FOR PUBLICATION
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`UNITED STATES OF AMERICA,
`Plaintiff-Appellee,
`
`
`
`
`
`v.
`
`v.
`
`
`
`Nos. 18-10298
`18-10395
`
`D.C. No.
`3:17-cr-00139-SI-3
`
`
`
`
`
`Nos. 18-10299
`18-10408
`
`D.C. No.
`3:17-cr-00139-SI-2
`
`Nos. 18-10300
`18-10394
`
`D.C. No.
`3:14-cr-00139-SI-2
`
`
`DAVID LONICH,
`Defendant-Appellant.
`
`UNITED STATES OF AMERICA,
`Plaintiff-Appellee,
`
`
`BRIAN SCOTT MELLAND,
`Defendant-Appellant.
`
`UNITED STATES OF AMERICA,
`Plaintiff-Appellee,
`
`
`
`v.
`
`
`DAVID LONICH,
`Defendant-Appellant.
`
`
`
`
`
`
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`UNITED STATES OF AMERICA,
`Plaintiff-Appellee,
`
`
`
`
`
`v.
`
`v.
`
`
`
`Nos. 18-10298
`18-10395
`
`D.C. No.
`3:17-cr-00139-SI-3
`
`
`
`
`
`Nos. 18-10299
`18-10408
`
`D.C. No.
`3:17-cr-00139-SI-2
`
`Nos. 18-10300
`18-10394
`
`D.C. No.
`3:14-cr-00139-SI-2
`
`
`DAVID LONICH,
`Defendant-Appellant.
`
`UNITED STATES OF AMERICA,
`Plaintiff-Appellee,
`
`
`BRIAN SCOTT MELLAND,
`Defendant-Appellant.
`
`UNITED STATES OF AMERICA,
`Plaintiff-Appellee,
`
`
`
`v.
`
`
`DAVID LONICH,
`Defendant-Appellant.
`
`
`
`
`
`
`
`2
`
`
`UNITED STATES V. LONICH
`
`UNITED STATES OF AMERICA,
`Plaintiff-Appellee,
`
`
`
`v.
`
`
`BRIAN SCOTT MELLAND,
`Defendant-Appellant.
`
`UNITED STATES OF AMERICA,
`Plaintiff-Appellee,
`
`
`
`
`
`
`
`
`
`
`
`Nos. 18-10301
`18-10407
`
`D.C. No.
`3:14-cr-00139-SI-4
`
`Nos. 18-10303
`18-10405
`
`D.C. No.
`3:14-cr-00139-SI-3
`
`Nos. 18-10304
`18-10390
`
`D.C. No.
`3:17-cr-00139-SI-1
`
`OPINION
`
`
`SEAN CLARK CUTTING,
`Defendant-Appellant.
`
`UNITED STATES OF AMERICA,
`Plaintiff-Appellee,
`
`v.
`
`v.
`
`
`SEAN CLARK CUTTING,
`Defendant-Appellant.
`
`Appeal from the United States District Court
`for the Northern District of California
`Susan Illston, District Judge, Presiding
`
`Argued and Submitted February 10, 2021
`San Francisco, California
`
`Filed January 10, 2022
`
`
`
`
`
`
`
`
`
`UNITED STATES V. LONICH
`
`3
`
`Before: Andrew D. Hurwitz and Daniel A. Bress, Circuit
`Judges, and Clifton L. Corker,* District Judge.
`
`Opinion by Judge Bress
`
`
`SUMMARY**
`
`Criminal
`
`The panel affirmed Sean Cutting’s, Brian Melland’s, and
`
`David Lonich’s convictions, but vacated their sentences and
`remanded for resentencing, in a complex case arising from
`fraudulent schemes concerning bank loans and real estate in
`Sonoma County, California.
`
`The panel held the Sixth Amendment’s Speedy Trial
`
`Clause was not violated. Defendants claimed a Speedy Trial
`Clause violation as to all charges first brought in the October
`2016 superseding indictment. Defendants then argued this
`court should reverse their convictions as to the charges in the
`original March 2014 indictment because of “prejudicial
`spillover” from evidence used to prove the charges in the
`allegedly unconstitutional superseding indictment. The
`panel had no occasion to consider defendants’ “prejudicial
`spillover”
`theory because
`the panel held
`that
`the
`government’s decision to file new charges in the superseding
`indictment did not infringe defendants’ Speedy Trial Clause
`
`* The Honorable Clifton L. Corker, United States District Judge for
`the Eastern District of Tennessee, sitting by designation.
