November 15, 2013
UNITED STATES of America, Plaintiff-Appellee,
Oliver KING, aka Hamid Malekpour, Defendant-Appellant.
Argued and Submitted May 9, 2013.
[Copyrighted Material Omitted]
Terrence Kellogg, Seattle, WA, for Defendant-Appellant.
Michael S. Morgan (argued), Assistant United States Attorney, and Jenny A. Durkan, United States Attorney, United States Attorney's Office, Seattle, WA, for Plaintiff-Appellee.
Appeal from the United States District Court for the Western District of Washington, James L. Robart, District Judge, Presiding. D.C. No. 2:10-cr-00168-JLR-1.
Before: SIDNEY R. THOMAS and JACQUELINE H. NGUYEN, Circuit Judges, and RAYMOND J. DEARIE,
NGUYEN, Circuit Judge:
Oliver King appeals his convictions for unlawfully dealing in firearms, in violation of 18 U.S.C. § 922(a)(1)(A), and making false statements to customs officials to gain entry into the United States, in violation of 18 U.S.C. § 1001. With regard to his conviction for unlawfully dealing in firearms, King contends that the district court erred in refusing to give his proposed jury instructions, which required the government to prove that King was not acting as an authorized agent of a federal firearms licensee. In an issue of first impression in our circuit, we hold that King is not entitled to such an instruction. Because we also find that King's remaining contentions— that the evidence was insufficient, and that the district court abused its discretion in denying his motion for a new trial— lack merit, we affirm.
A. Factual Background
Oliver King, born Hamid Malekpour, is an Iranian-born Canadian citizen and self-described firearms enthusiast. In January 2009, during a flight from Amsterdam to Tehran, King bonded with Amir Zarandi, an Iranian-born United States citizen, over their shared passion for guns.
Although King purportedly ran an ammunition manufacturing business in Vancouver, Canada, he was not permitted to lawfully deal firearms in either the United States or Canada. As a non-immigrant alien, King was ineligible for a license to deal firearms in the United States. He was eligible for a license in Canada, but his license had been revoked. Three months after he and Zarandi met, King invited Zarandi to Vancouver. During the visit, King drove Zarandi to a building where King's company was purportedly located. When Zarandi asked to go inside, King made excuses and did not permit Zarandi to enter. At King's apartment, King showed off his gun collection and introduced Zarandi to his " wife," Rebecca Reznick, whom King claimed to have met when they served together in the Israeli Intelligence. (In fact, she was his girlfriend whom he met on J-date.) Zarandi indicated that he was interested in getting into the firearms business, but didn't know very much about it. King proposed, and Zarandi agreed, to have King do the " legwork" to help Zarandi set up a firearms business in the United States.
In May 2009, King secured a one-room office in McMinnville, Oregon, and incorporated an entity called McMinnville Hunting and Police Supply (" MHPS" ). MHPS's articles of incorporation listed King, using the pseudonym " O. Ki," as its registered agent. King paid the incorporation fee and lease with Reznick's credit card.
As support for MHPS's federal firearms license (" FFL" ) application, Zarandi mailed King copies of his social security card and certificate of naturalization. In June 2009, King submitted the application on behalf of MHPS. The application listed Zarandi, identified as the company's CEO, as the sole " responsible person."  Approximately two months later, King flew Zarandi to McMinnville to meet with an
investigator from the Bureau of Alcohol, Tobacco, and Firearms (" ATF" ) about the license. During this meeting, Zarandi and King informed the investigator that King would " not be part of the business, that Amir [Zarandi] would solely be the owner/operator of the business."
MHPS's application was subsequently approved and, in October 2009, an investigator contacted Zarandi to inquire as to whether he had received the license. Zarandi said he had not, but indicated that his " consultant" might have. King later contacted the investigator, identifying himself as " Oliver Ki." During the phone call, King repeatedly used the term " we" when referring to MHPS. When the investigator questioned his involvement, King chalked it up to his " broken English," reiterating that he was only a consultant. Weeks passed, and Zarandi still had not heard whether MHPS's license had been approved. So he called King, who said he would look into it. Within a few hours, Zarandi received the license via e-Fax.
