United States v. Benjamin Galecki

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA, No. 20-10288

Plaintiff-Appellee, D.C. No.

2:15-cr-00285-

v. APG-EJY-2

BENJAMIN GALECKI, AKA

Zencense Ben, OPINION

Defendant-Appellant.

UNITED STATES OF AMERICA, No. 20-10296

Plaintiff-Appellee, D.C. No.

2:15-cr-00285-

v. APG-EJY-1

CHARLES BURTON RITCHIE, AKA

Burton Ritchie,

Defendant-Appellant.

Appeal from the United States District Court

for the District of Nevada

Andrew P. Gordon, District Judge, Presiding

2 USA V. GALECKI

Argued and Submitted December 6, 2021

San Francisco, California

Filed December 27, 2023

Before: Ronald M. Gould and Daniel P. Collins, Circuit

Judges, and Roslyn O. Silver, * District Judge.

Opinion by Judge Collins

SUMMARY **

Criminal Law

The panel affirmed Benjamin Galecki’s and Charles

Burton Ritchie’s drug-trafficking and money-laundering

convictions in connection with their distribution of “spice,”

a synthetic cannabinoid product; reversed their mail and wire

fraud convictions; and remanded for further proceedings.

Defendants manufactured and distributed spice through

their company, Zencense Incenseworks, LLC. The drug-

trafficking charges were based on the premise that, although

the particular cannabinoid that Defendants used, XLR-11,

had not yet been specifically listed as a prohibited controlled

substance under federal law, that cannabinoid was

*

The Honorable Roslyn O. Silver, United States District Judge for the

District of Arizona, sitting by designation.

**

This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

USA V. GALECKI 3

nonetheless treated as a controlled substance because it was

an “analogue” of a listed substance.

Defendants contended that all of their convictions should

be set aside on the ground that the district court erred in

refusing to suppress evidence seized during or as a result of

a raid at Zencense’s Nevada warehouse. The panel held that

Defendants failed to establish that they have Fourth

Amendment standing to challenge the search and that the

district court therefore properly denied their motions to

suppress.

Defendants argued that the evidence was insufficient to

establish the scienter required in a Controlled Substances

Act (CSA) prosecution resting on the Controlled Substance

Analogue Enforcement Act of 1986 (the Analogue

Act). Applying McFadden v. United States, 576 U.S. 186

(2015), and considering the record as a whole, the panel

concluded that a rational jury could find, beyond a

reasonable doubt, that both Defendants had the scienter

required for an Analogue Act case.

The panel held that the district court did not abuse its

discretion in concluding that its “deliberate ignorance”

instruction modeled on this court’s decision in United States

v. Jewell, 532 F.2d 697 (9th Cir. 1976) (en banc), had a

sufficient foundation in the evidence.

The panel rejected Defendants’ as-applied vagueness

challenge to the statutory definition of a “controlled

substance analogue” in the Analogue Act.

Defendants argued that their due process rights were

violated by the district court’s failure to compel the

Government to grant use immunity to two potential defenses

witnesses who would have testified as to the Defendants’

4 USA V. GALECKI

scienter concerning whether XLR-11 was covered by the

Analogue Act. The panel held that Defendants failed to

make the requisite showing of a direct contradiction in

testimony that resulted in a fundamentally unfair distortion

of the fact-finding process.

Rejecting Defendants’ contention that the evidence was

insufficient to support their convictions for operating a

continuing criminal enterprise in violation of the CSA, the

panel held that the evidence was sufficient to permit a

rational jury to conclude that Defendants acted “in concert”

with five or more persons.

The panel held that the evidence at trial was insufficient

to prove the mail-fraud and wire-fraud offenses charged in

the indictment, and that Defendants were entitled to

judgment of acquittal on these counts, because the

Government presented no evidence that the specific alleged

misrepresentations were materially false to anyone who

bought Zencense’s products.

The panel addressed whether the jury’s general verdict

on the money laundering offenses—which did not specify on

which predicate offenses it relied—may stand. The panel

held that any error under Yates v. United States, 354 U.S.

298 (1957), in allowing the money laundering convictions to

be based on the mail and wire fraud conduct, rather than on

the CSA offenses, was harmless beyond a reasonable doubt.

USA V. GALECKI 5

COUNSEL

James Felman (argued) and Brandon K. Breslow (argued)

Kynes Markman & Felman PA, Tampa, Florida; J. Lloyd

Snook III, Snook & Haughey PC, Charlottesville, Virginia;

for Defendants-Appellants.

Elizabeth O. White (argued) and Robert L. Elman, Assistant

United States Attorneys, Office of the United States

Attorney-Reno, Reno, Nevada; Adam M. Flake and Daniel

D. Hollingsworth, Assistant United States Attorneys;

Christopher Chiou, Acting United States Attorney, Office of

The United States Attorney, Las Vegas, Nevada; for

Defendants-Appellants.

OPINION

COLLINS, Circuit Judge:

Defendants Benjamin Galecki and Charles Burton

Ritchie were convicted of drug trafficking, mail fraud, wire

fraud, and money laundering in connection with their

distribution of “spice,” a synthetic cannabinoid product that,

when smoked, produces a high. The drug-trafficking

charges were based on the premise that, although the

particular cannabinoid that Defendants used had not yet been

specifically listed as a prohibited controlled substance under

federal law, that cannabinoid was nonetheless treated as a

controlled substance because it was an “analogue” of a listed

substance. On appeal, Defendants raise multiple challenges

to their analogue-based drug-trafficking convictions, but we

reject these contentions and affirm those convictions. We

6 USA V. GALECKI

likewise affirm their money laundering convictions, but we

reverse their mail and wire fraud convictions.

I

A

Defendants Galecki and Ritchie manufactured and

distributed spice through their company, Zencense

Incenseworks, LLC (“Zencense”), which was formed in

Florida in 2010. Although headquartered in Florida,

Zencense also manufactured spice at a warehouse that the

company leased in Nevada. Zencense was highly successful,

and mid-2012, it employed approximately 140 people.

At trial, several former Zencense employees testified

concerning the company’s spice operations. For example,

Robert Biggerstaff testified that Galecki taught him how to

manufacture spice that contained a cannabinoid known

alternatively as “XLR-11” or “5F-UR-144.” The “point of

adding” the XLR-11, Biggerstaff explained, was to “create a

product that would actually get you high.” Rachel

Templeman, a sales employee, testified that Zencense

customized the product with various flavorings, including

blueberry, cherry, vanilla, chocolate, and pineapple.

Although both Templeman and Biggerstaff stated that

they knew that end users were ingesting Zencense’s

products, the company maintained an official position that

its products were simply “potpourri,” which it sold in

packets labeled “not for human consumption.” Consistent

with this company position, Biggerstaff testified that

Zencense staff were instructed not to refer to the various

versions of the product as “flavors,” because that could

“invoke[] a connotation of being orally ingested.” Rather,

staff were expected to use the words “aroma” or “fragrance.”

USA V. GALECKI 7

Biggerstaff stated that, if a Zencense employee did not use

the “language of fragrance” or “aroma,” and instead

“refer[red] to something involving taste,” that employee

“would have been terminated” by Galecki or Ritchie.

Templeman agreed that “we weren’t able to call [the

options] flavors” and that she instead referred to them as

“[a]romas” or “scents.”

However, rather than sell its “potpourri” to home goods

stores such as “Bed Bath & Beyond” or to general retailers

such as Target or Walmart, Zencense marketed its products

primarily to “either smoke shops or alternative adult

emporiums” or “independent convenience stores.”

Templeman testified that when she referred to “spice or

incense or potpourri” on sales calls to such potential

retailers, “they knew what you were talking about,” because

those names were “standard in the industry.” Asked why

Zencense did not market its potpourri to stores like Target or

Walmart, Biggerstaff explained that “[w]e didn’t believe

they would be a good customer for our product” because

they would be expecting “an air freshener,” and “that’s not

the product that we were selling.”

To illustrate the stark contrast between Zencense’s

products and actual potpourri, the Government introduced

testimony from the CEO of a genuine potpourri company,

Aromatique. The CEO testified that Aromatique typically

sold its conventional potpourri to retailers such as

Anthropologie and Macy’s for as much as $18 per 8-ounce

package. Zencense “potpourri,” by contrast, sold to smoke

shops and other similar stores for around $7.50 per gram—

i.e., more than 90 times the price of ordinary potpourri at

8 USA V. GALECKI

Aromatique. 1 The potpourri options available to shoppers at

Aromatique included “Smell of Spring,” “Tarocco &

Clove,” and “Valencia Orange.” The Zencense “potpourri”

options included “Bizarro,” “Shockwave,” “Headhunter,”

“Sonic Boom,” and “DefCon 5 Total Annihilation.”

The Government also introduced Zencense’s written

sales script into evidence, and it confirmed the company’s

focus on selling to smoke shops while simultaneously

maintaining the nominal position that the products were “not

for human consumption.” For example, if a potential retailer

responded that it did not carry “spice” and was not familiar

with it, the script stated that the Zencense salesperson should

then explain that spice was “an herbal incense blend that you

burn” and then immediately ask, “Do you sell pipes?” If the

retailer responded that it did not sell pipes, the script stated

that “[m]ost likely this will not be a potential customer” and

the salesperson should “[e]nd [the] call, mark ‘Not

Interested,’ explain in notes, and mark for deletion.” But if

the retailer stated that it did sell pipes, then the caller was to

immediately respond by saying, “You know how pipes are

for tobacco use only? Well, spice is not for human

consumption.” An associated note in the script reminded the

caller that the company’s “stance” was “always that it is not

for human consumption.” But the script also noted that

retailers “that are in this business understand that language

is very important and will usually not press the issue too

much.”

In addition, the Government presented testimony to

show that Galecki and Ritchie were aware that customers

1

A wholesale price of $18 for an 8-ounce package works out to

approximately $2.25 per ounce. By contrast, a wholesale price of $7.50

per gram works out to more than $212 per ounce.

USA V. GALECKI 9

were smoking Zencense products to get high. The owner of

a chain of smoke shops who purchased spice from Zencense

testified that Ritchie told him that if someone smoked spice,

“it would knock you out for a couple of hours on the floor.”

