FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 09-30131
Plaintiff-Appellee, D.C. No.
v. 3:06-cr-05504-
CHARLES NOLON BUSH, RBL-1
Defendant-Appellant.
OPINION
Appeal from the United States District Court
for the Western District of Washington
Ronald B. Leighton, District Judge, Presiding
Argued and Submitted
October 4, 2010—Seattle, Washington
Filed December 3, 2010
Before: Sidney R. Thomas and Milan D. Smith, Jr.,
Circuit Judges, and David A. Ezra, District Judge.*
Opinion by Judge Milan D. Smith, Jr.
*The Honorable David A. Ezra, United States District Judge for the
District of Hawaii, sitting by designation.
19195
19198 UNITED STATES v. BUSH
COUNSEL
Gregory Charles Link, Esq., Washington Appellate Project,
Seattle, Washington, for defendant-appellant Charles Nolon
Bush.
Helen J. Brunner, Esq., Assistant United States Attorney;
Arlen A. Storm, Esq., Assistant United States Attorney, West-
ern District of Washington, Seattle, Washington, for the
appellee United States of America.
UNITED STATES v. BUSH 19199
OPINION
M. SMITH, Circuit Judge:
Defendant-Appellant Charles Nolon Bush appeals his con-
viction on twenty-seven of thirty-two counts charged in the
Indictment. A jury convicted Bush of one count of securities
fraud in violation 15 U.S.C. §§ 78j(b) and 78ff(a), eight
counts of wire fraud in violation of 18 U.S.C. § 1343, three
counts of mail fraud in violation of 18 U.S.C. § 1341, and fif-
teen counts of engaging in unlawful monetary transactions
(transactional money laundering) in violation of 18 U.S.C.
§ 1957. Bush primarily contends that the government failed to
prove that his money-laundering transactions involved the
“profits” of criminal activities—a distinction he argues is nec-
essary under the Supreme Court’s decision in United States v.
Santos, 553 U.S. 507 (2008). Because Santos and its progeny
dealt with money laundering under a different statute, 18
U.S.C. § 1956, Bush’s argument that Santos applies to a Sec-
tion 1957 transactional-money-laundering conviction is a mat-
ter of first impression for this court. Although we hold that
Santos applies to Section 1957 convictions, it provides no
relief to Bush because his money-laundering and fraud
offenses do not “merge” as the crimes in Santos did. Accord-
ingly, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
I. Bush’s Investment Schemes
Bush’s convictions arise from his creation and operation of
three different “high-yield” investment programs in the west-
ern United States from 1997 until 2006. Over the course of
what ultimately amounted to a four-year, $36 million Ponzi
scheme, Bush lured approximately 400 victims into “invest-
ing” with him.
In 1997, after several years of marketing lackluster con-
sumer products, Bush met real-estate developer Duane
19200 UNITED STATES v. BUSH
Christy, who was seeking financing to construct a luxury
resort in Baja California to be known as Cabo San Quintin.
Bush pledged that he could provide $800 million in financing
to construct the resort. To raise this capital, Bush began pro-
moting several high-yield investments to the public. Bush
acquainted himself with other high-yield “promoters” by join-
ing an organization called Global Prosperity. At various
Global Prosperity workshops, Bush was introduced to other
people involved in such schemes.
A. Hulaman Management Services
In early 1999, Bush paid unlicensed and self-proclaimed
“ecclesiastical lawyer” Glen Stoll to start an ethereal legal
entity known as a “corporation soul.” Stoll filed articles of
incorporation in Washington state for an entity called Director
of the Cornerstone Institute (Cornerstone). Bush began pro-
moting securities known as “mid-term notes” under one of
Cornerstone’s auxiliary branches, Hulaman Management Ser-
vices (Hulaman). Bush told investors that these notes gener-
ated profits from favorable interest-rate movements and that
investors could reap substantial gains in just over a month.
According to his investors, Bush promised an eight- to nine-
percent return per year as well as a high probability of a
twenty-five-percent return every four to six weeks. Rather
than structure the notes and manage the money himself, Bush
told investors that he was a “facilitator for high-yield invest-
ments.”
Using his contacts from Global Prosperity, Bush reinvested
money given to him in two trading programs: IFR Trust, oper-
ated by Larry Wilcoxson of California, and Mintus, Inc.,
operated by Carolyn Mintus of New York. At his trial, Bush
explained his understanding of Mintus’s program into which
he was placing investors’ money:
Well, just the—that they made these tranches. These
trades were down, and they bought and sold paper.
UNITED STATES v. BUSH 19201
I hear it called “mid-term bank note.” I don’t know
what it is. Quite frankly I’m not a financier.
In addition to a return on his investments, Mintus offered
Bush an $800 million guarantee for his planned investment in
Cabo San Quintin.