According to Zarandi, King was eager to buy guns once the license was secured. Zarandi agreed to order five semi-automatic rifles from LWRC International (" LWRC" ). After this transaction, Zarandi also agreed to let King " use the company" in order to buy items which did not require a federal firearms license, such as optics and scopes.
But King wanted more. Before long, he began purchasing firearms behind Zarandi's back. Unbeknownst to Zarandi, King submitted credit applications on MHPS's behalf to multiple firearms suppliers, providing them with copies of the license on which Zarandi's signature had been forged. On one occasion, King even posed as Zarandi, setting up an email account in Zarandi's name to submit paperwork with Zarandi's forged signature. Using this falsified documentation, King ordered nineteen additional firearms— semi-automatic rifles, pistols, shotguns, and sniper rifles— as well as magazines and thousands of rounds of ammunition.
Although there was no evidence that King successfully sold any firearms,  King offered to procure them for others on at least two occasions. First, he offered to supply a " weapon or gun" to David Potter, the property manager of MHPS's office building, bragging that he could get it at a cheap price. When Potter said he was interested in a " 44 mag," King replied, " No problem." King also offered to sell David Seward a handgun. After Seward told King that he was interested in a Glock 9mm handgun, King invited Seward into the MHPS office, showed him a Glock that was for sale, and offered it to Seward for about $500. The sale was never consummated, but Seward subsequently called King to inquire about purchasing three other firearms.
Between May 2009 and May 2010, King entered the United States from Canada on eighteen separate occasions. Fifteen of these times he was referred for secondary inspection. During his interactions with
Customs and Borders Protection (" CBP" ) officials, King repeatedly lied about his reasons for entering the United States, concealing his firearms-related activities. For instance, on November 8, 2009, King told CBP officers that he was going to meet his father-in-law and wife at a Costco store in Bellingham, Washington. Instead, he drove to MHPS's office in McMinnville, Oregon.
Similarly, on March 15, 2010, King entered the United States after telling a CBP officer that he was going to a nearby Costco to buy a camcorder. ICE agents followed him as he continued to drive south to Marysville, Washington, at which point they discontinued surveillance. The next day, King rented a storage unit in Ferndale, Washington (located approximately twenty minutes from the Canadian border). His rental paperwork listed MHPS's corporate office as his address of record.
On May 18, 2010, King presented a brand new passport to a CBP officer at a different port of entry, claiming he was heading to Bellingham, Washington, to pick up his wife at Target. However, agents followed him as he drove directly to Oregon, arriving at MHPS's office in McMinnville the next morning. There, they observed King loading several large boxes into his car before driving back north to his U-Haul storage unit.
Agents searched King's vehicle and storage unit and recovered twenty-one firearms, assault-rifle magazines, and ammunition. King's laptop contained a number of incriminating documents, including the following: digital copies of credit applications submitted to firearms dealers on MHPS's behalf that contained Zarandi's forged signature; an unsigned letter from " A. Zarandi" confirming King's employment with MHPS; copies of Zarandi's social security card and certificate of naturalization; articles of incorporation for MHPS; and an unsigned copy of MHPS's federal firearms license.
B. Procedural History
King was indicted on charges of unlawfully dealing in firearms (Count 1); unlawful possession and/or transportation of firearms and ammunition by an alien (Count 2); and three counts of making false statements to a government agency, namely border customs officials (Counts 3-5). Prior to trial, he requested jury instructions that stated, in relevant part, that the government was required to prove King was not acting as an agent " of another person or corporation that did have a license as a firearms dealer" in order to convict him of unlawfully dealing in firearms. The district court refused to provide these instructions.
Following a six-day trial, a jury convicted King on all five counts. He subsequently appealed. While his appeal was pending, however, the Department of Justice's Office of Legal Counsel (" OLC" ) issued an opinion that negated the legal theory supporting King's alien-in-possession conviction on Count 2. The government conceded that this conviction could not stand, and we remanded for re-sentencing on the remaining counts.