And Jayson Lang, who owned a business that sold XLR-11

to Zencense, testified that “[i]t was common knowledge that

people were consuming the product” and that Galecki had

told him “people liked the 5F-UR-144 [XLR-11] more than”

another similar cannabinoid because XLR-11 was

“fluorinated,” which “made it stronger.”

In July 2012, employees of an apparel shop that was

located next to Zencense’s Nevada warehouse contacted the

Las Vegas police about what they considered to be

suspicious activities at the warehouse. Ultimately, federal

authorities sought and obtained a search warrant, which was

executed on July 25, 2012. Numerous items were seized,

including substantial quantities of XLR-11.

Notified of the Nevada raid, Ritchie responded the same

day by calling a Florida police officer whom he knew from

middle school and who in turn referred him to a DEA agent

named Claude Cosey. On July 26, Ritchie took Cosey and

another DEA employee on a “tour” of the company’s Florida

facilities, and he gave them free samples. During the tour,

Cosey told Ritchie “[y]ou know people smoke this, correct?”

Ritchie responded: “Hey, I sell it as either incense or

potpourri . . . . Whatever they do with it after that, I don’t

know and I don’t want to know.”

Defendants were charged with conducting a continuing

criminal enterprise in violation of the Controlled Substances

Act (“CSA”), see 21 U.S.C. § 848; violations of the CSA

relating to alleged drug trafficking; and various financial

10 USA V. GALECKI

crimes including money laundering, mail fraud, and wire

fraud.

B

At the time Defendants engaged in the charged conduct,

XLR-11 had not yet been listed on the federal schedules of

controlled substances governed by the CSA. 2 Accordingly,

the Government’s drug-trafficking charges proceeded on the

theory that XLR-11 fell within the CSA’s provisions

addressing “analogues” of listed substances. To set the

relevant context concerning the Government’s analogue

theory, we first review what it means to be an “analogue”

under the CSA, and we then summarize the Government’s

trial evidence concerning whether XLR-11 was an analogue.

1

The CSA provides for five “schedules” of controlled

substances that are regulated under the Act. See 21 U.S.C.

§ 812. The schedules are numbered in decreasing levels of

perceived dangerousness, with “Schedule I” listing the most

dangerous substances that have no accepted medical use.

See id. § 812(b)(1), (c). The various schedules, however, are

not set in stone: the CSA expressly “authorizes the Attorney

General to add or remove substances, or to move a substance

from one schedule to another.” Touby v. United States, 500

U.S. 160, 162 (1991) (citing 21 U.S.C. § 811(a)).

Unsurprisingly, violations of the CSA that involve Schedule

I substances “carry the most severe penalties.” Id.

The listed-chemical approach of the CSA gave rise to a

significant loophole. By taking a substance listed on the

federal schedules and making modifications to its chemical

2

Effective May 16, 2013, XLR-11 was formally added to Schedule I.

See 78 Fed. Reg. 28735 (May 16, 2013).

USA V. GALECKI 11

structure, drug designers were able to “develop subtle

chemical variations of controlled substances” that were

functionally similar to a listed chemical without actually

being a listed chemical. Grinspoon v. DEA, 828 F.2d 881,

891 (1st Cir. 1987) (citation omitted). Congress responded

to this problem by passing the Controlled Substance

Analogue Enforcement Act of 1986 (“the Analogue Act”).

See Pub. L. No. 99-570, title I, subtitle E, 100 Stat. 3207-13–

3207-14 (Oct. 27, 1986). The Analogue Act accomplishes

this goal through two amendments to the CSA. First, the

Analogue Act added a new definition of the term “controlled

substance analogue.” 21 U.S.C. § 802(32)(A). Second, the

Analogue Act added a new section establishing the

substantive rule governing such “controlled substance

analogues.” See id. § 813. In its current form, the key

subsection of that latter provision states: “A controlled

substance analogue shall, to the extent intended for human

consumption, be treated, for the purposes of any Federal

law[,] as a controlled substance in schedule I.” Id. § 813(a).

Thus, any substance falling within the definition of a

controlled substance analogue must be treated, if “intended

for human consumption,” as equivalent to the most serious

controlled substances with the most severe penalties.

McFadden v. United States, 576 U.S. 186, 188 (2015)

(citations omitted).

Given this draconian rule, the statutory definition of

“controlled substance analogue” is obviously crucial. That

definition states that, subject to certain limited exceptions:

[T]he term “controlled substance analogue”

means a substance—

(i) the chemical structure of which is

substantially similar to the chemical

12 USA V. GALECKI

structure of a controlled substance in

schedule I or II;

(ii) which has a stimulant, depressant, or

hallucinogenic effect on the central nervous

system that is substantially similar to or

greater than the stimulant, depressant, or

hallucinogenic effect on the central nervous

system of a controlled substance in

schedule I or II; or

(iii) with respect to a particular person,

which such person represents or intends to

have a stimulant, depressant, or

hallucinogenic effect on the central nervous

system that is substantially similar to or

greater than the stimulant, depressant, or

hallucinogenic effect on the central nervous

system of a controlled substance in

schedule I or II.

21 U.S.C. § 802(32)(A).

Although the three components of this definition are

written in the disjunctive, most courts have read the statute

as requiring proof of both (1) component (i) and (2) either

component (ii) or component (iii). See United States v.

Makkar, 810 F.3d 1139, 1142–43, 1146 (10th Cir. 2015)

(concluding that this reading was confirmed by “the plain

language of the statute” and also noting the potential

vagueness concerns presented by a broader, fully disjunctive

reading); see also United States v. Turcotte, 405 F.3d 515,

521–22 (7th Cir. 2005); United States v. Klecker, 348 F.3d

69, 71 (4th Cir. 2003); United States v. Hodge, 321 F.3d 429,

435–39 (3d Cir. 2003); United States v. Washam, 312 F.3d

USA V. GALECKI 13

926, 930 n.2 (8th Cir. 2002). With the acquiescence of both

sides, that reading was explicitly embodied in the jury

instructions that were given at Defendants’ trial, and the

Government confirmed at oral argument in this court that it

does not contest that construction of the statute for purposes

of this case. In view of that concession, “we need not decide

in this case whether that interpretation is correct,” and

therefore “we assume for the sake of argument that it is.”

McFadden, 576 U.S. at 194 n.2 (declining to address this

very same issue).

2

The indictment charged that XLR-11 was an analogue of

“JWH-018,” a substance that was added to Schedule I

effective March 1, 2011. See 76 Fed. Reg. 11075 (Mar. 1,

2011); see also 21 C.F.R. § 1308.11(g)(3). At trial, the

Government relied on expert testimony to establish that

XLR-11 satisfied both elements of the definition of an

analogue with respect to JWH-018.

First, Dr. Gregory Endres, an expert in “organic forensic

and medicinal chemistry,” testified that XLR-11 had a

substantially similar chemical structure to JWH-018. Dr.

Endres prepared the following diagram depicting XLR-11

and JWH-018 side-by-side:

14 USA V. GALECKI

Dr. Endres stated that “[t]o make a determination on

structural similarity I look at the chemical as a whole.” Dr.

Endres explained that XLR-11 and JWH-018 have “exactly

the same” “acylindole core,” including the “same atoms” in

the “same locations” with the “exact same structure.” In Dr.

Endres’s view, the “substitution of a fluorine atom” in the

tail part of XLR-11’s structure was not a significant change

from JWH-018. Dr. Endres also noted that the “naphthyl

group” in JWH-018 was replaced by a

“tetramethylcyclopropyl” group in XLR-11. He stated that

the naphthyl group is an aromatic that can engage in “pi

stacking,” a phenomenon that he described as providing a

“weak electrostatic interaction . . . that can contribute to

better binding affinity.” However, he stated that he did not

view this “as a significant enough change,” because “pi

stacking is not required for binding affinity in the

cannabinoid receptors.”

Second, Dr. Jordan Trecki, a pharmacological expert,

opined that “XLR-11 has a substantially similar

USA V. GALECKI 15

hallucinogenic effect on the central nervous system of that

of JWH-018.” Dr. Trecki testified that chemical differences

between JWH-018 and XLR-11 “retained and actually

intensified the pharmacological effect of the substance.”

Substances like XLR-11 “continued to work [as] well [as] or

greater than the original JWH substance,” and the changes

from JWH-018 to XLR-11 “enhanced” the substance’s

effect by, among other things, adding a fluorine atom.

Because fluorine “reduce[s] the metabolism of [a]

substance,” it allows substances to “stay[] in your body

longer,” meaning that less of the substance is necessary to

trigger the same effect over time.

C

Zencense employee Ryan Eaton—who had been sent to

assist Zencense’s warehouse operations in Las Vegas—was

tried alongside Galecki and Ritchie as a co-defendant.

However, the jury acquitted Eaton on all six counts with

which he was charged. The jury also acquitted Galecki and

Ritchie on two drug-trafficking counts involving a different

alleged analogue, known as “AM 2201” (Counts 20–21), but

it convicted both men on all remaining counts, including all

five drug-trafficking charges involving XLR-11 (Counts 22–

26). 3 Galecki and Ritchie were each sentenced to 20 years

3

Specifically, the jury convicted Galecki and Ritchie of the following

five drug-trafficking offenses: (1) conspiracy to manufacture, possess

with intent to distribute, and distribute XLR-11, in violation of 21 U.S.C.

§ 846 (Count 22); (2) manufacture of XLR-11, in violation of 21 U.S.C.

§ 841(a)(1) (Count 23); (3) distribution of XLR-11, in violation of 21

U.S.C. § 841(a)(1) (Count 24); (4) maintaining drug-involved premises,

in violation of 21 U.S.C. § 856(a)(1) (Count 25); and (5) possession of a

“listed chemical” (viz., acetone) with intent to manufacture a substance

containing a detectable amount of XLR-11, in violation of 21 U.S.C.

16 USA V. GALECKI

in prison, followed by three years of supervised release, and

a criminal forfeiture order was entered against both of them.

