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United States v. Shayota

United States District Court, N.D. California, San Jose Division

May 8, 2017

UNITED STATES, Plaintiff,
v.
JOSEPH SHAYOTA and ADRIANA SHAYOTA, Defendants.

          ORDER DENYING MOTIONS FOR NEW TRIAL AND MOTION FOR JUDGMENT OF ACQUITTAL RE: DKT. NOS. 499, 500, 501

          LUCY H. KOH United States District Judge

         Before the Court are Adriana Shayota's motion for judgment of acquittal, ECF No. 499, Adriana Shayota's motion for a new trial, ECF No. 500, and Joseph Shayota's motion for a new trial, ECF No. 501. The government opposes all three motions. The Court held an evidentiary hearing on the issue of alleged juror misconduct on April 18, 2017. ECF No. 565. Having considered the submissions of the parties, the testimony at the evidentiary hearing, the record in the case, and the relevant law, the Court hereby DENIES all three motions.

         I. BACKGROUND

         A. Factual Background

         The following facts are from the Government's Indictment, ECF No. 1, and the Superseding Information, ECF No. 169.

         Joseph Shayota was a principal of Tradeway, International Inc., d/b/a Baja Exporting LLC (“Baja Exporting”). Joseph Shayota's wife, Adriana Shayota, was the owner of Baja Exporting. ECF No. 169, at ¶ 7. 5-Hour ENERGY is a liquid dietary supplement made by Innovation Ventures, LLC; Living Essentials, LLC; and International IP Holdings, LLC (together, “Living Essentials”). Id. at ¶ 1. In late 2009, Joseph Shayota began to purchase Spanish-labeled 5-Hour ENERGY from Living Essentials for export to Mexico. Id. at ¶ 20. However, rather than selling the product in Mexico, Joseph Shayota diverted the product for sale in the United States. Id. Joseph Shayota was unable to sell the Spanish-language 5-Hour ENERGY in the United States. Therefore, Joseph Shayota organized a conspiracy to repackage the 5-Hour ENERGY bottles with English labels and resell them in the United States. Id. Baja Exporting sold its stock of repackaged and relabeled 5-Hour ENERGY by December 2011. Id. at ¶ 21. After selling the stock of genuine but relabeled and repackaged 5-Hour ENERGY, beginning in early 2012 Joseph Shayota organized a conspiracy to counterfeit the 5-Hour ENERGY liquid itself, package the 5-Hour ENERGY in counterfeit packaging, and sell the counterfeit product in the United States. Id. at ¶¶ 22-27.

         Thus, the instant case involves two conspiracies. The first conspiracy, from late 2009 to December 2011, was a conspiracy to relabel and resell legitimate Spanish-labeled 5-Hour ENERGY with counterfeit English labels and boxes. The second conspiracy, from early 2012 to November 2012, was a conspiracy to manufacture counterfeit 5-Hour ENERGY liquid, place the liquid in counterfeit bottles with counterfeit labels in counterfeit boxes, and sell the counterfeit product.

         In developing these conspiracies, Joseph Shayota was assisted by Adriana Shayota, who owned, and controlled the accounting for, Baja Exporting and who transferred funds to the entities described below to pay for their roles in the conspiracies. Id. at ¶ 7. Joseph Shayota was also assisted by Walid Jamil, a relative of Joseph Shayota[1] and the owner of Midwest Wholesale Distributors (“Midwest”). Id. at ¶ 9; Trial Transcript (“T.”) 11/14/16 at 19-20. Walid Jamil was assisted in the conspiracies by his brother, Raid Jamil. ECF No. 169, at ¶ 10. Walid Jamil hired MCR Printing and Packaging (“MCR”) to manufacture boxes for the product. Id. at ¶ 9. MCR was owned by Mario Ramirez, who was assisted in the designing and printing of counterfeit boxes by his son, Camilo Ramirez. Id. at ¶¶ 14-15. Leslie Roman, who owned a company called Flexopack, manufactured the counterfeit 5-Hour ENERGY labels. Id. at ¶ 13.

         The counterfeit 5-Hour ENERGY liquid and counterfeit bottles were manufactured by Juan Romero, owner of Advanced Nutraceutical Manufacturing, LLC (“Advanced Nutraceutical”). ECF No. 1, at ¶ 14. Juan Romero acquired empty bottles and bottle caps from companies in Guadalajara, Mexico. Id. Juan Romero manufactured the liquid in plastic barrels in a storage facility and then filled the bottles with the liquid. Id.

         Justin Shayota, the nephew of Joseph and Adriana Shayota and Walid Jamil, [2] organized the repackaging and relabeling of the counterfeit 5-Hour ENERGY through the company that he owned, JT Wholesale, at the direction of Walid Jamil. ECF No. 169, at ¶ 8; T.11/14/16 at 19-20. Under Walid Jamil's instructions, Justin Shayota hired day laborers to use a steam tunnel to place labels on the bottles of counterfeit 5-Hour ENERGY and to use an inkjet printer to place lot numbers and expiration dates on the bottom of the bottles of counterfeit 5-Hour ENERGY. Id. Justin Shayota then shipped the bottles to Dan-Dee Company (“Dan-Dee”), which was a cash-and-carry warehouse owned by Kevin Attiq and his brother Fadi Attiq. Dan-Dee then sold the counterfeit 5-Hour ENERGY across the United States. Id. at ¶¶ 8, 11-12.