Although Bush testified that he made no promises about the
returns he could provide and that his trading programs were
based on his “best efforts,” his clients testified that he repre-
sented the investments as risk-free. He claimed the principal
would remain in the investors’ own accounts and was secured
by real estate or promissory notes. Further, literature distrib-
uted by Bush indicated that his investment had minimal risk
and could produce up to a 300-percent yearly return. Accord-
ing to a letter soliciting new investments, investor funds
would be held “in trust” until the pool accumulated $1 mil-
lion. At that point, the pooled funds would be transferred to
Wilcoxson or Mintus who would then place the money with
a “private merchant bank.” After investors sent money, Bush
sent them a Hulaman Trust International Trust and Fiduciary
Agreement, which catalogued investors’ funds under the reas-
suring heading “Assets Delivered in Trust.” Soon after Bush
began to invest with Mintus, she failed to make her first pay-
ment due to Bush. Despite this, Bush testified that he
remained confident about the viability of Mintus’s program
and continued to place Hulaman-client money with her.
Bush recruited several individuals to assist him in promot-
ing Hulaman. Chief among them was his longtime marketing
partner Marilyn March. Bush also tapped Larry and Vicki
Webster to work as “financial planners” and promoters, pay-
ing them a percentage of any funds they raised. Bush hired
March’s friend Tammy Stuckey to work as his administrative
assistant. She was paid $1000 per week in cash. For his part,
Bush told investors that he lived an ascetic life and “was
merely a conduit for charity,” using his profits from the trad-
19202 UNITED STATES v. BUSH
ing program to fund his own charity, the From the Heart
Foundation (Foundation).
Beginning in February 1999, and despite not receiving divi-
dends from Mintus, Bush directed Stuckey to prepare and
send client account statements to Hulaman investors showing
balance increases of approximately twenty-five percent per
month. Bush also began paying some investors twenty-five
percent returns on their initial investments.
In July 1999, Bush and March purchased a property in
Washington state known as View Park Golf Estate (View
Park). Priced at $1.8 million, this 20-acre property included
an 8,300 square-foot home, a golf course, tennis and basket-
ball courts, and a fishing pond. Bush used funds from Hula-
man’s bank account to make the $250,000 down payment on
View Park and pay the $10,000 per month mortgage. Bush
and March used the home as a residence and meeting place
for Hulaman investors and Foundation contributors. Bush
hired groundskeepers, a chef, a masseuse, and a personal staff
for View Park. In the summer of 1999, Bush hired new staff,
including a personal secretary, to whom he paid a $125,000
salary into an offshore bank account. After several employees
objected to being paid exclusively in cash, Bush began paying
them through Kelly Temporary Services.
Using Hulaman money, Bush also entered into leases with
the Seattle Mariners baseball team and Seattle Seahawks foot-
ball team for luxury suites at their respective stadiums. Bush
invited prospective investors to join him in the suites for vari-
ous sporting events.
B. Global Dominion Financial Services
In August 1999, the Federal Bureau of Investigation (FBI)
began probing Wilcoxson and Mintus, executing search war-
rants to gather evidence about their offerings of mid-term
notes. One month later, Bush informed his investors that
UNITED STATES v. BUSH 19203
Hulaman had moved its operations to the Caribbean island-
nation of Nevis and was now operating under the moniker
Global Dominion Financial Services (Global Dominion).
Under Global Dominion, Bush promoted “high-yield” invest-
ments in “international financial institutions.” Again promis-
ing an eight-percent annual return, with sporadic twenty-five-
percent interest payments, Bush asked investors to wire trans-
fer him money at the Bank Crozier in Grenada or to send
money to his associate Nigel Grant, an attorney in Coronado,
California. Bush told investors that a $1350 payment to Grant
was necessary to establish the Nevis L.L.C., which would
hold their money. Bush transferred all Hulaman files to
Grant’s law office in Coronado. After Bush’s personal secre-
tary traveled to Coronado to organize the files, Grant began
sending account statements from his law office to Global
Dominion investors.
Grant began posting investor account statements on Global
Dominion’s new website. For the first eight-week “trading
period” under Global Dominion’s watch, client statements
showed a twenty-five percent return on investment. As was
the case with Hulaman, neither Bush nor his associates at
Global Dominion were reaping substantial returns from their
investments in Mintus and Wilcoxson. Indeed, of the $12.3
million Bush claims to have invested with Wilcoxson and
Mintus from both Hulaman and Global Dominion, Bush
received back a pittance of $53,000. Nevertheless, Global
Dominion continued to post new earnings to client account
statements.