On remand, King moved for a new trial on the remaining counts under Federal Rule of Criminal Procedure 33(b)(1), arguing, inter alia, that the OLC opinion amounted to newly discovered evidence meriting retrial. The district court denied this motion. On July 9, 2012, the court re-sentenced King to an aggregate thirty-month prison term, plus three years of
supervised release, for his unlawful firearms dealing conviction in Count 1 and his three false statement convictions in Counts 3-5. This appeal followed.
A. Jury Instructions
We turn first to King's contention that the district court erred in rejecting his proposed jury instructions setting forth a purported agency defense to the charge under 18 U.S.C. § 922(a)(1)(A). " A criminal defendant has a constitutional right to have the jury instructed according to his theory of the case, provided that the requested instruction is supported by law and has some foundation in the evidence." United States v. Marguet-Pillado, 648 F.3d 1001, 1006 (9th Cir.2011) (citations and internal quotation marks omitted). We review de novo whether an instruction is supported by law; we review for abuse of discretion whether it has a foundation in evidence. United States v. Anguiano-Morfin, 713 F.3d 1208, 1209 (9th Cir.2013) (citation omitted).
King's proposed instructions stated, in relevant part, that he could not be convicted of unlicensed firearms dealing unless the government proved that he was not " authorized to act on behalf of another person or corporation that did have a license as a firearms dealer." King sought these instructions so that he could argue to the jury that he was not guilty of unlicensed firearms dealing because he only acted on behalf of MHPS, a licensed corporate entity. We hold that the district court properly refused King's proposed agency instructions.
We begin, as always, with the statutory text. See United States v. O'Donnell, 608 F.3d 546, 549 (9th Cir.2010); see also United States v. Johnson, 680 F.3d 1140, 1144 (9th Cir.2012) (" If the plain meaning of the statute is unambiguous, that meaning is controlling[.]" ) (citations omitted). Section 922(a)(1)(A) prohibits:
any person ... except a ... licensed dealer, to engage in the business of ... dealing in firearms, or in the course of such business to ship, transport, or receive any firearm in interstate or foreign commerce.
18 U.S.C. § 922(a)(1)(A); see also 18 U.S.C. § 923(a) (" No person shall engage in the business of ... dealing in firearms ... until he has received a license to do so from the Attorney General." ); 27 C.F.R. § 478.41(a) (2011) (" each person intending to engage in business as ... a dealer in firearms shall, before commencing such business, obtain the license required" ). King's argument that, as an authorized agent, he was not included in the term " any person ... except a ... licensed dealer" does not comport with the statute's plain language. The term " person" is defined to include " any individual, corporation, company, association, firm, partnership, or joint stock company." 18 U.S.C. § 921(a)(1). King, as an individual human being, is therefore a " person" within the meaning of § 922(a)(1)(A).
King further suggests that, as an authorized agent for MHPS, he was not " any person ... except a ... licensed dealer" — he was a licensed dealer within the meaning of § 922(a)(1)(A). Interpreting the statute in this manner, however, would undermine— if not emasculate— the comprehensive licensing scheme designed by Congress. See Jonah R. v. Carmona, 446 F.3d 1000, 1005 (9th Cir.2006) (stating that courts may consider, inter alia, a " statute's overall purpose" to " illuminate Congress's intent" ). The Gun Control Act of 1968, Pub.L. No. 90-618, 82 Stat. 1213 (codified as amended at 18 U.S.C. § 921 et seq. ) was " aimed at restricting public access to firearms."
Huddleston v. United States, 415 U.S. 814, 824, 94 S.Ct. 1262, 39 L.Ed.2d 782 (1974). To this end, Congress required anyone wishing to " engage in the business of ... dealing in firearms" to obtain a federal firearms license from the ATF. See 18 U.S.C. § 923(a); 27 C.F.R. § 478.41(a).
