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--------------------------------------------------------------------------------
Case Name:
USA V MATSUMARU 
Case Number: Date Filed: 
99-10334 04/03/01 
--------------------------------------------------------------------------------
FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,
                                                     No. 99-10334
Plaintiff-Appellee,
                                                     D.C. No.
v.                                                    CR-97-00974-SOM

SHO JAY MATSUMARU,
                                                     OPINION
Defendant-Appellant.

Appeal from the United States District Court
for the District of Hawaii
Susan Oki Mollway, District Judge, Presiding

Argued and Submitted
November 13, 2000--Honolulu, Hawaii

Filed April 3, 2001

Before: Procter Hug, Jr., Chief Judge, Stephen S. Trott, and
Kim McLane Wardlaw, Circuit Judges.

Opinion by Judge Trott
_________________________________________________________________
COUNSEL

William L. Osterhoudt, Law Offices of William L.
Osterhoudt, San Francisco, California, for the defendant-
appellant.

Omer G. Poirier, United States Attorney's Office, Honolulu,
Hawaii, for the plaintiff-appellee.
_________________________________________________________________
OPINION

TROTT, Circuit Judge:

It's been said that "good counsellors lack no clients."
WILLIAM SHAKESPEARE, MEASURE FOR MEASURE act I, sc.2.Sho
Jay Matsumaru certainly did not lack clients, but according to
the government, it was not because he was a "good counsel-
lor." To the contrary, the government characterizes Matsu-
maru as a cunning, sophisticated lawyer engaged in a
complex, multi-layered criminal scheme designed to defraud
his clients and the United States government.

The prosecution pieced together the acts of Matsumaru's
tragic play during a week-long trial, featuring over twenty-

                               4183
five witnesses. The denouement came when a jury convicted
the protagonist, Matsumaru, of two counts of wire fraud, two
counts of visa fraud, and one count of establishing a commer-
cial enterprise for the purpose of evading immigration laws.
The district court closed the script by sentencing Matsumaru
to five concurrent forty-one month sentences and by ordering
him to pay $50,000 in restitution.

Not content with his fate, Matsumaru appealed his convic-
tions and sentence. We have jurisdiction of this sequel under
28 U.S.C. S 1291. As discussed in detail below, we affirm
four of Matsumaru's five convictions, and affirm his sentence,
except with respect to the amount of restitution ordered by the
district court. Accordingly, we affirm in part, reverse in part,
and remand the case to the district court for the limited pur-
pose of calculating the amount of restitution Matsumaru must
pay.

I

Background

1. The Scheme

Matsumaru is a Japanese citizen who has been a permanent
resident of the United States since 1984. In addition to speak-
ing both Japanese and English, Mastumaru is a licensed attor-
ney who practiced law in Hawaii from 1988 until the time of
his conviction in 1999. Among other disciplines, Matsumaru
helped Japanese clients obtain visas from the United States
government. He bragged that he had almost a 100% success
rate in securing visas for his clients.

The government surmised that Matsumaru's success rate
was a function of an elaborate, multi-faceted strategy devised
to defraud the United States government, and at the same
time, to swindle his unwitting foreign clients. First, Matsu-
maru advertised in a Japanese language publication as a bilin-

                               4184
gual immigration attorney capable of helping Japanese
citizens obtain visas from the United States Department of
State ("State Department"). Japanese citizens desirous of liv-
ing in the United States who saw Matsumaru's advertisement
contacted him. Matsumaru explained that in order to qualify
for a particular visa, a Japanese citizen must invest a substan-
tial sum of money in a United States company. To effectuate
the investment, Matsumaru instructed the Japanese citizens to
wire money from their Japanese bank accounts to newly
formed corporate bank accounts in Hawaii. Instead of using
these funds to invest in United States companies, however,
Matsumaru, without authorization, diverted most of the
money to his own personal uses.

Then, after creating the paper trail supposedly demonstrat-
ing his clients' investments in viable United States compa-
nies, Matsumaru endeavored to secure visas for his clients. He
prepared application materials for his clients to submit to the
United States consulate in Japan. In these materials, Matsu-
maru made several false representations to the United States
government about the history of his clients' investments and
about the formation of their United States enterprises. Relying
on these false representations, the government granted visas
to Matsumaru's clients.

2. The Clients

Several clients sought Matsumaru's legal assistance in
securing visas that would allow them to live in the United
States. Matsumaru's representation of three clients in particu-
lar -- Yasutsugu Wada ("Wada"), Kimio Murakami
("Murakami"), and Shinji Tsutsumi ("Tsutsumi") -- gives
rise to the instant case.

a. Yasutsugu Wada

After seeing Matsumaru's advertisement in a Japanese pub-
lication, Wada contacted the immigration attorney, expressing

                               4185
his desire to live in the United States. Because Wada's previ-
ous application for a student visa had been denied, Matsumaru
knew that the United States government would be reluctant to
grant Wada a permanent visa. Matsumaru suggested that
Wada first try to obtain a treaty investor visa, known as an
"E-2 visa,"1 which would allow him to stay temporarily in the
United States. If successful in obtaining a temporary treaty
investor visa, Wada should then try to secure a visa that
would allow him to stay permanently in the United States.

Wada hired Matsumaru to help him obtain both visas, and
they entered into a two-part written agreement setting forth
each party's rights and responsibilities. Wada paid Matsumaru
$10,000 to help him obtain the E-2 treaty investor visa. If the
government denied Wada's petition for a treaty investor visa,
Matsumaru agreed to reimburse the $10,000 fee, less
expenses. But, if Wada was successful in obtaining a tempo-
rary treaty investor visa and was later able to secure a perma-
nent visa, Wada agreed to pay Matsumaru an additional
$10,000 fee.

