Petition for Writ of Certiorari — Faraday Hosseinipour, Petitioner v. United States

APPENDIX TO PETITION FOR WRIT

OF CERTIORARI

TABLE OF CONTENTS

Appendix A – Court of Appeals opinion .................. 1a

Appendix B – Court of Appeals order ..................... 69a

Appendix C – District Court order .......................... 70a

Appendix D – District Court order .......................... 86a

Appendix E – Excerpt of jury instructions.............. 102a

Appendix F – Excerpt of proposed instructions ...... 112a

Appendix G – Excerpt of response to instructions 116a

Appendix H – Excerpt of instructions conference .. 118a

Appendix I – Excerpt of acquittal motion ............... 123a

Appendix J – Excerpt of motion for acquittal ......... 126a

i

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

RICHARD G. MAIKE (22-6114/23-5563);

DOYCE G. BARNES (22-6121/23-5561);

FARADAY HOSSEINIPOUR (23-5029/5560),

Defendants-Appellants.

Appeal from the United States District Court for the

Western District of Kentucky at Owensboro.

No. 4:17-cr-00012-Gregory N. Stivers, District Judge.

Argued: December 11, 2024

Decided and Filed: June 26, 2025

KETHLEDGE, J., delivered the opinion of the

court in which McKEAGUE and NALBANDIAN, JJ.,

concurred. NALBANDIAN, J. delivered a separate

concurring opinion.

OPINION

KETHLEDGE, Circuit Judge. The defendants here

were leading figures in a company called Infinity 2

Global, which the FBI later concluded was a pyramid

scheme. The company extracted some $34 million

from investors who paid to join the scheme, nearly all

of whom lost money. After a 25-day trial, a jury

convicted Richard Maike, Doyce Barnes, and Faraday

Hosseinipour of both conspiracy to commit mail fraud

and conspiracy to commit securities fraud. These

defendants now offer some three dozen reasons to

(1a)

(2a)

reverse their convictions. We reject all their

arguments and affirm.

I.

A.

By way of background, this case is about a

fraudulent scheme, specifically a pyramid scheme. The

nature of a pyramid scheme is to consume its own

participants. These schemes usually take the form of a

"multilevel marketing" organization, which can be a

legitimate business arrangement. See, e.g., In re

Amway Corp., 93 F.T.C. 618 (1979). But a pyramid

scheme lacks sufficient outside revenue-say, from

product sales-to repay the investments of most

participants. Its revenue, rather, comes mostly from

within, in the form of payments by recruits to

participate in the scheme itself. See In re Koscot

Interplanetary, 86 F.T.C. 1106 (1975). Participation

often brings the right to sell various products-music,

jewelry, software-which are usually mediocre and

overpriced. United States v. Gold Unlimited, 177 F.3d

472 (6th Cir. 1999); FTC v. BurnLounge, Inc., 753 F.3d

878 (9th Cir. 2014). Those are a feint, meant to deceive

recruits and regulators alike. Koscot, 86 F.T.C. at *58.

More important is the right to earn rewards for

recruiting new participants-and thus to receive a

share of the scheme's primary source of revenue. These

schemes survive only as long as their recruitment

revenue does; and so their incentives always

emphasize recruitment over product sales. Gold

Unlimited, 177 F.3d at 480. Yet the scheme's

architects invariably seek to conceal its nature, in part

by the façade of product sales, in part by elaborate

systems of tiers, fees, and bonuses-what the district

court in one case called "a labyrinth of obfuscation."

BurnLounge, 753 F.3d at 883. Pyramid schemes are

thus merely a subset of what federal law calls schemes

to defraud.

(3a)

B.

1.

In February 2013, Richard Maike incorporated

Infinity 2 Global (I2G), which he said would use

network marketing-sometimes known as multilevel

marketing-to sell digital products to consumers. In

addition, the company created an online casino

(operated by a third party), where persons outside

the United States (but not inside) could place bets.

Doyce Barnes was the company's vice president for

sales, Maike its president. Neither had any apparent

background in software: before the I2G venture,

Maike sold nutritional supplements through

multilevel marketing, and Barnes sold jewelry. In

March 2013, Barnes prepared a spreadsheet with

revenue projections for I2G. Those projections

showed the company grossing more than $30 million

by year's end, with every dollar coming from

payments by participants-called "distributors"-in the

scheme itself.

That summer, Maike and Barnes began recruiting

distributors for I2G, who could buy into the scheme at

one of four levels. The bottom three were "Novice,"

"Player," and "High Roller," which participants could

join for an up-front payment of $100, $400, and $600,

respectively. Other mandatory fees ran from $300$900 per year. Participants at those levels could earn

recruiting bonuses and, in theory, commissions for

selling the "I2G Touch"-an unfinished social-media

platform whose development the company had

outsourced to one Rocky Wright. But most

participants joined at the "Emperor" level, which cost

$5,000 for the first year and $2,400 per year

thereafter. Emperors could earn larger recruitment

bonuses (subject to a byzantine and sometimes

changing network of rules), along with (again in

theory) commissions for software sales. In addition,

(4a)

unlike lower-level distributors, Emperors were

entitled to a pro-rata share of I2G's profits from the

online casino.

Two early recruits to the scheme were Richard

Anzalone and Faraday Hosseinipour, who worked as

partners and had ample experience with multilevel

marketing. Together they bought four Emperor

packages, which entitled them to four pro-rata shares

of the casino profits. They also agreed to join I2G's

inner circle, helping to develop strategies to enlist new

recruits. Part of that strategy was a series of in-person

conferences that I2G held during the fall of 2013. At

these conferences, I2G's leadership-including Maike,

Barnes, Anzalone, and Hosseinipour-pitched their

audiences about the commissions (i.e., recruitment

fees) and casino revenue they could receive as

Emperors. They also depicted the software in the

company's

pipeline-the

"Touch"

social-media

platform,

and

a

music

platform

called

"Songstergram"-as revolutionary. At three of these

conferences, Anzalone and Hosseinipour (among

others) held up oversized, six-figure checks in front of

their audiences, sometimes for amounts they never

received.

At another conference, Rocky Wright appeared

onstage to talk about the company's pending software

products. But I2G's leadership introduced him to the

audience as "Bob Johnson"-because Wright's software

firm had recently declared bankruptcy, and the

company feared that audience members might look

him up. Also unmentioned was that "Touch" was a

near-copy of a product that Wright's firm had offered

online for free, called "Qubeey."

Meanwhile, online, Hosseinipour was especially

active in recruiting new participants to the scheme.

That fall, she told potential recruits that I2G would

soon release Songstergram-and that musicians like

(5a)

Britney Spears, Justin Timberlake, and Lady Gaga

had agreed to endorse it. None of those things were

true. Hosseinipour also recruited new members on

YouTube, posting videos of "Hangouts" in which she

discussed I2G

with (ostensibly) prospective

distributors. In one such video, she told viewers, "Join

I2G. Get your share of the 150 billion gambling pie,

which is supposed to triple in the next two years." In

another video, she pitched the casino this way: "Join

as an emperor, and you do not have to recruit, and you

do not have to gamble. Can we all say passive

income?" And Maike, among other things, told

prospective recruits during a conference call that "the

company was offered $100 million" for its Touch

software alone. That statement too was baseless.

By the end of 2013, I2G had sold 7,000 distributor

packages, yielding millions in revenue for the

company and its inner circle. By 2014, however, some

observers had begun to see through the company's

representations. The Touch software was rife with

glitches and never generated any appreciable income

for any of the distributors; indeed they were never

even allowed to sell it to consumers. Songstergram

never launched and likewise generated zero income.

And even for top-tier distributors like Anzalone, the

casino was a bust. Anzalone testified that his pro-rata

share of casino income had topped out around $90 for

his first month as an Emperor and ran near $15-20

per month thereafter. (Meanwhile, after year one, the

monthly fees for an Emperor were ten times that

amount.)

In early 2014, some distributors began to contact

state regulators and to threaten class-action lawsuits.

By spring, as Anzalone described it, "the Internet was

just really bad on I2G." Hosseinipour acted to have

some of that criticism taken down. A handful of more

(6a)

sophisticated critics brought their concerns to I2G

directly. One wrote in an email:

after reviewing this business model, it's

clear to see Infinity2Global is [relying]

on new member money paying for

founding member incomes. This is a

classic Ponzi organization. . . . Here you

have a sales organization which is

banned from selling the product. . . . All

three so-called products are third-party

programs and are truly low quality.

Another commenter emailed Anzalone and

Hosseinipour the following:

Nowhere on the corporate site is there a

product descriptions [sic] and the exact

features offered by the social media

platform. . . . Nowhere in the

compensation document says that money

is earned for the sale of products. But it

says ‘if you buy this package’ you ‘will

earn this rank’. Meaning you can

purchase positioning. Nowhere in the

compensation plan document states that

money is earn [sic] through retailing

products to customers, and there is no

place for a customer to purchase a

product.

Maike's solution to all this criticism, in July 2014,

was to change the company's name from I2G to

Global 1 Entertainment (G1E). Yet the company's

recruitment slowed and its revenue dried up. Near

the end of 2014, I2G (now G1E) ceased operations.

By that time, however, the company had reaped

more than $34 million in revenue-nearly all of it

(save about $500,000) paid in by the company's own

distributors. Most of that money went to the

company's top tier, including the defendants here.

(7a)

Nearly all the investors who bought into the schemesome 96%-lost money.

The FBI began investigating I2G near the end of

2014, and concluded that I2G was a pyramid scheme

whose management and top-tier distributors had

defrauded its lower-tier ones. A grand jury

thereafter indicted Maike, Barnes, Hosseinipour,

Anzalone, and two other top-tier distributors for

conspiracy to commit mail fraud, in violation of 18

U.S.C. §§ 1341 and 1349, and conspiracy to commit

securities fraud, in violation of 15 U.S.C. § 78j(b) and

18 U.S.C. § 371.

Anzalone took a plea deal and testified against the

three defendants before us here. (The two other

defendants also took plea deals.) In 2022, after a 25day trial, a jury convicted Maike, Barnes, and

Hosseinipour on both counts. Anzalone died soon

afterward. Maike was sentenced to 120 months in

prison, Barnes to 48 months, and Hosseinipour to 30

months. They later brought these appeals, which we

have consolidated here.

II.

A.

1.

The defendants each argue that the jury lacked

sufficient evidence to find them guilty of conspiracy to

commit mail fraud, in violation of 18 U.S.C. §§ 1341

and 1349. When reviewing a guilty verdict, we

determine only "whether, after viewing the evidence

in the light most favorable to the prosecution, any

rational trier of fact could have found the essential

elements of the crime beyond a reasonable doubt."

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

Here, the crime of conviction was a conspiracy

offense, which means the government need not have

proved that each defendant engaged in conduct

satisfying each element of the underlying substantive

(8a)

offense (mail fraud).

To prove a murder-for-hire

conspiracy, for example, the government need not

prove that each defendant pulled the trigger for the

fatal shot. Instead, to sustain the defendants'

conviction for conspiracy to commit mail fraud here,

the government must have proven that each of them

agreed (with at least one other person) to commit mail

fraud, and did so knowingly and voluntarily. See 18

U.S.C. § 1349; United States v. Rogers, 769 F.3d 372,

382 (6th Cir. 2014).

So we consider the government's evidence on these

points. Sometimes the easiest way to prove agreement

is by action: that one defendant or another engaged in

conduct satisfying each element of a substantive

offense-along with circumstantial evidence that they

did so pursuant to a plan they all shared in commonis proof enough that they conspired to commit it. See

United States v. Faulkenberry, 614 F.3d 573, 584 (6th

Cir. 2010). Two robbers who enter a bank from

different entrances, for example, presumably do not

do so by coincidence.

Evidence of conduct amounting to fraud is what

the government offered here. Mail fraud has three

elements: the defendant must devise or knowingly

participate in a scheme to defraud; the defendant

must do so with the intent of depriving a victim of

money or property; and the scheme must in some way

use the mail. United States v. Turner, 465 F.3d 667,

680 (6th Cir. 2006); Rogers, 769 F.3d at 380.

Here, at trial, the government presented abundant

proof that the defendants knowingly participated in

(and in Maike's case devised) a fraudulent scheme. "A

scheme to defraud is any plan or course of action by

which someone intends to deprive another of money or

property by means of false or fraudulent pretenses,

representations, or promises." Faulkenberry, 614 F.3d

at 581 (cleaned up). I2G's business plan-and its

(9a)

elaborate system of fees and rules for distributor

compensation-was undisputedly a "plan or course of

action." And the government presented overwhelming

evidence that the defendants employed that plan to

deprive others-namely, lower-level distributors-of

money by means of lies and fraudulent

representations. For example, Barnes's projections of

the company's revenue were based 100% on payments

from distributors, with zero projected income from

outside sources. Maike lied to prospective recruits

about the casino's monthly profits; and after monthly

payouts to Emperors dropped to circa $17 per month

and stayed there, the reality (a jury could easily infer)

was that these defendants knew that Emperors would

not recoup their investments from casino revenues.

Maike also lied about the company having been

offered $100 million for the Touch software alone. The

defendants also knew, but concealed from prospective

recruits, that Touch was nearly identical to a product

that Rocky Wright's (bankrupt) firm had offered

online for free. The defendants (or at least one of

them-the record does not make clear who) also lied to

conference attendees by introducing Rocky Wright as

"Bob Johnson." Hosseinipour misrepresented to

prospective recruits that "passive income" would allow

them to recoup their investments without any

recruitment of new members on their part. Barnes

made the same misrepresentation to prospective

recruits in an October 2013 conference call, telling

them they could just "sit on the couch" and make

money on the casino. Hosseinipour lied about celebrity

endorsements of Songstergram (claiming that even

Prince had "signed up"). The defendants also

misrepresented to conference attendees the amounts

that Anzalone and Hosseinipour received as

distributors, by having them display oversized sixfigure checks for amounts they did not receive. And

(10a)

Anzalone testified that he discussed with

Hosseinipour the more sophisticated observers'

criticisms of I2G-including that it was a "Ponzi

organization"-and that he thought those criticisms

were "valid." Yet the duo continued to recruit new

victims. Moreover, when another distributor accused

I2G of running a pyramid scheme, Hosseinipour was

unequivocal about what the company should do:

"There is no alternative except to bury him."

The results of the I2G scheme also supported an

inference that it was fraudulent, rather than (as the

defendants argue here) just star-crossed. The scheme

yielded more than $34 million in revenue for the

company, nearly all of it extracted from the

participants themselves; 96% of participants lost

money; and the defendants themselves reaped

millions. The evidence therefore allowed the jury to

infer not only that these defendants knowingly and

voluntarily agreed to participate in a fraudulent

scheme-namely a pyramid scheme-but that they

actually did so, thereby obtaining millions of dollars

in profits for themselves. The government presented

sufficient evidence for the jury to convict these

defendants of conspiracy to commit mail fraud.

2.

a.

The defendants also challenge the district court's

jury instructions concerning mail fraud. We review

challenges to jury instructions for an abuse of

discretion, though we review the instructions' legal

accuracy de novo. United States v. You, 74 F.4th 378,

391 (6th Cir. 2023).

The defendants first argue that the court's

instructions as to mail fraud (Instruction 8) allowed

the jury to circumvent a finding that they participated

in a "scheme to defraud," which is the first element of

the substantive offense of mail fraud. The instructions

(11a)

provided that a “‘scheme to defraud’ includes any plan

or course of action by which someone intends to

deprive another of money or property by means of

false or fraudulent pretenses, representations, or

promises." Instruction 8(2)(A), Pg. ID 5265. The

instructions also defined a "pyramid scheme" (to

paraphrase here) as one in which "the focus is on

promoting the sale of interests in the venture rather

than the sale of products[.]" Id. 8(2)(B), Pg. ID 526566. In that definition, the fraud is implicit-any such

scheme is doomed to fail-rather than explicit; and the

court further instructed that a "pyramid scheme

constitutes a scheme or artifice to defraud for

purposes of this instruction." Id. Thus-the defendants

rightly observe-in the jury's mind, a finding that

defendants participated in a pyramid scheme could

substitute for a finding that they participated in a

fraudulent scheme. And the court's definition of a

pyramid scheme, as noted above, did not require the

jury expressly to find that it was fraudulent.

But that narrow substitution-"pyramid scheme"

for "scheme to defraud," as respectively defined by the

court-did not allow the jury to elide the question

whether the defendants participated in a fraudulent

scheme with fraudulent intent. In reviewing

challenges to jury instructions, we consider the

instructions as a whole. United States v. Kuehne, 547

F.3d 667, 679 (6th Cir. 2008). And here the relevant

instructions, considered as a whole, were duplicative

enough to require the jury to consider that question.

As an initial matter, the offense of conviction was

conspiracy to commit mail fraud; and so (as discussed

above) what the jury needed to find was that the

defendants voluntarily agreed to commit the crime of

mail fraud, not that they actually committed it.

(Evidence that they committed that crime, rather, was

proof that they had agreed to commit it.)

(12

12a)

a)

Meanwhile, to reiterate, the court instructed the

jury that a " scheme to defraud' includes [i] any plan

or course of action [ii] by which someone intends to

deprive another of money or property [iii] by means of

false or fraudulent pretenses, representations, or

promises." (Brackets added.) Hence that instruction

had three components. The first component-the

existence of a plan or scheme-was likewise part of the

court's definition of a pyramid scheme (as "any plan,

program, device," etc.). Instruction 8(2)(B), Pg. ID

5265. That aspect of the pyramid-scheme instruction

thus did not lead the jury astray. Meanwhile, the

second component of the "scheme to defraud"

instruction-that the scheme be one "[ii] by which

someone intends to deprive another of money or

property"-was more than covered by another part of

Instruction 8, namely subpart (1)(C). That subpart

required "that the defendant had the intent to

defraud" when he participated in the scheme. And

the third component-that the scheme employed "false

or fraudulent pretenses, representations, or

promises"-is covered by subpart (1)(B) of Instruction

8, which required that "the scheme included a

material misrepresentation or concealment of a

material fact[.]”