Not everyone can obtain a federal firearms license; applicants must satisfy the myriad requirements set forth in complex statutory provisions and dense federal regulations. See generally 18 U.S.C. § 923 (licensing requirements); 27 C.F.R. § 478.44 (requirements for an original firearms license). Corporate entities present a unique challenge in this regard. While the Gun Control Act affords them the status of legal personhood, it simultaneously recognizes the limits of this legal fiction. To this end, any corporate applicant must provide a wealth of information about each " responsible person," owner, and partner of the company. The purpose of this information is to " enable[ ] ATF to look beyond the corporate structure, to related persons and entities able to direct the applicant's operation and management" in determining whether to approve a firearms license. XVP Sports, LLC v. Bangs, No. 11-379, 2012 WL 4329263, at *10 (E.D.Va. Mar. 21, 2012) (affirming the ATF's denial of a license where a company deliberately transferred ownership in an effort to avoid listing the true owner as a " responsible person" ).
King's proposed agency instructions are at odds with the Gun Control Act's purpose and comprehensive nature. The premise of his claim, if accepted, would allow King to skirt federal law by incorporating a front corporation with a straw principal, and then dealing firearms with impunity as a so-called " agent" of the company. We are hard pressed to believe that Congress would have intended such an easy workaround to such a complex, pervasive regulatory scheme. Cf. Casanova Guns, Inc. v. Connally, 454 F.2d 1320, 1322 (7th Cir.1972) (" [T]he fiction of a corporate entity must be disregarded whenever it has been adopted or used to circumvent the provisions of a statute." ).
Our conclusion is also consistent with the well-settled principle that " an agent cannot be insulated from criminal liability by the fact that his principal authorized his conduct." United States v. Fleischli, 305 F.3d 643, 652 (7th Cir.2002) (internal quotation marks omitted). To this end, the Seventh Circuit's decision in Fleischli offers helpful guidance. The defendant in Fleischli was convicted of violating 18 U.S.C. § 922( o )(1), which imposes restrictions on the possession and transportation of machineguns. Id. at 647. Fleischli, a convicted felon, was not licensed to possess the firearm. Id. Nevertheless, he insisted that his possession was lawful because, at the time he possessed it, he was acting as an agent of a corporation that was licensed to possess it. Id. at 652.
The court flatly rejected this argument. In upholding Fleischli's conviction, it reasoned that " a convicted felon who could not have legitimately obtained a manufacturer's or dealer's license may not obtain access to machine guns by setting up a sham corporation." Id. So too here, an
agent who could not have legitimately obtained a license to deal firearms may not deal firearms by positioning himself as a " consultant" for a licensee. Just as federal law did not permit Fleischli to " immunize himself from prosecution" by " hiding behind a corporate charter[,]" neither does it permit King to escape liability by claiming that he was acting on behalf of XMPS. Id.
Moreover, it bears emphasis that there is no factual support for King's putative agency defense in the record. True, King may have been acting as an authorized agent for MHPS when he filed the company's articles of incorporation, submitted its license paperwork, secured a lease, etc. But these activities were not what gave rise to criminal liability under § 922(a)(1)(A). The unlicensed firearms dealing charge, rather, rested on King's activities that rose to the level of " engaging in the business of firearms dealing" — i.e., ordering, receiving, transporting, and attempting to sell firearms. See 18 U.S.C. § 921(a)(21)(C). There is no evidence showing that King was acting as an authorized agent of MHPS when he engaged in these activities. To the contrary, the record shows that King duped his business partner, falsified documents, and misappropriated company resources in his effort to deal firearms. We therefore agree with the district court that King was not entitled to his proposed jury instructions.
B. Sufficiency of Evidence Supporting King's Conviction for Unlawful Firearms Dealing
King next contends that the evidence was insufficient to prove that he " engaged in the business" of dealing firearms, as required by § 922(a)(1)(A). We disagree.
