Order Denying Motion for Judgment of Acquittal; Order Denying Motion for New Trial (Document 316)

Summary

Order dated January 10, 2025, Document 316, in United States v. Keith Lawrence Middlebrook, No. 2:20-cr-229-DSF, denying his motion for judgment of acquittal and his motion for new trial (Dkt. 285, 286). The court notes he was convicted of eleven counts of wire fraud after a jury trial. It finds that, putting aside two charged statements, the government provided sufficient evidence that he falsely claimed that "QC20" and "QP20" were "patent pending", that Magic Johnson was a director and/or officer, and that he had secured funding from seven investors who had invested between $750,000 and $1,000,000. The order also rejects the venue, variance and burden-of-proof arguments and denies a request for an evidentiary hearing.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

Case 2:20-cr-00229-DSF   Document 316 Filed 01/10/25     Page 1 of 9 Page ID
                                  #:5015




                UNITED STATES DISTRICT COURT
               CENTRAL DISTRICT OF CALIFORNIA




  UNITED STATES OF AMERICA,            2:20-cr-229-DSF
      Plaintiff,
                                       Order DENYING Motion for
                   v.                  Judgment of Acquittal; Order
                                       DENYING Motion for New Trial
  KEITH LAWRENCE                       (Dkt. 285, 286)
  MIDDLEBROOK,
      Defendant.




        Defendant Keith Lawrence Middlebrook was convicted of eleven
 counts of wire fraud after a jury trial. Defendant now moves for a
 judgment of acquittal pursuant to Federal Rule of Criminal Procedure
 29 or, in the alternative, for a new trial pursuant to Federal Rule of
 Criminal Procedure 33(a).

                 I. Motion for Judgment of Acquittal

        The Court must “enter a judgment of acquittal if the Government
 fails to present sufficient evidence to sustain a conviction. Evidence is
 sufficient to sustain a conviction if, “viewed 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.” United
 States v. Miller, 953 F.3d 1095, 1108 (9th Cir. 2020) (cleaned up).
 “[E]vidence is insufficient to support a verdict where mere speculation,
 rather than reasonable inference, supports the government’s case.”
 United States v. Nevils, 598 F.3d 1158, 1167 (9th Cir. 2010). However,
 “[c]onflicting evidence is to be resolved in favor of the jury verdict.”
 United States v. Corona-Verbera, 509 F.3d 1105, 1117 (9th Cir. 2007).
Case 2:20-cr-00229-DSF   Document 316 Filed 01/10/25     Page 2 of 9 Page ID
                                  #:5016



 “The hurdle to overturn a jury’s conviction based on a sufficiency of the
 evidence challenge is high.” United States v. Rocha, 598 F.3d 1144,
 1153 (9th Cir. 2010).

       Defendant argues that the government failed to present sufficient
 evidence regarding two charged false statements: (1) that Defendant’s
 purported COVID-19 cure and/or prevention product was effective and
 (2) that investments in Defendant’s venture were risk free and
 guaranteed by a party in Dubai.

         Even if the Court were to assume that the government did not
 present sufficient evidence to prove the falsity of these two statements
 beyond a reasonable doubt, Defendant would not be entitled to a
 judgment of acquittal. Defendant was charged with a scheme to
 defraud based on multiple statements, and there is very strong
 evidence in the record that several of these were false. The jury was
 not required to agree unanimously on any particular false statement to
 convict Defendant. United States v. Lyons, 472 F.3d 1055, 1068 (9th
 Cir. 2007). And “when faced with a record of historical facts that
 supports conflicting inferences a reviewing court must presume – even
 if it does not affirmatively appear in the record – that the trier of fact
 resolved any such conflicts in favor of the prosecution and must defer to
 that resolution.” Nevils, 598 F.3d at 1164 (cleaned up). This means
 that if there is sufficient evidence in the record as to one of the charged
 false statements, a court must presume that the conviction was based
 on that statement and not speculate that one or more jurors might have
 chosen a different statement. As the circuit explained in United States
 v. Halbert, 640 F.2d 1000, 1008 (9th Cir. 1981),

       [T]he possibility that the verdict was based on an erroneous
       legal ground is error, but the possibility that a criminal
       conviction might have been based on factual allegations
       unsupported in the record does not necessitate reversal if
       there is other evidence sufficient to support the conviction
       . . . . Even if the Government had not established one or
       more of the six acts of misrepresentation . . ., sufficient




                                     2
Case 2:20-cr-00229-DSF   Document 316 Filed 01/10/25       Page 3 of 9 Page ID
                                  #:5017



       proof of even one of the acts would have been enough to
       support [the defendant’s] conviction for mail fraud.

