United States v. Richard Renzi , 769 F.3d 731 ( 2014 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 13-10588
Plaintiff-Appellee,
D.C. No.
v. 4:08-cr-00212-
DCB-BPV-1
RICHARD G. RENZI,
Defendant-Appellant.
UNITED STATES OF AMERICA, No. 13-10597
Plaintiff-Appellee,
D.C. No.
v. 4:08-cr-00212-
DCB-BPV-2
JAMES W. SANDLIN,
Defendant-Appellant. OPINION
Appeal from the United States District Court
for the District of Arizona
David C. Bury, District Judge, Presiding
Argued and Submitted
June 17, 2014—Seattle, Washington
Filed October 9, 2014
2 UNITED STATES V. RENZI
Before: Richard C. Tallman, Consuelo M. Callahan,
and Sandra S. Ikuta, Circuit Judges.
Opinion by Judge Tallman;
Special Concurrence by Judge Ikuta
SUMMARY*
Criminal Law
The panel affirmed the convictions and sentences of
former Congressman Richard Renzi and his friend and
business partner James Sandlin in a case in which Renzi, who
owned and operated an insurance agency, misappropriated
clients’ insurance premiums to fund his congressional
campaign, and lied to insurance regulators and clients to
cover his tracks.
The panel rejected Renzi’s contention that the
government failed to prove that he or Sandlin solicited or
received “something of value” in exchange for Renzi’s
promise to support land exchange legislation, and that the
evidence was therefore insufficient to sustain his extortion
and honest-services fraud convictions. Observing that the
Ninth Circuit’s pattern jury instruction for bribery merely
recommends that the district court specifically describe the
thing of value, the panel found no error in the uncontested
jury instructions.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
UNITED STATES V. RENZI 3
The panel held that, if a member of Congress offers
evidence of his own legislative acts at trial, the government
is entitled to introduce rebuttal evidence narrowly confined to
the same legislative acts, and such rebuttal evidence does not
constitute questioning the member of Congress in violation of
the Speech and Debate Clause. The panel held that Renzi’s
introduction of testimony concerning Renzi’s support for
certain legislation opened the door for the government to
introduce rebuttal evidence on these narrow points, and that
Renzi was not impermissibly questioned about his legislative
acts in violation of the Clause. The panel held that the district
court properly declined to balance another congressman’s
Speech or Debate Clause privilege against Renzi’s right to
present a defense.
The panel held that the district court did not abuse its
discretion in excluding classified information, where Renzi
introduced ample similar evidence supporting his theory of
the case, the district court handled the issue appropriately in
conformance with the Classified Information Procedures Act,
and there was no constitutional violation.
The panel held that no violation of Napue v. Illinois
occurred during the government’s direct examination of two
witnesses, where the statements at issue were not material.
Regarding Renzi’s insurance-fraud conviction, the panel
rejected Renzi’s contentions (1) that the government failed to
prove that Renzi & Company, an insurance agency
specializing in obtaining insurance coverage for non-profit
organizations and crisis pregnancy centers, was “engaged in
the business of insurance” within the meaning of 18 U.S.C.
§ 1033(f); (2) that two letters sent to insurance regulators do
not qualify as “financial” documents within the meaning of
4 UNITED STATES V. RENZI
18 U.S.C. § 1033(a)(1)(A); and (3) that the district court erred
in instructing the jury on the definition of “financial reports
or documents.”
Regarding Renzi’s RICO conviction, the panel held that
the government was not required to show that Renzi &
Company “misappropriated” funds held “in trust” for another
in order to prove mail or wire fraud, this additional language
in the indictment was surplusage, and the district court did
not constructively amend the indictment by omitting the “in
trust” language from the jury instructions.
The panel upheld the district court’s calculation under
U.S.S.G. § 2C1.1(b)(2) of the value of a payment Renzi
received in exchanged for influence exerted to the sale of
property. The panel rejected Renzi and Sandlin’s contention
that the district court erred by concluding that the value of the
payment was $200,000 (the amount of a debt to Renzi that
Sandlin paid off) rather than zero (the net value to Renzi).
The panel concluded that there was sufficient evidence to
support Sandlin’s convictions for conspiracy to engage in
wire fraud, Hobbs Act extortion, and engaging in monetary
transactions with criminally derived funds, where there was
powerful proof of criminal intent, and the jury rejected
Sandlin’s defense that money he received was the result of a
legitimate, innocent property sale.
Specially concurring, Judge Ikuta disagreed with the
majority’s overbroad reading of § 1033, which could impose
criminal liability not just on an insurer but also on any third
party who interacts with insurers. She agreed with the result
because Renzi & Company engaged in a range of activities as
UNITED STATES V. RENZI 5
an insurance broker, some of which may be evidence that it
acted as an agent of the insurer.
COUNSEL
Dan Himmelfarb (argued), Kelly B. Kramer, Stephen Lilley,
Joseph P. Minta, Mayer Brown LLP, Washington, D.C.;
Chris S. Niewoehner, Steptoe & Johnson LLP, Washington,
D.C., for Defendant-Appellant Richard G. Renzi.
Gary Udashen (argued), Sorrels, Udashen & Anton, Dallas,
TX, for Defendant-Appellant James Sandlin.
David A. O’Neil, Acting Assistant Attorney General; David
V. Harbach, II, Deputy Chief, Public Integrity Section; David
M. Bitkower, Deputy Assistant Attorney General; Stephan E.
Oestreicher, Jr. (argued), Attorney, Appellate Section, United
States Department of Justice, Criminal Division, Washington,
D.C.; John S. Leonardo, United States Attorney; Gary
Restaino, Assistant United States Attorney, District of
Arizona, for Plaintiff-Appellee United States of America.
Kerry W. Kircher (argued), General Counsel; William Pittard,
Deputy General Counsel; Todd B. Tatelman, Mary Beth
Walker, Eleni M. Roumel, and Isaac B. Rosenberg, Assistant
Counsel, Office of General Counsel, United States House of
Representatives, Washington, D.C., for Amicus Curiae
Bipartisan Legal Advisory Group of the United States House
of Representatives.
6 UNITED STATES V. RENZI
OPINION
TALLMAN, Circuit Judge:
Congressmen may write the law, but they are not above
the law. Former Arizona Congressman Richard Renzi
learned this lesson the hard way when he was convicted by
jury on charges of conspiracy, honest-services fraud,
extortion, money laundering, making false statements to
insurance regulators, and racketeering. Now Renzi and
codefendant James Sandlin appeal their convictions and
sentences, asserting that the evidence was insufficient to
support the verdict. Renzi further argues that his convictions
were predicated on serial violations of his constitutional
rights, including violations of his Congressional Speech or
Debate Clause privilege. We reject their arguments and
affirm both convictions and sentences.
I
The United States brought insurance fraud charges against
Renzi, public corruption charges against Renzi and Sandlin,
and a racketeering charge against Renzi. The evidence
showed that Renzi, who owned and operated an insurance
agency, misappropriated clients’ insurance premiums to fund
his congressional campaign, and lied to insurance regulators
and clients to cover his tracks.1 The public corruption
charges were based on Renzi and Sandlin’s involvement in a
conspiracy to extort private businesses to purchase land
1
Because Renzi and Sandlin challenge the sufficiency of the evidence
to support their convictions, the facts we recite are based on the evidence
from the trial viewed in the light most favorable to support the jury’s
verdict. See Jackson v. Virginia, 443 U.S. 307, 319 (1979).
UNITED STATES V. RENZI 7
owned by Sandlin in exchange for Renzi’s promise to support
favorable federal land exchange legislation. Finally, the
evidence established that Renzi used his insurance business
as an enterprise to conduct a pattern of racketeering activity
by diverting clients’ insurance premiums for his personal use,
facilitating an extortionate land transfer, and laundering its
proceeds.
A
In the early 2000s, Renzi owned and operated Renzi &
Company (R&C),2 an insurance agency specializing in
obtaining insurance coverage for non-profit organizations and
crisis pregnancy centers.3 R&C obtained group insurance
coverage for its clients through brokers who worked on
behalf of insurance carriers. R&C used two primary brokers:
(1) North Island Facilities, which secured insurance coverage
through Safeco Insurance Company, and (2) Jimcor Agency,
which secured insurance coverage through both United States
Liability Insurance Company and Royal Surplus Lines
Insurance Company. R&C collected yearly premiums from
its clients and, after keeping a small percentage as a profit,
remitted those premiums to the broker. After taking their
commission, the broker (either North Island or Jimcor)
remitted the remainder of the premium to the insurer—either
Safeco, United States Liability, or Royal Surplus.
On December 10, 2001, Renzi publicly announced his
candidacy for a seat in the United States House of
2
R&C became known as Patriot Insurance Agency after 2002.
3
Crisis pregnancy centers are organizations that counsel women
regarding alternatives to abortion.
8 UNITED STATES V. RENZI
Representatives serving Arizona’s First Congressional
District. The very next day, Renzi began diverting cash from
R&C to fund his congressional campaign. Between
December 2001 and March 2002, Renzi transferred over
$400,000 from R&C to his “Rick Renzi for Congress”
account. To avoid campaign disclosure regulations, Renzi
claimed the money as a personal loan to the Renzi campaign.
But most of the diverted funds were directly traceable to
insurance premiums R&C had collected from clients.4
In April 2002, North Island sent R&C an invoice for
$236,655.90 to bind annual Safeco coverage for R&C’s
clients. R&C had already collected the insurance premiums
from its clients. But it had funneled those premiums to
Renzi’s congressional campaign. Because R&C no longer
had the money, Renzi did not allow Aly Gamble, R&C’s
Senior Underwriter, to pay North Island.5 Two months later,
Safeco warned R&C that it planned to cancel R&C’s policies
for nonpayment. Another month passed with no response
from R&C.
4
At trial, Renzi suggested that the money he withdrew from R&C to
fund his congressional campaign was simply R&C’s repayment of a prior
loan Renzi had made to the company. Renzi did not provide any
documentation to support this contention. By its verdict, the jury rejected
his defense.
5
At trial, Renzi attributed the nonpayment of premiums to a coverage
dispute with Safeco over Safeco’s decision to deny a claim in part because
the crisis pregnancy centers offered religious counseling. Because
religious counseling was central to the mission of the crisis pregnancy
centers, which was to educate women about alternatives to abortion, Renzi
claimed that he interpreted Safeco’s position as a decision to deny
coverage for all claims brought by crisis pregnancy centers. Based on the
outcome at trial, the jury did not believe Renzi’s alternative explanation.