Matsumaru explained to Wada that in order to qualify as a
treaty investor, he had to invest a substantial sum of money
in a United States company. Wada agreed to establish a new
United States company named Paradise Corporation. Per Mat-
sumaru's instructions, Wada wired $650,000 from his bank in
Japan to a newly formed Paradise Corporation bank account
in Hawaii on which both Wada and Matsumaru were signato-
ries. According to their arrangement, Matsumaru was the sole
manager of Paradise Corporation, and Wada contractually
agreed "not [to] interfere with the business matters at all."
_________________________________________________________________
1 An E-2 treaty investor visa is available to citizens of certain foreign
countries, including Japan, who come to the United States "solely to
develop and direct the operations of an enterprise in which he has
invested, or of an enterprise in which he is actively in the process of
investing a substantial amount of capital." 8 U.S.C. S 1101(a)(15)(E)(ii).
This provision comprises the heart of Matsumaru's first two claims on
appeal and is discussed in detail in Section II.1.b., infra.

                               4186
Once Wada wired the $650,000 into the Paradise Corpora-
tion bank account, Matsumaru diverted a substantial portion
of those funds for personal uses. For instance, Matsumaru
deposited a $370,000 Paradise Corporation check, denomi-
nated as a loan, into his personal account at another bank.
Wada testified that he never authorized any "loan " to Matsu-
maru, much less a loan for $370,000. Moreover, Matsumaru
used corporate funds to pay directly for personal debts and
services, including physical therapy, massages, guitar lessons,
and alimony to his ex-wife.

With a paper trail supposedly evidencing Wada's invest-
ment, Matsumaru turned his attention toward securing Wada
a treaty investor visa. He prepared a packet of materials for
Wada to submit to the United States consulate in Japan. As
part of the packet, Matsumaru wrote a letter describing Wada
and the creation of Paradise Corporation. In this letter, Matsu-
maru made two allegedly false statements: (1) that Wada was
a qualified treaty investor when, in fact, Wada was not a qual-
ified treaty investor because he had contractually ceded all
managerial responsibilities over Paradise Corporation to Mat-
sumaru; and (2) that Paradise Corporation had purchased a
travel company, known as Pacific Hawaiian Travel, for
$239,000, when, in fact, Paradise Corporation had not done
so. The United States government granted Wada's E-2 visa
petition.

The jury convicted Matsumaru of (1) committing wire
fraud against Wada in violation of 18 U.S.C. S 1343 and (2)
committing visa fraud against the United States in violation of
18 U.S.C. S 1546.

b. Kimio Murakami

Murakami also saw Matsumaru's advertisement and con-
tacted him seeking legal assistance in obtaining an E-2 treaty
investor visa. Matsumaru told Murakami that he had to make
a substantial investment in a United States corporation in

                               4187
order to qualify for a treaty investor visa and suggested that
Murakami start a golf tour business called Jin Golf. Murakami
agreed, wrote a $50,000 check to create Jin Golf, and, per
Matsumaru's instructions, wired $200,000 from his bank in
Japan to Jin Golf's corporate account in Hawaii.

To get Jin Golf rolling, Matsumaru convinced Murakami to
pay $50,000 for Big Golf, an existing golf tour company
owned by one of Matsumaru's former clients. Matsumaru
drew up the sales agreement, Murakami signed the agreement,
and Murakami's wife wrote a check, denominated as a "van
purchase," on the Jin Golf account for $50,000. Instead of
getting the entire Big Golf company, however, Murakami
received only one van and one business license.

At trial, Kusuo Urahama, the owner of Big Golf and a for-
mer client of Matsumaru's, testified that he had already sold
Big Golf to another man, and therefore could not have sold it
to Murakami. Urahama also explained that he never received
any part of Jin Golf's $50,000 check. In fact, Matsumaru
deposited the $50,000 check into a bank account of which
Urahama was wholly unaware.

The jury convicted Matsumaru of committing wire fraud
against Murakami in violation of 18 U.S.C. S 1343.2

c. Shinji Tsutsumi

Like Wada and Murakami, Tsutsumi also saw Matsumaru's
advertisement in a Japanese publication and contacted him
seeking legal assistance in obtaining a treaty investor visa.
Matsumaru told Tsutumi that he had to make a substantial
investment in a United States corporation in order to qualify
_________________________________________________________________
2 The government charged Matsumaru with visa fraud for allegedly
making false statements to the United States government in connection
with Murakami's treaty investor visa petition. The jury acquitted Matsu-
maru of this charge.

                               4188
as a treaty investor. Matsumaru convinced Tsutsumi to invest
in Paradise Resorts, a company previously owned by Matsu-
maru's sister. Per Matsumaru's instructions, Tsutsumi
invested $300,000 in Paradise Resorts.

Once Tsutsumi invested in Paradise Resorts, Matsumaru
prepared a packet of materials for Tsutsumi to submit to the
United States government along with his treaty investor visa
petition. As part of the packet, Matsumaru wrote a letter
describing Tsutsumi and the history of Paradise Resorts. In
this letter, Matsumaru made two allegedly false statements:
(1) that Paradise Resorts managed several condominium units,
when in fact, Paradise Resorts did not manage several condo
units; and (2) that Paradise Resorts provided resort-
management and travel services, when, in fact, it did not pro-
vide those services. The U.S. government granted Tsutsumi's
E-2 visa petition.

The jury convicted Matsumaru of committing visa fraud
against the United States in violation of 18 U.S.C.S 1546.3

II

Discussion

Matsumaru challenges his convictions and sentence on six
grounds:

      1. The superseding indictment misstated the legal
      requirements for E-2 treaty investor visas.
_________________________________________________________________
3 The government also charged Matsumaru with committing wire fraud
against Tsutsumi, but the jury acquitted Matsumaru of this charge. Addi-
tionally, the government charged Matsumaru with committing visa fraud
against the United States in connection with the treaty investor visa peti-
tion of another client, Osamu Masuda, but the jury acquitted Matsumaru
of this charge, as well.

                               4189
      2. The government compounded the error in the
      indictment by misstating the requirements for
      treaty investor visas throughout the trial.

