Court Opinion

ID: 3170073
Source: CourtListenerOpinion
Date Created: 2016-01-15 19:00:49.822423+00
Date Added: 2024-06-11T11:59:25.078422
License: Public Domain

FOR PUBLICATION

    UNITED STATES COURT OF APPEALS
         FOR THE NINTH CIRCUIT

 UNITED STATES OF AMERICA,                        No. 14-30042
                 Plaintiff-Appellee,
                                                    D.C. No.
                     v.                          2:12-cr-00133-
                                                     RSM-1
 MARK F. SPANGLER,
              Defendant-Appellant.                  OPINION

        Appeal from the United States District Court
           for the Western District of Washington
        Ricardo S. Martinez, District Judge, Presiding

                 Argued and Submitted
          December 10, 2015—Seattle, Washington

                     Filed January 15, 2016

 Before: M. Margaret McKeown and Richard C. Tallman,
   Circuit Judges, and Joan Humphrew Lefkow,* Senior
                       District Judge

                   Opinion by Judge Lefkow

  *
    The Honorable Joan Humphrey Lefkow, Senior United States District
Judge for the Northern District of Illinois, sitting by designation.
2                 UNITED STATES V. SPANGLER

                           SUMMARY**

                           Criminal Law

    The panel affirmed convictions on twenty-four counts of
wire fraud, seven counts of money laundering, and one count
of investment-adviser fraud.

    The panel held that the district court did not abuse its
discretion in barring on relevancy grounds the defendant’s
expert witness from testifying, and held that any error was
harmless. The panel rejected the defendant’s contention that
exclusion of the expert’s testimony violated his Sixth
Amendment right to present a defense.

    The panel held that the district court did not abuse its
discretion in admitting testimony regarding the defendant’s
status as a fiduciary, introduced to explain why the
defendant’s clients did not question his documents and
reports, where the investors’ lay understandings of the
defendant’s fiduciary obligations demonstrated how he was
able to accomplish the alleged fraud, and where any concerns
about the jurors’ equating violations of fiduciary duty with
criminal liability were put to rest by the district court’s
careful instructions on the elements of the offenses and the
absence of breach of fiduciary duty as a consideration in
determining guilt.

    The panel rejected the defendant’s contention that the
district court violated his Fifth Amendment rights when it

  **
     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. SPANGLER                     3

declined to strike Count 33, which alleged that the defendant
committed investment-adviser fraud by violating 15 U.S.C.
§ 80b-6 (prohibiting investment advisers from engaging in
certain conduct) without mentioning 15 U.S.C. § 80b-17
(through which violations of § 80b-6 are made criminal) and
without using the word “willful.”

    The panel concluded that cumulative error analysis is
inapposite, as the defendant has not demonstrated any errors.

                         COUNSEL

Suzanne Lee Elliott (argued), Law Office of Suzanne Lee
Elliott, Seattle, Washington, for Defendant-Appellant.

Teal Luthy Miller (argued), Assistant United States Attorney;
Annette L. Hayes, Acting United States Attorney, United
States Attorneys’ Office, Western District of Washington,
Seattle, Washington, for Plaintiff-Appellee.

                         OPINION

LEFKOW, Senior District Judge:

    Mark F. Spangler appeals his jury convictions on twenty-
four counts of wire fraud (18 U.S.C. § 1343), seven counts of
money laundering (18 U.S.C. § 1957), and one count of
investment-adviser fraud (15 U.S.C. § 80b-17). We focus on
three of Spangler’s arguments raised on appeal: (1) that the
district court abused its discretion in barring his expert
witness from testifying, and that the exclusion of the expert’s
testimony violated his Sixth Amendment right to present a
4                UNITED STATES V. SPANGLER

defense; (2) that the district court abused its discretion in
permitting testimony about his status as a fiduciary; and
(3) that the district court violated his Fifth Amendment rights
by failing to strike count 33 from the second superseding
indictment.1 We have jurisdiction under 28 U.S.C. § 1291,
and we affirm.

