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Date: 12-16-2021
Case Style:
United States of America v. Vivian Tat AKA Vivian Lnu
Case Number: 19-50034
Judge: Susan P. Graber
Court:
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
On appeal from The United States District Court
for the Central District of California
Plaintiff's Attorney: Bram Alden (argued), Deputy Chief, Criminal Appeals
Section; L. Ashley Aull, Chief, Criminal Appeals Section;
Tracy L. Wilkison, Acting United States Attorney; United
States Attorney’s Office
Defendant's Attorney:
Description:
San Francisco, CA - Criminal defense lawyer represented defendant with one count of making a false entry in bank records charge.
This appeal stems from a sting operation to uncover
money laundering near Los Angeles. In 2014, the
government indicted Ruimin Zhao; Raymond Tan, who is
Zhao’s husband; and Defendant for conspiring to launder
$25,500 in 2009. Four years later, the government added
two counts that accused Defendant Tat of making false
entries in the bank’s records.
The scheme went this way: Jimmy Yip, the
government’s informant and a former racketeer, persuaded
Tan to convert proceeds from Yip’s purported drug sales into
cashier’s checks. Yip’s money actually came from the
Federal Bureau of Investigation (“FBI”). In exchange, Yip
would pay Tan $4500. Tan said that he was the man for the
job because his wife knew an insider at a local bank:
Defendant. Tan and Yip agreed that the checks would be
made out to a fictitious “Oscar Santana.”
Defendant, meanwhile, knew that one of her customers
sought a way to withdraw a large amount of cash without
showing the withdrawal on her account. (The customer
1 We affirm Defendant’s and her codefendant’s convictions for
conspiring to launder money in a concurrently filed memorandum
disposition.
UNITED STATES V. TAT 5
wanted to shield it in her divorce proceedings.) Defendant
proposed a trade: if the customer drew $25,500 in three
cashier’s checks from her account, Defendant knew
someone who would pay off-the-books cash for them. The
customer agreed.
Yip, wearing a secret camera, met the coconspirators in
one of the bank’s conference rooms on December 14, 2009.
Yip’s money was counted, the cashier’s checks were signed,
and all sides went on their way. But Defendant’s customer
thought something felt off—why did she have to make the
checks out to an Oscar Santana? She asked Defendant to
reverse the transactions.
The bank’s logs, presented as Exhibit 48 at trial,
document both the checks’ purchase and their return. The
logs record that, on December 14, the customer purchased
three cashier’s checks worth a combined $25,500 and then
reversed those transactions. At trial, the government elicited
testimony that (1) Yip gave the customer $25,500; (2) the
customer drew $25,500 in cashier’s checks from her
account; (3) Defendant gave those cashier’s checks to Yip;
and (4) Defendant reversed the transactions at the customer’s
request.
Timothy Truong, the bank’s custodian of records,
testified that, although the logs contained in Exhibit 48 can
show the account from which the cashier’s checks were
drawn, those logs cannot show the source of any
simultaneously received cash that the customer did not
deposit. In other words, Truong testified that those logs
could not disclose Yip’s involvement.
After the original checks were returned, Tan and Zhao,
working with Defendant, obtained replacement cashier’s
checks in their own names. One of those replacement checks
6 UNITED STATES V. TAT
was documented in the bank’s logs, which the government
introduced as Exhibit 47 at trial. That log shows that, on
December 14, Zhao drew a $7500 cashier’s check payable
to “Oscar Santana” from the account of her facial and
massage business. At trial, the government elicited
testimony that Zhao went to the bank; deposited $7500 in
cash; purchased a cashier’s check for $7500 with a check
from her business account; and then gave that cashier’s
check to Tan, who gave it to Yip. Zhao’s account lacked
sufficient funds to cover the cashier’s check before her
deposit of Yip’s money.
Truong testified that the logs shown in Exhibit 47 do not
allow the bank’s employees to list the source of a purchaser’s
funds. In other words, Truong testified that the logs can
show that a customer paid for the cashier’s check in cash,
but they cannot show that cash’s source. The government
also presented evidence that the check from Zhao’s business
account, used to draw the cashier’s check, featured
Defendant’s handwriting.
Tan pleaded guilty to conspiring to launder money.
Defendant and Zhao went to trial. The jury convicted them
both of conspiring to launder money, 18 U.S.C. § 1956(h),
and it convicted Defendant of two counts (Counts 2 and 3)
of making a false entry in a bank’s records, 18 U.S.C.
§ 1005.
DISCUSSION
Defendant argues that insufficient evidence supports her
false-entry convictions. We “must consider the evidence
presented at trial in the light most favorable to the
prosecution.” United States v. Nevils, 598 F.3d 1158, 1164
(9th Cir. 2010) (en banc). We then “must determine whether
this evidence, so viewed, is adequate to allow ‘any rational
UNITED STATES V. TAT 7
trier of fact [to find] the essential elements of the crime
beyond a reasonable doubt.’” Id. (alteration in original)
(emphasis omitted) (quoting Jackson v. Virginia, 443 U.S.
307, 319 (1979)). If the evidence fails at that second step,
we must reverse. Id. at 1165.