      3. The government presented improper lay witness
      testimony.

      4. The district court erred by failing to define "ma-
      teriality" in its jury instructions.

      5. The evidence was insufficient to convict on any
      of the five counts for which he was found guilty.

      6. In determining his sentence under the United
      States Sentencing Guidelines, the district judge
      (a) miscalculated the loss Matsumaru caused;
      (b) mischaracterized his clients as "vulnerable
      victims"; (c) improperly double-counted
      enhancements; and (d) neglected to consider rel-
      evant factors in ordering Matsumaru to pay
      $50,000 in restitution.

We address each of Matsumaru's contentions in turn.

1. Under the Specific Circumstances of this Case, the
      Superseding Indictment Did Not Misstate the Legal
      Requirements for E-2 Treaty Investor Visas.

Matsumaru first argues that the superseding indictment
should have been dismissed because it misstated the legal
requirements for E-2 treaty investor visas.

a. Standard of Review

Because Matsumaru timely objected to the facial validity of
the superseding indictment, our review is de novo. United
States v. Fleming, 215 F.3d 930, 935 (9th Cir. 2000); United
States v. Du Bo, 186 F.3d 1177, 1180 n.1 (9th Cir. 1999).

                               4190
b. Analysis

[1] The government alleged that Matsumaru falsely stated,
among other things, that his clients qualified as treaty inves-
tors and were therefore entitled to treaty investor visas. In
order to qualify for an E-2 treaty investor visa, a foreign citi-
zen must be entering the United States "solely to develop and
direct the operations of an enterprise in which he has invested
. . . a substantial amount of capital." 8 U.S.C.
S 1101(a)(15)(E)(ii) (West 2000) (emphasis added). The
phrase "develop and direct" is not defined in the statute, but
the United States Department of State, the agency charged
with primary enforcement of the statute, explains the phrase
as follows:

      Solely to develop and direct. The business or indi-
      vidual treaty investor does or will develop and direct
      the enterprise by controlling the enterprise through
      ownership of at least 50% of the business, by pos-
      sessing operational control through a managerial
      position or other corporate device, or by other
      means.

22 C.F.R. S 41.51(p) (West 2000).

Matsumaru contends that Paragraph 1b of the superseding
indictment misstates the legal requirements for E-2 treaty
investor visas. Paragraph 1b states: "An E-2 visa is a visa
granted to foreign investors who actively manage  substantial
business enterprises in the United States." Emphasizing the
disjunctive nature of the regulation, Matsumaru argues that
active management is one way to satisfy the "develop and
direct" requirement of the statute, but is not the only way.
According to him, "[m]ajority ownership of a qualifying busi-
ness enterprise is . . . an independent ground  upon which to
satisfy the `direct and develop' requirement of the statute,
regardless of whether the majority investor is personally
involved in the management of the business."

                               4191
Matsumaru points out that Wada was a majority owner in
his United States enterprise and thus maintains that Wada was
indeed a qualified treaty investor, irrespective of whether he
actively managed his enterprise. Because Paragraph 1b men-
tions only active management and neglects to refer to major-
ity ownership as an alternative way to meet the "develop and
direct" requirement, Matsumaru argues that the indictment
invited the grand jury to indict him on the mistaken impres-
sion that he lied when he claimed Wada was a qualified treaty
investor.4 If the grand jury had known that majority ownership
independently satisfied the "develop and direct " requirement,
he contends it would not have indicted him.

We acknowledge that the "active management" phrase of
the superseding indictment does not track verbatim the "de-
velop and direct" language of the statute. See 8 U.S.C.
S 1101(a)(15)(E)(ii). However, under the circumstances of
this case, we conclude that the indictment's departure from
the "develop and direct" language of the statute does not
require dismissal.

First, the State Department itself recognizes that, in some
cases, majority ownership will not satisfy the "develop and
direct" requirement of the statute. Specifically, the State
Department explains that "[o]wnership of at least 50 percent
of the business will meet the control requirement, if the owner
retains full rights of control of that portion of the business and
has not assigned them to another." 9 FOREIGN AFFAIRS
_________________________________________________________________
4 Matsumaru was also convicted of committing visa fraud in connection
with Tsutsumi's petition. However, the government did not allege in the
indictment or at trial that Matsumaru falsely characterized Tsutsumi as a
"qualified treaty investor." Instead, the government alleged that Matsu-
maru falsely described Tsutsumi's enterprise, Paradise Resorts, as manag-
ing several condominium units and providing hotel-resort and travel
services, when, in fact, neither was true. Therefore, any alleged error in
the indictment concerning whether Matsumaru identified his clients as
"qualified treaty investors" is irrelevant to Tsutsumi's petition.

                               4192
MANUAL (F.A.M.) S 41.51 N.11.1 (1993) (emphasis added).
Conversely, "[a]n investor, although owning a majority of the
shares, may have lost control by pledging stock, giving prox-
ies or surrendering rights by contract." 2 GORDON ET AL.,
Immigration Law and Procedure S 17.06 (2000). "[W]e must
give substantial deference to an agency's interpretation of its
own regulations because its expertise makes it well-suited to
interpret the language." Dep't of Health & Human Servs. v.
Chater, 163 F.3d 1129, 1133 (9th Cir. 1998) (citing Thomas
Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994)). "This
deference is warranted all the more when the regulation con-
cerns a complex and highly technical regulatory program, in
which the identification and classification of relevant criteria
necessarily require significant expertise and entails the exer-
cise of judgment grounded in policy concerns." Id. at 1134
(internal quotation omitted). The decision whether to grant a
foreign citizen's petition for a treaty investor visa is a com-
plex, fact-specific inquiry requiring experience, expertise, and
the exercise of policy judgment.

[2] We find it persuasive that the State Department, in
interpreting its own regulation, recognizes that a majority
owner who cedes managerial control over his enterprise does
not control the business in such a way that he can "develop
and direct" it. See 9 F.A.M. S 41.51 N.11.1. This precise set
of circumstances exists in this case: Wada contractually ceded
all managerial control over Paradise Corporation to his law-
yer, Matsumaru, and as a result lost the ability to "direct and
develop" his enterprise. See id.