                        BACKGROUND2

   On May 14, 2013, a grand jury returned a second
superseding indictment charging Spangler with twenty-five
counts of wire fraud, seven counts of money laundering, and
one count of investment-adviser fraud. At trial, the
government presented evidence of the following:

    Spangler was a registered investment adviser and a one-
time chairman of the National Association of Personal
Financial Advisors. From the early 1980s until 2011,
Spangler headed a Seattle investment firm known during the
relevant time period as The Spangler Group, which serviced
between twenty and twenty-five client families at any given
time.

    In 1998, Spangler set up five investment funds, two of
which—the Equity Investors Group, LLC (Equity) and the
Income+ Investors Group, LLC (Income)—are particularly
relevant for purposes of this appeal. Spangler’s clients

        1
    We resolve all other issues and affirm the district court in a
memorandum disposition filed concurrently with this opinion.
    2
    We limit this section to general background and expand on the facts
relevant to Spangler’s arguments on appeal in the analysis sections set
forth below.
               UNITED STATES V. SPANGLER                     5

expected that the money they put into Equity and Income
would be invested in publicly-traded companies and that
investment decisions would be made by an outside
investment manager, rather than Spangler.               These
expectations found support in the private placement
memoranda (PPMs) for the funds. Indeed, the 1998 version
of the PPM for Equity, which was drafted by William
Carleton, Spangler’s attorney, provided that “the securities in
which [Equity] invests are expected to be traded in public
markets” and that Spangler would use Southeastern Asset
Management, Inc. to make investment decisions. Both PPMs
provided that the funds’ investment objectives could be
changed only by a two-thirds vote of the owners.

    The PPMs also contained disclaimers, which the defense
emphasized at trial. For example, the PPMs warned clients
that the investments to be made involved a “high degree of
risk” and that “no investment in these securities should be
made by any person who is not in a position to lose the entire
amount of such investment.” At trial, Carleton described
these warnings as “boilerplate.”

    In 1999, Spangler and Carleton organized Spangler
Ventures, which consisted of a series of investment funds
dedicated to startup companies. According to Carleton, the
purpose of Spangler Ventures was to offer “high-risk venture-
style . . . startup company investing” separate from the five
funds set up in 1998. Spangler was intimately involved in
two of the startups in which the Spangler Ventures funds
invested: TeraHop and Tamarac. Spangler served as
chairman of both entities and held other positions as well.

    Despite his apparent intent to separate the funds invested
in public equities from those invested in startup companies,
6               UNITED STATES V. SPANGLER

in 2003 Spangler began to move money from Equity and
Income into TeraHop and Tamarac, all without his clients’
consent. Although he sometimes transferred the money
directly, he often funneled the money through the Spangler
Ventures funds first, largely because he stood to gain 16% of
any profits made by Spangler Ventures under the terms of
those funds.

   Spangler’s diversion of cash from Equity and Income to
TeraHop was especially problematic because TeraHop lost
more than $50 million between 2001 and 2010. Given
TeraHop’s poor financial performance, TeraHop frequently
could not make interest payments on loans it had taken from
Income. Accordingly, TeraHop borrowed money from
Equity and various Spangler Ventures funds to make the
payments, and Income, in turn, used the money to pay
quarterly dividends to investors. In this way, Spangler
operated a circular Ponzi scheme, using his clients’ money to
generate their interest payments.

    To conceal evidence of wrongdoing, Spangler provided
his clients with carefully worded quarterly statements titled
“portfolio performance analyses.” These statements referred
to the funds invested in Equity as “marketable equities” and
the funds invested in Income as “specialty bonds.”
Investments in “private equities” were listed in a separate
category, creating the illusion that only a small percentage of
funds was dedicated to private investments such as startup
companies. In reality, however, a much larger portion of
Spangler’s clients’ portfolios was invested in private equities,
as funds invested in Equity and Income were also being
moved into TeraHop and Tamarac. For example, a portfolio
report for one of Spangler’s clients from the last quarter of
2010 represented that the client had less than 1% of his
                UNITED STATES V. SPANGLER                     7

portfolio invested in TeraHop when 51% of his portfolio was
actually invested in the startup.