UNITED STATES V. RENZI 9
In July 2002, Safeco began sending cancellation notices
to R&C’s clients. With cancellation notices in hand, worried
clients began calling R&C. Gamble fielded these calls. To
respond to client concerns, Renzi dictated a letter to Gamble,
which she sent to clients later that month. The letter stated
that, because “spiritual counseling was no longer covered”
under Safeco’s policy, R&C had “replaced” Safeco with “the
Jimcor Insurance Company.” The letter promised that clients
would experience “no lapse in coverage.” Attached to each
letter was a new certificate of liability insurance ostensibly
from “Jimcor Insurance Company.” The certificate listed a
policy number, policy limits, and effective policy dates.
None of this was true: Jimcor was not an insurance
company,6 and the new certificates were entirely fabricated.
Gamble testified that at Renzi’s request, she inserted random
policy numbers, cut and pasted Safeco’s policy limits, and
chose Safeco’s August 2002 cancellation date as the effective
date of the new fake policy. Then, at Renzi’s direction,
Gamble sent out at least 74 of these letters and phony
insurance certificates, but only to clients who had called R&C
to voice concern.
North Island continued to formally demand payment of
premiums from R&C. In October 2002, with no payments in
hand and no response from R&C, North Island notified state
6
While Jimcor Agency was a broker for some of R&C’s policies, Jimcor
was not a broker for these particular policies (which were brokered by
North Island on behalf of Safeco). And importantly, although Jimcor
Agency was a broker, meaning that it worked on behalf of clients to
obtain insurance coverage for them from insurance companies, it was not
an insurer or working on behalf of an insurance company to provide
insurance policies or indemnify policy holders who experienced a covered
loss.
10 UNITED STATES V. RENZI
insurance regulators in Virginia and Florida of R&C’s
nonpayment. Clients began receiving calls from these state
insurance regulators.
In early November, R&C sent another letter to its clients,
signed by Gamble on behalf of R&C’s Interim President
Andrew Beardall.7 The letter again reassured clients that they
were “properly insured” with “no lapses in coverage.” These
statements were also false—at that time clients had no
insurance coverage at all. Instead, between August and
November 2002, R&C adjusted all insurance claims
internally, paying clients directly for any outstanding claims.
On November 5, 2002, Renzi was elected to the United
States House of Representatives. A few weeks later, Renzi
received a $230,000 gift from his father. That same day,
R&C paid the full amount due to North Island: $236,655.90.
After receiving full payment, Safeco decided to retroactively
reinstate all of R&C’s policies.
But R&C’s troubles were just beginning. In early 2003,
R&C received a letter from the Virginia State Corporate
Commission Bureau of Insurance. In the letter, the Bureau of
Insurance asked R&C to explain why it had collected client
premiums but failed to remit them to North Island, and why
it had issued certificates of insurance showing that coverage
had been placed through Jimcor, which is not an insurance
company. In March 2003, Renzi responded by letter on
7
Beardall, Renzi’s law school friend and classmate, took over as the
Interim President of R&C while Renzi was occupied with his
congressional campaign. However, Gamble testified that Renzi remained
involved in R&C’s day-to-day operations even after he was elected to
Congress.
UNITED STATES V. RENZI 11
behalf of R&C. Renzi’s letter attributed the withheld
payments to an ongoing coverage dispute with Safeco, and
claimed that “a member of the office staff” had “mistakenly
typed ‘Jimcor’” when generating the certificates. The letter
characterized the mistake as an “inadvertent computer slip.”
In early spring, R&C received another letter—this time,
from the Florida Department of Insurance—inquiring as to
why premiums collected by R&C had not been remitted to
Safeco. R&C responded in a letter signed by Beardall.
Again, R&C blamed the faulty certificates on a “computer
error by a member of the office staff.” R&C stated that the
Safeco insurance policies were “in force for the whole year
without any lapses.” At trial, Gamble testified that there was
no “inadvertent computer slip.” She confirmed that Renzi
himself had instructed her to create the fake certificates,
insert the false coverage information, and send the certificates
to complaining clients.
In May 2003, R&C surrendered its Virginia insurance
license to avert penalties. R&C chose not to renew its Florida
license. As a result, the Florida Department of Insurance took
no further action against R&C.
B
The public corruption counts arose out of Renzi and
Sandlin’s long-time friendship and business relationship.8
From 2001 to 2003, Renzi and Sandlin were partners in a real
estate development company, Fountain Realty and
Development, Inc., based in Kingman, Arizona. In February
8
Sandlin’s wife was a close friend with Renzi in high school, and
Sandlin worked on Renzi’s election campaign.
12 UNITED STATES V. RENZI
2003, shortly after his election to Congress, Renzi sold
Sandlin his share of the company. Sandlin paid Renzi in part
with an $800,000 promissory note, payable in annual
installments through September 2007 at five percent interest.
During this time, Sandlin also owned a 640-acre parcel
(the “Sandlin tract”) in southeastern Arizona, near the San
Pedro River and within the watershed of the United States
Army’s Fort Huachuca (“the Fort”). Sandlin had been leasing
the tract to an alfalfa farmer, who was using an excessive
amount of water (1,846 acre feet per year) in a region that
was facing chronic water shortages. Water conservation was
a high priority for Fort Huachuca because the Fort conducted
important training and was facing local controversy over its
water usage. At the same time, the Fort was being reviewed
by the Base Realignment and Closure Commission
(“BRACC”) and was under a federal court order to reduce its
water consumption.
In 2004, the Resolution Copper Company (“RCC”)
acquired land and mineral rights to a large copper deposit
located near Superior, Arizona. RCC was planning to extract
the copper, but first wanted to secure ownership of an
adjacent parcel of land owned by the United States Forest
Service. RCC began talking with Congressman James Kolbe
about sponsoring a federal land exchange bill.9 But Kevin
Messner, Renzi’s Chief of Staff, told Renzi that he should be
the one to introduce RCC’s exchange, as Messner believed
that the exchange could help Renzi gain political support
during Renzi’s upcoming reelection campaign. The RCC
9
A federal public land exchange is a real estate transaction in which a
property owner exchanges privately-owned land for federal public land.
Such exchanges require congressional approval.
UNITED STATES V. RENZI 13
land exchange proceeded no further that year, but RCC and
Renzi agreed to touch base again after the election.
1
By the time Renzi was reelected to Congress in early
2005, he had secured a seat on the House Natural Resources
Committee, which was responsible for land exchanges
requiring legislative approval.10 At a private meeting in
January 2005, RCC executive Bruno Hegner asked Renzi
which lands RCC should consider purchasing to exchange
with the government for the Forest Service parcel. Renzi
“nonchalant[ly]” mentioned the Sandlin tract, but he did not
disclose his relationship with Sandlin, nor did he disclose the
fact that Sandlin owed him $700,000 in principal on the
$800,000 note. Hegner testified that, although RCC would
not have been interested in the Sandlin property absent
Renzi’s suggestion, RCC began negotiating with Sandlin.
Renzi and Hegner met again in February 2005. Hegner
testified that in this meeting, Renzi was insistent about the
importance of RCC acquiring the Sandlin property and
including it in the land exchange. Renzi stressed that
acquiring the Sandlin property would benefit national
security, because decreasing water usage on the Sandlin
property was critical to Fort Huachuca’s sustainability. Tom
Glass, an RCC consultant who also attended the meeting,
asked Renzi if he had a business relationship with Sandlin.
Hegner testified that Renzi became visibly aggravated and
10
Before the United States House of Representatives could take a floor
vote on proposed legislation, the Natural Resources Committee needed to
approve the proposed land exchange legislation, with a recommendation
that the bill be passed into law.
14 UNITED STATES V. RENZI
insisted that, although he had sold a piece of property to
Sandlin many years ago, “there was no business relationship.”
Ultimately, RCC’s negotiations with Sandlin were not
fruitful. In March 2005, Hegner advised Renzi that RCC was
unable to reach an agreement with Sandlin because Sandlin
was insisting upon unreasonable terms. Later that day,
Sandlin sent Hegner a fax stating, “I just received a phone
call from Congressman Renzi’s office. They have the
impression I haven’t been cooperative concerning this water
issue. I feel I have been very cooperative . . . . I still want to
cooperate.”
Negotiations continued, albeit unsuccessfully. When
Hegner told Renzi that he was continuing to have trouble with
Sandlin, Renzi responded with the key ultimatum: “No
Sandlin property, no bill.” Hegner immediately understood
this to mean that Renzi would not sponsor RCC’s legislative
land swap proposal unless RCC included the Sandlin property
in the land exchange. Hegner asked, “What if I can’t get this
done?” Renzi replied, “That would be a topic for another
conversation,” and hung up. In shock, Hegner mailed himself
a sealed note memorializing the conversation. That same
day, Hegner learned that Renzi and Sandlin had been joint
shareholders in an Arizona business. As a result, RCC
decided not to pursue the Sandlin tract.
In May 2005, Renzi introduced a federal land exchange
bill featuring RCC that did not include the Sandlin property.
No action was ever taken on the bill.
UNITED STATES V. RENZI 15
2
In April 2005, Philip Aries of The Aries Group
approached Joanne Keene, Renzi’s District Director, to
discuss the possibility of Renzi sponsoring a federal land
exchange bill. Keene put Aries in contact with Sandlin, and
Aries and Sandlin spoke on the phone on April 14 for about
28 minutes. That same day, Sandlin exchanged nine phone
calls with Renzi.
The next day, Aries proposed to trade petrified forest
parcels in Renzi’s district for federal land near Florence,
Arizona. Renzi did not seem interested in the forest parcels,
but emphasized that the Sandlin tract was of critical
importance in resolving Fort Huachuca’s water issues. Renzi
told Aries that each congressional term, he could prioritize a
single land exchange to pass directly through the Natural
Resources Committee. He promised Aries: “If you include
the Sandlin piece in your exchange, I will give you my free
pass.” Once again, Renzi did not mention his preexisting
relationship with Sandlin.
During the negotiation period, Aries emphasized to Keene
that he was “going way out on a limb at the request of
Congressman Renzi,” and that he was “putting [his] complete
faith in Congressman Renzi and [Keene] that this is the
correct decision.” At trial, Aries testified that The Aries
Group “had no interest” in owning the Sandlin tract, and
would not have bought the tract absent Renzi’s promise. But
within a few weeks, Aries and Sandlin had reached a deal.
Aries agreed to purchase 480 acres of Sandlin’s property for
$4.5 million. Aries sent a $1 million deposit in two $500,000
installments on May 3 and May 5, 2005. On May 5, Sandlin
immediately wrote a $200,000 check payable to Renzi Vino,
16 UNITED STATES V. RENZI
an Arizona wine company owned by Renzi. Renzi then
deposited the check into a bank account of Patriot
Insurance.11 Renzi’s 2005 public financial disclosure
statement did not report Sandlin’s payment.