Furthermore, as the State Department regulations and man-
ual recognize, awarding a treaty investor visa to a foreign citi-
zen based exclusively on majority ownership would, in some
cases, contravene the purpose behind the treaty investor visa
statute. Congress explained that an E-2 treaty investor visa "is
intended to provide for the temporary admission  of such
aliens who will be engaged in developing or directing the
operations of a real operating enterprise . . . . " H.R. REP. NO.

                               4193
82-1365 (1952) (emphasis added). If an investor has no mana-
gerial control over the enterprise, the investor's constant
physical presence in the United States would be unnecessary,
and thus there would be no reason to award a treaty investor
visa. See id. This scenario is starkly presented in Wada's case.
Because Wada ceded all managerial control over Paradise
Corporation to Matsumaru, there was no need for him to live
temporarily in the United States.

[3] We conclude that a majority owner who contractually
cedes all managerial control to another loses the ability to
"develop and direct" the enterprise, as required by 8 U.S.C.
S 1101(a)(15)(E)(ii) and 22 C.F.R. S 41.51(p). See 9 F.A.M.
S 41.51 N.11.1. By surrendering his right to manage Paradise
Corporation, Wada precluded himself from developing and
directing his enterprise. Under these specific circumstances,
we hold that the superseding indictment's "actively manage"
language did not misstate the legal requirements for a treaty
investor visa in a way that would compel the district court to
dismiss the indictment. However, we do not suggest that the
government utilize such loose language in future indictments.

2. The Government Did Not Present a Legally
      Erroneous Case to the Jury.

Matsumaru alleges that the government compounded the
error in the indictment by presenting its case to the jury on the
"false premise" that a foreign national cannot obtain a treaty
investor visa simply through majority ownership of a United
States enterprise. For the reasons expressed above, we reject
that claim.

3. The Government Properly Elicited Testimony
      Regarding Materiality.

Matsumaru next argues that the government improperly
elicited testimony from two lay witnesses about the material-

                               4194
ity of Matsumaru's assertions made in support of his clients'
treaty investor visa petitions.

a. Standard of Review

We review for an abuse of discretion the district court's
admission of lay witness testimony. See United States v.
Simas, 937 F.2d 459, 464 (9th Cir. 1991).

b. Analysis

[4] Materiality is a requirement of visa fraud, and presents
a mixed question of law and fact that must be decided by the
jury. See 18 U.S.C. S 1546; United States v. Gaudin, 515 U.S.
506, 509-11 (1995). A statement is material if it is capable of
affecting or influencing a governmental decision. See United
States v. Serv. Deli Inc., 151 F.3d 938, 941 (9th Cir. 1998).
"The false statement need not have actually influenced the
agency, and the agency need not rely on the information in
fact for it to be material." Id. (internal citations omitted).
Therefore, in this case, the government was required to prove
beyond a reasonable doubt that Matsumaru's statements made
in support of his clients' visa petitions could have affected or
influenced the government's decision to grant those petitions.

To satisfy its burden, the government called to the witness
stand two government officials to discuss what factors are
material in determining whether or not to grant immigrant
visas. One witness was a centers adjudication officer for the
Immigration and Naturalization Service ("INS") and in that
capacity "ma[d]e decisions on petitions and applications for
aliens seeking benefits into the United States," including E-2
treaty investor visas. The other witness, a State Department
official, testified to having personally reviewed between five
and six thousand E-2 treaty investor petitions, and was cur-
rently the chief of the non-immigrant visa unit in the Ameri-
can Embassy in Tokyo, Japan. However, neither witness
actually reviewed Matumaru's clients' visa petitions when

                               4195
those petitions were originally submitted to the United States
consulate in Japan, and the prosecutor did not establish either
of them as an expert.

During direct examination, the prosecutor instructed each
witness to review the visa petitions along with the supporting
materials, and then asked whether knowing certain facts
would have affected the witness's decision to grant or deny
the petition. For example, the prosecutor asked the INS cen-
ters adjudication officer whether she would have granted
Wada's treaty investor petition if she had known that Wada
contractually ceded all managerial control over his enterprise,
Paradise Corporation, to his lawyer, Matsumaru. The INS
officer responded that she would have questioned Wada's
petition because "it doesn't appear that Mr. Wada is directing
and developing any investment."

In another instance, the prosecutor asked the State Depart-
ment bureau chief whether he would have granted Tsutsumi's
treaty investor petition if he had known that Tsutsumi's enter-
prise, Paradise Resorts, had no employees and did not manage
several condominium units as had been represented in Matsu-
maru's letter. The State Department bureau chief responded
that he would have questioned Tsutsumi's petition because
"that doesn't constitute a commercial undertaking which is
providing a good service for sale."

Matsumaru challenges the government's presentation on
two grounds. First, he argues that because the witnesses were
not established as experts and were not the officials who
reviewed the petitions when originally submitted, they lacked
personal knowledge as required by Federal Rule of Evidence
701. See FED. R. EVID. 701. Second, he asserts that the wit-
nesses improperly provided legal conclusions to the jury. We
respectfully disagree with both contentions.

[5] Even though the government witnesses were not the
officials who reviewed the visa petitions when the petitions

                               4196
were originally submitted to the United States consulate, they
did review those documents before stating their opinions to
the jury. Therefore, the witnesses' opinions were "rationally
based on the[ir] perception" of the documents. FED. R. EVID.
701.

[6] Moreover, the witnesses did not provide impermissible
legal conclusions. Rather, in answering the prosecutor's ques-
tions, the witnesses explained why knowing certain facts
could have affected or influenced their decision to approve
the particular visa petition. "Government witnesses are per-
mitted . . . to testify as to whether certain truths, if known,
would have influenced their decisionmaking . . . . " United
States v. Kingston, 971 F.2d 481, 486 (10th Cir. 1992). This
type of lay testimony is entirely proper. If Matsumaru dis-
agreed with the witnesses' testimony, he could have cross-
examined the witnesses (which he did), and he could have
called his own agency official to rebut the government's wit-
nesses (which he did not).

