No. 17-50358 IN THE UNITED STATES COURT OF APPEALS …...no. 17-50358 in the united states court of...

No. 17-50358

IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT _________________________

UNITED STATES OF AMERICA,

Plaintiff–Appellee,

v.

HEON-CHEOL CHI,

Defendant–Appellant. _________________________

On Appeal from the United States District Court for the Central District of California (Walter, J.)

_________________________

BRIEF FOR THE UNITED STATES _________________________

NICOLA T. HANNA United States Attorney Central District of California POONAM G. KUMAR Assistant United States Attorney Central District of California

JOHN P. CRONAN Acting Assistant Attorney General MATTHEW S. MINER Deputy Assistant Attorney General DAVID M. FUHR ANNA G. KAMINSKA JOHN-ALEX ROMANO Trial Attorneys U.S. Department of Justice Criminal Division, Fraud Section 1400 New York Avenue, NW Washington, DC 20530 Tel. 202-353-0249

Case: 17-50358, 06/11/2018, ID: 10903491, DktEntry: 19, of 69

i

TABLE OF CONTENTS

TABLE OF CONTENTS ............................................................................... i

TABLE OF AUTHORITIES ....................................................................... iii

STATEMENT OF JURISDICTION ............................................................. 1

STATEMENT OF THE ISSUES .................................................................. 1

STATEMENT OF THE CASE ..................................................................... 2

I. Procedural History ...................................................................... 2

II. Relevant Facts ............................................................................ 2

A. The Trial Evidence ............................................................ 2

1. Chi Accepts Bribes In Exchange For Helping Foreign Manufacturers Secure Sales In South Korea. ...................................................................... 3

2. Chi Transfers More Than Half A Million Dollars In Bribes To A New York Brokerage Account. ......... 8

3. Chi Continues Accepting Bribes From Kinemetrics After GSL Terminates Its Arrangement With Him And Informs Chi That The Arrangement Is Likely Illegal. .......................... 10

B. The Indictment And Jury Instructions .............................. 12

C. The Jury Deliberations And Verdict ................................. 15

III. Rulings Under Review .............................................................. 16

SUMMARY OF ARGUMENT .................................................................. 16


ii

ARGUMENT ............................................................................................. 18

I. The District Court Correctly Declined To Instruct The Jury On Federal Bribery Law Or To Dismiss The Indictment For Not Alleging A Federal Bribery Offense. ................................... 18

A. Standard Of Review ........................................................ 19

B. The Elements Of A Foreign Bribery Predicate Under The Money Laundering Statutes Do Not Incorporate Section 201(b). ................................................................. 19

II. The District Court Correctly Instructed The Jury On The Elements Of South Korean Bribery. .......................................... 32

A. Plain-Error Review Applies. ............................................ 32

B. The Quid Pro Quo Instruction Was A Correct Statement Of South Korean Law...................................................... 35

C. The “Official Duties” Instruction Was A Correct Statement Of South Korean Law. .................................... 41

D. Any Error Does Not Warrant Reversal. ........................... 46

III. Sufficient Evidence Supported Chi’s Conviction. ....................... 49

A. Standard of Review ......................................................... 49

B. The Evidence Proved That More Than $10,000 In Bribe Payments By Kinemetrics Was Used To Cover The $56,000 Check Charged In Count 6. .......................... 50

CONCLUSION .......................................................................................... 57

STATEMENT OF RELATED CASES ....................................................... 58

CERTIFICATE OF COMPLIANCE .......................................................... 59

CERTIFICATE OF SERVICE ................................................................... 60


iii

TABLE OF AUTHORITIES

Cases

Barber v. Thomas, 560 U.S. 474 (2010) .......................................................... 30

Cannon v. Univ. of Chicago, 441 U.S. 677 (1979) ............................................. 21

Descamps v. United States, 570 U.S. 254 (2013) ............................................... 27

Evans v. United States, 504 U.S. 255 (1992) .................................................... 40

In re Catapult Entertainment, Inc., 165 F.3d 747 (9th Cir. 1999) ....................... 30

Jones v. United States, 527 U.S. 373 (1999) ..................................................... 33

Leocal v. Ashcroft, 543 U.S. 1 (2004) .............................................................. 27

Mathis v. United States, 136 S. Ct. 2243 (2016) ............................................... 27

Maynard v. Cartwright, 486 U.S. 356 (1988) ................................................... 45

McDonnell v. United States, 136 S. Ct. 2355 (2016) .................................. passim

Neder v. United States, 527 U.S. 1 (1999) ................................................... 31, 47

Nyabwa v. United States, 696 F. App’x 493 (Fed. Cir.), cert. denied, 138 S. Ct. 564 (2017) .............................................................. 21 Perrin v. United States, 444 U.S. 37 (1979) ...................................................... 28

Richardson v. March, 481 U.S. 200 (1987) ...................................................... 42

Sandoz Inc. v. Amgen Inc., 137 S. Ct. 1664 (2017) .......................................... 30

Scheidler v. NOW, 537 U.S. 393 (2003) .......................................................... 28

S.E.C. v. McCarthy, 322 F.3d 650 (9th Cir. 2003) ........................................... 22


iv

Sullivan v. Louisiana, 508 U.S. 275 (1993) ..................................................... 47

Taylor v. United States, 495 U.S. 575 (1990) ................................................... 27

United States v. Ali, 620 F.3d 1062 (9th Cir. 2010) ......................................... 19

United States v. Alvarez-Hernandez, 478 F.3d 1060 (9th Cir. 2007) .................... 21

United States v. Awan, 456 F. Supp. 2d 167 (E.D.N.Y. 2006) ......................... 20

United States v. Bertman, 686 F.2d 772 (9th Cir. 1982) .................................... 28

United States v. Boyland, 862 F.3d 279 (2d Cir. 2017), cert. denied, 138 S. Ct. 938 (2018) .............................................................. 44 United States v. Castillo-Mendez, 868 F.3d 830 (9th Cir. 2017) .......................... 47

United States v. Chao Fan Xu, 706 F.3d 965 (9th Cir. 2013), abrogated on other grounds, RJR Nabisco, Inc. v. European Community, 136 S. Ct. 2090 (2016) ................................... 17, 25-26 United States v. Clark, 646 F.2d 1259 (8th Cir. 1981) ...................................... 25

United States v. Corona-Sanchez, 291 F.3d 1201 (9th Cir. 2002) (en banc) ......... 27

United States v. Crowe, 563 F.3d 969 (9th Cir. 2009) ....................................... 32

United States v. Feola, 420 U.S. 671 (1975) ..................................................... 21 United States v. Ferriero, 866 F.3d 107 (3d Cir. 2017), cert. denied, 138 S. Ct. 1031 (2018) ................................................. 28, 44, 45 United States v. Forsythe, 560 F.2d 1127 (3d Cir. 1977) ................................... 28

United States v. Frega, 179 F.3d 793 (9th Cir. 1999) ................................... 41, 47

United States v. Friedman, 854 F.2d 535 (2d Cir. 1988) ................................... 54

United States v. Garrido, 713 F.3d 985 (9th Cir. 2013) ..................................... 38


v

United States v. Gaudin, 515 U.S. 506 (1995) .................................................. 46

United States v. Gibson, 881 F.2d 318 (6th Cir. 1989) ...................................... 21

United States v. Haley, 452 F.2d 398 (8th Cir. 1971) ....................................... 49

United States v. Hanley, 190 F.3d 1017 (9th Cir. 1999) .................................... 50

United States v. Hofus, 598 F.3d 1171 (9th Cir. 2010) ...................................... 40

United States v. Hsieh Hui Mei Chen, 754 F.2d 817 (9th Cir. 1985) ................... 55

United States v. Jackson, 72 F.3d 1370 (9th Cir. 1995) ..................................... 29

United States v. Jefferson, 289 F. Supp. 3d 717 (E.D. Va. 2017) ........................ 44

United States v. Johnson, 297 F.3d 845 (9th Cir. 2002) .................................... 33

United States v. Kaplan, 836 F.3d 1199 (9th Cir. 2016), cert. denied, 137 S. Ct. 1392 (2017) ....................................................... 19, 32 United States v. Lazarenko, 564 F.3d 1026 (9th Cir. 2009) ............... 12, 17, 24-25 United States v. Lemus, 847 F.3d 1016 (9th Cir. 2016) ..................................... 49 United States v. Leyva, 282 F.3d 623 (9th Cir. 2002) ....................................... 38

United States v. Mays, 558 F. App’x 583 (6th Cir. 2014) ................................. 39

United States v. McDonough, 727 F.3d 143 (1st Cir. 2013) ............................... 39

United States v. Mikhel, 889 F.3d 1003 (9th Cir. 2018) .................................... 29

United States v. Nardello, 393 U.S. 286 (1969) ................................................ 28

United States v. Nevils, 598 F.3d 1158 (9th Cir. 2010) (en banc) ................. 49, 50

United States v. Olano, 507 U.S. 725 (1993) .................................................... 33


vi

United States v. One 1997 E35 Ford Van, 50 F. Supp. 2d 789 (N.D. Ill. 1999) .... 20

United States v. Padilla, 639 F.3d 892 (9th Cir. 2011) ...................................... 42

United States v. Prevezon Holdings Ltd., 122 F. Supp. 3d 57 (S.D.N.Y. 2015) .... 20

United States v. Real Property Known as 2291 Ferndown Lane, Keswick VA 22947-9195, 2011 WL 2441254 (W.D. Va. June 14, 2011) ........ 20 United States v. Real Property Known as Unit 5B of Onyx Chelsea Condominium, 2012 WL 1883371 (S.D.N.Y. May 12, 2012) ................. 20, 23 United States v. Repak, 852 F.3d 230 (3d Cir. 2017) ........................................ 48

United States v. Rogers, 321 F.3d 1226 (9th Cir. 2003) ..................................... 50

United States v. Rutgard, 116 F.3d 1270 (9th Cir. 1997) .................................. 50

United States v. Shill, 740 F.3d 1347 (9th Cir. 2014) ....................................... 19

United States v. Silver, 864 F.3d 102 (2d Cir. 2017), cert. denied, 138 S. Ct. 738 (2018) .............................................................. 42 United States v. Skelos, 707 F. App’x 733 (2d Cir. 2017) .................................. 48

United States v. Stauffer, 922 F.2d 508 (9th Cir. 1990) ..................................... 56

United States v. Sun-Diamond Growers of California, 526 U.S. 398 (1999) ..... 31, 38

United States v. Tannenbaum, 934 F.2d 8 (2d Cir. 1991) .................................. 33

United States v. Tirouda, 394 F.3d 683 (9th Cir. 2005) .................................... 33

United States v. Torres, 869 F.3d 1089 (9th Cir. 2017) ................................ 33, 34

United States v. Turner, 133 F.3d 1208 (9th Cir. 1998) .................................... 54

United States v. Urciuoli, 613 F.3d 11 (1st Cir. 2010) ....................................... 54


vii

United States v. Wilkes, 662 F.3d 524 (9th Cir. 2011) ...................................... 56

United States v. Zalapa, 509 F.3d 1060 (9th Cir. 2007) .................................... 46

Village of Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489 (1982) ................................................................................. 45