]”

Even if the jury found a pyramid scheme,

therefore, the court's Instruction 8 directed the jury to

make a finding as to every component of a scheme to

defraud. Nor, for that same reason, did the supposed

breadth of the court's definition of a pyramid scheme

make any difference here. We therefore reject the

defendants' arguments on these points.

We do note, however, that the district court's

instruction as to pyramid schemes served little

purpose here. Unlike many state laws, federal law

does not proscribe pyramid schemes specifically.

Instead it proscribes schemes to defraud, of which

(13a)

pyramid schemes are a subset. Meanwhile, the

definition of a scheme to defraud is straightforward;

the definition of a pyramid scheme is abstruse. And

what ultimately matters, in a federal criminal

prosecution for fraud, is whether the defendants

participated in a scheme to defraud.

b.

The defendants argue that the court abused its

discretion by rejecting their request for a jury

instruction about an affirmative defense of "antisaturation." A defendant is entitled to an instruction

about an affirmative defense only when that defense

finds "some support in the evidence and in the law."

United States v. Johnson, 416 F.3d 464, 467 (6th Cir.

2005).

Saturation, for purposes of a pyramid scheme,

occurs when participants at the lowest level of a

pyramid cannot find new recruits-and thus cannot

recoup their investment in joining the scheme. See

Gold Unlimited, 177 F.3d at 481. The defendants say

they prevented the scheme here from reaching

saturation because they capped the number of

Emperors at 5,000. In both theory and in fact,

however, this argument is meritless. As to theory,

the cap merely created an artificial point of

saturation-because the last Emperors to join, before

reaching the cap, would not themselves be able to

recruit new Emperors. And in fact the cap had no

effect-because the number of Emperors never

reached 5,000 (at any point in time) before I2G

ceased operations.

More to the point, no "anti-saturation" measure

can cure misrepresentations that induced people to

buy into a scheme under false pretenses. And here, as

shown above, these defendants made many such

misrepresentations. Their anti-saturation instruction

(14a)

would have only confused the jury, and the district

court was right to reject it.

B.

The defendants challenge the sufficiency of the

evidence to convict them of conspiracy to commit

securities fraud, in violation of 18 U.S.C. § 371 and 15

U.S.C. § 78j(b). Specifically, they argue that the

government lacked evidence that I2G's Emperor

packages were securities.

As an initial matter, the Supreme Court has

treated that question-whether an instrument is a

security-as a question of fact for "the jury" to decide.

S.E.C. v. C.M. Joiner Leasing Corp., 320 U.S. 344, 355

(1943). And that is how the parties here treated this

question in the district court, not least in their

proposed jury instructions for this count at trial. Gov't

Proposed Instruction 5; Defs. Response to Proposed

Jury Instructions, Pg. 5. We therefore review whether

"any rational trier of fact could have found" the

Emperor packages to have been a security. Jackson,

443 U.S. at 319.

"Congress' purpose in enacting the securities laws

was to regulate investments, in whatever form they

are made and in whatever form they are called."

S.E.C. v. Edwards, 540 U.S. 389, 393 (2004) (cleaned

up). "To that end, it enacted a broad definition of

`security,' sufficient to encompass virtually any

instrument that might be sold as an investment." Id.

(cleaned up). Here, the government contended at

trial that the Emperor packages were investment

contracts.

Whether “a particular scheme is an investment

contract” depends on "whether the scheme involves

an investment of money in a common enterprise with

profits to come solely from the efforts of others." Id.

Here, Emperors paid $5,000 (and $2,400 per year

after the first year) for each Emperor package they

(15a)

chose to buy. That satisfied the element of "an

investment of money." Id.

A "common enterprise," in turn, "requires a

sharing or pooling of funds." Union Planters Nat’l

Bank of Memphis v. Commercial Credit Business

Loans, 651 F.2d 1174, 1183 (6th Cir. 1981). It also

requires commonality in the sense that the success of

each investor is tied "to the success of the overall

venture." Id. Here, Emperors paid into a common

pool-I2G's bank account-and the company in turn

paid a third-party vendor to operate the casino. And

the income received by each Emperor was tied to the

casino's success: every Emperor received the same

pro-rata share of the casino's profits for each

Emperor package he purchased. The Emperor

packages thus amounted to stakes in a common

enterprise.

Next, the investors' profits from that enterprise

must have come "solely from the efforts of others."

Edwards, 540 U.S. at 393. That was true here.

Hossienipour, among others, repeatedly emphasized

that the casino income was "passive income" for

Emperors; to receive it, they needed only to purchase

the package. As Hosseinipour said, "You don't even

have to gamble. You don't have to recruit at the

emperor

level."

Barnes

made

the

same

representation in the October 2013 conference call to

potential investors, when he described the casino

revenue as "a passive position, that anyone can come

in and share in the pool equally for one year." He

added, "there's nothing they gotta do except sit there

and draw their money from the pool." Maike, who

was on the same call, said nothing. So for Emperors

the casino profits (such as they were) came from the

efforts of others. Thus, when one considers the

entitlement to casino revenue in isolation, the

(16a)

Emperor package was an archetypal investment

contract-and thus a security.

But the defendants argue that the Emperor

package loses that character when considered

together with the possibility of recruitment bonuses.

Whether an investment is a security depends on the

transaction as a whole. International Brotherhood of

Teamsters v. Daniel, 439 U.S. 551, 559 (1979).

Emperor packages cost $4,400 more than the next

level of distributorship beneath them. That premium

entitled Emperors alone to a pro-rata share of the

casino profits. But Emperors also earned greater

rewards than lower-level distributors did for each new

recruit they brought into the scheme. The "interest

acquired" by Emperors for that premium thus

"intermingled security and nonsecurity aspects." Id.

at 560.

Given that intermingling, the Emperor packages

were securities if they contained "to a very

substantial degree elements of investment contracts."

Id. (cleaned up). And on that point the evidence at

trial was straightforward. Emperors were free to buy

more than one such package; Anazalone testified that

some Emperors did so, and that he and Hosseinipour

indeed bought four (before they realized how minimal

the casino income would be). But an Emperor

obtained the full "nonsecurity" benefit of an Emperor

package-the more generous formula for recruitment

rewards-with the purchase of only one such package.

Thus, as a government expert explained to the jury at

trial, the only reason to buy additional Emperor

packages was to obtain additional shares of the

casino's profits. That some investors (including

Anzalone and Hosseinipour) bought those additional

packages, therefore, was strong evidence that

investors saw the security aspect of Emperor

packages-the casino profits-to be "very substantial."

(17a)

Id. And at trial ten witnesses testified unequivocally

that they each bought an Emperor package solely

because of the share of casino profits that came with

it-without any intention of recruiting new

participants to the scheme.

Finally, in deciding whether an instrument is a

security,

the

Court

considers

the

seller's

representations about it-"the economic inducements

held out to the prospect." Joiner, 320 U.S. at 353.

Here, as described above, the defendants represented

to prospective recruits again and again that the casino

income, standing alone, would be enough for them to

make a profit on their investment. And as Anzalone

testified at trial, the "exciting part of [I2G] was, and

what got us going, was the rev-the, excuse me, profit

sharing of the-of the casino. That's what really got the

program going. . . . [M]any people believed, you know,

I get-I need to get as many shares as possible, because

this thing could be huge.”

In Joiner, the Supreme Court said that "[i]n the

enforcement of an act such as this it is not

inappropriate that promoters' offerings be judged as

being what they were represented to be." Id. That is

what the jury found here. The jury had ample

grounds to find that the Emperor packages were

securities and thus that the defendants were guilty

of conspiracy to commit securities fraud.

***

The criminal judgments of Maike and Barnes are

affirmed. We also affirm Hosseinipour's criminal

judgment; except that, as described in our

unpublished opinion, we vacate the district court's

denial of her Rule 33 motion for a new trial, and

remand her case for the limited purpose of deciding

that motion anew.

(18a)

CONCURRENCE

NALBANDIAN, Circuit Judge, concurring. I

concur fully in the published and unpublished

opinions. I write separately to address a couple of

issues that I think are left unresolved in the majority

opinion.

The main issue concerns the fraud convictions.

The indictment illustrates, and the jury instructions

confirm, that the government pursued two fraud

theories-I2G was either a generic fraud or a pyramid

scheme. The majority explains why sufficient

evidence supports the conspiracy convictions on a

general-fraud theory. I agree. But the indictment,

the evidence at trial, the expert testimony, the

government's closing arguments, and the jury

instructions all show that the government also

leaned heavily into the theory that I2G was a

pyramid scheme. And why wouldn't they?

Succeeding on that theory was a shortcut of sorts in

its burden of proof.

The jury was instructed that it could find I2G was

either a pyramid scheme or a general fraud. But we

don't have a special verdict form explaining which

the jury picked. If this were only about sufficient

evidence, then we could affirm on the general-fraud

theory alone. Griffin v. United States, 502 U.S. 46,

58-60 (1991). But I think the defendants separately

argue that the government presented an erroneous

legal theory-an Emperor-only capped pyramid. They

claim that the indictment, the proof at trial, and the

jury instructions all reflect this error. If true, then

proof of the general fraud is not enough to affirm

their convictions. Id. Jurors aren't "equipped to

determine whether a particular theory of conviction

submitted to them is contrary to law." United States

v. Kurlemann, 736 F.3d 439, 449-50 (6th Cir. 2013)

(quoting Griffin, 502 U.S. at 59).

(19a)

Still, I would find that the defendants' argument

fails on the facts of this case. I believe the government

did not indict and did not prove a capped pyramid.

And any reference to the Emperors in the jury

instructions was harmless. So I'd affirm their

convictions.

I.

The days of the traveling salesman are largely

behind us, but one vestige remains. Multilevel

marketing is a type of organizational structure that

allows a company to leverage the low-cost and

potential yield of an entrepreneurial team of salesmen

without the overhead of retail locations. These

companies-MLMs-also leverage financial incentives

for their salesmen who both recruit new members and

sell products (or services). But an MLM runs into legal

trouble if it under-incentivizes product sales and overincentivizes recruiting. When that happens, a legal

MLM becomes an illegal pyramid scheme.

Anyone with access to the internet in the early

2000s knows why: chain-letter emails cause the same

problem, just with fewer financial consequences. For

those unfamiliar, you'd get an email that directs you

to "forward this to 5 new people or you'll have bad luck

for the next 10 years." A quick look at the math

highlights the problem. If the first person sends it to

five people and they all forward it to five people each,

suddenly thirty people have received the email.1 This

1 You

can visualize this growth in tiers of an ever-widening

pyramid. At the top you have the origin of the email chain: person

zero. At the next level, are the first 5 people that receive the

email. At the next, 25. At the next, 125. The math is

straightforward: the size of each level of the pyramid is reflected

in the equation 5X where x is the level of the pyramid. So at the

first level: 51=5. At the second: 52=25. At the third: 53=125. At

the fourth: 54=625. At the fifth: 55=3,125 and so on. As each level

grows, the scale of the pyramid's fraud also grows because with

(20a)

is the start of exponential growth. And with

exponential growth, very soon, at least in theory, a

final layer of people-those who received the email lastwill be left holding the bag. That is, they'll receive the

email, have no one to forward it to who hasn't already

seen it, and presumably be stuck with ten years of bad

luck.

A financial scheme whose core financial reward is

tied to recruiting new members leads to the same

result. Eventually the scheme must fail and when that

happens, the final and largest layer of recruits is left

with a guaranteed loss. So because these pyramid

schemes will always result in a financial loss to the

individuals who are last to join, courts have concluded

that they are inherently fraudulent. United States v.

Gold Unlimited, Inc., 177 F.3d 472, 479 (6th Cir.

1999); Webster v. Omnitrition Int’l, Inc., 79 F.3d 776,

781 (9th Cir. 1996). But courts and legislatures

recognize that illegal pyramids share features with

legal MLMs, like Amway. In re Amway Corp., 93

F.T.C. 618 (1979). And because entrepreneurial

market activity is beneficial, we must distinguish

between the two. Gold Unlimited, 177 F.3d at 480

(collecting sources recognizing the importance of

distinguishing between the two).

Still, distinguishing between them isn't always

straightforward and requires a comprehensive look at

the scheme's organization, marketing practices, and

incentive structures. Synthesizing these ideas, the

Federal Trade Commission originally condemned

pyramids as a deceptive trade practice under Section

each new lev-el its reach exceeds the total headcount of the layers

above it. So when this pyramid has five levels, the sum of the

first four levels (5+25+125+625=780) is less than the fifth level

alone (3,125).

(21a)

5 of the Federal Trade Commission Act. 15 U.S.C. §

45. It explained that these schemes:

are characterized by the payment by

participants of money to the company in

return for which they receive (1) the

right to sell a product and (2) the right to

receive in return for recruiting other

participants into the program rewards

which are unrelated to sale of the

product to ultimate users.

Omnitrition, 79 F.3d at 781 (quoting In re Koscot

Interplanetary, Inc., 86 F.T.C. 1106, 1180 (1975)). This

second factor is the sine qua non of a pyramid scheme,

because the scheme is simply an "elaborate chain

letter" premised on unlimited recruiting that leads to

saturation. Gold Unlimited, 177 F.3d at 481 (quoting

Omnitrition, 79 F.3d at 781); see also id. ("Koscot's

second factor-that an illegal pyramid rewards

participants for recruitment, not for sales-implies that

saturation must occur.").

The Commission noted that when a scheme meets

this characterization, the sale of products would be

"likely to prove worthless for many participants"

because they'd find it nearly impossible to recoup their

investments through the sale of products alone.

Koscot, 86 F.T.C. at 1181. As a result, the "substantial

rewards for recruiting other distributors" would prove

necessary. Id. Thus, the Commission concluded that

such schemes involved "inevitably deceptive

representation[s]" on the participant's ability to

recover his investment. Id.

All of this comes from the context of civil FTC

enforcement. But courts have since concluded that

pyramid schemes are not only deceptive (under

Section 5) but also fraudulent (under civil antifraud

statutes). Webster v. Omnitrition highlights this shift.

79 F.3d at 782. And in the process, the Ninth Circuit

(22a)

took what the FTC had described as the

"characteriz[ation]" of a pyramid scheme and created

a two-part test: "We adopt the Koscot standard here

and hold that the operation of a pyramid scheme

constitutes fraud . . . ." Id. at 782.

Then, in United States v. Gold Unlimited, we

extended Koscot to criminal mail fraud, albeit with

some added nuance. Relevant here, Gold Unlimited

did two key things. First, we approved an instruction

that

mirrored

Koscot's

and

Omnitrition's

characterizations of pyramid schemes. Gold

Unlimited, 177 F.3d at 479-84 (citing Koscot, 86 F.T.C.

at 1187 and Omnitrition, 79 F.3d at 781-82). Gold

Unlimited had contended that the instruction was

incomplete because it didn't specifically tell the jury

that a company could establish anti-saturation

policies to avoid being an illegal pyramid scheme. Id.

at 482. But we rejected that view; when the

government proves the second Koscot factor, there is

an "impli[cation] that saturation must occur." Id. at

481; see also id. at 482 ("Given the grave risks imposed

on investors in illegal schemes, the government

should have to do no more than prove that the

program satisfies the definition of Koscot.").

Still, we recognized that a defendant can rebut

that implication by carrying the burden "of

establishing that it has effective anti-saturation

programs." Id. at 482. As for Gold Unlimited, it had

failed to both request the relevant anti-saturation

instruction and to show that it merited one on the

record. Id. But we left open the possibility that future

defendants could prove that they had established

policies

that

"de-linked"

recruitment

from

commissions sufficient to warrant an affirmative

defense. Id. at 481-82. We also recognized the

possibility that "prudent district courts might

supplement the Koscot test to reflect the difference

(23a)

between legitimate multi-level marketing and illegal

pyramids and Ponzi schemes." Id. at 483. In so doing,

we noted that many states only prohibit schemes that

"primarily" compensate participants for recruitment

rather than sales. Id.

The second major thing that we did in Gold

Unlimited was hold that a court may instruct a jury

that a "pyramid scheme constitutes a scheme or

artifice to defraud" under the mail-fraud statute. Id.

at 478, 484. In other words, a jury's finding that there

was a "pyramid scheme" becomes a shortcut for the

government's proof of mail fraud. Once the jury finds

a pyramid, the only thing left for the government to

prove is that the defendants used the mails to

perpetuate their scheme.

II.

A.

With this framing in mind, the first issue concerns

the scope of the alleged "pyramid scheme." Was the

government's theory that all I2G was a pyramid, or

was it just a pyramid of Emperors? The answer hinges

on the indictment. And when we look at the

indictment, we look at it as a whole because, like a

constructive amendment or a prejudicial variance, the

whole indictment colors whether the defendant was

on notice of the charges against him. United States v.

Sittenfeld, 128 F.4th 752, 774-75 (6th Cir. 2025) ("Any

change to the indictment outside of [the Grand Jury]

implicates other, related constitutional concerns-the

defendant's Fifth Amendment protection from double

jeopardy and Sixth Amendment right to notice of the

charges against him."); cf. id. at 781 ("[W]e read

indictments as a whole, and can consider the full scope

of the indictment to analyze whether the trial

evidence varied from the indictment." (cleaned up)).

The real question here is whether the defendants were

on notice to defend against an I2G-pyramid rather

(24a)

than an Emperor-only pyramid. So I look at the whole

indictment, including the manner and means and the

government's "specification of the ways in which the

defendant sought to accomplish his crime." Id.at 781

(cleaned up).

The government's second superseding indictment

alleges two things: a general theory of fraud and a

pyramid scheme. Both extend to I2G as a whole. A

point the first paragraph of the indictment makes

clear: "[T]he defendants[] engaged in a $25 million

dollar fraudulent pyramid scheme, operating under

the name Infinity 2 Global or I2G (hereinafter “I2G”),

by representing that investors would receive a return

on investment based upon an online internet gaming

site called i2gcasino.com." R.230, Second Superseding

Indictment, PageID 1452 (emphasis added).

The next paragraph alleges the same. The

defendants "falsely represented that I2G was

generating massive profits from its online internet

gambling site and that the public could share in such

profits through the purchase of a $5,000 `Emperor'

position in I2G." Id. at 1452-53 (emphasis added). And

again: "I2G was operating as a fraudulent pyramid

scheme in which inflated returns were paid to early

promoters in order to induce later victim-investors to

invest in the company." Id. (emphasis added).

