United States v. Tangtang Zhao
Opinion
In the
United States Court of Appeals For the Seventh Circuit ____________________ No. 23-3366 UNITED STATES OF AMERICA, Plaintiff-Appellee, v.
TANGTANG ZHAO, Defendant-Appellant. ____________________
Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:21-cr-00505-1 — Manish S. Shah, Judge. ____________________
ARGUED NOVEMBER 8, 2024 — DECIDED JUNE 23, 2025 ____________________
Before RIPPLE, HAMILTON, and KIRSCH, Circuit Judges. HAMILTON, Circuit Judge. In late 2020, the federal govern- ment implemented a vaccination program to immunize the public against the novel coronavirus, COVID-19. The govern- ment supplied private entities with vaccine doses and ancil- lary supplies at no cost, so long as the entities agreed to com- ply with the terms of a provider agreement. Among the items the government provided were COVID-19 vaccination record cards to be completed and given to each vaccine recipient. 2 No. 23-3366
During the pandemic, defendant-appellant Tangtang Zhao, a pharmacist employed at Walgreens, took blank vac- cination cards from his workplace and sold them on eBay.com for his personal benefit. Zhao was charged with and convicted on twelve counts of theft of government property in violation of 18 U.S.C. § 641. On appeal, he argues that the government presented insufficient evidence to prove that the vaccination cards were government property when he took them from his workplace. He also challenges the trial judge’s response to the jury’s question about the definition of government property and parts of the jury instructions. We affirm. To secure a conviction under section 641, the government had to prove that it maintained sufficient “super- vision and control” over the vaccination cards in Walgreens’ possession. See United States v. Wheadon, 794 F.2d 1277, 1283– 84 (7th Cir. 1986). The government presented evidence that it controlled the use and distribution of the cards, retained ac- cess to the cards for quality assurance purposes, and could terminate Walgreens’ participation in the vaccination pro- gram for failure to comply with the provider agreement. From that evidence, the jury could find that the government’s su- pervision and control over the vaccination cards was suffi- cient to retain their federal character. The trial court also did not err in denying Zhao’s motions for judgment of acquittal, in answering the jury’s question, or in instructing the jury. I. Factual and Procedural Background A. The COVID-19 Vaccination Program The evidence presented at trial established the facts as fol- lows. On January 31, 2020, the Secretary of the Department of Health and Human Services (HHS) declared a national public No. 23-3366 3
health emergency due to the spread of a novel coronavirus known as COVID-19. On March 13, 2020, the President de- clared a national emergency. During the ensuing months, the federal government worked with pharmaceutical and bio- technology companies to develop effective vaccines for COVID-19 with unprecedented speed. The 2023 Nobel Prize in Physiology or Medicine was awarded to Katalin Karikó and Drew Weissman for their discoveries that enabled the de- velopment of effective vaccines using messenger RNA mole- cules. The federal government raced to distribute the new vac- cines as widely and quickly as possible. The government dis- tributed the new vaccines at no cost to providers that enrolled in the Centers for Disease Control and Prevention’s (CDC) COVID-19 vaccination program. At the same time, the federal government contracted with a private company to procure and distribute “ancillary kits” that contained supplies needed to administer the vaccines. The ancillary kits were also pro- vided at no cost to providers authorized to distribute COVID- 19 vaccine doses. The kits included COVID-19 vaccination record cards. The CDC provided a template for the cards’ de- sign specifying their dimensions and contents. The cards fea- tured both HHS’s and the CDC’s official symbols. After the kits were assembled, they were shipped to authorized provid- ers. Pursuant to the procurement contract, the kits, including the vaccination cards, became the federal government’s prop- erty after the government was invoiced, and they remained government property throughout the shipping process. CDC entered into agreements to distribute the vaccine with certain large retail pharmacy corporations, including Walgreens. In January 2021, Walgreens began providing in- 4 No. 23-3366
store vaccinations pursuant to its agreement with the CDC. The agreement prohibited Walgreens from selling or seeking reimbursement for the vaccine and ancillary supplies. It re- quired Walgreens to give each vaccine recipient or his or her legal representative a completed vaccination card. The agree- ment also included a hyperlink to a page on the CDC’s web- site that provided updated guidance and required providers to “monitor such identified guidance for updates and comply with such updates.” B. Defendant’s Thefts and Sales of COVID-19 Vaccination Cards Between March 24 and April 13, 2021, defendant Zhao was employed as a pharmacist at a Walgreens administering the COVID-19 vaccines. During this period, he listed 658 COVID- 19 vaccination cards for sale on eBay. He sold 630 of those cards, raising the cards’ price over time from $7.99 each to a high of $10.99 per card. Zhao received at least $5,600 from sell- ing vaccination cards. Some of the people who bought a vac- cination card reported doing so out of fear that unvaccinated people might be arrested or that the vaccination cards might be necessary to obtain food. In the title of the eBay listings and in communications with potential purchasers, Zhao empha- sized the cards’ authenticity. eBay sent Zhao five notices that it had removed his listings because they violated eBay’s government items policy. Zhao’s account was eventually placed on a 10-day selling restriction. After a reporter contacted Zhao through his eBay account, Zhao stopped selling vaccination cards and told eBay users inquiring about additional vaccination cards that his account had been hacked. No. 23-3366 5
C. Criminal Proceedings A grand jury charged Zhao with twelve counts of theft of government property in violation of 18 U.S.C. § 641. 1 The case was tried to a jury. At the close of the government’s case, Zhao moved for a judgment of acquittal on all counts. He argued primarily that the government had not shown that the vac- cination cards were government property at the time he took them. The district court denied the motion, and the jury found Zhao guilty on all counts. After trial, Zhao renewed his motion for judgment of ac- quittal. The district court denied his motion. The court sen- tenced Zhao to a one-year term of probation and imposed a
1 18 U.S.C. § 641 reads as follows:
Whoever embezzles, steals, purloins, or knowingly converts to his use or the use of another, or without authority, sells, conveys or disposes of any record, voucher, money, or thing of value of the United States or of any department or agency thereof, or any property made or being made under contract for the United States or any department or agency thereof; or Whoever receives, conceals, or retains the same with intent to convert it to his use or gain, knowing it to have been embezzled, stolen, purloined or converted— Shall be fined under this title or imprisoned not more than ten years, or both; but if the value of such property in the aggregate, combining amounts from all the counts for which the defendant is convicted in a single case, does not exceed the sum of $1,000, he shall be fined under this title or imprisoned not more than one year, or both. The word “value” means face, par, or market value, or cost price, either wholesale or retail, whichever is greater. 6 No. 23-3366
$5,600 fine. Zhao has appealed. He challenges the denial of his motion for a judgment of acquittal on the ground that the gov- ernment failed to produce evidence sufficient to prove that the vaccination cards remained government property at the time of the theft. He also challenges the district court’s re- sponse to the jury’s request for clarification regarding the def- inition of government property. Finally, he challenges the dis- trict court’s jury instruction defining “value” and its instruc- tion about Zhao’s knowledge. II. Discussion A. Sufficiency of the Evidence Zhao argues primarily that there was insufficient evidence to prove the vaccination cards were government property when he stole them from Walgreens. “We review de novo a district court’s denial of a motion for a judgment of acquittal for insufficient evidence.” United States v. Godinez, 7 F.4th 628, 638 (7th Cir. 2021). We construe the evidence in the light most favorable to the government, and we affirm the jury’s verdict if any rational trier of fact could have found the offense’s ele- ments satisfied beyond a reasonable doubt. Id., citing Jackson v. Virginia, 443 U.S. 307, 319 (1979). “This is usually a high hur- dle for a defendant to clear, but ‘the height of the hurdle de- pends directly on the strength of the government's evidence.’” United States v. Kelerchian, 937 F.3d 895, 907 (7th Cir. 2019), quoting United States v. Garcia, 919 F.3d 489, 496–97 (7th Cir. 2019). To establish a violation of 18 U.S.C. § 641, the government had to prove that Zhao stole or knowingly converted a “thing of value of the United States”—i.e., government property. United States v. Kristofic, 847 F.2d 1295, 1296 (7th Cir. 1988). No. 23-3366 7
The key question here under section 641 is whether the gov- ernment maintained a property interest in the vaccination cards at the time of theft or conversion. See United States v. Maxwell, 588 F.2d 568, 573 (7th Cir. 1978). To answer that ques- tion in this case, both parties cite a line of cases involving funds stolen after the government distributed them to third parties. Those cases establish that legal title is not dipositive. Rather, property distributed to a third party remains govern- ment property within the meaning of section 641 if “the fed- eral government still maintained supervision and control over the funds at the point when the funds were converted.” United States v. Wheadon, 794 F.2d 1277, 1283–84 (7th Cir. 1986). Although money is not perfectly analogous to tangible items like the vaccination cards in this case, the federal fund- ing cases provide a useful starting point for our analysis. In each case, the defendants were involved in administering fed- erally funded programs from which they misappropriated money. See Kristofic, 847 F.2d at 1299. In Wheadon, for exam- ple, we affirmed the convictions of the executive director of a local housing authority who had been siphoning federal funds allocated for low-income housing projects. 794 F.2d at 1279–80. Regardless of the federal program at issue, we ap- plied “the supervision and control test to determine owner- ship as between the federal government and an organiza- tional ‘conduit’ for federal funds.” Kristofic, 847 F.2d at 1299 (footnote omitted). This case involves the same basic inquiry. The vaccination cards indisputably belonged to the federal government before they were delivered to Walgreens. At that point, Walgreens took possession of the cards as an organizational conduit for 8 No. 23-3366
the government’s vaccination program. If the government maintained enough supervision and control over the vaccina- tion cards in Walgreens’ possession to retain the cards’ “fed- eral character,” id. at 1297–98 (internal quotation marks omit- ted), the cards were government property for purposes of sec- tion 641 at the time Zhao stole them from his workplace. Determining whether the government maintained suffi- cient supervision and control over stolen property in a third party’s possession requires a fact-intensive inquiry. Case law in this circuit and others has identified several categories of evidence that may be relevant and probative, including: whether the government retained a reversionary interest; whether the government restricted the use of the property; whether the government imposed internal controls; whether the government had the right to inspect or access the private entity’s records; statutory or regulatory provisions governing the property; and whether the government had the right to terminate the contract or cut off funding to the private entity. See Wheadon, 794 F.2d at 1284–85; United States v. Scott, 784 F.2d 787, 790–91 (7th Cir. 1986); Maxwell, 588 F.2d at 571–72; see also United States v. Osborne, 886 F.3d 604, 611–12 (6th Cir. 2018) (summarizing relevant factors identified by Sixth Cir- cuit and other circuits’ case law). But courts “have not explic- itly indicated the relative importance or weight of the various factors,” Osborne, 886 F.3d at 612, and other factors may be relevant depending on the case. After taking a fresh look at the evidence presented at trial, we agree with the district court’s analysis. The vaccination cards were distributed to private entities like Walgreens as part of a government-led program to develop and distribute vaccines for COVID-19 as rapidly as possible. The No. 23-3366 9
