Case 3:18-cr-04683-GPC Document 176 Filed 06/08/20 PageID.1749 Page 1 of 45
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF CALIFORNIA
`
`ROBERT S. BREWER, JR.
`United States Attorney
`MELANIE K. PIERSON
`SABRINA L. FEVE
`RANDY S. GROSSMAN
`Assistant United States Attorney
`California Bar Nos. 112520/226590/177890
`880 Front Street, Room 6293
`San Diego, CA 92101-8893
`Tel: (619) 546-6786
`Sabrina.Feve@usdoj.gov
`Attorneys for the United States
`
`
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`UNITED STATES OF AMERICA,
`
`
`Plaintiff,
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`v.
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`
`JACOB BYCHAK (1),
`
`MARK MANOOGIAN (2),
`
`MOHAMMED ABDUL QAYYUM (3),
`PETR PACAS (4),
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`
`Defendants.
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`
`
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`
`
`
`Case No. 18cr04683-GPC
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`GOVERNMENT RESPONSE IN
`OPPOSITION TO DEFENDANTS’
`MOTION TO DISMISS THE WIRE
`FRAUD COUNTS FOR FIFTH
`AMENDMENT DUE PROCESS &
`SIXTH AMENDMENT NOTICE
`VIOLATIONS
`
`Honorable Gonzalo P. Curiel
`
`Date: June 26, 2020
`Time: 2:30 p.m.
`
`
`
`
`INTRODUCTION
`I.
`The Supreme Court has ruled that “property,” for purposes of the wire and mail
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`fraud statutes, is “something of value” or a “valuable entitlement.” Pasquantino v.
`United States, 544 U.S. 349, 355, 357 (2005). The government therefore bears the
`burden of proving at trial that, under the wire fraud statute’s first essential element,
`Defendants’ scheme to obtain property by means of false or fraudulent representations
`involved obtaining something of value or a valuable entitlement. Ninth Cir. Model Jury
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`Instr. § 8.124. To decide whether the government has met this burden via a motion to
`dismiss would impermissibly invade the province of the jury. Rather, the proper
`challenge to the sufficiency of the government’s evidence is via a Rule 29 motion.
`
`Defendants, however, argue that the Court can either hold a hearing on whether
`IP addresses are property for purposes of the wire fraud statute via Rule 104 of the Rules
`of Evidence (“Rule 104”), or decide the issue as a question of law before trial under the
`doctrines of void-for-vagueness and fair notice. Rule 104, however, only permits the
`Court to hold hearings on “preliminary questions” about the admissibility of evidence.
`It does not permit the Court to determine an ultimate issue, like whether IP addresses
`are something of value and therefore property under 18 U.S.C. § 1343.
`is similarly
`Defendants’ void-for-vagueness and fair notice argument
`unsupported. When, as here, Defendants are not raising a First Amendment challenge
`and the statute in question does not incorporate by reference any other law or
`constitutional provision, the void-for-vagueness and fair notice challenges are one and
`the same. United States v. Lanier, 520 U.S. 259, 267 (1997). The Supreme Court and
`Ninth Circuit have recognized only two ways to argue void-for-vagueness: as a facial
`or as an as-applied challenge. United States v. Williams, 553 U.S. 285, 304 (2008);
`United States v. Purdy, 264 F.3d 809, 811 (9th Cir. 2001). Defendants do not raise a
`facial attack, perhaps because the Supreme Court has repeatedly held that property, for
`purposes of the mail and wire fraud statutes, is given its “ordinary or natural meaning”
`and includes “every species of valuable right and interest.” Pasquantino, 544 U.S. at
`255-56 (citations omitted). Nor do they raise an as-applied challenge, as they recognize
`it would be premature. ECF No. 169-1 at 7. Defendants opt instead for a third type of
`challenge, citing “vagueness as-applied to the face of the indictment” to argue the
`indictment must allege not only the elements of the charge, but also evidence of why IP
`addresses are property. The Court, however, has already rejected this argument, finding
`that “the Government need not allege in the indictment its case theory or the evidence
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`Gov. Opp. to Defs.’ Mot. to Dismiss the Wire Fraud
`Counts under Void-for-Vagueness & Fair Notice
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`underlying the charges” to satisfy “the ‘fair notice’ requirement.” ECF No. 160 at 15
`(quoting United States v. Holmes, 2020 WL 666563, at *6 (N.D. Cal. Feb. 11, 2020)).
