United States v. Green ( 2010 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA,  No. 08-10149
Plaintiff-Appellee,
v.  D.C. No.
CR-05-0208-WHA
JUDY GREEN,
OPINION
Defendant-Appellant.

Appeal from the United States District Court
for the Northern District of California
William H. Alsup, District Judge, Presiding
Argued and Submitted
October 5, 2009—San Francisco, California
Filed January 22, 2010
Before: Pamela Ann Rymer and A. Wallace Tashima,
Circuit Judges, and Lynn S. Adelman,* District Judge.
Opinion by Judge Tashima
*The Honorable Lynn S. Adelman, United States District Judge for the
Eastern District of Wisconsin, sitting by designation.
1311
UNITED STATES v. GREEN 1315
COUNSEL
Phillip H. Stillman, Cardiff, California, for the defendant-
appellant.
Adam D. Hirsch, Antitrust Division, U.S. Department of Jus-
tice, Washington, DC, for the plaintiff-appellee.
OPINION
TASHIMA, Circuit Judge:
Depending on whose version of this case you hear, defen-
dant Judy Green is either a dedicated public schoolteacher
who spent the years before her conviction working to help
impoverished schools across the country, or the mastermind
of a massive fraudulent scheme that bilked the federal govern-
ment out of almost $60 million. The government takes the lat-
ter view, and charged Green with defrauding E-Rate, a
Federal Communications Commission (“FCC”) program that
funds technology projects at schools and libraries. Green
insists the former is true, maintaining that she is guilty of
nothing more than helping schools maximize their federal
funding by exploiting loopholes in the E-Rate rules and regu-
lations. A jury eventually convicted Green of all twenty-two
counts brought against her: eleven counts of wire fraud (18
U.S.C. § 1343), nine counts of bid rigging (15 U.S.C. § 1),
one count of conspiracy to commit bid rigging (15 U.S.C.
§ 1), and one count of conspiracy to commit wire and mail
fraud (18 U.S.C. § 371). Because we conclude that Green’s
actions amounted to fraud on the federal government, we
affirm her conviction.
1316 UNITED STATES v. GREEN
BACKGROUND
I. The E-Rate Program
At the center of this case is a part of the FCC’s Universal
Service program, known as the Schools and Libraries pro-
gram, or E-Rate for short. Funded by a Universal Service fee
placed on telecommunications providers (and generally
passed along to consumers), the Universal Service program is
designed to promote telecommunications access for low-
income, rural, high-cost, or otherwise underserved communi-
ties. See 47 U.S.C. § 254. As its official name implies, E-Rate
uses its portion of Universal Service funding to finance tele-
communications projects at school and libraries.
The Schools and Libraries Division (“SLD”) of the Univer-
sal Service Administrative Company (“USAC”)1 is charged
with distributing E-Rate’s annual budget of $2.25 billion.
SLD accepts applications from schools for technology proj-
ects and subsidizes those projects on a sliding scale — from
20 percent to 90 percent of a project’s cost — determined by
the percentage of the school’s students that participate in the
National School Lunch Program. 47 C.F.R. § 54.505. SLD is
required to give funding priority to applications for the provi-
sion of “telecommunications services, voice mail, and Internet
access.” 47 C.F.R. § 54.507(g)(1). The most economically
disadvantaged schools have priority for the remainder of the
funds. Id.
As with any sizeable program, E-Rate is governed by a
complicated and, at times, less than clear set of rules and reg-
ulations. Two program rules are particularly relevant to this
case. First, SLD has detailed rules governing what equipment
and services may be purchased with E-Rate funds. In general
1
USAC is a nonprofit corporation designated by the FCC as the admin-
istrator of the Universal Service Fund, the source of funding for E-Rate
and other Universal Service programs. See 47 C.F.R. §§ 54.5, 54.701-717.
UNITED STATES v. GREEN 1317
terms, SLD will subsidize the purchase and installation of
equipment needed to establish a school’s connectivity. End-
user devices that are needed to actually make use of that con-
nectivity, such as computers, telephones, or fax machines, are
not eligible for a subsidy by SLD. In E-Rate jargon, these cat-
egories are referred to as “eligible” and “ineligible” equip-
ment, respectively.
Second, because E-Rate only subsidizes a portion of the
cost of eligible equipment and services, a school must have
the ability to cover the remaining balance of an E-Rate proj-
ect’s costs. Thus, the school must be able to obtain any ineli-
gible equipment that is necessary to make use of the project.
The school must also have the wherewithal to cover its co-
pay, that portion of the project’s cost that will not be covered
by the E-Rate subsidy.
When a school wants to apply for E-Rate funds, it must
first fill out an FCC form, identifying the technology project
for which it seeks funding. The school provides this form to
SLD, which posts it on a website to solicit bids from vendors.
After the bidding is complete, the school selects the winning
bid. Based upon its chosen bid, the school submits a detailed
application for E-Rate funding to SLD, specifying the equip-
ment and services to be purchased from each vendor. The
application requires the school to set out the total cost of the
project, the amount of eligible and ineligible equipment
included in that cost, the E-Rate subsidy rate for which the
school qualifies, and finally, based on the above information,
the ultimate amount of funding the school seeks from SLD.