On October 28, 1999, Bush received a letter from the
Washington State Department of Financial Institutions (DFI)
which questioned the legality of his operations. Bush sought
counsel from Stoll, his unlicensed “attorney.” Stoll sent a let-
ter on Bush’s behalf to the DFI denying that Bush was con-
nected to any improper activity.
Beginning in December 1999 and continuing through May
2000, Bush and his associates directed their office manager in
19204 UNITED STATES v. BUSH
Nevis to transfer money from the Bank Crozier to various
accounts in the United States. These included Mintus’s
account in New York, Grant’s account in the Bahamas, and
various Bush accounts in Seattle. Fifteen of these transactions
to Bush’s accounts, each in excess of $10,000, formed the
basis for the unlawful monetary transaction charges in this
case (Counts 18-32). According to Bush’s office manager,
money was never paid out to Global Dominion investors.
In May 2000, Bush began winding down Global Dominion.
When investors called to inquire about the absence of divi-
dends, Bush told an employee in Nevis to placate them by
claiming there were delays at the Federal Reserve in New
York that prevented wire transfers. When investors called
back to see if the money had been freed up, employees
repeated the lies.
C. Cornerstone Institute
In July 2000, Bush signed an installment contract that for-
malized his commitment to provide $800 million in financing
for Cabo San Quintin. Thereafter, Bush began operating the
Cornerstone Institute and recruited new investors for another
mid-term notes scheme, purportedly secured by Bush’s inter-
est in Cabo San Quintin. Bush did not inform investors that
his interest was subject to his satisfaction of the $800 million
financing obligation. Bush provided prospective investors an
application packet that included wire-transfer instructions and
an escrow agreement. Investors received monthly account
statements, which again reflected frequent and substantial div-
idend returns (sometimes 150 percent of the principal).
Despite the good news communicated to investors, Bush was
still not generating returns from Cabo San Quintin, Mintus, or
Wilcoxson. By the end of 2001, he had paid less than $2 mil-
lion out of the $300 million due under his obligation to the
resort.
Since Bush was unable to find any new investors by 2002
to permit him to fund his Cabo San Quintin obligations, his
UNITED STATES v. BUSH 19205
partners in Cabo San Quintin forced him out of the project. In
June 2002, View Park was repossessed by its former owner
after Bush and March stopped making payments on the mort-
gage. In July 2002, Bush moved to Paris.
In total, between 1998 and 2002, Hulaman, Global Domin-
ion, and Cornerstone received more than $35.6 million from
investors. As noted earlier, Bush placed $12.3 million in the
Ponzi schemes run by Wilcoxson and Mintus. He also placed
$233,500 with Wilcoxson personally and $6.1 million with
Mintus personally. He paid $8.7 million back to investors
who requested payments of dividends. He paid more than
$3.7 million in expenses and salaries. Finally, he diverted
$8.4 million to his own accounts, including $1.4 million in
cash withdrawals, and funds used to purchase and make
improvements to View Park, and to purchase artwork and
make gifts to friends and family.
On August 9, 2006, a federal grand jury returned a thirty-
two count Indictment against Bush. After being extradited
from Poland in January 2008, Bush was arraigned in the
Western District of Washington.
II. Bush’s Trial and Sentence
Bush’s two-week jury trial commenced in October 2008.
At the close of the Government’s case-in-chief, Bush did not
move for a judgment of acquittal.
Bush testified at trial about his investment offerings and
dealings with Wilcoxson and Mintus. He stated his belief that
both of their investment programs were legitimate enterprises,
even explaining how Mintus took impressive steps to “satisfy
his due diligence.” For instance, Bush claimed that at his first
meeting with Mintus, she was accompanied by two former
board members of the Federal Reserve Bank of New York.
Bush detailed how he had divided investor money into three
categories—transfers to Mintus, transfers to Mexico, and
19206 UNITED STATES v. BUSH
operational expenses. Because he had “sworn secrecy” to his
associates, Bush was unable to inform his investors about how
he invested their money. When asked why he was using
investor money “to buy the house and the SUVs and the mas-
seuse and the chef,” Bush responded, “The only reason I am
doing that is because I believe that there is money sitting in
New York that offset [sic] this.” He then admitted he never
told investors about Mintus’s defaults. In total, Mintus pur-
portedly owed Bush more than $200 million.
Bush shifted significant responsibility for planning the
investment scheme to Grant and his other associates, claiming
that Grant designed the structure of Global Dominion in
Nevis, as well as its business plan. Although he stated that
Grant and others had “completely” taken over Global Domin-
ion in Nevis, Bush conceded that he could direct wire trans-
fers.
Bush testified that the $1.6 million he and March spent to
remodel View Park enabled them to use the property for the
Foundation. He claimed that other expenditures amounted to
“asset placement,” and that his repeated $9,000 per day bank
withdrawals were for charity and employee salaries.