Statutes & Rules

18 U.S.C. § 2 ........................................................................................... 2, 21

18 U.S.C. § 201(a)(3) ................................................................................... 43

18 U.S.C. § 201(b) ................................................................................ passim

18 U.S.C. § 371 ........................................................................................... 21

18 U.S.C. § 666 ........................................................................................... 38

18 U.S.C. § 924(e) ....................................................................................... 26

18 U.S.C. § 981(a)(1)(B) .............................................................................. 23

18 U.S.C. § 1951(b)(2) ................................................................................. 39

18 U.S.C. § 1956(c)(7)(A) ............................................................................ 30

18 U.S.C. § 1956(c)(7)(B)(i) ......................................................................... 22

18 U.S.C. § 1956(c)(7)(B)(ii) ........................................................................ 22

18 U.S.C. § 1956(c)(7)(B)(iii) .................................................................. 22, 25

18 U.S.C. § 1956(c)(7)(B)(iv) ................................................................ passim

18 U.S.C. § 1956(c)(7)(B)(v) ........................................................................ 22

18 U.S.C. § 1956(c)(7)(D) ............................................................................ 30


viii

18 U.S.C. § 1957 ................................................................................ 2, 12, 50

18 U.S.C. § 1961(1) ..................................................................................... 30

18 U.S.C. § 3231 ........................................................................................... 1

28 U.S.C. § 547(1) ....................................................................................... 21

28 U.S.C. § 1291 ........................................................................................... 1

Fed. R. Crim. P. 26.1 .................................................................................. 30

Fed. R. Crim. P. 52(b) ................................................................................. 32

Patriot Act of 2001, P.L. 107-56, 115 Stat. 272 (Oct. 26, 2001) ..................... 23

Constitutional Provision

U.S. Const., art. II, § 2, cl. 1 ........................................................................ 21

Other Authorities

Black’s Law Dictionary (10th ed. 2014) ...................................................... 27, 40

Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, 37 I.L.M. 1 (Dec. 17, 1997) .......... 29 H.R. Rep. 107-250(I) (Oct. 17, 2001) (available at 2001 WL 1249988) ..... 23, 24

Ninth Circuit Model Jury Instruction 8.13 (2010) ......................................... 38


1

STATEMENT OF JURISDICTION

Defendant Heon-Cheol Chi (“Chi”) appeals from the judgment of

conviction in a criminal case, entered by the district court (Walter, J.) on

October 3, 2017. D.202.1 The district court had jurisdiction under 18 U.S.C.

§ 3231. Chi filed a timely notice of appeal on October 13, 2017. ER 201. This

Court has jurisdiction under 28 U.S.C. § 1291.

STATEMENT OF THE ISSUES

1. In a money laundering prosecution charging that the transacted

property was derived from “an offense against a foreign nation involving . . .

bribery of a public official,” 18 U.S.C. § 1956(c)(7)(B)(iv), whether the district

court erred by not instructing the jury on the elements of federal-official bribery

under 18 U.S.C. § 201(b), in addition to the elements of the foreign bribery

offense, or by not dismissing the indictment for not charging a § 201(b) violation.

2. Whether the jury instructions on the elements of South Korean

bribery were reversible error.

3. Whether the evidence was sufficient to trace the transacted property

to bribe payments.

1 “ER” refers to Chi’s Excerpts of Record; “SER” refers to the government’s Supplemental Excerpts of Record; “D.__” refers to entries on the district court docket; “GX” refers to government exhibits; and “Br.” refers to Chi’s opening brief.


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STATEMENT OF THE CASE

I. PROCEDURAL HISTORY

On April 12, 2017, a grand jury in the Central District of California

returned a First Superseding Indictment charging defendant Chi with six counts

of engaging in monetary transactions in property exceeding $10,000 that was

derived from specified unlawful activity (“SUA”), in violation of 18 U.S.C.

§§ 1957, 2. ER 193-200. The charged SUA was an offense against a foreign

nation involving bribery of a public official, specifically, bribery in violation of

Article 129 of South Korea’s Criminal Code. ER 198. On July 17, 2017, after

a five-day trial, the jury returned a partial verdict convicting Chi on Count 6 and

deadlocking on the remaining counts. D.162. The district court declared a

mistrial on the remaining counts and later dismissed them on the government’s

motion. ER 203. The court sentenced Chi to 14 months of imprisonment, to be

followed by one year of supervised release, and fined him $15,000. ER 202-03.

Chi completed his prison sentence and was released from the custody of the

Bureau of Prisons in May 2018.

II. RELEVANT FACTS

A. The Trial Evidence

Chi was a citizen and resident of the Republic of Korea (“South Korea”).

SER 26; ER 193. Chi worked at the Korea Institute of Geoscience and Mineral

Resources (“KIGAM”), a government-funded research institute, serving at one


3

time as the director or researcher in charge of KIGAM’s Earthquake Research

Center and otherwise as a senior researcher. SER 2-6, 167-69. The

government’s evidence at trial showed that, between 2009 and 2016, Chi

received more than $1 million in bribes from companies that sold seismic

monitoring equipment to KIGAM and other customers in South Korea. That

money was paid to Chi’s California bank account, and he transferred almost half

of it to an investment account in New York.

1. Chi Accepts Bribes In Exchange For Helping Foreign Manufacturers Secure Sales In South Korea.

KIGAM is the sole government-funded geological research institution in

South Korea and it performs research on a variety of geoscience topics. SER 2.

KIGAM’s Earthquake Research Center operates a nationwide acoustic network

to monitor seismic activity and artificial blasts. SER 5; see also SER 29

(KIGAM’s control room is used to brief South Korea’s President in the event of

a nuclear weapons test). KIGAM also performs monitoring under the United

Nations Comprehensive Test Ban Treaty, serving as South Korea’s national data

center. SER 2-4. KIGAM purchased equipment directly from companies to

perform its research and also certified equipment sold to other end users in South

Korea. SER 89-90, 116-18.

Guralp Systems Limited (“GSL”) and Kinemetrics, Inc., manufactured

equipment used in detecting and monitoring earthquakes and other seismic


4

events. SER 8-10, 59-60. GSL is headquartered in the United Kingdom, and

Kinemetrics is headquartered in Pasadena, California. SER 7, 60. Both

companies, as well as Kinemetrics’s subsidiary, Quanterra, sold equipment to

customers in South Korea, including KIGAM – a “significant customer” in a

“large market” according to GSL’s chief executive officer (“CEO”). SER 12-

13, 28, 60-63, 65.

For many years, GSL and Kinemetrics bribed Chi in exchange for Chi

using his official position to help them secure sales in South Korea. Chi’s

assistance took two forms. First, he asked or directed KIGAM to purchase

equipment manufactured by GSL, Kinemetrics, and Quanterra, while also

recommending or certifying those companies’ products to other customers. See,

e.g., SER 57-58, 67-71, 98-100, 104-05, 109-11, 123, 170-74, 178-79. Second, he

gave GSL and Kinemetrics inside information about their competitors’ activities

and about upcoming projects. SER 72-74, 101, 106-07, 113-20, 123, 175-77; see,

e.g., SER 267-78 (Chi emails GSL that a competitor will not have the winning

bid); SER 303 (Chi emails Kinemetrics information about bid involving

GeoSIG); SER 310 (Chi emails Kinemetrics information about Geotech

presentation). In providing this assistance, Chi leveraged his position as a senior

KIGAM researcher and the director of the Earthquake Research Center. See,

e.g., SER 284-85 (October 25, 2011 email from Chi explaining that he is “fully


5

responsible” for the Earthquake Research Center and will be involved in an

“official advisory committee”); SER 253 (email from Chi to GSL explaining that

replacement of old GSL sensors with new ones cannot be done without his

agreement); SER 110-11 (Chi recommended GSL equipment to another end

user in his capacity as official advisor on a dams project).

Chi was eager to help GSL and Kinemetrics win sales in South Korea.

For example, in a December 2004 email, Chi told GSL that he wanted to make

a “large fortune” on orders of GSL equipment for an express train project on

which he worked, adding that GSL should not worry about his payment because

he had a U.S. bank account where the payment could be sent. SER 257. In a

January 2009 email to Kinemetrics, Chi remarked that only “very limited

orders” of equipment were made from Korea during the previous year, adding:

“I want to earn more than my loss. I hope that more orders for Early Warning

Systems will be done this year.” SER 299. Chi also tied his assistance to his

official position. For example, in a July 2008 email, Chi told GSL that his

institute played an important role in inspecting equipment and noted that it had

inspected and certified GSL equipment for a gas company. SER 270. And in

2016, Chi emailed Kinemetrics a photograph of himself and the Korean Minister

of Science “to show” that he had “explained” their product to the Minister, but


6

he also cautioned Kinemetrics not to use the photograph for advertising because

they “[we]re government officers.” SER 318.

GSL and Kinemetrics paid Chi well for his assistance. GSL paid Chi a

purported “advice fee” on each product it sold in South Korea, whether the sale

was to KIGAM or another customer. SER 21-22, 91, 94, 124-25. Between 2003

and 2015, GSL paid Chi almost $1 million. SER 30. Kinemetrics and

Quanterra treated Chi as a sales representative and similarly paid him fees for

products that they sold in South Korea. SER 64, 70-71; see, e.g., GX 222

(schedule showing 15% commission to Chi). Chi set forth the fees he was owed

in emails or invoices to the companies. See, e.g., GX 57 (invoices to GSL);

SER 265 (email to GSL); SER 301 (email to Quanterra and Kinemetrics). Chi

occasionally requested payment from GSL in cash if he would be visiting GSL’s

offices. See, e.g., SER 263 (requesting “Euro money equivalent” of $10,000);

SER 288 (requesting “[]30 bills of 100 euro[] from advice fee”). More

commonly, Chi directed GSL and Kinemetrics to send the money to his Bank

of America account in Glendora, California. SER 71, 95-97, 126-32. Between

2009 and 2016, GSL, Kinemetrics, and Quanterra wired $1,044,690 to Chi’s

account – $650,720 by GSL and $393,970 by Kinemetrics and Quanterra.

SER 244, 246.


7

Chi knew and repeatedly acknowledged in emails to GSL that, as a

government official, it was unlawful for him to use his position, in exchange for

money, to further a company’s sales. See, e.g., SER 281 (“Officially I can not

support any private company by regulation. Therefore, you could not use or

refer my name for your projects in Korea even if you fully supported behind [sic].

I am very sorry for my status as governmental officer.”); SER 290 (“I am a

governmental officer, and I should not have any contact with private

company.”); SER 293 (“Yes, I am a government officer, so I could not make

any private contract. Hence the previous one was il-legal [sic] to me.”).

Accordingly, Chi concealed his arrangements with GSL and Kinemetrics from

his colleagues at KIGAM and from Heesong Geotek, a South Korean distributor

of GSL and Kinemetrics products. SER 91-93, 103-04, 183-84, 188-90; see also

SER 274 (2009 email to GSL: “As you knew, due to my position and status, I

should not support any particular company privately, and my members have not

known the relationship between you and me.”). Chi also deleted emails, SER

261, asked GSL to delete or not forward emails, SER 255, 271, and directed

GSL and Kinemetrics to use opaque language when emailing him about advice

fees. See SER 277 (2010 email to GSL: “Whenever you ask your colleague to

pay advice fee, please let me know just by ‘your request was processed’ or by

any expression you want.”); SER 312 (Kinemetrics response to 2013 email from


8

Chi: “Your request is being process[ed].”). And Chi’s intent in directing the

companies to send his money to a bank account in the United States, rather than

South Korea, was to conceal the schemes. See SER 276-77.

2. Chi Transfers More Than Half A Million Dollars In Bribes To A New York Brokerage Account.

Apart from the $1,044,690 wired by GSL, Kinemetrics, and Quanterra,

Chi’s Bank of America account contained an original balance and credits

totaling about $11,000. SER 133. No other money was deposited into that

account between January 2009 and November 2016. SER 133-34. Thus, 99%

of the money in Chi’s account came from companies that paid him for using his

position to help secure sales in South Korea. SER 134.