4. The District Court Did Not Err by Failing to Define
      "Materiality" in Its Jury Instructions.

Matsumaru next claims that the district court erred by fail-
ing to define "materiality" in its jury instructions.

a. Standard of Review

Because Matsumaru did not object to the jury instructions,
we review their adequacy for plain error. United States v.
Montgomery, 150 F.3d 983, 996 (9th Cir. 1998). Plain error
requires an "(1) error, (2) that is plain, and (3) that affects
substantial rights." Johnson v. United States , 520 U.S. 461,
467 (1997) (internal quotations omitted). If these three condi-
tions are met, we may exercise our discretion to notice the
error but only if it (4) seriously affects the fairness, integrity,
or public reputation of judicial proceedings. Id. (internal quo-
tation omitted).

                               4197
b. Analysis

Our Circuit has never addressed the question of whether a
district court's failure to define "materiality " when instructing
the jury constitutes plain error. In the only reported case deal-
ing with the issue, the First Circuit held that" `materiality' is
not such a technical concept outside of the jurors' experience
that failure to define it rises to the level of plain error." United
States v. Blasini-Lluberas, 169 F.3d 57, 67 (1st Cir. 1999).

[7] We need not decide whether the failure to define mate-
riality can ever constitute plain error because the court's fail-
ure to do so in this case does not warrant reversal. First, the
district court properly instructed the jury that materiality is a
required element of visa fraud. Cf. United States v. Uchimura,
125 F.3d 1282, 1287 (9th Cir. 1997) (finding failure to
include materiality as an element of offense -- a more egre-
gious error than simply failing to define it -- did not warrant
reversal because of "overwhelming" evidence). Second, the
court identified the specific statements Matsumaru made to
the United States government that the jury had to find mate-
rial. Third, the government presented two agency officials
who explained precisely how and why Matsumaru's state-
ments were capable of influencing the government's decision
to grant or deny his clients' visa petitions. Based on this testi-
mony, the jury was not left completely without guidance as to
the meaning of materiality. See United States v. Santana-
Rosa, 132 F.3d 860, 864-65 (1st Cir. 1998) (holding that fail-
ure to define "customs waters" does not warrant reversal
because "the jury was not left completely without guidance"
based on witnesses' testimony). Fourth, the record contains no
evidence that the jury requested a definition of "materiality"
or was confused about the term in any way. Finally, the jury
acquitted Matsumaru of two counts of visa fraud. Under these
circumstances, we need not reach the question of whether this
was plain error because the "fairness, integrity, or reputation
of the judicial proceedings" is not called into question. As a
result, we need not reverse.

                               4198
5. The Evidence Was Sufficient to Convict Matsumaru
      on Four of the Five Counts for Which He Was Found
      Guilty.

Matsumaru also contends that the evidence introduced at
trial was insufficient to sustain any of his five convictions.

a. Standard of Review

In reviewing the sufficiency of evidence after a conviction,
we ask whether, viewing the evidence in the light most favor-
able to the prosecution, any rational trier of fact could have
found the essential elements of the offense beyond a reason-
able doubt. United States v. Chu, 5 F.3d 1244, 1248 (9th Cir.
1993). Under this standard, we conclude that the evidence
was sufficient to convict Matsumaru of two counts of wire
fraud and two counts of visa fraud, but was not sufficient to
convict Matsumaru of establishing a commercial enterprise
for the purpose of evading immigration laws in violation of 8
U.S.C. S 1325(d).

b. Analysis

      (1) Wire Fraud -- Counts 1 & 2

[8] Title 18 U.S.C. S 1343 provides:

      Whoever, having devised . . . any scheme or artifice
      to defraud, or for obtaining money or property by
      means of false or fraudulent pretenses, representa-
      tions, or promises, transmits or causes to be transmit-
      ted by means of wire . . . in interstate or foreign
      commerce, any writings, signs, signals, pictures or
      sounds for the purpose of executing such scheme or
      artifice [is guilty of wire fraud].

18 U.S.C. S 1343 (2000). Matsumaru was convicted of com-
mitting wire fraud against Wada and Murakami. The evidence
is sufficient to support both convictions.

                               4199
With respect to Wada, the government presented evidence
that (1) Matsumaru instructed Wada to wire $650,000 from
Japan to a corporate bank account in Hawaii; and (2) Matsu-
maru, without authorization, diverted part of those funds to
his own personal bank account and used another part to pay
for personal debts and services, including physical therapy,
massages, guitar lessons, and alimony to his ex-wife.

With respect to Murakami, the government presented evi-
dence that (1) Matsumaru instructed Murakami to wire at
least $200,000 from Japan to a corporate bank account in
Hawaii; (2) Matsumaru told Murakami that $50,000 of those
funds would be used to purchase another company named Big
Golf; (3) instead of receiving the entire Big Golf company,
Murakami received only one van and one business license;
and (4) the owner of Big Golf, Kusuo Urahama, already sold
the company to another person and never received any part of
Jin Golf's $50,000 payment.

[9] Viewing the evidence presented in a light most favor-
able to the prosecution, a rational jury could conclude that
Matsumaru committed wire fraud against both Wada and
Murakami.

      (2) Visa Fraud -- Counts 5 & 7

[10] Title 18 U.S.C. S 1546(a) provides in pertinent part:

      Whoever . . . knowingly subscribes as true, any false
      statement with respect to a material fact in any appli-
      cation, affidavit, or other document required by the
      immigration laws . . . [is guilty of visa fraud].

18 U.S.C. S 1546 (2000). Matsumaru was convicted of two
counts of visa fraud against the United States government in
connection with the visa petitions of Wada and Tsutsumi. The
evidence is sufficient to support both convictions.