         B. Procedural Background

         1. Indictment and Superseding Information

         On May 14, 2015, a federal grand jury returned a three-count Indictment against Defendants Joseph Shayota, Adriana Shayota, Justin Shayota, Walid Jamil, Raid Jamil, Kevin Attiq, Fadi Attiq, Leslie Roman, Juan Romero, Mario Ramirez, and Camilo Ramirez (collectively, “Defendants”). ECF No. 1 (“Indictment”). The Indictment charged Defendants with one count of conspiracy to traffic in counterfeit goods in violation of 18 U.S.C. § 2320(a), one count of conspiracy to commit criminal copyright infringement in violation of 18 U.S.C. § 371, and one count of conspiracy to introduce misbranded food into interstate commerce in violation of 18 U.S.C. § 371. Id.

         In response to a motion by Defendants, on May 10, 2016, the Court found that counts two and three of the Indictment were duplicative of each other. ECF No. 144, at 6-7. Therefore, on June 29, 2016, the Government filed a two-count Superseding Information in the United States District Court for the Northern District of California. ECF No. 169 (“Superseding Information”). The first count in the Superseding Information alleged conspiracy to traffic in counterfeit goods in violation of 18 U.S.C. § 2320(a). Id. ¶ 16-28. The second count in the Superseding Information alleged conspiracy to commit criminal copyright infringement and to introduce misbranded food into interstate commerce in violation of 17 U.S.C. § 506, 18 U.S.C. § 2319, and 21 U.S.C. §§ 331 & 333. Id. ¶ 29-32.

         2. Severance Motions

         The Court granted numerous severances in the course of the instant case. On March 23, 2016, Defendants Joseph Shayota and Kevin and Fadi Attiq filed motions to sever their trials from the trial of Walid Jamil. ECF Nos. 117, 111. The basis of Joseph Shayota's motion was that the Government would “introduce at trial out-of-court confessions or admissions made by [Walid] Jamil in the form of deposition testimony from [certain] related civil proceedings.” ECF No. 145 at 5. Such testimony, Joseph Shayota argued, would run afoul of the holding in Bruton v. United States, 391 U.S. 123 (1968). The Court found Joseph Shayota's motion to sever premature, as the Government had not yet identified the deposition testimony it would offer at trial. Id. at 5-6. The Court therefore denied Joseph Shayota's motion to sever without prejudice.

         The basis for Kevin and Fadi Attiq's motion to sever was that Walid Jamil had filed a declaration stating that Walid Jamil would offer exculpatory testimony as to Kevin and Fadi Attiq if Walid Jamil were tried separately from Kevin and Fadi Attiq. The Court granted Kevin and Fadi Attiq's motion to sever. Id. at 5. In reaching this conclusion, the Court noted that Kevin and Fadi Attiq “ha[d] made a reasonable showing that [co-Defendant] Walid Jamil would testify if severed, ” and that Walid Jamil would offer exculpatory testimony. Id. at 3. “In particular, ” Kevin and Fadi Attiq had “provided a declaration from Walid Jamil directly stating that he would testify on behalf of [Kevin and Fadi Attiq] if their case were to be severed, but that he would not wish to testify at a joint trial.” Id. at 3-4.

         On August 24, 2016, the Court held a status conference in which the Court ordered the parties to meet and confer regarding severance issues and file a Joint Severance Status Report. ECF No. 207 at 1-2. The parties filed their Joint Severance Status Report on August 26, 2016. ECF No. 208. In this report, the parties agreed to hold one joint trial for Joseph Shayota and Adriana Shayota and one joint trial for Kevin Attiq and Fadi Attiq. Id. at 1. The Government proposed to try the remaining Defendants in a single trial: Walid Jamil, Raid Jamil, Leslie Roman, Mario Ramirez, and Camilo Ramirez. Id. “All of the Defendants, except for Raid Jamil, Mario Ramirez[, ] and Camilo Ramirez, stipulate and agree[d]” to these proposed trial groupings. Id.

         On September 13, 2016, the Court granted a motion by Mario Ramirez and Camilo Ramirez to sever their trial from the joint trial of Walid Jamil and Leslie Roman. ECF No. 238. Thus, on September 13, 2016, the Court was prepared to hold the following four trials starting on October 24, 2016 and continuing through February 17, 2017: (1) Walid Jamil and Leslie Roman, (2) Joseph Shayota and Adriana Shayota, (3) Kevin Attiq and Fadi Attiq, and (4) Mario Ramirez and Camilo Ramirez. ECF No. 238.