It's true that these examples also show that the

Emperors were central to the indictment, in part

because the alleged securities fraud only extended to

the Emperors. But that didn't divorce Emperors from

the larger I2G fraud, which is why the indictment

repeatedly refers to "I2G" not just Emperors. Id. at

1454-57, ¶¶10, 15, 17-18. This isn't a no-brainer, but

in the absence of a to-wit clause, and given the

overarching structure of I2G, separating the

Emperors from the rest of the scheme is illogical. Cf.

United States v. Lee, 919 F.3d 340, 349 (6th Cir. 2019)

(25a)

(noting that an indictment's factual allegations

should be construed "in a practical sense with all the

necessary implications" (internal quotation marks

omitted)); United States v. Bowker, 372 F.3d 365, 376

(6th Cir. 2004) ("Courts utilize a common sense

construction in determining whether an indictment

sufficiently informs a defendant of an offense."

(internal quotation marks omitted)), abrogated on

other grounds by United States v. Booker, 543 U.S.

220 (2005). So I think the government alleged enough

to show that its two theories of fraud were based on

I2G, not just the Emperors.

B.

With the scope of the pyramid clarified, the next

question is what did the government prove at trial: an

Emperor-only capped pyramid, or an I2G pyramid?

The government only charged defendants with

conspiracy to commit mail fraud rather than a

substantive count of mail fraud. To prove a conspiracy

the government did not have to also prove the

individual elements of the substantive offense. United

States v. Phillips, 872 F.3d 803, 806 (6th Cir. 2017)

(citing Salinas v. United States, 522 U.S. 52, 65

(1997)). But the jury must be instructed on, and

"unanimously agree on," one object. Pattern Crim.

Jury Instr. 6th Cir. 3.01A (2025). Here, the only

alleged object was mail fraud.

Mail fraud rests on a scheme-to-defraud. 18 U.S.C.

§ 1341. Normally the government establishes such a

scheme by proving that the defendant intended to

defraud and deprive another of money, and that he

made material misrepresentations to do so. United

States v. Daniel, 329 F.3d 480, 485-86 (6th Cir. 2003).

But, as I noted above, if a jury finds a pyramid scheme,

(26a)

it necessarily finds a scheme to defraud. 2 Gold

Unlimited, 177 F.3d at 484.

So looking at the evidence at trial, the question

becomes whether the government proved that I2G

would grow endlessly because purchasers could only

recoup their investments by recruiting others for

money unrelated to product sales. I think the answer

is plainly yes-I2G's promotional materials, among

other things, make clear it operated as an illegal

pyramid scheme.

Maike created I2G based on a "binary

compensation system." In a binary scheme, each

person is responsible for recruiting two people

beneath them and so on, to develop a "downline." The

"downline" is the pool from which an individual can

earn commissions. It's also what generates a

"pyramid": one person at level 1, two people beneath

him at level 2, four people beneath them at level 3,

and so on.

I2G invited people (whom they call "Independent

Business Owners" (IBOs)) to join I2G. Once invested,

IBOs would gain access to digital products, earn the

opportunity to recruit new members, and-if you joined

as an Emperor-earn passive income from an online

casino. But a high-level overview of the bonus

structure highlights how I2G was curated to

encourage recruiting not to promote its products.

2 Both parties acknowledge this point. R. 692, Trial Tr. Vol. 21,

PageID 10,009. As defense counsel explained: if there was a

pyramid scheme, the government didn't "have to prove a

particular lie." Oral Arg., 1:08:40-1:09:25 (No. 22-6114),

https://www.opn.ca6.uscourts.gov/

internet/court_audio/audio/12-11-2024%20-%20Wednesday/226114%20USA%20v%20 Richard%20Maike.mp3; id. at 1:09:301:09:50 ("[P]yramid is a surrogate for everything except use of

the mails.").

(27a)

Every new member would join at one of four levels

of membership: Novice, Player, High Roller, or

Emperor. To earn commissions, any IBO needed to

maintain active status by staying current on their

dues. There were the up-front start up fees: an annual

fee of $19.95 for access to certain software, and a

"membership" fee (Novices $100, Players $400, High

Rollers $600, and Emperors $5,000). Every year

members had to renew their membership.

I2G promoted itself through the "Infinite

Opportunity Plan," which described five ways to earn

commissions: (1) Fast Start Bonuses, (2) Binary

Income, (3) Matching Bonuses, (4) Leadership Pools,

and (5) a Revenue Share. The Fast Start Bonus was

simple. For every member an IBO enrolled, he'd earn

a flat 10% on the initiation fee. So if he recruited a

Novice, he'd earn $10 (10% of $100). No sale of

products necessary.

"Binary Income" was I2G's version of rewards

points. For example, I2G gave IBOs credit for every

new member he recruited in "business volume" (BV).

For every new member the IBO recruited, he'd earn

BV based on the level the new member entered at:

New Novices would earn his recruiter 60BV, Players

240BV, High Rollers 260BV, and Emperors 3,000BV.

Once an IBO earned enough BV he'd get "cash

back." Remember, Maike formed I2G based on a

binary scheme, so each person was responsible for

recruiting two people-one on his right "side" and

another on his left "side." If he earned 300 BV on both

sides (so 600 BV total), he'd complete one cycle and

could earn cash back. And new recruits were

attributable to the IBO even if they were several

"levels" down in the pyramid. That meant an IBO

could still earn BV from a new member recruited ten

(28a)

or fifteen levels beneath him. 3 Again, no sale of

products necessary.

The Leadership Pools were the final recruitment

bonus. These bonuses were available to IBOs again

based on binary cycles completed by his downline, but

the rewards were significant. At the lowest end in the

"silver pool," IBOs could earn a one-time cash bonus

of $10,000. No sale of products necessary.

Unique to the Emperors was access to a revenue

share in an online casino. I2G had hired a third party

to manage the casino. And the managing contract split

the casino's proceeds: 30% to the vendor and 70% to

I2G. That 70% was split 50/50: half to I2G and half

split equally among Emperors. This structure was

supposed to create a passive income stream. Without

any obligation to recruit, Emperors could collect

revenue generated by the casino. To ensure this

revenue stream wasn't diluted, I2G placed a 5,000person cap on the number of Emperors. Still, there

was no way to gain access to the casino's revenue

without the start-up costs-$5,000 plus fees-i.e.,

without joining the pyramid.

I2G had also curated a unique portfolio of digital

products. First, they rolled out the I2GTouch, a hybrid

social media videoconferencing platform. Then

Songstergram, which was pitched as a social media

product to create, edit, and share original music

videos. And right before I2G became defunct, they had

rolled out a travel discount engine, a fantasy sports

platform, a video game system, and a sports book for

international users.

But these products, especially the Touch, were

limited if not useless. For example, there was

3 The Star Matching Bonus was another recruitment bonus that

allowed IBOs to earn commissions based on downline recruits.

Again, no sale of products necessary.

(29a)

evidence that the Touch was never fully developed.

And though the Touch wasn't functional, I2G didn't

wait to start charging its members for the

opportunity to access it for an added fee (from $25 for

Novices up to $200 for Emperors). Beyond that, the

Touch was an expensive (and defective) knockoff of

Qubeey-an existing, free-to-use product in the same

market.

The majority says more about these products, but

their relevance here is only to highlight their

irrelevance to I2G's money-making scheme. Some

products didn't work and still others were promoted

based on outlandish lies-like that Britney Spears had

endorsed Songstergram. Key to the pyramid-scheme

determination is that these products were completely

detached from I2G's incentive structure, a problem

that was highlighted by their dysfunction. You could

earn some BV by using Songstergram, but the real

money-making was in the various recruitment

bonuses. And there was no evidence of Touch sales to

anyone outside of I2G, so any rewards earned from the

"sale" really came from recruitment, confirming that

the products were never intended for widespread use.

Instead, they were a fig leaf to hide the true purpose

of the scheme: quick cash for those at the top of the

pyramid.

To be fair, it's not clear that all I2G's products were

entirely fraudulent. Given that I2G was operating

between February 2013 and December 2014, there's a

possibility that some of I2G's ideas were just ahead of

their time. Indeed, the rise of online gambling,

casinos, and sports betting in the wake of the Supreme

Court's decision in Murphy v. NCAA, 138 S. Ct. 1461

(2018) suggests as much. And while the Touch was

still in development, now-ubiquitous products like

Facebook Live and Instagram Live didn't exist.

(30a)

But that's not the point. The government didn't

have to prove that the products were entirely

fraudulent. Nor did the jury have to find that they

were-although it could have. What matters is that the

only way to make real money based on I2G's incentive

structure was through recruitment. The products,

even if they would have worked, were at best an

ancillary benefit.

All to say, it's clear that someone paid money into

I2G to access the pyramid. And once in, you could reap

the benefits of that access by recruiting others. This is

the sine qua non of a pyramid. And all of this evidence

confirms that the scope of the government's case was

about whether I2G-not just the Emperors-would grow

endlessly based on the impermissible incentives tied

to recruiting. So as far as the government's proof is

concerned, the defendant's claim of an erroneous legal

theory doesn't hold up. The government proved the

object scheme to defraud based on overwhelming

evidence that I2G was a pyramid, as measured

against Koscot.

C.

Though the government's proof at trial makes

clear that they proved I2G was a pyramid scheme, this

still leaves the jury instructions. On this point, the

defendants contend that because the mail-fraud

instruction defined the object scheme to defraud in

reference to the Emperors, the jury possibly convicted

them on the erroneous Emperor-only-capped-pyramid

theory.

The instructions required the jury to find the

defendants "knowingly participated in or devised a

scheme to defraud in order to deprive another of

money or property, that is through the sale of Emperor

positions in Infinity 2 Global or i2g." R.554, Jury

Instructions, PageID 5265 (emphasis added). The

defendants contend that this italicized language

(31a)

rendered the pyramid definition legally erroneous

because it required the jury to find a capped pyramid

comprised of only Emperors. But they say a capped

pyramid is not a pyramid because it lacks the

potential for endless growth. Given that I've

concluded that the pyramid here was I2G as a whole

and am also skeptical that there can be a capped

pyramid at all-this is a serious issue.

But a jury may be instructed on alternative legal

theories, one incorrect and the other correct, and still,

the error can be harmless. See Hedgpeth v. Pulido, 555

U.S. 57, 60-62 (2008) (per curiam); Kurlemann, 736

F.3d at 449-50. So long as we are sure that "the verdict

would have been the same absent the error"-here

absent reference to the Emperors in the mail-fraud

instruction-we can affirm the conviction. Neder v.

United States, 527 U.S. 1, 17 (1999). When I look at

the instructions as a whole, the larger legal question

is whether the jury was informed of the definition,

character, and nature of the crime charged-conspiracy

to commit mail fraud. The instructions correctly

defined conspiracy. The substantive-mail-fraud

instruction correctly defined "scheme or artifice to

defraud." The mail-fraud instruction also correctly

defined "pyramid scheme," see infra Part III, and

correctly gave the jury the option to find that a

pyramid scheme satisfied the scheme-to-defraud

element. With all of these elements correctly defined,

the only question left is whether reference to the

Emperors instead of I2G was so misleading as to

render the jury's verdict erroneous. United States v.

Geisen, 612 F.3d 471, 485 (6th Cir. 2010). For several

reasons, I'm doubtful.

We review the prejudicial impact of an instruction

"in relation to all else that happened" at trial.

Kotteakos v. United States, 328 U.S. 750, 764 (1946).

Closing arguments, though not evidence, are a

(32a)

helpful starting place because they highlight how the

government "conceptualized the evidence and the

indictment, and how the evidence was presented to

the jury." Sittenfeld, 128 F.4th at 782 n.16;

Kurlemann, 736 F.3d at 450 (finding erroneous

instruction harmful based in part on the government

having repeatedly reiterated the erroneous legal

theory to the jury during closing); see also United

States v. Qureshi, 121 F.4th 1095, 1103-04 (5th Cir.

2024) (relying on government's closing argument as

evidence that jury was correctly informed on the

scope of the conspiracy), cert. denied, No. 24-900,

2025 WL 889184 (U.S. Mar. 24, 2025) (mem.).

On this point the government is on solid ground.

It-more than once-reiterated to the jury that the mailfraud finding they needed to make was about I2G, not

the Emperors. R. 671, Trial Tr. Vol. 24, PageID 7530

("But what the defendants agreed and were knowingly

promoting in this case was a pyramid scheme through

their promotion of I2G or Infinity 2 Global."); id. ("And

if you find that what Infinity 2 Global was[,] was a

pyramid scheme, then you have found that the United

States has satisfied the first element of Count 1. . . .");

id. at 7532 ("And so if you believe that Infinity 2

Global was a pyramid scheme, that the primary

purpose or nature of the business was to pull in theseto recruit people . . . then you will have found that a

scheme to defraud existed.").

As well, remember that the only charge the

government had to prove was conspiracy. This means

the government did not have to prove that mail fraud

in fact occurred. As other courts have noted, an error

in the object-offense instruction doesn't per se infect

a conspiracy conviction if that conspiracy instruction

is otherwise correct. Qureshi, 121 F.4th at 1103

(finding harmless an erroneous substantive-offense

instruction that did not infect conspiracy conviction);

(33a)

United States v. Fairley, 880 F.3d 198, 212 (5th Cir.

2018) (finding no plain error where substantive

instruction erroneously conflated two elements but

because conspiracy was "distinct from the substantive

counts," conspiracy conviction wasn't erroneous);

United States v. Kalaycioglu, 210 F. App'x 825, 83132 (11th Cir. 2006) (finding error in substantiveoffense instruction wasn't reversible because it was

not an essential element of conspiracy).

So long as the jury was informed on the definition,

character, and nature of the acts inherent to the

charged conspiracy, as these instructions did, we can

find that the defendants were not prejudiced by the

reference to the Emperors in the substantive

instruction. United States v. Hale, 685 F.3d 522, 541

(5th Cir. 2012) (finding no plain error where

instructions were "sufficient to apprise the jury of the

definition and character of the substantive crime

underlying the conspiracy charge, and because the use

of actual cocaine was not necessary to commit the

crime of conspiracy"); United States v. Marino, 562

F.2d 941, 945 (5th Cir. 1977) (omission from

instructions on specific intent to conspire was not

plain error because "read as a whole," instructions

"adequately charged the jury as to the definition,

character, and nature of the acts" of the conspiracy,

and "there [wa]s no doubt that there was sufficient

evidence from which the jury could have inferred

beyond a reasonable doubt" defendant had specific

intent). To be sure, the courts in these cases reviewed

for plain error and the defendants here preserved

their objections to the jury instructions. But the

overall analysis about the effect of the error-i.e.,

prejudice-is just as applicable here.

And we regularly affirm convictions in the

presence of trial errors-constitutional or otherwisewhere the evidence suggests the error had no effect on

(34a)

the verdict. United States v. Mack, 729 F.3d 594, 609

(6th Cir. 2013) ("The undisputed trial evidence

convinces us that, if properly instructed, the jury

would have found beyond a reasonable doubt as to

counts three and twelve that the defendant

brandished a firearm during the robberies. . . .");

United States v. Kuehne, 547 F.3d 667, 682 (6th Cir.

2008) (same). I don't think the instruction's errant

reference to Emperors prejudiced the defendants

because of the overwhelming proof that the

government offered about I2G's character as a

pyramid. See supra Part II.B.

I also find support from other circuits that have

found that a complete omission of the substantiveoffense instruction does not automatically infringe on

the defendant's substantial rights. Compare United

States v. Vaglica, 720 F.2d 388, 390-91 (5th Cir. 1983)

(finding "serious" but not reversible error when

district court failed to instruct jury on object of

conspiracy), with United States v. Martinez, 496 F.2d

664, 669 (5th Cir. 1974) (finding omission of any

reference to conspiracy's object was "serious" error

because, read as a whole, reflected an overall failure

to inform the jury on the definition, character, or

nature of the acts that support a finding of importing,

possessing, or distributing marijuana). See

also

United States v. Kalaycioglu, 210 F. App'x 825, 831-32

(11th Cir. 2006) (finding error in substantive-offense

instruction wasn't reversible in part because

defendants were only charged with conspiracy instead

of a substantive honest-services charge). Those courts

too looked to the circumstances of the specific

prosecution, the evidence presented, and the

challenge raised. Vaglica, 720 F.2d at 391. So as I

explain above, because overwhelming evidence

supported the I2G-was-a-pyramid-scheme finding, I

(35a)

would find any reference to the Emperors in the

instruction harmless.

And finally, alternatively, Hedgpeth, 555 U.S. 57,

also suggests the error is harmless. The Court found

a per-se-reversal rule was inappropriate when, in

cases like this one, the jury is "instructed on multiple

theories of guilt, one of which [was] improper." Id. at

61. Instead, like most trial errors, such an error is

subject to harmlessness review. Id. at 61-62. So long

as the instructional error does not "vitiat[e] all the

jury's findings," the error is harmless. Id. at 61

(quoting Neder, 527 U.S. at 11 (alteration in original)).

Only if the evidence on the valid alternative

theory-here, that I2G was a general fraud-is

"relatively weak," the government relies heavily on

the "improper theory," and the district court's

instructions on the improper theory are "interwoven

throughout the jury charge," is an instructional error

in this context harmful. United States v. Andrews, 681

F.3d 509, 522 (3d Cir. 2012) (internal quotation marks

omitted) (applying these guideposts to find a Skilling

v. United States, 561 U.S. 358 (2010) instructional

error harmless). Altogether, though the government

relied heavily on the pyramid-scheme theory, the

other factors favor a finding of harmlessness. As the

majority describes, there was overwhelming evidence

to support a finding of general fraud. This, combined

with the government's repeated reference during

closing that the jury could find a general fraud was

the object of the conspiracy, and the fact that the

Emperors are only referred to once in the mail-fraud

instruction (rather than repeatedly), together suggest

that the reference was harmless. R.671, Trial Tr. Vol.