Galecki and Ritchie timely appealed, and we have

jurisdiction under 28 U.S.C. § 1291.

II

We first address Defendants’ contention that all of their

convictions should be set aside on the ground that the district

court erred in refusing to suppress evidence seized during or

as a result of the raid at Zencense’s Nevada warehouse.

In June 2016, Galecki filed a motion to suppress,

asserting that the search warrant affidavit contained false and

misleading information in violation of Franks v. Delaware,

438 U.S. 154 (1978). The district court denied this motion

on the ground that Galecki had not established that he had

Fourth Amendment “standing” to challenge a search of a

warehouse leased, not by him, but by Zencense. See United

States v. SDI Future Health, Inc., 568 F.3d 684, 695 (9th Cir.

2009) (holding that, as “a matter of substantive Fourth

Amendment law,” a person challenging a search or seizure

must show that there has been a violation of that Amendment

“as to him, personally” (emphasis added) (simplified)); see

also Byrd v. United States, 138 S. Ct. 1518, 1530 (2018)

(noting that “Fourth Amendment ‘standing’” “should not be

confused with Article III standing, which is jurisdictional”).

Ritchie subsequently filed his own motion to suppress—

which Galecki later joined—arguing that the search warrant

affidavit both was defective under Franks and failed to

§ 841(c) (Count 26). (The statutory definition of “listed chemical” refers

to a distinct list of chemicals that are used in the manufacture of

controlled substances, and that term therefore does not correspond to the

above-described schedules of controlled substances. See 21 U.S.C.

§ 802(33), (35)(B).)

USA V. GALECKI 17

establish probable cause. The district court denied this

motion as to both Defendants on the ground that it was an

improper motion to reconsider the earlier order denying

Galecki’s motion to suppress.

We need not decide whether the district court erred in

treating Ritchie’s motion as an improper motion for

reconsideration. Reviewing the merits of the Fourth

Amendment standing de novo as to both Defendants, see

United States v. Lopez-Cruz, 730 F.3d 803, 807 (9th Cir.

2013), we conclude that the district court correctly denied

the motions.

In arguing that they have standing to challenge the search

of Zencense’s Nevada warehouse, Defendants assert that

they each had a “reasonable expectation of privacy” in those

premises. See Byrd, 138 S. Ct. at 1526–27 (noting that this

test for Fourth Amendment standing “was derived from the

second Justice Harlan’s concurrence in Katz v. United States,

389 U.S. 347 (1967)”). To establish standing under this test,

Defendants had to show that they “manifested a subjective

expectation of privacy” in the Nevada warehouse that

“society is willing to recognize . . . as reasonable.”

California v. Ciraolo, 476 U.S. 207, 211 (1986). We

conclude that Defendants failed to make that showing.

As we have recognized, determining who may assert a

reasonable expectation of privacy with respect to specific

commercial spaces “requires analysis of reasonable

expectations ‘on a case-by-case basis.’” SDI Future Health,

568 F.3d at 695 (quoting O’Connor v. Ortega, 480 U.S. 709,

718 (1987) (plurality)). The need for such a case-by-case

inquiry arises from two considerations. First, because “the

expectation of privacy that the owner of commercial

property enjoys in such property differs significantly from

18 USA V. GALECKI

the sanctity accorded an individual’s home,” Donovan v.

Dewey, 452 U.S. 594, 598–99 (1981), the “expectation of

privacy in commercial premises” is “less than[] a similar

expectation in an individual’s home.” New York v. Burger,

482 U.S. 691, 700 (1987); see also Minnesota v. Carter, 525

U.S. 83, 90 (1998) (“Property used for commercial

purposes” is thus “treated differently for Fourth Amendment

purposes from residential property.”). Second, in light of the

“great variety of work environments,” any given company

officer, manager, or owner may not have the same personal

reasonable expectation of privacy in all of the commercial

spaces of the organization. SDI Future Health, 568 F.3d at

695.

In SDI Future Health, we identified a number of

considerations that inform the determination as to whether a

particular individual has a reasonable expectation of privacy

in a specific company space. First, we noted that, under our

decision in United States v. Gonzalez, Inc., 412 F.3d 1102

(9th Cir. 2005), the joint owners and managers of a “small

business,” particularly one that is “family-run,” may

exercise such complete “day-to-day” personal control over,

and “full access” to, the company’s facilities that those

owner/managers would have a reasonable expectation of

privacy over the relevant spaces. SDI Future Health, 568

F.3d at 696 (citing Gonzalez, Inc., 412 F.3d at 1116–17); see

also Gonzalez, Inc., 412 F.3d at 1117 (noting, by contrast,

that “the hands-off executives of a major corporate

conglomerate might lack standing to challenge all

intercepted conversations at a commercial property that they

owned, but rarely visited”).

Second, we stated in SDI Future Health that a further

“crucial” threshold factor is whether the particular place

searched in the commercial facility was “given over to the

USA V. GALECKI 19

defendant’s exclusive use,” 568 F.3d at 695–96 (emphasis

added) (simplified), because a showing of such exclusivity

would indicate that, absent countervailing considerations,

the person’s expectation of privacy was reasonable.

Third, SDI Future Health held that, outside “the case of

a small business over which an individual exercises daily

management and control, an individual challenging a search

of workplace areas beyond his own internal office must

generally show some personal connection to the places

searched and the materials seized.” 568 F.3d at 698

(emphasis added). We further stated that whether the

requisite personal connection has been shown should be

assessed “with reference to the following factors,” which we

said are not exclusive, id. at 698 & n.8:

(1) whether the item seized is personal

property or otherwise kept in a private place

separate from other work-related material;

(2) whether the defendant had custody or

immediate control of the item when officers

seized it; and (3) whether the defendant took

precautions on his own behalf to secure the

place searched or things seized from any

interference without his authorization.

Id. at 698 (footnotes omitted). “Absent such a personal

connection or exclusive use, a defendant cannot establish

standing for Fourth Amendment purposes to challenge the

search of a workplace beyond his internal office.” Id.

Under this framework, Galecki and Ritchie did not

establish Fourth Amendment standing with respect to the

Nevada warehouse. First, this case does not fall within the

distinctive scenario, typified by Gonzalez, Inc., in which the

20 USA V. GALECKI

defendants personally exercise day-to-day physical access to

and control over the facilities as part of their daily

management of a closely held small business. Indeed, the

record does not affirmatively indicate that Galecki and

Ritchie had ever actually visited the Nevada warehouse,

much less exercised personal day-to-day control over the

physical plant. Second, the Nevada warehouse is not the

personal office of either Defendant. Because this case thus

does not fall into either of these two scenarios, we consider

whether Defendants established that, in light of the factors

identified in SDI Future Health, they had the requisite

“personal connection to the places searched and the

materials seized.” 568 F.3d at 698.

As to the first SDI Future Health factor, the items seized

from Zencense’s Nevada warehouse were not the “personal

property” of Galecki or Ritchie, nor were they “kept in a

private place separate from other work-related material.” Id.

Rather, they were materials used in the manufacture of

Zencense’s products, such as XLR-11, plant material,

acetone, and flavorings; physical equipment, such as drying

racks; or documents, such as packing slips, handwritten

notes concerning flavorings, and a document relating to

rental of a facility. Because “the first factor really addresses

whether the item seized was personal property without any

relationship to work,” id. at 697, it provides no support for

finding the requisite personal connection to the warehouse.

The second SDI Future Health factor likewise provides

no basis for finding standing, because neither Galecki nor

Ritchie had personal “custody or immediate control” of the

items at the time that they were seized. Id. at 698. As noted

earlier, there does not appear to be any record evidence that

either Defendant ever even visited the warehouse, which was

thousands of miles from Zencense’s Florida headquarters.

USA V. GALECKI 21

Moreover, Defendants concede that neither of them was

present at the warehouse at the time it was searched.

The third SDI Future Health factor addresses whether

the defendant “took precautions on his own behalf to secure

the place searched or things seized from any interference

without his authorization.” Id. (emphasis added). This

“third factor involves actions the employee takes on his own

behalf, not as an agent of the [company].” Id. at 697

(emphasis added). Defendants have pointed to no such

evidence in the record. Instead, they point to the fact that

Eaton took steps to keep the warehouse locked and secure

and that Defendants had the legal right, as managers of

Zencense, to prohibit others from entering the property. At

best, those actions show only that Defendants took steps as

agents of Zencense to ensure the security of the company’s

property, and not that they took any steps to secure the

warehouse or its contents on their own behalf. As we made

clear in SDI Future Health, it is not enough that Defendants

set “general policy” over company premises, “put in place

significant security measures” there, or took “steps to protect

the privacy” of the building. Id. Under this factor, there

must be some showing that actions were taken for the benefit

of Galecki or Ritchie personally, as opposed to the benefit of

the company as a whole. There is no such evidence.

Nor does the record disclose any other factor, beyond the

three we identified in SDI Future Health, that would support

finding the required “personal connection” to the Nevada

warehouse. See id. at 698 n.8. 4 Accordingly, we hold that

4

Defendants point to the general factors that we used to analyze Fourth

Amendment standing in Lopez-Cruz, such as whether the defendant has

a property interest in the placed searched, whether the defendant has the

22 USA V. GALECKI

Galecki and Ritchie failed to establish that they have Fourth

Amendment standing to challenge the search of the Nevada

warehouse and that the district court therefore properly

denied their motions to suppress.

III

We reject Defendants’ challenges to their convictions for

drug trafficking in violation of the CSA.

A

Defendants argue that the evidence was insufficient to

establish the scienter required in a CSA prosecution resting

on the Analogue Act. We disagree.

In McFadden v. United States, 576 U.S. 186 (2015), the

Supreme Court addressed “the knowledge necessary for

conviction” under the principal drug-trafficking statute, 21

U.S.C. § 841(a)(1), “when the controlled substance at issue”

is “an analogue” rather than a scheduled controlled

substance. 576 U.S. at 188. The Court held that such

knowledge could be established in either of two ways. First,

the Government may establish the requisite scienter “by

evidence that a defendant knew that the substance with

which he was dealing is some controlled substance—that is,

one actually listed on the federal drug schedules or treated as

such by operation of the Analogue Act—regardless of

whether he knew the particular identity of the substance.”

