:04:05.965751
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,                 No. 12-50300
           Plaintiff-Appellee,
                                         D.C. No.
              v.                   2:09-cr-00824-GHK-1

ALFRED NASH VILLALOBOS,
        Defendant-Appellant.               OPINION

     Appeal from the United States District Court
         for the Central District of California
    George H. King, Chief District Judge, Presiding

                Argued and Submitted
        January 7, 2014—Pasadena, California

                   Filed April 11, 2014

 Before: William A. Fletcher, Milan D. Smith, Jr., and
           Paul J. Watford, Circuit Judges.

         Opinion by Judge Milan D. Smith, Jr.;
            Concurrence by Judge Watford
2               UNITED STATES V. VILLALOBOS

                           SUMMARY*

                          Criminal Law

    The panel affirmed a lawyer’s conviction for attempted
extortion.

    The panel held that the district court’s jury instruction –
that threats to testify or provide information are “wrongful”
under the Hobbs Act if made with the intent to induce or take
advantage of fear – was erroneous because it would
necessarily lead a jury to conclude that all threats are
wrongful. The panel concluded, however, that the error was
harmless because any rational jury would have found the
defendant guilty, absent the erroneous instruction, since the
“means” the defendant employed to obtain property – threats
to have his client cooperate with, or alternatively, impede an
ongoing criminal investigation into the Director of the Los
Angeles Chabad Israel Center’s visa-procurement scheme,
contingent on payment – were unlawful and therefore clearly
wrongful under the circumstances.

    The panel held that the district court did not err by not
providing a claim of right instruction. The panel explained
that even if available, a claim of right defense would do
nothing to shield the defendant from conviction of attempted
extortion.

    Concurring in the judgment, Judge Watford would affirm
the conviction for different reasons. He wrote that the

  *
    This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
              UNITED STATES V. VILLALOBOS                     3

defendant could not assert a claim-of-right defense, where
there was no arguable nexus between the subject of the threat
and a legitimate claim to the property demanded. He
therefore found no error in the jury instructions which were,
he wrote, an accurate statement of the law as applied to the
facts of this case in which no such nexus existed.

                         COUNSEL

Rebecca P. Jones (argued), San Diego, California, for
Defendant-Appellant.

Mark R. Yohalem (argued), Assistant United States Attorney,
Los Angeles, California, for Plaintiff-Appellee.

                          OPINION

M. SMITH, Circuit Judge:

    Defendant-Appellant Alfred Nash Villalobos appeals
from his conviction for attempted extortion, in violation of
18 U.S.C. § 1951(a), and endeavoring to obstruct justice, in
violation of 18 U.S.C. § 1503(a). Villalobos claims that the
district court erred in instructing the jury that all threats to
testify or provide information are “wrongful” under the
Hobbs Act if made with the intent to induce or take advantage
of fear, and in precluding a claim of right defense to the
attempted extortion charge. We hold that even though the
district court’s jury instruction was erroneous, that error was
4                UNITED STATES V. VILLALOBOS

harmless. We also hold that the district court did not err in
precluding Villalobos’s claim of right defense. We affirm.1

    FACTUAL AND PROCEDURAL BACKGROUND

    This appeal arises out of the government’s investigation
of Rabbi Amitai Yemeni (Rabbi Yemeni), the director of the
Los Angeles Chabad Israel Center (Center), because of his
efforts to help Israeli nationals obtain visas to come to the
United States under the pretext that they were religious
workers at the Center. Pursuant to Rabbi Yemeni’s scheme,
such individuals would not work at the Center, but would be
paid as if they were. They would then return to Rabbi
Yemeni the money paid to them by the Center.

     Orit Anjel (Orit) came to the United States, allegedly as
a religious worker at the Center. Orit was accompanied by
her husband Avraham Anjel (Avi). Orit purportedly worked
at the Center, and Avi received her paychecks. Avi regularly
cashed the checks at a bank, and, in turn, gave the money to
Rabbi Yemeni. In 2009, Orit received a letter from Rabbi
Yemeni terminating her work at the Center.