When properly preserved, we review sufficiency-of-evidence challenges by asking whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. United States v. Nevils, 598 F.3d 1158, 1164 (9th Cir.2010) (en banc) (citing Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979)). Here, however, King failed to preserve his sufficiency-of-evidence challenge. Accordingly, we apply plain-error review. See United States v. Flyer, 633 F.3d 911, 917 (9th Cir.2011). " Under plain-error review, reversal is permitted only when there is (1) error that is (2) plain, (3) affects substantial rights, and (4) seriously affects the fairness, integrity, or public reputation of judicial proceedings." Id. (citation omitted).
To prove that King " engaged in the business" of firearms dealing, the government had to establish that he " engaged in a greater degree of activity than the occasional sale of a hobbyist or collector, and that [he] devoted time, attention and labor to selling firearms as a trade or business with the intent of making profits through the repeated purchase and sale of firearms." 18 U.S.C. § 921(a)(21)(C); see also Ninth Circuit Model Instruction 8.53 (2010); United States v. Breier, 813 F.2d 212, 214-15 (9th Cir.1987). There is ample evidence in the record from which a reasonable jury could have drawn this conclusion. To wit, King incorporated and funded a firearms business " on behalf" of a friend whose American citizenship enabled the business to obtain a federal firearms license. He then misappropriated the company's business account, using falsified documentation to set up credit accounts
and order firearms from manufacturers and wholesalers behind his purported partner's back. King ordered nineteen firearms, including duplicates of the same model. He received these firearms at the company's office, and transported them in his car during the middle of the night to a storage unit just south of the Canadian border.
Moreover, King held himself out as a firearms dealer. He attempted to sell one firearm to a tenant in MHPS's office building and offered to provide another to his building manager. King also sold ammunition and pistol magazines and represented to the buyer that he was " buying and selling, trading in guns, operating out of a company that was owned by a friend of his in McMinnville[,]" and that he could procure any item in a gun publication at a cheaper price. The record also contained overwhelming evidence that King repeatedly lied to customs and border officials about his true purpose in entering the United States.
Taken together, this evidence is more than sufficient for a rational jury to conclude that King was more than a mere hobbyist. See 18 U.S.C. § 921(a)(21)(C). In arguing to the contrary, King asserts that certain " evidence of innocence" — namely, his role as an agent for Zarandi and the fact that he was not listed as a " responsible person" on MHPS's license— would preclude a rational fact finder from finding him guilty beyond a reasonable doubt. However, in determining whether evidence is sufficient to support a conviction, " the question is not whether the evidence excludes every hypothesis except that of guilt but rather whether the trier of fact could reasonably arrive at its conclusion." Nevils, 598 F.3d at 1165 (emphasis added).
Because the evidence, viewed in the light most favorable to the government, demonstrates that King engaged in the business of dealing firearms, there was no plain error.
C. Materiality of False Statements
King also challenges his convictions under 18 U.S.C. § 1001, which prohibits making false statements in any matter within the jurisdiction of a federal department or agency. King neither denies that he lied to border officials nor disputes the jurisdictional predicate of the crime; he contests only the materiality of his false statements.
Because materiality is an element of the offense, see United States v. Selby, 557 F.3d 968, 977 (9th Cir.2009), whether a false statement is material to an agency decision is a question properly resolved by a jury, rather than by the court. United States v. Gaudin, 515 U.S. 506, 512, 522-23, 115 S.Ct. 2310, 132 L.Ed.2d 444 (1995). The issue before us is therefore whether the government presented sufficient evidence to support the jury's finding of materiality. See United States v. Serv. Deli Inc., 151 F.3d 938, 941 (9th Cir.1998). Because King failed to move for a judgment of acquittal on this basis, we review for plain error. Flyer, 633 F.3d at 917.
A misstatement is material for purposes of § 1001 if it has " a natural tendency to influence, or [is] capable of
influencing, the decision of the decisionmaking body to which it was addressed." Gaudin, 515 U.S. at 509, 115 S.Ct. 2310 (citation omitted). A misstatement need not actually influence the agency decision in order to be material; propensity to influence is enough. See United States v. Facchini, 832 F.2d 1159, 1162 (9th Cir.1987). Accordingly, our concern is not with the extent of the agency's reliance, but rather with the " intrinsic capabilities of the false statement itself[.]" Serv. Deli Inc., 151 F.3d at 941.
