9/26/25: Restitution case

In United States v. Wells, --- F.4th ---, No. 23-3969 (9th Cir. 2025), the Court vacated the district court’s restitution orders, and remanded, in a case concerning the extent to which the funds in a federal retirement savings account, known as a Thrift Savings Plan (TSP) account, are available to compensate crime victims under the Mandatory Victims Restitution Act of 1996 (MVRA).

In a prior appeal, the Court affirmed James Michael Wells’ convictions for murdering two co-workers at a U.S. Coast Guard maintenance facility, but vacated the district court’s restitution order. On remand, the district court issued amended restitution orders, which authorized the government to collect, as a lump sum, all of the funds held in his TSP account. In this appeal, Wells challenged the orders issued on remand.

This case concerns the extent to which the funds in a federal retirement savings account, known as a Thrift Savings Plan (“TSP”) account, 1 are available to compensate crime victims under the Mandatory Victims Restitution Act of 1996 (“MVRA”). TSPs are part of a larger statute, the Federal Employees’ Retirement Systems Act (“FERSA”), which established a comprehensive retirement program for federal employees. Defendant James Michael Wells appeals the district court’s restitution orders, which authorized the government to collect, as a lump sum, all of the funds held in his TSP account. The parties agree that a valid restitution order was entered and that a TSP statutory provision, 5 U.S.C § 8437(e)(3), makes at least some of Wells’ TSP funds subject to government collection. 

The government argues that a TSP regulation, 5 C.F.R. § 1653.33, allows it to collect the entirety of a defendant’s TSP account balance in one lump-sum payment—i.e., completely cash out the account—whenever a court issues a valid restitution order under the MVRA, 18 U.S.C. § 3663A. Wells argues that the TSP statutory scheme protects his wife’s legal interest in his account and therefore limits the government to garnishing only periodic payments from the account. 

We conclude that the government can completely cash out a defendant’s TSP account to satisfy a restitution order under the MVRA only when the plan’s terms would allow the defendant to do so at the time of the order. Because the TSP’s spousal consent provision did not permit Wells to completely cash out his account unilaterally at the time he was ordered to pay restitution, neither could the government. Accordingly, we vacate the district court’s restitution orders and remand for proceedings consistent with this opinion.

Under the MVRA, the government cannot enforce a restitution order by cashing out a defendant’s retirement plan account if the retirement plan’s terms prohibit the defendant from doing so without spousal consent. Here, FERSA § 8435 provides the relevant terms of Wells’ retirement plan. Section 8435 prohibits Wells from cashing out the balance of his TSP account without his spouse’s consent. Section 8437(e)(3) does not expand the government’s authority under the MVRA, nor does it override FERSA’s spousal protections. Accordingly, we vacate the district court’s restitution orders and remand for restitution proceedings consistent with this opinion, including a determination of whether Wells’ TSP funds constitute “earnings” under 15 U.S.C. § 1673 such that any garnishment would be limited to 25% under the MVRA.

9/23/25: Interesting case on possessing firearms within 1,000 feet of a school in violation of 18 U.S.C. § 922(q)(2)(A)

 In United States v. Metcalf, --- F.4th ---, No. 24-4818 (9th Cir. 2025), a divided Court reversed the district court’s order denying Gabriel Cowan Metcalf’s motion to dismiss an indictment charging him with possessing firearms within 1,000 feet of a school in violation of the Gun-Free School Zones Act, 18 U.S.C. § 922(q)(2)(A), and remanded with direction to dismiss the indictment.

Gabriel Cowan Metcalf lives in Billings, Montana, across the street from a public elementary school. For several days in August 2023—before the school year started—Metcalf patrolled outside his home with a shotgun, including on the sidewalk in front of his home. He did so to protect himself and his mother, whom he lives with, from a former neighbor who had repeatedly violated a protection order that Metcalf’s mother held against the neighbor. Local law enforcement received multiple complaints about Metcalf and confronted him several times, but didn’t charge him with violating any law, and indeed told him that he was complying with state law. Only after Metcalf reached out to the FBI was he indicted for violating the Gun-Free School Zones Act, which prohibits possessing firearms within 1,000 feet of a school. See 18 U.S.C. § 922(q)(2)(A).