24, PageID 7724 ("And when you look at the jury

instructions, it says there's actually two ways to

commit mail fraud. You can have a structure or

artifice to defraud one way or through the pyramid

(36a)

scheme. . . . The United States submits . . . that they

did both. . . ."); see also United States v. Donovan, 539

F. App'x 648, 653 (6th Cir. 2013) (finding instructions

harmless that incorrectly said Viagra was a controlled

substance-so an invalid object of a conspiracy-but

correctly listed other controlled substances; because

no evidence connected him to the Viagra-selling

conspiracy, affirmed conviction).

So though there was discussion of the Emperors at

trial, this isn't surprising because it was part of I2G's

overall fraud. And though there was reference to the

Emperors in the jury instructions, I think that was

harmless when viewed in light of the jury instructions

as a whole and the government's evidence at trial.

One final note. The defendants extend this theory

about the capped pyramid to argue that they were

entitled to an affirmative defense on anti-saturation.

Picking up on our suggestion in Gold Unlimited, the

defendants insist that they had an effective "antisaturation" or "anti-pyramiding" policy in place

because the Emperors were capped at 5,000. In their

view, this prevented endless growth, and comports

with what the government proved at trial-that is, a

capped pyramid. But I disagree.

Anti-pyramiding policies must be more than

cosmetic. Rather to be effective, they must connect

recruitment to retail sales, and in this way, defeat the

possibility of endless growth. 4 Gold Unlimited, 177

is the best example of a legal MLM

implementing effective anti-pyramiding policies. 93 F.T.C. 618.

Amway manufactured home products: cleaning supplies, soaps,

detergents, and the like.

Three familiar firms Procter & Gamble, Lever Bros., and

Colgate-Palmolive accounted for over 80% of this market, and

Amway was having trouble breaking in. Id. at 710. To

overcome the barriers to entry, Amway developed a "direct

selling" network and avoided retail stores altogether. Id. at

4 In the Matter of Amway

(37a)

F.3d at 482. By doing so, an MLM can defeat the

second Koscot factor.

The 5,000-Emperor cap does nothing to overcome

the unlimited-growth problem. It's true the cap served

a practical purpose it prevented diluting the casino

returns. But there's no evidence it also tied recruiting

bonuses to product sales. So on this front, the policy

failed to accomplish what an anti-pyramiding policy

must: link recruitment and product sales. And even

more fundamentally, the cap did not limit the number

of new Players, Novices, or High Rollers who could be

recruited. In this way, the cap on Emperors didn't

address the possibility of I2G's endless growth. For

both reasons, I would find that this cap, though novel

and superficially tied to the second Koscot factor, fails

710-11. They relied on their 360,000 distributors to purchase

products, then resell them at retail to customers or to other

distributors (who they had recruited). Id. at 711-12. In the

latter case, a second-order distributor would resell products

too. Distributors made money from the difference in the

wholesale price they purchased the product from Amway and

the retail price at which they sold the product. Id. at 712-14.

And when they recruited new distributors, they also earned a

commission.

To prevent the endless-growth problem Amway had

implemented several policies to ensure that recruiting promoted

product sales. Two are illustrative. First, the "70 percent rule"

required that a distributor sell at least 70% of the product he

bought each month before he could receive any bonus. Id. at 716.

Second, the "10 customer rule" required that a distributor make

unique sales to ten different customers each month (and provide

proof of that sale). Id. These policies highlighted an internal

emphasis on product sales which meaningfully limited the

possibility that any distributor would be overly motivated by

recruiting bonuses and avoid his sales obligations. This way,

"retail selling [remained] an essential part of being a

distributor." Id. So Amway was able to demonstrate it was a legal

MLM not at risk of growing like an endless chain.

(38a)

in substance as an anti-pyramiding policy. So though

the burden is not heavy to show there is some support

in the law for the instruction, there was neither

support in the law nor the evidence to support a jury

finding that I2G had overcome the second Koscot

factor. See id. at 482-83.5

I admit, complicating this conclusion is the government's

puzzling statement that saturation wasn't a problem in this case.

The government said: "[S]aturation (and thus anti-saturation) is

not at issue. . . ." R. 381, Gov't Mot., PageID 2922-23. And

continued: "For I2G, however, saturation is not the problem.

Unlike in Gold Unlimited, the United States has no plans to

present a witness to testify on the dangers of market saturation.

. . . Instead, the United States plans to show that I2G is a

pyramid scheme not because of any saturation problem, but

rather because I2G's scheme meets the definition approved in

BurnLounge." Id. I read this statement as saying I2G had not

reached a point of saturation i.e., they had not grown to a point

where the pyramid would collapse. And the government did not

intend to argue that saturation would imminently occur.

To be fair, the government does not have to prove saturation

before they can prosecute a pyramid scheme. Cf. Gold

Unlimited, 177 F.3d at 482 ("The alternative placing the burden

on the government forces the government to wait until after the

collapse, as that alternative permits operators to maintain that

the absence of collapse proves the success of the anti-saturation

policies."). A point government's counsel reiterated at argument.

Oral Argument at 37:20-37:40 (No. 22-6114) ("The government

does not have to prove as an element of that definition of [a]

pyramid scheme . . . that it was going to collapse or that it was

doomed to fail."); Id. at 39:58-40:15 ("The government doesn't

have to affirmatively prove that [saturation] has happened. . . .").

But I would reject a view that a fraud can also be a pyramid

without risk of saturation that is, endless growth. That means that

if I2G had only consisted of the 5,000 Emperors, but all else

remained the same in terms of the link between earnings and

recruiting it would undoubtedly have still been a fraud but not an

illegal pyramid. The 5,000 limit may create an artificial point of

"saturation," but that is not quite what saturation means when it

comes to pyramids. Saturation refers to endless growth and reflects

the essential feature that makes a pyramid per se illegal. A so5

(39a)

called "capped pyramid" lacks this aspect so would likely not be a

pyramid, even if it were a fraud.

***

All said, the government did not present an

erroneous legal theory to the jury. The indictment, the

proof at trial, and the instructions show the

government proved both that I2G was a general fraud

and a pyramid. Though the instructions have an

erroneous reference to the Emperors, that error was

harmless, and with the lens on I2G rather than the

Emperors, the anti-saturation argument similarly

fails.

III.

That still leaves one errant jury instruction issue.

Defendants claim that the mail-fraud instruction did

not sufficiently distinguish between a legal MLM and

a pyramid.

We review jury instructions for an abuse of

discretion. Geisen, 612 F.3d at 485. Trial courts retain

significant latitude to craft instructions, but they

abuse their discretion when the jury charge doesn't

accurately reflect the law. Id. (quoting United States

v. Ross, 502 F.3d 521, 527 (6th Cir.2007)). The only

remaining challenge to the jury instructions is that

they did not sufficiently distinguish between legal and

illegal MLMs. The instructions read:

A `pyramid scheme' is any plan,

program, device, scheme, or other

process characterized by the payment by

participants of money to the company in

return for which they receive the right to

sell a product and the right to receive in

return for recruiting other participants

into the program rewards which are

unrelated to the sale of the product to

ultimate users. The structure of a

pyramid scheme suggests that the focus is

on promoting the sale of interests in the

venture rather than the sale of products,

(76a)

(41a)

where participants earn the right to

profits by recruiting other participants,

who themselves are interested in

recruitment fees rather than products. A

pyramid scheme constitutes a scheme or

artifice to defraud for purposes of this

instruction.

Compare R.554, Jury Instructions, PageID 5265

(emphasis added), with Gold Unlimited, 177 F.3d at

481. The unitalicized portion of this instruction is a

direct copy of the instructions approved in Gold

Unlimited. Still, the panel there noted that there was

room for improvement and prudent district courts

might adjust to better reflect the difference between

legitimate MLMs and illegal pyramids. Gold

Unlimited, 177 F.3d at 483. And here the district

judge did exactly that. For support, he relied on

BurnLounge, a recent Ninth Circuit opinion

discussing what makes a pyramid fraudulent. FTC v.

BurnLounge, Inc., 753 F.3d 878, 889 (9th Cir. 2014).

The judge's additions highlighted the feature that

distinguishes a legal MLM from an illegal pyramid:

over-incentivizing recruitment in a way that

facilitates endless growth. These additions were not

erroneous.

IV.

Finally, I want to say a couple of things about the

securities fraud, including about the apparent

incongruity between the government's pyramidscheme theory and its securities-fraud theory.

Defendants make two challenges to their securities

fraud conviction. First, they argue that the Emperor

positions were not securities, so could not support a

securities-fraud conviction under 15 U.S.C. § 78j. And

second, they argue that the jury instructions

incorrectly define "security." But the Emperor was a

security and there was no error in the instructions.

(42a)

A.

As to the sufficient evidence, the only issue the

defendants raise on appeal is whether the Emperor

was a security. And everyone agrees that it must

satisfy the definition of investment contract to trigger

the fraud provisions of the Securities Acts. Id.

§ 78c(a)(10).

The test for whether a particular financial

relationship is an investment contract is by now,

well-known. Howey's four-part test asks "whether

the scheme involves an investment of money in a

common enterprise with profits to come solely from

the efforts of others." SEC v. Edwards, 540 U.S. 389,

393-94 (2004) (quoting SEC v. W.J. Howey Co., 328

U.S. 293, 301 (1946)). The test is flexible, designed

to capture new and creative financial relationships,

so "capable of adaptation to meet the countless and

variable schemes" that might be created. Id. at 393

(quoting Howey, 328 U.S. at 229). Given the

creativity that's necessarily involved with evading

securities regulation, we look to the substance of the

transaction and determine whether its "economic

realities" satisfy Howey rather than rely on the label

that its purchasers and promotors assign to it. Int’l

Bhd. of Teamsters, Chauffeurs, Warehousemen &

Helpers of Am. v. Daniel, 439 U.S. 551, 558-59 (1979)

(quoting United Hous. Found., Inc. v. Forman, 421

U.S. 837, 851-852 (1975)). This way, "[n]ovel,

uncommon, or irregular devices" may still be

captured within the reach of the act. SEC v. C.M.

Joiner Leasing Corp., 320 U.S. 344, 351 (1943). So we

look to the "character the instrument is given in

commerce." Id. at 352-53. This includes the "terms of

the offer, the plan of distribution, and the economic

inducements" promised to potential purchasers. Id.

at 353. Thus the promotor's sales tactics are within

our reach to consider. Id.

(43a)

On the government's theory, the Emperor is a

security because (1) an Emperor invests money

($5,000), (2) there was a common pooling of funds and

Emperors shared in a proportional profit from the

casino, (3) Emperors were attracted by the possibility

of a return from the casino, and (4) profits came from

the managerial efforts of I2G.

The majority holds that the Emperor was a

security and I agree. But I think we should

acknowledge one quirk in the government's theory

on the efforts-of-others prong. This element

addresses the relationship between the investor and

the venture. We don't require that the profits be

derived, "in some strict sense, solely from the efforts

of others." Odom v. Slavik, 703 F.2d 212, 215 (6th

Cir. 1983). Typically, we look to the economic

realities of the transaction to determine whether the

investor's involvement is limited to ministerial

functions. If merely ministerial, the venture won't be

excluded from the securities laws. Id. In other words,

something like common stock is a security because I

buy the stock and then reap the rewards because of

the efforts of the company's officers and employees.

The government thoroughly proved that IBOs

couldn't make any money except for their own effort

in recruiting others into the scheme. But that effort

had little, if any impact on the success or failure of the

casino. I think this potential disconnect isn't a

problem, however, under Howey. What's relevant to

the security finding is that the promotors promised

profits from the efforts of others, even if this turned

out to be false.

Consider a hypothetical based on the facts of

Howey. A promotor sells tracts of land in an orange

grove with the promise to develop, manage, and

nurture the grove. This combination-land sale and

land management-is what makes the transaction an

(44a)

investment contract. But if the land had never existed

and the "land" was still sold to investors, there's still

a security. Whether the land existed or not doesn't

change the character of what was sold. And it wouldn't

make sense for one circumstance to be covered by the

securities laws and the other not. Otherwise, a

securities fraudster benefits from committing a bigger

fraud. SEC v. Lauer, 52 F.3d 667, 670 (7th Cir. 1995)

(Posner, J.) ("It would be a considerable paradox if the

worse the securities fraud, the less applicable the

securities laws."); id. ("An elementary form of [the]

misrepresentation [in the sale of securities] is

misrepresenting an interest as a security when it is

nothing of the kind.").

So we look to I2G's promotions and

representations to the public. As the majority details,

the defendants represented that IBOs would have

ministerial functions in the operations of the company

and could sit back, relax, and collect the passive

income generated by the casino. This is

quintessentially relying on the "efforts of others."

Warfield v. Alaniz, 569 F.3d 1015, 1021-22 (9th Cir.

2009) ("[W]hile the subjective intent of the purchasers

may have some bearing on the issue of whether they

entered into investment contracts, we must focus our

inquiry on what the purchasers were offered or

promised."); SEC v. Banner Fund Int’l, 211 F.3d 602,

615 (D.C. Cir. 2000) (relying on the program's

brochure advertising program to determine how

transaction was represented before finding it was a

security); Aldrich v. McCulloch Props., Inc., 627 F.2d

1036, 1039-40 (10th Cir. 1980) ("Central to this test is

the promotional emphasis of the developer.

Characterization of the inducement cannot be

accomplished without a thorough examination of the

representations made by the defendants as the basis

(45a)

of the sale." (citations omitted)). So I would find the

Emperor position was a security.6

B.

Finally, the defendants challenge the instruction's

definition of "investment contract." They argue it

lacks a proper definition of horizontal commonality,

and that it incorrectly defined "efforts of others."

As a reminder, we review jury instructions for

abuse of discretion. Geisen, 612 F.3d at 485. A district

judge abuses his discretion when the instructions

incorrectly describe the law. Id. (quoting Ross, 502

F.3d at 527). But little needs to be said here. The

instruction is clear and legally accurate. It reads in

relevant part:

The term "investment contract" refers to

a contract transaction or scheme

whereby a person invests his or her

money, in a common enterprise, and is

led to expect profits derived primarily

from the efforts of others (i.e., persons

other than the investor). A common

enterprise ties the interest of each investor

in a pool of investors to the success of the

overall venture such that the investors

share a common fortune.

R.554, Jury Instructions, PageID 5267-68. The

italicized portion concerns horizontal commonality

and accurately describes this circuit's law. The

instruction needed to explain that the relevant

relationship the jury needed to identify was among

6 That I2G contracted with a third party to manage the casino

also doesn't impact this efforts-of-others calculus because it

doesn't change the Emperor's relationship with I2G. When the

investor has "no reasonable alternative" but to rely on the

promotor, the efforts of others prong is satisfied. Alunni v. Dev.

Res. Grp., LLC, 445 F. App'x 288, 296 (11th Cir. 2011) (quoting

Gordon v. Terry, 684 F.2d 736, 741 (11th Cir. 1982)).

(46a)

investors. Newmyer v. Philatelic Leasing, Ltd., 888

F.2d 385, 394 (6th Cir. 1989) ("[T]here must also be a

horizontal relationship between or among investors,

with the funds of two or more investors going into a

common pool from which all may benefit."). It does

that.

The instruction also correctly defines "efforts of

others." The district court, at the defendant's request,

clarified that "others" refers to "persons other than the

investor." The defendants take issue now because they

had asked that it be more explicit. But the language

the judge relied on reasonably reflects the law. The

"efforts of others" does not prevent the investor from

having any role in the venture, it just prevents the

investor from holding a managerial role. This is

exactly what the instructions asked the jury to find.

So for all these reasons, I concur and affirm the

convictions.

(47a)

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

RICHARD G. MAIKE (22-6114/23-5563);

DOYCE G. BARNES (22-6121/23-5561);

FARADAY HOSSEINIPOUR (23-5029/5560),

Defendants-Appellants.

Unpublished Appendix

Before:

McKEAGUE,

KETHLEDGE,

NALBANDIAN, Circuit Judges.

and

Decided and Filed: June 26, 2025

KETHLEDGE, Circuit Judge. “When a party

comes to us with nine grounds for reversing the district

court, that usually means there are none.” Fifth Third

Mortg. Co. v. Chicago Title Ins. Co., 692 F.3d 507, 509

(6th Cir. 2012). The defendants here come to us with

several times that number, with the same result. This

unpublished appendix addresses the arguments we

chose not to address in today’s published opinion. See

United States v. Barnes, -- F.4th --- (6th Cir. 2025).

I.

As we discussed at greater length in the published

opinion, Infinity 2 Global (I2G) was a pyramid scheme

that operated from February 2013 until December

2014. The defendants were three of its leaders:

Richard Maike was the president, Doyce Barnes was

the vice president for sales, and Faraday Hosseinipour

was a top distributor. In 2022, a jury convicted the trio

of conspiracy to commit mail fraud and conspiracy to

(48a)

commit securities fraud, and convicted Maike of

money laundering and tax evasion. They challenge

those convictions. Barnes also challenges his

sentence, and Maike challenges an order that he pay

restitution.

II.

A.

The defendants first challenge various aspects of

the jury instructions as well as the court’s answer to a

jury question. We review jury instructions for an

abuse of discretion, though we review their legal

accuracy de novo. United States v. You, 74 F.4th 378,

391 (6th Cir. 2023).

1.

Barnes and Hosseinipour argue that the court’s

instruction about good faith was legally inaccurate.

If a defendant believes, in good faith, that his false

or misleading statements were true, he cannot form

an intent to defraud. See United States v. Daniel, 329

F.3d 480, 488 (6th Cir. 2003). But a good-faith belief

that a venture will ultimately succeed does not

excuse false statements that a defendant makes to

induce others to join that venture. United States v.

Kennedy, 714 F.3d 951, 958 (6th Cir. 2013). Here, the

court instructed the jury that a defendant’s belief

“that the venture will eventually meet his or her

expectations” did not constitute the sort of good faith

that vitiates the defendant’s intent to defraud. We

have upheld the legal accuracy of this very

instruction for at least 40 years—because “no matter

how firmly the defendant may believe in the plan,

his belief will not justify baseless, false, or reckless

representations or promises.” See United States v.

Stull, 743 F.2d 439, 446 (6th Cir. 1984) (citation

omitted). The defendants here may have genuinely

believed in their scheme’s potential to succeed; but if

they deceived others in pursuit of that potential,

(49a)

they conspired to commit fraud. See Sixth Cir.