`Defendants’ motion proffers a series of factual assertions that they claim are
`undisputed and indisputable. As will be discussed below, the government disagrees with
`most of the material statements that Defendants rely on, particularly their contention
`that ARIN does not recognize the possessory interests of IP address registrants. The
`larger problem with Defendants’ factual assertions, however, is that they do not resolve
`the question of whether IP addresses are a “valuable entitlement” for purposes of wire
`fraud and omit or ignore relevant facts. At trial, the government will introduce evidence
`showing that Defendants repeatedly stated they “own[ed]” the blocks of IP addresses at
`issue in this case. The evidence will also show that Defendants paid hundreds of
`thousands of dollars to obtain these IP addresses, used the IP addresses to make millions
`of dollars sending commercial email, and kept using the IP addresses even after they
`were publicly flagged as “hijacked” because of how valuable they were.
`A hearing on these facts in advance of trial would usurp the jury’s fact-finding
`role. It would also be a waste of resources. To provide context for both the CAN-SPAM
`and wire fraud counts, the government will have to educate the jury about IP addresses,
`including by showing how IP addresses work, how IP addresses are distributed, and
`how ARIN records and publishes information for IP address registrants. Any pretrial
`hearing or evidentiary ruling on Defendants’ motion would therefore be both redundant
`and unwarranted. To avoid a hearing, Defendants ask the Court to take judicial notice
`of portions of documents that echo their position that IP addresses cannot be property.
`Their excerpts are impermissibly offered for the truth of the matter asserted, however,
`and not properly before the Court. For these reasons and those described in more detail
`below, Defendants’ motion to dismiss the wire fraud counts, their request for an
`evidentiary hearing, and their requests for judicial notice should be denied.
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`Gov. Opp. to Defs.’ Mot. to Dismiss the Wire Fraud
`Counts under Void-for-Vagueness & Fair Notice
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`Case 3:18-cr-04683-GPC Document 176 Filed 06/08/20 PageID.1752 Page 4 of 45
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`II. RELEVANT PROCEDURAL BACKGROUND1
`
`On October 31, 2018, a federal grand jury in the Southern District of California
`returned a ten-count indictment charging defendants Jacob Bychak, Mark Manoogian,
`Mohammed Abdul Qayyum, and Petr Pacas (collectively, “Defendants”) with
`Conspiracy, in violation of Title 18, United States Code, Section 371; four counts of
`Wire Fraud, in violation of Title 18, United States Code, Section 1343; five counts of
`Electronic Mail Fraud, in violation of Title 18, United States Code, Section 1037(a)(5)
`(the “CAN-SPAM” counts), and Criminal Forfeiture.
`The indictment’s ten charges all relate to Defendants’ hijacking of legacy Internet
`Protocol (IP) addresses and the use of the purloined IP addresses to send spam.
`Defendants have filed numerous pretrial motions in this case. Two prior motions
`provide context for the motion now before the Court: the motion to dismiss the CAN-
`SPAM counts and the motion to dismiss the wire fraud counts for failure to state a claim.
`A. Defendants’ Motion to Dismiss the CAN-SPAM Counts
`In March 2019, Defendants filed a motion to dismiss the CAN-SPAM counts
`(Counts 6-10) as void for vagueness both facially and as-applied and for failing to state
`a claim, which the United States opposed. ECF Nos. 69, 154. Several months later, the
`parties filed competing expert declarations, with the United States submitting the
`declaration of John Curran, the CEO of ARIN, and Defendants submitting the
`declaration of Marc Lindsey, an IPv4 market advisor and attorney. ECF Nos. 107-1,
`116. Prior to the hearing on their motion, Defendants indicated that they were not
`requesting an evidentiary hearing. In response, on August 27, 2019, the United States
`submitted briefing advising the Court that it agreed not to request a hearing based upon
`a discrete set of undisputed “relevant and material facts.” ECF No. 122 at 2. In
`
`
`1 The Court is familiar with, and the United States adopts by reference, the Statement
`of Facts submitted in support of its opposition to Defendant’s Rule 12 Motion to
`Dismiss Wire Fraud Counts. ECF No. 150 at 3-4.