    In 2008, Spangler sent letters to his clients and asked
them to sign new PPMs for Equity, Income, and other funds.
The letters informed Spangler’s clients of name changes for
some of the funds (e.g., Equity became “SG Growth+
Investors Group, L.L.C.” and Income became “SG Income+
Investors Group, L.L.C.”). The new PPMs gave Spangler
discretion to invest funds himself rather than with the
assistance of an outside investment adviser. Further, the
revised PPM for Equity changed the language of the original
PPM stating that securities were “expected to be” traded in
public markets to read that securities “may be” traded in
public markets. The PPMs did not mention TeraHop or
Tamarac directly, and Spangler’s clients testified that they did
not closely review the new PPMs or seek legal advice before
signing them, largely because they trusted Spangler and relied
on his expertise.

    Concerned about their investments in the wake of the
economic downturn of 2008, some of Spangler’s clients
asked him to liquidate their investments in Equity and
Income, which Spangler could not accomplish within the time
constraints established by the PPMs. When Spangler
informed his clients that he needed to seek new investors to
liquidate their interests, they told him that the plan sounded
like a Ponzi scheme. From there, the situation unraveled, and
in 2011 The Spangler Group was forced into receivership.
The receiver was able to recover some of Spangler’s clients’
funds, but many of his clients lost millions.

   At trial, Spangler rested after the government’s case
without testifying or offering other evidence. On November
8              UNITED STATES V. SPANGLER

7, 2013, the jury found Spangler guilty of thirty-two of the
thirty-three counts charged, finding him not guilty of one
count of wire fraud. On March 13, 2014, the district court
sentenced him to 192 months of imprisonment and three
years of supervised release. Spangler timely appealed,
challenging only his convictions.

                       DISCUSSION

I. Whether the District Court Abused its Discretion in
   Barring Spangler’s Expert Witness From Testifying

    Spangler first argues that the district court erred in
precluding his expert witness, John Keller, from testifying.
We review a district court’s decision to exclude expert
testimony for an abuse of discretion. See United States v.
Laurienti, 611 F.3d 530, 547 (9th Cir. 2010).

    Before trial, Spangler’s counsel disclosed Keller and three
other potential expert witnesses. The Keller disclosure stated
as follows:

       John Keller is a forensic accountant and
       former criminal investigator with the Internal
       Revenue Service. He will testify that he
       reviewed the receiver’s investigation of the
       Spangler Group businesses. He will testify
       that based on his review of the receiver’s
       analysis that there were no unexplained
       diversions of assets. Mr. Keller personally
       reviewed several portfolio position reports
       and portfolio performance summaries. He
       compared various account statements with the
       Spangler Company database of client records.
               UNITED STATES V. SPANGLER                    9

       He found nothing in this analysis that let [sic]
       him to believe that there was any attempt to
       make false representations to client [sic] about
       their account balances or account activity. He
       saw nothing in the client data reports to
       suggest that Mr. Spangler was inappropriately
       diverting client funds for his own benefit. Mr.
       Keller has also reviewed the client portfolio
       analysis to determine the client’s rates of
       return on their investments and compared
       them to rates of return if the clients had
       invested money into index funds or kept their
       money in Southeast Asset Management.

    The government moved to exclude all four expert
witnesses under Federal Rule of Evidence 702 and Daubert
v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993).
The district court denied the government’s motion as it
related to three of Spangler’s witnesses but granted the
motion with respect to Keller, deeming his testimony not
relevant.