Our analysis of a criminal statute begins with its text.
United States v. Price, 980 F.3d 1211, 1218 (9th Cir. 2019).
As relevant here, § 1005 criminalizes:
mak[ing] any false entry in any book, report,
or statement of such bank, company, branch,
agency, or organization with intent to injure
or defraud such bank, company, branch,
agency, or organization, or any other
company, body politic or corporate, or any
individual person, or to deceive any officer of
such bank, company, branch, agency, or
organization, or the Comptroller of the
Currency, or the Federal Deposit Insurance
Corporation, or any agent or examiner
appointed to examine the affairs of such
bank, company, branch, agency, or
organization, or the Board of Governors of
the Federal Reserve System[.]
§ 1005 (emphases added). Thus, the government must prove
that “(1) [D]efendant made a false entry in bank records,
caused it to be made, or aided and abetted its entry;
(2) [D]efendant knew the entry was false when it was made;
and (3) [D]efendant intended that the entry injure or deceive
a bank or public official.” United States v. Wolf, 820 F.2d
1499, 1504 (9th Cir. 1987). The parties dispute only whether
the government proved falsity.
8 UNITED STATES V. TAT
The Supreme Court held, more than a century ago, that
“the making of a false entry is a concrete offense, which is
not committed where the transaction entered actually took
place, and is entered exactly as it occurred.” Coffin v. United
States, 156 U.S. 432, 463 (1895). But courts have expanded
the reach of § 1005 (and its predecessor, 12 U.S.C. § 592)
beyond literal falsity; “material omissions are false
statements for the purposes of” the statute. United States v.
Ely, 142 F.3d 1113, 1119 (9th Cir. 1997); see United States
v. Darby, 289 U.S. 224, 226 (1933) (holding that § 592’s
“aim was to give assurance that upon an inspection of a bank,
public officers and others would discover in its books of
account a picture of its true condition”).
In the context of fraudulent loans, such an omission
might include “focus[ing] on whether the transaction is real
and substantial as opposed to merely formal.” United States
v. Krepps, 605 F.2d 101, 109 (3d Cir. 1979). That reasoning
makes sense with respect to loans—where the concern is that
hiding information from officials prevents them from
assessing a bank’s exposure. See id. (holding that “those
who are charged by law with the examination of these
records have a significant interest in obtaining a full picture
of the bank’s actual condition”). For example, we held that
a bank executive caused a false entry under § 592 when he
directed an uncompensated straw man to obtain a loan—
disbursed as a cashier’s check—because that straw man
(1) was unqualified for the loan; (2) had no plans to repay
the loan; and (3) immediately gave the cashier’s check to the
defendant. Hargreaves v. United States, 75 F.2d 68, 70–71
(9th Cir. 1935). Because the transaction was “fictitious,” the
bank’s “records would not indicate the true nature of the
transaction” and, thus, contained a false entry. Id. at 72.
Likewise, § 1005 criminalizes the omission of one’s true
purpose in seeking a loan. Wolf, 820 F.2d at 1503–04.
UNITED STATES V. TAT 9
But we agree with the Fifth Circuit that the same
reasoning does not necessarily apply to banks’ accurate
records of customers’ withdrawals. In United States v.
Manderson, 511 F.2d 179 (5th Cir. 1975), the defendant was
an employee of a mortgage company who sought to extort a
contractor before releasing the payment for a home’s repairs.
Id. at 180. The contractor, knowing extortion when he saw
it, contacted the mortgage company’s bank, which in turn
contacted the FBI. Id. The FBI provided the contractor with
marked bills, which the contractor then paid to the
defendant. Id. The defendant released the funds for the
repairs to the contractor and documented that transaction in
the mortgage company’s checkbook. Id.
The Fifth Circuit held that the defendant’s checkbook
entry was not a false entry under § 1005. Id.
The checkbook stub correctly reflected the
date, the payees, for what the check was
issued, its application to the escrow account,
the account number, and the amount. There
was no false entry unless it can be said that
appellant’s attempt to enrich himself at the
expense of [the contractor] and [the
homeowner] rendered it such. There was no
attempt to defraud [the mortgage company]
or the Bank and neither was defrauded.
Appellant correctly reflected the transaction
in the books of the Bank.
Id. Because the bank’s record is “the very entry that should
have been made had there been no later effort to extort,” that
record is not “lacking in verity.” Id. at 181. In other words,
that an accurately recorded bank transaction has a nexus to
unlawful activity does not, standing alone, make all entries
10 UNITED STATES V. TAT
related to that transaction “false” within the meaning of
§ 1005. Other courts have held the same. “[A]n entry is not
false merely because the underlying transaction is illegal,”
United States v. Gleason, 616 F.2d 2, 29 (2d Cir. 1979);
“questionable,” United States v. Hardin, 841 F.2d 694, 699
(6th Cir. 1988); “manipulative,” id.; or “fraudulent,” United
States v. Erickson, 601 F.2d 296, 302 (7th Cir. 1979). We
agree with our sister circuits’ analysis on that point. We
turn, then, to applying those principles to Defendant’s
convictions for making false entries in violation of § 1005.