In early September 2005, Renzi sent a letter to Sandlin
stating that the $800,000 promissory note—for the prior sale
of Renzi’s stake in their joint business—was “due and
payable” for $532,708.33 because Sandlin had recently sold
some Kingman property.12 Sandlin immediately took out a
loan from two close friends. He then wrote a check for
$533,000 to Patriot Insurance with the notation: “insurance
payment.” Renzi deposited the check. Again, Renzi did not
report this payment on his 2005 financial disclosure form.
The Aries Group closed escrow on the Sandlin tract on
October 7, 2005. Aries paid Sandlin $1.5 million in principal,
plus about $153,000 in interest.13 A federal land exchange
bill with Aries was never introduced.
In October 2006, Aries received a message from a
Phoenix New Times reporter asking about Aries’ dealings
with Renzi and Sandlin. Sandlin instructed Aries to call the
reporter back, deny that “Rick was the one pushing this land,”
and instead state that it was The Nature Conservancy that was
11
R&C was known as Patriot Insurance Agency at this time.
12
The evidence established that Sandlin had sold parcels in Kingman,
Arizona. However, the promissory note between Renzi and Sandlin was
not secured by any property and did not authorize Renzi to demand full
repayment before the due date of September 2007.
13
Shortly after the closing, Aries received an offer to resell the Sandlin
tract at a profit of more than $700,000.
UNITED STATES V. RENZI 17
“pushing the land deal.”14 Sandlin falsely assured Aries that
Renzi did not “receive [ ] proceeds from the closing” with the
Aries Group, and insisted that “Rick was involved in that land
in no way, shape, or fashion.”
C
After an extensive investigation, two federal grand juries
returned indictments against Renzi. The second superseding
indictment against Renzi and his codefendants was returned
on September 22, 2009. In June 2013, following a 24-day
jury trial with 45 witnesses, Renzi was convicted on 17 of 32
counts of public corruption, insurance fraud, and
racketeering, and Sandlin was convicted on 13 of 27 counts
of public corruption.15 Granting a substantial downward
14
In March 2004, The Nature Conservancy, an environmental group
with a strong interest in preserving the San Pedro River, had expressed a
desire to purchase the Sandlin property in order to retire its water usage.
But after the Conservancy conducted an appraisal of the land, it was
unable to strike a deal with Sandlin, who sought a price “way outside of
the market values.” Later, Aries testified that he sought the
Conservancy’s endorsement of his purchase of the Sandlin tract since the
Conservancy was committed to helping Fort Huachuca acquire water
rights.
15
Specifically, Renzi and Sandlin were convicted on one count of
conspiracy to commit honest-services wire fraud and extortion (18 U.S.C.
§ 371), six counts of honest-services wire fraud (18 U.S.C. § 1343, 1346),
two counts of extortion under color of official right (18 U.S.C. § 1951),
one count of conspiracy to commit money laundering (18 U.S.C.
§ 1956(h)), one count of concealing illegal proceeds (18 U.S.C.
§ 1956(a)(1)(B)(i)), and two counts of transacting in criminally derived
funds (18 U.S.C. § 1957). The jury also convicted Renzi on one count of
conspiracy to make a false statement to insurance regulators (18 U.S.C.
§ 371), two counts of making false statements to insurance regulators
18 UNITED STATES V. RENZI
variance, the district court sentenced Renzi to 36 months of
imprisonment.16 The district court sentenced Sandlin to 18
months of imprisonment. We have jurisdiction over their
appeals under 28 U.S.C. § 1291.
II
Renzi first challenges his extortion and honest-services
fraud convictions. Renzi contends that the evidence is
insufficient to sustain his convictions because the government
failed to prove that he or Sandlin solicited or received
“something of value” in exchange for his promise to support
land exchange legislation. Renzi points to the fact that The
Aries Group paid Sandlin a fair market price for the property,
and Sandlin then used the proceeds to repay Renzi on a
legitimate debt. According to Renzi, the extortion and
honest-services fraud convictions cannot be sustained because
the parties engaged in an equal value exchange. We disagree.
We review the district court’s interpretation of the statute
de novo. United States v. McFall, 558 F.3d 951, 956 (9th Cir.
2009). In reviewing the sufficiency of the evidence, we
(18 U.S.C. § 1033(a)(1)), and one count of racketeering (18 U.S.C.
§ 1962(c)).
16
Renzi’s codefendants, Beardall and Dwayne Lequire (R&C’s
accountant), were also indicted. A jury acquitted Beardall of conspiracy
and three counts of insurance fraud. A separate jury convicted Lequire of
conspiracy and eight counts of insurance fraud. On appeal, we reversed
Lequire’s convictions and entered a judgment of acquittal after concluding
that Lequire had not violated 18 U.S.C. § 1033(b). See United States v.
Lequire, 672 F.3d 724, 731 (9th Cir. 2012) (concluding that one cannot
“embezzle” funds that are not held “in trust” for another). In response to
Lequire, the district court dismissed the insurance-embezzlement charges
against Renzi.
UNITED STATES V. RENZI 19
consider “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,
1163–64 (9th Cir. 2010) (quoting Jackson v. Virginia,
443 U.S. 307, 319 (1979)).
A
The Hobbs Act criminalizes extortion, defined in relevant
part as “the obtaining of property from another, with his
consent, . . . under color of official right.” 18 U.S.C.
§ 1951(b)(2). The Hobbs Act defines “property” as
“something of value” that can be exercised, transferred, or
sold. Scheidler v. Nat’l Org. for Women, Inc., 537 U.S. 393,
405 (2003); McFall, 558 F.3d at 956. At common law and
still today, the prototypical example of “something of value”
has been money. See Sekhar v. United States, — U.S. —,
133 S. Ct. 2720, 2724 (2013) (“Extortion require[s] the
obtaining of items of value, typically cash, from the victim.”
(citing cases)).
The evidence at trial established the following: Aries
testified that The Aries Group “had no interest” in owning the
Sandlin property, but purchased it because Renzi promised a
“free pass” through the Natural Resources Committee if the
Sandlin property was included in Aries’ land exchange.
Immediately after Aries sent Sandlin a $1 million deposit,
Sandlin wrote Renzi a $200,000 check to Renzi Vino, which
Renzi deposited into a Patriot Insurance bank account.
Renzi’s required public financial disclosures never reported
this payment. This evidence is sufficient for a rational juror
to find that Renzi received money from The Aries Group,
through Sandlin, knowing that the payment was made in
20 UNITED STATES V. RENZI
exchange for Renzi’s improper promise to pass federal land
exchange legislation in The Aries Group’s favor. See Evans
v. United States, 504 U.S. 255, 268 (1992). Under the Hobbs
Act, nothing more is required.
Renzi contends that because he was entitled to receive
money from Sandlin under the terms of the promissory note,
the $200,000 payment from Sandlin cannot constitute
“something of value.” Not only does Renzi’s argument
downplay the role his public position played in helping him
collect a private debt earlier than would otherwise have been
the case, Renzi’s argument is premised on a fundamental
misunderstanding of the Hobbs Act. First, “it is not necessary
to prove that the extortioner himself, directly or indirectly,
received the fruits of his extortion or any benefit therefrom.”
United States v. Panaro, 266 F.3d 939, 948 (9th Cir. 2001)
(internal quotation marks omitted). The extortion was
complete once the proceeds reached Sandlin. See McFall,
558 F.3d at 956 (recognizing that the public official himself
or a third party acting in concert with the public official must
obtain the property of which the victim is deprived).
Second, the existence of a prior debt between Renzi and
Sandlin is immaterial to the fact that, together, Renzi and
Sandlin obtained property—i.e., money—from The Aries
Group that they were not otherwise entitled to receive
through Renzi’s official position. Even if Renzi was owed
money from Sandlin, he was in no way entitled to obtain that
money from The Aries Group using the threat of withholding
action on a public bill. Under Renzi’s narrow reading of the
statute, an official could always insulate himself from Hobbs
Act liability by directing the extortion victim’s payments to
any third party who owed the official money. Such an
interpretation defies the plain language of the statute and fails
UNITED STATES V. RENZI 21
to comport with the statute’s purpose: to guard against the
misuse of public office for personal gain. Evans, 504 U.S. at260–61.
Renzi next argues that an equal value exchange cannot
constitute “something of value” because there was no net loss
to the victim. Here, Renzi notes, the parties engaged in an
equal value exchange because The Aries Group paid Sandlin
a fair market price for the property. According to Renzi,
because the Sandlin property was not sold at an inflated price,
there can be no extortion. We find no support for Renzi’s
argument in the statute or in the case law. The Hobbs Act
requires the government to prove only that “a public official
has obtained a payment to which he was not entitled,
knowing that the payment was made in return for official
acts.” Evans, 504 U.S. at 268. We conclude that Renzi
obtained a $200,000 payment from Aries that he was not
otherwise entitled to receive. The government met its burden
under the statute. Thus, we affirm Renzi’s convictions on this
count.17
B
A similar analysis governs Renzi’s honest-services fraud
conviction. Under 18 U.S.C. § 1346, an official is guilty of
honest-services fraud if he accepts something of value in
exchange for an official act. 18 U.S.C. § 1346; Skilling v.
United States, 561 U.S. 358, 412–13 (2010) (noting that
§ 1346 “draws content . . . from” 18 U.S.C. § 201(b), which
prohibits corruptly accepting “anything of value”). The
17
Sandlin joins in Renzi’s briefing on this point. For the same reason
we find Renzi’s arguments unavailing, we affirm Sandlin’s convictions on
this basis.
22 UNITED STATES V. RENZI
phrase “anything of value” has been interpreted broadly to
carry out the congressional purpose of punishing the abuse of
public office. United States v. Williams, 705 F.2d 603, 623
(2d Cir. 1983). Thus, “thing of value” is defined broadly to
include “the value which the defendant subjectively attaches
to the items received.” United States v. Gorman, 807 F.2d
1299, 1305 (6th Cir. 1986).
The evidence was sufficient for a reasonable jury to find
that Renzi received a “thing of value”—money—in exchange
for his promise to perform an official act—utilizing his
influence to move the bill through Congress. We reject
Renzi’s argument that he “merely entered into an economic
exchange.” Id. at 1304. The money had subjective value to
Renzi, not only because it was a $200,000 payment, but
because it was the early repayment of a large private debt.
“The purpose of Section 201(g) is to reach all situations in
which a government agent’s judgment concerning his official
duties may be clouded by the receipt of an item of value
given to him by reason of his position.” Id. Here, Renzi
received money from The Aries Group that he was not
otherwise entitled to receive. This money clouded his
judgment in performing his official duties and deprived his
constituents of the honest services of their elected
representative. We affirm his conviction on this count.18
C
Renzi also faults the jury instructions for failing to
identify the specific “thing of value” at issue. He asserts that
this omission makes it impossible to know whether the jury’s
18
We also affirm Sandlin’s convictions as an aider and abettor on this
count.