         3. Guilty Pleas

         On March 2, 2016, Justin Shayota pled guilty to Counts 1 and 3 of the Indictment pursuant to a plea agreement. ECF No. 105; ECF No. 106. On September 13, 2016, Raid Jamil pled guilty to Count 2 of the Superseding Information pursuant to a plea agreement. ECF No. 237. On September 23, 2016, Leslie Roman pled guilty to Count 2 of the Superseding Information pursuant to a plea agreement. ECF No. 275. On October 7, 2016, Walid Jamil pled guilty to Count 1 and Count 2 of the Superseding Information. ECF No. 297. On November 4, 2016, Kevin Attiq pled guilty to Count 2 of the Superseding Information. ECF No. 403. On November 9, 2016, Mario Ramirez pled guilty to Count 2 of the Superseding Information. ECF No. 412. Both Camilo Ramirez and Fadi Attiq entered pre-trial diversion programs, and on February 9, 2017 the Court dismissed the charges against Camilo Ramirez “because he . . . complied with all of the terms of the program.” ECF No. 515. Juan Romero is a fugitive. ECF No. 147 at 4.

         4. Co-Conspirator Statements

         On August 19, 2016, the Government filed a notice identifying the co-conspirator statements the Government intended to present at trial. ECF No. 206 (“Gov't Notice”). Nearly all of the statements were from depositions taken in the consolidated civil proceedings entitled Innovation Ventures, LLC, et al. v. Ultimate One Distributing Corp., et al., E.D.N.Y. Case No. 1:12-CV-05354-KAM-ST.

         On September 21, 2016, the Ramirez defendants and the Shayota defendants moved to exclude the Government's proposed co-conspirator statements based on the Confrontation Clause and the rule against hearsay. ECF Nos. 269, 270. The Court provided the Ramirez defendants, the Shayota defendants, and the Government three rounds of briefing on the issue. See ECF Nos. 269, 270, 280, 291, 295, 296, 305, 307, 312.

         On October 19, 2016, the Court filed an order granting in part and denying in part Defendants' motions to exclude co-conspirator's statements. ECF No. 331. In the order, however, the Court specified that the proposed co-conspirator statements would be admissible under the Confrontation Clause and former testimony exception to the rule against hearsay only if the Government were to make a sufficient showing that the declarants would be unavailable at trial. Id. at 11, 25. After briefing from the parties and pursuant to the Court's order, ECF No. 351, the Government established the unavailability at trial of Walid Jamil, Leslie Roman, Kevin Attiq, Fadi Attiq, Mario Ramirez, and Camilo Ramirez by questioning each defendant at a hearing on October 24, 2016, in response to which each defendant invoked his Fifth Amendment right not to testify. ECF No. 376.

         5. Joseph and Adriana Shayota's Trial and Post-Trial Motions

         The jury trial of Joseph and Adriana Shayota began on October 24, 2016. After opening statements on October 25, 2016, both Joseph and Adriana Shayota moved to sever their trials. Joseph Shayota argued that a severance was justified “because Adriana Shayota's opening statement raised Joseph Shayota's extramarital affair with Tyneisha Evans even though the Government's opening statement did not.” ECF No. 384, at 1. Adriana Shayota argued that severance was justified because the Court had not accepted all of Adriana Shayota's proposed redactions to the November 27, 2012 deposition testimony to be introduced at trial against Joseph Shayota. ECF. No. 386, at 1. The Court denied these motions on October 28, 2016 for the reasons discussed in the orders. ECF Nos. 384 & 386.

         The Government rested on November 18, 2016. Joseph and Adriana Shayota did not renew their motions to sever after the Government rested. However, after the Government rested, Joseph and Adriana Shayota moved for judgment of acquittal under Federal Rule of Criminal Procedure 29 on the grounds that the Government had failed to prove that the trademarks that Defendants had allegedly counterfeited were “in use” at the time of the conspiracies. T. 11/18/16 at 132-34. The Court denied the motion and noted that the Government had produced evidence that Defendants' co-conspirators had purchased and used legitimate 5-Hour ENERGY to counterfeit the 5-Hour ENERGY trademarks, which demonstrated that the trademarks in question were in use at the time of the conspiracies. Id. On November 28, 2016, the jury returned a verdict finding Joseph and Adriana Shayota guilty of both charges. ECF No. 468.

         On January 17, 2017, Joseph and Adriana Shayota filed the instant three motions. Adriana Shayota filed a motion for judgment of acquittal, ECF No. 499, and a motion for a new trial, ECF No. 500. Joseph Shayota filed a motion for a new trial. ECF No. 501. Because Adriana Shayota's motion for a new trial was based in part on ineffective assistance of counsel, on January 23, 2017, the Government moved for an order finding waiver of Defendant's attorney-client privilege. ECF No. 502. The Court granted this motion on January 24, 2017. ECF No. 503. On January 27, 2017, Joseph McMullen filed a motion to withdraw as Adriana Shayota's attorney, ECF No. 505, which the Court granted on January 30, 2017, ECF No. 506. On February 16, 2017, Gregory Vega and Adam Gordon filed a motion to withdraw as Joseph Shayota's attorneys, ECF No. 521, which the Court granted on April 10, 2017, ECF No. 562.