Prior to charging the jury, Bush requested that the district
court give an instruction predicated on an advice-of-counsel
defense to fraudulent intent. Finding no factual basis in the
trial record, the district court declined to give the instruction
and, instead, gave an instruction that good faith is a complete
defense to those charges where intent was at issue.
The jury convicted Bush on the securities-fraud count,
eight wire-fraud counts, three mail-fraud counts, and all fif-
teen money-laundering counts. Bush was acquitted on five
wire-fraud counts that did not involve financial transactions.
The district court sentenced Bush to 360 months
imprisonment—240 months for the securities fraud, 120
UNITED STATES v. BUSH 19207
months for the money laundering to run consecutive with 240
months, and 60 months for the wire fraud to run concurrent.
The district court ordered Bush to pay $30.1 million in restitu-
tion and the $2,700 mandatory special assessment. This
appeal followed. We have jurisdiction under 28 U.S.C.
§ 1291.
DISCUSSION
Bush asserts two errors. First, he argues that there was
insufficient evidence to convict him of engaging in unlawful
monetary transactions under 18 U.S.C. § 1957 because the
government did not prove that his bank transfers included the
“profits” of his criminal activities. Second, he assigns error to
the district court’s refusal to give a jury instruction he pro-
posed. Both contentions are without merit.
I. Sufficiency of the Evidence for 18 U.S.C. § 1957
Convictions
This is the first proceeding where Bush has objected to the
sufficiency of evidence submitted by the government to con-
vict him of transactional money laundering. Evidence is suffi-
cient for conviction “if, 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 rea-
sonable doubt.” United States v. Mincoff, 574 F.3d 1186, 1192
(9th Cir. 2009) (quoting United States v. Dearing, 504 F.3d
897, 900 (9th Cir. 2007)) (internal quotation marks omitted).
While we normally undertake such reviews de novo, because
Bush failed to move for acquittal before the district court, we
will only apply plain error analysis here and examine the con-
viction to ensure there was no manifest miscarriage of justice.
United States v. Green, 592 F.3d 1057, 1065 (9th Cir. 2010).
Bush’s argument is two-fold. First, he claims that his wire-
fraud convictions are not distinct crimes from the fifteen
money-laundering convictions. Bush asserts that “proceeds”
19208 UNITED STATES v. BUSH
in the money laundering statute must mean the “profits,”
rather than the “receipts,” of predicate crimes. He proffers the
legal hypothesis that whenever a predicate offense to money
laundering necessarily involves the payment of the crime’s
receipts, the money-laundering offense “merges” with the
predicate crime. Assuming his premise is sound, Bush pro-
ceeds to his second argument that the government did not
present evidence to allow the jury to distinguish which money
he laundered for his personal “profit” and which he laundered
to pay the “costs” of his Ponzi scheme.
A. Money Laundering “Proceeds”
[1] Enacted in 1986, the Money Laundering Control Act
added to the Criminal Code two substantive offenses for laun-
dering monetary instruments—18 U.S.C. §§ 1956 and 1957.
Pub. L. No. 99-570 § 1352(a), 100 Stat. 3207-18, 21 (1986).
Both statutes prohibit conducting monetary transactions with
the “proceeds” of criminal activity, albeit in different ways.
Section 1956(a)(1) uses “proceeds” twice in its substantive
text, which provides:
Whoever, knowing that the property involved in a
financial transaction represents the proceeds of some
form of unlawful activity, conducts or attempts to
conduct such a financial transaction which in fact
involves the proceeds of specified unlawful activity
. . . with the intent to promote the carrying on of
specified unlawful activity . . . [shall be guilty of a
crime].
By contrast, Section 1957(a) provides:
Whoever, in any of the circumstances set forth in
subsection (d), knowingly engages or attempts to
engage in a monetary transaction in criminally
derived property of a value greater than $10,000 and
UNITED STATES v. BUSH 19209
is derived from specified unlawful activity, shall be
[guilty of a crime].
18 U.S.C. § 1957(a). While “proceeds” does not appear in
Section 1957(a)’s description of the offense, subsection (f)(2)
incorporates the term into the statute when it defines “crimi-
nally derived property” to mean “any property constituting, or
derived from, proceeds obtained from a criminal offense.” Id.
§ 1957(f)(2) (emphasis added). At the time relevant here, Sec-
tion 1957(f)(3) provided that “ ‘specified unlawful activity’
has the meaning given that term in section 1956.” Id.
§ 1957(f)(3).1
[2] The meaning of “proceeds” in Section 1956 has
received significant judicial attention in recent years after the
Supreme Court’s plurality decision in United States v. Santos,
553 U.S. 507 (2008). Two of our decisions—United States v.
Van Alstyne, 584 F.3d 803 (9th Cir. 2009), and United States
v. Moreland, 622 F.3d. 1147 (9th Cir. 2010)—have wrestled
with the meaning of Justice Scalia’s four-judge plurality opin-
ion in Santos, as well as Justice Stevens’s concurrence.