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`Gov. Opp. to Defs.’ Mot. to Dismiss the Wire Fraud
`Counts under Void-for-Vagueness & Fair Notice
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`particular, the United States listed the following material facts that both Curran and
`Lindsey agreed upon: (1) ARIN’s predecessors were responsible for assigning IP
`addresses and keeping track of them; (2) these prior authorities maintained a listing of
`IP address allocation to “ensure that no single address was allocated, or used by, more
`than one network” and to provide public listing of the registrants’ contact information;
`(3) ARIN currently maintains this listing, or registry, and the registry includes
`information for legacy (i.e. pre-ARIN) IP address holders; and 4) the registry is publicly
`available. Id. at 2-3. After identifying the undisputed facts its opposition relied on, the
`United States noted a disagreement between Curran and Lindsey regarding “property
`rights in [pre-ARIN] IP addresses under contract law” and advised the Court and
`Defendants that this disagreement was “immaterial to the Court’s determination of
`whether the term ‘registrant’ is unconstitutionally vague. This Court need not embroil
`itself in determining property rights in IP addresses under contract law.” Id. at 3-4.
`The Court heard argument on the CAN-SPAM motion on October 24, 2019. ECF
`No. 135. On February 28, 2020, the Court denied Defendants’ facial void-for-vagueness
`challenge and Rule 12 motion to the CAN-SPAM counts, finding that the “words used
`in the statute are given their ordinary meaning” and “the language of [1037](b)(5) is not
`ambiguous.” ECF No. 154 at 18. The Court denied without prejudice Defendants’ as-
`applied challenge, finding it “premature” because, at the “pre-trial phase,” the “Court
`lacks the factual predicate necessary,” such as “factual issues including how pre-1997
`addresses function . . . and the terms of ARIN’s service agreements, that may bear upon
`the Court’s decision.” Id. at 15.
`
`The Court’s Order did not refer to either the Curran or the Lindsey declarations.
`At a February 2020 hearing on Defendants’ motion to dismiss the wire fraud counts,
`government counsel asked, “if the court is actually making factual findings, if it’s
`referring to the declaration of John Curran which is outside the scope of the indictment,”
`to which the Court replied, “I’m not.” Ex. A, Feb. 20, 2020 Hrg. Tr., at 7. During an
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`Gov. Opp. to Defs.’ Mot. to Dismiss the Wire Fraud
`Counts under Void-for-Vagueness & Fair Notice
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`April 8, 2020 telephone conference, the Court again confirmed that it had not relied
`upon either declaration: “[T]he Court saw that what we had was this dispute between
`the experts as to what was and what wasn’t. And, at the end of the day, I relied
`essentially on dictionary definitions, which are wholly appropriate where there’s a void-
`for-vagueness argument.” Ex. B, Apr. 8, 2020 Hrg. Tr., at 14-15.
`B. Defendants’ Motion to Dismiss the Wire Fraud Counts
`On January 23, 2020, Defendants filed a motion to dismiss the wire fraud charges
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`(Counts 2-5) for failure to state an offense based on their argument that IP addresses are
`not property for purposes of the wire fraud statute. ECF Nos. 149, 160. The Court denied
`the motion in a written opinion issued on April 8, 2020, finding the government had
`adequately alleged § 1343’s statutory element that defendants sought to obtain money
`or property and noting that it lacked a factual record to determine whether IP addresses
`“are ‘property’ for purposes of the wire fraud statute.” ECF No. 160 at 2.
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`At a telephonic status hearing on April 8, 2020, after learning that the Court had
`denied the motion to dismiss the wire fraud counts, Defendants asked again to have the
`wire fraud charges dismissed. In particular, they requested the Court rule, as a matter of
`law, that IP addresses were not property within the meaning of the wire fraud statute
`based on undisputed facts. The Court noted that considering evidence outside the
`indictment for a facial void-for-vagueness challenge to the CAN-SPAM Act counts was
`very different from considering the extrinsic facts urged by the defense in their motion
`to dismiss the wire fraud counts. The Court also observed that, “I allowed any number
`of things to be filed—and keeping in mind that I didn’t rely upon 98 percent of them—
`to me, doesn’t change the conclusion.” Ex. B at 15.
