During the government’s closing arguments in the Infinity Two Global case, they misrepresented their burden of proof regarding the “scienter requirement” of “knowing intent” needed to prove the charges.
The term “pyramid scheme” was automatically defined as a “scheme to defraud,” which led the government to inform the jury that if they determined I2g to be a pyramid scheme, they would have met their burden of proof for count 1 (Vol. 24, #7531). The defense objected to this legal standard, and the court concurred, clarifying that “knowingly” needed to be proven to satisfy this element (Vol. 24, #7531). Despite the defense’s objection, their motion to strike the statement, and the request for the jury to disregard it (Vol. 24, #7531), the court did not strike the statement, correct the record, or instruct the jury to ignore it. As a result, the jury was left with the impression that a lesser standard of proof was required to convict Hosseinipour.
The government misrepresented its burden of proof by claiming that the defendant did not need to understand the definitions of a pyramid scheme, securities, or material misrepresentations to be found guilty of mail or securities fraud (vol 24 pg. 281 #7688). They failed to explain the “scienter requirement,” which states that Hosseinipour must have “knowingly participated” in an illegal pyramid scheme with the awareness that it was a “scheme to defraud.” The court ruled that Hosseinipour needed to have the “intent to defraud.” As stated, “They must prove she lied. She had the intent to cheat people through this artifice.” (vol 23 pg. 156 #11128).
Furthermore, the court determined that Hosseinipour needed to understand the legal definition attributed to an illegal pyramid scheme (vol 23 pgs. 157-158 #11127, 28). The ruling specified that the “defendant has to know the program was characterized by payments of money and that there was no legitimate product involved.” This understanding aligns with defining what constitutes a pyramid scheme (vol 23 pgs. 156-158 #11128-11128). The court’s definition was overly broad and not significantly different from descriptions of legitimate multi-level marketing (MLM) practices. This indicated that Hosseinipour needed to comprehend a pyramid scheme as one that involves “payments of money” without a legitimate product.
Given the substantial evidence that Hosseinipour and others believed in the product and dedicated significant time to promoting and training on it, along with a lack of evidence to suggest she did not consider the products legitimate, the charges against Hosseinipour were not reasonably substantiated.
By instructing the jury that Hosseinipour did not need to understand what a pyramid scheme was, the government undermined the “knowingly” standard. This reduced it to merely “knowing participation” in a multi-level marketing (MLM) scheme that could be perceived as a pyramid scheme. Such an approach compromises the essential elements required to prove the case. The defense highlighted these concerns to the court, referencing a recent Supreme Court ruling in Ruan. They requested that a supplemental “knowingly” element be included in the jury instructions specifically about pyramid schemes (vol. 23, pp. 140-151, #11108-11119). The court erred in denying this jury instruction, which effectively lowered the standard for the government and significantly jeopardized the jury’s understanding of the necessary scienter criteria related to participating in an illegal pyramid scheme. The government’s closing statements reinforced the idea that mere participation in a pyramid scheme was enough to satisfy their burden of proof: “You can have a structure or artifice to defraud one way or through a pyramid scheme” (vol. 24, p. 317, #7724)
The burden of proof concerning misrepresentations extended to the government’s incorrect application of “deliberate ignorance” as the standard to meet their burden. In the case of Hosseinipour, the government acknowledged that she joined with good intentions but demonstrated “deliberate ignorance” regarding what should have been obvious. The court ruled that “deliberate ignorance” could not be used to establish the necessary elements of the case; instead, “knowing intent” must be proven.
The scienter requirement applies to “knowing” participation in an illegal pyramid scheme. The government’s final statements reiterated that mere participation in a pyramid scheme was sufficient to meet their burden of proof. They stated, “You can have a structure or artifice to defraud either through a traditional scheme or through a pyramid scheme” (Vol 24, #7724) The government argued vigorously that deliberate ignorance must be included in jury instructions because that was the standard that applied to Hosseinipour. “And instead of taking a serious look, she put her head in the sand and keeps driving…She should have known and was told, Look at this, and she didn’t do that, and she kept driving, and that’s what the problem is.”(Vol 23 pg. 219 #11187)
The misrepresentation of the burden of proof involved describing “deliberate ignorance” as the standard for convicting Hosseinipour. The court ruled that “deliberate ignorance” could not be used to establish the necessary elements of the case and that “knowing intent” must be proven instead. As a result, the case against Hosseinipour should have been dismissed when the court eliminated the deliberate ignorance argument, as there was no evidence of “knowing intent.”