        Defendant also argues that the government failed to introduce
 sufficient evidence that the alleged false statements were material.
 The materiality of false statements is assessed objectively, not
 subjectively. United States v. Lindsey, 850 F.3d 1009, 1014 (9th Cir.
 2017).

       The element of materiality is evaluated under an objective
       test, in which we must examine the intrinsic capabilities of
       the false statement itself, rather than the possibility of the
       actual attainment of its end. To be material a statement
       need only have the propensity or capacity to influence or
       affect [a victim’s] decision. [T]he government does not have
       to prove actual reliance upon the defendant’s
       misrepresentations to satisfy materiality.

 Id. (cleaned up).

       There is no question that a rational juror could have found that
 the false statements at issue had “the propensity or capacity to
 influence or affect” a potential investor’s decisions. Putting aside the
 two statements noted earlier, the government provided sufficient
 evidence that Defendant falsely claimed: (1) that his products “QC20”
 and “QP20” were “patent pending,” (2) that Magic Johnson was a
 director and/or officer of Defendant’s venture, and (3) that Defendant
 had already secured funding from seven investors who had invested
 between $750,000 and $1,000,000. All of these statements clearly
 would be relevant to at least some potential investors as they directly
 relate to the value of the assets of the venture, its capitalization level,
 the confidence level of other investors, the riskiness of the investment,
 and the potential for publicity that might come from being associated
 with a prominent individual.

        For these reasons, the Court finds that the government provided
 sufficient evidence to sustain Defendant’s wire fraud convictions.




                                      3
Case 2:20-cr-00229-DSF    Document 316 Filed 01/10/25        Page 4 of 9 Page ID
                                   #:5018



                         II. Motion for New Trial

 A.    Standard

        The Court may set aside the jury verdict and order a new trial “if
 the interest of justice so requires.” Fed. R. Crim. P. 33(a). A motion for
 a new trial should be granted only “in exceptional circumstances in
 which the evidence weighs heavily against the verdict.” United States
 v. Del Toro-Barboza, 673 F.3d 1136, 1153 (9th Cir. 2012) (quoting
 United States v. Pimentel, 654 F.2d 538, 545 (9th Cir. 1981). “The
 court is not obliged to view the evidence in the light most favorable to
 the verdict, and it is free to weigh the evidence and evaluate for itself
 the credibility of the witnesses.” United States v. Kellington, 217 F.3d
 1084, 1097 (9th Cir. 2000). “[A] decision to grant or deny a new trial is
 within the sound discretion of the district court.” United States v.
 Steel, 759 F.2d 706, 713 (9th Cir. 1985).

 B.    Analysis

       1.     Previously Decided Issues

        Defendant reasserts several arguments addressed in written
 pretrial orders: (1) his motion to dismiss for selective prosecution,1 (2)
 his motion to suppress the search of his digital devices, (3) the
 government’s motion to admit evidence of financial structuring, and (4)
 the government’s request to admit certain of Defendant’s social media
 posts that were not sent to potential investors. Nothing that occurred
 at trial leads the Court to revisit these prior rulings, and the Court’s
 previous analyses are incorporated into this order.2



 1 Defendant asserts that the Court should have conducted an evidentiary

 hearing on his selective prosecution motion, but, given Defendant’s failure to
 present a prima facie showing, which he should have been able to do in his
 papers, a hearing would have been extraneous.
 2 The Ninth Circuit has recently stressed the importance of identifying a

 truly comparable class relative to the defendant when evaluating a selective
 prosecution claim. See United States v. Wilson, ___ F.4th ___; 2024 WL


                                       4
Case 2:20-cr-00229-DSF     Document 316 Filed 01/10/25       Page 5 of 9 Page ID
                                    #:5019



       2.     Cross Examination

       Defendant argues that he should have been allowed to ask
 questions of government witnesses on cross-examination that would
 show that Defendant’s allegedly false statements were not of the type
 that investors would find material. The questions were not allowed
 because they were well outside of the scope of the government’s direct
 examination and were not intended to impeach the witnesses’ bias or
 credibility. To the degree that the questions inquired about the
 witnesses’ subjective beliefs about materiality, they were also
 irrelevant. See Lindsey, 850 F.3d at 1016.

