Anzalone- Examples of Prejudice: Lack of Limiting Instruction
The Appeal Court applied an improper standard and overlooked or misunderstood Hosseinipour’s key argument on the misuse of Anzalone’s guilty plea and the lack of a limiting instruction.
Summary
The 6th Circuit and Supreme Court cases, such as Bruton v. United States, have emphasized that a defendant’s confession or plea agreement is so significant that a limiting instruction is inadequate when the defendant’s ability to cross-examine is compromised.
“Co-defendant or co-conspirator guilty pleas are not admissible as substantive evidence of the defendant’s guilt.” U.S. v. Benson, 591 F.3d 491, 498 (6th Cir. 2010). “When a guilty plea or conviction is introduced into evidence, the district court is required to give a cautionary instruction to the effect that the jury may use the conviction or guilty plea only to determine the testifying witness’s credibility.” U.S. v. Sanders, 95 F.3d 449, 454 (6th Cir. 1996).
In the case of Hosseinipour, Anzalone’s guilty plea was explicitly used to establish her guilt as Anzalone’s partner, which was acknowledged (Doc 692#10022). His statements and actions were treated as synonymous to Hosseinipour’s as his “partner in this crime. “ The prejudice is highlighted in the panel opinion, which references acts or statements that applied only to Anzalone as evidence against Hosseinipour, despite a lack of supporting evidence. The panel cites direct quotes from Hosseinipour’s videos that never occurred. It attaches meanings to emails detached from the evidence. The “guilty plea” was similarly misused to infer Hosseinipour’s guilt, as his partner.
First, the Court misapplied the more stringent plain error standard to Hosseinipour’s argument despite numerous independent objections to using the guilty plea and requests for the limiting instruction by all the defendants. (See Doc 678, 8162, 8163, 8028, 8029, 8164, 8165; Doc 681 #8304, #8306; Doc 692 #9907) This included a direct request from Hosseinipour to be included in Barnes’ request for a limiting instruction. (doc.692, #9907).
The Court had ruled that an objection made by one party served as an objection for the parties. Therefore, Hosseinipour was preserved on the issues through her own and co-defendant’s multiple requests for a limiting instruction (See Doc 678, 8162, 8163, 8028, 8029, 8164, 8165; Doc 681 #8304, #8306; Doc 692 #9907)
The panel overlooked or misunderstood Hosseinipour’s main argument concerning the critical misrepresentation of law that influenced the judgment of Anzalone’s “guilty plea” that mandated her finding of guilt.
Hosseinipour argued that the incorrect legal instruction regarding the government’s burden to prove guilt—without the necessity of mens rea—by mere participation in I2G, if a pyramid scheme was concluded, in conjunction with Anzalone’s guilty plea, left the jury with no choice but to declare her guilty. This highlighted the importance of having a limiting instruction.
In closing arguments, the government instructed the jury that Anzalone would be guilty without knowing that he was participating in a pyramid scheme (Doc 671 7689) and without mens rea if the jury concluded that a pyramid scheme existed and that he knowingly participated in I2G. (Doc 671 #7530)
“ And if you find that what Infinity 2 Global was was a pyramid scheme, then you have found that the United States has satisfied the first element of Count 1, that they were knowingly promoting a –”
Over objections, the Court acknowledged the error of law and explained the omission of the “knowingly” element to the prosecution, not the jury. Nor did the Court strike the improper instruction. The Court then allowed the prosecution to repeat the same erroneous misstatement of law. (doc 671 #7531, 32)
“And so if you believe that Infinity 2 Global was a pyramid scheme, that the primary purpose or nature of the business was to pull in these — to recruit people to join the business, then you will have found that a scheme to defraud existed. A pyramid scheme is, by definition under the law, a scheme to defraud.”(doc 671-7331, 32)
The legal instruction was erroneous. It suggested that anyone involved in I2G or any multi-level marketing (MLM) that requires recruiting—a fundamental aspect of every MLM—was guilty of conspiracy without criminal intent. The instruction also equated a focus on recruiting to a scheme to defraud under the law, based solely on regulatory guidance from Section 5(a) of the FTC Act rather than the penal code, as suggested.
Because the jury’s understanding of these legal arguments was directly related to the judgment of Anzalone’s guilty plea and correlated finding of guilt for Hosseinipour, a limiting instruction was crucial in this scenario.
Moreover, the jury was instructed that Anzalone was guilty by his mere “participation” without the requirement of mens rea if they concluded that it was a pyramid scheme. Combined with Anzalone’s guilty plea, this instruction required a guilty verdict for Hosseinipour or any I2G distributor participant.