Between June 2009 and November 2016, Chi wrote nine checks totaling

$521,000 from his Bank of America account and had them deposited in a Merrill

Lynch investment account in New York. SER 141-50; see also SER 156-57

($378,750.28 in check card purchases in South Korea from Chi’s Bank of

America account between 2009 and 2016). Although the Merrill Lynch account

was in Chi’s name, it listed his address as an apartment in Fort Lee, New Jersey,

where Daniel Yongkoo Lee lived. SER 138, 162-64. Lee did not know Chi or

that his address was listed on Chi’s accounts, and he received several mailings

from Merrill Lynch addressed to Chi with Lee’s name on a “care of” line. SER


9

163-64; see also SER 137, 166 (Lee’s Merrill Lynch broker had same name as

broker listed on Chi’s account).

The nine Bank of America checks deposited into Chi’s Merrill Lynch

account ranged in value from $30,000 to $150,000, and six checks were the bases

for the money laundering counts. GX 33; ER 198. Deducting the original

$11,000 balance in Chi’s Bank of America account from any single check still

left, for that check, more than $10,000 in money originally wired by GSL,

Kinemetrics, and Quanterra. SER 154. That was true of the Bank of America

check charged in Count 6. ER 198. That check, for $56,000, posted to Chi’s

Merrill Lynch account on November 22, 2016. SER 150-52. A forensic

accountant for the FBI determined that the $56,000 check was covered by at

least $35,542 in funds received from Kinemetrics. SER 155, 251.

The $521,000 in deposited Bank of America checks accounted for 94% of

the funds in Chi’s Merrill Lynch account between May 2009 and November

2016. SER 157-58. During that period, 23% of the funds in Chi’s Merrill Lynch

accounts was transferred to his Citibank account in South Korea. SER 159.

None of the money in Chi’s Merrill Lynch or Bank of America accounts was

transferred to KIGAM. SER 136, 160-61.


10

3. Chi Continues Accepting Bribes From Kinemetrics After GSL Terminates Its Arrangement With Him And Informs Chi That The Arrangement Is Likely Illegal.

Chi’s concealed arrangement with GSL began to unravel after

Christopher Potts became the CEO of GSL in late 2014. SER 7-9. Potts was

suspicious about GSL’s history of paying Chi purported consulting fees after

reviewing relevant documents, including invoices from Chi that referred, oddly,

to “units” of consultancy and showed a New Jersey address even though Chi

lived in South Korea. SER 15-18, 24-27. Potts knew that Chi was a “very

important customer” but he was concerned that the payments by GSL might be

bribes. SER 31-32.2 During a September 15, 2015, meeting, Potts told Chi that

he did not want to continue GSL’s arrangement with Chi because he thought it

was illegal and feared they would both end up in jail. SER 31, 33. Chi

confirmed that he was a government employee and did not push back on Potts’s

concerns. SER 32-35.

Chi later asked GSL, which for internal purposes had always factored into

its pricing how much it had to pay Chi, to continue considering advice fees when

setting prices. SER 35-39. During a December 2015 meeting, Potts reminded

Chi that GSL would no longer pay him. SER 40. When asked, Chi again

2 Chi was “instrumental” in growing GSL’s annual sales in South Korea,

from $20,000 to $50,000 in the early 2000s to around $1 million by 2014 or 2015. SER 121.


11

confirmed that he was a government employee. SER 40. Chi also said that

KIGAM was not aware of his arrangement with GSL; that only two people at

GSL had known about it; and that he had kept the arrangement confidential,

including by deleting emails, because it was illegal. SER 39-43.

Chi lobbied GSL to enter into new license and consultancy agreements

with KIGAM, in part to “justify[] the payments of previous advice fees legally.”

SER 45-46, 296. When Potts informed Chi that GSL would not proceed with

the agreements but still wanted to work with KIGAM, Chi said that GSL had

to make a “soft landing,” i.e., phase out payment of his fees over time. SER 49-

52. Potts declined to do so. SER 52. GSL later notified British authorities of

its previous payments to Chi. SER 54-55.

Chi continued receiving payments from Kinemetrics after Potts informed

him in September 2015 that GSL was discontinuing its arrangement with him.

See SER 244 (wires of $66,500 and $21,100 on November 9 and December 11,

2015, respectively). In June 2016, Chi informed Kinemetrics that he had

endorsed a Kinemetrics broadband sensor over a GSL product to the Korean

Meteorological Agency and that he too would be ordering the Kinemetrics

sensor the following year for KIGAM. SER 174, 320.

On December 12, 2016, Chi was arrested at the San Francisco airport

while traveling to attend a seismology convention. SER 180-81.


12

B. The Indictment And Jury Instructions

The superseding indictment charged that Chi engaged in monetary

transactions in property exceeding $10,000 derived from “specified unlawful

activity, that is, an offense against a foreign nation involving bribery of a public

official in violation of foreign law (Article 129 of South Korea’s Criminal

Code).” ER 198. Article 129 provides in relevant part:

A public official or an arbitrator who receives, demands or promises to accept a bribe in connection with his/her duties, shall be punished by imprisonment for not more than five years or suspension of qualifications for not more than ten years.

D.49-2 at 2.

Chi moved to dismiss the superseding indictment on the ground that it did

not adequately allege the underlying bribery offense. In doing so, he argued that

the indictment needed to allege conduct violating not only Article 129 but also

18 U.S.C. § 201(b). D.68 at 13-24. The district court denied that motion,

concluding that the indictment adequately alleged a violation of 18 U.S.C.

§ 1957 and that “‘when bringing charges of money laundering, the government

need not allege all the elements of the specified unlawful activity, i.e., the

underlying offense.’” ER 188 (quoting United States v. Lazarenko, 564 F.3d 1026,

1033 (9th Cir. 2009)) (internal quotation marks omitted).

The parties filed several documents concerning how the jury should be

instructed on whether the charged monetary transactions involved property


13

derived from a foreign offense involving bribery, including notices designating

South Korean law experts, D.49; D.93; opinions of the South Korean law

experts, D.71, D.93; joint statements regarding foreign law, D.95, D.99;

proposed jury instructions, D.97; ER 97-136; and certified translations of South

Korean law documents, D.112. Chi contended again that establishing foreign

bribery as the SUA required proving a violation of domestic bribery law, in

addition to Article 129 of South Korea’s Criminal Code. ER 102-05. As to the

elements of an Article 129 violation, Chi conceded that the parties’ “difference”

was “very, very discrete and narrow,” concerning whether the payment received

by the official needed to be “closely related” to (as opposed to “in connection

with”) the official’s duties. ER 55, 69, 71. Chi also contended that his status as

a public official was a jury question. ER 172.

The district court rejected Chi’s argument that the jury should be

instructed on domestic bribery law. ER 64-67. The court agreed that it needed

to determine that an Article 129 violation fit within the category of foreign

bribery offenses qualifying as predicate activity under the money laundering

statute, 18 U.S.C. § 1956(c)(7)(B), and found that the common law definition of

bribery was “virtually identical” to Article 129’s definition. ER 65. But the

court concluded that, if Congress had “intended to criminalize the laundering of

bribery proceeds only where the foreign bribery statutes tracked the


14

requirements of Section 201,” it would have done so explicitly: unlike other

subsections of § 1956(c)(7)(B) that “specifically incorporate[] definitions from

other United States statutes,” the provision defining foreign bribery offenses

does not incorporate the federal definition. ER 66. Thus, “the jury should only

be instructed on the definition of ‘bribery’ under Article 129.” ER 67.

The court determined that the alleged South Korean bribery offense “boils

down to” whether Chi was a public official and whether “the payment [was]

made or received as a quid pro quo for his conduct.” ER 71. The court also

ruled that, as a matter of law, a director or researcher at KIGAM is a public

official for purposes of Article 129, but the jury would decide the factual question

of whether Chi was a researcher or director. ER 68-69.

The district court instructed the jury that to convict Chi of the charged

money laundering it had to find, inter alia, that the property involved in the

monetary transaction “was, in fact, derived from bribery of a public official in

violation of foreign law, namely, Article 129 of South Korea’s Criminal Code.”

ER 2. That element required the government to prove that:

(1) The defendant is a public official for the purposes of Article 129; and (2) The defendant received, demanded, or promised to accept a payment in exchange for exercising his official duties, or in other words, as a quid pro quo for exercising his official duties.


15

ER 4. The court instructed the jury that a director or researcher at KIGAM is a

public official for purposes of Article 129. ER 4. It defined official duties as

“duties for which the public is responsible under the law, acts closely related to

such duties, acts that the public official is practically or customarily responsible

for, and acts that may influence decision-makers.” ER 5.

C. The Jury Deliberations And Verdict

During deliberations, the jury sent a note asking how to determine if

bribery had occurred under South Korean law. D.165. The district court

referred the jury to its previous instruction on Article 129. D.173. The jury also

asked how to determine whether a KIGAM director or researcher was a public

official. D.167. The court responded that, as a matter of law, such a director or

researcher is a public official. D.174.

During the first afternoon of deliberations, the jury informed the court that

it had reached a verdict on one count but was “hopelessly deadlocked” on the

other five counts. D.171. The parties agreed to the return of a partial verdict.

SER 203-04. The jury convicted Chi on Count 6, and the court granted the

defense’s unopposed motion for a mistrial on the remaining counts. SER 205-

13.


16

III. RULINGS UNDER REVIEW

Chi is appealing the denial of his motion to dismiss, ER 187-89; the jury

instructions and related rulings on South Korean bribery law, ER 4-5, 65-73, 82-

86, 92-93; and the denial of his motion for judgment of acquittal, ER 24-29.

SUMMARY OF ARGUMENT

I. The district court correctly denied Chi’s request to instruct the jury on

the elements of 18 U.S.C. § 201(b) and his related motion to dismiss the

indictment. The indictment alleged that the underlying unlawful activity was

“an offense against a foreign nation involving . . . bribery of a public official.”

18 U.S.C. § 1956(c)(7)(B)(iv). The plain language of that provision refers to a

bribery offense in violation of the foreign nation’s law, not generic bribery

(which Chi equates with a § 201(b) offense). Indeed, Congress has used almost

an identical term, “offense against the United States,” to refer to offenses

proscribed by specific federal laws; the substitution of “a foreign nation” for “the

United States” in § 1956(c)(7)(B) signals Congress’s reference to particular

violations of foreign law, here, Article 129 of South Korea’s Criminal Code.

Moreover, the list of foreign offenses in § 1956(c)(7)(B) incorporates several

definitions in the United States Code; the absence of a domestic bribery

reference underscores that the elements of a foreign bribery offense are defined

exclusively by foreign law. This natural reading is evident in the statute’s


17

legislative history and supported by United States v. Lazarenko, 564 F.3d 1026 (9th

Cir. 2009), and United States v. Chao Fan Xu, 706 F.3d 965 (9th Cir. 2013),

abrogated on other grounds, RJR Nabisco, Inc. v. European Community, 136 S. Ct.

2090 (2016). Chi’s arguments to the contrary, including his reliance on cases in

the sentencing-enhancement context, are meritless.

II. The district court correctly instructed the jury on the elements of a

South Korean bribery offense. Chi’s arguments here should be reviewed for

plain error because he failed to raise several of them at any point below, and he

failed to object in any respect to the court’s final instructions. But even under a

de novo standard of review, the instructions do not warrant reversal. The court

defined the quid pro quo required by Article 129 and the meaning of “official

duties” in accordance with decisions of South Korea’s Supreme Court, and the

instructions as a whole posed no risk that the jury would convict Chi of

unknowing or innocent conduct. Chi’s arguments for an instruction on “corrupt

intent to be influenced” and for a narrower “official duties” instruction are based

on domestic-law considerations, not relevant South Korean law. Moreover, any

error was not prejudicial and does not warrant reversal: the government

presented substantial evidence that Chi intended to promote Kinemetrics and

GSL sales in exchange for payment and that he attempted to conceal his

arrangements with the two companies. Chi’s procurement-related conduct also


18

reflected a formal exercise of governmental power.