On appeal, we hold that Metcalf’s indictment must be dismissed. The Gun-Free School Zones Act excepts from the Act’s broad prohibition individuals who hold a license by their state, if “before an individual obtains such a license, the law enforcement authorities of the State or political subdivision verify that the individual is qualified under law to receive the license.” § 922(q)(2)(B)(ii). The parties do not dispute that Metcalf holds a license pursuant to Montana Code section 45-8-360. Instead, they dispute whether Montana’s procedure for issuing this license complied with the requirements set out in § 922(q)(2)(B)(ii). Applying the traditional tools of statutory interpretation, Metcalf has offered at least a plausible reading of the exception in § 922(q)(2)(B)(ii), such that when we factor in the canon of constitutional avoidance and the rule of lenity, Metcalf lacked the appropriate notice to be convicted of violating the Gun-Free School Zones Act. Affirming Metcalf’s conviction would be inconsistent with the principles of fair notice and of not punishing innocent conduct, which underly the presumption in favor of scienter that the Supreme Court addressed in Rehaif v. United States, 588 U.S. 225 (2019). Accordingly, we reverse the district court’s order denying Metcalf’s motion to dismiss. Because we conclude that Metcalf’s appeal is resolved by virtue of the absence of fair notice, we do not address Metcalf’s second argument—that his conviction under the Gun-Free School Zones Act violates his Second Amendment rights. 

The parties [] dispute whether the Montana license that Metcalf holds complies with the federal requirements for the license exception to apply—that is, whether Montana’s licensure requirement provides “that, before an individual obtains such a license, the law enforcement authorities of the State or political subdivision verify that the individual is qualified under law to receive the license.” § 922(q)(2)(B)(ii). 

Applying the traditional tools of statutory interpretation—looking to the text, its context, statutory presumptions, judicial constructions, and the canons of construction—we conclude that Metcalf offers at least a plausible reading of § 922(q)(2)(B)(ii), which would qualify him for the license exception. Given this plausible reading, the government did not establish that Metcalf was at least on notice that his Montana license—which explicitly purported to comply with the federal statute—was insufficient to except him from § 922(q)(2)(A)’s prohibition. Affirming Metcalf’s conviction would thus not only run afoul of the rule of lenity’s cautions but would also undermine the principles underlying the Supreme Court’s decision in Rehaif, and the presumption in favor of scienter.

Metcalf also finds support in constitutional avoidance and the rule of lenity, as both militate against applying § 922(q)(2)(A) here. Constitutional avoidance applies “when, after the application of ordinary textual analysis, the statute is found to be susceptible of more than one construction.” Prison Legal News v. Ryan, 39 F.4th 1121, 1131 (9th Cir. 2022) (quoting Clark v. Martinez, 543 U.S. 371, 385 (2005)). The canon directs that “where an otherwise acceptable construction of a statute would raise serious constitutional problems, the Court will construe the statute to avoid such problems.” Edward J. DeBartolo Corp. v. Fla. Gulf Coast Bldg. & Constr. Trades Council, 485 U.S. 568, 575 (1988); see also Ashwander v. Tenn. Valley Auth., 297 U.S. 288, 348 (1936) (“When the validity of an act of the Congress is drawn in question, and even if a serious doubt of constitutionality is raised, it is a cardinal principle that this Court will first ascertain whether a construction of the statute is fairly possible by which the question may be avoided.” (quoting Crowell v. Benson, 285 U.S. 22, 62 (1932))). The canon suggests that “courts should construe ambiguous statutes to avoid the need even to address serious questions about their constitutionality.” United States v. Davis, 588 U.S. 445, 463 n.6 (2019). 

Constitutional avoidance counsels against adopting the district court’s interpretation of § 922(q)(2)(B)(ii), even if it is the more natural reading of the statute. As explained, the statute is susceptible to at least two plausible interpretations. And as the parties’ extensive dispute over the validity of Metcalf’s conviction under § 922(q)(2)(A) lays bare, his conviction “raise[s] serious constitutional problems,” or at least “serious questions,” under the Second Amendment. Edward J. DeBartolo Corp., 485 U.S. at 575; Davis, 588 U.S. at 463 n.6; see also United States v. Allam, 140 F.4th 289, 291 (5th Cir. 2025) (addressing Second Amendment challenge to Gun-Free School Zones Act). Thus, under these circumstances, we can construe the statutory exception “to avoid such problems.” Edward J. DeBartolo Corp., 485 U.S. at 575. To be sure, the government’s proposed interpretation may be the more natural understanding of what it means for a state law enforcement authority to verify an individual’s qualifications. But “even if the Government’s reading were not the best one, the interpretation is at least ‘fairly possible’—so the canon of constitutional avoidance would still counsel us to adopt it.”