SLD reviews this detailed application to ensure that it is in
compliance with E-Rate regulations. Occasionally, SLD con-
ducts a follow-up review and asks a school to provide more
information about its application. Once it has completed its
review, SLD either approves or denies the school’s funding
request.
1318 UNITED STATES v. GREEN
II. The Fraudulent Scheme
Green first learned of E-Rate in the 1990s, after spending
more than thirty years as a public school teacher in New York
City and Los Angeles. She saw an opportunity in the E-Rate
program and, in 1998, left teaching to set up a consulting
business to help guide schools and school districts through E-
Rate’s byzantine application process. Green marketed her ser-
vices to the poorest of schools; almost all of her clients were
eligible for the maximum 90 percent E-Rate subsidy.
According to the evidence introduced at trial, much of
which was undisputed, Green obtained most of her clients by
approaching school administrators at conferences held by the
National Alliance of Black School Educators. At these confer-
ences, Green, or one of her co-schemers, promised to help
school districts obtain E-Rate funding for significant technol-
ogy projects. Even better, they promised that the schools
would be forgiven their 10 percent co-pay, and that the con-
tractors would donate to the school districts thousands of dol-
lars in “bonus” equipment — equipment, such as end-user
equipment, that was ineligible for E-Rate funds. Needless to
say, a number of school districts leapt on board.
Once hired as a consultant, Green helped her clients design
their technology projects and filled out the SLD forms to
solicit project bids from vendors. At the same time, Green
approached potential contractors to assemble a team capable
of performing the projects to her specifications. Green
decided what services and equipment the contractors would
supply, dictated the “bonus” items the contractors were
required to provide at no charge (to the school), and informed
the contractors that the schools would not be paying their
share of the projects’ costs. The contractors then submitted
bids based upon Green’s specifications.
After receiving the bids, the school districts chose Green’s
pre-selected contractors to implement their technology proj-
UNITED STATES v. GREEN 1319
ects. Because Green had arranged the bids in advance, her
chosen contractors had inflated their bids to cover the costs of
the “bonus” equipment and services Green required them to
provide. One witness, for example, testified that the bid Green
arranged, and that his school district ultimately selected, was
three to four times higher than the other bids that the school
district received.
Finally, when the school districts submitted their funding
requests to SLD, Green took steps to ensure that SLD would
not ask questions about the projects. If SLD did ask questions,
Green took steps to ensure that it would be provided with
answers that minimized the chances it would follow up with
further review. For example, Green wrote equipment lists to
hide the fact that potentially ineligible equipment was
included within the projects’ scopes. She instructed the school
districts to tell SLD that they planned on paying their share
of the projects’ costs, even though they did not. And she
altered school budget information to show that the schools
could afford their co-pays.
Green’s conduct was eventually discovered by USAC. She
was later indicted in a twenty-two count indictment. The first
twenty counts charged Green with wire fraud and bid rigging
in connection with completed E-Rate projects at eleven school
districts across the country.2 The final two counts were con-
spiracy counts based upon uncompleted technology projects
at an additional fifteen school districts.
Following a nineteen-day trial, a jury convicted Green of
all charges against her. The district court sentenced her to a
ninety-month term of imprisonment. This appeal followed.
2
Green was charged with wire fraud for all eleven of these projects. She
was charged with collusion for only nine.
1320 UNITED STATES v. GREEN
DISCUSSION
Green challenges her conviction, as well as her ninety-
month sentence. We affirm.
I. Wire Fraud Convictions
Green’s overarching contention on appeal is that her
actions were not fraudulent because they were not prohibited
by the rules and regulations that governed the E-Rate program
during the time period charged in the indictment. Specifically,
Green raises three challenges to her wire fraud convictions, all
of which are variations on this common theme: (1) the E-Rate
rules and regulations were so poorly set out during the rele-
vant time period that her conviction violated her due process
right to fair warning that her conduct was criminal; (2) her
convictions relied on regulations that took effect after the con-
duct charged in the indictment, violating the Ex Post Facto
Clause of the Constitution; and (3) the district court’s instruc-
tions erroneously gave the jury unfettered discretion to decide
the legal question of which regulations were in effect during
Green’s purported fraud.
We review questions of law de novo. See United States v.
Kaczynski, 551 F.3d 1120, 1123 (9th Cir. 2009) (“We review
de novo questions of federal constitutional law . . . .”); United
States v. Romo-Romo, 246 F.3d 1272, 1274 (9th Cir. 2001)
(“Whether a jury instruction misstates elements of a statutory
crime is a question of law reviewed de novo.”). We conclude
that the offense of wire fraud does not require that Green’s
conduct violated a rule or regulation of the E-Rate program;
thus, her specific challenges fail.
Surprisingly, few courts have considered the precise issue
Green raises: whether actions that are not otherwise expressly
prohibited can nonetheless violate the federal fraud statutes.
Indeed, the government, while proclaiming that Green’s argu-
UNITED STATES v. GREEN 1321
ments are obviously incorrect, has not cited a single case in
support of its position.