`
`At the April 8, 2020 status hearing, the Court requested briefing from the parties
`regarding its legal authority to consider facts outside the record on a motion to dismiss
`the wire fraud counts. Id. at 6-7, 11-13. In particular, the Court asked, “how will we
`confront this question” of whether “IP blocks are or are not property,” and would
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`Gov. Opp. to Defs.’ Mot. to Dismiss the Wire Fraud
`Counts under Void-for-Vagueness & Fair Notice
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`determination of this question “invade[] the province of the jury.” Id. at 6, 9. The Court
`set a date for a hearing on these issues for June 26, 2020. Defendants, seeking a hearing
`under Rule 104 and setting forth their argument that the wire fraud counts should be
`dismissed for void-for-vagueness, filed their brief on May 18, 2020. ECF No. 169. This
`brief addresses the Court’s questions and Defendants’ arguments.
`III. LEGAL BACKGROUND: THE SUPREME COURT’S DEFINTION OF
`“PROPERTY” IN THE MAIL AND WIRE FRAUD STATUTES
`At the February 20, 2020 hearing on Defendants’ motion to dismiss the wire fraud
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`counts, the Court pointedly noted that “everyone was focused on the substance of” what
`an “IP address” was. Ex. A at 19. The Court, however, repeatedly observed that the
`relevant question was whether IP addresses “qualify or constitute property for purposes
`of” the mail and wire fraud statutes. Id. at 11; ECF No. 160 at 1, 2, 16. The Court’s
`emphasis on this point signaled that, in arguing over whether IP addresses were more
`like the copyrights in Dowling v. United States, 473 U.S. 207 (1985), or the domain
`names in Kremen v. Cohen, 337 F.3d 1024, 1029 (9th Cir. 2003), the parties had failed
`to identify the threshold legal issue: what is “property” for purposes of §§ 1343 and
`1341.2 The government apologizes for this oversight; this section seeks to rectify its
`earlier failure to identify and address this threshold issue.
`
`As the Court appears to have anticipated, the Supreme Court has squarely
`addressed and answered this question. Property for purposes of the wire and mail fraud
`statutes is “something of value” or a “valuable entitlement.” Pasquantino, 544 U.S. at
`355, 357. At issue in Pasquantino was whether Canada’s right to uncollected excise
`taxes on liquor constituted property under § 1343. Id. at 355. Pasquantino held that this
`right was “an entitlement” to collect money, which was “something of value” and
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`2 Because the “mail and wire fraud statutes share the same language in relevant part,”
`the Supreme Court “applies the same analysis to both sets of offenses.” Carpenter v.
`United States, 484 U.S. 19, 25 (1987).
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`Gov. Opp. to Defs.’ Mot. to Dismiss the Wire Fraud
`Counts under Void-for-Vagueness & Fair Notice
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`therefore property. Id. The Supreme Court based this finding, in part, on McNally v.
`United States, 483 U.S. 350, 358 (1987), which had previously held that “property
`rights” are “something of value.” Id. It also relied on Leocal v. Ashcroft, 543 U.S. 1, 9
`(2004), for the proposition that “[v]aluable entitlements like these are ‘property’ as that
`term ordinarily is employed.” Pasquantino, 544 U.S. at 356.
`In reaching this decision, the Supreme Court distinguished Pasquantino’s facts
`from those in Cleveland v. United States, 531 U.S. 12 (2000), based on its determination
`that the government interest in Cleveland was “purely regulatory,” whereas Canada’s
`interest in uncollected tax revenue was an “economic” interest. 544 U.S. at 356-57.
`Cleveland, however, still recognized that property for purposes of the mail fraud statute
`was an “entitlement” and reached its ruling, in part, by finding that the government’s
`interest in a pre-license processing fee, unlike a post-license revenue stream, was not
`“an entitlement . . . sufficient to establish a state property right.” 531 U.S. at 22.
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`Leaving no doubt that Pasquantino’s definition of “property” remains controlling
`precedent for wire fraud cases, the Supreme Court recently reaffirmed the definition in
`Kelly v. United States, 140 S. Ct. 1565 (2020). Kelly involved wire fraud charges against
`public officials who sought to manipulate public resources, namely access to the George
`Washington Bridge, for political purposes. Justice Kagan, writing for the majority,
`characterized this scheme as one to alter a regulatory choice and distinguished it from
`the “property fraud” schemes whose object involves a “valuable entitlement.” Id. at
`1573-74 (quoting Pasquantino v. United States, 544 U.S. 347, 357 (2005)). Concluding
`that the defendants’ realignment of the Bridge’s access lanes affected a Cleveland-like
`regulatory interest, and that the employee time and labor necessary to effectuate the lane
`realignment, while unquestionably a valuable entitlement constituting “property,” was
`“incidental” to the fraudulent scheme and not its object, the Supreme Court reversed the
`defendants’ fraud convictions. Id.