The defendant in Santos was convicted, inter alia, of oper-
ating an illegal lottery and Section 1956 money laundering.
553 U.S. at 509-10. After he received money from gamblers,
Santos paid a commission to his employees and then paid lot-
tery winners. Id. Those payments formed the basis of the
money-laundering charges. Id. In post-conviction habeas pro-
ceedings, Santos challenged the propriety of his money-
laundering conviction, claiming his transactions were merely
the distribution of receipts from gamblers—in the form of
1
In 2009, after the events at issue here, Section 1957(f)(3) was amended
to provide that “the terms ‘specified unlawful activity’ and ‘proceeds’
shall have the meaning given those terms in section 1956 of this title.” Id.
§ 1957(f)(3) (emphasis added). Pub. L. No. 111-21, § 2(f)(2), 123 Stat.
1618 (2009). Our discussion here is thus limited to the pre-amendment
context.
19210 UNITED STATES v. BUSH
payments to runners, winners, and collectors—as opposed to
the profits of the illegal lottery. Id. at 510. The district court
and Seventh Circuit agreed and vacated the money-laundering
convictions.
[3] The Supreme Court affirmed, although no opinion
commanded a majority of the Court. In the four Justice plural-
ity opinion, Justice Scalia held that because “proceeds,” as
then defined under Section 1956,2 could fairly be interpreted
to mean either “profits” or “receipts,” the rule of lenity meant
that “the tie [went] to the defendants.” Id. at 514-15. In San-
tos, accepting the government’s proffered interpretation that
proceeds meant “receipts” would yield a peculiar result—
every person who operated an illegal lottery would, by
default, simultaneously commit money laundering “because
paying a winning bettor is a transaction involving receipts.”
Id. at 515-16. This created a “merger problem.” Id. at 516.
The plurality went on to note that this “merger problem” was
not limited to transactions in furtherance of an illegal lottery
and noted that “[f]or a host of predicate crimes, merger would
depend on the manner and timing of payment for the expenses
associated with the commission of the crime.” Id. Justice
Scalia highlighted that “[t]he Government suggests no expla-
nation for why Congress would have wanted a transaction that
is a normal part of a crime it had duly considered and appro-
priately punished elsewhere in the Criminal Code to radically
increase the sentence for that crime.” Id. at 517.
Unwilling to categorically define “proceeds” to mean
“profits,” Justice Stevens concurred in the judgment and lim-
ited his opinion to the illegal gambling context. Id. at 526-28
(Stevens, J., concurring in the judgment). His concurrence
endorsed the plurality’s view on merger as applied to illegal
gambling prosecutions. Id. at 528 (quoting plurality opinion).
2
In 2009, Congress amended Section 1956(c)(9) to expressly define pro-
ceeds to include “gross receipts” of unlawful activity. Pub. L. No. 111-21,
§ 2(f)(1), 123 Stat. 1618.
UNITED STATES v. BUSH 19211
[4] In Van Alstyne, we considered the import of Santos for
the first time. See 584 F.3d at 813. There, we overturned two
money-laundering convictions committed in furtherance of a
Ponzi scheme when the evidence at trial showed the transac-
tions were merely putative dividends paid by the defendant
for the purpose of encouraging further principal contributions
by investors. Id. at 809-10, 815. We posited that “ ‘proceeds’
means ‘profits’ where viewing ‘proceeds’ as ‘receipts’ would
present a ‘merger’ problem of the kind that troubled the plu-
rality and concurrence in Santos.’ ” Id. at 814. We reasoned
that Santos did not examine the money-laundering statute
itself but, rather, inquired into the elements and purpose of the
predicate offense from which the laundered funds were
derived. See id. at 814-15 (considering the elements and pur-
pose of the mail-fraud statute). Because fraud statutes prohibit
the broader “scheme to defraud” as opposed to the completed
fraud, id. (citing Neder v. United States, 527 U.S. 1, 25
(1999)), the appropriate test was whether the money launder-
ing “was a central component of” the defendant’s criminal
scheme. Van Alstyne, 584 F.3d at 815. Because two of Van
Alstyne’s transactions furthered his fraud by encouraging new
investment to the Ponzi scheme, we adhered to Justice
Scalia’s reasoning that a defendant should not be punished for
“[t]ransactions that normally occur during the course of run-
ning a[n illegal scheme].” Santos, 553 U.S. at 517. Consistent
with this view, we upheld Van Alstyne’s third money-
laundering conviction because it concerned a transaction to
refund an investor’s principal outlay and thereby left fewer
funds “available to lull other investors into maintaining their
investment.” Van Alstyne, 584 F.3d at 816.