UNITED STATES V. RENZI 23
verdict rests on proper grounds. Because Renzi failed to
object to the jury instruction at trial, we review for plain
error. See United States v. Treadwell, 593 F.3d 990, 996 (9th
Cir. 2010); Fed. R. Crim. P. 52(b).
The Ninth Circuit’s pattern jury instruction for bribery
“recommend[s]” that the district court “specifically describe
the thing of value just as it is described in the indictment to
avoid a variance.”19 9th Cir. Crim. Jury Instr. 8.12, Cmt.
(2010). However, the recommendation is just that—a
recommendation. Neither the pattern jury instruction nor any
controlling precedent requires the district court to identify the
thing of value, especially where variance from the indictment
is not at issue.
Renzi notes that fatal variance could be at issue, pointing
to United States v. Choy, 309 F.3d 602 (9th Cir. 2002). In
Choy, although the indictment alleged that the “thing of
value” was $5,000, the government at trial urged an
uncharged and legally invalid theory—that the “thing of
value” was the purchase of computer equipment that enabled
a public official to receive a bribe. Id. at 605. Finding that
“[t]he theory on which he was convicted constituted a fatal
variance from the offense alleged in the indictment,” we
reversed. Id. at 607.
But Renzi’s case is notably different from Choy. Here,
the government’s theory of conviction has remained
19
A variance occurs when the evidence offered at trial proves facts
materially different from those alleged in the indictment. See United
States v. Von Stoll, 726 F.2d 584, 586 (9th Cir. 1984). A variance requires
reversal only if it prejudices a defendant’s substantial rights. See United
States v. Adamson, 291 F.3d 606, 616 (9th Cir. 2002).
24 UNITED STATES V. RENZI
consistent since the beginning: the “thing of value” has
always been “money . . . to Sandlin, part of which goes to
Renzi.” The indictment alleged that “Sandlin paid Renzi
$733,000 from the proceeds of the sale of the Sandlin
property.” Because the evidence at trial did not “prove[] facts
materially different from those alleged in the indictment,” no
variance is at issue. Von Stoll, 726 F.2d at 586. Accordingly,
we find no error, let alone plain error, in the uncontested jury
instructions.20
III
Renzi argues that the district court erred by allowing
testimony from his former District Director, Joanne Keene, in
violation of his Speech or Debate Clause privilege. He also
asserts that the district court prevented Renzi from presenting
a complete defense by erroneously protecting Congressman
Jim Kolbe’s Speech or Debate privilege at Renzi’s expense,
and by improperly excluding evidence under the Classified
Information Procedures Act (“CIPA”), 18 U.S.C. app. 3. As
a result, Renzi contends, he is entitled to a new trial.
We review de novo whether evidence at trial caused a
member of Congress to be “questioned” about his legislative
acts. United States v. Swindall, 971 F.2d 1531, 1543 (11th
Cir. 1992).
A
Renzi first argues that his former District Director, Joanne
Keene, presented testimony to the jury in violation of the
Speech or Debate Clause. Specifically, Renzi challenges two
20
Likewise, we affirm Sandlin’s convictions on this basis.
UNITED STATES V. RENZI 25
pieces of testimony: (1) Keene’s testimony that Renzi “did
not seem very excited and interested in the Resolution Copper
exchange” when Sandlin’s tract was no longer a part of it,21
and (2) Keene’s testimony that Renzi told her in fall 2005 that
“he wanted to put the brakes on . . . Mr. Aries’ land exchange
because” Congressman Duke Cunningham had been indicted
21
The full exchange was as follows:
Q: Do you recall any conversations with Mr. Renzi
around April of 2005 concerning his view of
whether he should be involved in the Resolution
land exchange?
Mr. Kramer: We have an objection on this.
The Court: Overruled.
By Mr. Harbach:
Q: You may answer.
A: I recall not any specific discussions, but he did not
seem very excited and interested in the Resolution
Copper exchange.
Q: In your opinion, do you think he should have been?
A: Yes.
Q: Why?
A: At that time, I felt it was a good exchange and it
had a lot of good components to it, and I thought it
was something that would be good for our
congressional district.
26 UNITED STATES V. RENZI
for public corruption.22 Renzi claims that this testimony
inquired into his legislative acts in violation of the Speech or
Debate Clause and, as a result, he is entitled to a new trial.
In determining whether Keene’s testimony concerned
Renzi’s protected legislative acts, we must revisit the
contours of the Speech or Debate Clause. In Renzi I, we
concluded that Renzi’s negotiations with private parties did
not constitute protected “legislative acts.” United States v.
22
The full exchange was as follows:
Q: Ms. Keene, do you know who Duke Cunningham
is?
A: Yes.
Q: Who is Duke Cunningham?
A: Mr. Duke Cunningham was a former member of
Congress.
Q: Do you recall a conversation with Mr. Renzi in the
fall of 2005 where Mr. Cunningham’s name was
mentioned?
A: Yes, I do.
Q: Tell us about that conversation.
A: It was a conversation during that time Mr.
Cunningham, I believe, was indicted for public
corruption as a sitting member of Congress, and
Mr. Renzi, I am not sure where he was, but he was
patched to me, we talked on the phone. And he
said at that time that he wanted to put the brakes on
this land exchange, on Mr. Aries’ land exchange
because of what was happening with Duke.
UNITED STATES V. RENZI 27
Renzi [Renzi I], 651 F.3d 1012, 1022 (9th Cir. 2011). We
made clear that promises or actions associated with future
legislation are not covered by the Clause. Id. (“Completed
‘legislative acts’ are protected [by the Clause]; promises of
future acts are not.”). Here, we consider whether, when
Renzi himself introduced evidence of his own legislative acts
through the cross-examination of government witnesses, the
government was then entitled to rebut that evidence.
The Speech or Debate Clause provides that, “for any
Speech or Debate in either House, [a member of Congress]
shall not be questioned in any other Place.” U.S.
Constitution, Art. I, § 6, cl. 1 (emphasis added). Evident
from its plain language, the focus is on the improper
questioning of a Congressman. As such, the Clause is
violated when the government reveals legislative act
information to a jury because this “would subject a Member
to being ‘questioned’ in a place other than the House or the
Senate.” United States v. Helstoski, 442 U.S. 477, 490
(1979).
In line with Helstoski’s holding, our sister circuits have
recognized that “a member is not ‘questioned’ when he or she
chooses to offer rebuttal evidence of legislative acts.” United
States v. McDade, 28 F.3d 283, 294–95 (3d Cir. 1994); see
also United States v. Myers, 635 F.2d 932, 942 (2d Cir.
1980). The rationale makes sense: a Congressman cannot
claim the protections of the privilege when he himself
introduces the violative evidence. However, McDade
recognized that this is a double-edged sword. Although a
Congressman may introduce evidence of his own legislative
acts, “he thereby subjects himself to cross-examination” on
those points. McDade, 28 F.3d at 295; see also United States
v. Rostenkowski, 59 F.3d 1291, 1303 (D.C. Cir. 1995).
28 UNITED STATES V. RENZI
In McDade, a member of Congress sought dismissal of
his indictment on the grounds that the indictment would
“force him to introduce evidence of legislative acts in order
to refute the charges against him.” McDade, 28 F.3d at 294.
The court was not sympathetic to McDade’s concerns. There
are times, the court recognized, that a member of Congress
may find it advantageous to introduce evidence of his own
legislative acts. For instance, a member who “is charged with
accepting a bribe in exchange for supporting certain
legislation” may “find it tactically beneficial to introduce
evidence of his or her assertedly legitimate reasons” for
ultimately supporting the legislation. Id. This is permissible
under the Clause, the court reasoned, because the member
himself chose to introduce such evidence. But in doing so,
the member “subjects himself to cross-examination” on these
points. Id. at 295.
We agree with the Second, Third, and D.C. Circuits. We
hold that, if a member of Congress offers evidence of his own
legislative acts at trial, the government is entitled to introduce
rebuttal evidence narrowly confined to the same legislative
acts, and such rebuttal evidence does not constitute
questioning the member of Congress in violation of the
Clause.23
Renzi and the Bipartisan Legal Advisory Group (BLAG)
of the United States House of Representatives, appearing as
23
In light of our holding, it is irrelevant that Renzi elicited legislative act
testimony from other witnesses rather than testifying himself at trial.
Renzi’s decision to elicit legislative act testimony from a third party does
not shield him from the government’s introduction of rebuttal evidence
any more than a congressman who testifies about his own legislative acts
is shielded from cross-examination regarding those acts. See McDade,
28 F.3d at 294.
UNITED STATES V. RENZI 29
amicus curiae, contend that our conclusion amounts to a
contention that Renzi, by introducing evidence of his own
legislative acts, waived his Speech or Debate privilege. This,
Renzi and BLAG contend, cannot be because the Supreme
Court has held that waiver, if even possible, “can be found
only after explicit and unequivocal renunciation of the
[Speech or Debate Clause] protection.” Helstoski, 442 U.S.
at 490–91. We understand Helstoski’s admonition. But we
find the limited rebuttal evidence at issue here distinct from
a waiver of the Speech or Debate privilege based on a
willingness to testify before a grand jury.
In Helstoski, a Congressman charged with conspiracy
volunteered legislative act evidence to the grand jury in
response to the prosecutor’s questioning on multiple
occasions. Id. at 480–82. At trial, the government contended
that Helstoski had waived the protections of the Clause by
testifying before the grand jury and voluntarily producing
documentary evidence of legislative acts. Id. at 490–92. The
Court disagreed. It concluded that “Helstoski’s words and
conduct cannot be seen as an explicit and unequivocal waiver
of his immunity from prosecution for legislative acts[.]” Id.
at 492. But there, the Court was concerned about whether
Helstoski’s introduction of legislative acts in response to
questioning by a prosecutor in front of a grand jury triggered
a waiver of Helstoski’s evidentiary privilege at trial. The
Court had no occasion to decide whether a Member is
“questioned” in violation of the Clause where, as here, he has
the opportunity to introduce testimony in his own defense and
decides to open the door at trial by introducing evidence of
his legislative acts.
We now turn to the specific evidence at issue.
30 UNITED STATES V. RENZI
1
We first address the challenged piece of testimony
concerning Renzi’s support for The Aries Group’s legislation.
On cross-examination of Aries, Renzi elicited that he had
“cooled his support” for Aries’ land exchange legislation in
the summer of 2006, after RCC complained that Aries’
exchange “seemed to be moving more quickly than theirs.”
In Keene’s testimony the next day, the government elicited an
alternative explanation as to why Renzi’s ardor had cooled.