         On February 21, 2017, the Government filed an opposition to Joseph Shayota's motion for a new trial. ECF No. 527. Also on February 21, 2017, the Government filed a consolidated opposition to Adriana Shayota's motion for judgment of acquittal and Adriana Shayota's motion for a new trial. ECF No. 528.[3] Joseph Shayota filed a reply on February 28, 2017. ECF No. 532. Adriana Shayota filed two separate replies supporting the motion for judgment of acquittal and the motion for a new trial on February 28, 2017. ECF Nos. 533-34. The Court held an evidentiary hearing on the issue of alleged juror misconduct on April 18, 2017. ECF No. 565.

         II. LEGAL STANDARD

         A. Motion for Judgment of Acquittal

         Federal Rule of Criminal Procedure 29 allows a criminal defendant to move for a judgment of acquittal on the grounds of insufficient evidence after the entry of a guilty verdict. Under Rule 29, “the relevant question is 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.” Jackson v. Virginia, 443 U.S. 307, 319 (1979) (emphasis in original).

         In deciding a Rule 29 motion, “[t]he district court . . . must bear in mind that it is the jury's exclusive function to determine the credibility of witnesses, resolve evidentiary conflicts, and draw reasonable inferences from proven facts.” United States v. Bernhardt, 840 F.2d 1441, 1448 (9th Cir. 1988). Additionally, a district court may find that “circumstantial evidence and inferences drawn from it” are sufficient to sustain a conviction. United States v. Reyes-Alvarado, 963 F.2d 1184, 1188 (9th Cir. 1992), as amended (June 15, 1992).

         B. Motion for a New Trial

         Federal Rule of Criminal Procedure 33 allows a court to “vacate any judgment and grant a new trial if the interest of justice so requires.” Fed. R. Crim. P. 33(a). The burden of justifying a new trial rests with the defendant. See United States v. Shaffer, 789 F.2d 682, 687 (9th Cir. 1986). The decision to grant a new trial is within the sound discretion of the trial court. See United States v. Love, 535 F.2d 1152, 1157 (9th Cir. 1976), cert. denied, 429 U.S. 847 (1976).

         III. DISCUSSION

         Before the Court are Adriana Shayota's motion for judgment of acquittal, ECF No. 499, Adriana Shayota's motion for a new trial, ECF No. 500, and Joseph Shayota's motion for a new trial, ECF No. 501. The Court first considers Adriana Shayota's motion for judgment of acquittal. The Court then considers Adriana Shayota's and Joseph Shayota's motions for a new trial together, because the issues raised in these motions overlap substantially.

         A. Adriana Shayota's Motion for Judgment of Acquittal

         Adriana Shayota argues that the Court should enter a judgment of acquittal under Rule 29 because the evidence that the Government presented was insufficient to sustain a guilty verdict. Specifically, Adriana Shayota argues that the evidence that the Government produced at trial was insufficient to show that “Ms. Shayota knowingly and willfully joined the charged conspiracies.” ECF No. 499, at 3. Adriana Shayota claims that the Government “principally relied on three pieces of evidence.” Id.

         First, the Government produced evidence showing that Justin Shayota emailed an invoice to Adriana Shayota at the request of Walid Jamil for 503 “cases” as well as “[t]rucking labels supplies ink for rest of orders.” Transcript 11/14/16 at 53-54; Government's Exhibit 200. Although Adriana Shayota did not testify at trial, in her December 6, 2012 deposition testimony that was introduced at trial Adriana Shayota claimed that Justin Shayota sent this invoice to her by mistake and that she confronted Justin Shayota about the alleged mistake during a phone call. Ex. A to ECF No. 500 at 219-22 (Adriana Shayota Deposition Transcript). At trial, Justin Shayota testified that he did not remember any such telephone conversation. Moreover, Justin Shayota testified that he was close to Adriana Shayota, who “was sort of looking out for [Justin] as [he] grew up.” Transcript 11/14/16 at 118. Thus, Justin was likely to have remembered a telephone conversation in which Adriana Shayota “snapp[ed]” at him it if happened. Transcript 11/22/16 at 99.