Here, as explained, Metcalf has offered a plausible reading of § 922(q)(2)(B)(ii), under which his license pursuant to Montana Code section 45-8-360 excepts him from the Gun-Free School Zones Act’s prohibition. While that alone may not be enough to trigger the rule’s application, the unique facts of this case militate in favor of its application. As Metcalf contends, he was informed by local authorities that it was permissible for him to be armed and that by possessing his firearm he was not violating the law. Metcalf then initiated a conversation with federal authorities, during which he expressed concerns about his interactions with the local officials and explained “how he has researched the law pertaining to firearms” and “went to great lengths to articulate that he follows the law.” Metcalf was also told by his state legislature, in Montana Code section 45-8-360, that he was “licensed and verified by the state of Montana within the meaning of the provisions regarding individual licensure and verification in the federal Gun-Free School Zones Act.” And before the district court’s decision in this case, there was no court decision that could have put Metcalf on notice that the license the legislature conferred upon him was, in fact, invalid to comply with federal law. Given these facts, we cannot say that Metcalf received the “fair warning … in language that the common world will understand,” with which the rule of lenity is concerned. 

Our decision today is a narrow one. Metcalf was the first, and to our knowledge, only, person in Montana to have raised the license exception in response to a charge for violating the Gun-Free School Zones Act. Our narrow conclusion results from the unique convergence of Metcalf’s plausible reading of Montana Code section 45-8-360, constitutional avoidance, the rule of lenity, and the absence of criminal notice. As one legal scholar has noted, Montana’s licensure process in section 45-8-360 is unique, and no other states of which we are aware have adopted a similar approach. See Eugene Volokh, Implementing the Right to Keep and Bear Arms for Self-Defense: An Analytical Framework and a Research Agenda, 56 UCLA L. Rev. 1443, 1528 & n.349 (2009). We do not purport to provide an authoritative exposition on the scope or limits of the license exception in the Gun-Free School Zones Act. We simply hold that the license exception includes at least some ambiguity given the unique facts of this case, requiring that we consider the rule of lenity and the presumption in favor of scienter as articulated in Rehaif. Here, the rule of lenity, the presumption in favor of scienter, and the principles articulated in Rehaif coalesce around one central point: fair notice. And Metcalf did not have that fair notice. We therefore conclude that the district court erred by declining to dismiss Metcalf’s indictment.

9/18/25: En banc decision in the 1326(d) context

In United States v. Rivera-Valdes, --- F.4th ---, 21-30177 (9th Cir. 2025) (en banc), the majority vacated the district court’s denial of Leopoldo Rivera-Valdes’s motion to dismiss an indictment alleging that he reentered the United States following deportation in violation of 8 U.S.C. § 1326, and remanded for further proceedings. Rivera-Valdes asserted that the underlying removal order was invalid because he was not afforded “reasonably calculated” notice of his removal hearing when the Government learned that its notice sent by certified mail was returned unclaimed.

Here is some of the helpful language from the majority opinion: 

Today we make explicit what has been implied in our prior case law. We hold that the notice afforded to noncitizens subject to removal is governed by the due process standards articulated in Mullane and Jones. Notice by the Government must be reasonably calculated to apprise noncitizens of the pendency of removal proceedings and to afford them the opportunity to be present and to participate. Jones, 547 U.S. at 226. “The notice must be of such nature as reasonably to convey the required information, and it must afford a reasonable time for those interested to make their appearance.” Mullane, 339 U.S. at 314 (internal citations omitted). Where the Government learns that its notice efforts have not succeeded, that knowledge triggers an obligation on the Government’s part to take additional reasonable steps to effect notice, if it is practicable to do so. Jones, 547 U.S. at 234. Notice is not “reasonably calculated” under the circumstances when the Government knows its method of service was ineffective and takes no additional steps to effect notice that are reasonably available to it. Id. at 227, 229.