`
`** This summary constitutes no part of the opinion of the court. It
`has been prepared by court staff for the convenience of the reader.
`
`
`
`UNITED STATES V. LONICH
`
`4
`
`rights. As to the first factor in the balancing test set forth in
`Barker v. Wingo, 407 U.S. 514 (1972), the length of the
`delay, the parties disagreed on when defendants’ Speedy
`Trial Clause rights attached for the new charges first brought
`in the superseding indictment. Defendants argued the
`original indictment should be used as the start date for the
`new charges in the superseding indictment. The government
`contended the date it filed the superseding indictment should
`be used. The panel did not need to resolve that debate
`because it concluded that, even assuming the clock started at
`the time of the original indictment, there was no Speedy
`Trial Clause violation because the delay caused no relevant
`prejudice to defendants.
`
` Defendants challenged the jury instructions on the
`money laundering (18 U.S.C. § 1957) and misapplication of
`bank funds (18 U.S.C. § 656) charges, contending that the
`instructions’ overarching definition of “knowingly”
`conflicted with the required mental states for the two
`charged offenses. The panel held that the district court’s
`general “knowingly” instruction was permissible and that
`defendants in any event did not show prejudice from the
`instruction.
`
` Melland argued that there was insufficient evidence to
`support his conviction for bribery by a bank employee
`(18 U.S.C. § 215(a)(2)), which was based on his securing a
`$50,000 investment in Melland’s energy-drink start-up. The
`panel held that, as the parties effectively agree, the district
`court appropriately stated the law when it instructed the jury
`that, to find Melland “acted corruptly,” as required under
`§ 215(a)(2), the jury must determine he “intend[ed] to be
`influenced or rewarded in connection with any business or
`transaction of” a financial institution. Noting that the
`
`
`
`UNITED STATES V. LONICH
`
`
`
`circumstantial evidence was plentiful, the panel held that
`there was sufficient evidence to support the conviction.
`
`5
`
`Lonich argued that there was insufficient evidence to
`
`support his conviction for attempted obstruction of justice
`(18 U.S.C. § 1512(c)(2)) by encouraging a straw buyer to
`mislead the grand jury about his role in a scheme to gain
`control of a real estate development. The panel held that
`§ 1512(c)(2) requires a showing of nexus to an official
`proceeding, but rejected Lonich’s argument
`that no
`reasonable jury could have found the required nexus here.
`Noting that neither party disputes using a “consciousness of
`wrongdoing” mens rea requirement for purposes of
`evaluating the sufficiency of the evidence, the panel held that
`a reasonable jury could find that the government met its
`burden of proof in demonstrating Lonich’s criminal intent.
`
`The panel held that defendants’ sentences must be
`
`vacated. The district court applied several enhancements
`that dramatically
`increased defendants’ recommended
`Guidelines sentencing ranges. These enhancements were
`premised on a critical factual finding: that defendants
`caused Sonoma Valley Bank (SVB) to fail, making
`defendants responsible for associated losses. Addressing the
`standard of proof that the government was required to meet
`to demonstrate whether defendants caused SVB to fail, the
`panel focused on factors five and six of the non-exhaustive
`factors set forth in United States v. Valencia, 222 F.3d 1173
`(9th Cir. 2000). Given the extremely disproportionate
`sentences that the disputed enhancements produced, the
`panel held that a clear and convincing evidence standard
`applies to the factual underpinnings for these enhancements.
`The panel concluded
`that
`the government did not
`demonstrate by clear and convincing evidence
`that
`defendants caused SVB to fail, where the district court made
`
`
`
`UNITED STATES V. LONICH
`
`6
`
`no independent findings about the cause of the bank’s
`collapse beyond adopting the Presentence Investigation
`Reports (PSRs) and rejecting defendants’ objections without
`explanation, and neither the PSRs nor the additional
`materials the government now cites sufficiently show that
`defendants were responsible for SVB failing, especially
`given indications in the record that other factors internal and
`external to the bank may have contributed to the bank’s
`collapse.