Pattern Crim. Jury Instr. § 10.04(3) (2023). The

court’s instruction on this point was accurate.

2.

Barnes and Hosseinipour next argue that the

district court’s instruction defining “intent to defraud”

as an intent to “cheat or deceive” was improper

because the instruction did not also say that the

scheme must deprive someone of something. See Shaw

v. United States, 580 U.S. 63, 72 (2016). But this

argument simply ignores the second half of the

sentence that they contend is problematic. The court

said that, to convict the defendants, the jury must find

that they acted “with an intent to deceive or cheat for

the purpose of depriving another of money or

property.” We therefore reject this argument.

3.

Barnes and Hosseinipour lodge one further

objection to a jury instruction. They did not raise this

objection at trial, however, so we review it only for

plain error. See United States v. Morrison, 594 F.3d

543, 546 (6th Cir. 2010). These defendants now argue

that an instruction that referred to “victim-investors”

improperly commented on the evidence “in a manner

that implies guilt.” See Buchanan v. United States,

244 F.2d 916, 920 (6th Cir. 1957). We grant that the

term “victim” implies that some wrong occurred. But

one ill-advised word did not make these jury

instructions, taken as a whole, “so clearly erroneous

as to likely produce a grave miscarriage of justice.”

Morrison, 594 F.3d at 546. We thus hold that the

district court made no error, plain or otherwise.

4.

Finally, all three defendants argue that the court

erred in its answer to a jury question. We review

answers to jury questions for an abuse of discretion and

uphold them unless, taken as a whole, the answers

(50a)

rendered the jury instructions “confusing, misleading,

and prejudicial.” United States v. Fisher, 648 F.3d 442,

447 (6th Cir. 2011). Here, the jury asked whether it

could “use the evidence from the whole case to

determine if the positions sold are/were a security” or

whether it was limited to considering “just the

purchase within the statute of limitations.” The court

responded: “You are permitted to use any evidence

which you deem appropriate to consider whether the

positions sold are/were a security. You are not limited

to the evidence regarding the purchase within the

statute of limitations.” The defendants contend that

this response implied that a purchase had, in fact,

occurred within the statute-of-limitations period—a

factual question that was in dispute. But the court’s

response simply quoted the language from the jury’s

question, which itself implied that the jury had

already determined that a purchase had occurred

within the statute of limitations. The answer was thus

neither confusing, nor misleading, nor prejudicial—so

the court did not abuse its discretion.

B.

The defendants next argue that the prosecution for

conspiracy to commit securities fraud was timebarred. To convict a defendant of that offense, a jury

must find that the defendant, or a co-conspirator,

committed an overt act that occurred within the fiveyear statute of limitations and that was alleged in the

indictment. See United States v. Smith, 197 F.3d 225,

228 (6th Cir. 1999); see also 18 U.S.C. § 3282. Here,

the grand jury returned the second superseding

indictment on November 13, 2019, so an overt act

must have occurred after that date in 2014. Although

the indictment listed 20 sales, 19 took place before

November 13, 2014. The twentieth sale—to an

investor known as S.H.—occurred on November 25,

2014.

(51a)

The crux of the defendants’ argument is that this

November 25 sale actually occurred in October, when

S.H. wired his money to I2G distributor Scott Magers.

But Magers did not deposit those funds into an I2G

bank account until November 25, which is when S.H.

became an Emperor. And the “case law gives ample

support to the proposition that payment is an integral

and often final term in a conspiracy.” United States v.

Schaffer, 586 F.3d 414, 424 (6th Cir. 2009) (cleaned

up). The exchange of funds is a two-sided transaction:

on one side the payment and on the other the receipt

of those funds. I2G’s receipt of those funds was

therefore an overt act that occurred within the

statute-of-limitations period. Maike also contends

that I2G’s receipt of payment does not count as an

overt act because that act was not itself criminal. But

an act need not be criminal to count as an overt act in

furtherance of a conspiracy. Braverman v. United

States, 317 U.S. 49, 53 (1942). Maike’s arguments are

meritless.

Meanwhile, Barnes and Hosseinipour also argue

that the jury instructions permitted the jury to convict

without finding that this final sale had occurred. The

court’s instruction said, “For you to return a guilty

verdict on the conspiracy charge in Count 13, the

government must convince you beyond a reasonable

doubt that at least one overt act was committed for the

purpose of advancing or helping the conspiracy after

November 13, 2014.” That same instruction’s list of

overt acts included only one act that had occurred

after that date. Hence the jury could not convict the

defendants without finding that this final sale had

occurred.

C.

The defendants next challenge the district court’s

failure to give an instruction that limited how the jury

could consider the testimony of Richard Anzalone. The

(52a)

parties agree that the court should have given a

limiting instruction after the jury heard that

Anzalone—an indicted coconspirator of Barnes and

Hosseinipour—had pled guilty to conspiracy to commit

securities fraud. A co-conspirator’s guilty plea is not

admissible as substantive evidence of a defendant’s

guilt. United States v. Benson, 591 F.3d 491, 498 (6th

Cir. 2010). When a guilty plea is introduced, the

district court must instruct the jury that it may use

that plea “only to determine the testifying witness’s

credibility.” United States v. Sanders, 95 F.3d 449, 454

(6th Cir. 1996); see also Fed. R. Evid. 105. A court errs

if it fails to give that instruction. United States v.

Modena, 302 F.3d 626, 631-32 (6th Cir. 2002).

The government contends that the court’s error

here was harmless. To show that an error was

harmless, the government must demonstrate by a

preponderance of the evidence that the error “did not

materially affect the verdict.” United States v.

Kilpatrick, 798 F.3d 365, 378 (6th Cir. 2015). (Maike

and Hosseinipour did not raise this issue at trial, so

they bear the even-heavier burden of demonstrating

plain error. See Puckett v. United States, 556 U.S.

129, 135 (2009).) We thus ask whether a jury would

likely have convicted the defendants had the court

given a proper instruction—not whether the jury

would likely have convicted the defendants without

Anzalone’s testimony at all. See Kotteakos v. United

States, 328 U.S. 750, 764-66 (1946). Hence the

inquiry focuses on whether the jury likely used the

testimony for the improper purpose of inferring guilt

by association. Although the risk that a jury will

assume such guilt is present whenever a testifying

co-conspirator has pled guilty to the same conspiracy

in which the remaining defendants are charged,

“much of this potential for prejudice is negated when

the pleading codefendant . . . testifies regarding the

(53a)

specific facts underlying the crimes in issue.” United

States v. Christian, 786 F.2d 203, 214 (6th Cir. 1986).

Here, Anzalone’s guilty plea was mentioned twice

during the government’s case. First, the

government’s

opening

statement

said

that

Anzalone—whom

the

prosecutor

called

Hosseinipour’s “partner in this crime”—had already

pled guilty “in this case.” Later, the government

began its direct examination of Anzalone by asking

him whether he had pled guilty to conspiracy to

commit securities fraud. He said that he had. The

prosecutor then asked Anzalone whether he had “also

commit[ed] the crime in Count 1, the conspiracy to

commit mail fraud.” Anzalone replied, “I believe so,

now that I understand it.” Anzalone then proceeded

to testify for prospective distributors, and how much

money he and other distributors made from the

scheme.

Anzalone’s testimony provided an insider’s

perspective on how I2G defrauded its distributors.

Throughout his testimony, the government displayed

emails between defendants as well as agendas and

videos from promotional events, and Anzalone

explained how that evidence fit into I2G’s fraudulent

scheme. For example, Anzalone testified that I2G’s

events lured potential investors by emphasizing the

casino: “[T]he exciting part of [I2G] was, and what got

us going, was the rev—the, excuse me, profit sharing

of the—of the casino. That’s what really got the

program going. . . . [M]any people believed, you know,

I get—I need to get as many shares as possible,

because this thing could be huge.” Anzalone also

demonstrated the sales pitch he used when selling

distributor packages, which was based on an I2G

PowerPoint presentation. While demonstrating his

sales pitch, Anzalone described how he misled

potential distributors about both the features and the

(54a)

availability of the I2G Touch: “It had many, many

different features. I would talk about the features it

had. A lot of which never worked.” These statements

illustrated the deception at the core of I2G’s

marketing strategy. Anzalone’s guilty plea thus bore

only on his credibility and his motivation to testify.

Moreover, the court gave the jury some instructions

that focused on Anzalone’s credibility. Specifically, the

instructions pointed out that the government had

agreed to recommend that Anzalone receive a reduced

sentence “in exchange for his cooperation.” The court

then told the jury to “consider Richard Anzalone’s

testimony with more caution than the testimony of

other witnesses” and to consider whether it “may have

been influenced by the government’s promise.” The

court also instructed the jury that it must reach an

independent conclusion about each defendant’s guilt

and should “not let the possible guilt of others influence

[its] decision in any way.” In the end, both the nature

of Anzalone’s testimony and the court’s other

instructions to the jury provide “fair assurance” that

the district court’s failure to give a specific limiting

instruction about Anzalone’s guilty plea did not

materially affect the jury’s verdict. Kotteakos, 328

U.S. at 765. We therefore hold that the court’s error in

failing to give this instruction was both harmless and

not plain.

D.

The defendants also raise several issues related to

the indictment.

1.

Barnes and Hosseinipour argue that the district

court lacked jurisdiction in these cases because the

mail-fraud indictment failed to allege that they had a

specific intent to defraud. Indictments must contain

the elements of the charged offense along with enough

facts to put defendants on notice of the charges

(55a)

against them so that they can mount a defense. See

Hamling v. United States, 418 U.S. 87, 117 (1974). But

an indictment that charges a conspiracy need not

allege “with technical precision” the elements of the

underlying crime that is the object of that conspiracy.

United States v. Superior Growers Supply, 982 F.2d

173, 176 (6th Cir. 1992). Here, the indictment alleged

that the defendants had “knowingly conspire[d]” to

commit mail fraud and that they had committed

various overt acts to further that conspiracy. Those

overt acts—such as causing the purchase of Emperor

packages on various dates listed in the indictment—

gave the defendants ample notice of the charges

against them. See United States v. McAuliffe, 490 F.3d

526, 531 (6th Cir. 2007). Hence the district court had

jurisdiction.

2.

Maike argues in the alternative that his

indictment was either constructively amended or

suffered from a prejudicial variance. Both implicate

his Fifth Amendment grand-jury right and

protections from double jeopardy, as well as his Sixth

Amendment right to be informed of the charges

against him. United States v. Sittenfeld, 128 F.4th

752, 775 (6th Cir. 2025).

Maike’s arguments center on the jury instructions.

The indictment, Maike says, referred only to a

pyramid scheme, while the jury instructions

permitted the conviction to rest on unindicted

conduct—a general theory of fraud. In this way, he

contends the instructions broadened the possible

bases of liability. Maike did not raise this objection at

trial, so we review it only for plain error. United States

v. Kuehne, 547 F.3d 667, 682 (6th Cir. 2008).

A constructive amendment occurs when an

indictment remains literally unchanged, but its terms

are altered because “events at trial raise a substantial

(56a)

likelihood that the defendant may have been

convicted of an offense other than the one charged in

the indictment.” United States v. Kettles, 970 F.3d 637,

648 (6th Cir. 2020). One way to constructively amend

an indictment is if the instructions effectively charge

the jury on a “separate offense that was not listed.”

Kuehne, 547 F.3d at 685. But when the “instructions

alone differ from the indictment to charge a different

means for committing the same crime, a mere

variance occurs and a defendant must demonstrate

prejudice.” Sittenfeld, 128 F.4th at 775. Prejudice in

this context means the defendant’s “substantial

right[s]” were affected. Id. at 784 n.19.

To evaluate whether the government erred, we

read the indictment “as a whole.” Id. at 781. This

means we can look to the “introductory allegations,”

the “scheme and artifice to defraud” that the

indictment describes, and the substantive counts.

United States v. Bradley, 917 F.3d 493, 503 (6th Cir.

2019). Together, these are the government’s

“specification of the ways in which the defendant[]

sought to accomplish” his crime. Id. And for the same

reason they delimit the relationship between the

indictment, the proper jury instructions, and an

impermissible alteration.

Here, Maike’s arguments hinge on a fundamental

misreading of the indictment. In total, it refers to a

pyramid scheme twice in its 22 pages—both in the

introductory allegations. By contrast, the “scheme and

artifice to defraud” describes a general theory of fraud,

including how the defendants made misleading

statements, concealed material facts, and lied about

the company’s potential. No constructive amendment

occurred. See Kettles, 970 F.3d at 648.

3.

For the same reason, no prejudicial variance

occurred either. Mail fraud does not, as Maike asserts,

(57a)

come in an “ordinary” variety that is distinct from a

“pyramid scheme” variety. The core of the offense is a

“scheme and artifice to defraud.” Here, the indictment

had an entire section so labeled; that section never

limited its scope to pyramid schemes. True, one way

for the jury to find that the defendants had devised a

scheme to defraud was to find that the defendants had

established a pyramid scheme, and the government

presented sufficient evidence for the court to instruct

the jury about what constitutes a pyramid scheme.

The instructions cannot have departed from the

means alleged in the indictment if the instructions

reflected two legally equivalent options; juries may

convict on any theory that an indictment fairly raises.

See United States v. Robinson, 99 F.4th 344, 366 (6th

Cir. 2024).

E.

We make shorter work of the defendants’

remaining common arguments.

All three defendants challenge various rulings that

admitted testimony from the government’s expert

witness, William Keep, and excluded testimony from

their expert, Manning Warren. Keep’s testimony both

“rest[ed] on a reliable foundation”—his expertise in

multilevel marketing and his scrutiny of I2G—and

was “relevant to the task” of evaluating I2G’s business

practices.

See

Daubert

v.

Merrell

Dow

Pharmaceuticals, 509 U.S. 579, 597 (1993).

Meanwhile, Warren did not establish that he had

expertise regarding pyramid schemes. Hence the

court did not abuse its discretion by limiting Warren’s

testimony to securities regulation, where he had

demonstrated expertise. See id. The court did not

abuse its discretion on these points.

The defendants next raise six challenges to the

admission of testimony from the government’s lead

case investigator, Agent Dave McClelland. They first

(58a)

contend that two summary charts he presented lacked

foundation. See Fed. R. Evid. 1006. The government

concedes that those charts—Exhibits 230 and 232—

should not have been admitted, because some of the

evidence they summarized had not been admitted.

But the record shows no reasonable probability that

these charts affected the jury’s verdict, so that error

was harmless. See United States v. Agrawal, 97 F.4th

421, 429 (6th Cir. 2024).

The defendants next contend that evidence of

Barnes’s foreign bank account was irrelevant. See

Fed. R. Evid. 401. But the potential location of

fraudulent proceeds could bear on the fraud’s extent

or nature, so we agree with the district court that the

evidence was relevant. See United States v. Streebing,

987 F.2d 368, 375 (6th Cir. 1993).

That leaves four hearsay objections to parts of

McClelland’s testimony. See Fed. R. Evid. 802. First,

the defendants challenge McClelland’s testimony

about what motivated distributors to purchase

Emperor packages. That testimony was hearsay. But

the participants themselves testified at trial to the

same facts, so any error from admitting McClelland’s

similar testimony was harmless. See United States v.

Martinez, 588 F.3d 301, 313 (6th Cir. 2009). Second,

the defendants object to the admission of an email

from one of the original I2G partners about his plans

to leave the company. But that email revealed the

partner’s present state of mind—that health and

family reasons motivated his departure from I2G—so

it falls within an exception to the rule against hearsay.

See Fed. R. Evid. 803(3). Third, the defendants object

to McClelland’s testimony that an employee of PlusFive Gaming (which ran I2G’s online casino)

“provided an answer” to his question about the

company’s invoices. But that statement was not

offered for its truth because McClelland stated only

(59a)

that the employee “provided an answer,” not what

that answer was—the statement thus not hearsay at

all. See Fed. R. Evid. 801(c). Finally, the defendants

object to McClelland’s identification of the I2G

participants whose initials appeared in the

indictment. But that identification involved no out-ofcourt statements at all, so it too was not hearsay. See

id. We therefore reject these challenges to Agent

McClelland’s testimony.

Barnes and Hosseinipour also assert that the

government introduced false evidence, which (they

say) violated their due-process right to a fair trial. The

government may not knowingly present false

evidence. Miller v. Pate, 386 U.S. 1, 7 (1967). To show

that false evidence tainted a jury’s verdict, a

defendant must demonstrate that evidence was both

false and material and that the government knew of

its falsity. United States v. Fields, 763 F.3d 443, 462

(6th Cir. 2014). Here, the defendants contend that

testimony based on Exhibit 101i—a spreadsheet

containing I2G participants’ earnings and losses—

was false. That spreadsheet provided the basis for the

government’s expert witness, William Keep, to testify

that 96 percent of I2G’s distributors lost money. But

the government elicited testimony from a computer

programmer who compiled the spreadsheet, Jerry

Reynolds, about the spreadsheet’s limitations.

Specifically, Reynolds testified about the very

deficiency to which the defendants point: that the

spreadsheet might not have included every payment

that I2G made to participants, so it might overstate

how many participants lost money. Moreover, the

defendants had ample opportunity to cross-examine

both Keep and Reynolds about anything that the

spreadsheets contained. See United States v. Ward,

190 F.3d 483, 491 (6th Cir. 1999). No due-process

violation occurred.

(60a)

Finally, Barnes argues that the government

violated Brady and the Jencks Act when it failed to

disclose a memorandum that summarized an

interview with Hosseinipour that IRS agent Matt

Sauber had conducted in March 2022. See Brady v.

Maryland, 373 U.S. 83 (1963). A Brady violation

occurs when government suppresses material

evidence that is favorable to the defendant. United

States v. Graham, 484 F.3d 413, 417 (6th Cir. 2007).

In the interview at issue here, Hosseinipour told

Agent Sauber that she had believed and had relied

upon various statements by Maike, that she did not

know what the casino’s actual profits were, and that

she believed the casino had long-term potential. If

anything, these statements illustrate the fraud that

permeated the scheme, which would have been

unfavorable to Barnes. No Brady violation occurred.