Id. at 194. Second, the Government may prove scienter “by

right to exclude others from it, and whether he took “normal precautions

to maintain privacy.” 730 F.3d at 808 (citation omitted). In light of these

factors, Zencense would clearly have standing to challenge the search of

the warehouse had it been prosecuted. See SDI Future Health, 568 F.3d

at 694 n.3. But in the specific context of an owner, manager, or employee

of a company, these factors must be viewed within the context of the SDI

Future Health framework.

USA V. GALECKI 23

evidence that the defendant knew the specific analogue he

was dealing with, even if he did not know its legal status as

an analogue.” Id.

The Court also elaborated on the actual sorts of proof that

might satisfy these two alternatives. As to the first—i.e.,

knowledge that the substance is a “controlled substance”—

the Government can rely on either “direct evidence,” such as

“past arrests that put a defendant on notice of the controlled

status of a substance,” or “circumstantial evidence,” such as,

“a defendant’s concealment of his activities, evasive

behavior with respect to law enforcement, knowledge that a

particular substance produces a ‘high’ similar to that

produced by controlled substances, and knowledge that a

particular substance is subject to seizure at customs.” Id. at

192 n.1; see also id. at 195 n.3. As to the second alternative,

the Court explained that the requisite scienter exists if the

Government shows that the defendant had knowledge of the

features of the substance that make it an analogue under the

Analogue Act’s definition. Id. at 194. In such a case, it is

the knowledge of the features that counts; the “defendant

need not know of the existence of the Analogue Act.” Id. at

195.

In assessing the sufficiency of the trial evidence of

scienter under these standards, 5 we ask only “whether, after

viewing the evidence in the light most favorable to the

5

We note that McFadden addressed only a prosecution under

§ 841(a)(1), whereas in Defendants’ case, only two of the five relevant

drug-trafficking charges rested specifically on that statute. See supra

note 3. Nonetheless, the parties and the district court proceeded on the

assumption that the same scienter requirements that apply under

McFadden in a § 841(a)(1) case are also applicable to the charges against

Defendants under §§ 841(c), 846, and 856(a)(1). We will proceed,

arguendo, on the same assumption.

24 USA V. GALECKI

prosecution, any rational trier of fact could have found the

essential elements of the crime beyond a reasonable doubt.”

Jackson v. Virginia, 443 U.S. 307, 319 (1979); see also

United States v. Nevils, 598 F.3d 1158, 1163–64 (9th Cir.

2010) (en banc). Here, we conclude that the evidence was

sufficient to permit a rational jury to find scienter under

McFadden’s first alternative—namely, that Defendants

dealt with a substance with “knowledge that [it] is listed

[under the CSA] or treated as listed by operation of the

Analogue Act.” McFadden, 576 U.S. at 196.6 In particular,

the record in this case includes evidence of each of the four

types of circumstantial evidence that McFadden identified

as supporting a finding of scienter under this first alternative.

Id. at 192 n.1; see also id. at 195 n.3.

First, the Government presented evidence that Galecki

and Ritchie each knew that XLR-11 “produces a ‘high’

similar to that produced by controlled substances.” Id. at 192

n.1. As noted earlier, a retailer who purchased spice from

Zencense testified that Ritchie told him that if a person

smoked spice, “it would knock you out for a couple of hours

on the floor.” And the owner of a business that sold XLR-

11 to Zencense testified that Galecki had told him that XLR-

11 was more popular than another cannabinoid because the

former was “fluorinated,” which “made it stronger” so that

the “high lasts longer.”

Second, there was evidence of “evasive behavior with

respect to law enforcement.” McFadden, 576 U.S. at 192

n.1. In particular, Biggerstaff testified that, to address the

possibility that Zencense’s products would be “seized” or

6

We therefore need not consider whether sufficient evidence supported

finding scienter under McFadden’s second alternative. See Griffin v.

United States, 502 U.S. 46, 56–60 (1991).

USA V. GALECKI 25

“confiscated” by law enforcement, the company maintained

“secret” storage locations “that just the higher-ups in the

company knew about so that if we ever had an interruption

in business, we could continue to sell because we still had

product that hadn’t been confiscated.” Biggerstaff stated

that, on at least one occasion, Ritchie personally took him

once to these storage facilities, and he also testified that

Ritchie told him not to say anything to anyone else about

these units. Cory Finch, a Zencense employee, testified that

Galecki sent him a text message regarding a Dodge work

truck that appeared to have expired registration tags.

Galecki stated that the truck could get “pulled over” and

informed Finch that if he did get pulled over in the truck,

there was a receipt showing the registration had been

renewed. In the meantime, Galecki instructed Finch not to

place “product in the Dodge until we have the new sticker.”

Defendants emphasize that Ritchie freely gave DEA

Agent Cosey a tour of Zencense’s Florida facility, but that

tour was given only after DEA agents had already raided the

Nevada warehouse. Weighing the competing inferences that

may be drawn from the record, the jury could reasonably

conclude that this tour, which was given only after the cat

was already out of the bag, reflected simply a disingenuous

and opportunistic shift in strategy towards law enforcement.

That inference is further bolstered by the fact that, during the

tour, Ritchie implausibly claimed to Agent Cosey that he

was unaware that customers were smoking Zencense

products.

Third, there was evidence from which the jury could

rationally infer that Defendants knew that the substances

involved were “subject to seizure at customs.” McFadden,

576 U.S. at 192 n.1. Specifically, Defendants were well

aware that the XLR-11 that they imported from China was

26 USA V. GALECKI

mislabeled as containing other products, such as “cytidine-

5' monophosphate.” A rational jury could conclude that the

products were mislabeled in this way precisely to avoid their

seizure by customs. Defendants argue that this practice was

standard throughout the spice industry, but that point does

not preclude the jury from drawing a permissible adverse

inference from the use of such mislabeling. Moreover, as

noted earlier, Defendants were aware of, and planned for, the

possibility that some of their products might be seized or

confiscated. In addition, even prior to the search of the

Nevada warehouse, Ritchie was informed of raids on retail

establishments, and at one point Zencense had a policy of

reshipping an order if the product that it shipped to a retailer

was seized.

Fourth, there was ample evidence that Defendants took

additional steps to “conceal[],” to the extent that they could,

the nature of their “activities.” McFadden, 576 U.S. at 192

n.1. As we have explained, the evidence readily supports the

inference that Defendants knew that their products would be

consumed by those who purchased them from smoke shops

and other retailers. Defendants, however, sought to obscure

that fact by labeling their products as “potpourri” or

“incense” and “not for human consumption.” They similarly

instructed their employees not to refer to the spice as having

“flavors,” which could connote ingestion. Defendants were

also aware that their “potpourri” products sold for very high

prices that vastly exceeded what a home aromatic would

actually fetch, which further supports a reasonable inference

that Defendants were engaged in a charade that sought to

avoid formally admitting what they knew that they were

selling.

The record also contains additional circumstantial

evidence beyond the four types that McFadden identified.

USA V. GALECKI 27

Because Templeman testified that Ritchie explained the

concept of an “analogue” to her, the jury could infer that

Ritchie was specifically familiar with the Analogue Act.

There was also testimony that, during the relevant

timeframe, spice distributors, including Zencense, serially

switched the cannabinoids they used as one after another was

formally added to the CSA’s schedules. When asked to

explain why Zencense kept changing the cannabinoid it

used, Templeman stated that “we knew that we were just

staying one step ahead of legality.”

Considering the record evidence as a whole, we have

little difficulty concluding that a rational jury could find,

beyond a reasonable doubt, that both Galecki and Ritchie

had the scienter required for an Analogue Act case under

McFadden. See United States v. Anwar, 880 F.3d 958, 967–

68 (8th Cir. 2018).

B

We next address Defendants’ contention that the district

court erred in giving a “deliberate ignorance” instruction

modeled on this court’s en banc decision in United States v.

Jewell, 532 F.2d 697 (9th Cir. 1976) (en banc). Under

Jewell, the Government can satisfy the scienter requirement

in a drug-trafficking case by showing that “[1] the defendant

[was] aware” that it was “highly probable” that he was

dealing with a controlled substance but [2] he acted with “a

conscious purpose to avoid learning the truth.” Id. at 704

(citation omitted); see also United States v. Heredia, 483

F.3d 913, 919–21 (9th Cir. 2007) (en banc). Defendants

contend that there was insufficient evidence to support

giving such an instruction here. See United States v. Yi, 704

F.3d 800, 804 (9th Cir. 2013) (“An instruction is appropriate

if it is ‘supported by law and has foundation in the

28 USA V. GALECKI

evidence.’” (citation omitted)). 7 We review the district

court’s conclusion that the evidence supported a Jewell

instruction only for an abuse of discretion, see Heredia, 483

F.3d at 921–22, and in conducting that review, we “must

view the evidence in the light most favorable to the party

requesting it,” Yi, 704 F.3d at 804 (citation omitted). We

find no abuse of discretion.

As framed in the jury instructions here, the first element

of the Jewell standard is that “the defendants . . . were aware

of a high probability that the charged controlled substance

analogue or analogues were treated as a controlled substance

by the Analogue Act.” This element is amply supported in

the trial record. As we have explained, there was substantial

evidence to support a finding that Defendants actually knew

that XLR-11 was treated as a controlled substance under the

Analogue Act. It necessarily follows that the evidence was

likewise sufficient to support the conclusion that Defendants

knew, at a minimum, that there was a high probability that

XLR-11 was a controlled substance analogue.

There was also sufficient evidence to support the second

element of the Jewell standard—i.e., that Defendants

“deliberately avoided learning the truth” about XLR-11. As

set forth earlier, Defendants were well aware that their

trafficking in XLR-11 had to be concealed, at all stages, from

law enforcement in order to avoid seizure of the XLR-11 and

their smokable products containing it. Defendants also

changed the cannabinoid that they used as earlier ones were

listed on the CSA’s schedules, which further supports an

7

Defendants do not contend that Jewell’s deliberate-ignorance standard

is inapplicable to Analogue Act cases under McFadden, and we therefore

assume arguendo that the district court’s Jewell instruction correctly

stated the law. Cf. Anwar, 880 F.3d at 967–68 (upholding a “deliberate

ignorance” instruction in an Analogue Act case).