` This meant that the government did not
`sufficiently support defendants’ 20-level loss enhancement
`under U.S.S.G. § 2B1.1(b)(1)(K). The panel wrote that its
`determination that the government did not adequately prove
`defendants caused SVB to fail means that enhancements
`under U.S.S.G. § 2B1.1(b)(2)(A)(i) (ten or more victims)
`and § 2B1.1(b)(17)(B)(i) (jeopardizing the safety and
`soundness of a financial institution) are infirm as well. The
`panel wrote
`that
`the same
`is
`true of defendants’
`approximately $20 million restitution orders, which were
`likewise premised on
`the government’s
`theory
`that
`defendants caused the bank to fail. The panel vacated
`defendants’ sentences and remanded for resentencing on an
`open record.
`
`The panel rejected defendants’ remaining challenges to
`
`their convictions in a memorandum disposition.
`
`
`
`
`
`
`
`
`UNITED STATES V. LONICH
`
`7
`
`COUNSEL
`
`
`
`
`
`George C. Harris (argued), The Norton Law Firm PC,
`Oakland, California,
`for Defendant-Appellant David
`Lonich.
`
`Juliana Drous (argued), Law Office of Juliana Drous, San
`Francisco, California, for Defendant-Appellant Brian Scott
`Melland.
`
`Steven J. Keoninger (argued), Assistant Federal Public
`Defender; Steven G. Kalar, Federal Public Defender; Office
`of the Federal Public Defender, San Francisco, California;
`for Defendant-Appellant Sean Clark Cutting.
`
`Francesco Valentini (argued), Trial Attorney; Brian C.
`Rabbitt, Acting Assistant Attorney General; United States
`Department of Justice, Criminal Division, Appellate
`Section, Washington, D.C.; Adam A. Reeves and Robert
`David Rees, Assistant United States Attorneys; David L.
`Anderson, United States Attorney; United States Attorney’s
`Office, San Francisco, California; for Plaintiff-Appellee.
`
`
`
`
`
`
`
`8
`
`
`UNITED STATES V. LONICH
`
`OPINION
`
`BRESS, Circuit Judge:
`
`This complex criminal appeal arises from fraudulent
`schemes concerning bank loans and real estate in Sonoma
`County, California. The three defendants, Sean Cutting,
`Brian Melland, and David Lonich, appeal their convictions
`and sentences, raising numerous issues for our review.
`
`We affirm defendants’ convictions. Among other things,
`we hold that the government did not infringe defendants’
`rights under the Sixth Amendment’s Speedy Trial Clause;
`that the district court’s jury instructions for money
`laundering and misapplication of bank funds do not require
`reversal; and that sufficient evidence supported Melland’s
`conviction for bribery by a bank employee and Lonich’s
`conviction for attempted obstruction of justice.
`
`However, we vacate defendants’ sentences and remand
`for resentencing. The defendants’ advisory Sentencing
`Guidelines
`ranges
`increased substantially based on
`sentencing enhancements that hinged on finding that
`defendants caused the Sonoma Valley Bank to fail. We hold
`that because
`the government has not sufficiently
`demonstrated that defendants caused the bank’s failure, the
`enhancements are not supported by the record.1
`
`
`1 In a concurrently filed opinion, we reject a third party’s ancillary
`challenge to the district court’s criminal forfeiture order. See United
`States v. 101 Houseco, LLC, No. 18-10305 (9th Cir. 2021).
`
`
`
`
`
`
`UNITED STATES V. LONICH
`
`9
`
`I. Facts and Procedural History
`
`A
`
`This case involves two overarching fraudulent schemes
`involving bank officers, a real estate developer, and the
`developer’s lawyer. Defendants Sean Cutting and Brian
`Melland were officers at Sonoma Valley Bank (SVB).
`Cutting was SVB’s Chief Lending Officer between 2005 and
`2011. He joined its board of directors in 2008 and became
`its CEO in 2009. Melland was a commercial loan officer at
`SVB. Bijan Madjlessi was a real estate developer who died
`shortly after being indicted in this case. Defendant David
`Lonich worked as Madjlessi’s in-house lawyer between
`2009 and 2012.
`
`Defendants’ extensive fraudulent schemes took place
`over many years. In the first scheme, which we will call the
`“legal lending limit scheme,” Cutting and Melland conspired
`with Madjlessi and Lonich to induce SVB to approve, over
`a period of years, millions of dollars in bank loans to
`Madjlessi and entities he controlled. These loans exceeded
`SVB’s legal lending limit—the maximum amount that
`California law permits a bank to lend a borrower or his
`affiliates.