More recently, in Moreland, we again applied the “central
to the scheme to defraud” framework where the defendant
used a pyramid scheme to obtain in excess of $73 million
from investors. Moreland, 622 F.3d at 1153, 1165-66. But cf.
United States v. Webster, 623 F.3d 901, 906 (9th Cir. 2010)
(“We . . . read Santos as holding that where, as here, a money
laundering count is based on transfers among co-conspirators
19212 UNITED STATES v. BUSH
of money from the sale of drugs, ‘proceeds’ includes all
‘receipts’ from such sales.”). We reversed two money-
laundering convictions that corresponded to “wire transfers
for the purpose of paying commissions . . . central to carrying
out the scheme’s objective of encouraging further invest-
ment.” Moreland, 622 F.3d at 1166. On grounds not relevant
here, we upheld several other money-laundering counts in
Moreland because the jury instructions did not require a spe-
cific showing of “proceeds,” and it was thus irrelevant
whether “profits” of the illegal activity were involved. Id. at
1167.
B. Applicability of Santos to 18 U.S.C. § 1957
[5] Because Bush was convicted of engaging in unlawful
monetary transactions under 18 U.S.C. § 1957, while Santos,
Van Alstyne, and Moreland all concerned money laundering
under the companion Section 1956, we first consider whether
Bush’s convictions are covered by Santos and its progeny.
The government briefly notes that Santos’s applicability “is
not clear and obvious” in this context. We decline to draw
such a superficial distinction between two coordinate statutes
and hold that Santos applies with equal force to transactions
prosecuted under Section 1957.
[6] As noted earlier, Sections 1956 and 1957 contain dif-
ferent elements but have a common genesis. For purposes
here, the statutory differences do not concern the usage or
meaning of “proceeds”; instead the crimes differ with respect
to the “knowledge” element. Section 1957 “does not require
that the defendant know of a design to conceal aspects of the
transaction or that anyone have such a design,” while Section
1956 has that requirement. See United States v. Wynn, 61 F.3d
921, 926-27 (D.C. Cir. 1995) (citation omitted). Both sections
make explicit use of the word “proceeds,” and since they were
enacted together in the Money Laundering Control Act, we
follow the “ ‘normal rule of statutory construction’ that ‘iden-
tical words used in different parts of the same act are intended
UNITED STATES v. BUSH 19213
to have the same meaning.’ ” Dep’t of Revenue of Or. v. ACF
Indus., Inc., 510 U.S. 332, 342 (1994) (citations and some
internal quotation marks omitted). Our reading of the terms as
synonymous across these statutes is supported further by the
cross-reference in Section 1957(f)(3) that “ ‘specified unlaw-
ful activity’ has the meaning given the term in section 1956”
and further buttressed by the fact that both sections target
money-laundering transactions. 18 U.S.C. § 1957(f)(3); see
Brown, 513 U.S. at 118 (“Textual cross-reference confirms
this conclusion.”); cf., Envtl. Def. v. Duke Energy Corp., 549
U.S. 561, 583 (2007) (Thomas, J., concurring) (“When Con-
gress repeats the same word in a different statutory context,
it is possible that Congress might have intended the context
to alter the meaning of the word.”) (emphasis added). Like-
wise, the Sixth Circuit, in holding that Santos applies to Sec-
tion 1957 concluded that “[i]t makes particular sense [to give
the words an identical meaning] here because the two statutes
cover the same subject matter in a common way.” United
States v. Kratt, 579 F.3d 558, 560 (2009).
[7] The statutory symmetry between Sections 1956 and
1957 is but one reason to extend the meaning of Santos. Even
more important is that Santos and its progeny are less an
examination of the money-laundering statutes and more an
inquiry into the predicate crimes which generate funds to be
laundered. See Santos, 553 U.S. at 516 (“For a host of predi-
cate crimes, merger would depend on the manner and timing
of payment for the expenses associated with the commission
of the crime.”). As we highlighted in Van Alstyne, the import
of Santos is its requirement that a court evaluate whether the
government has been redundant in its prosecution of a fraudu-
lent scheme—that is, whether the charges separate necessary
parts of the whole and treat them as independent bases for
criminal liability. See Van Alstyne, 584 F.3d at 815 (citing
Santos, 553 U.S. at 515-17). For Santos to have run his lot-
tery, he had to pay his employees and the lottery winners—
indeed, without such payments his crime was nothing but sim-
ple theft. Thus, the Santos merger problem is not limited to
19214 UNITED STATES v. BUSH
Section 1956 because the “merger” problem is not so con-
fined. See Iannelli v. United States, 420 U.S. 770, 772-73, 791
(1975) (considering merger in criminal conspiracy context).
