NOT FOR PUBLICATION
`
`UNITED STATES COURT OF APPEALS
`
`FOR THE NINTH CIRCUIT
`
`
`FILED
`
`
`APR 15 2025
`
`MOLLY C. DWYER, CLERK
`U.S. COURT OF APPEALS
`
`
`
`
`No. 21-10376
`
`
`D.C. No.
`5:18-cr-00172-BLF-1
`
`
`
`MEMORANDUM*
`
`
`
`
`
`
`
` Plaintiff-Appellee,
`
`UNITED STATES OF AMERICA,
`
`
`
` v.
`
`
`MICHAEL KAIL,
`
`
`
`
`
`
`
`
`
` Defendant-Appellant.
`
`
`
`Appeal from the United States District Court
`for the Northern District of California
`Beth Labson Freeman, District Judge, Presiding
`
`Argued and Submitted March 27, 2025
`Pasadena, California
`
`Before: BOGGS,** FRIEDLAND, and BRESS, Circuit Judges.
`
`
`Defendant-Appellant Michael Kail was convicted on eighteen counts of wire
`
`fraud, in violation of 18 U.S.C. §§ 1343, 1346; three counts of mail fraud, in
`
`violation of 18 U.S.C. §§ 1341, 1346; and seven counts of money laundering, in
`
`violation of 18 U.S.C. § 1957. After calculating $1,505,000 in actual losses, the
`
`
`*
` This disposition is not appropriate for publication and is not precedent
`
`
`except as provided by Ninth Circuit Rule 36-3.
`
`** The Honorable Danny J. Boggs, United States Circuit Judge for the
`
`
`U.S. Court of Appeals for the Sixth Circuit, sitting by designation.
`
`
`
`
`
`
`
`
`
`UNITED STATES COURT OF APPEALS
`
`FOR THE NINTH CIRCUIT
`
`
`FILED
`
`
`APR 15 2025
`
`MOLLY C. DWYER, CLERK
`U.S. COURT OF APPEALS
`
`
`
`
`No. 21-10376
`
`
`D.C. No.
`5:18-cr-00172-BLF-1
`
`
`
`MEMORANDUM*
`
`
`
`
`
`
`
` Plaintiff-Appellee,
`
`UNITED STATES OF AMERICA,
`
`
`
` v.
`
`
`MICHAEL KAIL,
`
`
`
`
`
`
`
`
`
` Defendant-Appellant.
`
`
`
`Appeal from the United States District Court
`for the Northern District of California
`Beth Labson Freeman, District Judge, Presiding
`
`Argued and Submitted March 27, 2025
`Pasadena, California
`
`Before: BOGGS,** FRIEDLAND, and BRESS, Circuit Judges.
`
`
`Defendant-Appellant Michael Kail was convicted on eighteen counts of wire
`
`fraud, in violation of 18 U.S.C. §§ 1343, 1346; three counts of mail fraud, in
`
`violation of 18 U.S.C. §§ 1341, 1346; and seven counts of money laundering, in
`
`violation of 18 U.S.C. § 1957. After calculating $1,505,000 in actual losses, the
`
`
`*
` This disposition is not appropriate for publication and is not precedent
`
`
`except as provided by Ninth Circuit Rule 36-3.
`
`** The Honorable Danny J. Boggs, United States Circuit Judge for the
`
`
`U.S. Court of Appeals for the Sixth Circuit, sitting by designation.
`
`
`
`
`
`
`
`
`
`district court sentenced Kail to thirty months per count to be served concurrently.
`
`Kail now appeals his convictions and sentence. We have jurisdiction under
`
`28 U.S.C. § 1291, and we affirm.
`
`We review de novo whether an indictment was constructively amended.
`
`United States v. Luong, 965 F.3d 973, 984 (9th Cir. 2020). We review the
`
`“formulation of jury instructions for abuse of discretion, but review de novo
`
`whether those instructions correctly state the elements of the offense and
`
`adequately cover the defendant’s theory of the case.” United States v. Liew, 856
`
`F.3d 585, 595-96 (9th Cir. 2017). When reviewing whether evidence was
`
`sufficient to support a verdict, we “determine whether any rational trier of fact
`
`could have found the essential elements of the crime beyond a reasonable doubt,”
`
`United States v. McCarron, 30 F.4th 1157, 1162 (9th Cir. 2022) (emphasis
`
`omitted) (quoting United States v. Nevils, 598 F.3d 1158, 1161 (9th Cir. 2010) (en
`
`banc)), and “resolv[e] all conflicts in the evidence in favor of the prosecution,”
`
`United States v. Rodriguez, 546 F.2d 302, 306 (9th Cir. 1976). We review de novo
`
`Sixth Amendment public-trial claims. United States v. Allen, 34 F.4th 789, 794
`
`(9th Cir. 2022). In determining whether the district court erred in sentencing, “we
`
`review the district court’s interpretation of the Guidelines de novo, its application
`
`of the Guidelines to the facts for abuse of discretion, and its factual findings . . . for
`
`clear error.” United States v. Gadson, 763 F.3d 1189, 1219 (9th Cir. 2014).