“The fundamental requisite of due process of law is the opportunity to be heard.” Grannis v. Ordean, 234 U.S. 385, 394 (1914). This “right to be heard has little reality or worth unless one is informed that the matter is pending and can choose for himself whether to appear or default, acquiesce or contest.” Greene, 456 U.S. at 449 (quoting Mullane, 339 U.S. at 314). For that reason, “notice must be of such nature as reasonably to convey the required information, and it must afford a reasonable time for those interested to make their appearance.” Mullane, 339 U.S. at 314 (internal citations omitted). Here, the relevant question is whether personal service of the OSC on Rivera-Valdes conveyed the “required information” which would “afford [him] an opportunity” to appear at his removal hearing and “present [his] objections.” Id. It did not

Even if Rivera-Valdes establishes a due process violation, that is not the end of the district court’s inquiry. Rivera-Valdes must demonstrate that he is entitled to relief under the other prongs of collateral attack: prejudice, administrative exhaustion, and deprivation of judicial review. See 8 U.S.C. § 1326(d); Martinez, 786 F.3d at 1230. The district court left these questions undecided, and we decline to consider them in the first instance.

Under Mullane and Jones, due process requires that the notice afforded to individuals subject to immigration removal proceedings must be reasonably calculated to inform them of the pendency of the proceedings and a meaningful opportunity to appear and to contest the charges. When the Government learned that its only attempt to notify Rivera-Valdes of the date, time, and location of his removal hearing had failed, it was not enough for the Government to throw up its hands and do nothing. The Government was obligated to take additional reasonable steps to effect notice, provided it was practicable to do so. See Jones, 547 U.S. at 234. We therefore vacate the district court’s judgment and remand for further proceedings consistent with this opinion. 

9/16/25: 4th Amend and other issues

In United States v. Bourdreau, --- F.4th ---, No. 23-4092 (9th Cir. 2025), the Court affirmed Christopher Todd Boudreau’s conviction and sentence for attempted coercion and enticement of a minor to engage in illegal sexual activity under 18 U.S.C. § 2422(b) and possession of child pornography under 18 U.S.C. § 2252A(a)(5)(B).

Boudreau was convicted of attempted coercion and enticement of a minor to engage in illegal sexual activity under 18 U.S.C. § 2422(b) and possession of child pornography under 18 U.S.C. § 2252A(a)(5)(B). On appeal, he challenges the district court’s denial of three pretrial motions: (1) his motion to suppress the child pornography seized from his residence; (2) his motion to sever the two charges in his indictment as improperly joined; and (3) his motion in limine to exclude evidence about a relationship that he pursued with a 17-yearold girl during the same month as his charged conduct. Boudreau also appeals the substantive reasonableness of his sentence. We affirm. 

Boudreau makes two arguments for suppressing the child pornography found at his residence. First, he contends that the warrant was not supported by probable cause to believe that child pornography would be found. Second, he contends that the affidavit supporting the warrant application contained knowingly false or reckless statements, demanding suppression under Franks v. Delaware, 438 U.S. 154 (1978).

To start, to the extent that the Government suggests the child pornography found at Boudreau’s residence should not be suppressed because the search warrant affidavit established probable cause to believe that officers would find evidence of enticement of a minor on Boudreau’s computer, this argument fails. For this argument to plausibly work, the Government must have argued that the child pornography inevitably would have been discovered because it was in plain view on Boudreau’s hard drive during the officers’ lawful search for evidence of enticement. But the Government did not cite or discuss either the inevitable-discovery exception or the plain-view doctrine. Cf., e.g., Nix v. Williams, 467 U.S. 431, 440–48 (1984) (adopting the inevitable-discovery doctrine); Arizona v. Hicks, 480 U.S. 321, 325–29 (1987) (explaining the requirements of the plain-view doctrine). Therefore, we do not address whether either principle applies here. See Fed. R. App. P. 28(a)(8), (b); Greenwood v. FAA, 28 F.3d 971, 977 (9th Cir. 1994). Instead, in this case the Government must show that the warrant application contained sufficient indicia of probable cause to believe that Boudreau possessed child pornography at his residence.