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`Gov. Opp. to Defs.’ Mot. to Dismiss the Wire Fraud
`Counts under Void-for-Vagueness & Fair Notice
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`The Supreme Court, in repeatedly interpreting property as a “valuable
`entitlement” or “something of value,” has rejected efforts to restrict “property” for
`purposes of wire and mail fraud to ownership or other narrow possessory interests. In
`Carpenter v. United States, 484 U.S. 19, 26 (1987), the Supreme Court rebuffed the
`argument that property must be owned to satisfy the wire fraud statute. “[N]ews matter,
`however little susceptible of ownership or dominion in the absolute sense . . . [can] be
`distributed and sold to those who will pay money for it, as for any other merchandise.”
`Id. (quoting International News Service v. Associated Press, 248 U.S. 215, 236 (1918)).
`Emphasizing the broad nature of property rights under § 1343, Pasquantino cited
`Black’s Law Dictionary for the position that “property” includes “every species of
`valuable right and interest.” 544 U.S. at 356 (internal citations omitted).
`Consistent with this binding precedent, the Courts of Appeal, reviewing
`convictions for mail and wire fraud, have found a range of valuable rights and interests
`to be property under these two statutes, including: the right to full payment, mining
`claims, civil causes of action, software source code, jobs, and employment contracts.
`See United States v. Ali, 620 F.3d 1062, 1067-68 (9th Cir. 2010) (right to full payment);
`Nygard v. Dickinson, 97 F.2d 53, 56 (9th Cir. 1938) (mining claims); United States v.
`Neff, 787 F. App’x 81, 91 (3d Cir. 2019) (civil causes of action); United States v.
`Seidlitz, 589 F.2d 152, 160 (4th Cir. 1978) (software source code); Sorich v. United
`States, 709 F.3d 670, 675 (7th Cir. 2013) (jobs); United States v. Granberry, 908 F.2d
`278, 280 (8th Cir. 1990) (employment contracts).
`Similarly, the Courts of Appeal have rejected arguments seeking to narrow the
`definition of property to something less than a “valuable entitlement” or “something of
`value.” See, e.g., Ali, 620 F.3d at 1068 (rejecting argument that “only ‘traditionally
`recognized forms of property’ constitute property under the [mail and wire fraud]
`statutes.”); United States v. Blaszczak, 947 F.3d 19, 32 (2d Cir. 2019)
`(“While Cleveland remains good law, courts have consistently rejected attempts –
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`Gov. Opp. to Defs.’ Mot. to Dismiss the Wire Fraud
`Counts under Void-for-Vagueness & Fair Notice
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`similar to those advanced by Defendants here – to apply its holding expansively . . . .
`[and find it] establish[ed] rigid criteria for defining property.”) (internal citations
`omitted). The Supreme Court’s definition of property as “something of value” or a
`“valuable entitlement” therefore applies directly to the issue now before the Court.3
`IV. WHETHER IP ADDRESSES ARE “PROPERTY” FOR PURPOSES OF
`§ 1343 MUST BE DECIDED AFTER TRIAL
`At the April 8, 2020 status conference, the Court directed the parties to address
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`two questions: (1) “how will we confront this question” of whether “IP blocks are or
`are not property;” and (2) would determination of this question “invade[] the province
`of the jury.” Ex. B at 6, 9. The answers to these two questions are: (1) via a post-trial
`motion pursuant to Rule 29 of the Federal Rules of Criminal Procedure (“Rule 29”);
`and (2) yes.