Despite this ruling, the government pursued the “deliberate ignorance” argument in their closing statements, suggesting that the jury could infer knowledge from “red flags” indicated by hearsay emails, which were inadmissible for the “truth of the matter.” They argued that “her decision to stay is where the crime is” (Vol 24 #7705). This framing misled the jury into believing that “deliberate ignorance” was sufficient to satisfy the government’s burden of proof.
With no direct evidence and the court’s dismissal of the “deliberate ignorance” standard, the government’s rebuttal arguments aimed to establish the “truth of the matter” using hearsay emails. However, these emails had been ruled inadmissible for that purpose two months prior. The defense objected to the use of these hearsay emails as evidence, arguing that they could not be considered “truth.” Nevertheless, the court rejected the request for a new limiting instruction, stating that the jury would need to rely on their memory of the earlier ruling (Vol 24 pg. 315 #7722). This situation was particularly concerning, as the court admitted that the jury would likely find it challenging to remember a limiting instruction given two months earlier (Vol 23 pg. 176 #11144).
A new limiting instruction was crucial in this case, which was lengthy and frequently interrupted, involving a multitude of hearsay emails. Among these were highly prejudicial claims labeling the company as an “illegal pyramid scheme” (Vol 24 pg. 301 #7708).
Rank speculation was used to accuse Hosseinipour of “never telling anyone,” which was deemed the burden of proof for a “material omission” related to fraud. This accusation was based on hearsay and lacked any evidence linked to a sale, statement, action, or witness testimony.
The main argument presented in the rebuttal was that Hosseinipour “should have known” there were issues, yet she “kept on selling,” which was framed as the crime (Vol. 24, pg. 298, #7705-7713, pg. 306). The closing instructions to the jury described “deliberate ignorance” as the standard for convicting Hosseinipour. The government did not outline Hosseinipour’s “intent” to commit a crime. Instead, they questioned whether it was “responsible” for her to repeat the Celebrity Claims made by Rocky Wright without conducting more “due diligence.”
Is it justifiable for the government to try to convict and potentially imprison someone for 20 years for merely repeating an announcement made at an MLM official event that was repeated by everybody??
No Evidence except for Hearsay Emails that Could not be judged for “Truth of the Matter.”
1.) The email from Riccardo Ferrari suggests that the company should incorporate an official income disclosure statement. Hosseinipour forwards this idea to Maike, indicating that it is a good suggestion. However, the government claims it was a crime that she did not leave the company after receiving this email. They also fail to inform the jury that Riccardo appears in a prior and subsequent hangout video, praising the company and stating that Rick Maike “had all his ducks in a row.” This deceit is alarming.
Sewell speculates about Hosseinipour’s actions, presenting hearsay from non-witnesses as if it were truth. He asks, “What is Faraday doing? She ignores it. She keeps selling” (Vol. 24, pg. 297, #7704). However, the government did not provide evidence of a single sale made by Hosseinipour. Every improper statement made during the closing arguments was an opinion presented as fact, which cannot be considered valid evidence. However, this was all they had.
“Does she leave? She had the opportunity to leave, just like any independent business owner (IBO) did. Ricardo pointed out the problems, and she simply forwarded the information to Rick. Nothing was done about it, and her “decision to stay, that is where the crime lies.”
The incorrect instruction suggested that Hosseinipour committed a crime simply by “staying with the company” after receiving recommendations from Ferrari, which is a significant misrepresentation of the law. Additionally, the government knew that Anzalone testified the recommended changes were implemented when David Koerner joined the company. So they knowingly misrepresented evidence to the jury.