         Second, the Government produced evidence showing that Adriana Shayota emailed from and to herself an Excel spreadsheet entitled “Wally.xlxs.” Id. at 177. The spreadsheet contained the heading “5HR, ” which Adriana Shayota concedes in her motion “mean[t] 5-Hour Energy.” ECF No. 499, at 4. The spreadsheet listed several wire transfers that Adriana Shayota made from Baja Exporting to Walid Jamil's company, Midwest, and Justin Shayota's company, JT Wholesale, for “payroll, ” “equipment, ” and “boxes cost.” Id. In total, the spreadsheet reflected more than $500, 000 in wire transfers that Adriana Shayota admitted that she made to Walid Jamil and Justin Shayota. As discussed above, Adriana Shayota was the owner of Baja Exporting and was in charge of all wire transfers and accounting tasks. Additionally, as discussed above, Walid Jamil hired MCR to manufacture counterfeit boxes, and Justin Shayota, through JT Wholesale, labeled and packaged the counterfeit 5-Hour ENERGY. Thus, the Government argued that a spreadsheet reflecting over $500, 000 in wire transfers for expenses related to “payroll, ” “equipment, ” and “boxes” constituted evidence that Adriana Shayota knew of and participated in the 5-Hour ENERGY conspiracies. However, Adriana Shayota testified in her deposition that she made this spreadsheet at the request of Walid Jamil and did not know what the entries meant. Id. at 5.

         Third, the Government produced evidence showing that after Adriana Shayota learned that Living Essentials had sued other entities with whom Baja Exporting did business for the sale of relabeled and counterfeit 5-Hour ENERGY, Adriana Shayota wired $2, 000, 000 from Baja Exporting to a Baja Foodservice bank account in Mexico. ECF No. 500-1, at 4. In her deposition, Adriana Shayota admitted that she could not recall any other time that she had wired such a large, round amount of money to pay invoices. Id. at 6.

         Adriana Shayota argues that this evidence is insufficient to support a guilty verdict and instead is “mere suspicion or speculation.” ECF No. 499, at 3 (citing United States v. Hernandez-Orellana, 539 F.3d 994, 1004 (9th Cir. 2008)). However, as the Government points out in its opposition, this was not the only evidence against Adriana Shayota. Specifically, the Government points to three other important pieces of evidence.

         First, the Government points out that in addition to transferring $2, 000, 000 to a Mexican bank account, Adriana Shayota's deposition testimony demonstrates that after learning of the 5Hour ENERGY lawsuit, Adriana Shayota drained the Baja Exporting bank account from $2, 900, 000 to $0. ECF No. 500, Ex. A, at 58. Nevertheless, in her deposition testimony, Adriana Shayota insisted that draining the bank account “ha[d] nothing to do with” the 5-Hour ENERGY litigation. Id. at 60. Additionally, Adriana Shayota was removed as a signatory on the Baja Foodservice bank account in Mexico before $2, 000, 000 was transferred to that account. ECF No. 500, Ex. A, at 54, 58.

         Second, in her deposition, Adriana Shayota stated that from July 2011 to January 2012, she loaned Walid Jamil $1, 525, 000 “to assist him in financially getting on his feet.” ECF No. 500, Ex. A, at 117. However, this loan was never listed on any personal financial statements or other documents, and there was no written indication of an obligation to repay the loan or pay interest. Id. at 117-20. In closing arguments, even Adriana Shayota's attorney, Joseph McMullen, admitted that Adriana Shayota lied when she claimed this was a personal loan. T. 11/22/16 at 108 (“Wow, if they're handing out million and a half dollar checks to get back on their feet, then sign me up, right?”). Instead, McMullen argued that this loan had something to do with Walid Jamil's new business venture called Green Health. Id. McMullen did not explain why Adriana Shayota would lie about investing in Green Health.

         Third, in her deposition testimony, Adriana Shayota admits that she gave Walid Jamil a large number of Spanish-labeled bottles of 5-Hour ENERGY and that Walid Jamil later gave her the same number of bottles, in the same flavors, with English labels. Id. at 185-86. At trial, Joseph Shayota's attorney argued that this one-for-one correspondence was unremarkable because Joseph and Adriana Shayota merely “swapped” the Spanish bottles for the English bottles. Id. at 80 (“They swapped and they got back the exact amount of product that they swapped.”). There was evidence that Living Essentials did not authorize Baja Exporting to sell Spanish label 5-Hour ENERGY in the United States and that Spanish label 5-Hour ENERGY was less valuable than English label 5-Hour ENERGY. However, McMullen argued in closing that Walid Jamil exchanged English label bottles for Spanish label bottles because he planned to “lose a little money up front” to the Shayotas to induce them to enter into Walid Jamil's “con.” Id. at 110 (“He's doing that because that's the first step of the con, okay? He doesn't need to make money on that first step because there's big money to be made in the second step.”).

         However, this evidence of a swap was contradicted by other evidence introduced at trial. Specifically, Defense Exhibit E is an email from Andres Camberos, Adriana Shayota's brother, to Rob McCormack, the head of international sales for Living Essentials. Ex. E. In this email, Camberos stated that Baja Exporting was having trouble selling Spanish-labeled 5-Hour ENERGY in Mexico and therefore Camberos proposed three options to deal with the 1, 648 cases that Baja Exporting still had in inventory:

1) You pick up the remaining cases in inventory and return the monies we wired for the product.
2) You exchange the product with fresh product, so that we have another 24 months to move through the inventory
3) If you do not agree with options (1) or (2), then our only choice would be to sticker the product and sell it in the U.S. Ex. E.