When Keene and Renzi became aware that Congressman
Cunningham was being prosecuted for public corruption,
Renzi told Keene that “he wanted to put the brakes on” the
Aries exchange because he had learned that Duke
Cunningham was being indicted for public corruption. This
testimony directly rebutted the legislative act testimony
elicited by Renzi himself regarding Renzi’s true reasons for
backing off of his support. We conclude that Renzi’s
introduction of this evidence opened the door for the
government to introduce rebuttal evidence on this point.24
24
Even if Renzi had not opened the door for the challenged testimony,
we would conclude that neither piece of evidence he challenges is
protected by the Clause. Keene’s statement that Renzi “wanted to put the
brakes on” the Aries exchange because he had learned that Duke
Cunningham was being indicted for public corruption was made before
Renzi made good on his promise to introduce a federal land exchange bill
that included tracts owned by the Aries Group. Therefore, the testimony
concerned only Renzi’s “promise to perform an act in the future,” which
is not a legislative act. Helstoski, 442 U.S. at 489. Nor is Keene’s
statement that Renzi “did not seem very excited and interested in the
Resolution Copper exchange,” which was based on her observation of
Renzi before he introduced the RCC bill, protected by the Clause. Again,
Renzi’s fading enthusiasm for his promise to introduce the RCC bill in the
future is not a protected legislative act. Id. While Renzi argues that under
United States v. Brewster, 408 U.S. 501 (1972), deciding whether to
UNITED STATES V. RENZI 31
We recognize, as we must, that “the Speech or Debate
Clause must be read broadly to effectuate its purpose of
protecting the independence of the Legislative Branch.”
United States v. Brewster, 408 U.S. 501, 516 (1972). But the
Clause has its limits. “[N]o more than the statutes we apply,
was its purpose to make Members of Congress super-citizens,
immune from criminal responsibility.” Id.Importantly, it was Renzi himself who injected into his
trial whether and to what extent he supported the Aries
exchange within Congress. Now, Renzi seeks the protections
of the Speech or Debate Clause, claiming the government was
not allowed to rebut Aries’ testimony and offer the jury
another possible reason Renzi cooled his support for the land
exchange—Duke Cunningham had been indicted and Renzi
did not want to be next. Taking our guidance from McDade,
we conclude that Renzi opened the door to the limited
rebuttal testimony adduced from Keene at trial by cross-
examining Aries on the same issue. In response, the
prosecution properly confined its rebuttal to the one material
point at issue: that the real reason Renzi cooled his support
for the land exchange was not because RCC had complained,
but because Cunningham had been indicted for corruption.
In light of the foregoing, we conclude that Renzi was not
impermissibly “questioned” about his legislative acts in
violation of the Clause.
support legislation is “clearly a part of the legislative process,” Brewster
suggests that a legislator’s decision to vote against a bill after it has been
introduced may be a protected legislative activity. See id. at 526–27.
32 UNITED STATES V. RENZI
2
The second piece of challenged testimony concerned
Renzi’s handling of the RCC land exchange after Renzi
learned that Hegner would not purchase the Sandlin property.
During cross-examination of Hegner, Renzi elicited that he
had “signed on to sponsor the [RCC] bill” even though the
bill no longer included the Sandlin property. Renzi further
elicited testimony that he did, in fact, introduce the bill in late
May 2005, although the bill did not move forward. Renzi’s
purpose in introducing this legislative act testimony was to
show that he continued to support the RCC exchange even
after Hegner refused to purchase the Sandlin property.
Two days later, Keene testified. When asked whether she
recalled any conversations with Renzi around April 2005
concerning his views about the RCC land exchange, Keene
stated that Renzi “did not seem very excited and interested in
the Resolution Copper exchange.” Keene’s testimony was
directly responsive to Hegner’s testimony that Renzi
spearheaded the introduction of the RCC bill. Because Renzi
himself elicited this legislative act testimony through cross-
examination of Hegner, we conclude that the government was
permitted to provide rebuttal evidence on this narrow point:
whether Renzi truly supported RCC’s bill within Congress
without the quid pro quo involving acquisition of the Sandlin
property. Because Renzi was not impermissibly questioned
in violation of the Clause, we find no Speech or Debate
Clause violation.25
25
Sandlin also argues that the district court’s improper admission of
evidence in violation of Renzi’s Speech or Debate privilege somehow
implicates his convictions. We need not decide whether Sandlin is
UNITED STATES V. RENZI 33
B
Kevin Messner was Renzi’s Chief of Staff from May
2003 to November 2004, before then serving as Congressman
Kolbe’s Chief of Staff. Because Congressman Kolbe invoked
his legislative privilege, the district court precluded Renzi
from questioning Messner about Kolbe’s legislative acts.
Renzi now argues that the district court inconsistently applied
the Speech or Debate Clause by allowing Keene to testify
extensively about her work in Renzi’s office but prohibiting
Messner from testifying about his interactions with Renzi
while Messner was serving as Kolbe’s Chief of Staff. Renzi
argues that the district court’s failure to balance Kolbe’s
Speech or Debate privilege against Renzi’s right to present a
defense violated Renzi’s Fifth and Sixth Amendment rights.
As a general principle, under the Fifth and Sixth
Amendments, a criminal defendant is guaranteed “a
meaningful opportunity to present a complete defense.”
United States v. Stever, 603 F.3d 747, 755 (9th Cir. 2010)
(internal quotation marks omitted). However, while Renzi
may waive his own Speech or Debate privilege, he cannot
waive the privilege of another Congressman. See U.S.
Football League v. Nat’l Football League, 842 F.2d 1335,
1374–75 (2d Cir. 1988) (“[T]he testimonial privilege that
members of Congress enjoy under the Speech or Debate
Clause of the Constitution, art. I, § 6, cannot be waived by
another member[.]”). This is so because, “[i]f the Clause
applies, it applies absolutely,” and there is no “balancing of
interests.” Renzi I, 651 F.3d at 1038 (citing Eastland v. U.S.
Servicemen’s Fund, 421 U.S. 491, 509–10 (1975)
entitled to seek refuge under Renzi’s Speech or Debate privilege. Since
Renzi is not entitled to relief under the Clause, neither is Sandlin.
34 UNITED STATES V. RENZI
(recognizing the “absolute nature of the speech or debate
protection”)). We conclude that Renzi’s right to present a
defense cannot override the Speech or Debate privilege of
another Congressman.
Messner’s proposed testimony concerned conversations
between Kolbe and Renzi regarding the proposed Aries bill.
These conversations took place while Messner was working
in Kolbe’s office. Because this testimony directly implicated
Kolbe’s legislative activities, the district court correctly
refused to allow Messner’s testimony. The district court was
not permitted to weigh Kolbe’s privilege against Renzi’s right
to present a defense.
Moreover, any additional testimony about the benefits of
including Sandlin’s property in a land exchange would have
been largely cumulative and of limited relevance. For weeks,
Renzi elicited from government and defense witnesses that
Fort Huachuca played a vital role in national security, that the
Fort’s water usage was a concern, and that retiring water
usage on Sandlin’s tract would aid the Fort. The parties
stipulated to those facts.26 At Renzi’s request, the court even
admitted an April 2005 email from Messner to Keene, in
which Messner expressed support for the Aries bill because
the land exchange would greatly help the Fort. Any
additional testimony on these points would have been largely
cumulative.
26
At trial, the government stipulated that: (1) “Fort Huachuca’s mission
was essential to the national security of the United States,” (2) “At all
times relevant to the indictment, Fort Huachuca was mandated to reduce
water usage in the Upper San Pedro Basin,” (3) “The Sandlin Property
was the last large agricultural water user in the area around the Fort’s
watershed,” and (4) “Retiring the water usage on the Sandlin property was
thus in the public interest and of value to Fort Huachuca.”
UNITED STATES V. RENZI 35
We hold that the district court properly declined to
balance Congressman Kolbe’s Speech or Debate privilege
against Renzi’s right to present a defense.27
C
Renzi also maintains he was unable to present a complete
defense because the district court excluded certain classified
materials regarding Renzi’s personal connection to Fort
Huachuca and his knowledge of its strategic value.
According to Renzi, the excluded evidence would have
shown that his insistence on including the Sandlin property in
the land exchange was motivated by his desire to protect the
Fort and its important activities.
Under the Classified Information Procedures Act (CIPA),
the government “may request the court to conduct a hearing
to make all determinations concerning the use, relevance, or
admissibility of classified information that would otherwise
be made during the trial.” 18 U.S.C. App. 3, § 6(a). The
district court reviewed the classified material in camera and
held a hearing on the defense request. CIPA does not “alter
the substantive rules of evidence, including the test for
relevance: thus, it also permits the district court to exclude
irrelevant, cumulative, or corroborative classified evidence.”
United States v. Passaro, 577 F.3d 207, 220 (4th Cir. 2009).
If the court authorizes disclosure of the classified
information, the government may move to substitute for such
classified evidence “a statement admitting relevant facts,” so
long as the statement “will provide the defendant with
substantially the same ability to make his defense.”
27
To the extent that Sandlin also joins Renzi on this issue, we reject
Sandlin’s challenge as well.
36 UNITED STATES V. RENZI
18 U.S.C. App. 3, § 6(c)(1). We review the district court’s
exclusion of classified information for abuse of discretion.
United States v. Miller, 874 F.2d 1255, 1275 (9th Cir. 1989).
We have carefully reviewed the classified materials filed
with this case and conclude the district court did not abuse its
discretion by excluding them. Although these materials may
have some limited relevance, they are cumulative of the
evidence Renzi actually presented at trial. See Fed. R. Evid.
403. Indeed, the evidence introduced at trial provided a
detailed narrative of how Renzi came to learn of the Fort’s
activities and their importance to national security. The
defense successfully introduced evidence including: (1) the
information contained in a detailed PowerPoint presentation
regarding the Fort’s activities that had been shown to Renzi
at a February 2003 briefing in Washington, D.C., (2) Matt
Walsh’s testimony regarding Renzi’s multi-day visit to the
Fort in January 2004,28 and (3) a copy of Renzi’s itinerary
from that visit. The parties also entered the detailed
stipulation regarding the training programs and activities that
take place at the Fort. The evidence cumulatively provided
Renzi with “substantially the same ability to make his
defense” as he would have had if the court had allowed the
introduction of the classified information itself. 18 U.S.C.
App. 3, § 6(c)(1); cf. United States v. Sedaghaty, 728 F.3d
885, 905 (9th Cir. 2013) (noting discovery substitution “need
not be of precise, concrete, equivalence,” so long as it placed
defendant “as nearly as possible, in the position he would be
in if the classified information . . . were available to him”
(internal quotation marks omitted)).