    Initially, the government contends that Spangler may not
raise this argument on appeal because he failed to testify on
his own behalf or otherwise introduce witness testimony or
other evidence at trial. In support, the government relies on
Luce v. United States, 469 U.S. 38 (1984), which held that, to
preserve for review a claim of improper impeachment of the
defendant with a prior conviction, the defendant must testify.
Luce provides no analog for the situation here. Spangler’s
10                 UNITED STATES V. SPANGLER

ability to challenge the ruling excluding expert testimony is
governed by Federal Rule of Evidence 702.3

    With respect to diversions of assets and false
representations, the district court did not abuse its discretion
in excluding the proffered testimony. Spangler argues that
Keller’s testimony would have been relevant to his intent to
defraud his clients. At trial, the government argued that
Spangler had hidden from his clients that he had been moving
their money from Equity and Income into TeraHop and
Tamarac by listing on his clients’ financial statements the
funds invested in Equity and Income in separate categories
from the funds invested in private equities. In doing so,
Spangler failed to disclose that the funds in Equity and
Income were also being funneled into private equities,
creating the illusion that his clients’ portfolios were primarily
invested in publicly traded companies.               Given the
government’s theory, any testimony that the clients’ financial
statements accurately reflected the amount of money invested
in each Spangler Group fund would have been irrelevant.
Rather, the government’s point was that, while the financial
statements were technically accurate, they failed to disclose
the reality behind Spangler’s investment decisions. Indeed,
the statements were in evidence for the jury to consider.

   Nor was Keller’s proposed testimony about the prudence
of Spangler’s investment decisions relevant to fraudulent

  3
    Neither party disputes that the district court applied the correct legal
rule. Indeed, the court’s cited reason for exclusion was lack of relevance,
which is folded into the Daubert standard under Federal Rule of Evidence
702. See Estate of Barabin v. AstenJohnson, Inc., 740 F.3d 457, 463 (9th
Cir. 2014) (“We have interpreted Rule 702 to require that ‘[e]xpert
testimony . . . be both relevant and reliable.”’ (alterations in original)
(quoting United States v. Vallejo, 237 F.3d 1008, 1019 (9th Cir. 2001))).
                UNITED STATES V. SPANGLER                     11

intent. The government’s case did not depend on whether
investing in private equities was an advisable investment
strategy but on whether Spangler diverted his clients’ funds
without their knowledge or consent. That in hindsight
Spangler’s investments in startup companies were arguably
prudent does not negate his fraudulent intent. See United
States v. Benny, 786 F.2d 1410, 1417 (9th Cir. 1986) (“While
an honest, good-faith belief in the truth of the
misrepresentations may negate intent to defraud, a good-faith
belief that the victim will be repaid and will sustain no loss is
no defense at all.” (citation omitted)).

    Even if the district court had erred in barring Keller’s
testimony, the error was harmless. Under our test for
harmless error, we “must reverse unless it is more probable
than not that the error did not materially affect the verdict.”
Laurienti, 611 F.3d at 547 (quoting United States v. Rahm,
993 F.2d 1405, 1415 (9th Cir. 1993)). Spangler was able to
assert repeatedly through cross-examination and his counsel’s
opening statement and closing argument that the financial
statements distributed by Spangler accurately reflected his
clients’ investments in the different Spangler Group funds
and that Spangler’s investment strategy was prudent given the
financial crisis of 2008. Moreover, Spangler could have
called a different expert witness, Peter Brous, to testify about
“the state of the economy and its effects on various
investments during a time frame spanning from 2005 to
2010.” Given that Spangler chose not to call Brous to support
his argument that Spangler’s investment strategy was sound,
he cannot credibly argue that he was prejudiced by the district
court’s exclusion of Keller. Cf. United States v. Cohen,
510 F.3d 1114, 1127 (9th Cir. 2007) (reversing the
defendant’s conviction and remanding for a new trial when
12             UNITED STATES V. SPANGLER

the erroneous exclusion of expert testimony left the defendant
“without any way to explain” his argument).