         The defense also introduced evidence that “sticker the product” meant relabeling the product. Specifically, the defense introduced another email from Camberos to McCormack in which Camberos stated that there was a mistake on the labels for some of the bottles of 5-Hour ENERGY, and therefore Camberos stated that “we now may have to sticker each unit” to correct the mistake. Ex. JJJ.

         Thus, it is clear from these defense exhibits that Baja Exporting intended to relabel the Spanish-labeled bottles with English labels and sell them in the United States. Indeed, while cross-examining McCormack, the defense suggested that McCormack “knew exactly” what stickering meant and knew that Baja Exporting planned to relabel the bottles. T.10/25/16, at 166-69. In light of this evidence, Adriana Shayota's later argument that Baja Exporting did not relabel the Spanish-labeled bottles but instead “swapped” them with Walid Jamil for English-labeled bottles was not credible.

         Together, this evidence is more than sufficient to support the jury's conclusion that Adriana Shayota knew of and agreed to the conspiracies to distribute relabeled, and to manufacture and distribute counterfeit, bottles of 5-Hour ENERGY. Much of the evidence was based on suspicious transactions and communications and Adriana Shayota's implausible explanations of these transactions and communications. For example, in her December 6, 2012 deposition testimony that was read at trial, Adriana Shayota claimed that Justin Shayota incorrectly sent her an invoice related to the conspiracies. However, Justin Shayota denied that he sent the invoice by mistake and denied that Adriana Shayota claimed that the invoice was sent by mistake. If the jury chose to credit Justin Shayota's testimony, then the jury would have found Adriana Shayota's claim that she received the invoice by mistake to be false and to be evidence of Adriana Shayota's knowledge of the conspiracies.

         Additionally, the jury may rationally have chosen not to credit Adriana Shayota's explanation for wiring $2, 000, 000 from Baja Exporting to the Baja Foodservices account in Mexico and draining the $2, 900, 000 Baja Exporting account to $0 after learning of the lawsuit by Living Essentials. In addition, Adriana Shayota was removed from the Baja Foodservices account in Mexico before the $2, 000, 000 was transferred to that account. The jury may have concluded that the timing and amount of the wire transfer, the timing of the removal of Adriana Shayota as a signatory to the Mexican bank account before the wire transfer, as well as the draining of the $2, 900, 000 account, indicated that Adriana Shayota was not simply paying an invoice but was instead trying to remove money from Baja Exporting before Living Essentials sued Baja Exporting for its role in the conspiracies to sell relabeled and counterfeit 5-Hour ENERGY. This in turn would support an inference that Adriana Shayota knew of and agreed to the conspiracies.

         Furthermore, the jury could rationally have disbelieved Adriana Shayota's explanations of the “swap” of Spanish and English bottles and the $1, 525, 000 loan to Walid Jamil. As discussed above, Adriana Shayota's account of the “swap” was contradicted by the defense's earlier evidence that McCormack knew that Baja Exporting would relabel the Spanish-labeled bottles with English labels. Additionally, as discussed above, Adriana Shayota's explanation of the $1, 525, 000 loan to Walid Jamil was so incredible that her attorney disavowed the explanation in his closing argument. If the jury disbelieved Adriana Shayota's explanations of these matters, the jury could rationally have inferred that Adriana Shayota knew of and agreed to the conspiracies.

         It also would have been rational for the jury not to credit Adriana Shayota's claim that she did not know the meaning of the Excel spreadsheet that she emailed from and to herself. In her deposition testimony, Adriana Shayota claimed that Walid Jamil simply told her to write down certain numbers and that Adriana Shayota did not know what the numbers meant. However, the jury could rationally have concluded that Adriana Shayota was not telling the truth in her deposition testimony and that she actually knew that the numbers in the spreadsheet referred to expenses related to the 5-Hour ENERGY conspiracies. Such a conclusion is particularly justified because Adriana Shayota's explanation was seemingly inconsistent with Adriana Shayota's theory that Walid Jamil concealed the 5-Hour ENERGY relabeling and counterfeiting from Joseph and Adriana Shayota. If Walid Jamil were attempting to conceal the 5-Hour ENERGY relabeling and counterfeiting from Joseph and Adriana Shayota, it is unlikely that Walid Jamil would have dictated the detailed expenses of the conspiracies for Adriana Shayota to enter on a spreadsheet. If the jury had chosen to disbelieve Adriana Shayota's explanation, this would have strongly supported the jury's finding that Adriana Shayota knew of and agreed to the conspiracies.