This case falls between Gourde and Dougherty. Unlike Gourde, the search warrant was not issued specifically to search for evidence of child pornography. Rather, similar to Dougherty, the supporting affidavit focused on facts related to Boudreau’s commission of a related but distinct crime— attempted enticement of a minor. Under our precedent, this alone does not establish probable cause to search his residence for evidence of any crime related to a sexual interest in children. See Dougherty, 654 F.3d at 899. But relevant facts and circumstances from a related offense may contribute to the totality of the circumstances supporting probable cause to search for evidence of child pornography. Such is the case here.

Given the totality of circumstances presented here, we conclude that the warrant, issued to search for evidence of a crime under Montana Code § 45-5-625, was supported by probable cause to believe not only that evidence of enticement would be found at Boudreau’s residence, but also evidence of child pornography.

Boudreau also argues that his motion to suppress should have been granted because Detective Wafstet knowingly or recklessly omitted from his affidavit that Boudreau used only his cellphone to communicate with “Mia” and that the cellphone had already been recovered by officers before the search warrant was sought. Bourdeau contends that this omission misled the issuing judge into believing that the search could locate an electronic device that was used to communicate with “Mia.”

Here, Boudreau’s Franks argument fails because even if Detective Wafstet knew and failed to disclose that Boudreau used only his cellphone to communicate with “Mia,”1 this omission was immaterial. As we have explained, there was probable cause to believe that Boudreau possessed child pornography. If Detective Wafstet lied or omitted material facts regarding Boudreau’s method of communication with “Mia,” it would have had no effect on the fair probability that Boudreau possessed child pornography. Either way, officers still had probable cause to search his home and seize any electronic devices capable of storing child pornography.

Next, Bourdeau argues that the district court erred by not severing the two charges in his indictment.

Of the applicable factors, the first factor carries the most weight in this case. Enticement of a minor and possession of child pornography both involve as an element that the defendant sought to engage in inappropriate sexual activities with minors, in person or voyeuristically. Our sister circuits that have addressed this issue have uniformly held that enticement of a minor is of the same or similar character to possession of child pornography.

While the Government may have been able to prove its case without Hope’s testimony, as Boudreau contends, that does not render the evidence unfairly prejudicial. Rather, it suggests that any error was harmless. See Lague, 971 F.3d at 1041. At trial, the jury heard properly admitted evidence of Boudreau’s predatory behavior toward someone he believed was 12-year-old girl. In this context, it is unlikely that Hope’s testimony caused the jury to convict Boudreau on an improper basis. 

On this record, the district court did not abuse its discretion in concluding that the sentence it imposed did not result in unwarranted sentencing disparity. 

9/15/24: fine and special assessment case

In United States v. Patrick, --- F.4th ---, No. 24-2638 (9th Cir. 2025), the Court affirmed the district court’s order, in a criminal case, imposing a fine and special assessment due immediately while also creating a payment schedule.

During the sentencing hearing, the district court ordered a fine of $1,000 and a special assessment of $100 “due immediately.” In recognition of his indigency, the court set up a monthly payment schedule for Patrick while he was incarcerated and on supervised release. On appeal, Patrick does not contest the imposition of the fine or special assessment, totaling $1,100. Rather, he argues that ordering the total due immediately while also creating a payment schedule violates 18 U.S.C. § 3572(d)(1), which allows the district court to either make the monetary penalties due immediately or create an installment schedule, but not both.

We hold that the district court did not violate 18 U.S.C. § 3572(d)(1). The district court properly made the fine and special assessment due immediately but allowed Patrick to discharge his obligations with minimal payments in recognition of his indigency. The district court’s order comports with our case law interpreting 18 U.S.C. § 3572(d)(1) in the restitution context and with the case law of our sister circuits in this context.

9/10/25: Selective enforcement and a categorical case

First, in United States v. Green, --- F.4th ---, No. 23-1294 (9th Cir. 2025), the Court affirmed the district court’s denial of Keenon Green’s motion for discovery by which Green sought to pursue a selective enforcement claim, and the sentence imposed by the district court, in a case in which Green was convicted of attempted sex trafficking of a minor and attempted sexual enticement of a minor.

We conclude that the district court did not abuse its discretion in rejecting Green’s discovery requests, given that he relied on an unreliably small sample size of past cases to claim selective enforcement. We also reject his argument that the district court abused its discretion at sentencing by ignoring his unwarranted disparity claim under 18 U.S.C. § 3553(a)(6). We affirm.