    We also reject Spangler’s attempt to constitutionalize his
claims by arguing that the district court’s ruling deprived him
of his Sixth Amendment right to present a defense. While the
Constitution affords the accused “a meaningful opportunity
to present a complete defense,” Holmes v. South Carolina,
547 U.S. 319, 324 (2006) (quoting Crane v. Kentucky,
476 U.S. 683, 690 (1986)), a criminal defendant “must
comply with established rules of procedure and evidence
designed to assure both fairness and reliability in the
ascertainment of guilt and innocence.” United States v.
Waters, 627 F.3d 345, 354 (9th Cir. 2010) (quoting United
States v. Perkins, 937 F.2d 1397, 1401 (9th Cir. 1991)). In
this case, Spangler was able “to present the substance” of his
defense to the jury. See id.; see also Perkins, 937 F.2d at
1401. The limited nature of Spangler’s defense was in large
part self-imposed, as he declined to introduce three expert
witnesses the district court deemed admissible. Accordingly,
we find no constitutional error.

II. Whether the District Court Abused its Discretion in
    Admitting Testimony Regarding Spangler’s Status as
    a Fiduciary

   Spangler next contends that the district court erred in
permitting testimony about Spangler’s status as a fiduciary.
We review for an abuse of discretion a district court’s
decision to admit evidence. United States v. Curtin, 489 F.3d
935, 943 (9th Cir. 2007) (en banc).

   Before trial, Spangler moved to strike the part of the
second superseding indictment that referenced the fiduciary
                  UNITED STATES V. SPANGLER                            13

duty he owed to his clients4 and to exclude any evidence of
his status as a fiduciary at trial. Specifically, Spangler argued
that evidence of his fiduciary duty would raise the risk that
the jury would perceive a violation of his fiduciary duties (a
civil offense that can result from negligent conduct) as
tantamount to willful fraud, and consequently, find criminal
liability. After finding that the portion of the motion directed
at the indictment was moot, as the court would not read the
indictment to the jury, the district court denied the remainder
of the motion on the basis that its instructions would delineate
“what the elements of each of the crimes charged against Mr.
Spangler are, and what specific burden the government bears
in proving each of those particular elements.”

     Government witnesses did mention Spangler’s status as
a fiduciary in their testimony. For example, when the
prosecutor asked James Peterson, a former client of
Spangler’s, whether he had a lawyer review various legal
documents he had received from Spangler, Petersen answered
that he had not and explained, “I mean, I was paying Mr.
Spangler a good amount of money to be a financial
advisor. . . . And, you know, he was my fiduciary. He had a
fiduciary responsibility to me.” Similarly, the prosecutor
referenced Spangler’s fiduciary duty to his clients during
closing argument and rebuttal. For example, the prosecutor
argued that Spangler’s clients had asked him to “protect my
life’s work. . . . And Mark Spangler, as their investment
advisor, as their fiduciary, said, I will protect it. . . . That is
what a fiduciary is. That is why Mark Spangler’s clients

    4
      The investment-adviser-fraud count of the second superseding
indictment provided, “MARK F. SPANGLER . . . owed a fiduciary
obligation of good faith, loyalty, and fair dealing to [his] clients, which
entrusted MARK F. SPANGLER . . . with their money to manage.”
14              UNITED STATES V. SPANGLER

trusted him when they handed him their life’s work. That is
how these crimes happened.” Although the government
proffered a proposed jury instruction specifying when a
fiduciary duty exists and instructing the jury that a violation
of that duty was one factor to consider in determining
whether the government had proved investment-adviser fraud
beyond a reasonable doubt, the district court refused the
instruction. With respect to both the wire-fraud and
investment-adviser-fraud counts, the court instructed the jury
on the elements of proof without indicating that it could
consider breach of fiduciary duty.

    Spangler now relies on United States v. Christo, 614 F.2d
486 (5th Cir. 1980), and United States v. Wolf, 820 F.2d 1499
(9th Cir. 1987), to argue that the cumulative effect of
references to Spangler’s fiduciary duties by government
witnesses and the prosecutor, as well as the district court’s
failure to give a limiting instruction, raised the risk that a
reasonable juror would have concluded that any breach of
fiduciary duty constituted fraud. Both Christo and Wolf dealt
with the danger of jurors’ equating violations of civil statutes
or regulations with criminal liability in the context of
prosecutions against bank executives for misapplication of
bank funds under 18 U.S.C. § 656.