28
Over the government’s objection, Walsh even testified that Renzi was
invited to visit Guantanamo Bay and observe in the field interrogators
trained at Fort Huachuca.
UNITED STATES V. RENZI 37
Accordingly, we conclude the district court did not abuse
its discretion in excluding the actual classified information.
Renzi introduced ample similar evidence supporting his
theory of the case, the district court handled the issue
appropriately in conformance with the statute, and there was
no constitutional violation.
IV
Renzi contends that the government knowingly elicited
false testimony during its direct examinations of Philip Aries
and Joanne Keene in violation of Napue v. Illinois, 360 U.S.
264 (1959). On direct examination, Aries testified that he did
not know about the Sandlin property prior to meeting with
Renzi on April 15, 2005. On cross-examination, the defense
confronted Aries with Sandlin’s phone records, which
revealed that Aries and Sandlin had spoken the day before for
28 minutes. Aries acknowledged that he had “made a
mistake by one day.” A few days later, Keene testified that
Renzi “brought up” the Sandlin tract to Aries at the April 15
meeting and that “there was a discussion about getting
[Sandlin’s] contact information” for Aries. Once again, the
defense confronted Keene with Sandlin’s phone records. In
response, Keene conceded her lack of certainty, and
acknowledged that she was “not sure how the contact
information was exchanged.”
A defendant’s due process rights are violated when a
conviction is obtained through the knowing use of false
testimony. To establish a Napue violation, a defendant must
show: (1) that the testimony was actually false, (2) that the
government knew or should have known that it was false, and
(3) that the testimony was material, meaning there is a
“reasonable likelihood that the false testimony could have
38 UNITED STATES V. RENZI
affected the judgment of the jury.” United States v. Houston,
648 F.3d 806, 814 (9th Cir. 2011). The district court found
that Aries and Keene were, at worst, honestly mistaken and
did not perjure themselves.
We consider Renzi’s Napue claim de novo, but we review
factual determinations underlying the ruling for clear error.
See, e.g., United States v. Inzunza, 638 F.3d 1006, 1020 (9th
Cir. 2009).
We conclude that Renzi has failed to prove the third
prong of Napue because there is not a “reasonable likelihood”
that Aries’ or Keene’s statements affected the jury’s
judgment. See Houston, 648 F.3d at 814. First, defense
counsel effectively attacked the credibility of Aries and
Keene on cross-examination. Id. (finding no reasonable
likelihood that false testimony affected the jury where
“[d]efense counsel effectively attacked [the witness’s]
credibility”). Second, whether or not Sandlin spoke to Aries
on April 14 or April 15 was of marginal relevance when
compared to Renzi’s promises (a “free pass” through the
Natural Resources Committee) at the April 15 meeting. The
primary dispute at trial was not whether Renzi pushed
Sandlin’s tract on Aries, but why. The jury could reasonably
conclude that Renzi, not Aries, pushed the tract at the
meeting, even though Aries had heard about the tract from
Sandlin the day prior. Because the statements were not
“material,” we conclude that no Napue violation occurred.29
We also question whether Renzi met the first two prongs
of the Napue test. Mere inconsistencies or honestly mistaken
witness recollections generally do not satisfy the falsehood
29
Likewise, we reject Sandlin’s arguments on this basis.
UNITED STATES V. RENZI 39
requirement. See United States v. Bagley, 473 U.S. 667, 678
(1985). Renzi has provided no evidence that Keene or Aries
knew their testimony was inaccurate. Moreover, although the
existence of the phone records allow for the possibility that
the prosecutors knew, or should have known, that Keene and
Aries might testify falsely, there is no evidence that the
prosecutors actually knew they would. This distinguishes the
situation from that present in Hayes v. Brown, 399 F.3d 972,
980–81 (9th Cir. 2005) (en banc), where the prosecutor
deliberately withheld relevant information from his witness.
Accordingly, we doubt that Renzi has met the first two
prongs of the Napue test but do not decide the issue as he has
not met the third prong of the test.
V
We next address whether Renzi is entitled to a judgment
of acquittal or a new trial on the insurance fraud counts.
Renzi was convicted of conspiring to violate and violating
18 U.S.C. § 1033(a)(1) by lying to Virginia and Florida
insurance regulators. The statute prohibits a person “engaged
in the business of insurance” from “knowingly, with the
intent to deceive, mak[ing] any false material statement” “in
connection with any financial reports or documents presented
to any insurance regulatory official.”30 18 U.S.C.
30
In its entirety, 18 U.S.C. § 1033(a)(1) reads:
Whoever is engaged in the business of insurance whose
activities affect interstate commerce and knowingly,
with the intent to deceive, makes any false material
statement or report or willfully and materially
overvalues any land, property or security—(A) in
connection with any financial reports or documents
presented to any insurance regulatory official or agency
40 UNITED STATES V. RENZI
§ 1033(a)(1)(A). Renzi contends that the evidence presented
at trial was insufficient to support his insurance fraud
convictions because the government failed to prove that R&C
was “engaged in the business of insurance” or that the two
letters sent to Virginia and Florida insurance regulators
qualify as “financial” documents. Renzi also argues that he
is entitled to a new trial because the district court
misinstructed the jury on the meaning of the term “financial
reports or documents.” For the reasons that follow, we deny
Renzi the relief he seeks.
We review the sufficiency of the evidence de novo to
determine whether, 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. Chung, 659 F.3d 815, 823
(9th Cir. 2011) (citing Jackson, 443 U.S. at 319).
A
For over ten years, Renzi served as the owner and
operator of R&C, an insurance agency that marketed and sold
insurance policies, approved applicants for insurance, issued
certificates of insurance, and collected premiums on behalf of
insurance carriers. Now, Renzi contends that his insurance
fraud conviction under § 1033(a)(1) cannot stand because
R&C was not “engaged in the business of insurance” as
or an agent or examiner appointed by such official or
agency to examine the affairs of such person, and
(B) for the purpose of influencing the actions of such
official or agency or such an appointed agent or
examiner, shall be punished as provided in paragraph
(2).
UNITED STATES V. RENZI 41
required by the statute. We conclude otherwise. A rational
juror could have found that R&C, an insurance agency, was
engaged in the business of insurance.
The statute defines the term “business of insurance”
broadly to mean the writing of insurance or reinsuring of risks
“by an insurer, including all acts necessary or incidental to
such writing or reinsuring and the activities of persons who
act as, or are, officers, directors, agents, or employees of
insurers or who are other persons authorized to act on behalf
of such persons[.]” 18 U.S.C. § 1033(f)(1). An “insurer” is
“any entity the business activity of which is the writing of
insurance or the reinsuring of risks, and includes any person
who acts as, or is, an officer, director, agent, or employee of
that business.” Id. § 1033(f)(2).
The statute is not a model of clarity. Nonetheless, we
read the statute to require that, to be “engaged in the business
of insurance,” R&C must either: (1) write insurance or
reinsure risks, and meet the definition of an “insurer” under
§ 1033(f)(2); (2) conduct acts necessary or incidental to
writing or reinsuring; or (3) conduct any activity, as long as
the person is, acts as, or is authorized to act on behalf of, an
officer, director, agent, or employee of an insurer. See United
States v. Segal, 495 F.3d 826, 836 (7th Cir. 2007) (concluding
that defendant, an independent insurance broker, was
“engaged in the business of insurance as that term is broadly
defined in the statute to include ‘all acts necessary or
incidental to such writing or reinsuring’”); Beamer v. NETCO
Inc., 411 F. Supp. 2d 882, 889 (S.D. Ohio 2005) (recognizing
that the “business of insurance” includes “all acts necessary
or incidental to such writing or re[insuring]”).
42 UNITED STATES V. RENZI
We conclude that the evidence introduced at trial was
sufficient for a rational juror to find that R&C was “engaged
in the business of insurance” because Aly Gamble, R&C’s
Senior Underwriter, testified that R&C was authorized to act
on behalf of insurer Royal Surplus Lines Insurance Company.
Gamble explained that Royal Surplus had one policy for
R&C’s numerous clients, an “aggregate” or “master” policy.
She testified that R&C would inquire as to whether its new
clients were qualified for coverage under that policy. If so,
R&C would accept their funds and issue a binding certificate
of insurance almost immediately. After R&C took these
steps, the new clients “actually had insurance” and were
“bound.” A binder gives “an insured temporary coverage
while the application for an insurance policy is being
processed or while the formal policy is being prepared.”
BLACK’S LAW DICTIONARY 190 (9th ed. 2009). Thus,
Gamble’s testimony established that Royal Surplus was
bound to provide insurance coverage for the new client.
Viewing this testimony in the light most favorable to the
prosecution, Nevils, 598 F.3d at 1163–64, a reasonable juror
could conclude R&C acted on behalf of Royal Surplus by
binding it to insuring new clients, and therefore R&C was
engaged in the “business of insurance.” Accordingly, even
giving “business of insurance” the most narrow definition
possible, we have no doubt that R&C falls under the realm of
the statute.
Alternatively, we conclude that R&C conducted acts
necessary or incidental to the writing of insurance or
reinsuring of risks. R&C: (1) marketed, developed, and sold
Safeco insurance policies, (2) issued certificates of insurance
to clients, (3) underwrote insurance applications, (4) collected
insurance premiums from clients and passed those premiums
on to Safeco, and (5) reported pending claims to Safeco. All
UNITED STATES V. RENZI 43
of these actions are “necessary or incidental” to the writing of
insurance. R&C even went so far as to issue fake insurance
certificates to clients, which listed Renzi as Jimcor Insurance
Company’s “authorized representative.” And during the
period of time when clients were not covered by any policy,
R&C paid clients directly after purportedly adjusting any
outstanding claims.
While Renzi asks us to interpret the term “business of
insurance” narrowly, we find that such an interpretation is
contrary to the definition itself, which is considerably broader
than just insurers who issue policies and take on risk. Indeed,
the statute covers insurers, agents of insurers, and even those
who act as agents of insurers. See 18 U.S.C. § 1033(f)(1).
Moreover, such a narrow definition is contrary to the statute’s
broad purpose, which was to “make it a Federal crime to
defraud, loot, or plunder an insurance company.” See
139 Cong. Rec. E209–04, E210 (Statement of Rep. Dingell).
If it looks like an insurance agency and acts like an
insurance agency, it’s probably engaged in the business of
insurance. A rational juror could have found that R&C,
which went so far as to issue fraudulent insurance policies to
dupe unwitting clients into believing they were fully insured,
was engaged in the “business of insurance” as the term is
broadly defined in § 1033(f)(1).