[F]or discovery involving a selective enforcement claim—at issue here—the Supreme Court has not yet spoken. Our court, however, held in Sellers that the “rigorous” discovery standard for a selective prosecution claim does not apply. 906 F.3d at 852–53. Instead, for a selective enforcement claim, the test is more relaxed, vesting broad discretion in the trial court. 

Additionally, Sellers concluded that although a defendant “will eventually need to show both elements” to prevail on a selective enforcement claim—that is, a discriminatory intent and effect—obtaining discovery for a selective enforcement claim does not require “some evidence” tending to show the existence of both.

Overall, it appears that the district court denied Green’s motion because it did not find his argument—which was based on just six federal cases—very compelling. This was a permissible reason under Sellers. Thus, the district court did not abuse its discretion in denying Green’s motion for discovery.

Green [also] argues that the district court procedurally erred by “refusing to consider” his unwarranted sentencing disparity claim in sentencing him to 144 months.  

Because the district court (1) gave the parties “a chance to argue for a sentence they believe[d] [was] appropriate,” and (2) “consider[ed] the § 3553(a) factors to decide if they support[ed] the sentence suggested by the parties,” we find no procedural error in the district court’s sentencing. Carty, 520 F.3d at 991. We also find that Green has failed to show that the district court’s 144-month sentence is substantively unreasonable. See Gall, 552 U.S. at 51. We thus affirm the 144-month sentence imposed by the district court.

Next, in United States v. Keast, --- F.4th ---, No. 24-1253 (9th Cir. 2025), the Court vacated a sentence and remanded for resentencing in a case in which Scott Keast pled guilty to one count of felon in possession of a firearm in violation of 18 U.S.C. § 922(g)(1).

Scott Keast challenges his 46-month sentence for one count of felon in possession of a firearm in violation of 18 U.S.C. § 922(g)(1). When Keast was sentenced for that federal crime, he had a prior, Oregon conviction for aggravated “unlawful use of a weapon.” See Or. Rev. Stat. §§ 161.610, 166.220(1)(a). The district court concluded that Keast’s prior conviction qualifies as a “crime of violence” under the Sentencing Guidelines, U.S.S.G. § 4B1.2(a)(1), which increased the recommended sentence. Keast contends the district court’s crime-of-violence analysis was incorrect, and we agree. Because the Oregon statutes of conviction do not require “as an element the use, attempted use, or threatened use of physical force against the person of another,” Keast’s prior conviction is not a crime of violence under the Sentencing Guidelines. We therefore vacate his sentence and remand for resentencing.

In reaching this conclusion, the Court rejected the government's reliance on the Duenas-Alvarez realistic probability test. 

9/9/25: Second Amendment case

In United States v. Stennerson, --- F.4th ---, No. 23-1439 (9th Cir. 2025), the Court affirmed the district court’s denial of a motion to dismiss an indictment charging Jaren Michael Stennerson with being an unlawful drug user in possession of a firearm in violation of 18 U.S.C. § 922(g)(3) and illegally receiving a firearm while under felony indictment in violation of 18 U.S.C. § 922(n).

Stennerson argued that §§ 922(g)(3) and 922(n) are facially unconstitutional under the Second Amendment and that § 922(g)(3) is unconstitutionally vague as applied to him. 

The Court held that §§ 922(g)(3) and 922(n) are facially constitutional under the analysis established in N.Y. State Rifle & Pistol Ass’n v. Bruen, 597 U.S. 1, 24 (2022), and United States v. Rahimi, 602 U.S. 680, 693 (2024), because there are circumstances in which they can be applied that are consistent with our nation’s history and tradition of firearms regulation. 

The Court also held that § 922(g)(3) is not unconstitutionally vague as applied to Stennerson because he was an admitted daily user of methamphetamine when he was charged with unlawful possession of a firearm.

9/5/25: Investment fraud case

In United States v. Jesenik, et al., --- F.4th ---, No. 24-5405 (9th Cir. 2025), the Court affirmed three defendants’ convictions arising out of the failure of Aequitas Management LLC, an investment management company. 

