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United States v. Chi

United States Court of Appeals, Ninth Circuit

August 30, 2019

United States of America, Plaintiff-Appellee,
v.
Heon-Cheol Chi, Defendant-Appellant.

          Argued and Submitted December 7, 2018 Pasadena, California

          Appeal from the United States District Court for the Central District of California John F. Walter, District Judge, Presiding No. 2:16-cr-00824-JFW-1.

          Benjamin L. Coleman (argued), Coleman & Balogh LLP, San Diego, California, for Defendant-Appellant.

          John-Alex Romano (argued), David M. Fuhr, and Anna G. Kaminska, Trial Attorneys; John P. Cronan, Acting Assistant Attorney General; Poonam G. Kumar, Assistant United States Attorney; Nicola T. Hanna, United States Attorney; United States Department of Justice, Criminal Division, Washington, D.C.; for Plaintiff-Appellee.

          Before: Johnnie B. Rawlinson and Carlos T. Bea, Circuit Judges, and Benjamin H. Settle, [*] District Judge.

         SUMMARY [**]

         Criminal Law

         The panel affirmed a conviction under 18 U.S.C. § 1957 for engaging in a monetary transaction of over $10, 000 derived from a "specified unlawful activity," in a case in which the defendant, a citizen of South Korea who was employed as a principal researcher and director at a government-funded geological research institute in South Korea, solicited and received payments from two seismometer manufacturers in exchange for ensuring that the research institute purchased their products, and gave the companies inside information about their competitors.

         The "specified unlawful activity" articulated in the indictment was, as defined in 18 U.S.C. § 1956(c)(7)(B), "an offense against a foreign nation involving . . . bribery of a public official;" and the offense against a foreign nation involving "bribery of a public official" was Article 129 of the South Korean Criminal Code.

         The panel held that "bribery of a public official" in § 1956 is defined by that phrase's "ordinary, contemporary, common meaning," and is not constrained by the federal bribery statute, 18 U.S.C. § 201, a statute to which § 1956 makes no reference. The panel held that because the crime described in Article 129 fits comfortably within the ordinary meaning of "bribery of a public official" as used in § 1956, the indictment was sufficient and there was no instructional error.

          OPINION

          Bea, Circuit Judge.

         Dr. Heon-Cheol Chi, a citizen of South Korea, was employed as a principal researcher and director at the Korea Institute of Geoscience and Mineral Resources (KIGAM), a government-funded geological research institute in South Korea. Over nearly fifteen years, Chi solicited and received payments from two seismometer manufacturers. In exchange, he ensured that KIGAM purchased their products, and he gave the companies inside information about their competitors. He asked the companies to route his payments-which totaled over a million dollars-to a bank account in the United States. An FBI investigation ensued, and Chi was arrested on December 12, 2016.

         Chi was indicted for six counts of violating 18 U.S.C. § 1957, which criminalizes engaging in monetary transactions of over $10, 000 derived from certain "offense[s] against a foreign nation," including crimes involving "bribery of a public official." 18 U.S.C. § 1956. The "offense against a foreign nation" here was a violation of Article 129 of the South Korean Criminal Code. The district court concluded that Article 129 could properly be classified as describing an offense involving "bribery of a public official," and the jury was instructed on the elements of that offense. Chi was convicted on one count, Count 6.[1]

         On appeal, Chi argues that the district court misinterpreted the term "bribery of a public official" as used in § 1956. According to Chi, "bribery of a public official" is a reference to the federal bribery statute, 18 U.S.C. § 201, and the district court erred by failing to ensure that the crime described in Article 129 fell within the elements of the crime described in said § 201. We disagree. We hold that "bribery of a public official" in § 1956 is defined by that phrase's "ordinary, contemporary, common meaning," Perrin v. United States, 444 U.S. 37, 42 (1979), and is not constrained by 18 U.S.C. § 201, a statute to which § 1956 makes no reference. Furthermore, because we find the crime described in Article 129 of the South Korean Criminal Code fits comfortably within the ordinary meaning of "bribery of a public official" as used in § 1956, we find the indictment was sufficient and that there was no instructional error. Accordingly, we affirm the judgment of the district court.

         BACKGROUND

         KIGAM is a government-funded geological research institute in South Korea. KIGAM's Earthquake Research Center operates a nationwide acoustic network to monitor seismic activity and artificial blasts. In addition, it serves as South Korea's data center for the United Nations Comprehensive Test Ban Treaty Organization (CTBTO), which monitors nuclear weapons tests around the world.

         Chi was a seismologist at KIGAM. He worked as a principal researcher and was the director of the Earthquake Research Center. Additionally, he served on a technical working group for the CTBTO, and he advised the President of South Korea on nuclear weapons testing as well. KIGAM purchases and distributes a large amount of geological equipment; over time, Chi became intimately involved in the procurement process.