`
`
`
`2
`
`
`
`
`
`1. Kail’s challenges to his convictions for wire or mail fraud all fail. As an
`
`initial matter, Kail’s argument that the indictment was constructively amended to
`
`add a property theory of liability misconstrues the wording of the indictment. The
`
`indictment charged Kail with devising a scheme “to obtain money and property by
`
`means of materially false and fraudulent pretenses, representations, promises, and
`
`omissions,” which “deprived Netflix of . . . its money and property by enabling the
`
`vendors to . . . negotiate more favorable contracts with Netflix than they would
`
`have been able to obtain.” The indictment therefore gave Kail “fair notice of the
`
`charges” brought under a property theory of liability. United States v. Holmes, 129
`
`F.4th 636, 661 (9th Cir. 2025) (quoting Luong, 965 F.3d at 985).1
`
`In any event, Kail’s fraud convictions can all be sustained under the honest-
`
`services theory of liability, which the indictment also charged.2 Kail’s challenges
`
`
`1 Kail argues that the Government’s decision to add the property fraud
`theory three weeks prior to trial was prejudicial because the Government had
`represented to Kail over almost three years that it was pursuing only an honest-
`services theory. But whether the Government’s strategy allegedly disrupted Kail’s
`preparation is irrelevant to the constructive-amendment issue, which in this case
`turns on the wording of the indictment on its face, not on the Government’s
`representations about what the indictment meant. See United States v. Bellot, 113
`F.4th 1151, 1156 (9th Cir. 2024). Nor has Kail raised any other separate claim
`based on the Government’s claimed delay in notifying Kail that it was also
`pursuing a property fraud theory.
`2 Because Kail’s fraud convictions can be affirmed under an honest-services
`theory, any instructional or sufficiency-of-evidence error pertaining to a property
`theory of liability was harmless. The jury here was asked to separately find
`whether Kail was guilty of Counts 1 to 22 under a property theory, under an
`
`
`
`
`3
`
`
`
`
`
`to the honest-services jury instructions fail. Kail first argues that the instructions
`
`did not cover his defense theory because they allowed the jury to convict Kail for
`
`receiving payment in exchange for lawful advising services. But, contrary to
`
`Kail’s argument, the instructions provided that the Government must prove that
`
`“the defendant knowingly devised or participated in a scheme or plan to defraud
`
`Netflix, Inc. of its right to his honest services,” and that “to find the defendant
`
`guilty of this offense, you must find that the defendant devised or participated in a
`
`plan or course of action involving bribes or kickbacks given or offered to the
`
`defendant.” The instructions further clarified that “[u]ndisclosed conflicts of
`
`interest, secret payments or undisclosed self-dealing alone, is not sufficient to
`
`constitute honest services mail fraud.” Taken as a whole, the instructions
`
`adequately covered Kail’s defense theory because they made clear that merely
`
`providing lawful advising services without disclosure to Netflix—though it would
`
`be undisclosed self-dealing—would not be honest-services fraud.
`
`Kail next argues that the instructions omitted essential elements of honest-
`
`services fraud by allowing conviction without proof of any misrepresentations
`
`
`honest-services theory, or under both theories. Because the jury found Kail guilty
`under the honest-services theory for each count on which he was convicted, no
`wire or mail fraud conviction depended on the jury’s finding Kail guilty under the
`property theory. We may therefore affirm Kail’s wire or mail fraud convictions
`under an honest-services theory alone. See United States v. Pelisamen, 641 F.3d
`399, 406 (9th Cir. 2011).
`
`
`
`4
`
`
`
`
`
`directed at Netflix. That argument is also unavailing. The district court instructed
`
`that an element of honest-services fraud is an “intent to defraud by depriving
`
`Netflix, Inc. of the right of honest services,” and that to act with “intent to
`
`defraud . . . means to act knowingly and with the specific intent to use false or
`
`fraudulent pretenses, representations, promises or omissions to cause loss of honest
`
`services.” The instructions further clarify: “What the government must prove is
`
`that the defendant knowingly devised or participated in a scheme or artifice to
`
`defraud Netflix, Inc. of its right to the defendant’s honest services through bribes
`
`or kickbacks.” Read together, those instructions are best understood to require
`
`proof that Kail made misrepresentations or omissions that were directed at Netflix.
`
`Kail claims that the instructions “did not require proof of a material
`
`misrepresentation or omission,” but he again reads the relevant instructions in
`
`isolation rather than in context. As noted above, the instructions required Kail to
`
`act with “the specific intent to use false or fraudulent pretenses, representations,
`
`promises or omissions to cause loss of honest services.” The instructions further
`
`required the jury to find that “Kail’s act was material; that is, the act had a natural
`
`tendency to influence, or was capable of influencing, a person’s or entity’s acts.”