                               4200
The government presented evidence that Matsumaru sub-
mitted a letter in support of Wada's visa petition 5 in which he
stated that (1) Wada was a qualified treaty investor; and (2)
Wada's company, Paradise Corporation, had purchased a
travel company for $239,000. Neither statement was true.
Wada was not a qualified treaty investor because he had con-
tractually ceded all managerial control of Paradise Corpora-
tion to Matsumaru, and therefore was not developing and
directing his enterprise as required under the treaty investor
statute and regulations. See 8 U.S.C. S 1101(a)(15)(E)(ii); 22
C.F.R. S 41.51(p); 9 F.A.M. S 41.51 N.11.1; see generally
Section II.1.b, supra. Furthermore, the government presented
evidence that Wada's corporation had not actually purchased
the travel company, as Matsumaru had represented. In fact,
Matsumaru deposited $238,000 of the $239,000 purported
purchase price for the travel company into his personal bank
account.

The government also presented evidence that Matsumaru
submitted a letter in support of Tsutsumi's visa petition in
which he stated that Tsutsumi's company, Paradise Resorts,
managed "several condominium units" and provided hotel-
resort and travel services. These statements were false. In fact,
_________________________________________________________________
5 Matsumaru points out that the State Department purges actual visa
petitions one year after they are received. Thus, according to Matsumaru,
because Wada's and Tsutsumi's actual petitions had been purged, the
prosecution failed to prove that Matsumaru's letters (including the false
statements) had actually accompanied the petitions. We disagree. First, the
consulate certified that Matsumaru's letters were recovered from United
States Embassy records abroad. Second, each letter was specifically
addressed to the consulate, concerned Matsumaru's clients' treaty investor
visa petitions, and was dated near the time each petition had been submit-
ted. Finally, the defense offered no evidence of government spoliation or
bad faith. This evidence is sufficient to show that the letters had been sub-
mitted to the United States government. See United States v. Green, 745
F.2d 1205, 1208 (9th Cir. 1985) ("Evidence of routine custom and practice
can be sufficient to support the inference that something is mailed.");
United States v. Brackenridge, 590 F.2d 810, 811 (9th Cir. 1979) (holding
that circumstantial evidence can support inference of mailing).

                               4201
at that time, Paradise Resorts had no employees, did not man-
age several condominium units, and did not provide either
hotel-resort or travel services. Matsumaru points out that Par-
adise Resorts is now a flourishing company providing hotel-
resort and travel services. Paradise Resorts' current situation,
however, is irrelevant to the company's status at the time
Matsumaru made representations to the United States govern-
ment. As explained, when Matsumaru made those statements,
they simply were not true.

[11] Viewing the evidence in a light most favorable to the
prosecution, a rational jury could conclude that Matsumaru
committed visa fraud against the United States government in
connection with the visa petitions of Wada and Tsutsumi.

      (3) Establishing a Commercial Enterprise for the
      Purpose of Evading Immigration Laws -- Count
      4

[12] Title 8 U.S.C. S 1325(d) makes it a crime for a person
to "knowingly establish[ ] a commercial enterprise for the
purpose of evading any provision of the immigration laws
. . . ." 8 U.S.C. S 1325(d) (West 2000). As detailed below,
because the government's theory of what constituted "estab-
lishing an enterprise" was novel and its evidence was insuffi-
cient to sustain a guilty finding, we reverse Matsumaru's
conviction on this count.

Before trial, Matsumaru moved to dismiss the indictment
because, among other things, the charging document failed to
identify the particular commercial enterprise the government
claimed had been established for the purpose of evading
immigration laws. Was it Paradise Corporation, the school
created for Wada; Jin Golf, the golf touring company set up
for Murakami; or Paradise Resorts, the resort management
company launched for Tsutsumi? When asked to clarify what
"enterprise" the government was referring to, the prosecutor
surprisingly responded that, "in fact, the commercial enter-

                               4202
prise is not one of these entities, but [rather is] Mr. Matsu-
maru's law practice." By his own words, the prosecutor was
required to prove that Matsumaru established his law practice
for the purpose of evading immigration laws.6

Somewhere during the course of the trial, however, the
prosecutor slightly modified the theory. He no longer claimed
that Matsumaru established his entire law practice for the pur-
pose of evading immigration laws. Instead, the prosecutor
asserted that the enterprise in question was only a portion of
Matsumaru's law practice. The district court accepted this
theory, and explained to the jury that in order to convict Mat-
sumaru of violating 8 U.S.C. S 1325(d), the government must
prove, inter alia, that "the defendant S. Jay Matsumaru estab-
lished a commercial enterprise, to wit, a portion of his law
practice, for the purpose of evading provisions of the immi-
gration laws of the United States . . . ." The jury convicted
Matsumaru of violating S 1325(d).

Matsumaru claims the government's evidence is insuffi-
cient to find him guilty of this charge for several reasons.
Because we agree with Matsumaru that the evidence
presented by the government at trial failed to prove that he
knowingly established his law practice for the purpose of
evading immigration laws, we need not address the merits of
his other contentions. To establish means "[t]o make or form;
to bring about or into existence." BLACK'S LAW DICTIONARY
566 (7th ed. 1999); see also WORLD BOOK DICTIONARY Vol.I
(A-K) 725 (1976) (defining "establish" as "to set up on a firm
or lasting basis; . . . [to] set up in business . . . to bring
about"). The district judge properly tracked these definitions
when she instructed the jury that " `To establish' means to
bring into being, to found, or to set up."
_________________________________________________________________
6 Accordingly, we express no opinion as to whether the government
could have proven that Paradise Corporation, Jin Golf, or Paradise Resorts
were merely sham enterprises established by Matsumaru for the purpose
of evading immigration laws.