III. The evidence sufficiently proved that more than $10,000 of the

transacted property charged in Count 6 – the $56,000 check deposited into Chi’s

Merrill Lynch account in 2016 – was derived from bribe payments. It is

undisputed that the check was covered by at least $35,542 in payments

Kinemetrics wired to Chi’s Bank of America account in late 2015, which were

purported commissions on sales of Kinemetrics equipment to KIGAM and

another end user. The jury could reasonably conclude that Chi received that

money in exchange for exercising his official duties to help secure those sales

based, inter alia, on evidence that Chi routinely recommended Kinemetrics

products to KIGAM and other end users, was paid by Kinemetrics for doing so,

was in a position to advance Kinemetrics sales given his responsibilities at

KIGAM, and sought to conceal his arrangement with Kinemetrics.

ARGUMENT

I. THE DISTRICT COURT CORRECTLY DECLINED TO INSTRUCT THE JURY

ON FEDERAL BRIBERY LAW OR TO DISMISS THE INDICTMENT FOR NOT

ALLEGING A FEDERAL BRIBERY OFFENSE.

Section 1957(a) makes it a crime to “knowingly engage[] . . . in a monetary

transaction in criminally derived property of a value greater than $10,000 [that]

is derived from specified unlawful activity” (SUA). “[W]ith respect to a

financial transaction occurring in whole or in part in the United States,” the


19

statute defines SUA to include “an offense against a foreign nation involving . .

. bribery of a public official . . . .” Id. § 1956(c)(7)(B)(iv). Chi contends (Br. 14-

29) that this provision requires at least “generic federal bribery of a public

official,” which he equates with a violation of 18 U.S.C. § 201(b), and

accordingly that the district court erred by not instructing the jury on, or

dismissing the indictment for failure to allege, a § 201(b) offense. Chi is wrong.

A. Standard Of Review

This Court reviews de novo whether the jury instructions omitted or

misstated elements of the offense, United States v. Kaplan, 836 F.3d 1199, 1214

(9th Cir. 2016), cert. denied, 137 S. Ct. 1392 (2017), and whether the indictment

failed to state an offense, United States v. Ali, 620 F.3d 1062, 1067 (9th Cir. 2010).

B. The Elements Of A Foreign Bribery Predicate Under The Money Laundering Statutes Do Not Incorporate Section 201(b).

The district court correctly concluded that a foreign bribery offense under

§ 1956(c)(7)(B)(iv) does not incorporate the definition of federal-official bribery

in § 201. ER 66-67.

1. The plain language of a statute is controlling when that language is

clear. United States v. Shill, 740 F.3d 1347, 1351 (9th Cir. 2014). Here,

§ 1956(c)(7)(B)(iv) defines the relevant SUA as “an offense against a foreign

nation involving . . . bribery of a public official.” As several courts have

concluded, “[g]iven its ordinary meaning, the phrase ‘against a foreign nation’


20

merely requires that the conduct be prohibited under the law of the foreign

nation in which it is committed.” United States v. One 1997 E35 Ford Van, 50 F.

Supp. 2d 789, 802 (N.D. Ill. 1999); accord United States v. Real Property Known as

Unit 5B of Onyx Chelsea Condominium, 2012 WL 1883371, *5 (S.D.N.Y. May 12,

2012) (rejecting vagueness challenge to § 1956(c)(7)(B)(iv); “offense against a

foreign nation” language and legislative history make clear that “foreign, not

domestic, [bribery] law applies”); United States v. Real Property Known as 2291

Ferndown Lane, Keswick VA 22947-9195, 2011 WL 2441254, *4 (W.D. Va. June

14, 2011) (concluding that, because § 1956(c)(7)(B)(iv) requires “‘an offense

against a foreign nation,’” “the federal bribery statute has no bearing on the

determination of ‘specified unlawful activity’”); United States v. Awan, 456 F.

Supp. 2d 167, 182-83 (E.D.N.Y. 2006) (concluding that an “offense against a

foreign nation” refers to violations of foreign law in rejecting vagueness

challenge to the term “involving”); see also United States v. Prevezon Holdings Ltd.,

122 F. Supp. 3d 57, 72-73 (S.D.N.Y. 2015) (finding civil forfeiture allegations

sufficient to support a reasonable basis that government “[would] be able to

prove violations of Russian law involving misappropriation, theft, or

embezzlement” under § 1956(c)(7)(B)(iv)).

Significantly, Congress used analogous language – “offense against the

United States” – in other provisions of the criminal code. See 18 U.S.C. §§ 2, 3,


21

371; see also, e.g., 28 U.S.C. § 547(1) (“each United States attorney, within his

district, shall – [ ] prosecute for all offenses against the United States”); U.S.

Const., art. II, § 2, cl. 1 (the President has the “Power to grant Reprieves and

Pardons for Offenses against the United States”). An “offense against the

United States” is a term of art that refers to a particular federal offense, not a

generic crime. See, e.g., Nyabwa v. United States, 696 F. App’x 493, 494 & n.1

(Fed. Cir.) (unpublished) (construing 28 U.S.C. § 1495: “The statutory term

‘offense against the United States’ refers to offenses defined by substantive

federal criminal statutes.”), cert. denied, 138 S. Ct. 564 (2017); United States v.

Gibson, 881 F.2d 318, 321 (6th Cir. 1989) (“It has long been established that the

words ‘offense against the United States’ encompass all offenses against the laws

of the United States . . . .”). Thus, for example, the prohibition on conspiring to

commit “any offense against the United States,” 18 U.S.C. § 371, prohibits an

agreement to engage in conduct prohibited by a criminal statute, see United States

v. Feola, 420 U.S. 671, 687 (1975), not an agreement to commit a generic crime.

When Congress enacts a new statute using the same words as an existing

statute, it is presumed to act with knowledge of how the existing statute is

construed and to intend that the same construction apply. See Cannon v. Univ. of

Chicago, 441 U.S. 677, 695-98 (1979); United States v. Alvarez-Hernandez, 478 F.3d

1060, 1065-66 (9th Cir. 2007). By using the term “offense against” in


22

§ 1956(c)(7)(B), but replacing “the United States” with “a foreign nation,”

Congress signaled that the statute applies to particular violations of foreign laws,

not to generic crimes.

If Congress had intended to criminalize the laundering of bribery proceeds

only where the activity violated the requirements of § 201(b), it would have said

so. As the district court explained, certain definitions of foreign offenses under

§ 1956(c)(7)(B) “specifically incorporate[] definitions from other” federal

statutes. ER 66; see 18 U.S.C. § 1956(c)(7)(B)(i) (incorporating controlled-

substance definition under the Controlled Substances Act); id. § 1956(c)(7)(B)(ii)

(incorporating crime-of-violence definition in 18 U.S.C § 16); id.

§ 1956(c)(7)(B)(iii) (incorporating foreign-bank definition in the International

Banking Act); id. § 1956(c)(7)(B)(v) (referencing controlled items under the

Arms Export Control Act and regulations). That Congress referenced certain

federal-law definitions in the text of § 1956(c)(7)(B), but not the definition of

federal-official bribery, is strong evidence that an “offense against a foreign

nation involving . . . bribery of a public official” does not depend on satisfying

the elements of § 201(b). Cf. S.E.C. v. McCarthy, 322 F.3d 650, 656 (9th Cir.

2003) (“It is a well-established canon of statutory interpretation that the use of


23

different words or terms within a statute demonstrates that Congress intended

to convey a different meaning for those words.”).3

2. The legislative history of § 1956(c)(7)(B)(iv) reinforces the clear

meaning of the statutory text. See Real Property Known as Unit 5B of Onyx Chelsea

Condominium, 2012 WL 1883371, at *5. Congress added the foreign-bribery

provision as part of the Patriot Act of 2001. See P.L. 107-56, § 315, 115 Stat. 272

(Oct. 26, 2001). The House Committee on Financial Services found several

“shortcomings” in existing law, including that, whereas “most countries simply

make it an offense to launder the proceeds of any crime, foreign or domestic, . .

. only a handful of foreign crimes” then appeared on the SUA list in § 1956(c)(7).

H.R. Rep. 107-250(I), 38 (Oct. 17, 2001) (available at 2001 WL 1249988). The

Committee explained the proposed expansion of that list:

This amendment enlarges the list of foreign crimes that can lead to money laundering prosecutions in this country when the proceeds of additional foreign crimes are laundered in the United States. The additional crimes include all crimes of violence, public corruption, and offenses covered by existing bilateral extradition treaties. The Committee intends this provision to send a strong signal that the

3 In the civil forfeiture statute, Congress specified that property tied to

proceeds obtained from certain “offense[s] against a foreign nation” is subject to forfeiture where, among other things, the criminal activity would also be punishable as a felony “under the laws of the United States” if it “had occurred within the jurisdiction of the United States.” 18 U.S.C. § 981(a)(1)(B). The absence of comparable language in § 1956(c)(7)(B)(iv) indicates, again, that an “offense against a foreign nation involving . . . bribery” is defined according to foreign law.


24

United States will not tolerate the use of its financial institutions for the purpose of laundering the proceeds of such activities.

Id. at 55; see also id. at 56 (cross-referenc[ing] [ ] the foreign crimes that are money

laundering predicates” in discussing civil-forfeiture amendment).

This history reveals that, after the terrorist attacks of September 11, 2001,

Congress detected and sought to fill a gap in the money laundering statutes by

adding foreign bribery and other foreign crimes to the list of money laundering

predicates. Nowhere did Congress specify that the foreign crime must also

satisfy the elements of a domestic crime.4 Rather, Congress’s intent was to send

a “strong signal” that U.S. financial institutions not be used to launder the

proceeds of foreign crimes.

3. The decisions in United States v. Lazarenko, 564 F.3d 1026 (9th Cir.

2009), and United States v. Chao Fan Xu, 706 F.3d 965 (9th Cir. 2013), abrogated

on other grounds, RJR Nabisco, Inc. v. European Community, 136 S. Ct. 2090 (2016),

support the district court’s interpretation of § 1956(c)(7)(B)(iv).

In Lazarenko, the Court held that an “offense against a foreign nation

involving . . . extortion,” 18 U.S.C. § 1956(c)(7)(B)(ii), is not limited to violent

4 The reference to offenses covered by existing bilateral extradition

treaties, see Br.18-19, does not suggest otherwise. That phrase neither modifies the reference to public corruption offenses nor mentions dual criminality; it simply describes certain foreign crimes added by the legislation.


25

offenses, because extortion at common law was a non-violent offense resembling

bribery and Congress did nothing to exclude the common-law meaning when it

used “extortion” in § 1956(c)(7)(B)(ii). 564 F.3d at 1038-40. In rejecting a

separate challenge to the sufficiency of the indictment’s allegations concerning

foreign law, the Court noted that “the jury was instructed that it had to find a

violation of Ukranian law [sic] and was provided with the elements of the

relevant Ukranian statutes [sic].” Id. at 1033-34. Under Lazarenko, therefore,

common law is relevant to determining that the alleged foreign offense is the

type of predicate that Congress sought to reach in § 1956(c)(7)(B), but the jury

should be instructed on the elements of the foreign-law offense. That is what

happened here: Chi conceded that Article 129 of South Korea’s Criminal Code

prohibits bribery of public officials, ER 553, but the district court still confirmed

that “[t]he common law definition of ‘bribery’ is virtually identical” to that in

Article 129, ER 65, before instructing the jury on Article 129. See, e.g., United

States v. Clark, 646 F.2d 1259, 1266 (8th Cir. 1981) (“At common law and under

most statutes, bribery is limited to a payment given in exchange for the exercise

of governmental power.”) (quotation marks and citation omitted).