`
`Thus, when read in context, the jury instructions required the jury to find that
`
`Kail’s misrepresentations or omissions were material to Netflix.
`
`Sufficient evidence also supported Kail’s convictions under an honest-
`
`
`
`5
`
`
`
`
`
`services theory.3 Although Kail observes that “every vendor witness . . . testified
`
`under oath that they had no [quid pro quo] agreement” with Kail, the Government
`
`presented evidence to the contrary. As the district court explained, “[w]hile
`
`witnesses implicated in the scheme unsurprisingly distanced themselves from the
`
`bribes and kickbacks during live testimony, there was ample contemporaneous
`
`documentary evidence that illustrated a quid pro quo scheme.” Our independent
`
`review of the record confirms this. “[R]esolving all conflicts in the evidence in
`
`favor of the prosecution,” we conclude that a rational juror could have found
`
`beyond a reasonable doubt that Kail had a quid pro quo with each relevant vendor.
`
`Rodriguez, 546 F.2d at 306.
`
`2. The district court did not err in instructing the jury that, as to the money-
`
`laundering counts, “[t]he government is not required to prove that Mr. Kail knew
`
`that his acts or omissions were unlawful.” Although an essential element of money
`
`laundering is the defendant’s knowledge that the transactions at issue involved
`
`criminally derived property, see United States v. Lonich, 23 F.4th 881, 899 (9th
`
`Cir. 2022), overruled on other grounds by United States v. Lucas, 101 F.4th 1158
`
`
`3 Kail only challenges whether sufficient evidence supported the existence of
`a quid pro quo between Kail and each of the relevant vendors. Any other
`sufficiency-of-evidence challenge pertaining to the honest-services theory is not
`“clearly and distinctly” raised in the opening brief and is deemed forfeited. See
`Avila v. L.A. Police Dep’t, 758 F.3d 1096, 1101 (9th Cir. 2014) (quoting McKay v.
`Ingleson, 558 F.3d 888, 891 n.5 (9th Cir. 2009)).
`
`
`
`6
`
`
`
`
`
`(9th Cir. 2024), the defendant need not know whether the act of money laundering
`
`itself is unlawful. See 18 U.S.C. § 1957(a); United States v. Stein, 37 F.3d 1407,
`
`1410 (9th Cir. 1994). The jury instructions stated that “[i]n regard to Counts 23
`
`through 29, charging Money Laundering . . . [t]he government is not required to
`
`prove that Mr. Kail knew that his acts or omissions were unlawful.” The specific
`
`reference to the money-laundering counts, in addition to a later instruction that
`
`“[t]he government must prove that Mr. Kail knew that the property involved in the
`
`monetary transaction constituted, or was derived from, proceeds obtained by some
`
`criminal offense,” correctly stated the knowledge element of money laundering.
`
`United States v. Knapp, 120 F.3d 928, 932 (9th Cir. 1997).
`
`3. The district court did not err—let alone plainly err—in closing the
`
`courtroom.4 A total courtroom closure is permitted when the closure is narrowly
`
`tailored to serve an overriding interest. Allen, 34 F.4th at 797. Here, the
`
`courtroom closure served the overriding interest of limiting the spread of COVID
`
`and was narrowly tailored because, consistent with Allen, the district court
`
`provided adequate “alternatives” to a public trial by granting all specific requests
`
`for in-person attendance. Id. at 799. In addition, a live audio feed and trial
`
`transcripts were made available to the public. See United States v. Hougen, 76
`
`
`4 We review the district court’s courtroom closure for plain error because
`Kail’s request that certain parties attend his trial in person did not constitute a
`timely objection to the issue he now presses on appeal.
`
`
`
`7
`
`
`
`
`
`F.4th 805, 811 (9th Cir. 2023). Thus, Kail has not shown error in the courtroom
`
`closures.
`
`4. The district court did not err in its sentencing calculation. The district
`
`court calculated $1,505,000 in actual losses—$120,000 from a contract with
`
`Docurated and $1,385,000 from a contract with Vistara. Record evidence supports
`
`those factual findings. As to Docurated, there was evidence that Docurated “was
`
`not ever a good fit for Netflix because [Docurated’s product] did not work
`
`with . . . [Netflix’s] Mac products” and that Netflix’s in-house products could
`
`perform the same function. And as to Vistara, there was evidence that the Vistara
`
`product was never rolled out, that Vistara “was never trusted,” and that “Netflix
`
`had other technology that was already doing a better job.” Although Kail points to
`
`countervailing evidence in the record suggesting that Netflix received at least some
`
`value from the contracts with Docurated and Vistara, that countervailing evidence
`
`does not show that the district court clearly erred in finding the Government’s
`
`evidence more compelling.
`
`AFFIRMED.
`
`
`
`8
`
`
`
`
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