USA V. GALECKI 29

inference that they deliberately attempted to select close-to-

the-edge substances that they could superficially claim were

not yet obviously illegal but that would undoubtedly produce

the high that their ultimate consumers wanted. On this

record, a jury could reasonably conclude that Defendants

deliberately avoided learning whether XLR-11 was treated

as a controlled substance under the Analogue Act.

We therefore hold that the district court did not abuse its

discretion in concluding that its Jewell instruction had a

sufficient foundation in the evidence.

C

Defendants contend that, as applied in this case, the

Analogue Act’s requirement that the substance in question

have a “chemical structure” that is “substantially similar to

the chemical structure of a controlled substance in schedule

I or II,” see 21 U.S.C. § 802(32)(A)(i), is unconstitutionally

vague. “As generally stated, the void-for-vagueness

doctrine requires that a penal statute define the criminal

offense with sufficient definiteness that ordinary people can

understand what conduct is prohibited and in a manner that

does not encourage arbitrary and discriminatory

enforcement.” Kolender v. Lawson, 461 U.S. 352, 357

(1983). Defendants argue that the underlying standard for

determining chemical structural similarity is impermissibly

vague and that “[n]o person of ordinary intelligence would

have a reasonable opportunity to ‘know’ that XLR-11 is

‘substantially similar’ in chemical structure to JWH-018.”

We reject Defendants’ as-applied vagueness challenge.

Because the phrase “substantially similar” “is not further

defined by the statute, we give that phrase its ordinary

meaning.” United States v. Kuzma, 967 F.3d 959, 968 (9th

Cir. 2020). In common parlance, “similar” means “having

30 USA V. GALECKI

characteristics in common” or “alike in substance or

essentials.” Similar, WEBSTER’S THIRD NEW

INTERNATIONAL DICTIONARY 2120 (1981 ed.) (“WEBSTER’S

THIRD”). The word “substantial,” as relevant here, means

that the thing “specified” is present “to a large degree or in

the main.” Substantial, WEBSTER’S THIRD, supra, at 2280.

Accordingly, the chemical structures of two substances are

“substantially similar” if they share common essential

characteristics “to a large degree or in the main.” Further,

the term “structure,” as used in the context of a chemical,

refers to “the arrangement of particles or parts in a

substance,” as in “the arrangement and mode of union of the

atoms in a molecule.” Structure, WEBSTER’S THIRD, supra,

at 2267. The statute thus requires, at a minimum, that the

two chemicals share, to a large degree or in the main,

common components in terms of the arrangement of atoms

and the chemical bonds between those atoms. However,

because the statute only requires “substantial” similarity, it

clearly contemplates that two substances may contain some

differences in their chemical structures and yet still be

sufficiently “alike” in their “essentials” to remain

“substantially similar.” Under these standards, Defendants’

as-applied vagueness challenge fails.

As an initial matter, the trial evidence in this case

provided an ample basis to conclude that XLR-11 satisfies

the statutory requirement that, at a minimum, it must share

common chemical structural features, in terms of the

arrangement of atoms and chemical bonds, with JWH-018.

As set forth earlier, the Government presented expert

testimony that XLR-11 and JWH-018 share a common

“acylindole core,” including the “same atoms” in the “same

locations” with the “exact same structure.” See supra

section I(B)(2). Defendants note that, despite this common

USA V. GALECKI 31

chemical core, there are also some structural differences

between the two substances. Specifically, as we have

explained, the Government’s chemical expert noted two

differences in the respective chemical structures of XLR-11

and JWH-018: (1) in contrast to JWH-018, “a fluorine atom”

was substituted in the tail portion of XLR-11’s structure; and

(2) the “naphthyl group” in JWH-018 was replaced by a

“tetramethylcyclopropyl” group in XLR-11. See supra

section 1(B)(2). Accordingly, the question here is whether

the statute provides an adequate basis for assessing whether

these particular differences in the two substances’ chemical

structures are sufficiently significant that, despite their

common chemical core, XLR-11 and JWH-018 should not

be considered “substantially similar” in “chemical

structure.”

In addressing that question, we agree with the Second

Circuit’s observation that, in judging similarity of chemical

structure, what matters is whether the particular structural

differences between two otherwise similar chemicals make

a difference “in the substance’s relevant characteristics.”

United States v. Roberts, 363 F.3d 118, 124 (2d Cir. 2004)

(emphasis added). In Roberts, the court noted that, apart

from “only two atoms,” the two substances in question had

otherwise identical chemical structures, as reflected in “two-

dimensional diagrams of the molecules.” Id. The

Government argued that this high percentage of overlapping

chemical structural similarity should be enough, “standing

alone,” to “establish substantial similarity in chemical

structure.” Id. (simplified). The court declined to adopt this

argument, noting that it would not be the “appropriate rule

to apply in every situation” because, “[i]n another case, it

might well be that a one- or two-atom difference in a

molecule made such a radical difference in the substance’s

32 USA V. GALECKI

relevant characteristics that any similarity in two-

dimensional charts would not be ‘substantial’ enough to

satisfy the definition of ‘controlled substance analogue.’”

Id. This analysis indicates that at least one way to establish

the required substantial similarity in chemical structure

would be to show that (1) the alleged analogue shares a

significant core of common chemical structural features with

a listed substance, in terms of arrangement of atoms and

chemical bonds; and (2) any residual differences in the

analogue’s chemical structure, as compared to that of a listed

substance, do not result in a material “difference in the

substance’s relevant characteristics.” Id. 8

Under that standard, Defendants’ as-applied vagueness

challenge must be rejected. Here, the trial evidence provides

a sufficient basis for concluding that XLR-11 and JWH-018

share a common core of identical chemical structural

features and that the subset of differences between the two

chemicals does not make a difference in the substance’s

“relevant characteristics.” Here, the Government’s expert

on chemical structure testified that the replacement of the

“naphthyl group” in JWH-018 with a

“tetramethylcyclopropyl” group in XLR-11 was not a

“significant enough change,” because it would not materially

affect the substance’s chemical “binding affinity in the

cannabinoid receptors.” Cf. Roberts, 363 F.3d at 125

(considering, in judging chemical similarity, how the body

metabolized the analogue). As for the “addition of a fluorine

8

There may well be other ways to establish the required substantial

similarity in chemical structure, and our decision should not be

understood as foreclosing other possible approaches that may be

appropriate in other cases with different facts. For purposes of the as-

applied challenge presented here, the approach suggested by the Second

Circuit’s Roberts decision is sufficient to resolve this case.

USA V. GALECKI 33

atom” in XLR-11, the Government presented expert

testimony at trial that the only relevant resulting difference

in chemical interaction and processing inside the body was

that the presence of a fluorine atom “help[s] the drug stay in

the body and not be metabolized or excreted too quickly.”

Moreover, as the Supreme Court noted in McFadden, the

other elements of an offense, such as scienter, can serve to

alleviate vagueness concerns by independently narrowing

the potential range of conduct covered by the statute. 576

U.S. at 197. As noted earlier, there is ample evidence in the

record to permit a jury to conclude that Defendants were

aware that XLR-11 was a controlled substance under the

Analogue Act, even if they did not know its precise chemical

structure. See supra section III(A). As a result, Defendants

are poorly positioned to contend that they could not be

expected to discern, through ordinary intelligence, the line

between lawful and unlawful conduct that is reflected in the

substantially-similar-chemical-structure element of the

statutory definition of an analogue. See Grayned v. City of

Rockford, 408 U.S. 104, 108 (1972). Additionally,

Defendants are simply wrong in contending that vagueness

doctrine precludes Congress from ever drawing legal lines

that take account of the complexities of the underling subject

matter being regulated. Those who traffic in substances that

they know will be ingested by consumers and will have

significant pharmacological effects can hardly be heard to

complain that the relevant line-drawing may involve a level

of complexity that, as here, may call for expert testimony.

The asserted vagueness of the substantially-similar-

chemical-structure element is further significantly mitigated

by the additional requirement that there be substantial

similarity in the actual or represented pharmacological effect

34 USA V. GALECKI

of the alleged analogue. 9 Even though the two elements of

substantial similarity in chemical structure and substantial

similarity in pharmacological effect are separate and distinct,

the two elements can operate in tandem to adequately narrow

the as-applied scope of the statute in a particular case. For

example, in a case—such as this one—in which the jury is

instructed to use the same listed substance (here, JWH-018)

in evaluating both elements of the definition of an

“analogue,” the requirement that there be a substantial

similarity in pharmacological effect will have the practical

consequence of placing an outer limit on the range of

relevant differences in chemical structure. That is, in such a

case, the statute’s elements will not all be met if the

difference in chemical structure in the analogue—even if it

seems superficially trivial—substantially alters the

analogue’s pharmacological effect. This additional element

places a significant outer limit on the range of chemical

variations that will fall within the statutory definition of the

offense as a whole, thereby further mitigating any vagueness

concerns.

Here, the expert testimony presented by the Government

at trial was that the two above-identified differences in

chemical structure between XLR-11 and JWH-018 did not

impede XLR-11 from having a substantially similar

pharmacological effect as JWH-018. Specifically, Dr.

Trecki described the concept of an “activity cliff,” which

refers to a structural change to a chemical that causes it to

“lose the pharmacological activity, meaning, in more

9

As we have observed, see supra at 12–13, the statute actually phrases

this additional requirement in the disjunctive, which might suggest that

it is an alternative element rather than an additional one. However, the

Government has repeatedly conceded, in this case and elsewhere, that it

is an additional requirement. See McFadden, 576 U.S. at 194 n.2.

USA V. GALECKI 35

layman’s terms, if you make a certain change, the drug will

stop working.” Dr. Trecki then explained that the chemical

differences between XLR-11 and JWH-018 did not result in

such an activity cliff:

So when we look at the differences in the

functional groups between . . . JWH-018 and

XLR-11, the changes that scientists used to

make these new molecules, it retained and

actually intensified the pharmacological

effect of the substance. The activity cliff

phenomena or theory did not apply here. The

substances all continued to work well or

greater than the original JWH substance.