                               4203
[13] The government presented no evidence from which a
rational trier of fact could find that Matsumaru brought into
being, founded, or set up his law practice for the purpose of
evading immigration laws. The actions Matsumaru took
which were allegedly intended to evade the immigration laws
in no way corresponded to the timing of when his law practice
was set up. Matsumaru established his law practice in 1988.
However, the indictment charged that "[f]rom in or around
September, 1992 to the present the Defendant . . . knowingly
established a commercial enterprise for the purpose of evad-
ing provisions of the immigration law relating to the issuance
of E-2 visas . . . ." The government offered no evidence that
in 1988 Matsumaru established his law practice with the
intent of evading immigration laws. In fact, at trial the gov-
ernment did not even claim that Matsumaru attempted to
evade immigration laws until 1992 when he submitted a false
statement in connection with Wada's visa petition. Conse-
quently, by its own charging document and by the evidence
it presented, the government demonstrated that Matsumaru set
up his law practice in 1988 and first violated immigration
laws in 1992, approximately four years later. In light of that
time gap, no reasonable jury could conclude that Matsumaru
knowingly established his law practice for the purpose of
evading immigration laws.

Even if the government was only required to prove that a
portion of Matsumaru's law practice was established for the
purpose of violating immigration laws, an issue which we
need not decide here, the government failed to carry its bur-
den. The government offered no evidence that in 1988 Matsu-
maru established even a portion of his law practice for the
purpose of evading immigration laws. At trial, the govern-
ment proved that Matsumaru submitted two false visa peti-
tions to the United States on behalf of his clients. The fact that
Matsumaru submitted two false statements to the United
States over the course of approximately eight years is insuffi-
cient to support a conviction for establishing an enterprise
within the meaning of S 1325.

                               4204
[14] Accordingly, because the evidence was insufficient to
sustain the jury's guilty verdict against Matsumaru for violat-
ing 8 U.S.C. S 1325(d), we reverse his conviction on that
count. Our reversal of Matsumaru's conviction on this single
count, however, will not affect his prison sentence because
the district court sentenced Matsumaru to five concurrent
forty-one month terms of imprisonment. Nevertheless, the
record should reflect that Matsumaru was correctly found
guilty only of two counts of wire fraud and two counts of visa
fraud; he was not properly convicted of the additional count
of establishing a commercial enterprise for the purpose of
evading immigration laws.

6. The District Court Properly Sentenced Matsumaru,
      Except for Ordering $50,000 in Restitution.

Finally, Matsumaru contends that the district court erred
during the sentencing phase by: (a) miscalculating the loss
attributable to him under United States Sentencing Guidelines
("U.S.S.G.") S 2F1.1; (b) mischaracterizing his clients as
"vulnerable victims" under U.S.S.G. S 3A1.1; (c) improperly
"double-counting" sentence enhancements; and (d) neglecting
to consider relevant factors when ordering $50,000 in restitu-
tion. Only this last argument has merit.

a. Any Error in the District Court's Loss Calculation
      Was Harmless.

      (1) Standard of Review

[15] "We review a district court's determination of the
amount of loss for clear error." United States v. Scrivener,
189 F.3d 944, 949 (9th Cir. 1999). An error in the court's loss
calculation is harmless if the district court "would have
imposed the same sentence absent the errors." United States
v. Garcia-Guizar, 227 F.3d 1125, 1132 (9th Cir. 2000) (inter-
nal quotation omitted).

                               4205
      (2) Analysis

The district court determined that Matsumaru caused Wada
and Murakami a combined loss of $711,163.83. Because Mat-
sumaru caused a loss between $500,000 and $800,000, the
district court enhanced Matsumaru's base offense level by ten
points. See U.S.S.G. S 2F1.1(b)(1)(K) (2000).

[16] The government showed that (1) $238,000 of a
$239,000 check issued by Wada's company was deposited
into Matsumaru's personal account without Wada's authoriza-
tion; (2) a $370,000 check issued by Wada's company, sup-
posedly a loan to Matsumaru, was deposited into
Matsumaru's personal account without Wada's authorization;
(3) at least $23,160 in checks from Wada's company paid for
Matsumaru's personal expenses, including guitar lessons,
massages, fitness instruction, and alimony; and (4) Matsu-
maru deposited $76,374.35 back into Wada's company's
account. Based on these findings, it was not clearly erroneous
for the court to conclude that Matsumaru caused a loss of at
least $554,785.65 -- well over the $500,000 cut-off for the
ten point enhancement. See id. Any alleged errors made by
the district court with respect to other calculations are there-
fore harmless. See Garcia-Guizar, 227 F.3d at 1132.

b. The District Court Did Not Clearly Err in Charac-
      terizing Matsumaru's Clients as Vulnerable Vic-
      tims.

      (1) Standard of Review

We "review[ ] for clear error a district court's finding that
a defendant's victims were unusually vulnerable. " Scrivener,
189 F.3d at 950.

      (2) Analysis

[17] The district court determined that Matsumaru's clients
-- Wada, Murakami, and Tsutsumi -- were "vulnerable vic-

                               4206
tims," and on that basis enhanced his sentence by two points.
See U.S.S.G. S 3A1.1(b) (2000). A vulnerable victim is a per-
son who is "particularly susceptible to the criminal conduct."
U.S.S.G. S 3A1.1 cmt. n.2 (2000).

      The adjustment would apply, for example, in a fraud
      case in which the defendant marketed an ineffective
      cancer cure or in a robbery in which the defendant
      selected a handicapped victim. But it would not
      apply in a case in which the defendant sold fraudu-
      lent securities by mail to the general public and one
      of the victims happened to be senile. Similarly, for
      example, a bank teller is not an unusually vulnerable
      victim solely by virtue of the teller's position in a
      bank.

Id. Matsumaru points out that his clients were wealthy,
sophisticated businessmen, and therefore claims that they
were not vulnerable. Additionally, he argues that it was
improper for the court to find that his clients'"ethnicity and
cultural affiliation constitute[d] a class of susceptibility."

Matsumaru draws our attention to United States v. Castel-
lanos, 81 F.3d 108, 110 (9th Cir. 1996). In Castellanos, the
defendant, as part of a fraudulent investment scheme, targeted
Spanish-speakers, advertised in Spanish language media, and
touted his company as "proudly Hispanic." Castellanos, 81
F.3d at 110. We found these factors insufficient "to support
a finding of particular susceptibility under S 3A1.1 that the
victims are more likely than other members of the general
population to become the victim of the particular crime at
issue." Id. We cautioned, however, that:

      This is not to say that S 3A1.1 would never apply
      against a defendant accused of running an "affinity
      scam" by which a minority business owner victim-
      izes people in his own community who are more
      likely to trust members of their own ethnic group.