In Chao Fan Xu, the defendants challenged their convictions for conspiring

to launder the proceeds of foreign bank fraud, see 18 U.S.C. § 1956(c)(7)(B)(iii),

in part on the ground that the district court erroneously instructed the jury that


26

fraud, or a scheme to defraud the Bank of China, “is a felony under foreign

Chinese law.” 706 F.3d at 985-86. In rejecting the defendants’ argument that

Chinese law was “unsettled,” or that the district court had improperly relied on

extradition case law liberally construing criminality, this Court concluded that

the “[d]efendants’ fraudulent acts [we]re unlawful in both the United States and

China.” Id. at 986-87. But the Court left no doubt that the district court’s

reliance on Chinese law to define the predicate fraud was appropriate when it

rejected the claim that the government was “impermissibly seek[ing] to enforce

Chinese law.” Id. at 987. The Court held that the “foreign fraud was a means

to violate United States laws” and that “[t]he challenged instruction

incorporate[d] Chinese law only as a predicate to enforcement of the money

laundering statute.” Id. (citing Pasquantino v. United States, 544 U.S. 349 (2005)).

4. Chi cites no case holding that a foreign bribery offense under

§ 1956(c)(7)(B)(iv) is generic bribery or defined according to domestic bribery

law. His arguments (Br. 14-21) for grafting a domestic-law requirement onto the

plain language of the statute are meritless.

Chi contends that “use of the word ‘offense’ signals the elements of a

generic definition of a crime,” citing cases that apply the categorical approach

to whether a prior conviction qualifies as a violent felony under the Armed

Career Criminal Act (“ACCA”), 18 U.S.C. § 924(e), a crime of violence under


27

18 U.S.C. § 16, or an aggravated felony under 8 U.S.C. § 1101(a)(43). Br. 14-15

(citing Mathis v. United States, 136 S. Ct. 2243 (2016); Descamps v. United States,

570 U.S. 254 (2013); Leocal v. Ashcroft, 543 U.S. 1 (2004); Taylor v. United States,

495 U.S. 575 (1990); United States v. Corona-Sanchez, 291 F.3d 1201 (9th Cir.

2002) (en banc)). But those cases do not construe a term analogous to “offense

against a foreign nation.” See generally Black’s Law Dictionary (10th ed. 2014)

(defining “offense” as “[a] violation of the law; a crime, often a minor one”).

Moreover, the Supreme Court’s adoption of the generic definition of an

offense and the categorical approach in Taylor, an ACCA case, was based on

specific considerations not applicable here. The Court looked to the “generic”

definition of burglary based on the ACCA’s history and text. Taylor, 495 U.S.

at 581-99. Similarly, the Court adopted the categorical approach because it

(1) “comports with ACCA’s history and text”; (2) “avoids the Sixth

Amendment concerns that would arise from sentencing courts[] making findings

of fact that properly belong to juries”; and (3) “averts ‘the practical difficulties

and potential unfairness of [an] approach’” in which a court would have to

determine the facts of a prior offense from “(often aged) documents.” Descamps,

570 U.S. at 267, 270 (quoting Taylor, 495 U.S. at 601). Section 1956(c)(7)(B) is

worded differently than ACCA. And unlike ACCA (or 18 U.S.C. § 16(b)), it

does not involve a court’s consideration of a defendant’s prior conviction: the


28

foreign criminal activity is part of the present charged offense, and the jury’s role

is to determine the facts related to that activity.

Nor do Chi’s authorities under the Travel Act, United States v. Nardello,

393 U.S. 286, 293-96 (1969); Perrin v. United States, 444 U.S. 37, 49 (1979), and

Racketeer Influenced and Corrupt Organizations Act (“RICO”), Scheidler v.

NOW, 537 U.S. 393, 409-10 (2003), support his argument. See Br. 15. The Court

in those cases looked to the generic definition of extortion or bribery to

determine whether acts prohibited by state extortion or bribery laws qualified as

predicate offenses. But it did not hold that the jury should be instructed on the

generic definitions. “[T]here is a difference between the elements of underlying

state-law predicates and the definition of generic offenses enumerated in federal

laws like RICO and the Travel Act.” United States v. Ferriero, 866 F.3d 107, 116

(3d Cir. 2017), cert. denied, 138 S. Ct. 1031 (2018); see, e.g., United States v.

Forsythe, 560 F.2d 1127, 1137 (3d Cir. 1977) (“Nardello stands for the proposition

that alleging a state violation which falls within the generic category of the

predicate offense is adequate to charge a violation of the Travel Act.”). For

example, this Court has held that “[w]hen the unlawful activity charged in the

indictment is the violation of state law,” the government “must prove as part of

the Travel Act charge that the defendant has or could have violated the

underlying state law.” United States v. Bertman, 686 F.2d 772, 774 (9th Cir. 1982);


29

see also United States v. Jackson, 72 F.3d 1370, 1374-76 (9th Cir. 1995) (rejecting

challenge to instructions on state bribery law on RICO count).5

Chi’s reliance (Br. 18) on the Convention on Combating Bribery of

Foreign Public Officials in International Business Transactions, 37 I.L.M. 1

(Dec. 17, 1997), is equally misplaced. Article 7 provides that “[e]ach Party

which has made bribery of its own public official a predicate offence for the

purpose of the application of its money laundering legislation shall do so on the

same terms for the bribery of a foreign public official, without regard to the place

where the bribery occurred.” Chi cites no reference to Article 7 in the legislative

history of § 1956(c)(7)(B)(iv). And Article 7 does not dictate a domestic-law

definition of foreign bribery predicates. Assuming § 1956(c)(7)(B)(iv) reflects an

exercise of Congress’s treaty-implementing authority, Congress reasonably

could have concluded that adding foreign-defined bribery offenses to the

definition of SUA was the appropriate way to make foreign bribery a money

laundering predicate “on the same terms” as domestic bribery. See United States

v. Mikhel, 889 F.3d 1003, 1023-24 (9th Cir. 2018) (rational relationship test

governs whether statute is a valid exercise of Article I treaty-implementing

authority). That is particularly true given the different state and federal bribery

5 As discussed infra, nothing in McDonnell v. United States, 136 S. Ct. 2355

(2016), requires defining foreign bribery predicates according to domestic law.


30

offenses that qualify as predicates under the money laundering statute. See 18

U.S.C. §§ 1956(c)(7)(A), 1956(c)(7)(D), 1961(1). The “same terms” here

involved adding foreign bribery offenses to that list of predicates.

Chi’s fallback (Br. 20-21) to the rule of lenity and policy arguments is

futile. The former “only applies if, after considering text, structure, history, and

purpose, there remains a grievous ambiguity or uncertainty in the statute.”

Barber v. Thomas, 560 U.S. 474, 488 (2010) (quotations marks and citation

omitted). Not so here – the statutory text alone evidences Congress’s intent to

define foreign offenses in § 1956(c)(7)(B)(iv) according to foreign law. Chi’s

policy rationale for a domestic-law definition – that judges should not be

burdened with fashioning foreign-law jury instructions – does not defeat that

plain meaning. See Sandoz Inc. v. Amgen Inc., 137 S. Ct. 1664, 1678 (2017); In re

Catapult Entertainment, Inc., 165 F.3d 747, 754 (9th Cir. 1999). In any event,

Rule 26.1 of the Federal Rules of Criminal Procedure expressly authorizes

district courts to make determinations on foreign law. And Chi’s policy pitch is

at odds with his request below that the district court instruct the jury on South

Korean bribery law (in addition to U.S. law), ER 102-05, and with his apparent

concession here that foreign bribery law would sometimes be relevant to

defining the SUA, see Br. 20-21. Chi’s arguments ring hollow.


31

5. Because § 1956(c)(7)(B)(iv) defines a foreign bribery predicate

according to foreign law, the court did not err by instructing the jury solely on

the elements of Article 129 or in denying Chi’s motion to dismiss for not alleging

a domestic-law violation. Moreover, the latter ruling was independently correct

because, as the district court found, the indictment tracked the language of the

money laundering statute. ER 188, 197-98. Even if domestic bribery law were

somehow relevant to defining foreign bribery under § 1956(c)(7)(B)(iv), it is well

settled that a money laundering indictment “need not allege all the elements of

the ‘specified unlawful activity,’ i.e., the underlying offense.” Lazarenko, 564

F.3d at 1033-34.

6. Finally, any error was harmless beyond a reasonable doubt. See

Neder v. United States, 527 U.S. 1, 9-10 (1999). As discussed below, the

instructions on South Korean bribery law required the jury to find that Chi

engaged in a quid pro quo to convict him. The “in exchange for” language used

by the district court reflects the essence of a bribery offense. See United States v.

Sun-Diamond Growers of California, 526 U.S. 398, 404-05 (1999); see also pp. 39-

40, infra. And the jury heard substantial evidence that, in exchange for payment,

Chi intended to use (and did use) his official position to advance sales by

Kinemetrics (and GSL) and attempted to conceal his arrangements with the two

companies, see pp. 4-8, 11, supra, evidencing his consciousness of guilt. Chi’s


32

conduct also reflected the exercise of formal government power for purposes of

the official-act definition under 18 U.S.C. § 201. See p. 48, infra. The jury would

have convicted Chi even in the absence of the alleged instructional error.

II. THE DISTRICT COURT CORRECTLY INSTRUCTED THE JURY ON THE

ELEMENTS OF SOUTH KOREAN BRIBERY.

Chi contends (Br. 33) that the district court erroneously instructed the jury

on the elements of South Korean bribery by (1) “fail[ing] to convey the

requisite corrupt and influence elements of bribery under Korean law,” and

(2) “incorrectly set[ting] forth the official act and public official elements.”

Chi failed to preserve these arguments because he did not object to the court’s

final instructions. In any event, the instructions were a correct statement of

South Korean law and supply no basis for reversal.

A. Plain-Error Review Applies.

As to preserved claims, the Court reviews de novo whether jury

instructions omit or misstate an element of the offense, and reviews the wording

of the instructions for an abuse of discretion. Kaplan, 836 F.3d at 1214. A

defendant’s failure to timely object to an instruction, however, triggers plain-

error review. See Fed. R. Crim. P. 52(b); United States v. Crowe, 563 F.3d 969,

972-73 (9th Cir. 2009). Under that standard, reversal is warranted only if

(1) there was error; (2) that was plain; (3) that affected substantial rights; and


33

(4) that seriously affected the fairness, integrity, or public reputation of judicial

proceedings. United States v. Olano, 507 U.S. 725, 733-37 (1993).

“[A] request for an instruction before the jury retires [does not] preserve

an objection to the instruction actually given by the court.” Jones v. United States,

527 U.S. 373, 388 (1999); accord United States v. Johnson, 297 F.3d 845, 866 n.19

(9th Cir. 2002). Nor is a general objection sufficient; a party must state distinctly

the matter to which it is objecting and the grounds for the objection. Fed. R.

Crim. P. 30(d); see, e.g., United States v. Tirouda, 394 F.3d 683, 688 (9th Cir. 2005).