    When Orit was terminated, Avi engaged Villalobos, a
lawyer, to help him recoup the money he had paid to Rabbi
Yemeni. Through his discussions with Avi, Villalobos
learned that the government wanted to interview Orit as part

    1
     Villalobos also alleges the following errors by the district court:
(1) the sufficiency of the evidence that Villalobos endeavored to obstruct
justice; (2) the admission into evidence of two of Villalobos’s statements;
(3) Agent Gary Bennett’s and Benjamin Gluck’s testimony concerning
Villalobos’s statements; and (4) the sentencing enhancement for abuse of
a position of trust. We address these claims in a memorandum disposition
filed contemporaneously with this opinion, and we affirm.
               UNITED STATES V. VILLALOBOS                     5

of its investigation into Rabbi Yemeni’s scheme. Villalobos
then approached Rabbi Yemeni, and later Rabbi Yemeni’s
lawyer, Benjamin Gluck (Gluck), and demanded payment.
Villalobos contends that he was merely helping the Anjels
recover back wages for Orit’s work at the Center that Rabbi
Yemeni had improperly required them to remit to him. The
government, on the other hand, contends that Villalobos was
attempting to extort Rabbi Yemeni, and that in return for
payment, Villalobos promised that Orit would do “whatever
it is we need her to do,” including impeding the investigation,
lying to investigating Assistant U.S. Attorney Keri Axel
(Axel), and repeating those lies to the grand jury.

    Gluck informed Axel about Villalobos’s demands for
payment, and agreed to record his subsequent
communications with Villalobos. FBI Special Agent Gary
Bennett was assigned to supervise Gluck’s communications
with Villalobos. Gluck recorded his conversations with
Villalobos, both in person and over the phone, in which they
discussed various aspects of the plan to pay Villalobos in
return for Orit’s favorable testimony during the investigation.

    Villalobos was arrested after Gluck gave him a cash
payment, shortly before Orit’s scheduled meeting with Axel.
Villalobos was charged with one count of attempted
extortion, 18 U.S.C. § 1951(a), and one count of endeavoring
to obstruct justice, 18 U.S.C. § 1503(a). After a five day trial,
the jury returned a guilty verdict on both counts, and the
district court entered judgment. Villalobos timely appealed.

                        DISCUSSION

   Extortion is defined in the Hobbs Act as “the obtaining of
property from another, with his consent, induced by wrongful
6             UNITED STATES V. VILLALOBOS

use of actual or threatened force, violence, or fear, or under
color of official right.” 18 U.S.C. § 1951(b)(2) (emphasis
added).

    Villalobos contends that the district court erred when it
instructed the jury that all threats to testify or provide
information are “wrongful” under the Hobbs Act if made with
the intent to induce or take advantage of fear. Closely related
to his initial contention, Villalobos also argues that the
district court erred when it precluded him from presenting a
claim of right defense to the extortion charge. More
specifically, Villalobos contends that he had a lawful claim to
the property he demanded on behalf of Orit, and that as such
his actions were not “wrongful” in the sense required by the
Hobbs Act.

     In United States v. Enmons, 410 U.S. 396 (1973), the
Supreme Court concluded that the use of force to achieve
legitimate labor ends was not extortion. The Court
interpreted the word “wrongful” in the Hobbs Act to “limit[]
the statute’s coverage to those instances where the obtaining
of the property would itself be ‘wrongful’ because the alleged
extortionist has no lawful claim to that property.” Id. at 400.
It reasoned that “[t]he term ‘wrongful,’ which on the face of
the statute modifies the use of each of the enumerated means
of obtaining property—actual or threatened force, violence,
or fear—would be superfluous if it only served to describe the
means used. For it would be redundant to speak of ‘wrongful
violence’ or ‘wrongful force’ since . . . any violence or force
to obtain property is ‘wrongful.’” Id. at 399–400 (footnote
omitted). The Court thus held that violence in the labor
context is not wrongful for purposes of extortion if the
                 UNITED STATES V. VILLALOBOS                            7

defendant has a lawful claim to the property, see id. at 400, or
a “claim of right.”2

    In United States v. Daane, 475 F.3d 1114, 1119–20 (9th
Cir. 2007), we held that the claim of right defense described
in Enmons is unavailable in cases involving physical violence
outside of the labor context, because such violence is
inherently wrongful. We agreed with the reasoning of United
States v. Zappola, 677 F.2d 264 (2d Cir. 1982), which
concluded that “Congress meant to punish as extortion any
effort to obtain property by inherently wrongful means . . .
regardless of the defendant’s claim of right to the property.”
Daane, 475 F.3d at 1120 (quoting Zappola, 677 F.2d at
268–69 (citations omitted)) (emphasis added). In other
words, we recognized in Daane that outside the labor context,
there are some attempts to obtain property that are so
inherently wrongful that whether the defendant had a lawful
claim to the property demanded is not relevant in determining
whether extortion or attempted extortion has been proven.