         Finally, it is significant that the jury was not required to find that Adriana Shayota had actual knowledge that Living Essentials had not authorized her to reproduce 5-Hour ENERGY trademarks or copyrights. Instead, the jury could have convicted Adriana Shayota based on a finding that she was deliberately ignorant that she did not have authorization to reproduce 5-Hour ENERGY trademarks and copyrights. Specifically, as part of the final jury instructions, the Court gave the following instruction to the jury:

         You may find that the defendant acted knowingly if you find beyond a reasonable doubt that the defendant:

1. was aware of a high probability that he or she was not authorized to reproduce 5-Hour ENERGY trademarks or copyright owned by Living Essentials and reproduced 5-Hour ENERGY trademarks or copyright owned by Living Essentials; and
2. deliberately avoided learning the truth.”
You may not find such knowledge, however, if you find that the defendant actually believed that he or she was authorized to use Living Essentials' 5-Hour ENERGY trademarks or copyright, or if you find the defendant was simply careless.”

ECF No. 453, at 22; see also United States v. Anderson, 741 F.3d 938, 948 (9th Cir. 2013) (finding that recklessness or willful blindness theories are valid for establishing the willfulness element in a criminal copyright case). Thus, the jury could have sustained its guilty verdict against Adriana Shayota in part by a finding that Adriana Shayota was deliberately ignorant of the fact that she did not have authorization to reproduce 5-Hour ENERGY trademarks and copyrights.

         If the jury did not believe Adriana Shayota's explanations of certain pieces of evidence, the most likely alternative explanation was that Adriana Shayota knew of and agreed to at least one of the objects of the conspiracies. ECF No. 453, at 24. In deciding a Rule 29 motion, a court should be mindful that “it is the jury's exclusive function to determine the credibility of witnesses, resolve evidentiary conflicts, and draw reasonable inferences from proven facts.” Bernhardt, 840 F.2d at 1448. Additionally, although much of the evidence against Adriana Shayota was circumstantial, the Ninth Circuit has held that “circumstantial evidence and inferences drawn from it may be sufficient to sustain a conviction.” Reyes-Alvarado, 963 F.2d at1188. Considered as a whole, therefore, the evidence that the Government produced at trial was more than sufficient to sustain the guilty verdict against Adriana Shayota.

         For these reasons, the Court DENIES Adriana Shayota's motion for judgment of acquittal.

         B. Joseph and Adriana Shayota's Motions for a New Trial

         Both Joseph and Adriana Shayota move for a new trial. Under Rule 33, the Court may order a new trial “if the interest of justice so requires.” Fed. R. Crim. P. 33(a). Joseph and Adriana Shayota move for a new trial on several grounds. First, Adriana Shayota claims that her trial counsel rendered ineffective assistance of counsel. Second, both Joseph and Adriana Shayota argue that the redactions to their deposition testimony were insufficient under Bruton v. United States, 391 U.S. 123 (1968). Third, both Joseph and Adriana Shayota argue that admitting the deposition testimony of Walid Jamil and Leslie Roman against them violated their rights under the Confrontation Clause and under Federal Rule of Evidence 802. Fourth, both Joseph and Adriana Shayota argue that juror misconduct violated their Sixth Amendment right to a fair and impartial jury. Fifth, both Joseph and Adriana Shayota argue that the Government violated Defendants' Fifth Amendment due process rights under Napue v. Illinois, 360 U.S. 264 (1959), because the Government failed to correct false testimony at trial. Sixth, Adriana Shayota argues that the jury's verdict was against the weight of the evidence and that in light of all the circumstances, the interests of justice require a new trial. The Court considers each of these arguments in turn.

         6. Ineffective Assistance of Counsel

         Adriana Shayota argues that her trial counsel, Joseph McMullen, rendered ineffective assistance of counsel because McMullen failed to discover and present evidence that Adriana Shayota had been advised that it was lawful to wire $2, 000, 000 from Baja Exporting to Baja Foodservice. Specifically, Adriana Shayota claims that on October 30, 2012, after learning of the lawsuit regarding 5-Hour ENERGY, Joseph and Adriana Shayota retained attorney Gregory Vega and his firm, Seltzer Caplan McMahon Vitek (“SCMV”), to represent Baja Exporting and the Shayotas personally. In a declaration filed along with her motion for a new trial, Adriana Shayota claims that at the beginning of November 2012, Adriana Shayota asked Vega whether it was legal for her to transfer funds from Baja Exporting to pay “a number of bills.” Declaration of Adriana Shayota, ECF No. 500-2, ¶ 3. Adriana Shayota does not claim that she ever told Vega that she intended to wire $2, 000, 000 to the Baja Foodservices account in Mexico, that she intended to drain Baja Exporting's bank account from $2, 900, 000 to $0, or that she would be removed as signatory on the Baja Foodservices account in Mexico before she would transfer the $2, 000, 000 to that account.