`
`Cutting and Melland recommended that SVB approve
`these loans without disclosing to the bank’s loan committee
`that Madjlessi was the beneficiary. Madjlessi then used the
`fraudulently obtained loans to pay the interest on preexisting
`SVB loans. In one instance, Melland secured a loan for
`Madjlessi only after Madjlessi (through a $50,000 payment
`from his wife) agreed to invest in Melland’s side business,
`an energy drink start-up known as Magnus Innovations
`Group.
`
`
`
`10
`
`
`UNITED STATES V. LONICH
`
`In connection with this scheme to keep Madjlessi’s
`businesses afloat through fraudulent loans, Cutting and
`Melland also conspired to conceal from the Federal Deposit
`Insurance Corporation (FDIC) SVB’s overall financial
`exposure to Madjlessi. Ultimately, Cutting and Melland
`enabled Madjlessi and his related entities to receive over
`$35 million in loans from SVB (although the government
`did not claim all these loans were fraudulent).
`
`the
`the second scheme, which we will call
`In
`“101 Houseco scheme,” Madjlessi and Lonich conspired
`with Cutting and Melland to gain control of Park Lane Villas
`East (PLV East), a Madjlessi real estate development in
`Santa Rosa, California. By March 2009, Madjlessi had
`defaulted on a separate $32 million loan from another bank,
`IndyMac, secured by PLV East. IndyMac was in FDIC
`conservatorship, and the FDIC scheduled a sale of
`Madjlessi’s defaulted note at an auction.
`
`FDIC rules prohibited Madjlessi and his related entities
`from participating in the auction. Nevertheless, the
`defendants used a straw buyer, James House, and a sham
`entity, 101 Houseco, LLC, to buy the IndyMac note at the
`auction and thereby secure control of PLV East. House, the
`straw buyer, was a contractor to whom Madjlessi owed
`around $200,000. House took part in the scheme so that
`Madjlessi would pay the $200,000.
`
`The defendants created 101 Houseco, LLC solely for
`bidding on the note, naming House as its owner on paper.
`Lonich also had House fax to DebtX, the company managing
`the FDIC auction, an eligibility certification in which House
`falsely certified that he was not using the auction to “benefit
`directly or indirectly” anyone “who otherwise would be
`ineligible to purchase assets from the FDIC.” To fund the
`deposit on the sale, Lonich had Melland transfer $100,000
`
`
`
`11
`
`UNITED STATES V. LONICH
`
`
`
`from Madjlessi’s daughter’s account into House’s business
`account, further concealing Madjlessi’s role from DebtX.
`To finance the rest of the purchase of the note, Melland and
`Cutting fraudulently secured for 101 Houseco a $5.4 million
`loan from SVB. Using the loan proceeds, 101 Houseco
`successfully bid $4.2 million to obtain Madjlessi’s defaulted
`IndyMac note, which had a face value exceeding
`$27 million.
`
`After the auction, SVB’s loans to House continued under
`the guise of allowing House to construct the Park Lane
`Villas. SVB continued to increase the loan amount until it
`reached $9.4 million.
` Of this $9.4 million, about
`$4.5 million was passed to Madjlessi through one of his
`construction companies. Madjlessi kept his side of the
`bargain with House, paying him the $200,000 owed for past
`contracting work. In line with the plan, Lonich later
`transferred effective control of 101 Houseco to Madjlessi.
`Lonich became 101 Houseco’s sole manager. Madjlessi’s
`wife became the beneficiary of the trust that held a 99%
`interest in 101 Houseco.
`
`Madjlessi and Lonich wanted to refinance PLV East
`through Fannie Mae or Freddie Mac programs for multi-
`family housing. In the meantime, however, Fannie Mae had
`repossessed several condos in PLV East and was selling
`them at auction. Fannie Mae preferred buyers who would
`occupy the condos over outside investors. To get around
`Fannie Mae’s preferences, Madjlessi and Lonich used straw
`buyers—including House, Madjlessi’s personal assistant,
`and the assistant’s two sons—to purchase the condos. The
`straw buyers then transferred the units to 101 Houseco.