Nor did the failure to disclose the memorandum

violate the Jencks Act. See 18 U.S.C. § 3500. The

Jencks Act requires the disclosure only of witness

statements that relate to the subject of the witness’s

testimony. United States v. Susskind, 4 F.3d 1400,

1404 (6th Cir. 1993) (en banc). But Sauber did not

testify about any statements covered in the

memorandum, so the Jencks Act does not apply.

F.

Apart from his conviction, Barnes argues that his

sentence was procedurally unreasonable. A court

commits procedural error if it calculates a sentencingguidelines range incorrectly. Gall v. United States,

552 U.S. 38, 51 (2007). We review a guidelines

calculation for an abuse of discretion and the court’s

underlying factual findings for clear error. United

States v. Yancy, 725 F.3d 596, 598 (6th Cir. 2013).

Barnes first argues that the court overestimated

the amount of economic loss that occurred through the

conspiracy. Under § 2B1.1(b) of the sentencing

(61a)

guidelines, if a crime causes economic loss of greater

than $25 million, a 22-level sentencing enhancement

applies. The Sentencing Commission’s Guidelines

commentary explains that loss is the “greater of actual

loss or intended loss.” USSG § 2B1.1 cmt. n.3(A).

Barnes contends that the ordinary meaning of “loss”

does not cover “intended loss,” but our court has held

otherwise. See You, 74 F.4th at 397-98. Here, over the

life of the scheme, I2G sold some 5,300 Emperor

packages (though as noted elsewhere it never had

more than 5,000 Emperors at any one time). The

district court, for its part, estimated the intended loss

by multiplying 5,000 Emperor packages by $5,000.

That $25 million—along with the monthly fees that

Emperors were required to pay—easily puts the

intended economic loss of the Emperor program above

$25 million. The district court thus made a

“reasonable estimate” of the intended economic loss,

which is all the guidelines require. See United States

v. Wendlandt, 714 F.3d 388, 393 (6th Cir. 2013).

Barnes also contends that the court erred by failing to

offset the value of the products that Emperors

received against the $25 million loss estimate. But the

evidence showed that those products were mostly

worthless. The district court’s intended-loss

calculation was not clearly erroneous.

Barnes next argues that the district court lacked

sufficient evidence to apply a four-level sentencing

enhancement for causing “substantial financial

hardship” to at least five victims. See USSG §

2B1.1(b)(2). The guidelines define such hardship to

include, among other things, “substantial loss” of one’s

retirement savings, “substantial changes” to one’s

living arrangements, and “substantial harm” to one’s

ability to obtain credit. USSG § 2B1.1, cmt. 4(F). Here,

victim-impact statements made clear that I2G caused

dozens of people to lose their life savings, their ability

(62a)

to pay rent, or their ability to obtain a mortgage. The

district court thus did not clearly err when it concluded

that I2G had caused substantial financial hardship for

at least five victims.

In any event, the district court flatly rejected the

sentencing guidelines’ usefulness in determining

Barnes’s sentence. At Barnes’s sentencing hearing, the

court said that the guidelines range of 262 to 327

months was “grossly disproportionate” and called the

guidelines “not helpful in calculating” Barnes’s

sentence. Instead, the court based Barnes’s sentence

on Maike’s ten-year sentence, and concluded that an

eight-year sentence would be “proportional” for

Barnes. Barnes’s deteriorating health led the court to

go even lower. Concerned that eight years might turn

out to be a life sentence, the court sentenced Barnes

to 48 months—about one-sixth the length of the

original guidelines range. Any minor errors in the

calculation of that range thus would have been

harmless anyway.

G.

Hosseinipour separately argues that her

attorney was constitutionally ineffective. After the

jury announced its verdict, Hosseinipour—through

a new attorney—moved for a new trial based on an

alleged violation of her Sixth Amendment right to

counsel. See Fed. R. Crim. P. 33. We review the

denial of a motion for a new trial for an abuse of

discretion. See United States v. Anderson, 76 F.3d

685, 692 (6th Cir. 1996). A district court abuses its

discretion “when it relies on clearly erroneous

findings of fact, uses an erroneous legal standard, or

improperly applies the law.” United States v. White,

492 F.3d 380, 408 (6th Cir. 2007).

Rule 33 permits a court to grant a defendant’s

motion for a new trial when the “interest of justice

so requires.” See Fed. R. Crim. P. 33(a). A Sixth

(63a)

Amendment violation “clearly meets this standard.”

United States v. Munoz, 605 F.3d 359, 373 (6th Cir.

2010). To establish that counsel was constitutionally

ineffective under the Sixth Amendment, a defendant

must show two things. First, she must show that her

attorney’s performance “fell below an objective

standard of reasonableness.” Strickland v.

Washington, 466 U.S. 668, 688 (1984). Second, she

must prove “that there is a reasonable probability

that, but for counsel’s unprofessional errors, the

result of the proceeding would have been different.”

Id. at 694.

Here, Hosseinipour offered sworn affidavits that

alleged various deficiencies in the performance of her

attorney, Wayne Manning (who is also her brother-inlaw). Those affidavits recited that, at trial, Manning

had failed to make various objections, or to impeach

certain witnesses. But we agree with the district court

that the record shows no prejudice to Hosseinipour at

trial. Among other things, counsel for Hosseinipour’s

co-defendants—whose interests largely aligned with

her own—ably represented their clients’ interests

through objections and motions throughout the trial,

which served Hosseinipour’s interests too.

That leaves Hosseinipour’s claim that Manning’s

pre-trial representation was ineffective. She

emphasizes three points. First, she alleges that

Manning never told her about the elements of the

charges against her or about her range of possible

sentences. Second, she alleges that Manning breached

the attorney-client privilege by disclosing her defense

strategy to the government and to her co-defendants.

Third, she alleges that Manning told her she would be

committing perjury if she accepted the government’s

offer of a plea deal—which allegedly would have come

with a recommendation of no jail time. She further

(64a)

alleges that she would have accepted the deal had

Manning not given her bad advice.

The district court chose not to hold an evidentiary

hearing about these allegations, and instead denied

Hosseinipour’s motion based on its own “recollection of

the trial and the record.” Yet that recollection was

mistaken in at least one respect. Specifically, the

court’s order described a pre-trial colloquy in which,

the order said, Hosseinipour had acknowledged that

she discussed the plea offer with her attorney. The

court also recalled, mistakenly, that Hosseinipour had

said she understood the penalties she was facing and

that she “had knowingly chosen to proceed to trial

notwithstanding the potential risks.” But that colloquy

never happened. The court’s denial of Hosseinipour’s

motion thus rested on a factual finding that was

clearly erroneous, and she had no opportunity to

correct that finding through an evidentiary hearing.

Hence we must vacate the district court’s order.

On remand, the district court can exercise its

discretion as to whether to hold an evidentiary hearing

about Manning’s pre-trial performance. See United

States v. Bass, 460 F.3d 830, 838 (6th Cir. 2006). The

parties can also address whether a motion for a new

trial under Criminal Rule 33 is a proper means to seek

relief for allegedly ineffective pre-trial assistance. See

generally Lafler v. Cooper, 566 U.S. 156, 171-72 (2012).

In this appeal, we hold only that the district court’s

denial of the motion rested on a clearly erroneous

factual finding, which was an abuse of discretion.

H.

Maike challenges his convictions—as well as an

order that he pay restitution—on several other

grounds. Initially, we consolidated his appeal only

with respect to issues common to Barnes and

Hosseinipour. But with the benefit of supplemental

(65a)

briefing from Maike and from the government, we now

address Maike’s remaining arguments here.

1.

Maike argues that the court abused its discretion

by admitting an IRS agent’s testimony, which Maike

says fell outside the scope of the government’s pretrial

disclosure. We review the admission of evidence for an

abuse of discretion. United States v. Jenkins, 593 F.3d

480, 484 (6th Cir. 2010). Under the version of

Criminal Rule 16 in effect at the time relevant here,

the government was required, upon the defendant’s

request, to provide a summary of any expert

testimony that it intended to offer at trial. Fed. R.

Crim. P. 16(a)(1)(G) (2013). If the government failed

to do so, a district court had discretion to grant a

continuance or to prohibit admission of the

undisclosed evidence. Fed. R. Crim. P. 16(d)(2) (2013).

The disclosure here concerned the government’s

allegation that Maike had evaded taxes by

underreporting his income. Specifically, the

government alleged that Maike had laundered some

of his I2G income into loans from an I2G affiliate,

which he then used to purchase two farms in Kansas.

Accordingly, the government disclosed that Paula

Basham—an experienced IRS agent and auditor—

would “explain the unsurprising conclusion that if

Maike had included the Kansas land purchases on his

taxes, he would have had tax due.”

At trial, Maike objected to a line of questions that,

in his view, fell outside this disclosure. The

government had asked Basham about potential “red

flags” that the IRS would use to determine that an

instrument “may look like a loan, but [is] not actually

a loan.” Basham testified that those indicators could

include a lengthy repayment term, a below-market

interest rate, no security, and other indicators that

the transaction was not conducted at arm’s length.

(66a)

She also testified that Maike’s loans for the Kansas

farms had these red flags. Maike now argues that

this testimony was expert testimony that—in

violation of Rule 16—the government failed to

disclose.

But any such nondisclosure was harmless. The

district court’s colloquy with Maike’s attorney—after

he objected to this testimony—showed that he was

prepared to address all these issues on crossexamination. And during cross Maike’s counsel

capably did so. Nor, on appeal, does Maike present any

serious argument that he was prejudiced by the

nondisclosure. Any error in admitting Basham’s

testimony was therefore harmless. See United States

v. Tarwater, 308 F.3d 494, 516 (6th Cir. 2002).

2.

Maike argues that the government violated

Brady. Maike’s accountant, Mike Pierce, testified

during the government’s case-in-chief at trial.

After Pierce’s direct examination, the government

provided Maike’s counsel with an FBI 302 record

of agents’ notes from their interview with Pierce.

Those notes included a statement by Pierce that

Maike “never refused to give me anything, and

whenever I asked for a backup document, he gave it to

me.” Although the government probably should have

provided that statement to Maike’ s counsel sooner,

Maike has not shown how that delay was material in

the Brady sense. See Jalowiec v. Bradshaw, 657 F.3d

293, 306-08 (6th Cir. 2011). The statement itself was

simple, and Maike’s counsel had ample time to

prepare his cross-examination of Pierce on that point.

No Brady violation occurred. See United States v.

Presser, 844 F.2d 1275, 1283-84 (6th Cir. 1988).

3.

Maike also argues that the district court’s jury

instruction on the “advice-of-accountant” defense

(67a)

misstated the relevant law. Suffice it to say we

disagree.

4.

Maike challenges the district court’s order that

he pay $5.2 million in restitution. Under the

Mandatory Victims Restitution Act, a district court

must order restitution for “any offense committed

by fraud or deceit” in which an identifiable victim

suffered a loss. 18 U.S.C. § 3663A(c)(1)(A)(ii). We

review a district court’s restitution calculation for

an abuse of discretion. United States v. Sawyer, 825

F.3d 287, 292 (6th Cir. 2016).

Here, the district court’s restitution order had two

components: one required Maike to pay restitution to

victims of I2G; the other required him to pay the

government amounts that he had evaded paying in

taxes. Maike contends that the restitution order failed

to account for refunds that I2G had previously paid to

some distributors. But none of those distributors are

among the 434 victims to whom the district court

ordered that Maike pay restitution. And we are

satisfied that the district court’s calculation of that

component of its order represents a reasonably precise

estimate, which is all that the statute requires. See

Kilpatrick, 798 F.3d at 388.

(68a)

Maike likewise challenges the amount he owes to

the government for tax evasion. The court ordered

Maike to pay the government $936,540—which was

39.6 percent of the $2.3 million loan that he failed to

report as income. Suffice it to say Maike had not

shown any error in that determination.

*

*

*

As we recited in our published opinion, the

defendants’ criminal judgments are affirmed; except

that we vacate the district court’s December 29, 2022,

order denying Hosseinipour’s motion for a new trial.

We remand her case to the district court for the

limited purpose of deciding that motion anew,

consistent with our decision here.

(69a)

APPENDIX B

No. 23-5020/23-5560

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA

Plaintiff-Appellee,

v.

ORDER

FARADAY HOSSEINIPOUR,

Defendant-Appellant.

Dated: August 27, 2025

BEFORE:

McKEAGUE,

KETHLEDGE,

NALBANDIAN, Circuit Judges.

and

The court received a petition for rehearing en

banc. The original panel has reviewed the petition for

rehearing and concludes that the issues raised in the

petition were fully considered upon the original

submission and decision of the cases. The petition

then was circulated to the full court. * No judge has

requested a vote on the suggestion for rehearing en

banc.

Therefore, the petition is denied.

ENTERED BY ORDER OF THIS COURT.

/s Kelly L. Stephens

Kelly L. Stephens

* Judge Bush is recused in these cases.

(70a)

APPENDIX C

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF KENTUCKY

OWENSBORO DIVISION

CRIMINAL ACTION NO. 4:17-CR-00012-GNS-CHL

UNITED STATES OF AMERICA

v.

RICHARD G. MAIKE, et al.

PLAINTIFF

DEFENDANTS

Dated: December 7, 2022

ORDER

This matter is before the Court on various posttrial motions (DN 561, 568, 569, 570, 571) filed by

Defendants Richard G. Maike (“Maike”), Doyce G.

Barnes (“Barnes”), and Faraday Hosseinipour

(“Hosseinipour”). The motions are ripe for

adjudication.

A.

Maike’s Motion for Reconsideration

(DN 561)

Maike moves for reconsideration of the Court’s

decision to detain him pending sentencing. (Def.’s

Mot. Recons. 1, DN 561). Following his conviction, the

Court ordered Maike detained after considering the

factors outlined in 18 U.S.C. § 3143(a). (Order 4, DN

552).

In relevant part, Section 3143 provides:

(1)

Except

as

provided

in

paragraph (2), the judicial officer shall

order that a person who has been found

guilty of an offense and who is

awaiting imposition or execution of

sentence, other than a person for

whom

the

applicable

guideline

(71a)

promulgated pursuant to 28 U.S.C.

994 does not recommend a term of

imprisonment, be detained, unless the

judicial officer finds by clear and

convincing evidence that the person is

not likely to flee or pose a danger to the

safety of any other person or the

community if released under section

3142(b) or (c). If the judicial officer

makes such a finding, such judicial

officer shall order the release of the

person in accordance with section

3142(b) or (c).

(2)

The judicial officer shall order

that a person who has been found

guilty of an offense in a case

described in subparagraph (A), (B),

or (C) of subsection (f)(1) of section

3142 and is awaiting imposition or

execution of sentence be detained

unless—

(A)

(i) the judicial officer

finds there is a substantial

likelihood that a motion for

acquittal or new trial will be

granted; or

(ii) an attorney for the

Government has recommended

that no sentence of imprisonment

be imposed on the person; and

(B)

the judicial officer finds

by clear and convincing

evidence that the person is not

likely to flee or pose a danger

(72a)

to any other person or the

community.

18 U.S.C. § 3143(a). In ordering detention, the Court

found that there was not a substantial likelihood that

Maike’s post-judgment motions would be granted, and

the United States has not recommended that no term

of imprisonment be imposed. Accordingly, the burden

was and is on Maike to prove by clear and convincing

evidence that he is not a flight risk and does not pose

a danger to another person or the community.

1.

Flight Risk

As Maike argued before the Court ordered his

detention, he has complied with all conditions of

pretrial release, during the pendency of the charges

he was permitted to travel within the United States

and internationally, and he returned after each of

those trips. (Def.’s Mot. Recons. 1). According to

Maike, these circumstances establish that he is not a

flight risk. (Def.’s Mot. Recons. 1). The United States

disagrees and maintains that detention was proper.

(Pl’s Resp. Def.’s Mot. Recon. 2, DN 567).

As the Court noted following trial, Maike does

pose a flight risk. He set up foreign banks accounts

and maintained substantial amounts of cash. Given a

potentially lengthy prison system, Maike has an

incentive to flee and has the means to do so. See

United States v. Hills, No. 1:16CR329, 2018 WL

3956865, at *2 (N.D. Ohio Aug. 17, 2018) “It is not

surprising that courts have recognized that

defendants who have significant financial means

simultaneously have the ability to flee and thereby

pose an increased risk of flight.” (citations omitted)).

2.

Danger to Another Person or

the Community

Maike also asserts that he should be released

because he does not pose a danger to any person or

the community. (Def.’s Mot. Recons 1). As a sister

(73a)

court has noted, “danger can ‘encompass pecuniary

or economic harm.’” United States v. Olive, No. 3:1200048, 2013 WL 1666621, at *2 (M.D. Tenn. Apr. 17,

2013) (quoting United States v. Madoff, 316 F. App’x

58, 6061 (2d Cir. 2009)). As the Court previously

ruled, Maike’s pre-sentence release would pose a

danger. He has been convicted of crimes involving

elements of deceitfulness, and there is a danger that

he would again engage in such conduct.

For these reasons, Maike has failed to

establish by clear and convincing evidence he is

neither likely to flee, nor pose a danger to another

person or the community. This motion will be

denied.1

B.

Def endants’

Motions

for

Ac quittal and for New Trial (DN

568, 569)/Defendants’ Motions to Adopt

and Join (DN 570, 571)

Maike, and Barnes have moved for acquittal

and for a new trial pursuant to Fed. R. Crim. P. 29

and 33. (Def.’s Mot. J. Acquittal & New Trial 1, DN

568 [hereinafter Barnes’ Mot. J. Acquittal]; Def.’s Mot.

J. Acquittal & New Trial 1, DN 569 [hereinafter

Maike’s Mot. J. Acquittal]). In addition, Hosseinipour

has moved to adopt and join Maike and Barnes’

1 In his motion, Maike raises other grounds unrelated to Section

3143(a) in seeking release. (Def.’s Mot. Recons. 2-3). He has

ongoing medical issues, has ex-pressed concerns about his living

conditions in the Daviess County Detention Center, and has

family obligations. (Def.’s Mot. Recons. 2-3). However, “personal

and familial hardship and disruption to . . . professional affairs

are the natural, if unfortunate, consequences of finding oneself

at the mercy of the criminal justice system.” United States v.