`The Court, in considering Defendants’ separate Rule 12(b) motions to dismiss
`the CAN-SPAM and wire fraud counts, repeatedly ruled that it cannot look to extrinsic
`facts. “In ruling on a pre-trial motion to dismiss an indictment for failure to state an
`offense, the district court is bound by the four corners of the indictment,” and it “must
`accept the truth of the allegations in the indictment in analyzing whether a cognizable
`offense has been charged.” ECF No. 154 at 16 (quoting United States v. Boren, 278
`F.3d 911, 914 (9th Cir. 2002)); ECF No. 160 at 4-5. Motions to dismiss for failure to
`state an offense should not “assess the veracity of [an indictment’s] claims or test the
`evidence . . . .” ECF No. 160 at 6 (quoting United States v. Jensen, 93 F.3d 667, 669
`(9th Cir. 1996)). Rather, the procedural tool for challenging the veracity of an
`indictment’s claims and testing the evidence’s legal sufficiency is a post-trial Rule 29
`motion.
`
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`3 The Court may have anticipated this definition when it noted at the hearing on
`Defendants’ previous motion to dismiss the wire fraud counts that “I don’t think anyone
`disputes that IP address, that netblocks confer some entitlement . . . .” Ex. A at 9.
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`Gov. Opp. to Defs.’ Mot. to Dismiss the Wire Fraud
`Counts under Void-for-Vagueness & Fair Notice
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`Defendants, having failed to obtain dismissal of the wire fraud counts for failing
`to state an offense and seeking to forestall a trial, argue there is a third way: Rule 104.
`ECF No. 169-1 at 8. In the alternative, they propose that the Court could consider and
`rule on “undisputed or indisputable facts.” Id. Finally, noting the Court’s willingness to
`allow the parties to submit extrinsic evidence for purposes of the previous void-for-
`vagueness challenge, Defendants now argue that the wire fraud counts should be
`dismissed under void-for-vagueness as a matter of law based on their unilateral proffer
`of extrinsic evidence.
`This section addresses the two questions the Court directed the parties to brief,
`including why Rule 104 would not permit the Court to invade the province of the jury
`and determine whether IP addresses are property for purposes of wire fraud. It also, for
`the sake of the record, addresses why Defendants’ “undisputed or undisputable facts”
`are both disputed and disputable, and why their requests for judicial notice and judicial
`estoppel should be denied. A separate section addresses Defendants’ void-for-
`vagueness and fair notice challenges.
`A. Rule 29 Is the Appropriate Tool for Considering Whether IP
`Addresses Are “Property” for Purposes of Wire Fraud
`The correct way to challenge the government’s ability to satisfy an essential or
`jurisdictional element of an offense is not via a motion to dismiss, but via Rule 29.
`United States v. Nukida, 8 F.3d 665, 672-73 (9th Cir. 1993). Rule 29(a) permits a
`defendant, after the government closes its evidence or after the close of all the evidence
`and before the matter is submitted to the jury, to seek acquittal by challenging the
`sufficiency of the evidence to sustain a conviction. Fed. R. Crim. P. 29(a). Rule 29(c)
`permits a defendant to make the same challenge after a jury returns a verdict. Fed. R.
`Crim. P. 29(c).
`A Rule 29 motion is the proper procedural tool for challenging the adequacy of
`the government’s evidence. For example, in United States v. Miller, 953 F.3d 1095,
`
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`Gov. Opp. to Defs.’ Mot. to Dismiss the Wire Fraud
`Counts under Void-for-Vagueness & Fair Notice
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`Case 3:18-cr-04683-GPC Document 176 Filed 06/08/20 PageID.1760 Page 12 of 45
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`1108 (9th Cir. 2020), the Ninth Circuit stated that, under Rule 29(c), the courts consider
`whether there is sufficient evidence of a charge’s “essential elements,” including, in that
`case, whether the government had introduced sufficient evidence of an “interstate wire
`communication” needed to sustain wire fraud charges. Multiple other decisions have
`similarly found that evidentiary challenges to wire fraud’s essential elements are
`brought via Rule 29. See, e.g., United States v. French, 748 F.3d 922, 935 (9th Cir.
`2014) (defendant may challenge the sufficiency of the evidence that she acted with the
`requisite intent to defraud under §§ 1341 and 1343 via Rule 29(c)); United States v.
`Jinian, 725 F.3d 954, 959-62 (9th Cir. 2013) (Rule 29(a) motion allows a defendant to
`challenge the sufficiency of the evidence of an interstate wire and thereby seek acquittal
`of a wire fraud charge); Blaszczak, 947 F.3d at 30-31 (overruling government objection
`that defendants’ failure to object to the wire fraud jury instruction that she must have
`“deprive[d] [the victim] of ‘something of value’” failed to preserve the issue because
`defendant brought a Rule 29(a) challenge to whether the wire fraud scheme involved
`“property”).