The objection must be “specific enough to bring into focus the precise nature of

the alleged error.” United States v. Torres, 869 F.3d 1089, 1106 n.4 (9th Cir. 2017)

(quotation marks and citations omitted).

Chi failed to preserve his current challenges. The court ruled on the

parties’ requests for jury instructions and read its tentative instructions on the

elements of an Article 129 violation at a pretrial hearing. ER 82-86. Chi lodged

only one general and one specific objection to the tentative instructions. ER 91.

The general objection – that the court did not grant the proposed defense

instruction – was not sufficient under Rule 30(d). See Tirouda, 394 F.3d at 688;

see also United States v. Tannenbaum, 934 F.2d 8, 14 (2d Cir. 1991) (“‘[R]equested

instructions do not substitute for specific objections to the court’s instructions.’”)

(quoting United States v. Graziano, 710 F.2d 691, 696 n.8 (11th Cir. 1983)). Chi’s


34

specific objection was that the court’s proposed definition of “official duties”

included acts that “assist” decision makers. ER 91. The court stated that it

would take the matter under advisement. ER 91. Chi then filed a supplemental

memorandum concerning only his objection to the “assist” language in the

official-duties instruction. D.141. Shortly before it charged the jury, the court

removed the “assist” language. SER 185-87. Chi made no objection at that

point. SER 187. Nor did he object when the court, after charging the jury, asked

the parties if “there [were] any objections to the jury instructions that were read

by the Court.” SER 192.

In short, once the court disclosed its tentative instructions to the parties,

Chi did nothing to bring into focus the alleged errors of which he now

complains. Torres, 869 F.3d at 1106 n.4. He did not object to the absence of

language about acting “corruptly” or with an intent to be “influenced”; to use of

the word “including” or the inclusion of duties for which an official was

“customarily responsible” in the official-duties definition; or to the instruction

that a KIGAM director or researcher is a public official. Accordingly, this Court

should review his claims for plain error.6

6 In particular, Chi points to nothing in the record showing that he

previously raised his current arguments concerning the official-duties definition or an express requirement that the jury find he intended to be influenced by the payments. He notes that he requested an instruction requiring the jury to find that an “improper payment was given in exchange for expressing his official


35

B. The Quid Pro Quo Instruction Was A Correct Statement Of South Korean Law.

Article 129 of South Korea’s Criminal Code makes it a crime for a “public

official” to “receive[], demand[] or promise[] to accept a bribe in connection

with his/her duties.” D. 49-2 at 2. As relevant here, the court instructed the

jury that, to find a violation of Article 129, it had to find that:

(1) [t]he defendant was a public official . . .; and

(2) [t]he defendant received, demanded, or promised to accept a payment in exchange for exercising his official duties, or in other words, as a quid pro quo for exercising his official duties.

ER 4. That instruction accurately conveyed the requirements of Article 129.

To begin with, the instruction did not differ substantially from Chi’s

proposed instruction on Article 129, which would have required the jury to find

that he was a public official; that he “received a payment closely related to his

official duties”; and that “[t]he improper payment was given in exchange for

exercising his official duties.” ER 121; see also ER 55 (Chi’s counsel noting only

a “very discrete and narrow difference” between the parties’ proposed

instructions). The court found that Chi’s proposed language about the payment

duties” and to agree on what he “intended to do in return for the payment.” Br. 30; see ER 12. But those were requests, not objections; the latter request went to juror unanimity; and neither request used the “intent to be influenced” language he now claims (Br. 33) should have been included. See also ER 90 (Chi’s expert making vague reference to the importance of “being influential” as an element of the quid pro quo).


36

being “closely related to” official duties, as well as the government’s “in

connection with” language (ER 117), risked confusing the jury about the

required nexus between the payment and the official duties. ER 70-71. The

“causal connection,” the court explained, “is really the quid pro quo”; the

payment “has to be an exchange for something. And that something has to be

the individual’s exercise of his official duties.” ER 70-71. The court ensured

that the jury focused on that requirement by giving a separate, “freestanding”

definition of official duties. ER 71; see ER 5.

The quid pro quo instruction accurately captured the requirements of

Article 129. Requiring that the public official receive, demand, or promise to

accept a payment “in exchange for” exercising his official duties accords with

the South Korean Supreme Court’s definition of the “legal interests” protected

by Article 129: “fairness in the carrying out of duties, and the inability of duties

to be bought or sold.” ER 484 (case 2013 Do 9003); accord ER 430 (case 2005

Do 4204); see D.71 at 5 n.4 (Supreme Court is only court in South Korea whose

“interpretations and decisions are considered to have binding authority”). And

it reflects how the Supreme Court has applied Article 129 in particular cases,

often with language mirroring the district court’s instruction. See, e.g., ER 430

(case 2005 Do 4204) (whether an official’s receipt of gain qualified as a bribe, in

that it had “a quid pro quo relationship with his official duties,” depends on “all


37

of the surrounding circumstances”); ER 342 (case 96 Do 3378) (finding that

political donations also qualify as bribes “as long as they were offered in

exchange for” exercise of official duty); ER 393 (case 2000 Do 5438) (describing

bribe “as an unlawful profit related to [the official’s] job, accompanied by the

expectation of any reciprocity”).

Thus, the Supreme Court has found bribery where the official helped an

individual obtain a military promotion “in return for” a land swap favorable to

the official, ER 393-94 (case 2000 Do 5438); where policemen arranged for

defense counsel to be appointed to represent suspects in an investigation “in

return for” a portion of counsel’s retention fee, ER 348-49 (case 98 Do 3697);

and where the father of a soldier paid an officer responsible for recommending

assignments to a battalion commander “in return for” the officer getting the

soldier assigned to a favorable job, ER 415 (case 2004 Do 1442). The quid pro

quo in those cases – payments “in return for” exercises of official duty – is exactly

what the district court’s instruction required here before the jury could find that

the monetary transactions involved property derived from a violation of Article

129. ER 4.

Chi contends (Br. 33) that the court erred by not requiring the jury to find

that he had a “corrupt intent to be influenced” because that is the “essence” of

a bribe. But Chi cites domestic law, 18 U.S.C. § 201(b)(2); United States v. Sun-


38

Diamond Growers of California, 526 U.S. 398 (1999), on that point. While the

language of federal bribery statutes focuses on the intent of the bribe payor or

payee to influence or be influenced, see 18 U.S.C. §§ 201(b), 666, South Korean

law analyzes bribery from the standpoint of whether the payment was in return

for exercising an official duty. Indeed, as filed, Chi’s proposed instructions on

Article 129 did not include as an element that he acted “corruptly,” ER 121; he

requested this instruction only after the court ruled that it would not also instruct

the jury on § 201(b), ER 78-79, betraying his belief that Article 129 does not

require it. And contrary to Chi’s argument (Br. 33), simply because the court

concluded, under a Lazarenko analysis, that the definitions of bribery under

South Korean law and common law are largely the same, ER 65, does not mean

the jury should have been instructed with language imported from a specific

domestic statute. See United States v. Garrido, 713 F.3d 985, 996-97, 1000-01 (9th

Cir. 2013) (declining to apply Sun-Diamond Growers’ interpretation of § 201(b) to

§ 666).

In any event, the district court’s instructions effectively required the jury

to find that Chi acted with illicit intent. “‘[C]orruptly’ under the bribery sections

of § 201 refers to the defendant’s intent to be influenced to perform an act in

return for financial gain.” United States v. Leyva, 282 F.3d 623, 626 (9th Cir.

2002); accord Ninth Circuit Model Jury Instruction 8.13 (2010). That intent was


39

implicit in the quid pro quo requirement, i.e., that Chi received, demanded, or

promised to accept a payment “in exchange for” exercising an official duty. If

a public official is trading the exercise of official duties for payments, those

payments are influencing the official’s conduct. Indeed, Chi’s own instructions

did not include an express “intent to be influenced” element; they effectively

treated the question of intent as implicit in the same “in exchange for” language

used by the district court. See ER 121 (third proposed element).

Courts often refer to the exchange of payment for official action as the

gravamen of a federal bribery offense. See, e.g., McDonnell, 136 S. Ct. at 2361

(“To convict the McDonnells of bribery, the Government was required to show

that Governor McDonnell committed (or agreed to commit) an ‘official act’ in

exchange for the loans and gifts.”); United States v. Mays, 558 F. App’x 583, 586-

87 (6th Cir. 2014) (unpublished) (“The essence of bribery under § 201 is the

receipt of something of value ‘in exchange for an official act.’”) (quoting Sun-

Diamond Growers, 526 U.S. at 404-05); United States v. McDonough, 727 F.3d 143,

152 (1st Cir. 2013) (defining quid pro quo in the context of honest-services fraud

as “the receipt of something of value ‘in exchange for’ an official act”). In the

related context of extortion under color of official right, 18 U.S.C. § 1951(b)(2),

an instruction requiring the jury to find that “a public official demand[ed] or

accept[ed] money in exchange for [a] specific requested exercise of his or her


40

official power” satisfies even the explicit quid pro quo requirement under

McCormick v. United States, 500 U.S. 257 (1991). Evans v. United States, 504 U.S.

255, 258, 268 (1992).7

Further, the instructions here required the jury to find that Chi received

an improper benefit and acted with consciousness of wrongdoing. See Br. 34.

The district court instructed the jury that Article 129 prohibits a public official

from receiving, demanding, or promising to accept a bribe in connection with his

duties.” ER 4 (emphasis added). A “bribe” connotes an illicit payment. See

Black’s Law Dictionary (10th ed. 2014) (defining “bribe” as “[a] price, reward, gift

or favor given or promised with a view to pervert the judgment of or influence

the action of a person in a position of trust.”). And the jury had to find that Chi

knew the money he laundered in the United States “constituted, or was derived

from, proceeds obtained by some criminal offense.” ER 2-3 (emphasis added).

Thus, quite apart from the fact that this case centered on concealed payments

Chi received from GSL and Kinemetrics, the instructions ensured the jury would

not find an Article 129 violation based on such innocent conduct as “collect[ing]

a paycheck” from KIGAM (Br. 34). See United States v. Hofus, 598 F.3d 1171,

1174 (9th Cir. 2010) (“The relevant inquiry is whether the instructions as a whole

7 Chi’s assertion (Br. 34) that the district court relied solely on Latin

phrasing is wrong; the instruction defined the quid pro quo. ER 4.


41

are misleading or inadequate to guide the jury’s deliberation.”) (quotation marks

and citation omitted).

In charging the jury, “[t]he trial court has substantial latitude so long as its

instructions fairly and adequately cover the issues presented.” United States v.

Frega, 179 F.3d 793, 806 n.16 (9th Cir. 1999). The district court reviewed

extensive materials on South Korean law, including case decisions, the joint

statement of the parties, and the opinions of their experts, and it heard argument

on the elements of an Article 129 offense. ER 53-54; see also pp. 12-13, supra.

The court was keenly aware of the need to prevent its instructions on South

Korean bribery from capturing innocent conduct. See SER 186 (as to the “assist”

language removed from the official-duties definition: “I continue to believe that

that language is too vague and confusing to a lay jury and could sweep in

innocuous, innocent, non-criminal conduct.”). The court committed no error

whatsoever by instructing the jury in a manner that tracked the South Korean

Supreme Court’s analysis of the quid pro quo required by Article 129.

C. The “Official Duties” Instruction Was A Correct Statement Of South Korean Law.

The court instructed the jury that official duties “include duties for which

the public official is responsible under the law, acts closely related to such duties,

acts that the public official is practically or customarily responsible for, and acts

that may influence decision-makers.” ER 5. This instruction was also correct.