government presented evidence that the participants in the vaccination program shared a collective understanding that the cards were government property until given to a vac- cinated patient. Most revealing, Walgreens’ Director of Im- munizations testified that he understood the vaccines and an- cillary kits to be property of the federal government because they were provided free of charge. That understanding is corroborated by the CDC’s June 11, 2021 announcement that “all USG-furnished ancillary materi- als, including COVID-19 Vaccination Record Cards, have re- mained property of the United States Government for exclu- sive use in the CDC COVID-19 Vaccination Program since the program’s inception.” Upon announcement, that language was expressly incorporated into the provider agreement. Alt- hough all of Zhao’s sales occurred before that June 2021 an- nouncement, a jury could reasonably infer that the announce- ment was an accurate statement of the cards’ status since the inception of the vaccination program—especially since in February 2021, before defendant’s charged conduct, the CDC posted an update on its website saying that the COVID-19 vaccines remained government property until administered to the vaccine recipient. The vaccines and ancillary kits were distributed for the same purpose and governed by the same agreements, so the status of the vaccines could fairly be im- puted to the vaccination cards as well. The government also placed restrictions on how the vac- cination cards were to be used. The provider agreement pro- hibited Walgreens from selling the vaccination cards. The agreement also required Walgreens to issue completed cards to each vaccine recipient or her legal representative. As the district court explained, a jury could have inferred from this 10 No. 23-3366
condition that Walgreens was prohibited from handing out blank vaccination cards. The government also had the right to inspect the vaccination cards in the custody of the pharma- cies. It could also terminate participation in the vaccination program for non-compliance with the terms of the provider agreement, including those pertaining to the vaccination cards. The government’s use restrictions, right to access vac- cination cards in Walgreens’ custody, and right to terminate provider agreements together signaled that the government maintained sufficient supervision and control over the cards for them to retain their federal character. Zhao emphasizes that the government did not retain a re- versionary interest in the vaccination cards and that certain aspects of the vaccination program were not tightly con- trolled. For example, the government did not impose record- keeping requirements to track unused vaccination cards or is- sue guidance about how to store or secure blank cards. If the government has a revisionary interest in the prop- erty in question, that is a “particularly compelling” piece of evidence of control and supervision, though a reversionary interest is not necessary to establish control and supervision. Wheadon, 794 F.2d at 1285; see also Osborne, 886 F.3d at 617 (“Although failing to retain a reversionary interest alone may not be fatal, it does require showing a greater exercise of su- pervision or control via other means ….”). Many of our cases upholding section 641 convictions rely, in part, on the govern- ment’s right to demand repayment of surplus funds. See, e.g., Scott, 784 F.2d at 790–91; United States v. Mitchell, 625 F.2d 158, 161 (7th Cir. 1980); Maxwell, 588 F.2d at 572. In the absence of a reversionary interest, we have upheld a section 641 convic- tion based on evidence of more onerous use and tracking No. 23-3366 11
restrictions than those shown by the evidence in this case. See, e.g., Wheadon, 794 F.2d at 1284–85 (upholding conviction based on evidence that federal government retained control through quarterly reports; access to all records of third party; imposing duty to maintain and keep accurate records on third party; right to terminate any contract; right to cut off funding and to approve any disbursements; right of prior approval on all contracts, proposals, and appropriations; and right to con- duct on-site inspections). We need not decide whether the extent of supervision and control shown here would be sufficient in a case of money sto- len or embezzled from a recipient of federal funds. On the facts of this case, with the stolen vaccination cards, the ab- sence of more onerous conditions of participation in the vac- cination program does not undermine the jury’s verdict. The purpose of the supervision-and-control test is to resolve “the jurisdictional question whether the crime committed had been against the federal government.” Kristofic, 847 F.2d at 1299. Federal jurisdiction is satisfied by the federal govern- ment’s “continuing responsibility to see that the federal funds are spent as Congress intended.” United States v. Hamilton, 726 F.2d 317, 321 (7th Cir. 1984) (analogous crime under 18 U.S.C. § 665), cited with approval by United States v. Brown, 742 F.2d 359, 362 (7th Cir. 1984) (affirming section 641 convictions). A reasonable jury could conclude that, under the circum- stances of the vaccination cards’ distribution, the absence of a reversionary interest in the cards did not diminish or elimi- nate the government’s responsibility to see that the vaccina- tion cards were used only as intended. A procurement official testified that the government’s decision not to seek the return of unused ancillary supplies was motivated by concern about 12 No. 23-3366
storage conditions and COVID-19 transmission. The jury could have credited this testimony and concluded that the government’s cautious approach to disposing of excess vac- cination cards promoted the goals of the vaccination program without diminishing the federal character of the vaccination cards. Further, even though the provider agreement did not include a mechanism for returning surplus vaccination cards, Walgreens did not act as if it had the right to use or dispose of excess cards as it pleased. Rather than find another use for excess cards, Walgreens worked with the CDC to shred and destroy them, ensuring that the cards would be used only as intended in the vaccination program. The cooperation between the CDC and Walgreens on the disposal of excess cards is further evidence that the federal government had and exercised a continuing responsibility to see that the vaccination cards were used pursuant to the provider agreement. The other aspects of the vaccination program on which Zhao relies are not dispositive of the jurisdictional question either. The supervision-and-control test is fact-sensitive, Os- borne, 886 F.3d at 609, so both the nature of the stolen property and the emergency context in which the vaccination program took place are highly relevant to our analysis. As far as record- keeping requirements and other internal controls go, we might expect the government to treat vaccination cards differ- ently than federal grant money. Federal grants are fungible with other sources of funding, and they carry an obvious risk of misappropriation. Evidence that the government required a third party to keep federal funds separate and traceable and/or to maintain accurate records is important to show that No. 23-3366 13