B
After receiving inquiries from Virginia and Florida
insurance regulators, R&C responded in two letters, which
stated that the fake “Jimcor” certificates were the result of an
accidental computer error by a member of the office staff,
that the nonpayment of premiums was due to a coverage
44 UNITED STATES V. RENZI
dispute with Safeco, and that clients suffered no lapses in
coverage during this time. Renzi contends that these letters
do not qualify as “financial . . . documents” within the
meaning of 18 U.S.C. § 1033(a)(1)(A). We disagree.
The statute does not define the phrase “financial . . .
documents,”31 and case law provides only sparse guidance on
how to interpret this phrase. After considering the plain
language of the terms, we conclude that a “financial . . .
document” includes documents relating to the “management
of money.” BLACK’S LAW DICTIONARY 631 (9th ed. 2009).
This covers more than just a balance sheet or an income
statement. It includes any document that relates to the
financial health of a company.
The letters R&C sent to insurance regulators qualify as
“financial . . . documents” because they relate to the
“management of money” and R&C’s financial health. The
letters were an attempt to conceal Renzi’s failure to forward
insurance premiums to the insurance carriers because they
had been diverted to his congressional campaign. The letters
were also designed to conceal that Renzi’s insureds had no
legitimate insurance coverage for a portion of the year after
Safeco issued cancellation notices. These letters concealed
R&C’s financial problems and sought to mislead insurance
regulators as to whether Renzi should maintain his licensed
insurance agent status.
31
The statute is ambiguous as to whether the term “financial” modifies
both “reports” and “documents.” We assume without deciding that
“financial” modifies both terms. See United States v. Segal, No. 02-cr-
112, 2004 WL 2931331, at *4 n.10 (N.D. Ill. Dec. 13, 2004) (“We also
find that the term ‘financial’ modifies both reports and documents.”).
UNITED STATES V. RENZI 45
Moreover, false statements within the letters (namely, that
“[t]here was a delay in payment due to [a] dispute,” but “[a]ll
the while, the clients had insurance that was active and
available to them”) had important financial implications. Had
the letters been composed truthfully, they would have
revealed that Renzi had redirected clients’ insurance
premiums into his congressional campaign, and that clients’
insurance coverage with Safeco had lapsed for a few months
based on nonpayment. This attempt to conceal R&C’s
financial issues directly related to R&C’s “management of
money.” Our decision comports with the purpose of
§ 1033(a), which was to punish knowing falsehoods that
obstruct the investigations of insurance regulators. See
139 Cong. Rec. E209–04 (Statement of Rep. Dingell) (“States
apparently are not collecting adequate information,
investigating wrongdoing, or taking legal action against the
perpetrators of insurance insolvency.”).
We conclude that the evidence was sufficient for a
reasonable juror to find that the letters R&C sent to Virginia
and Florida insurance regulators were “financial . . .
documents.”
C
Renzi argues that, over his objection, the district court
misinstructed the jury by stating that “[t]he terms ‘financial
reports’ or ‘financial documents’ include any documents
concerning the management of money or the potential
financial health and viability of a business or that relate to the
46 UNITED STATES V. RENZI
financial position of a business.”32 Renzi contends that this
“unbounded” definition left the jury free to conclude that
virtually any document satisfied this element and that,
therefore, he is entitled to a new trial.
District courts have wide discretion in crafting jury
instructions. United States v. Humphries, 728 F.3d 1028,
1032 (9th Cir. 2013). We review de novo whether a jury
instruction correctly states the law. United States v. Berry,
683 F.3d 1015, 1020 (9th Cir. 2012). Renzi is entitled to a
new trial if the instruction actually given was misleading or
inadequate to guide the jury’s deliberation. United States v.
Garcia-Rivera, 353 F.3d 788, 792 (9th Cir. 2003).
The district court’s definition of “financial documents”
was a correct statement of the law. Financial documents do,
in fact, “include” the documents mentioned by the court.
Humphries, 728 F.3d at 1032. The district court was not
required to explicitly state which documents were included or
excluded from the statute’s scope. Because the term
“financial . . . documents” is undefined in the statute, the
district court was permitted to rely on the plain language of
the terms along with supporting case law. Thus, the district
court did not err in instructing the jury that the definition of
“financial reports or documents” included “documents
concerning the management of money or the potential
financial health and viability of a business or that relate to the
financial position of a business.”
32
The district court’s instruction on the definition of “financial reports
or documents” was guided by its reading of United States v. Goff, 598 F.
Supp. 2d 1237, 1238 (M.D. Ala. 2009) (“When false statements in a
document are so connected to the potential financial health and viability
of a business, they surely fall within the scope of § 1033(a)[.]”).
UNITED STATES V. RENZI 47
VI
Next, Renzi challenges his conviction for engaging in a
pattern of racketeering activity in violation of 18 U.S.C.
§ 1962(c) (“RICO”). This count was predicated on three
alleged acts of racketeering: (1) Racketeering Act One: “Use
of Insurance Premiums Held in Trust to Fund First
Congressional Campaign;” (2) Racketeering Act Two:
“Scheme to Deprive the United States of Honest Services,
and to Extort Constituents;” and (3) Racketeering Act Three:
“Misappropriations from Spirit Mountain Insurance
Company.” The jury acquitted Renzi of Racketeering Act
Three, but found that Renzi committed many of the predicate
acts alleged in Racketeering Acts One and Two.
Racketeering Act One charged Renzi with executing a
“scheme and artifice to defraud” through the use of interstate
wires, in violation of 18 U.S.C. § 1343 (wire fraud), and
through the use of interstate mailings, in violation of
18 U.S.C. § 1341 (mail fraud). In describing the scheme, the
indictment stated that Renzi “misappropriat[ed] insurance
premium funds held in trust by [R&C] and divert[ed] those
funds to his own benefit.” This charge was based on Renzi’s
transfer of over $400,000 from R&C, some of which came
from client insurance premiums, to Renzi’s personal accounts
to fund his congressional campaign.
Renzi contends that the evidence was insufficient to
convict him because the government did not, and could not,
prove that Renzi “misappropriated” funds held “in trust” by
another. Renzi relies on United States v. Lequire, where we
held that Dwayne Lequire, R&C’s accountant, was not guilty
of “embezzlement” under 18 U.S.C. § 1033(b)(1) because
Patriot Insurance did not hold funds “in trust” for the insurer,
48 UNITED STATES V. RENZI
but instead was subject to a debtor-creditor relationship.
672 F.3d at 728–29. Referencing Lequire, Renzi contends
that R&C did not hold funds “in trust” for North Island;
instead, the funds belonged to R&C, subject to a debtor-
creditor relationship. Renzi also argues that Lequire “makes
clear” that misappropriation, like embezzlement, requires that
funds be held “in trust.”
Renzi overstates the holding of Lequire. While Lequire
specifically dealt with embezzlement under § 1033(b)(1), it
did not discuss misappropriation. And here, Renzi was not
charged with misappropriation or embezzlement. He was
charged with mail and wire fraud. Neither mail nor wire
fraud requires any express relationship, either fiduciary or
trust, between the victim and the defendant. See 18 U.S.C.
§§ 1341, 1343. Instead, the fraud statutes require proof of a
scheme to obtain money by means of false representations.
Id. Renzi does not dispute that a rational juror could have
found the evidence adduced at trial satisfied those elements.
“We have repeatedly held that language that describes
elements beyond what is required under statute is surplusage
and need not be proved at trial.” See Bargas v. Burns,
179 F.3d 1207, 1216 n.6 (9th Cir. 1999). Here, we conclude
that the indictment’s use of the phrases “misappropriation”
and “in trust” were surplusage. Those terms were used only
in describing the overall scheme to defraud, and were not
mentioned in the description of any of the predicate acts.
Because the government was not required to show that R&C
“misappropriated” funds held “in trust” for another in order
to prove mail or wire fraud, this additional language in the
indictment was surplusage and could be disregarded. Id.UNITED STATES V. RENZI 49
We also conclude that the district court did not
constructively amend the indictment by omitting the “in
trust” language from the jury instructions. Because the “in
trust” language was surplusage, removal of this language
from the jury instructions was not error. See United States v.
Garcia-Paz, 282 F.3d 1212, 1215–16 (9th Cir. 2002).
VII
In bribery, extortion, and honest-services fraud cases,
§ 2C1.1 of the United States Sentencing Guidelines instructs
a sentencing court to enhance a defendant’s offense level
based on the “greatest” of “[1] the value of the payment, [2]
the benefit received or to be received in return for the
payment, [3] the value of anything obtained or to be obtained
by a public official or others acting with a public official, or
[4] the loss to the government from the offense[.]” U.S.S.G.
§ 2C1.1(b)(2). The district court found the ten-level
enhancement “applicable under prong one; that is, the value
of the $200,000 payment on the counts of conviction that
Renzi received in exchange for the influence exerted to the
sale of the property.”
Renzi and Sandlin challenge the district court’s
calculation of value under § 2C1.1(b)(2). They contend that
the district court erred by concluding that the “value of the
payment” was $200,000 (the amount of the debt to Renzi that
Sandlin paid off), rather than zero (the net value to Renzi).
We review a district court’s method of calculating loss under
the Sentencing Guidelines de novo. United States v. Del
Toro-Barboza, 673 F.3d 1136, 1153–54 (9th Cir. 2012). We
review the district court’s determination of the amount of loss
for clear error. Id.50 UNITED STATES V. RENZI
Renzi and Sandlin base their argument on the Application
Notes to § 2C1.1(b), which state that “[t]he value of ‘the
benefit received or to be received’ means the net value of
such benefit.” U.S.S.G. § 2C1.1, app. n.3 (emphasis added).
They also rely on United States v. White Eagle, where we
found that the district court erred in equating the value of a
loan modification to a cash payment of the same size.
721 F.3d 1108, 1121 (9th Cir. 2013). In White Eagle, we
concluded that the district court should have considered the
“value of the benefit” received by the defendant, not just the
face amount of the transaction. Id. at 1122.
Renzi and Sandlin’s arguments ignore both the plain
language of the Guideline itself and the district court’s
colloquy. The Guideline instructs the district court to
consider the “greatest” of four calculation methods. And
here, the district court stated that it was basing its conclusion
on “prong one,” “the value of the $200,000 payment.”
According to the jury, the value of the payment from Aries to
Sandlin to Renzi was $200,000. Application Note Three does
not aid the court in interpreting prong one, since the Note
only discusses the proper interpretation of the phrase “the
benefit received,” which appears in prong two of the
Guideline. White Eagle does not compel a contrary decision
because it focuses exclusively on prong two.
Renzi and Sandlin argue that the “value of the payment”
prong must also be understood to incorporate the net value
principle since “[t]here is no basis for treating it differently”
and “any other interpretation would produce anomalous
results.” But the Application Note is clear in its scope: by
its terms, it applies only to the “benefit received” prong.