42

First, the court’s use of the word “include” was not erroneous. Chi

contends (Br. 35) that “include” is a term of enlargement, but the jury would

have understood the term just as the court used it – to introduce a finite set of

acts constituting official duties, not an open ended list of examples (as conveyed,

for example, by “include but are not limited to”). The court’s separate admonition

“to apply the law as I give it to you,” SER 218, precluded the jury from looking

outside the court’s definition of official duties. See Richardson v. March, 481 U.S.

200, 211 (1987) (jury is presumed to follow its instructions); United States v.

Padilla, 639 F.3d 892, 897 (9th Cir. 2011) (same). The court committed no

error.8

Nor was the district court’s inclusion of “acts that the public official is . . .

customarily responsible for” erroneous. To the contrary, the language reflects

South Korea’s definition of official duties under Article 129. See ER 415 (case

2004 Do 1442); ER 403 (case 2001 Do 970); ER 348-49 (case 98 Do 3697). One

of Chi’s cited cases defines the term to include “duties with which a person is

customarily or actually involved.” ER 426 (case 2005 Do 1420). Chi finds it

8 Chi’s reliance on United States v. Silver, 864 F.3d 102 (2d Cir. 2017), cert.

denied, 138 S. Ct. 738 (2018), is misplaced. The court there held that the jury instruction was erroneous because it defined “official act” as “any action taken or to be taken under color of official authority,” not because it used the term “includes.” Id. at 118 (emphasis in original).


43

significant that the court in that and another case did not find bribery where the

defendant performed a duty that, in his view, was invariably one for which he

was customarily responsible. Br. 35-36 (citing ER 426-27, 517-21). But the

outcome of those cases rested on other grounds. See ER 427 (concluding that

treatment of individual at detention center was not “closely related” to duties of

professor at national medical school); ER 518-21 (finding insufficient evidence

that consulting fee received by a national researcher “assume[d] the nature of

quid pro quo for the job duty performance”). Neither case applied the

“customarily responsible for” prong of the official-duties definition, let alone

held that such acts are beyond the scope of Article 129.

The U.S. Supreme Court’s decision in McDonnell did not require removing

that prong from the definition of official duties. See Br. 22-25, 35. McDonnell

adopted a two-part test for what constitutes an “official act” under 18 U.S.C.

§ 201(a)(3). 136 S. Ct. at 2371. First, “[t]he ‘question, matter, cause, suit,

proceeding or controversy’ must involve a formal exercise of governmental

power that is similar in nature to a lawsuit before a court, a determination before

an agency, or a hearing before a committee.” Id. at 2372; see id. (matter “must

also be something specific and focused that is ‘pending’ or ‘may by law be

brought’ before a public official”). Second, the official “must make a decision

or take an action on that ‘question, matter, cause, suit, proceeding or


44

controversy,’ or agree to do so,” such as by “using his official position to exert

pressure on another official to perform an ‘official act,’ or to advise another

official, knowing or intending that such advice will form the basis for an ‘official

act’ by another official.” Id. The Court held that “[s]etting up a meeting, talking

to another official, or organizing an event (or agreeing to do so) – without

more – does not fit that definition of ‘official act.’” Id.

The holding in McDonnell is based on the text of § 201(a)(3) and precedent

applying it. 136 S. Ct. at 2367-72. For that reason, courts have declined to apply

McDonnell to differently worded domestic statutes. See, e.g., Ferriero, 866 F.3d at

127-28 (3d Cir.) (New Jersey bribery statute); United States v. Boyland, 862 F.3d

279, 290-91 (2d Cir. 2017) (Section 666 and Travel Act conspiracy), cert. denied,

138 S. Ct. 938 (2018); United States v. Jefferson, 289 F. Supp. 3d 717, 735-36 (E.D.

Va. 2017) (Foreign Corrupt Practices Act conspiracy). Similarly, here, because

Article 129 does not refer to “official act” or the language in § 201(a)(3), and

because it was enacted by a foreign sovereign, not Congress, McDonnell is

irrelevant to the meaning of official duties under South Korean law.

To be sure, the Court in McDonnell also found that the government’s

“expansive” reading of “official act” raised “significant constitutional

concerns,” i.e., (1) potential interference in the ability of elected public officials

to respond to the needs of constituents, (2) notice concerns due to the vagueness


45

of the government’s definition, and (3) “setting standards of good government

for local and state officials,” in contravention of federalism principles.

McDonnell, 136 S. Ct. at 2372-73 (quotation marks and citation omitted).9 But

those concerns do not exist here: (1) the corrupt relationship was between Chi

and foreign companies, not any constituents, and as discussed below, his

conduct satisfies McDonnell’s definition of official act; (2) any vagueness

concerns were mitigated by the instructions requiring the jury to find that Chi

engaged in a quid pro quo and knew that the property involved in the money

laundering transactions was derived from a criminal offense, see Maynard v.

Cartwright, 486 U.S. 356, 361 (1988); Village of Hoffman Estates v. Flipside, Hoffman

Estates, Inc., 455 U.S. 489, 499 & n.14 (1982); and (3) instructing the jury on

South Korea’s definition of official duties, which includes acts for which an

official is customarily responsible, respects South Korean law, see Ferriero, 866

F.3d at 128.

Finally, the district court did not err by instructing the jury that “a director

or researcher at [KIGAM] is a public official for the purposes of Article 129.”

ER 4. That was a question of South Korean law for the district court to decide

9 McDonnell involved violations of the honest-services fraud statute, 18

U.S.C. § 1346. The parties agreed that the “official act” definition in § 201 was controlling. 136 S. Ct. at 2365.


46

under Rule 26.1. See Chao Fan Xu, 706 F.3d at 986. Chi does not contend (Br.

36-37) that the instruction was legally incorrect. Indeed, the district court relied

on Chi’s concession that before June 29, 2014, researchers and management at

research institutions qualified as public officials, and that after June 29, 2014, all

KIGAM employees qualified as public officials. ER 68-69; SER 215-16. Nor

did the instruction usurp the jury’s fact-finding role. See United States v. Gaudin,

515 U.S. 506, 511-14 (1995). It was still left to the jury to decide whether Chi

was a public official under the definition provided by the district court, i.e.,

whether he was a director or researcher at KIGAM. See Chao Fan Xu, 706 F.3d

at 986. In arguing that his status presents a mixed question of law and fact, Chi

conflates whether he was a public official with whether he exercised official

duties for GSL and Kinemetrics. Br. 37. The Court should reject his claim.

D. Any Error Does Not Warrant Reversal.

Any error in the jury instructions does not warrant reversing Chi’s

conviction.

First, to the extent it concerns a claim this Court deems unpreserved, any

error would not have been plain, i.e., clear or obvious, given the manner in which

South Korea’s Supreme Court construes the quid pro quo requirement and

“official duties” under Article 129. See United States v. Zalapa, 509 F.3d 1060,

1064 (9th Cir. 2007) (a “plain” error must be “so clear-cut, so obvious, [that] a


47

competent district judge should be able to avoid it without benefit of objection”)

(quotation marks and citation omitted).

Second, any error was harmless or, as to unpreserved claims, did not affect

Chi’s substantial rights (or satisfy the fourth plain-error prong). “Jury

instructions even if imperfect, are not a basis for overturning a conviction absent

a showing that they prejudiced the defendant.” Frega, 179 F.3d at 806 n.16.10

Even under a harmlessness standard, the alleged errors did not prejudice Chi,

because “it is clear beyond a reasonable doubt that a rational jury would have

found [him] guilty absent the error.” United States v. Castillo-Mendez, 868 F.3d

830, 835 (9th Cir. 2017) (quotation marks and citation omitted). As discussed,

the court’s quid pro quo instruction effectively required a finding that Chi

intended to take action favoring Kinemetrics or GSL. And the jury heard ample

evidence that, in exchange for payment, Chi intended to make purchasing

recommendations and provide inside information in ways that favored those

companies, including, for example, an email to GSL stating that, because he

was a “governmental officer,” “[o]fficially [he] [could] not support any private

company by regulation,” SER 281; an email to a Kinemetrics employee in which

10 The alleged errors here were not structural. See Neder, 527 U.S. at 9-10.

Chi’s authority for that point, Sullivan v. Louisiana, 508 U.S. 275 (1993) (cited at Br. 26, 37), involved a constitutionally flawed reasonable-doubt instruction. No such error is alleged here.


48

Chi expressed his desire for more orders of Kinemetrics and Quanterra products

so that he could “earn” money, SER 299; and his recommendation of

Kinemetrics equipment over GSL equipment after GSL had stopped bribing

him, SER 320; see also pp. 50-56, infra (sufficiency of Count 6 evidence).

Similarly, Chi’s own emails indicated that his procurement decisions and

recommendations were core functions of his position. See pp. 4-5, supra. The

jury’s verdict, therefore, did not turn on a finding that he accepted bribes for

exercising “customarily” performed duties. See, e.g., United States v. Repak, 852

F.3d 230, 253 (3d Cir. 2017) (decision by agency to award contract qualified as

official act under McDonnell); United States v. Skelos, 707 F. App’x 733, 739 (2d

Cir. 2017) (unpublished) (high-ranking official’s use of influence “to bestow a

county-issued contract” was “indisputably” an official act under McDonnell).

Chi makes much of two notes sent by the jury during deliberations and

the fact that it deadlocked on five counts. Br. 37-38. But the district court’s

instructions were clearly worded; they did not rely on arcane references to

foreign law or an “unexplained Latin phrase.” Br. 38. The jury returned a guilty

verdict on Count 6 in less than one day, after the court referred jurors back to its

original bribery instruction (with the defense’s agreement) and reiterated that a

KIGAM director or researcher qualifies as a public official. SER 194-99. The

partial verdict does not signal prejudice from any instructional error. See United


49

States v. Haley, 452 F.2d 398, 401 (8th Cir. 1971) (“refus[ing] to speculate as to

the basis for the jury verdict”). If anything, the jury’s unanimous finding of guilt

on Count 6 confirms the strength of the evidence supporting Chi’s conviction.

That evidence, discussed further below, vitiated the prejudice from any error.

III. SUFFICIENT EVIDENCE SUPPORTED CHI’S CONVICTION.

Chi contends (Br. 39-41) that the government failed to trace the $56,000

check deposited into his Merrill Lynch account to criminally derived property.

That claim lacks merit. The evidence was more than sufficient to connect those

funds to bribe payments.

A. Standard of Review

The district court denied Chi’s motion for judgment of acquittal under

Fed. R. Crim. P. 29(c). ER 24-29. In reviewing the sufficiency of the evidence,

this Court “determines whether ‘after viewing the evidence in the light most

favorable to the prosecution, any rational trier of fact could have found the

essential elements of the crime beyond a reasonable doubt.’” United States v.

Nevils, 598 F.3d 1158, 1163-64 (9th Cir. 2010) (en banc) (quoting Jackson v.

Virginia, 443 U.S. 307, 319 (1979)); accord United States v. Lemus, 847 F.3d 1016,

1020 (9th Cir. 2016). The Court resolves any conflicting inferences from the

evidence in favor of the guilty verdict and does not require that the government

“rebut all reasonable interpretations of the evidence that would establish the


50

defendant’s innocence, or ‘rule out every hypothesis except that of guilt beyond

a reasonable doubt.’” Nevils, 598 F.3d at 1164 (quoting Jackson, 443 U.S. at 326).

B. The Evidence Proved That More Than $10,000 In Bribe Payments By Kinemetrics Was Used To Cover The $56,000 Check Charged In Count 6.