       3.     Jury Instructions

       Defendant argues that the jury instructions were erroneous in
 two respects.

       First, he asserts that the Court should have instructed the jury
 that they must “find that a materially false statement was made to the
 alleged victim identified in the relevant count,” and that it was error
 that the instructions “did not specify that the government had to prove
 that an allegedly false statement was made to an alleged victim
 identified in the indictment, much less that, for each count, the
 allegedly false statement had to be made to the specific alleged victim
 identified in the indictment.” New Trial Mem. at 8. This argument is
 incorrect. The government charged Defendant with a scheme to
 defraud. In that context, there is no requirement that the government
 match specific false representations to specific alleged victims. The
 case cited by Defendant, United States v. Lew, 875 F.2d 219 (9th Cir.
 1989), concerns a different scenario where the government alleged a
 scheme to defraud where the deception was targeted at a different actor
 than the one from whom money was being obtained. Here, the
 government alleged a scheme where the false statements were directed



 5163081, at *7 (9th Cir. Dec. 19, 2024). As stated in the Court’s prior order,
 Defendant failed to identify such a class.



                                        5
Case 2:20-cr-00229-DSF    Document 316 Filed 01/10/25       Page 6 of 9 Page ID
                                   #:5020



 to potential investors and the money or property was also being taken
 from those potential investors.

       Defendant has also renewed his argument made at trial that the
 venue instruction should have precisely mirrored the allegations in the
 indictment for Counts 1 through 8. The indictment alleged that
 Defendant was “in Los Angeles, California” when he used or caused to
 be used certain specific wires that formed the basis for Counts 1
 through 8. See Indictment (Dkt. 40) ¶ 4. Instead, the Court gave an
 instruction that the government needed to show that Defendant was
 present in the Central District of California.

        Defendant argues that the failure to require the government to
 prove Defendant’s presence in “Los Angeles, California” was either a
 constructive amendment to the indictment or a fatal variance from it.
 There is no question that the underlying substantive venue
 requirement is satisfied by Defendant’s physical presence in the
 Central District, and there is also no question that the evidence was
 sufficient to show that Defendant was, in fact, present in the Central
 District when he used, or caused to be used, each of the charged wires.
 The only issue is whether the government should have been limited by
 the indictment to showing that Defendant was present in “Los Angeles,
 California” or if it could rely on evidence that Defendant was present in
 other parts of the District.3

       Objections that the trial court improperly instructed the
       jury about the contents of the indictment generally fall into
       one of two categories: a constructive amendment or a
       variance. An amendment of the indictment occurs when the
       charging terms of the indictment are altered, either
       literally or in effect, by the prosecutor or a court after the
       grand jury has last passed upon them. A variance, on the

 3 The Court did not instruct the jury on any theory of venue other than one

 based on Defendant’s physical presence in this District. Nor does the Court
 now rely on any other theory that might have been presented in the
 government’s opposition to the new trial motion.



                                       6
Case 2:20-cr-00229-DSF   Document 316 Filed 01/10/25     Page 7 of 9 Page ID
                                  #:5021



       other hand, occurs when the charging terms of the
       indictment are left unaltered, but the evidence offered at
       trial proves facts materially different from those alleged in
       the indictment. The line that separates a constructive
       amendment from a variance is not always easy to define,
       but characterizing an instruction as a constructive
       amendment typically mandates reversal, while a variance
       requires reversal only if it prejudices a defendant’s
       substantial rights.

 United States v. Ward, 747 F.3d 1184, 1189 (9th Cir. 2014) (cleaned up)
 (emphasis in original).