    In the present case, we consider whether nonviolent
threats outside the labor context can be “wrongful” under the
Hobbs Act. The threats at issue in this case —threats to
cooperate with an ongoing criminal investigation—are unlike
the threats of force or violence outside the labor context
discussed in Daane, because the threats at issue here are not
inherently wrongful. Indeed, our law encourages individuals
to cooperate with ongoing criminal investigations and
proceedings.

 2
   The Supreme Court also relied on the legislative context and history of
the Hobbs Act to conclude that the Act does not apply to the use of force
to achieve legitimate labor ends. Enmons, 410 U.S. at 401–08.
8                 UNITED STATES V. VILLALOBOS

    We conclude that where a nonviolent threat to obtain
property is not, by its nature, inherently wrongful, a court
must first consider whether the threat, as actually used in the
case at issue (the “means”), is wrongful, without regard to the
property demanded by the defendant (the “ends”). If a
nonviolent threat is wrongful under the circumstances, then
it is sufficient to sustain a conviction for extortion or
attempted extortion. In such situations, a court need not
consider whether the defendant has a lawful claim to the
property demanded. This approach is consistent with Daane,
which recognized that certain “means” to obtain property are
“wrongful” under the Hobbs Act without regard to the “ends”
sought by the defendant. See Daane, 475 F.3d at 1119–20.
A similar means-ends framework was adopted by the First
Circuit in United States v. Sturm, 870 F.2d 769 (1st Cir.
1989).3

    Here, Villalobos’s “means” were his threats to have Orit
cooperate with the investigation of Rabbi Yemeni, contingent
upon payment, and his “ends” were the money, fraudulent tax
receipts for donations, and a job or job recommendation for
Orit that he demanded from Rabbi Yemeni. Unlike violent
threats, threats to cooperate with an ongoing criminal

    3
    In Sturm, the First Circuit recognized that “different considerations”
apply in the context of extortion based on threats of force or violence than
in the context of threats that are not inherently wrongful, like threats based
on economic fear. Sturm, 870 F.2d at 772–73. It reasoned that extortion
cases based on force or violence generally involve wrongful “means,”
while extortion cases based on economic fear typically involve only
allegations of wrongful “ends” (i.e. the defendant does not have a lawful
claim to the property demanded). Id. at 773. It concluded that in such
situations, the use of legitimate economic threats (the “means”) to obtain
property is wrongful only if the defendant has no claim of right to the
property demanded (the “ends”). Id.
              UNITED STATES V. VILLALOBOS                   9

investigation are clearly not wrongful per se under the Hobbs
Act. However, if Villalobos’s threats were wrongful under
the circumstances, they are sufficient to sustain a conviction
for attempted extortion, without regard to the “ends”
Villalobos sought.

    The district court instructed the jury that a threat of
testifying or providing information was “wrongful” under the
Hobbs Act “if it [wa]s made with the intent to induce or take
advantage of fear . . . .” But by their nature, threats are
intended to induce or take advantage of fear. Accordingly, an
instruction that threats are wrongful if intended to induce or
take advantage of fear would necessarily lead a jury to
conclude that all threats are wrongful. The district court’s
instruction was thus erroneous because it essentially read the
“wrongful” element out of the Hobbs Act.

    Since the district court’s instruction was erroneous, we
must consider whether the district court’s error was “harmless
beyond a reasonable doubt.” United States v. Awad, 551 F.3d
930, 938 (9th Cir. 2009) (“If a jury instruction misstates an
element of a statutory crime, the error is harmless if it is
‘clear beyond a reasonable doubt that a rational jury would
have found the defendant guilty absent the error.’” (quoting
Neder v. United States, 527 U.S. 1, 18 (1999)); see also
Neder, 527 U.S. at 8–10 (holding that district court’s
erroneous jury instruction was subject to harmless error
review).

    To determine whether the district court’s error was
harmless, we first evaluate whether Villalobos’s threats to
cooperate with the ongoing investigation were wrongful. The
evidence is clear beyond a reasonable doubt that any rational
jury would have found Villalobos guilty absent the erroneous
10             UNITED STATES V. VILLALOBOS

jury instruction because Villalobos’s “means” to obtain the
property—his threats to have his client Orit cooperate with,
or alternatively, impede, the ongoing investigation,
contingent upon payment—were unlawful, and therefore
clearly wrongful under the circumstances. The evidence
overwhelmingly shows that Villalobos threatened to have
Orit change the story she would provide to the investigating
authorities, depending on whether Rabbi Yemeni paid him.
For example, Villalobos repeatedly promised to influence
Orit to have her “shade[]” things as necessary and to “do
whatever it is [they] need her to do” during her interview with
Axel if Rabbi Yemeni paid him. Villalobos made clear
through his conversations with Gluck that what Orit would
tell government agents and the grand jury depended on
whether Rabbi Yemeni acceded to his demands.