`
`
`
`12
`
`
`UNITED STATES V. LONICH
`
`Madjlessi and Lonich arranged the financing for these
`straw purchases through Cutting and Melland. Lonich
`drafted asset verification letters falsely stating that the
`buyers had sufficient assets with SVB to fund the purchases
`in full. Cutting and Melland then gave these letters back to
`Lonich on SVB letterhead with Cutting’s signature.
`
`After the FDIC and the California Division of Financial
`Institutions (DFI) examined SVB, DFI gave SVB the lowest
`rating it could give a bank without closing it. In August
`2010, California’s Commissioner of Financial Institutions
`seized control of SVB, ordering that the bank be liquidated
`and its assets turned over to the FDIC.
`
`When federal agents interviewed House, he admitted
`wrongdoing and agreed to cooperate. In subsequent secretly
`recorded meetings, Lonich advised House on how he should
`testify before a grand jury. House later pleaded guilty to
`bank and wire fraud charges for making false statements in
`connection with the 101 Houseco application for the SVB
`loan and the bid on the FDIC-owned note.
`
`B
`
`In March 2014, a federal grand jury returned a 29-count
`indictment against Cutting, Melland, Lonich, and Madjlessi
`for the 101 Houseco scheme (Madjlessi died soon after). In
`October 2016, the grand jury returned a superseding
`indictment adding charges for defendants’ legal lending
`limit scheme and their concealing from the FDIC SVB’s risk
`exposure to Madjlessi.
`
`In the fall of 2017, and after a 31-day jury trial, the jury
`convicted defendants on nearly all counts. This chart
`summarizes the convictions:
`
`
`
`
`
`
`Count
`
`1
`
`2
`
`3–4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`UNITED STATES V. LONICH
`
`13
`
`Offense
`
`Defendants
`
`18
`U.S.C. §
`371
`
`Conspiracy to commit
`bank fraud
`
`1344
`
`Bank Fraud
`
`371
`
`1005 Making a false bank
`entry for certain
`Madjlessi-related
`loans
`1005 Making a false bank
`entry for certain other
`Madjlessi-related
`loans
`Conspiracy to make
`false statements to the
`FDIC
`656 Misapplication of
`bank funds
`1007 Making a false
`statement to the FDIC
`Receiving a gift for
`procuring loans
`Conspiracy to commit
`wire fraud
`
`215
`
`1349,
`1343
`
`Cutting,
`Lonich, and
`Melland
`Cutting,
`Lonich, and
`Melland
`Melland
`(Cutting
`acquitted)
`
`Cutting and
`Melland
`
`Cutting and
`Melland
`
`Cutting and
`Melland
`Cutting and
`Melland
`Melland
`
`Cutting,
`Lonich, and
`Melland
`
`
`
`14
`
`
`11–15
`
`19–30
`
`32–36
`
`37
`
`
`
`UNITED STATES V. LONICH
`
`1343 Wire Fraud for the
`101 Houseco scheme
`
`1957 Money laundering for
`transferring loan
`proceeds House
`controlled to
`Madjlessi
`1005 Making a false bank
`entry for Cutting’s
`false asset-
`verification letters
`relating to purchases
`of PLV East condos
`1512(c) Attempted obstruction
`of justice
`
`Cutting,
`Lonich, and
`Melland
`Cutting,
`Lonich, and
`Melland
`
`Cutting,
`Lonich, and
`Melland
`
`Lonich
`
`All three defendants were acquitted of Count 16, a wire fraud
`charge. The government withdrew Counts 17, 18, and 31.
`
`The advisory Sentencing Guidelines range adopted by
`the district court for both Cutting and Melland was 235–293
`months. The Guidelines range for Lonich was 292–365
`months. The district court sentenced Cutting and Melland
`each to 100 months in prison, and Lonich to 80 months. The
`district court also ordered approximately $20 million in
`restitution and the forfeiture of PLV East.
`
`In this appeal, the defendants raise many challenges to
`their convictions and sentences. We review the district
`court’s legal conclusions de novo. See United States v.
`Gregory, 322 F.3d 1157, 1160 (9th Cir. 2003). And we
`
`
`
`UNITED STATES V. LONICH
`
`
`
`review its factual determinations for clear error. See id.
`at 1161.
`
`15
`
`II. The Speedy Trial Clause
`
`Defendants’ lead argument is that their convictions are
`invalid under the Sixth Amendment’s Speedy Trial Clause.