A. Count 3
Count 3 is premised on the bank’s log shown in Exhibit
48. That log states that Defendant’s customer purchased and
then returned three cashier’s checks for a sum of $25,500.
The government acknowledges that the record does not
contain a literal falsehood.
Nor does Exhibit 48 contain an omission such that the
bank’s “records would not indicate the true nature of the
transaction.” Hargreaves, 75 F.2d at 72. The government
argues that our decision in Hargreaves controls here. We
disagree. Although Hargreaves mentions a “cashier’s
check,” it really is a case about a fraudulent loan; the bank
was duped into lending money to an unworthy borrower. Id.
at 70. As we recently held in another case concerning the
scope of § 1005, the entry in Hargreaves implicated our
often-expressed concern that banks need to know borrowers’
true identities. United States v. Yates, No. 18-30183, 2021
WL 4699251, at *11 (9th Cir. October 8, 2021) (citing
Hargreaves, 75 F.2d at 70, 72). Count 3 causes no such
concern.
The only witness to testify on the matter stated that
Defendant could not have disclosed the source of the
UNITED STATES V. TAT 11
customer’s unbanked cash on the log contained in Exhibit
48. “The form does not call for a narrative response, allow
for comment, . . . or ask for the source of a payment” to the
customer. Id. at *12. She could disclose only that the
customer purchased and returned cashier’s checks. The
government points to no document related to the cashier’s
checks in question that Defendant completed falsely or that
she should have completed but did not. Cf. United States v.
Cordell, 912 F.2d 769, 773–74 (5th Cir. 1990) (holding that
a bank manager violated § 1005 when he declined to file a
required overdraft notice so that he could conceal from his
supervisors a violation of federal lending limits); United
States v. McAnally, 666 F.2d 1116, 1118 (7th Cir. 1981)
(holding that the bank’s employee violated § 1005 by failing
to record a loan even if “there was no false entry in a literal
sense”).
It also cannot be said that East West Bank would not
have “a picture of [the bank’s] true condition,” Darby,
289 U.S. at 226, without knowing that its customer had come
into a large amount of cash that she opted not to deposit.
Cashier’s checks—unlike loans—cannot be issued until the
bank receives funds. The bank would know that a real
customer drew a real cashier’s check from the undisputed
balance of her real account. How one chooses to “dispose of
the fund[s] so obtained should, in the absence of
misrepresentation on h[er] part, be of no interest to the bank,
and certainly not to the criminal law.” Krepps, 605 F.2d
at 106.
Indeed, Exhibit 48 is “the very entry that should have
been made had there been no” prior effort to launder money.
Manderson, 511 F.2d at 181. If Defendant’s customer
purchased a cashier’s check and gave it to Yip in exchange
for a used car, Exhibit 48 would look the same. Even if
12 UNITED STATES V. TAT
Defendant made the entries with an intent to deceive bank
officials, that satisfies only one of §1005’s three elements.
Wolf, 820 F.2d at 1504. An intent to deceive is the offense’s
mens rea, not the entire offense. It is no answer that the
cashier’s check was related to a money laundering scheme;
§ 1956—not § 1005—outlaws money laundering. Accurate
records reflecting a customer’s purchase of a cashier’s check
from her bank account are not false entries under § 1005
solely because that check has a nexus to money laundering.
We thus reverse Defendant’s conviction on Count 3.
B. Count 2
Count 2 is premised on the bank’s log shown in Exhibit
47. The log shows that, on December 14, Zhao deposited
$7500 (of the FBI’s money) and then drew a cashier’s check
payable to “Oscar Santana” for that same amount. A
reasonable juror could find beyond a reasonable doubt that
Defendant knew that Exhibit 47, the basis of Count 2,
contained a false entry for the simple reason that it listed a
fictitious payee. That fact is sufficient to sustain a
conviction under the principles described above; the
transaction itself is “false and fictitious” and “concocted for
the very purpose of distorting [a] financial statement.”
Yates, 2021 WL 4699251, at *11 (alteration in original)
(quoting Gleason, 616 F.2d at 29). Indeed, as the
government argued to the jury, “on its face, [we] know why
it’s false, because here it shows a cashier’s check in the
amount of $7500 to Oscar Santana.” And § 1005
criminalizes the making of “any” false entry with the
requisite mens rea. The jury was not required to accept
Defendant’s argument that she did not know that the name
was fictitious.
Unlike in Manderson, the log does not “correctly
reflect[] . . . the payee[] . . . [or] for what the check was
UNITED STATES V. TAT 13
issued.” 511 F.2d at 180. And unlike the log in Exhibit 48,
the log in Exhibit 47 gave Defendant the opportunity to
disclose that information. Thus, there is no “absence of
misrepresentation,” and the log very much is of “interest to
the bank, and . . . the criminal law.” Krepps, 605 F.2d
at 106. We thus affirm Defendant’s conviction on Count 2
Outcome: We REVERSE Defendant’s conviction on Count 3;
AFFIRM her conviction on Count 2; and REMAND for
resentencing
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