        The indictment includes multiple venue allegations, several of
 which are consistent with the Court’s instruction. It first alleges that
 Defendant executed a fraudulent scheme “in Los Angeles and Orange
 Counties, within the Central District of California, and elsewhere[.]”
 Indictment ¶ 2. It later reiterates that Defendant transmitted wires for
 the purposes of executing the scheme “in Orange and Los Angeles
 Counties, within the Central District of California, and elsewhere[.]”
 Id. ¶ 4. The problem only arises in the description of the wires in
 Counts 1 through 8. These specific descriptions allege that Defendant
 was “in Los Angeles, California” when he sent the relevant text
 messages.

        The heart of the constructive amendment inquiry is whether a
 jury could have convicted a defendant for conduct with which he was
 not charged. See Ward, 747 F.3d at 1191. There is no constructive
 amendment “when the indictment simply contains superfluously
 specific language describing alleged conduct irrelevant to the
 defendant’s culpability under the applicable statute.” Id. “In such
 cases, convictions can be sustained if the proof upon which they are
 based corresponds to the offense that was clearly described in the
 indictment. A part of the indictment unnecessary to and independent
 of the allegations of the offense is considered to be ‘a useless
 averment.’” Id.




                                     7
Case 2:20-cr-00229-DSF   Document 316 Filed 01/10/25     Page 8 of 9 Page ID
                                  #:5022



        Defendant was convicted for the conduct charged in the
 indictment – in short, conducting a fraudulent scheme within the
 Central District of California through the use of the interstate wires.
 The allegations that Defendant was present in “Los Angeles,
 California,” specifically, when he sent some of the charged wires were
 “superfluously specific” both with respect to Defendant’s substantive
 guilt and to proper venue for the prosecution. This is a case of a
 “useless averment” that had no substantive effect on the outcome of the
 case. There is no legitimate dispute that Defendant was present in the
 Central District of California – if not Los Angeles – when the wires
 were sent, and the indictment explicitly alleged that the conduct
 charged occurred within the District, even if at some points it
 unnecessarily alleged a more specific location.

       Defendant has a stronger argument that there was a variance in
 proof. But even if there were a variance, Defendant cannot show the
 prejudice necessary to set aside the verdict. The purported variance
 did not affect his substantive rights for the reasons previously stated –
 the government provided ample proof that Defendant was present in
 the Central District of California when sending the wires and such a
 showing is substantively sufficient to demonstrate venue in this
 District.

       4.    Burden of Proof Issues

       Finally, Defendant argues that the jurors ignored the Court’s
 instructions on burden of proof and that the government impermissibly
 attempted to shift the burden of proof in its closing argument.

       To the degree that Defendant relies on post-trial juror
 statements, that argument is barred by Federal Rule of Evidence
 606(b). Arguments made in court by the prosecution are not
 “extraneous prejudicial information” for the purposes of Rule 606(b),
 and Defendant’s cursory assertion of his Fifth and Sixth Amendment
 rights do not establish that this is a case where Rule 606(b) should be
 set aside for constitutional reasons. Defendant’s request for an
 evidentiary hearing is denied because no competent evidence regarding



                                     8
Case 2:20-cr-00229-DSF   Document 316 Filed 01/10/25    Page 9 of 9 Page ID
                                  #:5023



 jury deliberations can be admitted. Hearsay testimony by counsel is
 not a way around Rule 606(b).

        The government’s comment in its rebuttal argument was not
 improper burden shifting. Defendant had argued that there were holes
 in the government’s case because it failed to “follow leads” and did not
 call certain witnesses. In rebuttal, the government noted that the
 defense has subpoena power to call witnesses if Defendant believed
 that those witnesses would be helpful to his case (or harmful to the
 government’s). This is not inappropriate argument so long as the
 government refrains from commenting on a defendant’s failure to
 testify on his own behalf. See United States v. Cabrera, 201 F.3d 1243,
 1250 (9th Cir. 2000).

                             III. Conclusion

       Defendant’s motions for acquittal or new trial are DENIED.

       IT IS SO ORDERED.



  Date: January 10, 2025                ___________________________
                                        Honorable Dale S. Fischer
                                        United States District Judge




                                    9


File and source

File

316.pdf

Size

105,099 bytes

SHA-256

58f28ef2c38587fc9bbe7f1248f38506d5f4f2b0bb6ad86862a20b1b65dc60b8

Our copy

316.pdf

Original

No public link identified.