Here, two border officers testified that they might not have admitted King into the United States had he disclosed that his true purpose in entering the country was to engage in firearms-related activities. Based on this evidence alone, a rational jury could conclude that King's misstatements had a propensity to affect the officers' decision about whether to admit King into the United States. Indeed, we have found lies to border agents material in cases involving more attenuated connections between misstatements and agency decisions. See, e.g., United States v. Chen, 324 F.3d 1103, 1104-05 (9th Cir.2003) (holding that a defendant's false statement that he entered the country as a crewman on a particular fishing boat was material under § 1001 because it could have affected the government's investigation of smuggling and harboring of illegal aliens); United States v. Rodriguez-Rodriguez, 840 F.2d 697, 700-01 (9th Cir.1988) (holding that a defendant's false statement to a border patrol officer that everyone in the car was a United States citizen constituted a material misstatement under § 1001).
Relying solely on a dissent in an unpublished decision, United States v. Howard, 430 Fed.Appx. 569, 572 (9th Cir.2011) (Tashima, J., dissenting), King contends that his lies to CBP officers were immaterial because, as he was already the target of an ICE investigation, officers would have admitted him regardless, in order to further their investigation. King's argument, however, is foreclosed by numerous cases which emphasize that actual influence is not required, so long as the misstatement has a propensity to influence agency action. See, e.g., Serv. Deli Inc., 151 F.3d at 941; Rodriguez-Rodriguez, 840 F.2d at 700-01; Facchini, 874 F.2d at 643; United States v. Vaughn, 797 F.2d 1485, 1490 (9th Cir.1986).
In sum, we conclude that the evidence was more than sufficient to prove the materiality element supporting King's § 1001 convictions.
D. Motion for New Trial
King also appeals the denial of his motion for a new trial under Federal Rule of Criminal Procedure 33. He argues that the OLC opinion, which negated the viability of his alien-in-possession conviction on Count 2, constitutes " newly discovered evidence" warranting a new trial.
" We review a district court's order denying a motion for a new trial made on the ground of newly discovered evidence for abuse of discretion." United States v. Hinkson, 585 F.3d 1247, 1259 (9th Cir.2009) (en banc). A new trial is not warranted under Rule 33 unless a defendant can establish five elements: " (1) the evidence is newly discovered; (2) the defendant was diligent in seeking the evidence; (3) the evidence is material to the issues at trial; (4) the evidence is not (a) cumulative or (b) merely impeaching; and (5) the evidence indicates the defendant would probably be acquitted in a new trial." United States v. Berry, 624 F.3d 1031, 1042 (9th Cir.2010) (citation and internal quotation marks omitted).
King cannot clear the first hurdle here. As we held in United States v. Shelton, 459 F.2d 1005 (9th Cir.1972), a
change in the law does not constitute newly discovered evidence for purposes of Rule 33. Id. at 1006-07 (holding that a change in the legal standard for determining insanity did not amount to " newly discovered evidence" ). Shelton vitiates King's assertion that the OLC opinion warrants retrial.
Moreover, even if the OLC opinion constituted " newly discovered evidence," King's argument would still fail. Because the opinion pertains only to whether an alien-in-possession conviction under § 922(g)(5)(B) applies to aliens admitted without visas, King cannot establish that it was material to the unlawful firearms dealing and false statements charges. See Berry, 624 F.3d at 1042. And, because the same evidence supporting the now-vacated alien-in-possession conviction also supported the charge of unlawful dealing in firearms, King's assertion of unfair prejudice likewise fails.
We hold that the district court properly refused to instruct the jury on King's purported agency theory, that sufficient evidence supported King's firearms dealing and false statement convictions, and that the district court did not abuse its discretion in denying King's motion for a new trial.