Case Explained: USA V. SHI v. BOWEN HU

Court: United States Court of Appeals for the Ninth Circuit

Filed: 2026-07-02

Docket: 2:20-cr-00621-

The Ninth Circuit affirmed in part and vacated in part the sentences imposed on defendants Blade Bai, Bowen Hu, and Tairan Shi for their convictions regarding a conspiracy to launder funds from Target gift cards purchased via telephone scams, remanding the case for limited resentencing. The court held that the district court properly calculated the base offense level by including intended loss amounts within the “value of the laundered funds” under U.S.S.G. § 2S1.1(a)(2) and reasonably determined the total value to be approximately $2.5 million. Additionally, the panel found no plain error in denying a three-level reduction under U.S.S.G. § 2X1.1(b)(2) because the defendants’ scheme continued until arrest without evidence of an intent to stop. The court also affirmed the district court’s abuse of discretion findings in applying a three-level manager/supervisor enhancement under U.S.S.G. § 3B1.1(b) to Hu and Shi, and in denying Shi a two-level minor-participant adjustment under U.S.S.G. § 3B1.2 based on the record showing he was not substantially less culpable than the average participant. However, the court vacated the sentences regarding the application of the sophisticated laundering enhancement. The panel held that under the plain language and structure of U.S.S.G. § 2S1.1(b)(3), a two-level increase for sophisticated laundering requires the district court to have actually applied the two-level increase under subsection (b)(2)(B) for convictions under 18 U.S.C. § 1956. Because the district court instead applied the four-level enhancement under subsection (b)(2)(C) for being in the business of laundering funds, it did not satisfy the prerequisite condition for applying the sophisticated laundering enhancement. Consequently, the error requires remand for a limited resentencing to adjust the guideline computation and recalculate the sentences on a closed record consistent with this interpretation.

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