2.) (554) The Cathy Faucher’s email reports a website suggesting a free version of Quebee might exist. (vol 24 pg. 299 #7706) The government states in closing arguments “So Faraday sent this to Angela and Rick. So this is a big concern, right?… And what does Faraday do? Knowing this product is being given away for free? “She doesn’t tell anyone. She doesn’t tell her ibos about the problem. She keeps selling.” This email could not be considered “truth,” and it was not the truth; however, the government used it as if it were. Faucher was not a witness, so Faraday Hosseinipour was unable to confront this distributor regarding the reason for sending the email.
The government relied on misleading speculation and unfounded opinions when making these blanket statements. No evidence was presented regarding Hosseinipour’s conversations with others. The government was unaware of her discussions from eight years prior when it claimed that “she didn’t tell anyone.” This constituted an ongoing fraud upon the Court.
The assertion that Hosseinipour “continued to sell” was a recurring theme, despite the absence of any evidence to support these claims or witnesses to corroborate them. It appears that the government should have been obligated to present a single instance of a sale made by Hosseinipour, but they failed to do so.
“Staying with” a new MLM business, regardless of any issues it may have faced, does not satisfy the standard of proof necessary to establish “knowing intent” to commit fraud. According to the government’s criteria, anyone who promoted or stayed with the company would be considered guilty of fraud. The government informed the Court that anyone who promoted the company was a “co-conspirator.” This reasoning was illogical, especially since the government claimed, for restitution purposes, that the same “co-conspirators” were now the “alleged victims.”
3.) (ex 636) The use of hearsay from the Bruce Deery email is insidious as the government speaks “truth” through his hearsay with an unduly prejudicial charge that the company is a pyramid scheme.
The government stated in their closing remarks, “I’m going to put this on the screen because it’s what happens here.” (vol 24 pg. 299 #7706) “This is Bruce Deery talking, and he says…” (vol pg. 300 #7707) Bruce Deery is speaking to the jury, but he is not a witness!!
Unsupported hearsay statements from Deery are to present additional hearsay from “unnamed ibos” not in evidence (vol 24 pg. 301 #7708). “If the individual ibos figured it out and a LOT of them figured it out with less information than Bruce Deery had.” (Vol. 24 pg. 301 #7708)
This is another despicable example of prosecutorial misconduct using facts not in evidence to suggest that many individuals figured out that I2G was allegedly a pyramid scheme, despite having products directly related to rewards.
The emails were previously deemed as NOT “truth of the matter,” yet they were presented as such during closing arguments without a limiting statement reminder from the court a month later. This is particularly concerning in a case that lacked evidence of Hosseinipour’s criminal intent. Furthermore, Ms. Hosseinipour was denied her Sixth Amendment constitutional right to confront and challenge the hearsay and credibility of the non-witnesses. It is important to note that Deery was a partner with Chuck King in efforts to undermine i2G, and Chuck King was copied on the email. However, the jury was not informed of this fact, as Deery could not be cross-examined.
The misrepresentations of the government burden of proof and inadmissible hearsay were reinforced with false i2g statistical representations from unreliable and tainted data in 101G, 101B and 101 i (Vol 24, 7707, 7708 ) (See False Evidence and Prosecutorial Misconduct)
The prosecution incorrectly represented the definition of “pyramid scheme” during its closing arguments. This misrepresentation lowered the burden of proof required to demonstrate that I2G was an illegal pyramid scheme (Vol. 24, p. 7525, pg. 118). The government stressed that “outside sales” to the public (Vol. 24, #7525, pg. 118; #7528, pg. 121), as opposed to sales to distributors that are “related to the products,” should be the standard for proving that I2G operated as a pyramid scheme. However, this requirement was not part of the Gold Unlimited definition and is not the mlm standard that credits “internal consumption” as legitimate product sales.
The court-crafted definition further lowered the government’s burden by generalizing a pyramid scheme based on its “structure” and the subjective motivations of others joining the company which the jury had no way to judge.
The defense objected to any definition other than that established through the Gold Unlimited. The court tried to “improve upon” the Gold definition based on a civil regulatory case and deemed his definition as “platinum” to which the defense objected. (cite) Indeed, there was ample evidence that I2G products were consumed and directly related to the I2G rewards.