the funds retained their federal identity. Once a grant “is paid over to the end recipient, utilized, commingled or otherwise loses its identity,” the money ceases to be federal. United States v. Harris, 729 F.2d 441, 447 (7th Cir. 1984) (analogous offense under 18 U.S.C. § 657), quoting United States v. Smith, 596 F.2d 662, 664 (5th Cir. 1979), cited with approval by Brown, 742 F.2d at 362 (affirming section 641 convictions). Unlike money, the vaccination cards, which were de- signed and printed pursuant to federal specifications, were not fungible with other property in the hands of authorized vaccine providers. Because vaccination cards are not fungible with non-federal property, they do not present the tracing problems created by federal grants. Cf., e.g., Harris, 729 F.2d at 446–47 (explaining that government would lose its interest in federal funds if those funds became untraceable). And at the beginning of the vaccination program, the cards’ potential for misappropriation was not obvious. In light of these differ- ences between grant money and vaccination cards, the lack of evidence of extensive recordkeeping and tracking require- ments does not undermine the jury’s verdict, at least as a mat- ter of law. The government did not need to impose such re- strictions—which may have been reasonably rejected as bur- densome and unnecessary to accomplish the goals of the vac- cination program—to retain the cards’ federal character. Finally, the jury could reasonably conclude that the gov- ernment exercised less supervision and control than it might have otherwise due to the magnitude of the public health emergency and the speed at which the government moved to address it. As witnesses testified, the pandemic presented a fluid and constantly evolving situation, requiring the govern- ment and vaccine providers to adjust quickly to new 14 No. 23-3366
information, sometimes on a day-to-day basis. The jury could have reasonably taken emergency conditions into account when determining how much supervision and control the government needed to exercise to maintain the federal char- acter of the cards in Walgreens’ possession. 2 Applying the deference owed to a jury’s verdict of convic- tion, we conclude that a reasonable jury could find that the vaccination cards were government property at the time of conversion. While the government’s control over the vaccina- tion cards was not airtight, it was sufficient to retain the cards’ “federal character,” Kristofic, 847 F.2d at 1298 (internal quota- tion marks omitted), in the context of a public health emer- gency and a vaccination program executed at an unprece- dented pace.
2 Zhao also argued to the jury that the government abandoned the
vaccination cards once they were distributed to Walgreens. Abandoned property cannot be converted. See Morissette v. United States, 342 U.S. 246, 271 (1952). The supervision-and-control test is not intended to resolve whether a theft occurred at all. See Kristofic, 847 F.2d at 1298. But our analysis above shows that a jury could have easily rejected Zhao’s alternative theory. “[P]roperty is considered to be abandoned when the owner, intending to relinquish all rights to the property, leaves it free to be appropriated by any other person.” Toll Processing Services, LLC v. Kastalon, Inc., 880 F.3d 820, 824 (7th Cir. 2018), quoting Bell Leasing Brokerage, LLC v. Roger Auto Service, Inc., 865 N.E.2d 558, 564 (Ill. App. 2007). The vaccination cards were clearly not intended to be appropriated by “any other person.” They were distributed only to authorized pharmacies pursuant to an agreement that specified their intended use, and Walgreens worked with CDC to destroy cards that were not used for that purpose. The weakness of Zhao’s alternative theory reinforces the reasonableness of the jury’s verdict. No. 23-3366 15
B. Response to the Jury’s Question Zhao also argues that the district court plainly erred in re- sponding to the jury’s request for clarification on the defini- tion of government property. The court’s final instructions told the jury that an “item or thing of value belongs to the United States if the federal government maintains sufficient supervision and control over the property after the property was distributed to some other entity.” During deliberations, the jury sent a note to the court asking: “What defines suffi- cient supervision and control?” The court responded: “There is no additional definition of sufficient supervision and con- trol. That is an issue for you to decide.” Plain-error review is not available when the defendant waives his objection in an “intentional relinquishment or abandonment of a known right.” United States v. Olano, 507 U.S. 725, 732–33 (1993), quoting Johnson v. Zerbst, 304 U.S. 458, 464 (1938). Because Zhao expressly approved the district court’s proposed response to the jury’s question, he has waived this argument. See United States v. Protho, 41 F.4th 812, 832 (7th Cir. 2022) (defendant waived challenge to response to jury question by approving response’s proposed lan- guage); United States v. Harden, 893 F.3d 434, 452 n.3 (7th Cir. 2018) (same). Even if plain-error review were available, reversal would not be warranted because the district judge did not err in re- sponding to the jury’s question. See Puckett v. United States, 556 U.S. 129, 135 (2009) (reversal appropriate only if a plain error affected defendant’s substantial rights and seriously af- fected the fairness, integrity, or public reputation of judicial proceedings). District judges have considerable discretion on both whether and how to answer a jury’s question. E.g., 16 No. 23-3366
Protho, 41 F.4th at 831; United States v. Sims, 329 F.3d 937, 943 (7th Cir. 2003). We consider three factors when reviewing the language of a supplemental instruction or answer to a jury question: “1) whether the instruction as a whole fairly and ad- equately treated the issue; 2) whether the supplemental in- struction was a correct statement of law; and 3) whether the district court answered the jury’s question specifically.” Sims, 329 F.3d at 943. Because the supervision-and-control test is a clear and cor- rect statement of when property distributed to third parties remains a “thing of value of the United States” under section 641, the district court did not err by repeating it. See United States v. Durham, 645 F.3d 883, 894 (7th Cir. 2011); see also Re- public Technologies (NA), LLC v. BBK Tobacco & Foods, LLP, 135 F.4th 572, 580 (7th Cir. 2025) (“It is rare for us to vacate a judg- ment based on a district court’s decision not to issue a clarify- ing response when the initial instruction was a correct state- ment of law.”). Zhao contends that the court should have pro- vided the jury with additional guidance in the form of factors that appellate decisions have considered when applying the supervision-and-control test. In some cases, it may be appropriate to supplement a jury instruction by identifying specific factors for the jury’s con- sideration. The utility of a multi-factor approach likely de- pends on the legal context, the clarity of applicable case law, and the phrasing of the instruction. See United States v. Brown, 726 F.3d 993, 1004 (7th Cir. 2013) (explaining, in context of buyer-seller instructions in drug conspiracy cases, that our cases “do not prohibit a multi-factor approach per se” but do require careful attention to how a multi-factor instruction is formulated), overruled on other grounds by United States v. No. 23-3366 17