[1] We have been unable to find a case in which a court has
considered the interplay between the fraud statutes3 and a fed-
eral rule or regulation. A number of courts, however, have
considered the related issue of whether the crime of wire
fraud must be predicated on a violation of state law. We have
addressed this issue, albeit briefly, on at least one prior occa-
sion. In United States v. Louderman, 576 F.2d 1383 (9th Cir.
1978), we disposed of the argument in a single sentence:
“Furthermore, state law is irrelevant in determining whether
a certain course of conduct is violative of the wire fraud stat-
ute.” Id. at 1387; cf. United States v. Weyhrauch, 548 F.3d
1237, 1245 (9th Cir. 2008) (citing Louderman and concluding
in an honest services fraud case that “we have never limited
the reach of the federal fraud statutes only to conduct that vio-
lates state law”), cert. granted in part, 129 S. Ct. 2863 (2009).
The Eighth Circuit recently reached the same conclusion.
In United States v. Frost, 321 F.3d 738 (8th Cir. 2003), the
defendant, a certified public accountant, acted as one of two
trustees for a charitable trust. Id. at 740. At some point the
defendant began withdrawing money from the trust for his
personal use without the consent of the other trustee, placing
the other trustee’s name or initials on invoices or checks when
it was required. Id. He was convicted of both mail and wire
fraud. Id. at 739.
Frost appealed his conviction, arguing in part that his con-
duct was not fraudulent because Arkansas law permitted him
to “withdraw reasonable compensation from the Trust” with-
out the other trustee’s consent. Id. at 740. Because the govern-
3
“It is well settled that cases construing the mail fraud and wire fraud
statutes are applicable to either.” United States v. Shipsey, 363 F.3d 962,
971 n.10 (9th Cir. 2004) (citing Carpenter v. United States, 484 U.S. 19,
25 n.6 (1987)).
1322 UNITED STATES v. GREEN
ment could not prove that his actions were illegal, he argued,
his convictions for mail and wire fraud should be overturned.
Id. at 741. The Eighth Circuit rejected this argument, stating:
“We do not agree that the government, having proved beyond
a reasonable doubt each element of the offense, must also
prove a violation of Arkansas law.” Id.; see also United States
v. Williams, 545 F.2d 47, 50 (8th Cir. 1976) (per curiam) (“A
conviction for mail fraud does not depend upon a violation of
state law.”); United States v. Scallion, 533 F.2d 903, 910 (5th
Cir. 1976); United States v. Bush, 522 F.2d 641, 646 n.6 (7th
Cir. 1975).
[2] In a related context, the Supreme Court has also
rejected the argument that the elements of wire or mail fraud
include the violation of a separate law or regulation. In Sch-
muck v. United States, 489 U.S. 705 (1989), the defendant
was convicted of mail fraud based upon his scheme to roll
back the odometers on 150 automobiles and sell them to
dealerships in Wisconsin. Id. at 707, 711. On appeal, the
defendant argued that odometer tampering was a lesser
included offense to the mail fraud charge, and that the jury
should have therefore been given a lesser-included offense
instruction. Id. at 708-10. The Court rejected this argument,
concluding that the crime of mail fraud was a distinct crime
that did not rely on proof of odometer tampering:
Turning to the facts of this case, we agree with the
Court of Appeals that the elements of the offense of
odometer tampering are not a subset of the elements
of the crime of mail fraud. There are two elements
in mail fraud: (1) having devised or intending to
devise a scheme to defraud (or to perform specified
fraudulent acts), and (2) use of the mail for the pur-
pose of executing, or attempting to execute, the
scheme (or specified fraudulent acts). The offense of
odometer tampering includes the element of know-
ingly and willfully causing an odometer to be
altered. This element is not a subset of any element
UNITED STATES v. GREEN 1323
of mail fraud. Knowingly and willfully tampering
with an odometer is not identical to devising or
intending to devise a fraudulent scheme.
Id. at 721-22.
[3] Based on the above, we believe it is settled that wire
fraud does not require proof that the defendant’s conduct vio-
lated a separate law or regulation, be it federal or state law.
Rather, wire fraud has only three elements: “(1) a scheme to
defraud; (2) use of the wires in furtherance of the scheme; and
(3) a specific intent to deceive or defraud.” United States v.
Shipsey, 363 F.3d 962, 971 (9th Cir. 2004). The scheme to
defraud must only include an “affirmative, material misrepre-
sentation.” United States v. Benny, 786 F.2d 1410, 1418 (9th
Cir. 1986). A defendant’s conduct need not otherwise be ille-
gal in the sense that the government must also prove that the
defendant’s conduct violated a specific statute or regulation.