`Defendants claim a Speedy Trial Clause violation as to all
`charges first brought in the October 2016 superseding
`indictment. Defendants then argue we should reverse their
`convictions as to the charges in the original March 2014
`indictment because of “prejudicial spillover” from evidence
`used to prove the charges in the allegedly unconstitutional
`superseding indictment.
`
`to consider defendants’
`We have no occasion
`“prejudicial spillover” theory because we hold that the
`government’s decision to file new charges in the superseding
`indictment did not infringe defendants’ Speedy Trial Clause
`rights.
`
`A
`
`Some additional background on the proceedings below
`is necessary to understand our resolution of the Speedy Trial
`Clause issue. In March 2014, the grand jury indicted
`defendants on 29 charges related to the 101 Houseco
`scheme. In May 2016, the district court ordered the
`government to file any superseding indictment by October
`28, 2016, and set a trial date of March 2017.
`
`On October 27, 2016, the day before the court’s deadline,
`the grand jury returned the superseding indictment. Besides
`the charges for the 101 Houseco scheme from the original
`indictment,
`the superseding
`indictment
`included new
`allegations for
`the
`legal
`lending
`limit scheme and
`
`
`
`UNITED STATES V. LONICH
`
`16
`
`defendants’ related fraud on the FDIC regarding SVB’s
`financial exposure to Madjlessi.
`
`Criminal defendants enjoy certain protections from post-
`indictment delays. Some are statutory, codified in the
`Speedy Trial Act. See 18 U.S.C. § 3161; see also, e.g.,
`United States v. Murillo, 288 F.3d 1126, 1131 (9th Cir.
`2002). Others are constitutional, rooted in the Sixth
`Amendment’s Speedy Trial Clause. See, e.g., Barker v.
`Wingo, 407 U.S. 514, 530–33 (1972); Murillo, 288 F.3d at
`1131. “The specific time limits set by the Speedy Trial Act
`are . . . different from the broader limits of the [S]ixth
`[A]mendment” because the constitutional analysis “is
`governed by the more flexible consideration of prejudice
`caused by delay.” Murillo, 288 F.3d at 1131 (quoting United
`States v. Pollock, 726 F.2d 1456, 1460 n.5 (9th Cir. 1984)).
`
`Defendants did not assert either below or on appeal an
`independent Speedy Trial Clause or Speedy Trial Act
`violation for the 101 Houseco scheme charges that were in
`the original indictment. The defendants had instead long
`agreed to the approximately 3-year period between the
`original March 2014 indictment and the original March 2017
`trial date, based on their need to prepare a defense against
`the indictment’s complex allegations. See United States v.
`Aguirre, 994 F.2d 1454, 1457 (9th Cir. 1993) (“The Speedy
`Trial Clause primarily protects those who assert their rights,
`not those who acquiesce in the delay—perhaps hoping the
`government will change its mind or lose critical evidence.”).
`Defendants contended below, however, that there was a
`Speedy Trial Clause violation based on the new charges first
`brought in the October 2016 superseding indictment
`
`
`
`UNITED STATES V. LONICH
`
`
`
`associated with the legal lending limit scheme and the
`related fraud on the FDIC.2
`
`17
`
`The district court initially granted defendants’ motion
`asserting a Speedy Trial Clause violation and dismissed the
`superseding indictment without prejudice. The court
`calculated the period of delay using the March 2014 original
`indictment date as the starting point and March 2017 (the
`original trial date) as the end date. This three-year delay, the
`district court held, presumptively prejudiced the defendants.
`
`The district court also found that “[t]he government
`could have filed all of the charges contained in the
`superseding indictment when it filed the original indictment,
`and the government has not adequately explained why it did
`not do so.” According to the district court:
`
`This is not a case where new evidence has
`come to light that prompted the need to
`supersede. Rather, the government simply
`chose to seek indictment on some of the
`charges of which it was aware, while holding
`back on others. Then later—much later,
`some 31 months
`later—it decided
`to
`supersede to add the charges it had been
`holding back, including a new conspiracy and
`new substantive charges. Although the Court
`does not find bad faith on the part of the
`government, the Court does find that the
`
`
`2 Defendants do not argue there was excessive pre-indictment delay
`under the Fifth Amendment. See United States v. Corona-Verbera,
`509 F.3d 1105, 1112 (9th Cir. 2007) (“The Fifth Amendment guarantees
`that defendants will not be denied due process as a result of excessive
`pre-indictment delay.” (quoting United States v. Sherlock, 962 F.2d
`1349, 1353 (9th Cir. 1989))).