Chi’s conviction under 18 U.S.C. § 1957 required the government to prove

that (1) he knowingly engaged in a monetary transaction; (2) he knew the

transaction involved criminal property; (3) the property’s value exceeded

$10,000; (4) the property was derived from bribery in violation of Article 129 of

South Korea’s Criminal Code; and (5) the transaction occurred in the United

States. ER 2; see, e.g., United States v. Rogers, 321 F.3d 1226, 1229 (9th Cir. 2003).

Count 6 was based on the November 22, 2016, deposit into Chi’s Merrill Lynch

account of a $56,000 check drawn from his Bank of America account. ER 198.

Because the bribe money wired to Chi’s Bank of America account was

commingled with $11,000 in unrelated funds, SER 133-34, circuit precedent

required the government to trace $10,000 or more of the funds used to cover the

$56,000 check to bribe payments from GSL or Kinemetrics. See United States v.

Rutgard, 116 F.3d 1270, 1292 (9th Cir. 1997); United States v. Hanley, 190 F.3d

1017, 1024-25 (9th Cir. 1999).

It is undisputed that at least $35,542 of the $56,000 is traceable to funds

that Chi received from Kinemetrics in late 2015. SER 251. Kinemetrics made


51

two wire transfers to Chi’s Bank of America account: $66,500 on November 9,

2015, and $21,100 on December 11, 2015. SER 80-81, 244. The $66,500

transfer was Chi’s commission on a $1.72 million sale of equipment and services

to the Korean Meteorological Administration (“KMA”). SER 81, 322-31; GX

240. The $21,100 transfer was Chi’s commissions on sales of digitizers to

KIGAM and KMA (for about $309,960 and $18,340, respectively). SER 80,

332-35; GX 242. The evidence sufficiently proved that Chi received these

payments in exchange for exercising his official duties in Kinemetrics’s favor.

First, the evidence proved that Kinemetrics regularly paid Chi for securing

sales of Kinemetrics and Quanterra products in South Korea to KIGAM and

other end users. Internal Kinemetrics documents identified Chi as a sales

representative and showed that Chi accrued sales commissions between 2008

and 2015. SER 66-67, 72-78; see, e.g., GX 222. Based on those documents,

Kinemetrics’s controller, Michelle Harrington, testified that Chi was a sales

representative for the company. SER 64, 83; see also SER 84-86 (testifying on

cross examination to her belief that payments to Chi were sales commissions

based on internal notes in sales orders). Harrington also testified that sales

representatives “support[ed] the sales activities for regions outside the United

States” and were paid on a per-sale commission basis, usually between 5% and

15% of the sale. SER 63.


52

Chi’s own communications confirmed that he was paid for promoting and

securing sales of Kinemetrics products. For example, in a January 2009 email

to Kinemetrics’s sales manager for South Korea, Outhay Viengkhou, see SER

62, Chi described fees he was owed for sales in 2008 to KIGAM and KMA,

lamented that “only very small amounts [had been] ordered from Korea,” and

stated his desire “to earn more than [his] loss” and his “hope that more orders

for Early Warning Systems w[ould] be done” in 2009. SER 299 (emphasis

added). In other emails, Chi described his promotion of Kinemetrics or

Quanterra products to KIGAM and other end users. See, e.g., SER 303 (“KINS

(Korea Institute of Nuclear Safety) should replace their systems (Q4120, FBA23

and STS-2) with new ones since 10 years were passed like as KMA. I

recommended Q330.”); SER 312 (“My institute is starting to replace Q4120

with Q330 this year. Electrical company might start to do from next year. KMA

is already replacing from last year. If possible, I want to receive the half

personally.”); SER 174, 320 (recommending that KMA use Kinemetrics

equipment over GSL equipment in 2016); see also SER 178 (Q330 is a Quanterra

product). Chi’s assistance also involved providing Kinemetrics with inside

information about its competitors. See, e.g., SER 308 (warning Viengkhou that

Nanomatrics had asked KIGAM to test its broadband sensor and might try to

replace Kinemetrics’s equipment); SER 310 (warning Viengkhou that Geotech


53

had made presentations to KIGAM and KMA, attaching the presentation, and

noting in follow-up email that he was “delaying” his response to Geotech about

KIGAM’s requirements).

Second, the evidence showed that Chi was exercising his official duties by

promoting and securing sales for Kinemetrics. Chi was a senior researcher at

KIGAM and was “fully responsible” for the Earthquake Research Center upon

becoming its director. SER 2-6, 167-69, 284. As such, Chi influenced which

seismic-monitoring equipment should be purchased by KIGAM and other end

users in South Korea. Indeed, he once boasted to Kinemetrics that he was “a

very very VIP” to an intelligence company that had entered into “a special

MOU” with KIGAM to analyze KIGAM data; the company needed to

construct a “fixed array infrasound station” and Chi’s colleagues had

recommended a Quanterra product. SER 314. Chi added that sales distributors

or commercial companies “could not persuade Government organizations to

use their systems. They only follow the guidance or reference of government-

supported research organizations or societies.” Id.; see also SER 318 (Chi

emailed Kinemetrics photograph of himself and Minister of Science to show he

had explained Kinemetrics product to the Minister); SER 270 (explaining to

GSL KIGAM’s role in inspecting equipment and noting that KIGAM had

inspected and certified GSL equipment for a gas company). The jury could


54

reasonably conclude from the evidence that, in exchange for payment, Chi

exercised his responsibilities for making and advising on procurement decisions

in a manner favoring Kinemetrics.

In finding that Chi engaged in a quid pro quo scheme, the jury could also

rely on the evidence that he sought to conceal his relationship with Kinemetrics.

See ER 430 (case 2005 Do 4204) (quid pro quo determination under Article 129

“shall be made in light of all the surrounding circumstances”); see also United

States v. Turner, 133 F.3d 1208, 1215-16 (9th Cir. 1998) (evidence official told

payor not to use checks in payor’s name was evidence of Hobbs Act quid pro

quo); United States v. Urciuoli, 613 F.3d 11, 14 & n.2 (1st Cir. 2010) (evidence that

bribe payor sought to conceal relationship with public official supported his

conviction for honest-services fraud); United States v. Friedman, 854 F.2d 535, 554

(2d Cir. 1988) (jury may infer existence of corrupt agreement from, inter alia,

“behavior indicating consciousness of guilt”). For example, Chi often directed

Kinemetrics to take precautions with respect to his communications. See SER

301 (instructing Quanterra employee not to reply to his email concerning the

“advice” fees owed to him); SER 310 (instructing Viengkhou to “not distribute

widely” the information on Geotech he was forwarding); SER 318 (instructing

Viengkhou not to use photograph of himself and Minister in advertising

materials because they were both government officials). Kinemetrics also used


55

the same phrasing that Chi directed GSL to use when referring to his payment

demands. See SER 312 (“Your request is being process[ed].”); SER 277. And

whereas Kinemetrics paid Heesong Geotek its sales commissions at a bank in

South Korea, Chi had Kinemetrics send his payments to a U.S. bank account in

order to conceal them. SER 87-88, 276-77; cf. ER 518, 521 (case 2016 No 3175)

(citing defendant’s disclosure of consulting fee to tax authority in finding

insufficient evidence of bribery).

Significantly, Chi received the $87,600 from which the $56,000 check was

drawn after GSL’s new CEO had notified Chi that he was terminating GSL’s

similar arrangement with Chi because it was likely illegal. See pp. 10-11, supra;

see also pp. 7-8, supra (collecting Chi’s emails to GSL acknowledging that his

arrangement with GSL was improper because he was a government official).

The jury could reasonably rely on Chi’s knowledge that he was engaged in

wrongdoing to find that the Kinemetrics funds used to cover the $56,000 check

were part of a quid pro quo prohibited by Article 129. See United States v. Hsieh

Hui Mei Chen, 754 F.2d 817, 822 (9th Cir. 1985).

Chi mistakenly contends (Br. 41) that the evidence did not reveal the

specific action he took in exchange for the two transfers from Kinemetrics, or

that “[n]obody with personal knowledge testified about what the payment[s]

w[ere] for.” The jury is entitled to rely equally on direct and circumstantial


56

evidence and it may find facts at issue on the basis of circumstantial evidence

alone. See United States v. Stauffer, 922 F.2d 508, 514 (9th Cir. 1990). As

discussed, the jury heard substantial evidence that, in exchange for payments,

Chi recommended the purchase of Kinemetrics products to KIGAM and other

end users and provided inside information to Kinemetrics about its competitors.

The jury could also draw on the substantial evidence of Chi’s corrupt

relationship with GSL, which must be viewed in the light most favorable to the

guilty verdict on Count 6.11 Based on Chi’s entire course of conduct, the jury

could reasonably conclude that Kinemetrics paid Chi $87,600 in late 2015 in

exchange for Chi again exercising his official duties to secure the sales to KMA

and KIGAM that supported those payments. See, e.g., United States v. Wilkes,

662 F.3d 524, 544 (9th Cir. 2011) (rejecting sufficiency challenge to bribery

conviction where government presented substantial evidence of course of

conduct involving exchange of favors and gifts for benefits and support from

Congressman). The Court should deny Chi’s claim.

11 For example, the conduct involving Kinemetrics and GSL overlapped

in time; the companies were in the same line of business; Chi referred to payments from both companies as “advice fees”; and Chi received those payments in the same offshore bank account in the United States.


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CONCLUSION

For the foregoing reasons, the judgment of conviction should be affirmed.

Respectfully submitted,

NICOLA T. HANNA United States Attorney Central District of California POONAM G. KUMAR Assistant United States Attorney Central District of California

JOHN P. CRONAN Acting Assistant Attorney General MATTHEW S. MINER Deputy Assistant Attorney General DAVID M. FUHR ANNA G. KAMINSKA Trial Attorneys, Fraud Section s/John-Alex Romano _______________________________ JOHN-ALEX ROMANO Trial Attorney, Fraud Section Criminal Division U.S. Department of Justice 1400 New York Avenue, NW Washington, DC 20530 Tel. 202-353-0249 [email protected]


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STATEMENT OF RELATED CASES

Undersigned counsel is not aware of any related cases.

s/John-Alex Romano _______________________________ JOHN-ALEX ROMANO U.S. Department of Justice Criminal Division, Fraud Section 1400 New York Avenue, NW Washington, DC 20530 Tel. 202-353-0249 [email protected]


59

CERTIFICATE OF COMPLIANCE

1. This brief complies with the typeface requirements of Fed. R. App. P. 32(a)(5)

and the type style requirements of Fed. R. App. P. 32(a)(6) because it has been

prepared in a proportionally spaced typeface using Microsoft Word 2013 in

Calisto MT 14-point font in text and footnotes.

2. This brief complies with 9th Cir. R. 32-1. The brief contains 13,499 words,

excluding the parts of the brief exempted by Fed. R. App. P. 32(f).

Dated: June 11, 2018

s/John-Alex Romano _______________________________ JOHN-ALEX ROMANO U.S. Department of Justice Criminal Division, Fraud Section

1400 New York Avenue, NW Washington, DC 20530 Tel. 202-353-0249 [email protected]


60

CERTIFICATE OF SERVICE

Undersigned counsel of record certifies that all participants in this case are

registered users of the Court’s electronic case filing system and that the foregoing

Brief for the United States was this day delivered by electronic case filing to the

Clerk of the Court and to counsel for Chi:

Benjamin L. Coleman Coleman & Balogh LLP 1350 Columbia Street, Suite 600 San Diego, CA 92101 (619) 794-0420

DATED: JUNE 11, 2018

s/John-Alex Romano ______________________________ JOHN-ALEX ROMANO U.S. Department of Justice Criminal Division, Fraud Section

1400 New York Avenue, NW Washington, DC 20530 Tel. 202-353-0249 [email protected]


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