[4] We reject Green’s contention that if we unmoor her
wire fraud conviction from the E-Rate rules and regulations,
her conviction will be based on nothing more than her having
deprived the federal government of its right to make an “in-
formed decision.” To support this argument, Green invokes
the honest services fraud cases, which simply are inapplicable
to her case. Although the law of honest services fraud remains
unsettled, the debate over the reach of the crime of honest ser-
vices fraud need not detain us. For at the heart of that debate
is the concern that honest services fraud does not require any
form of tangible harm; thus, it has been argued that there is
no principled limit to the reach of the statute. See, e.g., United
States v. Sorich, 523 F.3d 702, 707 (7th Cir. 2008) (“[G]iven
the amorphous and open-ended nature of § 1346, . . . courts
have felt the need to find limiting principles.”), cert. denied,
129 S. Ct. 1308 (2009); United States v. Urciuoli, 513 F.3d
290, 294 (1st Cir. 2008) (“The central problem is that the con-
cept of ‘honest services’ is vague and undefined by the stat-
ute.”); see also Sorich v. United States, 129 S. Ct. 1308
1324 UNITED STATES v. GREEN
(2009) (Scalia, J., dissenting from denial of certiorari).4 But
where, as here, financial harm to the victim is an integral part
of the offense, there has never been any suggestion that a fur-
ther limitation on the fraud statutes is required.
[5] That Green’s E-Rate scheme involved millions of dol-
lars in federal funds was sufficient to bring it squarely within
the heartland of the federal fraud statutes. In such a case, the
government needed only to prove a scheme to defraud; it was
not required to establish that the scheme separately violated
the E-Rate regulations. Accordingly, we reject Green’s con-
tention that her conduct needed to violate a rule or regulation
of the E-Rate program in order to be fraudulent. Under well-
established circuit precedent, as discussed in Part II, below,
proof of such a violation is not an element of the fraud
offense.
II. Sufficiency of the Evidence
Green also challenges the sufficiency of the evidence for all
but one of her counts of conviction. We review de novo suffi-
ciency of the evidence claims. United States v. Overton, 573
F.3d 679, 685 (9th Cir. 2009). “Evidence is sufficient to sup-
port a conviction unless, viewing the evidence in the light
most favorable to sustaining the verdict, no rational trier of
fact could have found the essential elements of the crime
beyond a reasonable doubt.” Id.
A. Wire Fraud (Counts 1-11)
In order for the jury to convict Green of wire fraud, it had
to find: “(1) a scheme to defraud; (2) use of the wires in fur-
therance of the scheme; and (3) a specific intent to deceive or
4
The Supreme Court has granted certiorari in three honest services
fraud cases this term to address the reach of the statute. See Skilling v.
United States, 130 S. Ct. 393 (2009); Weyhrauch v. United States, 129 S.
Ct. 2863 (2009); Black v. United States, 129 S. Ct. 2379 (2009).
UNITED STATES v. GREEN 1325
defraud.” Shipsey, 363 F.3d at 971. On appeal, Green chal-
lenges the sufficiency of the evidence as to the first and third
elements.
Green, however, did not challenge the sufficiency of the
evidence for her wire fraud convictions below. “[W]hen a
defendant does not preserve a claim of sufficiency of the evi-
dence by failing to make a motion for acquittal at the close of
the evidence, the review is deferential, requiring reversal only
upon plain error or to prevent a manifest injustice.” United
States v. Delgado, 357 F.3d 1061, 1068 (9th Cir. 2004). Thus,
we review only for plain error.
We find no such manifest injustice here. The government
introduced ample evidence of both a scheme to defraud and
intent to defraud, much of which was undisputed. Green’s co-
schemers, as well as representatives from the school districts
she worked with, testified that the school districts were prom-
ised that the entire project would be paid for out of E-Rate
funds, and that the school districts would obtain substantial
“bonus” items for free. These promises were never revealed
to SLD. Further, Green testified about her own role in the
scheme and admitted to much of the charged conduct. For
example, Green admitted to editing equipment lists to prevent
SLD from learning that the projects included potentially ineli-
gible equipment. She also acknowledged that she took steps
to conceal from SLD the fact that the schools would not be
paying their co-pays.
In light of the fact that much of the evidence against her
was undisputed, Green’s sufficiency-of-the-evidence argu-
ment does not focus on the amount of evidence against her.
Rather, she challenges the interpretation of that evidence.
Green contends that there is an “innocent explanation” for her
conduct — that she was helping impoverished schools by get-
ting contractors to donate equipment and to waive the portion
of the contract price that the school was required to pay. See
Delgado, 357 F.3d at 1068-69 (“[W]hen there is an innocent
1326 UNITED STATES v. GREEN
explanation for a defendant’s conduct as well as one that sug-
gests that the defendant was engaged in wrongdoing, the Gov-
ernment must produce evidence that would allow a rational
jury to conclude beyond a reasonable doubt that the latter
explanation is the correct one.”). Because she was merely
exploiting loopholes in the E-Rate application process, Green
contends, her conduct was not criminal.
[6] We fail to see the “innocent” explanation that Green
describes. Even accepting that her ultimate motives were
laudable, she concealed material facts from the federal gov-
ernment in an attempt to induce it to fund her projects. That,
standing alone, is fraud.