`
`
`
`18
`
`
`UNITED STATES V. LONICH
`
`and
`deliberately
`acted
`government
`intentionally with regard to charging the new
`crimes added in the superseding indictment.
`
`The district court further found that the government’s
`delay had prejudiced
`the defendants.
` Citing
`the
`government’s production of millions of pages of additional
`documents, the poor quality of its electronic document
`production, its general discovery delays, and the fact that the
`broadened charges would require defendants to re-review
`documents previously produced, the district court found that
`the government had put defendants in an “untenable
`position.” If the new charges remained in this case, “the
`[March 2017] trial date would almost certainly need to be
`continued in order to allow the defense time to prepare.” The
`district court dismissed the superseding indictment without
`prejudice, allowing the government to refile the new charges
`in a new case.
`
`The government moved for reconsideration, noting that
`Speedy Trial Clause violations require dismissals with
`prejudice. See, e.g., Strunk v. United States, 412 U.S. 434,
`440 (1973); United States v. Saavedra, 684 F.2d 1293, 1297
`(9th Cir. 1982). The government therefore suggested that
`the district court’s order would more properly be grounded
`in Federal Rule of Criminal Procedure 48, which allows
`dismissals without prejudice. See United States v. Yuan
`Qing Jiang, 214 F.3d 1099, 1103 (9th Cir. 2000). Rule 48
`permits a court to dismiss an indictment “if unnecessary
`delay occurs in: (1) presenting a charge to a grand jury;
`(2) filing an information against a defendant; or (3) bringing
`a defendant to trial.” Fed. R. Crim. P. 48.
`
`The district court granted the government’s motion for
`reconsideration, explaining that it had “clearly intended that
`
`
`
`19
`
`UNITED STATES V. LONICH
`
`
`
`the dismissal be without prejudice, and the Court erred by
`not grounding its order in Rule 48.” The court reiterated its
`previous finding that “the government had unnecessarily
`delayed in seeking the superseding indictment.” And it
`again noted “the prejudice defendants would experience if
`forced to proceed to trial in March 2017 on the new charges,
`given the technical problems with the government’s
`discovery production as well as the new discovery produced
`regarding the new charges.” The court then dismissed the
`superseding indictment without prejudice under Rule 48.
`
`In March 2017, in response to the district court’s order,
`the government filed a new action against defendants based
`on an entirely new indictment concerning the legal lending
`limit scheme. Not wanting two trials, defendants requested
`that the district court consolidate the two cases. Defendants
`also requested that the district court vacate the March 2017
`trial date so they would have sufficient time to prepare for a
`consolidated trial. The district court granted defendants’
`request and re-set the trial for October 2017.
`
`B
`
`1
`
`The Sixth Amendment provides that “[i]n all criminal
`prosecutions, the accused shall enjoy the right to a speedy
`and public trial, by an impartial jury . . . .” U.S. Const.
`amend. VI.
` The Speedy Trial Clause
`limits
`the
`government’s ability to delay criminal trials once it has
`“arrested or formally accused” a defendant of a crime.
`Betterman v. Montana, 578 U.S. 437, 441 (2016). The
`purpose of the Clause is to “prevent[] undue and oppressive
`incarceration prior to trial, minimiz[e] anxiety and concern
`accompanying public accusation, and limit[] the possibilities
`that long delay will impair the ability of an accused to defend
`
`
`
`UNITED STATES V. LONICH
`
`20
`
`himself.” Id. at 1614 (quoting United States v. Marion,
`404 U.S. 307, 320–21 (1971)).
`
`To assess whether the Speedy Trial Clause was violated,
`we apply the four-part balancing test from Barker v. Wingo,
`407 U.S. 514 (1972), considering (1) the length of the delay,
`(2) the reason for the delay, (3) whether the defendant
`asserted his rights, and (4) the prejudice to the defendant. Id.
`at 530–33; see also Doggett v. United States, 505 U.S. 647,
`651 (1992) (explaining that “[o]ur cases . . . have qualified
`the literal sweep of the [Speedy Trial Clause] provision by
`specifically recognizing the relevance of four separate
`enquiries” set forth in Barker); United States v. King,
`483 F.3d 969, 976 (9th Cir. 2007).