Indeed, neither of Defendants’ experts affirmatively opined

that the differences in chemical structure on which they

focused would lead to XLR-11 having overall materially

reduced pharmacological effects than JWH-018.

Taking all of the foregoing points together, we reject

Defendants’ as-applied vagueness challenge to the statutory

definition of a “controlled substance analogue.”

D

Defendants argue that their due process rights were

violated by the district court’s failure to compel the

Government to grant use immunity to two potential defense

witnesses who would have testified as to Defendants’

scienter concerning whether XLR-11 was covered by the

Analogue Act. Specifically, Defendants sought to call

Timothy Dandar, a lawyer who would have testified that he

advised Defendants that XLR-11 was “not an illegal product

under the Controlled Substance Analogue Act,” and Adam

36 USA V. GALECKI

Libby, a chemist who would have testified that he advised

Defendants that XLR-11 was not substantially similar in

chemical structure to JWH-018. The parties agreed below

that, if called as witnesses, Dandar and Libby would assert

their Fifth Amendment rights. The Government declined to

grant Dandar and Libby use immunity and the trial court

denied a motion by the defense to compel the Government

to do so. Reviewing de novo, see United States v. Straub,

538 F.3d 1147, 1156 (9th Cir. 2008), we conclude the trial

court did not err.

“[F]or a defendant to compel use immunity[,] the

defendant must show that: (1) the defense witness’s

testimony was relevant; and (2) either (a) the prosecution

intentionally caused the defense witness to invoke the Fifth

Amendment right against self-incrimination with the

purpose of distorting the fact-finding process; or (b) the

prosecution granted immunity to a government witness in

order to obtain that witness’s testimony, but denied

immunity to a defense witness whose testimony would have

directly contradicted that of the government witness, with

the effect of so distorting the fact-finding process that the

defendant was denied his due process right to a

fundamentally fair trial.” Id. at 1162. There is no dispute

that Dandar’s and Libby’s testimony would have been

“relevant” at step one of the Straub test. Id. The only

question is whether the district court correctly concluded that

the Defendants failed to establish either of the two Straub

alternatives at step two. It did.

Defendants rely on the second Straub alternative, which

focuses on the effect of the Government’s actions in denying

immunity to defense witnesses while granting it to

prosecution witnesses. Although Defendants do not point to

any witnesses who were formally granted immunity in this

USA V. GALECKI 37

case, the Government concedes in its answering brief that we

have held “that government witnesses who are granted

favorable plea deals in return for their testimony are

encompassed by Straub[’s] use of the term ‘immunized.’”

United States v. Wilkes, 744 F.3d 1101, 1105 n.1 (9th Cir.

2014). Defendants, however, failed to show, as Straub

requires, that Libby and Dandar would have given testimony

that “directly contradicted” the testimony of one of the

Government cooperating witnesses in a way that

impermissibly distorted the fact-finding process.

This case bears no resemblance to Straub, in which we

found the requisite direct contradiction when the defense

witness sought to be immunized would have given directly

contradictory testimony concerning the critical content of a

specific conversation that occurred at a particular place and

during a particular timeframe. 538 F.3d at 1162–63. No

Government witness here testified to the contents of any

communications between Defendants and Dandar or Libby,

much less that the contents of those communications were

the opposite of what Defendants claimed. Moreover,

although (as we have explained) the testimony of the

Government’s witnesses supplied evidence from which a

rational jury could circumstantially conclude that Galecki

and Ritchie knew that XLR-11 was treated as a controlled

substance by virtue of the Analogue Act, those witnesses’

testimony also included other elements that refute any

suggestion that the refusal to immunize Dandar and Libby

resulted in such a distortion of the fact-finding process that

the trial was rendered fundamentally unfair. For example,

Templeman also testified that she was specifically told by

Ritchie and Galecki that the products they were selling were

legal. Indeed, after testifying that Ritchie had explained the

concept of an analogue to her, Templeman added that she

38 USA V. GALECKI

was not worried that they might actually be selling analogues

because she “believed the product was legal” based on her

conversations with Defendants.

Defendants are not entitled to insist on immunity for any

witness that might provide additional testimony that, from

Defendants’ point of view, might helpfully contribute to the

overall assessment of the circumstantial evidence. They

were required, under Straub, to show a direct contradiction

in testimony that resulted in a fundamentally unfair

distortion of the fact-finding process. The district court

correctly held that they failed to make that showing.

IV

Defendants contend that the evidence was insufficient to

support their convictions for operating a continuing criminal

enterprise (“CCE”) in violation of the CSA. See 21 U.S.C.

§ 848. “In order to prove that a defendant is guilty of

engaging in a continuing criminal enterprise in violation of

21 U.S.C. § 848, the government must establish (1) that the

defendant’s conduct constituted a felony violation of federal

narcotics law; (2) that the described conduct occurred as part

of a continuing series of violations of federal narcotics law;

(3) that the defendant undertook the activity in concert with

five or more persons; (4) that the defendant acted as the

organizer, supervisor, or manager of the criminal enterprise;

and (5) that the defendant obtained substantial income or

resources from the purported enterprise.” United States v.

Hernandez-Escarsega, 886 F.2d 1560, 1570 (9th Cir. 1989).

A “continuing series” for purposes of the second element

means “three or more federal narcotics violations.” Id. “It

is not necessary,” for purposes of the third “in concert with”

element, that the defendant “act in concert with five or more

persons at the same time, or that five or more persons be

USA V. GALECKI 39

engaged in any single criminal transaction.” United States v.

Burt, 765 F.2d 1364, 1366 (9th Cir. 1985). However, the “in

concert with” element does “require[] proof of a conspiracy”

sufficient to violate 21 U.S.C. § 846. Rutledge v. United

States, 517 U.S. 292, 300 (1996). We conclude that the

evidence was sufficient under these standards.

Defendants contend that there was insufficient evidence

to support the jury’s conclusion that they acted “in concert”

(i.e., criminally conspired) with five or more persons. We

disagree. The evidence was sufficient to permit a rational

jury to conclude that Defendants acted in concert with the

following five Zencense employees: Ryan Eaton, Rachel

Templeman, Robert Biggerstaff, Corey Finch, and Diana

Duty.

Defendants assert that Eaton cannot be counted as one of

the five requisite conspirators given that the jury acquitted

him on all charges. That is wrong. “It is well established

that a person may be convicted of conspiring with a co-

defendant even when the jury acquits that co-defendant of

conspiracy.” United States v. Ching Tang Lo, 447 F.3d

1212, 1226 & n.8 (9th Cir. 2006) (citing United States v.

Powell, 469 U.S. 57, 65–66 (1984), and United States v.

Valles-Valencia, 823 F.2d 381, 381–82 (9th Cir. 1987)). As

we explained, “inconsistent verdicts do not necessarily lead

to the conclusion that the guilty verdict was the incorrect

verdict,” because “inconsistent verdicts can just as easily be

the result of jury lenity as a determination of the facts.” Id.

at 1226 n.8 (citation and internal quotation marks omitted).

Consequently, “the acquittal of all conspirators but one does

not necessarily indicate that the jury found no agreement to

act.” Id. (citation omitted).

40 USA V. GALECKI

Although the jury’s acquittal of Eaton is thus not

dispositive, we must still undertake an “independent review

of the sufficiency of the evidence” as to whether Galecki and

Ritchie conspired with Eaton. Powell, 469 U.S. at 67. We

conclude that the evidence on that point was indeed

sufficient. Finch testified that he trained Eaton how to make

spice, including teaching him the same “knowledge of the

process and the additives and things like that” that had

originally been conveyed to Finch by Galecki. Finch

testified that Eaton, after some time working with Zencense

in Florida, left for Las Vegas. Shipping records showed that

Ritchie then shipped packages to and from Eaton in Las

Vegas, with shipping costs to “send[] packages between

Burton Ritchie and Ryan Eaton at the warehouse” alone

totaling just over $14,000. When agents raided the Nevada

warehouse where Eaton worked, they found industrial

cement mixers, drying tables, jugs of flavoring, a large safe,

mylar bags, documentation from Zencense’s Chinese

exporters, and large drums of acetone for processing spice.

The Government also presented evidence that Eaton texted

an acquaintance that “I do nothing but make itchy spice in a

hot warehouse and float in my pool.” A special agent

testified that Eaton said that he received instructions that

“the word ‘flavoring’ should never be used,” that “it should

always be referred to as a fragrance rather than a flavor,” and

that if anyone joked about the phrase “[n]ot for human

consumption,” that employee could “potentially be fired on

the spot.” Based on this evidence, a rational jury could find,

beyond a reasonable doubt, that Galecki and Ritchie acted in

USA V. GALECKI 41

concert with Eaton in undertaking the underlying drug-

trafficking activity. 10

The same is true of Templeman, Biggerstaff, and Finch,

all of whom testified at trial. Templeman’s testimony

provided substantial evidence from which a rational jury

could conclude that she and Defendants acted in concert.

Templeman testified that she was aware of instructions to

use euphemistic language when describing the flavors of

Zencense products; that she was aware Zencense shipments

had been raided by law enforcement and that she had

conveyed that information to Ritchie; that Ritchie told her

what an analogue was; and that she, a single Zencense

“potpourri” salesperson, made a 5 percent commission on

sales, with her commission amounting to between $100,000

and $125,000, in the months of May to August 2012 alone.

Biggerstaff’s testimony likewise established that he was

aware of the company’s requirement to use euphemistic

language to describe its products’ flavors; was aware

Zencense products had been raided by law enforcement; was

aware that Defendants controlled what Biggerstaff called

“secret” storage units to replace “confiscated” product; had

been taught by Galecki to manufacture spice, which

Biggerstaff knew contained XLR-11; and that Galecki told

him XLR-11 was just “one molecule off” from another

synthetic drug. And Finch testified that although he initially

thought he was making incense, he later learned he was in

fact producing spice; that he had originally been trained to

produce spice by Galecki; that he placed “not for human

10

For the same reason, we reject Defendants’ contention that, because

he was acquitted, Eaton cannot serve as a supervisee for purposes of

establishing that Defendants acted in concert with at least one or more of

the five supervisees in undertaking “three or more federal narcotics

violations.” Hernandez-Escarsega, 886 F.2d at 1570.