This case is reminiscent of United States v. Baum, 555 F.3d
1129 (10th Cir. 2009), in which the defendant was charged
with wire fraud based upon a complicated mortgage fraud
scheme:
. . . Mr. Baum acted as the real-estate agent for the
buyer, who was seeking a home loan in the subprime
market because of weak credit. The buyer generally
could not afford the down payment required by the
lender (from 5% to 15% of the cost of the home), so
the buyer borrowed that money from Mr. Baum and
his associates. Mr. Baum’s client agreed to buy the
home at the seller’s listed price, which often had
been reduced over time as the home failed to sell;
but Mr. Baum and his client obtained the consent of
the seller and the seller’s agent to list an inflated
price on the purchase contract. The price inflation
did not benefit the seller because Mr. Baum prepared
an addendum to the purchase contract requiring the
seller to pay the excess over the listed price to a
named company for remodeling or repairing the
home. Apparently unbeknownst to the seller, the
company was merely a bank account used to funnel
the money to provide cash to the purchaser and to
UNITED STATES v. GREEN 1327
pay Mr. Baum and his associates for their services
and for advancing the down payment.
The mortgage lender, of course, was not informed of
the true nature of the transaction.
Id. at 1130.
Baum was convicted of mortgage fraud. One of his argu-
ments for reversal on appeal was that “the failure to have
remodeling or repair work done on the homes . . . amounts
merely to breach of contract, not a crime.” Id. The Tenth Cir-
cuit disagreed: “The fraud . . . was that the mortgage lender
was led to believe that it was lending money to purchase a
home for $X, not to purchase a home for $X-$Y and then
undertake $Y worth of remodeling or repairs.” Id. at 1132.
[7] As in Baum, Green’s fraudulent scheme led SLD to
believe it was funding something other than what it was actu-
ally funding. The applications Green helped prepare did not
disclose the true nature of the agreements she had reached
with the vendors. Instead, they distorted the full scope of the
projects, concealing the added costs and the “bonus” equip-
ment the school districts would receive. In Baum’s formula-
tion, Green’s actions led SLD to believe it was funding the
listed equipment for $X, not $X-$Y with the school district
receiving $Y worth of extra equipment and was not funding
its own co-pay.
[8] There was ample evidence to support the wire fraud
convictions. No plain error occurred.
B. Conspiracy to Commit Mail and Wire Fraud (Count
22)
In order to convict Green of conspiracy to commit mail and
wire fraud, the jury had to find: “(1) an agreement to engage
in criminal activity, (2) one or more overt acts taken to imple-
1328 UNITED STATES v. GREEN
ment the agreement, and (3) the requisite intent to commit the
substantive crime.” United States v. Montgomery, 384 F.3d
1050, 1062 (9th Cir. 2004). In a conspiracy charge, “[t]he
agreement need not be explicit; it is sufficient if the conspira-
tors knew or had reason to know of the scope of the conspir-
acy and that their own benefits depended on the success of the
venture.” Id. The agreement may be inferred from circumstan-
tial evidence. United States v. Hubbard, 96 F.3d 1223, 1226
(9th Cir. 1996).
The conspiracy count was based upon Green’s relationship
with Richard Favara. Favara was the owner of Expedition
Networks, a technology company that worked with Green to
bid on E-Rate projects. He also was the founder of the Ameri-
can Education Alliance (the “Alliance”), a nonprofit started
with the goal of providing computers to underprivileged
schools.
Favara testified that in 2002 he worked with Green to
secure fifteen E-Rate projects for Expedition Networks. As
part of this process, Favara agreed to allow Green to become
Director of Grants for the Alliance, despite the fact that it had
no assets. Green intended to use the Alliance to award bogus
grants to schools to strengthen their applications for E-Rate
funding. Under this scheme, the Alliance would purport to
make a grant to a poor school district so the district could
claim that it had the assets to make its co-pay. Green would
ensure that the school selected Expedition Networks to per-
form the project. Favara would then funnel a portion of the
contract payments from Expedition Networks to the Alliance,
which would use the money for the grant it had awarded to
the school district. Those funds would eventually be returned
to Expedition Networks in the form of the school’s co-pay.
To help Green convince the school districts to hire her,
Favara agreed to let Green post on the Alliance’s website a
falsified financial overview of the nonprofit. According to
Favara, Green wanted to post this information “to make the
UNITED STATES v. GREEN 1329
company look stronger when she was talking to schools.”
Favara agreed to Green’s request because Expedition needed
the business to “breathe financially.”
[9] This testimony established that both Green and Favara
were committed to the common goal of obtaining the fifteen
E-Rate contracts, and that both agreed to utilize false financial
information to achieve that goal. This is sufficient evidence
for the jury to find an agreement existed. See Montgomery,
384 F.3d at 1062-63.
[10] There was also sufficient evidence that Green had the
intent to defraud. Evidence introduced at trial established that
Green knew the Alliance had no assets, but that she nonethe-
less had Favara post the false financial information on its
website. Further, Green proposed to make grants to schools to
cover their co-pays out of the inflated profits that Expedition
Networks would receive from the E-Rate contracts it
received. She even submitted falsified letters to USAC
informing it of grants that the Alliance had awarded, even
though no such grants had been made. This was sufficient to
support the jury’s finding of intent to defraud.