    In Christo, the government’s case centered on a series of
overdrafts in the defendant executive’s account which, the
government argued, were violations of a civil statute
prohibiting a bank from extending more than $5,000 credit to
its executive officers. Christo, 614 F.2d at 489. The
government “attempt[ed] to bootstrap” the civil violations
into criminal misapplication felonies. Id. at 492. In addition,
the court instructed the jury to consider whether the
overdrafts violated the civil statute in determining criminal
                UNITED STATES V. SPANGLER                    15

liability. Id. at 491. The Fifth Circuit reversed the
convictions on the basis that the government’s conduct
compounded by the improper jury instruction required a new
trial. See id. at 492 (“After examining the record of the trial,
one questions whether Christo was found guilty of willful
misapplication with intent to injure and defraud the bank or
. . . for overdrafting his checking account.”).

    Similarly, in Wolf, we relied on Christo in reversing
convictions of a bank executive for criminal misapplication
of bank funds and false entry. There, the government relied
on violations of banking Regulation O, which requires the
defendant to disclose to the bank’s directors his interest in
bank loans, to show a material nondisclosure on a loan
application. Wolf, 820 F.2d at 1505. The jury was instructed
that violation of Regulation O was “background evidence,”
but we concluded the instruction was insufficient to cure the
“serious risk that the jury would find Wolf guilty of criminal
misapplication and false entry because he failed to comply
with Regulation O.” Id.

    Nothing in this record indicates that testimony and
argument regarding Spangler’s fiduciary status
“impermissibly infected” Spangler’s prosecution.          Cf.
Christo, 614 F.2d at 492. As set out above, the testimony
regarding fiduciary duty was introduced to explain why
Spangler’s clients did not question his documents and reports.
The investors’ lay understandings of Spangler’s fiduciary
o bl i gat i o n s — t h e y t h o u ght t hey coul d t rus t
him—demonstrated how he was able to accomplish the
alleged fraud. We are satisfied that admission of the
testimony did not result in the sort of bootstrapping against
which Christo and Wolf warned. Moreover, any concerns
about the jurors’ equating violations of fiduciary duty with
16              UNITED STATES V. SPANGLER

criminal liability were put to rest by the district court’s
careful instructions on the elements of the offenses and the
absence of reference to breach of fiduciary duty as a
consideration in determining guilt. As such, we conclude
there was no abuse of discretion.

III.   Whether the District Court Violated Spangler’s
       Fifth Amendment Rights When it Declined to
       Strike Count 33 From the Indictment

    Spangler also contends that the district court violated his
Fifth Amendment rights when it declined to dismiss count 33
of the second superseding indictment. We review the
sufficiency of an indictment de novo. United States v. Lo,
231 F.3d 471, 481 (9th Cir. 2000).

     Count 33 alleged that Spangler committed investment-
adviser fraud under the Investment Advisers Act of 1940 by
violating 15 U.S.C. § 80b-6, which prohibits investment
advisers from engaging in certain conduct. A separate section
of the Act, 15 U.S.C. § 80b-17, provides that “[a]ny person
who willfully violates any provision of this subchapter . . .
shall, upon conviction, be fined not more than $10,000,
imprisoned for not more than five years, or both.” Although
the second superseding indictment charged Spangler with
failing to disclose his interests in TeraHop and Tamarac and
the full extent of his clients’ investments in those entities in
violation of § 80b-6, it made no mention of § 80b-17. Nor
did it use the word “willful.”