Page, 123 F.4th 851, 862 (7th Cir. 2024) (en banc). The district court has substantial discretion to decide whether supple- menting jury instructions with specific factors is appropriate. See United States v. Papia, 560 F.2d 827, 843 (7th Cir. 1977) (“Generally, the necessity, extent and character of supplemen- tary instructions on the law requested by a jury are matters within the sound discretion of the trial court ….”). Reasonable minds could disagree about the utility of a multi-factor approach to defining government property on the facts of this case. Even experienced jurists and attorneys can find multi-factor tests difficult to apply, especially when the factors are unweighted. See Marrs v. Motorola, Inc., 577 F.3d 783, 788 (7th Cir. 2009). The factors that Zhao identifies from our case law are not only unweighted but adapted from a different factual context involving funds instead of tangible items. As we indicated above, some of the factors identified by our case law are tailored to the characteristics of financial instruments. Although those factors provided a good starting point for us to apply the supervision-and-control test to the government’s conduct in this case, they were not necessarily ideal guideposts for a jury composed of laypersons. In light of these features of our section 641 case law, it is far from clear whether further guidance about the supervi- sion-and-control test would have been more likely to help the jurors or confuse them. The district court was best situated to decide which outcome was more likely given Zhao’s offense conduct, the evidence presented, and the parties’ closing ar- guments. Judge Shah acted well within his substantial discre- tion by reiterating the legal standard and leaving the jury to rely on its “intuition and common sense” to evaluate whether the vaccination cards were government property. United 18 No. 23-3366
States v. Johnson, 916 F.3d 579, 586 (7th Cir. 2019) (encouraging district courts to use “simple and succinct instructions [that] invite the jury to rely on its own intuition and common sense in resolving the cases”; affirming jury instructions listing the Duran factors for determining a dealer’s purpose for carrying a weapon). C. Jury Instructions Finally, Zhao challenges the district court’s instructions on the value of the stolen property and Zhao’s knowledge about the stolen property. Because he failed to object to either in- struction on the grounds raised on appeal, we review his chal- lenges only for plain error. Fed. R. Crim. P. 30(d); United States v. Gan, 54 F.4th 467, 478 (7th Cir. 2022); United States v. Wheeler, 540 F.3d 683, 689 (7th Cir. 2008) (raising substantively differ- ent objection is not sufficient to preserve new argument for appeal). Zhao argues that the jury instructions were errone- ous in two respects. First, Zhao takes issue with the court’s instruction about the time at which value is established. Section 641 requires the jury to determine whether the value of the stolen property at issue exceeded $1,000. Consistent with the pattern instruc- tions for this circuit, the district court instructed the jury as follows: “‘Value’ means face value, market value, or a price actually paid for the item in question, whichever is greater. Market value is the price someone would be willing to pay for the item to someone else willing to sell it.” See The William J. Bauer Pattern Criminal Jury Instructions of the Seventh Cir- cuit, at 291 (Instruction for 18 U.S.C. § 641, “Definition of Value”). The court further instructed the jury: “Value is estab- lished at the time of possession rather than at the time of theft.” Zhao argues that the court’s instruction about the time No. 23-3366 19
when value is established misstated the law as set forth in United States v. Brookins, 52 F.3d 615 (7th Cir. 1995). The district court did not err, much less plainly so, by in- structing the jury to consider the value of the vaccination cards while they were in Zhao’s possession. The last para- graph of section 641 permits “a number of different methods of valuation for the purposes of determining whether a viola- tion should be classified and sentenced as a misdemeanor or as a felony.” United States v. Oberhardt, 887 F.2d 790, 792 (7th Cir. 1989). Measuring value at the time of the defendant’s pos- session reflects the value that the stolen property fetches on the “thieves’ market,” which may be substantially higher than other measures of value. See United States v. Ditata, 469 F.2d 1270, 1272 (7th Cir. 1972). Our case law, including Brookins, has long held that the price stolen property fetches on the “thieves’ market” is a permissible measure of value under sec- tion 641. See Brookins, 52 F.3d at 619–20 (“Furthermore, the Court allows the use of a ‘thieves’ market’ as ‘an appropriate method for determining the “market value” of [stolen] goods ....’” (quoting Oberhardt, 887 F.2d at 792)); see also Ditata, 469 F.2d at 1272–73 (district court properly instructed jury to de- termine value of stolen items as of dates of defendant’s pos- session of them instead of date they were stolen; citing cases reviewing section 641 convictions). Determining value at the time of possession was particularly appropriate in this case because the cards’ value on eBay was substantially higher than the per-unit cost the government paid to produce the cards, which it provided for free to Walgreens and other dis- tributors. Second, Zhao argues that the value instruction and the possession-of-stolen-property instruction were erroneous 20 No. 23-3366
because they presupposed that a theft necessarily occurred. This argument is meritless. We “consider the jury instructions in their entirety, rather than in ‘artificial isolation.’” United States v. Webber, 536 F.3d 584, 599 (7th Cir. 2008), quoting United States v. Westmoreland, 122 F.3d 431, 434 (7th Cir. 1997). The value instruction’s reference to the time of theft followed earlier instructions that required the jury to find first whether Zhao stole the property. The possession-of-stolen-property instruction informed the jury that it could infer that Zhao knew the property was stolen only “[i]f” it found that he “was in possession of property that recently had been stolen.” The instruction was worded conditionally and permissively, so it did not assume that a theft occurred. In any event, Zhao cannot establish that any error affected his substantial rights. See Puckett, 556 U.S. at 135. At trial, Zhao did not meaningfully contest the value of the vaccina- tion cards or whether he stole them from Walgreens. On ap- peal, he does not argue that the cards’ price on eBay did not accurately reflect their market value. And although Zhao sug- gests that the government failed to prove that he stole the blank vaccination cards from Walgreens, he does not actually challenge the sufficiency of the evidence for that element of section 641. Regardless, the government presented sufficient evidence at trial for a jury to conclude beyond a reasonable doubt that Zhao knowingly stole vaccination cards from his workplace. AFFIRMED.