`Tellingly, the Kelly decision that Defendants rely on arose from a Rule 29 motion,
`not from a motion to dismiss or a Rule 104 hearing. In United States v. Baroni, 909 F.3d
`550, 561 (3d Cir. 2018), the Third Circuit considered the Kelly defendants “challenge
`[to] the sufficiency of the evidence underlying their wire fraud convictions.” Cert.
`granted sub nom. Kelly v. United States, 139 S. Ct. 2777 (2019), and rev'd and
`remanded sub nom. Kelly v. United States, 140 S. Ct. 1565 (2020). In particular, both
`the Third Circuit and, later, the Supreme Court reviewed the defendants’ argument,
`brought via Rule 29, that the evidence was insufficient to show that the alleged victim
`was “deprived of any property right.” Baroni, 909 F.3d at 562.4
`
`
`4 In fact, the district court in Kelly rejected defendants’ attempt to litigate their as-
`applied vagueness challenge via a motion to dismiss, finding it “inappropriate for a
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`Gov. Opp. to Defs.’ Mot. to Dismiss the Wire Fraud
`Counts under Void-for-Vagueness & Fair Notice
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`Similarly, McNally, Carpenter, Cleveland, and Pasquantino all came before the
`Supreme Court post-trial. In McNally, the Supreme Court’s review of the post-trial
`record focused on the trial court’s instruction to the jury that it could find the defendants
`had impermissibly obtained money or property by one of two theories and found that
`both theories of property impermissibly included a right to honest and impartial
`government services. 483 U.S. at 354-55. In Carpenter, the Supreme Court took
`specific note of findings the district court made “on the basis of testimony presented at
`trial.” 484 U.S. at 22. Cleveland relied on trial evidence showing that the government’s
`interest in a pre-license processing fee, unlike a post-license revenue stream, was not
`“an entitlement . . . sufficient to establish a state property right.” 531 U.S. at 22. Finally,
`in Pasquantino, the Supreme Court referred “to the evidence presented at trial” in
`determining that Canada’s “valuable entitlement” to collect tax revenue was “something
`of value” and therefore property for purposes of the wire fraud statute. 544 U.S. at 353-
`54. The Supreme Court’s reliance on substantive trial records in each of these canonical
`wire fraud cases illustrates why any pretrial attack on the sufficiency of the
`government’s evidence pertaining to the wire fraud “property” element is inherently
`premature and should only be brought via Rule 29.
`B. Rule 104 Is Not an Appropriate Basis for Defendants’ Challenge
`Defendants cite Rule 104(a) as the sole procedural tool for hearing evidence
`extrinsic to the four corners of the indictment. ECF No. 169-1 at 24-25. Rule 104 does
`not, however, allow for a hearing on anything other than “preliminary questions” about
`the admissibility of evidence. Rule 104(a) provides that “[t]he court must decide any
`preliminary question about whether a witness is qualified, a privilege exists or evidence
`is admissible.” Rule 104 provides the court with the gatekeeping authority to decide
`preliminary questions that make evidence inadmissible under some other rule of
`
`pretrial motion.” See Br. for Pet., United States v. Kelly, 2019 WL 4568203, at *12
`(Sept. 17, 2019).
`
`Gov. Opp. to Defs.’ Mot. to Dismiss the Wire Fraud
`Counts under Void-for-Vagueness & Fair Notice
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`Case 3:18-cr-04683-GPC Document 176 Filed 06/08/20 PageID.1762 Page 14 of 45
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`evidence, but it does not itself provide a substantive basis for excluding evidence.
`United States v. Evans, 728 F.3d 953, 960-61 (9th Cir. 2013).
`In determining whether a party has introduced sufficient evidence to meet its
`burden under Rule 104, the “trial court neither weighs credibility nor makes a finding
`that the party has proved the conditional fact by a preponderance of the evidence.”
`Huddleston v. United States, 485 U.S. 681, 690 (1988). The court must simply examine
`the evidence and decide whether the jury could find that conditional fact by a
`preponderance of the evidence (if so