Christman, 712 F. Supp. 2d 651, 656 (E.D. Ky. 2010).

(74a)

motions. (Def.’s Mot. Adopt & Join 1, DN 570; Def.’s

Mot. Adopt & Join 1, DN 571).2

Fed. R. Crim. P. 29 provides that “[a] defendant

may move for a judgment of acquittal, or renew such

a motion, within 14 days after a guilty verdict or after

the court discharges the jury, whichever is later.” Fed.

R. Crim. P. 29(c)(1). When moving for acquittal and a

new trial, the defendant challenging the sufficiency of

the evidence “bears a very heavy burden.” United

States v. Tocco, 200 F.3d 401, 424 (6th Cir. 2000).

“[T]he relevant question is whether, after viewing the

evidence in the light most favorable to the

prosecution, any rational trier of fact could have found

the essential elements of the crime beyond a

reasonable doubt.” Jackson v. Virginia, 443 U.S. 307,

319 (1979); United States v. Garrido, 467 F.3d 971,

984 (6th Cir. 2006). A motion for acquittal “will be

confined to cases where the prosecution’s failure is

clear.” United States v. Connery, 867 F.2d 929, 930

(6th Cir. 1989) (internal quotation marks omitted)

(citing Burks v. United States, 437 U.S. 1, 17 (1978)).

Fed. R. Crim. P. 33 provides that “[u]pon the

defendant’s motion, the court may vacate any

judgment and grant a new trial if the interest of

justice so requires.” Fed. R. Crim. P. 33(a). “Motions

for a new trial are not favored and are granted only

with great caution.” United States v. Garner, 529 F.2d

962, 969 (6th Cir. 1976). “The defendant bears the

burden of proving that a new trial should be granted.”

United States v. Davis, 15 F.3d 526, 531 (6th Cir.

1994). As the Sixth Circuit has explained:

Such a motion calls on the trial judge to

take on the role of a thirteenth juror,

weighing

evidence

and

making

The motions to adopt and join are unopposed, and will be

granted.

2

(75a)

credibility determinations firsthand to

ensure there is not a miscarriage of

justice. . . . [W]hile Rule 29 requires the

court to view the evidence in a light

most favorable to the prosecution, Rule

33 does not.

United States v. Mallory, 902 F.3d 584, 596 (6th Cir.

2018) (internal citations omitted).

1.

Professor William Keep

Defendants assert that the Court improperly

admitted some testimony from Professor William

Keep (“Keep”) during trial, which were issues raised

both pretrial and during the trial. (Maike’s Mot. J.

Acquittal 3-6; Barnes’ Mot. J. Acquittal 8; Def.’s Reply

Mot. J. Acquittal 1-2, DN 593 [hereinafter Maike’s

Reply]; Def.’s Reply Mot. J. Acquittal 4-5, DN 592

[hereinafter Barnes’ Reply]). These issues have been

thoroughly argued previously, and Defendants have

failed to present any argument warranting a different

conclusion than the Court’s prior rulings. The motion

will be denied on this basis.

Defendants

also reiterate

their

prior

arguments as to why they should have been permitted

to introduce testimony through Professor Manning

Warren (“Warren”) that Defendants did not engage in

an illegal pyramid scheme. (Maike’s Mot. J. Acquittal

6; Barnes’ Mot. J. Acquittal 89; Maike’s Reply 1-2;

Barnes’ Reply 5). Consistent with the Court’s prior

rulings regarding Warren’s testimony, the motions

will be denied.

2.

Former Special Agent

McClelland

Maike argues that he is entitled to a judgment

of acquittal or a new trial because former FBI Special

Agent David McClelland (“McClelland”) was

permitted to testify improperly about information

(76a)

gathered during his investigation in violation of the

Federal Rules of Evidence and the Sixth Amendment’s

Confrontation Clause. (Maike’s Mot. J. Acquittal 6-9;

Maike’s Reply 24). The United States, however, notes

that McClelland testified after numerous fact

witnesses testified, and it is permissible for an

investigator to provide background relating to the

investigation. (Pl.’s Resp. Defs.’ Post-Trial Mots. 4-5,

DN 583). In addition, McClelland testified about

summaries he prepared as part of the investigation

and prosecution of this case. (Pl.’s Resp. Defs.’ PostTrial Mots. 6).

Clearly, the parties view and recall

McClelland’s

testimony

differently.

After

considering the parties’ arguments, Maike’s

assertions about the challenged testimony do not

warrant a different conclusion than the Court’s

prior rulings. The motion will be denied.

3.

IRS Revenue Agent Paula

Basham

In addition, Maike asserts that the Court

should grant his motion because IRS Revenue Agent

Paula Basham (“Basham”) was improperly permitted

to opine about sham loans, which he objected to at

trial. (Maike’s Mot. J. Acquittal 12-13; Maike’s Reply

5-6). The United States contends that the testimony

was properly admitted. (Pl.’s Resp. Defs.’ Post-Trial

Mots. 6-9).

The Court addressed the issues raised by

Maike during the course of the trial, and he has failed

to show why a different ruling is warranted at this

time. This motion will be denied as to Basham.

5.

Jury Instructions

Defendants also raise several issues relating to

the jury instructions. (Maike’s Mot. J. Acquittal 6-12,

13-14, 15-16; Barnes’ Mot. J. Acquittal 3-7, 9-13). At

trial, the Court and counsel spent an extensive

(77a)

amount of time discussing and crafting the

instructions ultimately given to the jury.

a.

Scienter/Pyramid

Scheme

–

Gold

Unlimited

Defendants make several arguments relating

to the knowledge requirement and whether the

Emperor program was an illegal pyramid scheme.

(Maike’s Mot. J. Acquittal 9-10; Barnes’ Mot. J.

Acquittal 4-7; Maike’s Reply 6; Barnes’ Reply 1-3).

Maike contends the Court erred in instructing

as to Maike’s knowledge in participating in a scheme

to defraud and improperly expands the definition of a

pyramid scheme considered in United States v. Gold

Unlimited, 177 F.3d 472 (6th Cir. 1999). (Maike’s Mot.

J. Acquittal 9-10; Maike’s Reply 6). This issue was

discussed extensively during trial—including more

recent decisions like Fed. Trade Comm’n v.

BurnLounge, Inc., 753 F.3d 878 (9th Cir. 2014). In

drafting the jury instructions, the Court added

language from BurnLounge to specify that a pyramid

scheme involves the promotion of the program itself

rather than the sales of products. See also Kerrigan v.

ViSalus, Inc., 112 F. Supp. 3d 580, 593 (E.D. Mich.

2015) (noting that “the key inquiry [of the second

element of the Koscot test] is whether the alleged

scheme pays rewards ‘primarily for recruitment

rather than for sales of merchandise.’” (quoting

BurnLounge, Inc., 753 at 884)).

While Maike disagrees with the instruction, the

inclusion of the challenged language was consistent

with the Sixth Circuit’s statement in Gold Unlimited

that it may be prudent to clarify the difference

between legitimate business ventures and illegal

schemes. See Gold Unlimited, Inc., 177 F.3d at 483.

Thus, Maike’s motion will be denied on this basis.

(78a)

Similarly, Barnes argues that the evidence

presented at trial established that the Emperor

program was a legal multi-level marketing scheme.

(Barnes’ Mot. J. Acquittal 5-7; Barnes’ Reply 3). There

was overwhelming evidence, however, to support the

jury’s finding that it was an illegal pyramid scheme.

In addition, Barnes contends that there was

insufficient evidence to prove that he knew any false

representations were made to the purchasers of the

Emperor packages. (Barnes’ Mot. J. Acquittal 4-5;

Barnes’ Reply 3). “The existence of a conspiracy to

violate federal law may be established by a tacit or

mutual understanding among the parties.” United

States v. Keene, 959 F.2d 237, 1992 WL 68285 (6th Cir.

1992) (quoting United States v. Blakeney, 942 F.2d

1001, 1010 (6th Cir. 1991)). In the absence of direct

proof, the government may rely on circumstantial

evidence upon which the jury could infer an

agreement. See United States v. Hanson, 41 F.3d 580,

582 (10th Cir. 1994) (citation omitted). At trial, there

was evidence presented upon which the jury could find

that Barnes knowingly joined the conspiracy involving

i2G.

Accordingly, Barnes has not shown that he is

entitled to relief under Rule 29 or 33. His motion will

be denied as to these issues.

b. Anti-Saturation Instruction

Defendants also assert that the Court erred

in failing to give the requested anti-saturation

instruction. (Maike’s Mot. J. Acquittal 11-12; Barnes’

Mot. J. Acquittal 7; Barnes’ Reply 3-4). Their

arguments appear to be largely reiteration of prior

contentions regarding this instruction. As the Court

noted during one of the discussions with counsel

regarding the proposed instructions, there was an

absence of proof to support giving an anti-saturation

instruction, which is consistent with the holding in

(79a)

United States v. Gold Unlimited, Inc., 177 F.3d 472

(6th Cir. 1999). As Barnes acknowledges, an antisaturation instruction is only warranted if the proof

supports it. (Barnes’ Mot. J. Acquittal 7). Further, the

defendants had the burden of establishing that an

effective anti-saturation program was implemented.

See Gold, 177 F.3d at 482. No such evidence was

presented.

As recognized by the Sixth Circuit in Gold,

“[t]he key to any anti-pyramiding rule . . . is that the

rule must serve to tie recruitment bonuses to actual

retail sales in some way.” Id. (quoting Webster v.

Omnitrition Int’l, Inc., 79 F.3d 776, 783 (9th Cir.

1996)). At trial, the only anti-saturation policy urged

by defendants was the numerical cap of 5000 placed

on the sale of “Emperor positions”, which were

promised to receive a portion of profits from an on-line

casino in Asia.3 The program bonuses however, were

based solely upon recruitment of new members. No

significant profits were ever realized by the casino and

the only revenue to the venture was derived almost

exclusively from the sale of the Emperor and other

positions.4 Far from preventing the program from

failure, the numerical cap ensured that the last

members recruited would certainly lose their money

because they would be unable to qualify for bonuses

for the recruitment of new members. Therefore, no

instruction for anti-saturation was warranted. See

Gold, 177 F.3d at 482 (Defendant “did not prove at

trial that it appropriately tied recruitment bonuses to

To avoid online gambling restrictions in the United States,

participation in the casino could only occur outside the U.S.

4 Evidence at trial reflected that Emperors received payments

in the range of $15 per month, or $60,000 monthly assuming

4000 Emperors, but the casino generated losses except for two

months when a negligible profit was received.

3

(80a)

actual retail sales” or that it “de-linked recruitment

and commissions.”); cf. In re Amway Corp., 93 F.T.C.

618, 716 (1979) (“It is only when the newly recruited

distributor begins to make wholesale purchases from

his sponsor and sales to consumers, that the sponsor

begins to earn money from his recruit’s efforts.”).

Accordingly, in the absence of sufficient proof,

Defendants were not entitled to an anti-saturation

instruction and are not entitled to relief from the jury

verdict under Fed. R. Crim. P. 29 or 33. The motions

will be denied on this basis.

c.

Investment Contract

In addition, Defendants challenge the

definition of “investment contract” included in the

jury instructions. (Maike’s Mot. J. Acquittal 12;

Barnes’ Mot. J. Acquittal 9-15; Maike’s Reply 6-7;

Barnes’ Reply 6-8). Citing no law, Maike contends that

word “investors” should have been used instead of

“investor.” During trial, Barnes vigorously argued his

view of how “investment contract” should be defined.

This definition was discussed extensively, and

Defendants have not presented an argument

warranting relief under Rule 29 or 33 on this issue.

Their motions will be denied on this basis.

d.

Qualification as a

Security

Defendants argue that the evidence was

insufficient to support a finding that the Emperor

positions constituted a security. (Maike’s Mot. J.

Acquittal 12; Barnes’ Mot. J. Acquittal 15; Maike’s

Reply 7-8; Barnes’ Reply 8). There was ample evidence

presented at trial upon which the jury could find that

the Emperor positions purchased were a security. The

motions will therefore be denied on this issue.

e.

Sham vs. Loans

Instructions

(81a)

Maike also avers that the Court erred in

instructing the jury as to “legitimate arms-length

loan” and a “sham loan.” (Maike’s Mot. J. Acquittal 13;

Maike’s Reply 9). This issue was discussed during

trial, and Maike cites no legal authority in support of

his argument—other than the absence of this

language in the Sixth Circuit Pattern Instructions.

In general, “a trial court has broad discretion in

crafting jury instructions . . . .” United States v. Rios,

830 F.3d 403, 431 (6th Cir. 2016). The Sixth Circuit

“do[es] not require a trial court to use any particular

form or words.” United States v. Godofsky, 943 F.3d

1011, 1019 (6th Cir. 2019) (citing Jones v. United

States, 527 U.S. 373, 391 (1999)). Absent any

authority to show that the challenged instruction was

in error, Maike’s motion will be denied as to this issue.

f.

Good Faith/Advice of

Accountant

Maike objects to the advice of accountant

instruction (Instruction No.15). (Maike’s Mot. J.

Acquittal 14). While Maike requested an instruction,

he argues that the Court’s instruction is incorrect and

included language not contained in his proposed

instruction. (Maike’s Mot. J. Acquittal 14; Maike’s

Reply 9-10). As the United States notes, however, the

instruction correctly states the law. (Pl.’s Resp. Defs.’

Post-Trial Mots. 16).

“A trial judge is ‘not required to adopt the

language suggested by a defendant in the Court’s

instructions to the jury.’” United States v. Theunick,

651 F.3d 578, 589 (6th Cir. 2011) (quoting United

States v. Garner, 529 F.2d 962, 970 (6th Cir. 1976)).

As the United States notes, the instruction given

largely mirrors the instruction requested by Maike.

(Pl.’s Resp. Defs.’ Post-Trial Mots. 15-17). While

Maike cites United States v. Duncan, 850 F.2d 1104

(6th Cir. 1988), in support of his position, that case

(82a)

does not address whether the inclusion of the

challenged language was improper. Rather, Duncan

addressed, inter alia, when a good faith reliance on a

tax preparer or tax counsel instruction should be

provided, which was done in this case. See id. at 111519.

For these reasons, this issue does not warrant

a new trial or acquittal. Maike’s motion will be denied

on this basis.

g.

Overt Acts

Defendants contend that the Court erred in the

instruction addressing overt acts (Instruction No. 7)

charged in Count 13 of the Second Superseding

Indictment. (Maike’s Mot. J. Acquittal 15-16; Barnes’

Mot. J. Acquittal 15-16; Barnes’ Reply 8-9). In

particular, Count 13 outlined 20 overt acts or

transactions—with the latest occurring in November

2014. (Second Superseding Indictment ¶ 40, DN 230).

This issue was raised before and during trial,

and the Court rejected Maike’s contention that there

was no transaction that occurred within the statute

of limitations. As the United States notes, there was

evidence to show that an unindicted co-conspirator

sold Emperor shares even after the summer of 2014,

and Maike directed the co-conspirator to deposit

those funds into an account in the name of Tech

Entertainment d/b/a Global 1 Entertainment. (Pl.’s

Resp. Defs.’ Post-Trial Mots. 20). Thus, there was

evidence that the jury could rely upon in finding that

an overt act occurred within the statutory limitations

period. The motion will be denied as to this issue.

6.

Other Acts – Fed. R. Evid.

404(b)

Defendants also challenge the introduction of

evidence that they contend should have been

excluded under Fed. R. Evid. 404(b). (Maike’s Mot.

J. Acquittal 14-15; Barnes’ Mot. J. Acquittal 8-9;

(83a)

Maike’s Reply 8-9; Barnes’ Reply 5-6). Like Barnes,

Maike asserts that the Court erroneously permitted

the introduction of evidence relating to “disputes over

where certain participants were located in the

downline tree . . . .” (Maike’s Mot. J. Acquittal 14-15;

Barnes’ Mot. J. Acquittal 8-9). Maike also contends

that the Court should have excluded any evidence

relating to and Defendants’ prior involvement in a

company called BidXcel. (Maike’s Mot. J. Acquittal 1415). As the United States notes, the Court previously

ruled that Defendants’ prior experience in BidXcel

was admissible at trial as res gestae evidence. (Pl.’s

Resp. Defs.’ Post-Trial Mots. 12). In addition, the

disputes regarding the placement of participants

within the pyramid was potential evidence for the jury

to consider as to fraud. Because the Court previously

addressed the admission of this evidence and

Defendants have failed to show why a different result

is warranted, the motions will be denied.

7.

Jury Question

Defendants assert that the Court erred in

answering a jury question received during

deliberations relating to the statute of limitations.

(Maike’s Mot. J. Acquittal 15; Barnes’ Mot. J.

Acquittal 16; Barnes’ Reply 9-10). As the United

States recites, the Court instructed the jury that it

could consider the evidence from the entire case as

part of its deliberations and not just the purchase

within the limitations period. (Pl.’s Resp. Defs.’ PostTrial Mots. 21). Defendants’ assertion that the answer

was inappropriate is not well-taken and does not

provide a basis for relief under Rule 29 or 33.

8.

Hosseinipour MOI/Brady

Violation

Finally, Barnes asserts that the United

States failed to produce timely a memorandum of

information (“MOI”) prepared by Special Agent

(84a)

Matt Sauber (“Sauber”) relating to Hosseinipour,

which violated Barnes’ rights under Brady v.

Maryland, 373 U.S. 83 (1963). (Barnes’ Mot. J.

Acquittal 16-17). Under Brady, “the suppression by

the prosecution of evidence favorable to an accused

upon request violates due process where the evidence

is material either to guilt or to punishment,

irrespective of the good faith or bad faith of the

prosecution.” Brady, 373 U.S. at 87. The subject MOI

was prepared by Sauber based on a meeting he

attended with Hosseinipour, her trial counsel, and an

Assistant United States Attorney. (Pl.’s Resp. Defs.’

Post-Trial Mots. Attach. 1-3, DN 583-1). The MOI was

not produced until after the close of Barnes’ case.