                               4207
      Evidence that an ethnic group was particularly sus-
      ceptible to the fraud due to lack of education,
      extreme insularity, superstition, or lack of familiarity
      with United States business practices or law enforce-
      ment might suffice to support use of S 3A1.1 against
      a defendant accused of swindling members of such
      a group.

Id. at 112.

The facts of this case are distinguishable from those in Cas-
tellanos. It is true that the district judge relied on some of the
same factors we found insufficient to support a finding of vul-
nerability in Castellanos, such as the fact that Matsumaru tar-
geted Japanese nationals in Japanese publications. However,
the district judge did not stop there. She also based her finding
of vulnerability on different and additional factors, including
the facts that Matsumaru's clients desired treaty investor visas
but were unfamiliar with United States immigration laws and
business practices; that Matsumaru touted himself as a bilin-
gual attorney capable of handling immigration matters; and
that the Japanese culture places absolute trust in lawyers. For
instance, one of Matsumaru's clients explained why he signed
documents written totally in English although he could read
only Japanese: "Japanese people trust the profession of attor-
ney entirely. So I totally trusted Mr. Matsumaru. So since he
told me to sign, I sign it without any doubt . . . . " Another cli-
ent similarly clarified why he unquestioningly signed docu-
ments provided by Matsumaru: "Japanese people absolutely
trust attorney. So, therefore, if there was some kind of expla-
nation was from the attorney, we trust them entirely."

[18] Taking all these factors together, we cannot say it was
clearly erroneous for the district court to conclude that Matsu-
maru's clients were vulnerable victims under U.S.S.G.
S 3A1.1(b). See Castellanos, 81 F.3d at 110; see also United
States v. Bengali, 11 F.3d 1207, 1212 (4th Cir. 1993) (finding

                               4208
victim to be vulnerable because he was unfamiliar with "the
way we do business here and handle crime").

c. The District Court Did Not Improperly Double-
      Count Enhancements.

      (1) Standard of Review

We "review[ ] de novo the district court's interpretation and
application of the Sentencing Guidelines." Scrivener, 189
F.3d at 950.

      (2) Analysis

[19] Matsumaru's claim that the district court improperly
double-counted by applying both the "vulnerable victim" and
"special skill" enhancements is specious. Double counting
"occurs where one part of the Guidelines is applied to
increase a defendant's punishment on account of a kind of
harm that has already been fully accounted for by the applica-
tion of another part of the Guidelines." United States v. Reese,
2 F.3d 870, 895 (9th Cir. 1993). Here, the vulnerable victim
enhancement was based, at least in part, on factors not con-
templated by the special skill enhancement, such as Matsu-
maru's advertisement in a Japanese publication, the victims'
unfamiliarity with the English language and United States
business and immigration practices, and the absolute trust the
Japanese culture places in attorneys. The district court did not
improperly double-count enhancements.

d. The District Court Erred in Ordering $50,000 in
      Restitution.

Matsumaru argues that in ordering him to pay $50,000 in
restitution, the court erred by failing to consider (1) his debili-
tated financial situation; and (2) the actual loss he caused
Murakami.

                               4209
      (1) Standard of Review

As long as it does not exceed the bounds of statutory
framework, we review a district court's decision to order res-
titution for an abuse of discretion. United States v. Lawrence,
189 F.3d 838, 846 (9th Cir. 1999). The court's underlying fac-
tual findings are reviewed for clear error. Id.

      (2) Analysis

[20] The district judge did not err by refusing to account for
Matsumaru's lack of financial resources. In determining
whether restitution is appropriate, a court generally considers:
(1) the amount of actual loss sustained by the victim; (2) the
financial resources of the defendant; and (3) such other fac-
tors as the court deems appropriate. 18 U.S.C. S 3663 (West
2000). However, there is a significant exception to this gen-
eral rule: if the defendant is subject to the Mandatory Victims
Restitution Act ("MVRA"), the district court need not assess
the defendant's ability to pay restitution. See 18 U.S.C.
S3664(f)(1)(A) (West 2000) ("In each order of restitution, the
court shall order restitution to each victim . . . without consid-
eration of the economic circumstances of the defendant."); see
also United States v. Dubose, 146 F.3d 1141, 1143 (9th Cir.
1998) ("Congress enacted the MVRA in 1996 . . . It makes
restitution mandatory, without regard to a defendant's eco-
nomic situation . . . .") (citations omitted). The government
correctly points out that Matsumaru is subject to the MVRA
because his convictions involved fraud under Title 18. See 18
U.S.C. S 3663A(c)(1)(A)(ii); 18 U.S.C. S 1343 (wire fraud);
18 U.S.C. S 1546 (visa fraud). Therefore, the court did not err
by refusing to consider Matsumaru's ability to pay restitution
to Murakami.

[21] However, we agree with Matsumaru that the court
failed to properly assess the actual loss Matsumaru caused
Murakami. Matsumaru misled Murakami into believing that
the entire Big Golf business cost $50,000. Even though

                               4210
Murakami did not get the entire business, he did receive a van
and a business license. The van and license obviously have
some value. The district court's failure to discount the
$50,000 restitution amount by their value was clearly errone-
ous. On remand, the district court must deduct the actual
value of the van and the license from the $50,000 restitution
order.

III

Conclusion

For the reasons expressed above, we affirm Matsumaru's
convictions for the two counts of wire fraud and the two
counts of visa fraud. We reverse Matsumaru's conviction for
establishing a commercial enterprise for the purpose of evad-
ing immigration laws in violation of 8 U.S.C. S 1325(d).
Finally, we affirm the sentence imposed by the district judge,
except with respect to the restitution amount.

AFFIRMED in part, REVERSED in part, and
REMANDED.

                               4211

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