Opinion
In the
United States Court of Appeals For the Seventh Circuit ____________________ No. 23-3366 UNITED STATES OF AMERICA, Plaintiff-Appellee, v.
TANGTANG ZHAO, Defendant-Appellant. ____________________
Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:21-cr-00505-1 — Manish S. Shah, Judge. ____________________
ARGUED NOVEMBER 8, 2024 — DECIDED JUNE 23, 2025 ____________________
Before RIPPLE, HAMILTON, and KIRSCH, Circuit Judges. HAMILTON, Circuit Judge. In late 2020, the federal govern- ment implemented a vaccination program to immunize the public against the novel coronavirus, COVID-19. The govern- ment supplied private entities with vaccine doses and ancil- lary supplies at no cost, so long as the entities agreed to com- ply with the terms of a provider agreement. Among the items the government provided were COVID-19 vaccination record cards to be completed and given to each vaccine recipient. 2 No. 23-3366
During the pandemic, defendant-appellant Tangtang Zhao, a pharmacist employed at Walgreens, took blank vac- cination cards from his workplace and sold them on eBay.com for his personal benefit. Zhao was charged with and convicted on twelve counts of theft of government property in violation of 18 U.S.C. § 641. On appeal, he argues that the government presented insufficient evidence to prove that the vaccination cards were government property when he took them from his workplace. He also challenges the trial judge’s response to the jury’s question about the definition of government property and parts of the jury instructions. We affirm. To secure a conviction under section 641, the government had to prove that it maintained sufficient “super- vision and control” over the vaccination cards in Walgreens’ possession. See United States v. Wheadon, 794 F.2d 1277, 1283– 84 (7th Cir. 1986). The government presented evidence that it controlled the use and distribution of the cards, retained ac- cess to the cards for quality assurance purposes, and could terminate Walgreens’ participation in the vaccination pro- gram for failure to comply with the provider agreement. From that evidence, the jury could find that the government’s su- pervision and control over the vaccination cards was suffi- cient to retain their federal character. The trial court also did not err in denying Zhao’s motions for judgment of acquittal, in answering the jury’s question, or in instructing the jury. I. Factual and Procedural Background A. The COVID-19 Vaccination Program The evidence presented at trial established the facts as fol- lows. On January 31, 2020, the Secretary of the Department of Health and Human Services (HHS) declared a national public No. 23-3366 3
health emergency due to the spread of a novel coronavirus known as COVID-19. On March 13, 2020, the President de- clared a national emergency. During the ensuing months, the federal government worked with pharmaceutical and bio- technology companies to develop effective vaccines for COVID-19 with unprecedented speed. The 2023 Nobel Prize in Physiology or Medicine was awarded to Katalin Karikó and Drew Weissman for their discoveries that enabled the de- velopment of effective vaccines using messenger RNA mole- cules. The federal government raced to distribute the new vac- cines as widely and quickly as possible. The government dis- tributed the new vaccines at no cost to providers that enrolled in the Centers for Disease Control and Prevention’s (CDC) COVID-19 vaccination program. At the same time, the federal government contracted with a private company to procure and distribute “ancillary kits” that contained supplies needed to administer the vaccines. The ancillary kits were also pro- vided at no cost to providers authorized to distribute COVID- 19 vaccine doses. The kits included COVID-19 vaccination record cards. The CDC provided a template for the cards’ de- sign specifying their dimensions and contents. The cards fea- tured both HHS’s and the CDC’s official symbols. After the kits were assembled, they were shipped to authorized provid- ers. Pursuant to the procurement contract, the kits, including the vaccination cards, became the federal government’s prop- erty after the government was invoiced, and they remained government property throughout the shipping process. CDC entered into agreements to distribute the vaccine with certain large retail pharmacy corporations, including Walgreens. In January 2021, Walgreens began providing in- 4 No. 23-3366
store vaccinations pursuant to its agreement with the CDC. The agreement prohibited Walgreens from selling or seeking reimbursement for the vaccine and ancillary supplies. It re- quired Walgreens to give each vaccine recipient or his or her legal representative a completed vaccination card. The agree- ment also included a hyperlink to a page on the CDC’s web- site that provided updated guidance and required providers to “monitor such identified guidance for updates and comply with such updates.” B. Defendant’s Thefts and Sales of COVID-19 Vaccination Cards Between March 24 and April 13, 2021, defendant Zhao was employed as a pharmacist at a Walgreens administering the COVID-19 vaccines. During this period, he listed 658 COVID- 19 vaccination cards for sale on eBay. He sold 630 of those cards, raising the cards’ price over time from $7.99 each to a high of $10.99 per card. Zhao received at least $5,600 from sell- ing vaccination cards. Some of the people who bought a vac- cination card reported doing so out of fear that unvaccinated people might be arrested or that the vaccination cards might be necessary to obtain food. In the title of the eBay listings and in communications with potential purchasers, Zhao empha- sized the cards’ authenticity. eBay sent Zhao five notices that it had removed his listings because they violated eBay’s government items policy. Zhao’s account was eventually placed on a 10-day selling restriction. After a reporter contacted Zhao through his eBay account, Zhao stopped selling vaccination cards and told eBay users inquiring about additional vaccination cards that his account had been hacked. No. 23-3366 5