“There are three components of a true Brady

violation: The evidence at issue must be favorable to

the accused, either because it is exculpatory, or

because it is impeaching; that evidence must have

been suppressed by the State, either willfully or

inadvertently; and prejudice must have ensued.”

Strickler v. Greene, 527 U.S. 263, 281-82 (1999). In its

response, the United States asserts that the MOI does

not contain any Brady material and the MOI had been

disclosed to Hosseinipour’s counsel. (Pl.’s Resp. Defs.’

Post-Trial Mots. 21-22).

Barnes has not shown that the MOI was

favorable to him. The MOI, inter alia, recounts plea

agreement discussions, and memorializes some

statements by Hosseinipour, who apparently did not

speak much during the meeting. The MOI reflects

that Hosseinipour alleged knowing nothing of any

illegal scheme and was critical of Maike in the event

the Indictment were proved true. Hosseinipour also

made several statements in which she expressed the

belief that i2G Touch, the online casino, and

Songstagram had the potential to be successful.

Barnes’ name is not mentioned in the MOI.

(85a)

In addition, the MOI was not material. The

MOI would be considered material only “when

there is a reasonable probability that, had the

evidence been disclosed, the result of the

proceeding would have been different.” Smith v.

Cain, 565 U.S. 73, 75 (2012) (internal quotation

marks omitted) (quoting Cone v. Bell, 556 U.S. 449,

469-70 (2009)). The Supreme Court has clarified that

“[a] reasonable probability does not mean that the

defendant ‘would more likely than not have received a

different verdict with the evidence,’ only that the

likelihood of a different result is great enough to

‘undermine[] confidence in the outcome of the trial.’”

Id. at 75-76 (second alteration in original) (quoting

Kyles v. Whitley, 514 U.S. 419, 434 (1995)). As

described above, the contents of the MOI are not

material. Based the Court’s review of the MOI, failure

to disclose the contents does not undermine

confidence in the verdict ultimately reached by the

jury.

For these reasons, Barnes’ motion will be

denied as to the MOI.

CONCLUSION

For the foregoing reasons, IT IS HEREBY

ORDERED as follows:

1.

Defendant’s Motion for

Reconsideration (DN 561) is DENIED.

2.

Defendants’ Motions for Acquittal

and for New Trial (DN 568, 569) are DENIED.

3.

Defendants’ Motions to Adopt and Join

(DN 570, 571) are GRANTED.

/s Greg N. Stivers

Greg N. Stivers

Chief Judge

United States District

Court

December 7, 2022

APPENDIX D

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF KENTUCKY

OWENSBORO DIVISION

CRIMINAL ACTION NO. 4:17-CR-00012-GNS-CHL

UNITED STATES OF AMERICA

v.

FARADAY HOSSEINIPOUR

PLAINTIFF

DEFENDANT

Dated: December 29, 2022

ORDER

This matter is before the Court on various

post-trial motions (DN 578, 579) filed by Defendant

Faraday Hosseinipour (“Hosseinipour”). The motions

are ripe for adjudication.

A.

Defendant’s Motion for New Trial

(DN 578)

Hosseinipour moves for a new trial pursuant to

Fed. R. Crim. P. 33. (Def.’s Mot. New Trial 12-26, DN

578). She asserts that her trial counsel’s performance

was so deficient that her conviction should be vacated

and she should be granted a new trial. (Def.’s Mot.

New Trial 1226).

Fed. R. Crim. P. 33 provides that “[u]pon the

defendant’s motion, the court may vacate any

judgment and grant a new trial if the interest of

justice so requires.” Fed. R. Crim. P. 33(a). “Motions

for a new trial are not favored and are granted only

with great caution.” United States v. Garner, 529 F.2d

962, 969 (6th Cir. 1976). “The defendant bears the

burden of proving that a new trial should be granted.”

United States v. Davis, 15 F.3d 526, 531 (6th Cir.

1994). As the Sixth Circuit has explained:

(86a)

(87a)

Such a motion calls on the trial judge to

take on the role of a thirteenth juror,

weighing

evidence

and

making

credibility determinations firsthand to

ensure there is not a miscarriage of

justice. . . . [W]hile Rule 29 requires the

court to view the evidence in a light

most favorable to the prosecution, Rule

33 does not.

United States v. Mallory, 902 F.3d 584, 596 (6th Cir.

2018) (internal citations omitted).

In her motion, Hosseinipour raises numerous

issues relating to her trial counsel’s performance prior

to and during trial. (Def.’s Mot. New Trial 12-26). In

particular, she contends that her counsel’s

performance constituted ineffective assistance of

counsel (“IAC”) in violation of her Sixth Amendment

rights under Strickland v. Washington, 466 U.S. 668

(1984).1 (Def.’s Mot. New Trial 12-26).

Hosseinipour contends that the Court should hold an

evidentiary hearing on her IAC claims. (Def.’s Mot. New Trial 2526). The United States opposes the request. (Pl.’s Resp. Def.’s

Mot. New Trial 24, DN 583). “Whether to hold an evidentiary

hearing before deciding a motion for a new trial is within the

discretion of the trial court.” Bass, 460 F.3d at 838 (citing United

States v. Anderson, 76 F.3d 685, 692 (6th Cir. 1996)). “An

evidentiary hearing is required unless ‘the record conclusively

shows that the [movant] is entitled to no relief.’ Thus, no hearing

is required if the [movant’s] allegations ‘cannot be accepted as

true because they are contradicted by the record, inherently

incredible, or conclusions rather than statements of fact.’”

Arredondo v. United States, 178 F.3d 778, 782 (6th Cir. 1999)

(internal citation omitted) (citation omitted). The Court may rely

upon its recollection of trial and counsel’s performance in ruling

on the motion. See id. (citing Blanton v. United States, 94 F.3d

227, 235 (6th Cir. 1996)). Based on the Court’s recollection of the

trial and the record, Hosseinipour is not entitled to an

evidentiary hearing because she has not shown that she is

entitled to a new trial on this basis. To the extent that she wishes

1

(88a)

As the Supreme Court has explained:

The “Sixth Amendment guarantees a

defendant the right to have counsel

present at all ‘critical’ stages of the

criminal proceedings.” Montejo v.

Louisiana, 556 U.S. 778, 786 (2009)

(quoting United States v. Wade, 388

U.S. 218, 227-228 (1967)). Critical

stages

include

arraignments,

postindictment

interrogations,

postindictment lineups, and the entry

of a guilty plea.

Frye, 566 U.S. at 140. “To prevail on a motion for new

trial based upon ineffective assistance, the defendant

must show that counsel’s performance was deficient

and that the deficiency prejudiced the defense in a

manner that deprived the defendant of a fair trial.”

United States v. Bass, 460 F.3d 830, 838 (6th Cir.

2006) (citing Strickland, 466 U.S. at 687).

i. Performance

Under Strickland, the performance prong

requires a defendant to “show that counsel’s

representation fell below an objective standard of

reasonableness,” and in making this determination,

the court “must judge the reasonableness of counsel’s

challenged conduct on the facts of the particular case,

viewed as of the time of counsel’s conduct.”

Strickland, 466 U.S. at 688, 690. The Supreme Court

has cautioned that “[s]urmounting Strickland’s high

to better develop the record in support of an IAC claim, it would

be more appropriate to do so following her direct appeal through

a motion pursuant to 28 U.S.C. § 2255. See United States v.

Seymour, 38 F.3d 261, 263 (6th Cir. 1994) (“Ineffective assistance

of counsel claims are best brought by a defendant in a postconviction proceeding under 28 U.S.C. § 2255 so that the parties

can develop an adequate record on the issue.” (quoting United

States v. Daniel, 956 F.2d 540, 543 (6th Cir. 1992)).

(89a)

bar is never an easy task.” Premo v. Moore, 562 U.S.

115, 122 (2011) (quoting Padilla v. Kentucky, 559

U.S. 356 (2010)). When a court assesses counsel’s

performance, it must make every effort to “eliminate

the distorting effects of hindsight, to reconstruct the

circumstances of counsel’s challenged conduct, and to

evaluate the conduct from counsel’s perspective at

the time.” Strickland, 466 U.S. at 689. The salient

question is whether an attorney's representation

amounted to incompetence under “prevailing

professional norms,” not whether it deviated from

best practices or most common custom. Id. at 690.

In her motion,2 Hosseinipour asserts that her

attorney provided ineffective assistance relating to

pretrial preparations and plea negotiations. (Def.’s

Mot. New Trial 6-9). She notes disagreements with

her counsel and issues with his trial preparation. It

is unclear whether those issues satisfy this prong of

Strickland based on the record.

Four months prior to trial, Hosseinipour, her

attorney, an Assistant United States Attorney, and

Special Agent Matt Sauber (“Sauber”) met for almost

four hours to discuss the charges and evidence in this

case and a potential guilty plea, which was

memorialized by in a memorandum of information

(“MOI”) prepared by Sauber. (Pl.’s Resp. Defs.’ PostTrial Mots. Attach. 1-3, DN 583-1). The MOI notes

that the plea agreement was discussed.

2 The motion is largely premised on affidavits from Hosseinipour;

her trial counsel and brother-in-law, Wayne Manning; and her

husband, David Manning. (Hosseinipour Aff., DN 578-1; W.

Manning Aff., DN 578-2; D. Manning Aff., DN 578-3). “However,

it is well established that a self-serving habeas affidavit is not

sufficient to establish a constitutional violation.” Snyder v.

Grayson, 872 F. Supp. 416, 420 (E.D. Mich. 1994) (citing Caudill

v. Jago, 747 F.2d 1046, 1051 (6th Cir. 1984)).

(90a)

On the first day of trial, the Court inquired as

to pretrial plea negotiations between the United

States and Richard Maike (“Maike”), Doyce Barnes

(“Barnes”), and Hosseinipour before the beginning of

the trial in accordance with Missouri v. Frye, 566 U.S.

134 (2012). As with all Defendants, the Court

confirmed that any plea offer had been

communicated to Hosseinipour by her attorney. The

Court also inquired whether she: (i) had sufficient

time to discuss the plea offer with her attorney; (ii)

understood the potential penalties if convicted; (iii)

comprehended the terms of the plea offer; (iv) knew

the differences in any potential penalties between the

plea offer and a potential guilty verdict; and (v) had

decided to proceed to trial. Because of her affirmative

responses, the Court found that Hosseinipour had

knowingly chosen to proceed to trial notwithstanding

the potential risks. Thus, the record does not support

Hosseinipour’s assertion of a violation of her Sixth

Amendment rights based on her counsel’s pretrial

conduct.

Hosseinipour also raises various claims

regarding trial. (Def.’s Mot. New Trial 9-12). All three

Defendants were named in the two conspiracy counts

(Counts 1 and 13) of the Second Superseding

Indictment. During trial, counsel for each Defendant

took turns questioning witnesses. Hosseinipour’s

counsel always went last based on the order of

Defendants in the Second Superseding Indictment.

By the time Hosseinipour’s counsel questioned a

witness, counsel for co-Defendants had already

capably exhausted possible subjects of crossexamination. In addition, the evidence reflected that

Hosseinipour was less culpable than her coDefendants, and reasonable counsel may have made

the tactical decision not to question witnesses more

(91a)

extensively to minimize the risk of drawing attention

to her and her involvement in the scheme.

In pre-trial motions, trial motions, and

objections, Hosseinipour’s counsel either made a

similar motion or objection as other defense counsel,

or made a separate motion or objection. Thus, it is not

clear what motion should have been made or what

objection could have been raised on her behalf which

was not.

As the Supreme Court cautioned in

Strickland:

Judicial

scrutiny

of

counsel’s

performance

must

be

highly

deferential. It is all too tempting for a

defendant to second-guess counsel’s

assistance after conviction or adverse

sentence, and it is all too easy for a

court, examining counsel’s defense

after it has proved unsuccessful, to

conclude that a particular act or

omission of counsel was unreasonable.

A fair assessment of attorney

performance requires that every effort

be made to eliminate the distorting

effects of hindsight, to reconstruct the

circumstances of counsel’s challenged

conduct, and to evaluate the conduct

from counsel’s perspective at the time.

Because of the difficulties inherent in

making the evaluation, a court must

indulge a strong presumption that

counsel’s conduct falls within the wide

range of reasonable professional

assistance; that is, the defendant must

overcome the presumption that, under

the circumstances, the challenged

action “might be considered sound

(92a)

trial strategy.” There are countless

ways to provide effective assistance in

any given case. Even the best criminal

defense attorneys would not defend a

particular client in the same way.

Strickland, 466 U.S. at 689-90 (internal citations

omitted) (citation omitted); see also Smith v. United

States, 542 F. Supp. 3d 755, 767 (M.D. Tenn. 2021) (“It

is easy enough for post-conviction counsel to find fault

with trial counsel’s tactics and advice (or non-advice),

but a court’s role is not to act as a ‘Monday morning

quarterback.’” (citing Fountain v. United States, 211

F.3d 429, 434 (7th Cir. 2000); Schumacher v. Hopkins,

83 F.3d 1034, 1037 (8th Cir. 1996))).

When the alleged errors are viewed by the

appropriate standard, Hosseinipour’s arguments are

not supported by the record, largely appear to be

efforts to second-guess trial counsel, and potentially

reflect her own remorse for choosing not to accept a

plea offer. Thus, Hosseinipour has not satisfied her

burden of showing that her counsel’s performance was

deficient under Strickland.

ii.

Prejudice

The prejudice prong is also a high bar. To

satisfy this element, the defendant must “show that

there is a reasonable probability that, but for counsel’s

unprofessional errors, the result of the proceeding

would have been different.” Strickland, 466 U.S. at

694. “A reasonable probability is a probability

sufficient to undermine confidence in the outcome.”

Id.

Hosseinipour contends that she was prejudiced

by her trial counsel’s performance. (Def.’s Mot. New

Trial 24). To the extent that Hosseinipour’s trial

counsel was not as polished or thorough as coDefendants’ counsel, however, it is not clear that

Manning’s performance prejudiced her and resulted in

(93a)

her conviction. There was strong evidence presented

of Hosseinipour’s involvement in the scheme upon

which the jury relied in finding her guilty.

Accordingly, she has failed to satisfy the prejudice

prong under Strickland.

For the reasons outlined above, Hosseinipour

has failed to prove an IAC claim to warrant a new

trial. This motion will be denied, and she may raise an

IAC claim in a motion pursuant to 28 U.S.C. § 2255.

B.

Defendant’s Motion for Judgment

of Acquittal (DN 579)

Hosseinipour also moves for a judgment of

acquittal pursuant to Fed. R. Crim. P. 29. (Def.’s Mot.

J. Acquittal, DN 579). Fed. R. Crim. P. 29 provides

that “[a] defendant may move for a judgment of

acquittal, or renew such a motion, within 14 days

after a guilty verdict or after the court discharges the

jury, whichever is later.” Fed. R. Crim. P. 29(c)(1).

When moving for a judgment of acquittal and a new

trial, the defendant challenging the sufficiency of the

evidence “bears a very heavy burden.” United States

v. Tocco, 200 F.3d 401, 424 (6th Cir. 2000). “[T]he

relevant question is whether, after viewing the

evidence in the light most favorable to the

prosecution, any rational trier of fact could have

found the essential elements of the crime beyond a

reasonable doubt.” Jackson v. Virginia, 443 U.S. 307,

319 (1979); United States v. Garrido, 467 F.3d 971,

984 (6th Cir. 2006). A motion for a judgment of

acquittal “will be confined to cases where the

prosecution’s failure is clear.” United States v.

Connery, 867 F.2d 929, 930 (6th Cir. 1989) (internal

quotation marks omitted) (citing Burks v. United

States, 437 U.S. 1, 17 (1978)).

1.

Proof of Conspiracy to

Commit Mail Fraud

(94a)

Hosseinipour raises various challenges to the

sufficiency of the proof presented at trial to convict her

of the crime of conspiracy to commit mail fraud. (Def.’s

Mot. J. Acquittal 3-14).

a.

Intent

Hosseinipour asserts that the evidence at trial

was insufficient to prove that she intended to

conspire. (Def.’s Mot. J. Acquittal 3-6). “Establishing

a conspiracy requires only that the defendant ‘knew

the object of the conspiracy and voluntarily associated

himself [or herself] with it to further its objectives.’”

United States v. Smith, 749 F.3d 465, 477 (6th Cir.

2014) (quoting United States v. Jamieson, 427 F.3d

394, 402 (6th Cir. 2005)). “Further, ‘circumstantial

evidence alone can sustain a guilty verdict,’ and [a

court] will draw all reasonable inferences in favor of

the prosecution.” United States v. Frost, 125 F.3d 346,

354 (6th Cir. 1997) (internal citation omitted) (citation

omitted).

As to the element of intent, “a jury may consider

circumstantial evidence of fraudulent intent and draw

reasonable inferences therefrom. Intent can be

inferred from efforts to conceal the unlawful activity,

from misrepresentations, from proof of knowledge,

and from profits.” United States v. Davis, 490 F.3d

541, 549 (6th Cir. 2007) (internal quotation marks

omitted)citation omitted). In addition, “[t]he existence

of a conspiracy to violate federal law may be

established by a tacit or mutual understanding among

the parties.” United States v. Keene, 959 F.2d 237,

1992 WL 68285 (6th Cir. 1992) (quoting United States

v. Blakeney, 942 F.2d 1001, 1010 (6th Cir. 1991)).

There was evidence presented at trial from

which the jury could find that Hosseinipour intended

to conspire with others, and that she knowingly and

voluntarily joined the conspiracy. Accordingly, her

motion will be denied.

(95a)

b.

Mail Fraud

Hosseinipour also argues that there was

insufficient evidence to prove that she committed mail

fraud. (Def.’s Mot. J. Acquittal 6-9). “Mail fraud

‘consists of (1) a scheme or artifice to defraud; (2) use

of mails in furtherance of the scheme; and (3) intent

to deprive a victim of money or property.’” Smith, 749

F.3d at 477 (quoting United States v. Turner, 465 F.3d

667, 680 (6th Cir. 2006)).

While she challenges the sufficiency of the

proof, there was proof at trial that supported the jury’s

verdict as to the elements required for Count 1. Her

mo

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