Former Aequitas executives Robert Jesenik, Andrew MacRitchie, and Brian Rice were convicted of wire fraud and conspiracy to commit wire fraud. Jesenik was also convicted of making a false statement on a loan application.

We first address all defendants’ contention that they may have been convicted on an invalid legal theory of fraud and Rice’s challenge to the sufficiency of evidence.

False statements can include “misleading half-truths,” representations that are partly true but misleading “because of [the defendant’s] failure to state additional or qualifying matter,” Universal Health Servs., Inc. v. United States ex rel. Escobar, 579 U.S. 176, 188 (2016) (cleaned up). Even in the absence of a false statement, a conviction can be based on a failure to disclose material facts. See United States v. Shields, 844 F.3d 819, 822 (9th Cir. 2016). But wire fraud can be premised on such an omissions theory only if the defendant had a special “trusting relationship” with the victim. Id. at 823. That relationship is not required in fraud cases premised on misrepresentations, including half-truths. 

The defendants contend that although they were charged in the operative indictment only with engaging in “material misrepresentations and misleading half-truths,” the government really presented an omissions theory at trial.9 They argue that the district court therefore erred in denying proposed instructions requiring proof of a trusting relationship. 

“[A] general verdict that may rest on a legally invalid theory” cannot stand unless we are convinced beyond a reasonable doubt that presentation of the invalid theory “did not contribute to the jury’s verdict.” United States v. Yates, 16 F.4th 256, 269–70 (9th Cir. 2021) (cleaned up). Such an error is not harmless even “where the verdict is supportable on [another] ground.”

To the extent the defendants argue that it was error for the district court to allow the government to ask investors “would you have invested had you known” questions, or to discuss what the defendants did not disclose, we disagree. It is well-established that such evidence is probative of the materiality of a half-truth or misrepresentation.  

And the government did not argue that omissions alone were sufficient to prove fraud or present that theory to the jury. Rather, the government elicited extensive testimony about the relevant affirmative statements when questioning witnesses about non-disclosures, and stressed these affirmative statements in closing argument.

Had the defendants been charged under an omissions theory, the government would have been required to show a relationship giving rise to a duty to disclose. See Shields, 844 F.3d at 822–23; United States v. Spanier, 744 Fed. App’x 351, 353–54 (9th Cir. 2018). But these defendants were not so charged, and the district court therefore did not err in denying the defendants’ proposed “independent duty” instruction. See United States v. Farrace, 805 Fed. App’x 470, 473 (9th Cir. 2020). For the same reason, the district court did not abuse its discretion in denying the proposed instruction that “omissions alone are not sufficient to support a charge of mail or wire fraud” and that “[a]n omission alone – absent a connection to a half-truth – does not constitute a misrepresentation.”

In the context of this case, however, the defendants’ affirmative representations that Aequitas was in good financial health, made while soliciting purportedly secure investments in income-generating assets, have a plain nexus to non-disclosures about liquidity problems, difficulty paying operating expenses, and an SEC investigation concerning potential misuse of investor funds. Whether those representations were misleading half-truths was therefore properly a question for the jury.

We next address the defendants’ contentions that they were precluded from presenting a complete defense. These arguments again center on disclosures in the PPMs and audited financial statements.

“[T]he focus of the mail fraud statute, like any criminal statute, is on the violator.” Proof of a scheme to defraud does not require showing that a victim relied on the defendant’s falsehoods; it is sufficient that falsehoods were material. Lindsey, 850 F.3d at 1014. Materiality, as opposed to reliance, is an objective measure of a representation’s “tendency to influence” “the decisionmaker to whom [it] was addressed.”

Whether a representation has a tendency to influence a decisionmaker is not the same question as whether the decisionmaker would be justified in relying on it. Justifiable reliance is relevant to civil liability for fraud, but not to criminal liability. See Neder, 527 U.S. at 24–25; see also Weaver, 860 F.3d at 95. Thus, consistent with other circuits that have addressed the issue, see, e.g., Weaver, 860 F.3d at 95–96; United States v. Lucas, 516 F.3d 316, 339–40 (5th Cir. 2008); United States v. Ghilarducci, 480 F.3d 542, 547 (7th Cir. 2007), we hold that contractual disclaimers do not render immaterial other representations in criminal wire fraud prosecutions.