42 USA V. GALECKI

consumption” stickers on Zencense products; and that he

was aware of “the flavor versus fragrance rule” in talking

about Zencense products. While Finch testified that he

began to believe the product was questionable when

interviewed by law enforcement, implying that he had not

believed the product was illegal prior to that point in time,

the jury was not required to credit Finch’s self-serving

statements about his own state of mind.

The record evidence is less robust as to Diana Duty, who

did not testify at trial. But we must affirm Defendants’ CCE

conviction so long as, “viewing the evidence in the light

most favorable to the prosecution, any rational trier of fact

could have found the essential elements of the crime beyond

a reasonable doubt.” Jackson, 443 U.S. at 319. According

to Finch, Duty conducted Finch’s job interview, and she

chose to conduct it, not at Zencense’s offices, but at a nearby

McDonald’s. After he “passed the interview,” Finch was

then “taken back to a unit where I was given the job.” Finch

also stated that, after he was hired, it was Duty who

instructed him as to “exactly” what “was the terminology we

should use.” She stated that “[a]ll plant material” was to be

called “product” and that “[t]here’s no flavor; there’s

fragrance.” Finch did not think that it was unusual to call

plant material “product,” but he thought it seemed “a little

odd” that “it was pretty harsh on the flavor versus fragrance

rule,” but since “it was a new job,” he “did what [he] was

told.” Duty thus had the role of interviewing and clearing a

prospective employee off-campus before bringing him back

to Zencense’s facility, and she was the one who then

instructed that employee in the crucial euphemistic language

that was employed by Defendants to describe their products.

The nature of Duty’s knowledge and role in the company

provides a sufficient circumstantial basis to permit a rational

USA V. GALECKI 43

jury to conclude, beyond a reasonable doubt, that Defendants

acted in concert with Duty.

V

Defendants also challenge their convictions for mail

fraud, wire fraud, and money laundering (Counts 2–19). We

reverse Defendants’ convictions for mail fraud and wire

fraud, but we affirm their convictions for money laundering.

A

Defendants argue that the evidence was insufficient to

prove all of the elements necessary to sustain their

convictions for mail and wire fraud (Counts 9–19). 11 “The

elements of mail and wire fraud are: (1) proof of a scheme

to defraud; (2) using the mails or wires to further the

fraudulent scheme; and (3) specific intent to defraud.”

United States v. Sullivan, 522 F.3d 967, 974 (9th Cir. 2008)

(citing 18 U.S.C. §§ 1341, 1343). “In order to prove a

‘scheme to defraud,’ the jury must find that the defendant

employed ‘material falsehoods.’” United States v. Lindsey,

850 F.3d 1009, 1013 (9th Cir. 2017) (quoting Neder v.

United States, 527 U.S. 1, 20 (1999)). However, “‘the

government does not have to prove actual reliance upon the

defendant’s misrepresentations’ to satisfy materiality.” Id.

at 1014 (quoting Neder, 527 U.S. at 25). Rather, “a false

statement is material if it has ‘a natural tendency to

influence, or [is] capable of influencing,’” the decisionmaker

to whom the statement “was addressed.” Id. at 1013

11

Specifically, these charges included conspiracy to commit mail fraud

in violation of 18 U.S.C. § 1349 (Count 9); conspiracy to commit wire

fraud in violation of 18 U.S.C. § 1349 (Count 14); four substantive

counts of mail fraud in violation of 18 U.S.C. § 1341 (Counts 10–13);

and five substantive counts of wire fraud in violation of 18 U.S.C. § 1343

(Counts 15–19).

44 USA V. GALECKI

(quoting Neder, 527 U.S. at 16). We agree that, under these

standards, the Government’s evidence at trial was

insufficient to prove the mail fraud and wire fraud offenses

charged in the indictment.

The scheme to defraud that was charged in the

indictment and that was the basis for all of the mail fraud and

wire fraud counts was that, “for the purposes of obtaining

money from others,” Defendants “made materially false and

fraudulent pretenses, representations, and promises that

Zencense manufactured and distributed ‘herbal incense,’

‘potpourri,’ and ‘aromatherapy’ not for human consumption

to conceal that they then and there well knew that the ‘herbal

incense,’ ‘potpourri,’ and ‘aromatherapy’ was synthetic

cannabinoid products for human consumption.” The jury

was likewise expressly instructed, nearly verbatim, that all

of the fraud charges rested on these alleged false material

representations.

The problem with the Government’s theory is that, in

assessing whether Defendants made a “material falsehood”

for the purpose of obtaining money or property, materiality

is judged in relation to the persons to whom the statement is

addressed. Lindsey, 850 F.3d at 1013; see also Universal

Health Servs., Inc. v. United States ex rel. Escobar, 579 U.S.

176, 193 (2016) (“Under any understanding of the concept,

materiality looks to the effect on the likely or actual behavior

of the recipient of the alleged misrepresentation.”

(simplified)); Neder, 527 U.S. at 16 (holding that, in cases

charging materially false statements to a government agency

or officer, “a false statement is material if it has a natural

tendency to influence, or is capable of influencing, the

decision of the decisionmaking body to which it was

addressed.” (emphasis added) (simplified)). Here, the

persons to whom the charged statements were made for the

USA V. GALECKI 45

purpose of obtaining money or property were the retailers

and end consumers of Zencense’s products. But the

Government presented no evidence at trial that the specific

alleged misrepresentations were materially false to anyone

who bought Zencense’s products.

The Government presented no evidence whatsoever that

the labeling of Zencense’s products as “potpourri” and “not

for human consumption” had any natural tendency to

influence retailers or consumers into thinking that they were

purchasing extraordinarily expensive high-end home

aromatics. All of the Government’s evidence, in fact,

pointed in precisely the opposite direction—i.e., that the

purchasers all understood, and were in on, the charade. For

example, the Government introduced testimony from Ryan

Yarbro, an employee of a company with a chain of smoke

shops that sold Zencense products, and he stated that

“everyone, at least in the company I worked for, knew that

people would be smoking it.” Victor Nottoli, who owned

another chain of smoke shops that sold Zencense products,

testified that his understanding of Zencense products’ use by

consumers was that “[t]hey were smoking it.” Templeman,

a Zencense sales employee, testified that when she used the

words “spice or incense or potpourri” to refer to Zencense’s

products on sales calls to retailers, they “knew what you

were talking about.”

Moreover, the Government introduced testimony

showing that Defendants deliberately avoided marketing

their products to retailers who were interested in purchasing

true potpourri or incense. Asked why the company did not

market Zencense potpourri to stores like Target or Walmart,

Biggerstaff explained that “[w]e didn’t believe they would

be a good customer for our product” because they would be

expecting “an air freshener,” and “that’s not the product that

46 USA V. GALECKI

we were selling.” Templeman testified that most of

Zencense’s customers “were either smoke shops or

alternative adult emporiums, just not your run of the mill

products,” and that sales staff did not try to market to

“Walmart or Bed Bath & Beyond.” The Government also

introduced Zencense’s sales script into evidence, and that

document instructed salespersons making calls that, if a

potential client was unfamiliar with spice, they were to ask

if the store sold pipes. If the answer was no, the script

explained, “[m]ost likely this will not be a potential

customer” because “they are not the kind of store we want to

sell to.” In such cases, the script instructed, the salesperson

should “[e]nd call, mark ‘Not Interested,’ . . . and mark for

deletion.”

At no point did the Government introduce evidence that

Defendants intentionally marketed or sold their products as

real “spice” to cooking shops, as “incense” to yoga studios,

or as “potpourri” to home improvement stores—in other

words, directed their products, in any way, toward any

retailers or consumers as to whom the “potpourri” label

might have had “a natural tendency” to influence them to

believe they were purchasing something other than drugs.

Lindsey, 850 F.3d at 1013. Indeed, the Government

underscored the point by bringing the CEO of an actual

potpourri company to trial, who testified that he sold his

potpourri for 1/90th the price of Zencense’s product, used

fundamentally different ingredients in crafting his potpourri,

sold his products to an entirely different set of retailers, and

did not use secret code words to describe his potpourri

products.

On this record, the Government simply failed to prove

that Defendants made any materially false statement to

purchasers for the purpose of obtaining money or property.

USA V. GALECKI 47

The Government’s evidence confirmed that both Defendants

and the purchasers whose money Defendants were trying to

obtain understood the labels “potpourri” and “not for human

consumption” as a code for “smokable synthetic

cannabinoids.” While “[a] misrepresentation may be

material without inducing any actual reliance,” United States

v. Blixt, 548 F.3d 882, 889 (9th Cir. 2008) (citation

omitted)—as in the case of a false statement to an

undercover law enforcement officer who is secretly aware of

the defendant’s fraudulent scheme—there can be no

materially false statement when both the listener and the

hearer know and intend that the words being used have the

same distinctive meaning.

While Defendants were properly convicted under the

CSA, the Government’s effort to shoehorn this case into the

mail fraud and wire fraud statutes failed as a matter of law.

Defendants were entitled to a judgment of acquittal on these

counts. 12

B

We next address Defendants’ convictions for money

laundering offenses (Counts 2-8). 13 Each of these charges

12

At oral argument, the Government suggested that the fraud convictions

could be sustained on the alternative theory that Defendants falsely

stated or implied to retailers that Zencense’s products were legal, thereby

inducing retailers to purchase products they would otherwise have

refrained from purchasing. This contention fails because, as the district

court correctly recognized, the jury cannot properly convict a defendant

of mail fraud based on different misrepresentations from those that were

charged in the indictment. See United States v. Adamson, 291 F.3d 606,

614–16 (9th Cir. 2002).