C. Criminal Proceedings A grand jury charged Zhao with twelve counts of theft of government property in violation of 18 U.S.C. § 641. 1 The case was tried to a jury. At the close of the government’s case, Zhao moved for a judgment of acquittal on all counts. He argued primarily that the government had not shown that the vac- cination cards were government property at the time he took them. The district court denied the motion, and the jury found Zhao guilty on all counts. After trial, Zhao renewed his motion for judgment of ac- quittal. The district court denied his motion. The court sen- tenced Zhao to a one-year term of probation and imposed a
1 18 U.S.C. § 641 reads as follows:
Whoever embezzles, steals, purloins, or knowingly converts to his use or the use of another, or without authority, sells, conveys or disposes of any record, voucher, money, or thing of value of the United States or of any department or agency thereof, or any property made or being made under contract for the United States or any department or agency thereof; or Whoever receives, conceals, or retains the same with intent to convert it to his use or gain, knowing it to have been embezzled, stolen, purloined or converted— Shall be fined under this title or imprisoned not more than ten years, or both; but if the value of such property in the aggregate, combining amounts from all the counts for which the defendant is convicted in a single case, does not exceed the sum of $1,000, he shall be fined under this title or imprisoned not more than one year, or both. The word “value” means face, par, or market value, or cost price, either wholesale or retail, whichever is greater. 6 No. 23-3366
$5,600 fine. Zhao has appealed. He challenges the denial of his motion for a judgment of acquittal on the ground that the gov- ernment failed to produce evidence sufficient to prove that the vaccination cards remained government property at the time of the theft. He also challenges the district court’s re- sponse to the jury’s request for clarification regarding the def- inition of government property. Finally, he challenges the dis- trict court’s jury instruction defining “value” and its instruc- tion about Zhao’s knowledge. II. Discussion A. Sufficiency of the Evidence Zhao argues primarily that there was insufficient evidence to prove the vaccination cards were government property when he stole them from Walgreens. “We review de novo a district court’s denial of a motion for a judgment of acquittal for insufficient evidence.” United States v. Godinez, 7 F.4th 628, 638 (7th Cir. 2021). We construe the evidence in the light most favorable to the government, and we affirm the jury’s verdict if any rational trier of fact could have found the offense’s ele- ments satisfied beyond a reasonable doubt. Id., citing Jackson v. Virginia, 443 U.S. 307, 319 (1979). “This is usually a high hur- dle for a defendant to clear, but ‘the height of the hurdle de- pends directly on the strength of the government's evidence.’” United States v. Kelerchian, 937 F.3d 895, 907 (7th Cir. 2019), quoting United States v. Garcia, 919 F.3d 489, 496–97 (7th Cir. 2019). To establish a violation of 18 U.S.C. § 641, the government had to prove that Zhao stole or knowingly converted a “thing of value of the United States”—i.e., government property. United States v. Kristofic, 847 F.2d 1295, 1296 (7th Cir. 1988). No. 23-3366 7
The key question here under section 641 is whether the gov- ernment maintained a property interest in the vaccination cards at the time of theft or conversion. See United States v. Maxwell, 588 F.2d 568, 573 (7th Cir. 1978). To answer that ques- tion in this case, both parties cite a line of cases involving funds stolen after the government distributed them to third parties. Those cases establish that legal title is not dipositive. Rather, property distributed to a third party remains govern- ment property within the meaning of section 641 if “the fed- eral government still maintained supervision and control over the funds at the point when the funds were converted.” United States v. Wheadon, 794 F.2d 1277, 1283–84 (7th Cir. 1986). Although money is not perfectly analogous to tangible items like the vaccination cards in this case, the federal fund- ing cases provide a useful starting point for our analysis. In each case, the defendants were involved in administering fed- erally funded programs from which they misappropriated money. See Kristofic, 847 F.2d at 1299. In Wheadon, for exam- ple, we affirmed the convictions of the executive director of a local housing authority who had been siphoning federal funds allocated for low-income housing projects. 794 F.2d at 1279–80. Regardless of the federal program at issue, we ap- plied “the supervision and control test to determine owner- ship as between the federal government and an organiza- tional ‘conduit’ for federal funds.” Kristofic, 847 F.2d at 1299 (footnote omitted). This case involves the same basic inquiry. The vaccination cards indisputably belonged to the federal government before they were delivered to Walgreens. At that point, Walgreens took possession of the cards as an organizational conduit for 8 No. 23-3366
the government’s vaccination program. If the government maintained enough supervision and control over the vaccina- tion cards in Walgreens’ possession to retain the cards’ “fed- eral character,” id. at 1297–98 (internal quotation marks omit- ted), the cards were government property for purposes of sec- tion 641 at the time Zhao stole them from his workplace. Determining whether the government maintained suffi- cient supervision and control over stolen property in a third party’s possession requires a fact-intensive inquiry. Case law in this circuit and others has identified several categories of evidence that may be relevant and probative, including: whether the government retained a reversionary interest; whether the government restricted the use of the property; whether the government imposed internal controls; whether the government had the right to inspect or access the private entity’s records; statutory or regulatory provisions governing the property; and whether the government had the right to terminate the contract or cut off funding to the private entity. See Wheadon, 794 F.2d at 1284–85; United States v. Scott, 784 F.2d 787, 790–91 (7th Cir. 1986); Maxwell, 588 F.2d at 571–72; see also United States v. Osborne, 886 F.3d 604, 611–12 (6th Cir. 2018) (summarizing relevant factors identified by Sixth Cir- cuit and other circuits’ case law). But courts “have not explic- itly indicated the relative importance or weight of the various factors,” Osborne, 886 F.3d at 612, and other factors may be relevant depending on the case. After taking a fresh look at the evidence presented at trial, we agree with the district court’s analysis. The vaccination cards were distributed to private entities like Walgreens as part of a government-led program to develop and distribute vaccines for COVID-19 as rapidly as possible. The No. 23-3366 9