For the same reason, we reject the argument that the defendants’ representations in sales pitches and marketing materials were immaterial to “accredited” investors. To be sure, “materiality is judged in relation to the persons to whom the statement is addressed.” Galecki, 89 F.4th at 737 (cleaned up). But “the wire fraud statute protects the naive as well as the worldly-wise.” United States v. Ciccone, 219 F.3d 1078, 1083 (9th Cir. 2000) (cleaned up). Materiality is a question of fact for the jury, see United States v. Gaudin, 28 F.3d 943, 944 (9th Cir. 1994) (en banc), aff'd, 515 U.S. 506 (1995), and the district court properly left the materiality issue to the jury.

To the extent that the defendants challenge the district court’s preclusion of evidence about investor negligence or non-reliance, their argument is foreclosed by Lindsey, a case involving mortgage fraud. We held there that “a bright-line rule against evidence of individual lender behavior to disprove materiality is both a reasonable and necessary protection” because “evidence of individual lender behavior can easily touch on lender negligence, intentional disregard, or lack of reliance—none of which is a defense to mortgage fraud.” 850 F.3d at 1017.11 We find no reason to adopt a different rule in this case, simply because the loans gave rise to promissory notes instead of mortgages.

To the extent the defendants argue that “if an investor felt misled, it was because the investor . . . chose to disregard part of the complete representation,” they effectively seek to urge that Aequitas’s investors were negligent. As Lindsey emphasizes, “negligence is not a defense to wire fraud.” 

9/3/25: Case on supervised release sentencing

In United States v. Taylor, --- F.4th ---, No. 24-1244 (9th Cir. 2025), the Court affirmed the 60-month sentence imposed upon revocation of Douglas Taylor’s supervised release.

The Court explained that a district court imposing a modification or revocation of a term of supervised release may not punish the defendant for the original crime of conviction. Esteras v. United States, 145 S. Ct. 2031, 2040 (2025). Moreover, a court may not punish a defendant who has violated the terms of supervised release by engaging in criminal conduct. See United States v. Miqbel, 444 F.3d 1173, 1182 (9th Cir. 2006); United States v. Simtob, 485 F.3d 1058, 1062 (9th Cir. 2007). However, the court may consider a violation of criminal law underlying the supervised release violation in its evaluation of the criminal history of the defendant, the risk of recidivism, and the violator’s breach of the court’s trust.

Taylor argues that the district court improperly punished Taylor for his August 2008 conduct under Miqbel and Simtob, by stating that his conduct was “egregious.” We disagree. Unlike in Miqbel, 444 F.3d at 1183, the court did not improperly cite § 3553(a)(2)(A) in stating the reasons for its sentence. Rather, the court considered the appropriate factors, including that Taylor had violated the terms and conditions of supervised release, see § 3553(a)(1) (requiring the court to consider “the nature and circumstances of the offense and the history and characteristics of the defendant”), and that Taylor had not responded to sanctions or attempted interventions, see id. § 3553(a)(2)(B) (requiring consideration of “adequate deterrence”). Read in context, the court’s statement that Taylor had “engaged in egregious conduct that is a danger not only to himself but to the public” is consistent with § 3553(a)(2)(C), which requires the court to consider the need “to protect the public from further crimes of the defendant.” As Simtob allows, the district court considered Taylor’s criminal history, the “similar[ity] to [Taylor’s] past transgressions,” and Taylor’s “propensity for recidivism and inability to integrate peacefully into a community.” 485 F.3d at 1062. Moreover, the court noted that Taylor violated the court’s trust and was unable to integrate peacefully back into the community. See Esteras, 145 S. Ct. at 2040 n.5 (taking “no position on whether this is a permissible consideration.”).

The district court thus “properly look[ed] to and consider[ed] the conduct underlying the revocation as one of many acts contributing to the severity of” Taylor’s breach of trust, so as to fully understand Taylor’s history and risk of recidivism. Simtob, 485 F.3d at 1063. The district court did not discuss retribution or punishment for Taylor’s violation of the conditions of his supervised release. Thus, the district court did not procedurally err on this ground, much less plainly err. 

In sum, the district court did not commit plain procedural error by considering Taylor’s circumstances and arguments and imposing a 60-month above-Guidelines sentence at the revocation sentencing hearing.