`
`Importantly, “none of the four [Barker] factors . . . [i]s
`either a necessary or sufficient condition to the finding of a
`deprivation of the right of speedy trial. Rather, they are
`related factors and must be considered together with such
`other circumstances as may be relevant,” as part of “a
`difficult and sensitive balancing process.” Barker, 407 U.S.
`at 533; see also United States v. Mendoza, 530 F.3d 758, 762
`(9th Cir. 2008) (“None of [the Barker] factors are either
`necessary or sufficient, individually, to support a finding that
`a defendant’s speed[y] trial right has been violated.”);
`Gregory, 322 F.3d at 1161–65 (discussing the Barker
`factors).
`
`The first Barker factor, the length of delay, is “a double
`enquiry,” serving both as a triggering mechanism for the rest
`of the Speedy Trial Clause evaluation and a factor in that
`analysis. Doggett, 505 U.S. at 651–52. The “general
`consensus” is that an eight-month delay “constitutes the
`threshold minimum” to initiate the full Barker inquiry.
`Gregory, 322 F.3d at 1162 n.3. If the delay crosses that
`threshold, we generally proceed to the four-factor Barker
`
`
`
`UNITED STATES V. LONICH
`
`
`
`test. Id. at 1161. “Although there is no bright-line rule,
`courts generally have found that delays approaching one
`year are presumptively prejudicial.” Id. at 1161–62.
`
`21
`
`The parties spend considerable effort dueling over the
`first Barker factor. They agree that the relevant end date for
`our analysis is the original trial date in March 2017. But they
`disagree on when defendants’ Speedy Trial Clause rights
`attached for the new charges first brought in the superseding
`indictment. Defendants argue we should use the original
`indictment as the start date for the new charges in the
`superseding indictment. The government contends we
`should use the date it filed the superseding indictment
`because, in its view, the Speedy Trial Clause is “offense
`specific” and the new charges involved different offenses
`under Blockburger v. United States, 284 U.S. 299 (1932), the
`seminal precedent
`in
`the Double Jeopardy context.
`Essentially, the government argues that its superseding
`indictment reset the Speedy Trial Clause clock here because
`the new charges were not barred under Blockburger’s
`Double Jeopardy test.
`
`We need not resolve that debate today because we
`conclude that, even assuming the clock started at the time of
`the original indictment, there was no Speedy Trial Clause
`violation because the delay caused no relevant prejudice to
`the defendants.
`
`2
`
`If we assume that the Speedy Trial Clause clock on the
`charges in the superseding indictment started to run when the
`initial indictment was filed, the delay from that point to the
`original trial date was three years. That is a substantial delay.
`But under Barker, it is not conclusively a Speedy Trial
`Clause violation. It is not nearly as egregious as other cases
`
`
`
`UNITED STATES V. LONICH
`
`22
`
`in which courts have found Speedy Trial Clause violations.
`See, e.g., Doggett, 505 U.S. at 657 (8.5-year delay); United
`States v. Black, 918 F.3d 243, 248–49 (2d Cir. 2019) (5.75-
`year delay); United States v. Handa, 892 F.3d 95, 107 (1st
`Cir. 2018) (6.5-year delay); United States v. Shell, 974 F.2d
`1035, 1036 (9th Cir. 1992) (5-year delay).
`
`Indeed, when considering the other Barker factors,
`courts have held much longer delays than the one here
`permissible under the Speedy Trial Clause. See, e.g., United
`States v. Loud Hawk, 474 U.S. 302, 314–17 (1986) (more
`than 7-year delay); Barker, 407 U.S. at 533–34 (“well over
`five year[]” delay); United States v. Alexander, 817 F.3d
`1178, 1183 (9th Cir. 2016) (per curiam) (5-year delay);
`Corona-Verbera, 509 F.3d at 1116 (“nearly eight-year
`delay”); Aguirre, 994 F.2d at 1456–58 (5-year delay);
`Rayborn v. Scully, 858 F.2d 84, 89 (2d Cir. 1988) (over 7-
`year delay). The three-year delay that we assume occurred
`here was thus not dispositively unconstitutional, but instead
`“presumptively prejudicial.” Gregory, 322 F.3d at 1162.
`This means it is “sufficie
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