C. Bid Rigging (Counts 12-20)
Finally, Green challenges the sufficiency of the evidence
on the bid-rigging counts. Viewing the evidence in the light
most favorable to the government, we conclude that the evi-
dence at trial easily supported the jury’s finding that Green
participated in multiple bid-rigging conspiracies.
Section 1 of the Sherman Act provides: “Every contract,
combination in the form of trust or otherwise, or conspiracy,
in restraint of trade or commerce among the several States, or
with foreign nations, is declared to be illegal.” 15 U.S.C. § 1.
The section does not prohibit all restraints of trade, but only
those that are unreasonable. United States v. Brown, 936 F.2d
1042, 1045 (9th Cir. 1991). Generally, the question whether
1330 UNITED STATES v. GREEN
a restraint of trade is unreasonable involves a detailed factual
inquiry. Id. This case-by-case analysis is unnecessary, how-
ever, “when the restraint falls into a category of agreements
which have been determined to be per se illegal. Such agree-
ments are those that ‘always or almost always tend to restrict
competition and decrease output.’ ” Id. (quoting Northwest
Wholesale Stationers, Inc. v. Pac. Stationery & Printing Co.,
472 U.S. 284, 289-90 (1985)).
Green does not dispute that bid rigging constitutes an
offense that is per se illegal. See United States v. Rose, 449
F.3d 627, 630 (5th Cir. 2006) (“[C]onspiracies to submit col-
lusive, noncompetitive, rigged bids . . . are per se violations
of the Sherman Act.”); United States v. Reicher, 983 F.2d
168, 170 (10th Cir. 1992) (“Bid rigging is [a] per se violation
[of the Sherman Act].”). Instead, she claims that she did not
engage in bid rigging because the agreements she organized
were legitimate teaming agreements among companies that
were not competitors. See United States v. MMR Corp., 907
F.2d 489, 498 (5th Cir. 1990) (noting “unremarkable proposi-
tion that an agreement not to compete between two parties
who are not actual or potential competitors is not per se or
otherwise illegal because an agreement not to compete
between two parties who are not competitors is meaning-
less”); see also Northrop Corp. v. McDonnell Douglas Corp.,
705 F.2d 1030, 1050-54 (9th Cir. 1983) (concluding that
teaming agreement between government contractors war-
ranted analysis under the rule of reason).
[11] The government’s evidence, however, was sufficient
to support the jury’s finding that Green engaged in bid rig-
ging. To begin with, the evidence at trial established that
Green controlled the bidding process. She informed vendors
in advance that they would be selected for E-Rate projects,
dictated the contents of their bids, and orchestrated matters so
that school districts would award their contracts to her pre-
selected vendors. These actions went beyond merely arrang-
ing a team of contractors to create a legitimate bid; they
UNITED STATES v. GREEN 1331
encouraged that team to fashion its bid without regard to the
competition. By interfering with the competitive bidding pro-
cess in this way, there can be little doubt that Green’s actions
fell within the heart of the anticompetitive conduct prohibited
by the Sherman Act.
[12] The government’s evidence also established that
Green did more than just arrange “teams.” Green routinely
interfered with arm’s length negotiations between contractors,
dictating which vendors would act as subcontractors and what
portions of the projects they would perform. For example,
with respect to count twelve, a project for the West Fresno
School District, there was testimony that Green explicitly told
two vendors that they would act as subcontractors to her cho-
sen contractor, as well as what portions of the project both
vendors would perform. Representatives from both subcon-
tractors testified that their companies had planned to bid on
portions of the project directly to the school district until
Green told them to act as subcontractor. Thus, these compa-
nies were at least potential, if not actual, competitors. Similar
evidence supported counts thirteen and twenty. A rational jury
could conclude that Green’s actions were meant to subvert the
competition between these vendors.
The remaining counts all involved an agreement executed
between two vendors where the larger, NEC, would act as
prime contractor, and the smaller, VNCI, as subcontractor, on
all bids the two acquired. Green claims that VNCI and NEC
were not true competitors because VNCI was too small and
underfunded to act as the primary contractor. Yet there was
evidence introduced at trial that VNCI served as the prime
contractor on at least one other E-Rate project. From this evi-
dence, a rational jury could have concluded that VNCI had
the capability of serving as the prime contractor, and thus was
a potential competitor, for this, as well as other projects.
[13] The above evidence was more than sufficient for a
rational trier of fact to convict Green of bid rigging. Accord-
ingly, we affirm her conviction on those counts.
1332 UNITED STATES v. GREEN
III. Vicarious Liability Instruction
Green also challenges the district court’s vicarious liability
instruction. The instruction read as follows:
For defendant to be guilty of an offense committed
by a coschemer in furtherance of the scheme, the
offense must be one that could be — could reason-
ably be foreseen as a necessary and natural conse-
quence of the scheme to defraud.
Many of the faxes and e-mails alleged in the counts
to have been wirings were sent by individuals not
claimed to have been a coschemer. It is not neces-
sary, however, that the government prove the sender
was a coschemer so long as the government proves
beyond a reasonable doubt that defendant or a cos-
chemer knew or could have reasonably foreseen that
the e-mail or fax in question would be sent to carry
out an essential part of the alleged scheme.