The improper instructions assigned guilt to “unknowing participation” in a pyramid scheme. This significant issue could affect millions of distributors in the United States, as their mere participation in a multi-level marketing (MLM) program—potentially classified as a pyramid scheme based on subjective and inconsistent regulatory guidance—might wrongfully lead to federal fraud charges. The significance of these rulings cannot be overstated.
While any instruction that omits the requirement of mens rea from a criminal offense is problematic, the jury was instructed to disregard mens rea and determine guilt based on legal “participation” if they found a pyramid scheme. Therefore, the Anzalone “guilty plea” automatically concluded Hosseinipour’s guilt if a pyramid was concluded. This broad instruction would similarly criminalize the legal “participation” of all 18,000 distributors who knowingly participated in I2G.
The consequences are monumental for the 20 million distributors in the United States alone who participate in an MLM, which may be deemed a pyramid scheme based on subjective determinations of what constitutes an excessive focus on recruiting, inferior products, or other regulatory conclusions drawn from the overly broad definitions and instructions.
Since distributor participation in a multi-level marketing (MLM) company identified as a pyramid scheme had never been prosecuted as a criminal offense, nor in the civil regulatory context Congress specifically intended for pyramid schemes to be judged under Section 5A of the FTC Act—the misuse of Anzalone’s guilty plea against Hosseinipour carries significant implications and consequences that extend far beyond this case. (Congressional and Senate anti-pyramid law of 2017,2018, citing intended judgments of pyramid schemes to be viewed under the 5 A of the FTC Act as an unfair business practice)
Anzalone’s explanation of the law, as explained by his attorney, reinforced the improper conclusion of law by affirming it as the reason he accepted his plea deal. He shared that his “great attorney,” Patrick, explained the law to him. “Ignorance of the law doesn’t make me not guilty.” This reinforced the notion by a legal authority that mens rea was not required to determine guilt in the specific case of “participating in a pyramid scheme”. Therefore, if Anzalone was guilty, despite ignorance that his participation was breaking the law, and Hosseinipour participated, she must also be found guilty.
Hosseinipour was most adversely affected by Anzalone’s guilty plea as his actions and knowledge were viewed as synonymous with hers due to their partnership. This prejudice is highlighted by the panel’s opinion, which likewise attributes Anzalone’s actions to Hosseinipour, despite the absence of supporting evidence and direct evidence to the contrary.
For example, the panel claimed that Hosseinipour promoted “passive income” at live meetings. It cited her influence on Maike as a member of the “inner circle,” despite direct testimony that Maike excluded her from conversations and meetings (doc 465 #3579) and failed to acknowledge her in emails unless he copied her and his wife (doc 504 #4372). Hosseinipour was said to have held up the incorrect check at an Asian event she never attended (doc 504 #4454, #4372). It was further inferred that she knew Rocky Wright and that he was introduced as Bob Johnson. This evidence related only to Anzalone but was cited as proof of Hosseinipour’s guilt.
The panel also offered direct quotes from Hosseinipour on videos promoting “passive income” with no work required, which do not exist. Instead, the video clips from the trial offered “income disclaimers,” emphasizing the requirement of hard work (487 3883). 3884). Five government videos and four witness testimonies confirmed her consistent use of income disclosures and emphasis on the hard work required to succeed with I2G.
While the standard of “most favorable” to the government should generally apply, it cannot override the use of false evidence in the government’s response. False quotes from videos that do not exist were presented as direct proof of guilt. The Appeal panel relied on these inaccuracies to deny her argument. Supreme Court authority regarding the knowing use of false evidence must take precedence over the standard favoring the government in this situation.
The sole reference to “passive income” related to Hosseinipour came from an unverified “description” under an unverified video, which was so dubious that the Court did not allow its introduction. (Doc 683 #8748-8752) Yet the government introduced it as a direct quote by Hosseinipour, despite the same witness testimony that her videos always provided income disclosures and emphasized that hard work was necessary to earn any income. (Doc 683 #8748)
The panel’s opinion underscores the prejudice from Anzalone’s guilty plea as it attributes his personal beliefs, statements, and actions to her, for which there is no supporting evidence.
Moreover, a conclusion regarding Hosseinipour’s guilt cannot be separated from Anzalone’s guilty plea. Their actions were viewed jointly, making it difficult to view them independently. The prejudicial inferences stemming from their partnership were significant, and this equally applies to Anzalone’s guilty plea, especially in the absence of a limiting instruction.