    Ten days into trial and after the government had presented
all of its evidence, Spangler moved to dismiss count 33,
arguing that the second superseding indictment failed to cite
the correct statutory subsection and to allege willfulness, an
                UNITED STATES V. SPANGLER                    17

essential element of the offense. Because of these defects,
Spangler argued, it was unclear whether the grand jury had
passed on the charge. The district court denied the motion,
finding that it was untimely and therefore that, giving the
indictment a liberal and common-sense reading, it could not
be said “that the defendant was in any way misled or
prejudiced by the error, if there is an error, in the citation.
Nor is the citation omission grounds to dismiss the
indictment, at least at this point in time.”

    Although the failure of an indictment to state an offense
cannot be waived, a tardy challenge—that is, one made
during trial or after the verdict—‘“suggests a purely tactical
motivation’ and is needlessly wasteful because pleading
defects can usually be readily cured through a superseding
indictment before trial.” Lo, 231 F.3d at 481 (quoting United
States v. Pheaster, 544 F.2d 353, 361 (9th Cir. 1976)).
Further, ‘“the fact of the delay tends to negate the possibility
of prejudice in the preparation of the defense,’ because one
can expect that the challenge would have come earlier were
there any real confusion about the elements of the crime
charged.” Id. (quoting Pheaster, 544 F.2d at 361). Given
these considerations, “indictments which are tardily
challenged are liberally construed in favor of validity,”
Echavarria-Olarte v. Reno, 35 F.3d 395, 397 (9th Cir. 1994)
(quoting United States v. Rodriguez-Ramirez, 777 F.2d 454,
459 (9th Cir. 1985)), and the question becomes whether the
indictment is sufficient when “read in a common sense,
nontechnical fashion.” Lo, 231 F.3d at 481.

    Applying that standard here, we have no trouble
sustaining the indictment. “Correct citation to the relevant
statute, though always desirable, is not fatal if omitted,” as
long as the “the error did not mislead the defendant to his
18             UNITED STATES V. SPANGLER

prejudice.” United States v. Vroman, 975 F.2d 669, 671 (9th
Cir. 1992) (internal quotation marks and citations omitted).
Here, Spangler does not argue that he was prejudiced by the
lack of a citation to § 80b-17 nor could he, as he
acknowledged in a pretrial motion that “[v]iolations of §
80b-6 are made criminal through § 80b-17.”

    Instead, Spangler argues that the absence of the word
“willful” from the investment-adviser-fraud count raises the
risk that the grand jury did not find that Spangler acted with
fraudulent intent. This contention also fails. As we stated in
United States v. Awad, 551 F.3d 930, 936 (9th Cir. 2009), “an
inference of willfulness is obvious because of the facts
alleged in the indictment.” Specifically, the second
superseding indictment alleged, among other things, that
Spangler “knowingly devised a scheme and artifice to defraud
investors” by diverting their money “into two risky private
start-up companies” and concealing evidence of any
wrongdoing. Count 33 expressly incorporated all other
portions of the indictment by reference, including the
language quoted above. Given that the Supreme Court in a
related context has defined a “willful” act as “one undertaken
with a ‘bad purpose,”’ Bryan v. United States, 524 U.S. 184,
191 (1998); see also Awad, 551 F.3d at 936, a reasonable
grand juror would infer from the second superseding
indictment that Spangler acted with the requisite bad purpose.

IV.    Cumulative Error

    Finally, Spangler maintains that the cumulative effect of
the errors committed at trial justifies reversal of his
convictions. Under the law of cumulative error, where “no
single trial error examined in isolation is sufficiently
prejudicial to warrant reversal, the cumulative effect of
               UNITED STATES V. SPANGLER                   19

multiple errors may still prejudice a defendant.” United
States v. Frederick, 78 F.3d 1370, 1381 (9th Cir. 1996).
Here, the cumulative error analysis is inapposite, as Spangler
has not demonstrated any errors by the district court. See
United States v. Martinez-Martinez, 369 F.3d 1076, 1090 (9th
Cir. 2004).

                      CONCLUSION

   For the foregoing reasons, we affirm Spangler’s
convictions.

   AFFIRMED.