Green takes issue with two aspects of this instruction. She
argues that the instruction: (1) erroneously stated that the wire
transmission need not have been sent by a co-schemer; and
(2) erroneously failed to restrict Green’s criminal liability to
what was reasonably foreseeable to her. We review de novo
“the question whether a trial court’s jury instruction omitted
or incorrectly described an element of the offense.” United
States v. Thongsy, 577 F.3d 1036, 1040 (9th Cir. 2009).
Green’s first point is incorrect. The Supreme Court long
ago foreclosed the argument that the wire must be sent by a
member of the scheme to defraud. In Pereira v. United States,
347 U.S. 1 (1954), the defendant seduced and married a
wealthy woman by purporting to be “the owner and operator
of several profitable hotels.” Id. at 3-5. After the wedding, the
defendant convinced his new wife to lend him $35,000 that he
claimed he would use as an advance on the purchase price of
UNITED STATES v. GREEN 1333
a new hotel. Id. at 5. Once he received the check, the defen-
dant cashed it and fled. Id.
[14] The defendant was convicted of mail fraud, but chal-
lenged his conviction on the ground that he had not made any
mailing; the mailing underlying his conviction was a check
sent from a bank in El Paso, Texas, to a bank in Los Angeles.
Id. at 8. The Supreme Court rejected his argument: “To con-
stitute a violation of these provisions, it is not necessary to
show that petitioners actually mailed or transported anything
themselves; it is sufficient if they caused it to be done.” Id. at
8; see also id. at 8-9 (“Where one does an act with knowledge
that the use of the mails will follow in the ordinary course of
business, or where such use can reasonably be foreseen, even
though not actually intended, then he ‘causes’ the mails to be
used.”); Schmuck, 489 U.S. at 711-712 (affirming conviction
for mail fraud where mailing was sent by defrauded car
dealerships).
[15] Green’s second point is more viable. A participant in
a scheme to defraud is liable for “acts of mail or wire fraud
committed by co-schemers,” provided those acts took place
“during the life of the scheme and . . . were reasonably fore-
seeable as a necessary and natural consequence of the fraudu-
lent scheme.” United States v. Stapleton, 293 F.3d 1111,
1118-19 (9th Cir. 2002). In the mail and wire fraud context,
we have not previously articulated the standard for “reason-
able foreseeability.” We agree with Green that foreseeability
must be evaluated according to the facts that were known to
the defendant.
We have been unable to find a case that reaches this con-
clusion in the wire fraud context. In the related realm of con-
spiracy, however, it appears to be an established rule,
although it is rarely discussed. See, e.g., United States v.
Casiano, 113 F.3d 420, 427 (3d Cir. 1997) (“Thus, the issue
is whether there was sufficient evidence that Casiano could
have reasonably foreseen the use of a gun by his co-
1334 UNITED STATES v. GREEN
conspirators.”); United States v. Hernandez, 509 F.3d 1290,
1298 (10th Cir. 2007) (“It is well established that, ‘[u]pon
[his] conviction of conspiracy to possess with intent to distrib-
ute [marijuana], [Mr. Hernandez] was accountable for that
drug quantity which was within the scope of the agreement
and reasonably foreseeable to [him].’ ” (quoting United States
v. Arias-Santos, 39 F.3d 1070, 1078 (10th Cir. 1994)) (alter-
ations in original)).
We implicitly reached this conclusion while discussing co-
conspirator liability in United States v. Castaneda, 9 F.3d 761
(9th Cir. 1993), overruled on other grounds by United States
v. Nordby, 225 F.3d 1053, 1059 (9th Cir. 2000). Castaneda
involved a conspiracy to distribute cocaine and heroin in
which Uriel Castaneda was a supplier, and his wife, Leticia
Castaneda, held a minor role. Id. at 763. Leticia Castaneda,
like the other members of the conspiracy, was prosecuted for
seven counts of possessing a firearm in connection with a
drug-trafficking crime. Id. at 763-64; see also 18 U.S.C.
§ 924(c). The predicate offense for one of these counts was
the overarching conspiracy to distribute drugs itself; the
remaining counts were based upon other conspiracy mem-
bers’ use of firearms at the time they possessed drugs with
intent to distribute. Id. at 764-66.
Although we affirmed the possession convictions of the
other defendants, we concluded that Leticia Castaneda had
such a “marginal role” in the conspiracy that she could not
reasonably have foreseen the details of her co-conspirators’
actions: “[G]iven Leticia’s lack of participation in the conspir-
acy and her lack of involvement with the predicate offenses,
the use of firearms by the other conspirators in relation to
these offenses was not reasonably foreseeable to her.” Id. at
767-68. We therefore vacated all of her convictions except the
one that had as its predicate offense the conspiracy as a
whole. Id.