Thus, we hold that the district court did not err in imposing a
UNITED STATES V. RENZI 51
ten-level enhancement under § 2C1.1(b)(2) to both Renzi and
Sandlin.
VIII
James Sandlin, Renzi’s codefendant, challenges the
sufficiency of the evidence to support his convictions for
conspiracy to engage in wire fraud, Hobbs Act extortion, and
engaging in monetary transactions with criminally derived
funds. Primarily, he asserts that there is no evidence that he
agreed with Renzi to conceal their prior business relationship.
Sandlin contends that the evidence shows that he was an
innocent businessman engaging in financial transactions. We
review de novo whether, 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. Nevils, 925 F.2d at 1231; Jackson,
443 U.S. at 319.
Sandlin claims that he was always forthright in his
dealings with Hegner and Aries. He points to the fact that he
explicitly told Hegner that he and Renzi continued to have
“business dealings.” And when he and Aries began
discussing the land exchange, he volunteered that he and
Renzi had a “very, very close working relationship and
personal relationship” because his wife had attended high
school with Renzi. According to Sandlin, this free sharing of
information was consistent with his role as an innocent
businessman.
Based on our own de novo review of the evidence before
the jury, it is impossible to conclude that no reasonable juror
would have voted to convict Sandlin. Most importantly, the
government was not required to prove the existence of an
52 UNITED STATES V. RENZI
explicit agreement to prove conspiracy. Iannelli v. United
States, 420 U.S. 770, 777 (1975). Instead, the existence of an
agreement to commit an unlawful act can “be inferred from
the facts and circumstances of the case.” Id. at 777 n.10.
Here, while the jury was presented with evidence that
Sandlin volunteered information about his relationship with
Renzi, the jury also heard that: (1) Sandlin never told RCC or
Aries that he owed Renzi $700,000 plus interest on a personal
note or that he planned to repay his debt to Renzi with some
of the proceeds; (2) Sandlin repaid Renzi with a $200,000
check made payable to Renzi Vino, even though the debt was
payable to Renzi personally; (3) Sandlin paid Renzi
immediately upon receiving the earnest money from Aries;
(4) Sandlin spoke to Renzi seven times on the day of the first
payment; (5) Sandlin made a second repayment to Renzi with
a $533,000 check made payable to Patriot Insurance with the
notation “insurance payment,” even though the debt was
payable to Renzi personally; and (6) Sandlin insisted in a
phone call with Aries that “Rick was involved in that land in
no way, shape, or fashion.” Finally, when Sandlin began
receiving phone calls from investigative reporters looking
into the sale of his property, he immediately called Aries to
provide instructions on how to respond to media inquiries.
The attempt to lay off the deal on The Nature Conservancy
could easily be viewed by a reasonable jury as proof of
consciousness of guilt over how the transaction had been
structured.
That conduct was powerful proof of criminal intent. The
jury rejected Sandlin’s defense that the money he received
from The Aries Group was the result of a legitimate, innocent
property sale. We conclude that the evidence was sufficient
to support Sandlin’s convictions.
UNITED STATES V. RENZI 53
IX
The Constitution and our citizenry entrust Congressmen
with immense power. Former Congressman Renzi abused the
trust of this Nation, and for doing so, he was convicted by a
jury of his peers. After careful consideration of the evidence
and legal arguments, we affirm the convictions and sentences
of both Renzi and his friend and business partner, Sandlin.
AFFIRMED.
IKUTA, Circuit Judge, specially concurring:
“If it looks like an insurance agency and acts like an
insurance agency,” Maj. Op. at 43, it might be a brokerage
company whose activities are not covered by 18 U.S.C.
§ 1033.
Section 1033 is drafted narrowly. It criminalizes conduct
by persons who are “engaged in the business of insurance.”
18 U.S.C. § 1033(a)(1). The definition of “business of
insurance” is, on its face, limited to activities by insurers.
The statute defines the term to mean either “the writing of
insurance,” or “the reinsuring of risks,” in both cases, “by an
insurer.” 18 U.S.C. § 1033(f)(1). It defines “insurer” to
mean “any entity the business activity of which is the writing
of insurance or the reinsuring of risks.” Id. § 1033(f)(2). The
“business of insurance” includes activities by employees and
agents of an insurer, as well as activities “incidental to”
writing insurance or reinsuring risks that may be undertaken
by an insurer. Id. § 1033(f)(1). Nothing in the statute
54 UNITED STATES V. RENZI
suggests that someone who is not an insurer or authorized to
act on an insurer’s behalf is in the “business of insurance.”
While a broker is involved in the insurance industry, its
business does not generally meet the definition of “business
of insurance” for purposes of § 1033(f). In general,“the legal
distinction between an ‘agent’ and a ‘broker’ is that an
‘agent’ transacts insurance as the agent of the insurer and a
‘broker’ transacts insurance as the agent of the insured with
regard to a particular insurance transaction.” 2 Jeffrey E.
Thomas New Appleman on Insurance Law Library Edition
§ 1502[1][a] (LexisNexis 2009) (emphasis in original);
Black’s Law Dictionary 220 (9th ed. 2009) (“insurance
broker” defined as “a person who, for compensation, brings
about or negotiates contracts of insurance as an agent for
someone else, but not as an officer, salaried employee, or
licensed agent of an insurance company.”).
To be sure, a broker could also be an agent for an
insurance company. Whether an entity is a broker or an
insurance agent (or both) depends on “the particular facts of
the case.” Curran v. Indus. Comm’n of Ariz., 752 P.2d 523,
526 (Ariz. Ct. App. 1988); see also Sparks v. Republic Nat.
Life Ins. Co., 647 P.2d 1127, 1140 (Ariz. 1982). Courts apply
agency principles of the applicable state to determine whether
a broker is also serving as an agent of an insurance company.
See United States v. Segal, 495 F.3d 826, 836 (7th Cir. 2007)
(rejecting defendants’ claim that they were brokers and
therefore not “engaged in the business of insurance” under
§ 1033(b), in light of Illinois law that a broker could become
an agent of the insured under some factual circumstances)
(citing Capitol Indem. Corp. v. Stewart Smith Intermediaries,
Inc., 593 N.E. 2d 872 (Ill. 1992)); see also United States v.
Lequire, 672 F.3d 724, 728 (9th Cir. 2012) (looking to
UNITED STATES V. RENZI 55
Arizona law to determine that an insurance broker did not
hold property in trust for an insurer for purposes of § 1033).
Under the Arizona law applicable here, see id., a broker does
not become the agent of an insurer simply because “the
insurer contemplates receiving insurance business from
brokers.” Curran, 752 P.2d at 527. Nor does a broker
become an insurance agent if the broker merely solicits
applications for the insurer and secures “from the insurer’s
agent the policy which was issued.” Id.But the majority here does not determine whether R&C
is writing insurance or reinsuring risks, or whether R&C is an
agent of Safeco or Royal Surplus under principles of Arizona
agency law. Instead, the majority relies on an expansive
reading of § 1033 that could impose criminal liability not just
on an insurer but also on any third party who interacts with
insurers. Specifically, the majority focuses on the language
defining the “business of insurance” as writing or reinsuring
risks by an insurer “including all acts necessary or incidental
to such writing or reinsuring.” 18 U.S.C. § 1033(f)(1).
According to the majority, this means that any action by a
third party that is “necessary or incidental to” an insurer’s
business is part of the “business of insurance.” Maj. Op. at
42–43. Because a broker’s business is to help customers
obtain insurance, and such activities are incidental to writing
insurance, the majority’s interpretation appears to make
brokerage businesses per se subject to liability under § 1033,
regardless of whether a particular broker is acting as an agent
of an insurer. Indeed, the majority’s interpretation may make
even a policy holder who writes a regulator and falsely
accuses an insurance company of stealing his money liable
under § 1033. The policy holder’s letter is likely a “financial
document” under our opinion, and receiving an insurance
56 UNITED STATES V. RENZI
policy is “incidental to” the insurance company’s business of
insuring and reinsuring.
There is no indication Congress intended the statute to be
read this broadly. The most natural reading of the “including
all acts” language in § 1033(f)(1) (emphasis added) is that it
refers to other acts “by an insurer.”1 This could include
activities typically undertaken as part of an insurer’s business,
such as drafting financial reports or communicating with
regulators, because such acts are “incidental to” the insurance
company’s business of insuring and reinsuring. By contrast,
when Congress wanted the statute to cover third parties such
as brokers, it said so directly. In another subsection of the
same statute, 18 U.S.C. § 1033(b)(1), Congress expressly
imposed liability on third parties who are not insurers. In that
section, the statute provides that a person who is either
“engaged in the business of insurance” or “involved (other
than as an insured or beneficiary under a policy of insurance)
in a transaction relating to the conduct of affairs of such a
1
The full definition states:
(1) the term “business of insurance” means–
(A) the writing of insurance, or
(B) the reinsuring of risks,
by an insurer, including all acts necessary or incidental
to such writing or reinsuring and the activities of
persons who act as, or are, officers, directors, agents, or
employees of insurers or who are other persons
authorized to act on behalf of such persons.
18 U.S.C. § 1033(f)(1).
UNITED STATES V. RENZI 57
business” can be held liable. This latter category would
include brokers, and expressly excludes a policy holder.
Although I disagree with the majority’s overly broad
reading of the statute, I agree with the result. A broker can
become an insurance agent based “upon the particular facts
of the case” if the insurer’s actions “create actual or apparent
authority for a broker to act on its behalf.” Curran, 752 P.2d
at 526. Here, R&C engaged in a range of activities as an
insurance broker, some (but not all) of which may be
evidence that R&C acted as an agent of the insurer.2 Maj.
Op. at 42–43. At a minimum, there was evidence at trial
indicating that R&C could bind Royal Surplus, i.e., issue a
contract of insurance, and a person who has the power “to
obligate the insurer upon any risk” is an agent of the insurer.
Curran, 752 P.2d at 526. Accordingly, viewing the evidence
in the light most favorable to the government, a reasonable
juror could conclude that R&C was an agent of Royal
Surplus, and thus falls under the definition of person involved
in the “business of insurance.” I therefore concur with this
portion of the majority’s opinion on these limited grounds.
2
The majority’s claim that R&C “even went so far as to issue fake
insurance certificates to clients, which listed Renzi as Jimcor Insurance
Company’s ‘authorized representative,’” Maj. Op. at 43, erroneously
confuses a broker’s work with an insurer’s work. The fake Certificate of
Liability Insurance shows that R&C was the “producer” which is
consistent with being a broker, see Curran, 752 P.2d at 524, 527, and
Renzi signed the certificate as the authorized representative of R&C, (not
Jimcor) certifying only that if Jimcor canceled the policy, R&C would not
be liable.