[8] Finally, because Section 1957 does not contain a
knowledge requirement and, thus, likely prohibits a broader
scope of criminal activity than Section 1956, an interpretation
which unduly limits Santos’s context could allow the govern-
ment to sidestep its holding by charging money laundering
under Section 1957. Accordingly, we hold that under 18
U.S.C. § 1957, where a transaction in criminally-derived
property creates a “merger” problem of the kind that troubled
the plurality and concurrence in Santos, or our court in Van
Alstyne, the “proceeds” transacted must include the “profits”
of the predicate criminal activity.
C. The Absence of Merger in Bush’s Conviction
[9] We next consider whether Bush’s money-laundering
convictions present the merger problems of Santos or Van
Alstyne. Because the district court did not specifically instruct
the jury that “proceeds” must include “profits,” if such a
merger problem exists, then the jury instructions were errone-
ous.
The eighteen monetary transactions at issue here occurred
during a finite period of Bush’s overall scheme—from
December 29, 1999 to May 24, 2000. All involved transfers
from Bank Crozier to bank accounts controlled by Bush in
Washington state. The transactions occurred during the sec-
ond phase of the overall Ponzi scheme when Bush and Grant
operated under the Global Dominion name. The stage of the
transactions in the context of the larger fraud is particularly
important because the timing reveals their irrelevance to the
overarching fraudulent scheme.
[10] The circumstances surrounding the securities, wire,
and mail-fraud convictions were all distinct from the money
UNITED STATES v. BUSH 19215
laundering, thus alleviating any merger concerns. First, the
securities fraud conviction (Count 1) related to a January
2002 attempted sale of an investment contract in Cabo San
Quintin—a fraud that occurred more than 18 months after the
last money-laundering transaction charged in the Indictment.
Likewise, the mail-fraud convictions (Counts 15-17) have no
connection to the transfers—rather the mail fraud was based
on Bush’s promotional activities and the sending of false doc-
uments to clients. With respect to two of the wire-fraud
charges (Counts 12 and 13), the transactions involved trans-
fers from a bank in Oregon to Bush’s accounts in Washington
after the money laundering was completed.
[11] This leaves only six wire-fraud charges (Counts 2-7)
which could present “merger” problems. Unlike the cases
analyzed earlier, however, none of the transactions from Bank
Crozier to Bush was “central to carrying out the scheme’s
objective[s].” Moreland, 622 F.3d at 1166. The necessity of
the transfers from Bank Crozier was limited to Bush’s per-
sonal interest in veiling the sources of his income from public
authorities. Unlike Moreland, the Government showed that
Bush engaged in the transfers from Bank Crozier primarily as
a means to benefit himself. This was evidenced by the fact
that Bush operated his scheme for several years without mak-
ing these international transfers from Bank Crozier. Notably,
the overseas money transfers began after authorities began
investigating Hulaman, Mintus, and Wilcoxson. Rather than
risk investors sending money directly to his Hulaman account,
Bush deflected attention by steering the investments overseas
first. While this is not as detrimental to the Ponzi scheme as
the defendant in Moreland refunding an investor’s principal,
it also did not directly assist Bush in generating new invest-
ments. Taking additional steps to hide completed criminal
activity is not central to the solicitations necessary for a Ponzi
scheme to continue operating. Further, we decline to endorse
a merger rule that would reward criminals for increasing
nefarious behavior by taking additional steps to avoid justice.
19216 UNITED STATES v. BUSH
Bush’s argument that the government did not distinguish
which of his transfers from Bank Crozier to the Washington
accounts were “costs” and which were “profits” is a red her-
ring. In a period of six months, Bush moved more than $2.48
million from overseas accounts to pay approximately $9,000
in weekly costs. These “costs” included “business necessities”
like his home, personal bills, and suites at football and base-
ball games—all outlays which benefitted Bush as much as
they did his clients or associates. Bush’s profligacy is not a
basis for weaving money laundering into a Ponzi scheme.
Finally, we note that in Kratt, the Sixth Circuit also consid-
ered whether the inclusion of the money-laundering charge
under Section 1957 led to “a radical increase in the statutory
maximum sentence” for the underlying offense. 579 F.3d at
562. Bush’s money-laundering convictions, only some of
which even present the possibility of merger, had the possibil-
ity of adding ten years to his overall sentence. 18 U.S.C.
§ 1957(b)(1). By contrast, his mail and wire-fraud convictions
had thirty-year statutory maximums. 18 U.S.C. §§ 1341,
1343. This is quite distinct from Santos, where the operation
of an illegal lottery carried only a five-year sentence while
money-laundering under Section 1956 could have led to an
additional twenty years of imprisonment. See 553 U.S. at 516.