         KIGAM frequently purchased equipment from Guralp Systems, a seismometer manufacturer in England. On September 7, 2015, Guralp Systems' executive chairman, Christopher Potts, noticed that the company had paid Chi "several hundred thousand dollars" over the previous several years, which "seemed like a large amount of money." Upon further inspection, he discovered that Guralp Systems had paid Chi "nearly a million dollars from 2003 through to 2015" pursuant to a one-page, hand-written consulting agreement. But the letter didn't "look like a consulting agreement at all." Potts became apprehensive that the payments "could . . . be bribes."

         After discussing the matter with his associates, Potts confronted Chi over lunch on September 15, 2015. He told Chi that he believed the arrangement to be inappropriate and illegal. Chi did not disagree, but promptly called "his boss or his director," spoke briefly to him in Korean, and then reassured Potts that his superior "had agreed that it was okay to have an official agreement between [Guralp Systems] and KIGAM." Potts declined such an arrangement.

         Over the next several months, Chi attempted a variety of pricing maneuvers to receive what he termed "advice fees" from Guralp Systems. Potts consistently rebuffed him. In December 2015, Potts confronted Chi again, this time at a geophysics conference in San Francisco. Chi admitted that he was a government official and that the previous arrangement was illegal, but after the conference concluded, he renewed his efforts to be paid. He emailed Potts asking for a "consulting agreement" that would pay $300, 000 over the next three years, and demanded payment for services rendered under the previous agreement.[2] Potts never replied. Instead, he notified the United Kingdom Serious Fraud Office (SFO), which began an investigation. At some point, the FBI became involved as well.

         The FBI investigation revealed the existence of another company: Kinemetrics, a seismometer manufacturer headquartered in Pasadena, California.[3] Like Guralp Systems, Kinemetrics paid Chi money in exchange for recommending and purchasing their products. In addition, Chi provided Kinemetrics information about the company's competitors, sending them confidential presentations from other manufacturers. Chi was surprisingly candid in his communications with Kinemetrics, often admitting that his conduct was against the law.

         The investigation also revealed a money trail. Because Chi had to report his "cash flow . . . to [the] government every year," he asked Kinemetrics and Guralp Systems to deposit his fees in a Bank of America account in Glendora, California. Between 2009 and 2016, the two companies wired $1, 044, 690 to that account. Chi then transferred $521, 000 from the Bank of America account to a Merrill Lynch account in Fort Lee, New Jersey. From there, he transferred the money to his Citibank account in South Korea. None of the money was ever transferred to KIGAM.

         On December 12, 2016, Chi flew to San Francisco for a seismology convention, where the FBI arrested him in the airport. A grand jury returned an indictment charging Chi with six counts of engaging in monetary transactions derived from a "specified unlawful activity," in violation of 18 U.S.C. § 1957. The "specified unlawful activity" articulated in the indictment was-as defined in 18 U.S.C. § 1956(c)(7)(B)-"an offense against a foreign nation involving . . . bribery of a public official." And the offense against a foreign nation involving "bribery of a public official" was Article 129 of the South Korean Criminal Code.[4]

         Chi moved to dismiss the indictment on the ground that it did not adequately allege the offense. He claimed that in addition to alleging a violation of Article 129, the indictment was required to allege a violation of 18 U.S.C. § 201, the federal bribery statute.[5] The district court denied Chi's motion. During trial, Chi made a similar argument, suggesting that the jury should be instructed on domestic bribery law in addition to the elements of Article 129. The court rejected that argument too. It agreed that "it must ensure that the definition of 'bribery' under Article 129 of the South Korea Criminal Code falls within the category of conduct of a bribery of a public official, as contemplated by Section 1956(c)." But it found that the definition in Article 129 did fall within that category, thereby rejecting Chi's claim.[6] Importantly, the court read the translated Article 129 to the jury.

         The jury ultimately convicted Chi on Count 6, which arose from a $56, 000 check sent from the Bank of America account in California to the Merrill Lynch account in New Jersey. It was unable to reach a verdict on the five remaining counts. Chi now appeals, arguing that the crime described in Article 129 of the South Korean Criminal Code must also fall within the ambit of the crimes described in 18 U.S.C. § 201, and that the indictment and jury instructions were in error as a result. Chi also argues that the court incorrectly interpreted South Korean law, and that insufficient evidence supported his conviction on Count 6.

         STANDARD OF REVIEW

         The sufficiency of an indictment is subject to de novo review. United States v. Berger, 473 F.3d 1080, 1097 (9th Cir. 2007). In addition, we review "the wording of jury instructions for an abuse of discretion, but review de novo whether jury instructions omit or misstate elements of a statutory crime or adequately cover a defendant's ...


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