[16] Castaneda therefore established that vicarious liabil-
ity must be predicated on acts that were reasonably foresee-
UNITED STATES v. GREEN 1335
able to the defendant. Although it was decided in the context
of a conspiracy, we believe its holding applies equally in the
context of mail and wire fraud. Indeed, courts have long
remarked upon the similarities between a conspiracy and the
“scheme to defraud” element of mail fraud. See, e.g., Staple-
ton, 293 F.3d at 1116-17; United States v. Lothian, 976 F.2d
1257, 1262-63 (9th Cir. 1992).
[17] Under this standard, the district court’s foreseeability
instruction was incorrect. As is plain from the instruction, the
jury was allowed to convict Green based upon what was rea-
sonably foreseeable not only to her, but also to her co-
schemers. No portion of the district court’s instructions cor-
rected this error.
[18] Although the instruction was erroneous, that is not the
end of our inquiry. We must next determine whether the error
was harmless. See Hedgpeth v. Pulido, 129 S. Ct. 530, 530-32
(2008) (per curiam) (holding instructional error is subject to
harmless error review); United States v. Smith, 561 F.3d 934,
938 (9th Cir. 2009) (en banc) (holding instructional error to
be “[n]on-structural constitutional error[ ]” and “therefore
subject to harmless error review”). As the trial court noted,
and as detailed below, the evidence was overwhelming that
Green was at the center of each of the fraudulent schemes.
Unlike in Castaneda, Green’s involvement in the schemes
was not “marginal.” She was aware of and intricately
involved in every scheme charged in the indictment. Further,
each of the wires identified in the indictment were routine
emails or faxes made in furtherance of the schemes; they fell
well within the range of ordinary communications to be
expected in the course of bidding on and procuring a govern-
ment contract.
[19] Accordingly, while the district court’s instruction may
have misstated the proper standard of reasonable foreseea-
bility, any error was harmless beyond a reasonable doubt. See
United States v. Anchrum, 2009 WL 5125788, *4 (9th Cir.
1336 UNITED STATES v. GREEN
2009) (“A jury instruction error is harmless if it is ‘ “clear
beyond a reasonable doubt that a rational jury would have
found the defendant guilty absent the error.” ’ ” (quoting
United States v. Gracidas-Uliberry, 231 F.3d 1188, 1197)
(9th Cir. 2001) (quoting Neder v. United States, 527 U.S. 1,
(1999))).
IV. Ninety-Month Sentence
Green’s final contention is that her ninety-month sentence
was “unreasonable and unconstitutionally disparate from that
of similarly situated defendants.” Given that Green has not
alleged that her sentencing suffered from any procedural
error, we review for “substantive reasonableness, considering
the totality of the circumstances.” United States v. Higuera-
Llamos, 574 F.3d 1206, 1211 (9th Cir. 2009).
[20] The district court’s ninety-month sentence was well
within the range of reasonableness. There was ample justifica-
tion for Green receiving a more severe sentence than her co-
schemers. The evidence produced at trial established that
Green was the ringleader and driving force behind the fraudu-
lent schemes: she approached the school districts, she orches-
trated the bidding process, and she dictated the equipment that
would be included in the projects. At sentencing, Green even
conceded a four-point organizer enhancement. This was suffi-
cient to justify her more severe sentence. See, e.g., United
States v. Carter, 560 F.3d 1107, 1121 (9th Cir. 2009) (finding
that disparities in sentences among co-conspirators did not
make sentences unreasonable because the defendants were not
similarly situated).
[21] We also reject Green’s argument that her sentence was
unreasonable in light of her age and background; the trial
judge expressly took those circumstances into account when
imposing her sentence. Despite the fact that he believed a sen-
tence in the Guidelines range of 97-121 months was appropri-
ate for the crimes Green committed, he departed downward in
UNITED STATES v. GREEN 1337
light of both of the above factors. Further, the trial judge had
already been lenient in his Guidelines calculations, resulting
in a Guidelines range that was significantly lower than that
which Green may have deserved. In short, the trial judge
fairly and carefully crafted Green’s sentence, taking into con-
sideration the circumstances Green raises on appeal.
Finally, Green’s contention that her sentence was more
severe than those received by defendants in other E-Rate
cases also does not render her sentence unreasonable. Indeed,
her sentence was below the low-end of the Guidelines range,
and the Guidelines range exists to ensure national uniformity
in sentencing. United States v. Saeteurn, 504 F.3d 1175, 1181
(9th Cir. 2007); see also United States v. Becerril-Lopez, 541
F.3d 881, 895 (9th Cir. 2008) (“[W]e have trouble imagining
why a sentence within the Guidelines range would create a
disparity, since it represents the sentence that most similarly
situated defendants are likely to receive.”); United States v.
Carty, 520 F.3d 984, 988 (9th Cir. 2008) (en banc) (“[W]e
recognize that a correctly calculated Guidelines sentence will
normally not be found unreasonable on appeal.”).
The record reveals that the experienced trial judge con-
ducted a detailed examination of the Sentencing Guidelines
and carefully considered Green’s particular circumstances
before imposing sentence. We therefore conclude that Green’s
sentence was not unreasonable.
CONCLUSION
For the foregoing reasons, the judgment of conviction and
the sentence are AFFIRMED.