In the end, Bush received five additional years for his money
laundering—hardly a “radical” disparity from the twenty-five-
year sentence for his various frauds.
[12] Since Bush does not dispute that he executed the
transactions in question and because those transactions did not
merge with his predicate frauds, we hold that there was suffi-
cient evidence to convict Bush of transactional money laun-
dering under 18 U.S.C. § 1957.
II. Advice of Counsel Instruction
Bush’s second claim on appeal concerns the district court’s
refusal to give an “advice-of-counsel” instruction. We review
UNITED STATES v. BUSH 19217
a district court’s determination “that a factual foundation does
not exist to support a jury instruction proposed by the defense
for an abuse of discretion.” United States v. Daane, 475 F.3d
1114, 1119 (9th Cir. 2007) (quotations omitted).
[13] Bush requested the following instruction:
As I have explained, one element which the govern-
ment must prove beyond a reasonable doubt is that
defendant had the unlawful intent to [commit] secur-
ities fraud, wire fraud, mail fraud. Evidence that the
defendant in good faith followed the advice of coun-
sel would be inconsistent with such an unlawful
intent. Unlawful intent has not been proved if the
defendant, before acting, made full disclosure of all
material facts to an attorney, received the attorney’s
advice as to the specific course of conduct that was
followed, and reasonably relied on the advice in
good faith.
Finding no basis in the record to support the advice-of-
counsel instruction, the district court gave a broader good-
faith instruction:
An intent to defraud is an intent to deceive or cheat.
Good faith is a complete defense to each count,
because good faith is inconsistent with an intent to
defraud. Good faith means a belief or opinion hon-
estly held without an intent to mislead. However, the
defendant’s belief that victims of any fraud will be
paid in the future or will sustain no economic loss
does not constitute a good-faith offense [defense] if
there is an intent to defraud.
The defendant does not have the burden of proving
he acted in good faith. The government must prove
beyond a reasonable doubt that the defendant acted
with the intent to defraud and did not act in good
19218 UNITED STATES v. BUSH
faith. Proof that the defendant acted with reckless
disregard for the truth of material misrepresentations
he may have made is inconsistent with good faith.
[14] “A defendant is entitled to have the judge instruct the
jury on his theory of defense, provided that it is supported by
law and has some foundation in the evidence.” United States
v. Bello-Bahena, 411 F.3d 1083, 1088-89 (9th Cir. 2005)
(quoting United States v. Fejes, 232 F.3d 696, 702 (9th Cir.
2000)). An advice-of-counsel instruction requires the defen-
dant show that he made a full disclosure of all material facts
to his attorney and that he then relied “in good faith on the
specific course of conduct recommended by the attorney.”
United States v. Ibarra-Alcarez, 830 F.2d 968, 973 (9th Cir.
1987). We have repeatedly recognized that the failure to give
a requested instruction is not reversible error “if other instruc-
tions, in their entirety, adequately cover that defense theory.”
United States v. Mason, 902 F.2d 1434, 1438 (9th Cir. 1990);
see also United States v. Crandall, 525 F.3d 907, 912 (9th
Cir. 2008).
As applied here, Bush needed to present evidence that he
fully advised his attorney of his plan, received advice regard-
ing that plan from the attorney, and followed that exact advice
in good faith. The district court found none of these predicates
were met, and we agree.
[15] The district court found that, for his “legal advice,”
Grant was “paid almost $2 million, which is a pretty good fee
for corporate advice.” We agree with the district court that
Grant was “up to his eyeballs” in the fraudulent scheme and
not serving in the role of Bush’s legal adviser. Grant was
positioned as a business partner, sending out account state-
ments and retaining investor account files at his law office.
Moreover, Bush never revealed to anyone his own fruitless
investments in the schemes run by Mintus and Wilcoxson—
essential facts necessary to convey a full and accurate story to
Grant. The record is replete with evidence on which the dis-
UNITED STATES v. BUSH 19219
trict court could have, and did, base its decision not to give
Bush’s requested instruction, and we find no abuse of discre-
tion.
[16] Finally, even if Bush had established a basis for the
advice-of-counsel instruction, the broader good-faith instruc-
tion given by the district court subsumes Bush’s proposed
instruction. Because “[a]dvice of counsel is not regarded as a
separate and distinct defense but rather as a circumstance
indicating good faith which the trier of fact is entitled to con-
sider on the issue of fraudulent intent,” Bisno v. United States,
299 F.2d 711, 719 (9th Cir. 1961), and the district court gave
a good-faith instruction, there was no error. See also Ibarra-
Alcarez, 830 F.2d at 973.
CONCLUSION
For the foregoing reasons, Bush’s conviction and sentence
are AFFIRMED.
AFFIRMED.