13

Specifically, the indictment charged one count of conspiracy to engage

in financial transactions to promote unlawful activity, in violation of 18

48 USA V. GALECKI

required the Government to prove either that Defendants

carried out (Counts 4–7) or conspired to carry out (Counts

2–3, and 8) financial activity involving “specified unlawful

activity.” See 18 U.S.C. § 1956(a)(1), (a)(2)(A), (h). The

indictment listed, as the predicate “unlawful activity” for

these charges, all of the other charged offenses, including

both the CSA offenses and the fraud offenses. The jury

instructions likewise permitted the jury to rely on the

conduct underlying any of the charged violations of the CSA

or the fraud offenses. The jury returned general verdicts of

guilt on the money laundering charges, without specifying

which predicate the jury had relied on in convicting.

Given that we have affirmed Defendants’ convictions as

to the CSA offenses but reversed their convictions mail fraud

and wire fraud offenses, the question arises whether the

jury’s general verdict on the money laundering offenses—

which could have rested on any of these predicate offenses—

may stand. The Supreme Court has held that, in certain

circumstances, a general verdict of guilt must be set aside

“where the verdict is supportable on one ground, but not on

another, and it is impossible to tell which ground the jury

selected.” Yates v. United States, 354 U.S. 298, 312 (1957).

This rule applies, for example, where the unsupportable

ground for the verdict was time-barred by a statute of

limitations, see Yates, 354 U.S. at 304–11, or was tainted by

constitutional error, see Stromberg v. California, 283 U.S.

359, 367–68 (1931). However, in Griffin v. United States,

U.S.C. § 1956(h) (Count 2); one count of conspiracy to transport funds

to promote unlawful activity, in violation of 18 U.S.C. § 1956(h) (Count

3); four substantive counts of transporting funds to promote unlawful

activity, in violation of 18 U.S.C. § 1956(a)(2)(A) (Counts 4–7); and one

count of conspiracy to launder monetary instruments in violation of 18

U.S.C. § 1956(h) (Count 8).

USA V. GALECKI 49

502 U.S. 46 (1991), the Supreme Court distinguished Yates

and Stromberg and upheld a general verdict of conviction for

conspiracy, even though the verdict could have rested on

“either one of the two objects of the conspiracy” and one of

those objects was supported by insufficient evidence. Id. at

48, 60 (emphasis omitted). Indeed, the Court described any

such proposed extension of Yates to the insufficiency context

as “unprecedented and extreme.” Id. at 56. Moreover, the

Court noted that it had previously squarely held that “when

a jury returns a guilty verdict on an indictment charging

several acts in the conjunctive, . . . the verdict stands if the

evidence is sufficient with respect to any one of the acts

charged.” Turner v. United States, 396 U.S. 398, 420 (1970)

(quoted in Griffin, 502 U.S. at 56–57). The Court held that

the resulting “distinction between legal error (Yates) and

insufficiency of proof (Turner)” is one that “makes good

sense”:

Jurors are not generally equipped to

determine whether a particular theory of

conviction submitted to them is contrary to

law—whether, for example, the action in

question is protected by the Constitution, is

time barred, or fails to come within the

statutory definition of the crime. When,

therefore, jurors have been left the option of

relying upon a legally inadequate theory,

there is no reason to think that their own

intelligence and expertise will save them

from that error. Quite the opposite is true,

however, when they have been left the option

of relying upon a factually inadequate theory,

50 USA V. GALECKI

since jurors are well equipped to analyze the

evidence.

Griffin, 502 U.S. at 58–59.

Because we have reversed the mail fraud and wire fraud

convictions for insufficiency of the evidence, this case

would appear to be governed by the Griffin/Turner

insufficiency rule rather that the Yates legal-error rule. On

the other hand, the jury here arguably was not “well

equipped” to detect the insufficiency of the evidence as to

the mail fraud and wire fraud predicates, see Griffin, 502

U.S. at 59, because the jury did convict Defendants of those

offenses despite the evidentiary insufficiency that we have

identified. Moreover, we have previously recognized that,

in some cases, a conclusion that the evidence was

insufficient may actually rest more on a legal determination

than a factual one—i.e., it may rest on the conclusion that

the amply proved conduct simply “fails to come within the

statutory definition of the crime” as charged in the

indictment. Griffin, 502 U.S. at 59 (stating that such a legal

determination is subject to the Yates rule); see United States

v. Gonzalez, 906 F.3d 784, 791 (9th Cir. 2018)

(characterizing our prior decision in United States v.

Manarite, 44 F.3d 1407, 1413 (9th Cir. 1995), as an example

of an insufficiency determination that actually rests on a

“legal deficiency” that, under Griffin, would be subject to the

Yates rule). We conclude that we need not decide whether

this case is governed by the Griffin/Turner rule or the Yates

rule. Even assuming that Yates applies, the Supreme Court

has squarely held that “errors of the Yates variety are subject

to harmless-error analysis.” Skilling v. United States, 561

U.S. 358, 414 (2010). We conclude that any Yates error here

was harmless.

USA V. GALECKI 51

Skilling held that “[h]armless error analysis,” which was

described in the context of “collateral review” in Hedgpeth

v. Pulido, 555 U.S. 57 (2008), “applies equally to cases on

direct review.” 561 U.S. at 414 n.46. Hedgpeth held that

Yates errors are governed by the same harmless-error

standards that otherwise govern instructional errors,

including the omission of an element, see Hedgpeth, 555

U.S. at 60–62, and in the context of direct review, those

standards were set forth in Neder, 527 U.S. at 18–19. Under

Neder’s standards, a Yates error is harmless if, after a

“thorough examination of the record,” we are able to

“conclude beyond a reasonable doubt that the jury verdict

would have been the same absent the error.” Id. at 19. As

we shall explain, that standard is met here.

As noted earlier, the money laundering counts on which

Defendants were convicted consisted of four substantive

counts of transporting funds to promote unlawful activity, in

violation of 18 U.S.C. § 1956(a)(2)(A) (Counts 4–7), and

three different conspiracy counts charged under 18 U.S.C.

§ 1956(h). Each of the four substantive counts rested on a

specific monetary transfer from a Zencense account to a

bank account in Jiaojiang, China. Given that these large

payments to a Chinese account were clearly in payment for

the XLR-11 that was being purchased by Zencense from

China, these four particular monetary transactions were

directly tied to the drug-trafficking activity underlying the

CSA charges and only derivatively and indirectly tied to the

domestic sales activities that underlay the mail fraud and

wire fraud charges. Given that fact, we have little difficulty

concluding, beyond a reasonable doubt, that the jury’s

conviction on these four substantive accounts “would have

been the same absent” the asserted Yates error in giving the

jury the alternative option of relying on the fraud charges.

52 USA V. GALECKI

Neder, 527 U.S. at 19. And because Count 3 explicitly

charged a conspiracy to transfer money “from a place in the

United States to and through a place outside of the United

States, namely, China,” the same reasoning readily leads us

to conclude that any Yates error with respect to that

conspiracy count was likewise harmless.

That leaves only the conspiracy charges in Count 2,

which alleged a conspiracy to “conduct financial

transactions . . . which involved the proceeds of [the]

specified unlawful activity,” and Count 8, which alleged a

conspiracy to “engage in a monetary transaction . . . in

criminally derived property,” namely, the “deposit,

withdrawal, transfer, and exchange of funds and monetary

instruments, such property having been derived from [the]

specified unlawful activity” (emphasis added). As charged,

these two conspiracies focused on the funds obtained from

Zencense’s overall operations, and so, unlike the other five

charges, they are not similarly focused directly on the

purchase of XLR-11. In support of these charges, the

Government introduced evidence of domestic transactions

involving Zencense’s revenues, and the Government

expressly relied on both the drug trafficking and fraud

predicates in urging the jury to convict on these counts.

Despite that difference, we nonetheless conclude beyond a

reasonable doubt that the “jury verdict” on these two counts

“would have been the same absent” any Yates error. Neder,

527 U.S. at 19.

As noted earlier, the theory of mail fraud and wire fraud

charged in the indictment was that Defendants made

materially false representations about their products “to

conceal that they then and there well knew that the ‘herbal

incense,’ ‘potpourri,’ and ‘aromatherapy’ was synthetic

cannabinoid products for human consumption” (emphasis

USA V. GALECKI 53

added). The Government’s fraud-based theory was thus

explicitly intertwined with the drug-trafficking activity.

Moreover, the jury here did properly convict Defendants on

all of the drug-trafficking charges asserted under the CSA.

Given these two key facts, we have no reasonable doubt that

the jury’s verdict would have been the same had the jury

understood that a conviction on Counts 2 and 8 could only

be based on the charged drug-trafficking activity. Indeed,

on this record, there is no reasonable possibility that the jury

here rested its convictions on Counts 2 and 8 on a

determination that Zencense’s ultimate revenues were

derived only from mail fraud and wire fraud and not also

from drug-trafficking. See United States v. Jefferson, 674

F.3d 332, 361 (4th Cir. 2012) (“[I]f the evidence that the jury

‘necessarily credited in order to convict the defendant under

the instructions given . . . is such that the jury must have

convicted the defendant on the legally adequate ground in

addition to or instead of the legally inadequate ground, the

conviction may be affirmed.’” (citation omitted)); see also

United States v. Reed, 48 F.4th 1082, 1090 (9th Cir. 2022)

(holding, in the context of a collateral challenge, that an

instructional error in allowing a jury to base a conviction on

alternative conspiracy predicates, one of which is legally

invalid, is nonetheless harmless when the resulting

alternative “conspiracies” are “inextricably intertwined”

such that “no rational juror could have” convicted based on

“one predicate but not the other” (citations omitted)).

Because any Yates error in allowing the money

laundering convictions to be based on the mail fraud and

wire fraud conduct was harmless beyond a reasonable doubt,

we affirm Defendants’ money laundering convictions.

54 USA V. GALECKI

VI

Defendants’ convictions on Counts 1–8 and 22–26 are

affirmed. Defendants’ convictions on counts 9–19 are

reversed, and the district court is instructed to enter a

judgment of acquittal on those counts. We remand to the

district court for further proceedings consistent with this

opinion.

AFFIRMED IN PART, REVERSED IN PART, AND

REMANDED.