         In her declaration, Adriana Shayota claims that Vega informed her that she could transfer funds as long as there was no freezing order prohibiting her from doing so. Adriana Shayota also states that Vega facilitated a wire transfer from Baja Exporting to SCMV, which “confirmed for [Adriana Shayota] that he saw no legal impediment to making such transfers.” Id. ¶ 4. Relying on this advice, Adriana Shayota states that she made the $2, 000, 000 transfer between Baja Exporting and Baja Foodservice on November 2, 2012. Id. ¶ 5.[4]

         Vega also filed a declaration in which he states that on either October 30, 2012, October 31, 2012, November 1, 2012, or November 2, 2012, Adriana Shayota “asked [Vega] if there was any issue with Baja paying its vendors.” ECF No. 500-3, at ¶ 3. Vega states that he responded that he was “unaware of any legal prohibition on Baja Exporting paying its vendors from funds in Baja Exporting's bank account. Id. ¶ 4.

         Subsequently, after Joseph and Adriana Shayota were indicted in the instant criminal case, Vega referred Adriana Shayota to McMullen because SCMV determined that it could not represent both Joseph Shayota and Adriana Shayota in the criminal case. Id. ¶ 10. Adriana Shayota retained McMullen and “told him on several occasions” that Vega had advised her that the November 2, 2102 wire transfer was lawful. Id. ¶ 11. McMullen also filed a declaration regarding the incident, and McMullen claims that when McMullen and Adriana Shayota “discussed the two-million-dollar wire transfer during our pretrial meetings, she told me words to the effect of Mr. Vega said that the wire transfer was okay.” ECF No. 500-3, at ¶ 8. However, as discussed above, Adriana Shayota never claims that she told Vega about the $2, 000, 000 transfer. ECF No. 500-2, at ¶ 3. Instead, Adriana Shayota claims that she simply asked Vega generally whether Baja Exporting could “pay the bills.” Id.

         McMullen states that he “assumed” from his conversation with Adriana Shayota that Vega had told her that the $2, 000, 000 wire transfer was legal after Adriana Shayota made the wire transfer. McMullen Declaration, ECF No. 500-4, ¶ 9. McMullen also states that if he had known that Vega gave the advice before the wire transfer, he would have called Vega as a witness at trial. Id. ¶ 12.

         A claim of ineffective assistance of counsel is governed by the two-part test set forth in Strickland v. Washington, 466 U.S. 668, 687 (1984). To prevail on such a claim, a defendant must show: (1) that counsel's representation fell below the range of competence demanded of attorneys in criminal cases; and (2) that the defendant was prejudiced by counsel's representation. The reviewing court must “indulge a strong presumption that counsel's conduct falls within the wide range of reasonable professional assistance.” Id. at 689. In order to demonstrate prejudice, Defendant must “show that there is a reasonable probability that but for counsel's unprofessional errors, the result of the proceeding would have been different.” Id. at 694. Courts may address the two prongs of the Strickland test in whichever order is most efficient and need not address one prong if the other prong is lacking. Id. at 697. However, the United States Supreme Court has stated that “[i]f it is easier to dispose of an ineffectiveness claim on the ground of lack of sufficient prejudice, which we expect will often be so, that course should be followed.” Strickland, 466 U.S. at 697.

         In the instant case, Adriana Shayota has not sufficiently demonstrated that she was prejudiced by her trial counsel's alleged errors. Adriana Shayota argues that the Government emphasized the $2, 000, 000 wire transfer as evidence of Adriana Shayota's consciousness of guilt, and “[t]estimony from Mr. Vega that Ms. Shayota had consulted him about the transfer and followed his advice would have rebutted the inference the government asked the jury to draw.” ECF No. 500, at 7. However, the inference that the Government asked the jury to draw did not rely on the wire transfer being illegal. Indeed, the Government never claimed at trial that the wire transfer itself was illegal. To the contrary, in closing the Government acknowledged that there was no freezing order at the time of the $2, 000, 000 transfer and noted that “what happened there is exactly why accounts need to be frozen.” T.11/22/16 at 125. In his closing argument on behalf of Adriana Shayota, McMullen also noted that Baja Exporting was not subject to a freeze at the time of the $2, 000, 000 transfer. T.11/22/16 at 101. The Government went on to argue that even if the money went to pay verifiable debts, that does not excuse the fact that the money was obtained from selling relabeled and counterfeit 5-Hour ENERGY. The Government also noted that Adriana Shayota was removed as signatory of the Baja Foodservice bank account in Mexico just before the $2, 000, 000 wire transfer, which was further evidence that the purpose of the wire transfer was to move the money to an account that was less likely to be frozen. Id. Additionally, the Government pointed out that not only did Adriana Shayota transfer $2, 000, 000, Adriana Shayota “zeroed out” Baja Exporting's $2, 900, 000 “business account.” T.11/22/16 at 62.

         Thus, Vega's advice does not undermine the conclusion that the reason that Adriana Shayota transferred the money was to remove ill-gotten gains from Baja Exporting's account. Indeed, the jury may have drawn a stronger adverse inference if it heard that Adriana Shayota asked Vega only whether it was legal to transfer funds from Baja Exporting to pay “a number of bills, ” ECF No. 500-2, at ¶ 3, and did not inform Vega that she planned to transfer an even $2, 000, 000 from one Baja entity to another, that she would be removed as a signatory on ...


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