    As evidence of the unlawfulness of Villalobos’s conduct,
the jury necessarily found that Villalobos’s conduct was
unlawful when it found him guilty of endeavoring to obstruct
justice by instructing Orit to make false and misleading
statements to the investigators in exchange for payment. The
district court instructed the jury that in order to prove
obstruction of justice, the government had to prove beyond a
reasonable doubt that Villalobos sought payment and other
compensation “from the target of a pending federal grand jury
investigation in exchange for an agreement that [Villalobos]
would cause his client, Orit . . . , to make false and misleading
statements to [Axel] or the grand jury conducting that
investigation . . . .” Because the record makes clear beyond
a reasonable doubt that any rational jury would have found
that Villalobos’s threats were wrongful because they were
unlawful, his threats were sufficient to sustain a conviction
for attempted extortion. See Awad, 551 F.3d at 938.
                 UNITED STATES V. VILLALOBOS                          11

    In light of the above, although the district court’s jury
instruction on wrongfulness was erroneous, that error was
harmless. Because Villalobos’s threats were wrongful under
the Hobbs Act, we need not reach the question whether a
claim of right defense is available in this context. Even if
available, such a claim would do nothing to shield Villalobos
from conviction of attempted extortion. The district court did
not err by not providing a claim of right instruction.

      AFFIRMED.

WATFORD, Circuit Judge, concurring in the judgment:

   I agree with the majority that Mr. Villalobos’ extortion
conviction should be affirmed, but I reach that conclusion for
somewhat different reasons.

    Like the district court, I see no need to decide whether
threats to provide truthful testimony in an ongoing criminal
investigation are always “inherently wrongful,” thereby
precluding assertion of a claim-of-right defense.1 Even if
such threats are not inherently wrongful, the district court
correctly concluded that Villalobos could not assert a claim-
of-right defense in this case. A defendant is entitled to raise
that defense only when, among other things, there’s some
basis in the record for finding a nexus between the subject of

  1
    Villalobos’ wrongdoing also involved offering to have Orit Anjel
provide untruthful testimony favorable to Rabbi Yemeni in return for the
payment demanded, but that conduct didn’t involve a threat and therefore
can’t be characterized as extortion. It was instead properly charged as an
attempt to obstruct justice.
12             UNITED STATES V. VILLALOBOS

the allegedly extortionate threat and a legitimate claim to the
property demanded. See United States v. Jackson, 180 F.3d
55, 70–71 (2d Cir. 1999); United States v. Tobin, 155 F.3d
636, 640 (3d Cir. 1998).

    No such nexus even arguably exists here. Even if Anjel
really was owed $120,000 in back wages, as Villalobos
claimed, she was not threatening to provide truthful testimony
in an ongoing criminal investigation about Rabbi Yemeni’s
supposed wage-and-hour violations. In that scenario, at least,
Anjel would have been a victim of the offense, and payment
of the money demanded could be viewed as “‘reasonable
action to make good the wrong which was the subject of the
threatened charge.’” Appellant’s Opening Brief 32 (quoting
11 Del. Code Ann. tit. 11, § 847(b)). The criminal
investigation related to Rabbi Yemeni’s alleged acts of
immigration fraud, and far from being a victim of that
offense, Anjel was herself both a participant in and a
beneficiary of it. On these facts, “the evidence precluded the
[claim-of-right] instruction as a matter of law.” Tobin,
155 F.3d at 641.

     I therefore find no error in the district court’s instructions
to the jury. The instructions stated, in essence: (1) a threat to
provide testimony is wrongful if it’s made “with the intent to
induce or take advantage of fear” that the victim will be
subjected to criminal investigation, prosecution, or
punishment; and (2) if Villalobos made such a threat, it was
still wrongful even if he had a claim of right to the property
he demanded. As applied to the facts of this case, in which
no nexus existed between the threat and the property
demanded, that was an accurate statement of the law.
Villalobos has offered us no basis for holding otherwise.