government presented evidence that the participants in the vaccination program shared a collective understanding that the cards were government property until given to a vac- cinated patient. Most revealing, Walgreens’ Director of Im- munizations testified that he understood the vaccines and an- cillary kits to be property of the federal government because they were provided free of charge. That understanding is corroborated by the CDC’s June 11, 2021 announcement that “all USG-furnished ancillary materi- als, including COVID-19 Vaccination Record Cards, have re- mained property of the United States Government for exclu- sive use in the CDC COVID-19 Vaccination Program since the program’s inception.” Upon announcement, that language was expressly incorporated into the provider agreement. Alt- hough all of Zhao’s sales occurred before that June 2021 an- nouncement, a jury could reasonably infer that the announce- ment was an accurate statement of the cards’ status since the inception of the vaccination program—especially since in February 2021, before defendant’s charged conduct, the CDC posted an update on its website saying that the COVID-19 vaccines remained government property until administered to the vaccine recipient. The vaccines and ancillary kits were distributed for the same purpose and governed by the same agreements, so the status of the vaccines could fairly be im- puted to the vaccination cards as well. The government also placed restrictions on how the vac- cination cards were to be used. The provider agreement pro- hibited Walgreens from selling the vaccination cards. The agreement also required Walgreens to issue completed cards to each vaccine recipient or her legal representative. As the district court explained, a jury could have inferred from this 10 No. 23-3366
condition that Walgreens was prohibited from handing out blank vaccination cards. The government also had the right to inspect the vaccination cards in the custody of the pharma- cies. It could also terminate participation in the vaccination program for non-compliance with the terms of the provider agreement, including those pertaining to the vaccination cards. The government’s use restrictions, right to access vac- cination cards in Walgreens’ custody, and right to terminate provider agreements together signaled that the government maintained sufficient supervision and control over the cards for them to retain their federal character. Zhao emphasizes that the government did not retain a re- versionary interest in the vaccination cards and that certain aspects of the vaccination program were not tightly con- trolled. For example, the government did not impose record- keeping requirements to track unused vaccination cards or is- sue guidance about how to store or secure blank cards. If the government has a revisionary interest in the prop- erty in question, that is a “particularly compelling” piece of evidence of control and supervision, though a reversionary interest is not necessary to establish control and supervision. Wheadon, 794 F.2d at 1285; see also Osborne, 886 F.3d at 617 (“Although failing to retain a reversionary interest alone may not be fatal, it does require showing a greater exercise of su- pervision or control via other means ….”). Many of our cases upholding section 641 convictions rely, in part, on the govern- ment’s right to demand repayment of surplus funds. See, e.g., Scott, 784 F.2d at 790–91; United States v. Mitchell, 625 F.2d 158, 161 (7th Cir. 1980); Maxwell, 588 F.2d at 572. In the absence of a reversionary interest, we have upheld a section 641 convic- tion based on evidence of more onerous use and tracking No. 23-3366 11
restrictions than those shown by the evidence in this case. See, e.g., Wheadon, 794 F.2d at 1284–85 (upholding conviction based on evidence that federal government retained control through quarterly reports; access to all records of third party; imposing duty to maintain and keep accurate records on third party; right to terminate any contract; right to cut off funding and to approve any disbursements; right of prior approval on all contracts, proposals, and appropriations; and right to con- duct on-site inspections). We need not decide whether the extent of supervision and control shown here would be sufficient in a case of money sto- len or embezzled from a recipient of federal funds. On the facts of this case, with the stolen vaccination cards, the ab- sence of more onerous conditions of participation in the vac- cination program does not undermine the jury’s verdict. The purpose of the supervision-and-control test is to resolve “the jurisdictional question whether the crime committed had been against the federal government.” Kristofic, 847 F.2d at 1299. Federal jurisdiction is satisfied by the federal govern- ment’s “continuing responsibility to see that the federal funds are spent as Congress intended.” United States v. Hamilton, 726 F.2d 317, 321 (7th Cir. 1984) (analogous crime under 18 U.S.C. § 665), cited with approval by United States v. Brown, 742 F.2d 359, 362 (7th Cir. 1984) (affirming section 641 convictions). A reasonable jury could conclude that, under the circum- stances of the vaccination cards’ distribution, the absence of a reversionary interest in the cards did not diminish or elimi- nate the government’s responsibility to see that the vaccina- tion cards were used only as intended. A procurement official testified that the government’s decision not to seek the return of unused ancillary supplies was motivated by concern about 12 No. 23-3366
storage conditions and COVID-19 transmission. The jury could have credited this testimony and concluded that the government’s cautious approach to disposing of excess vac- cination cards promoted the goals of the vaccination program without diminishing the federal character of the vaccination cards. Further, even though the provider agreement did not include a mechanism for returning surplus vaccination cards, Walgreens did not act as if it had the right to use or dispose of excess cards as it pleased. Rather than find another use for excess cards, Walgreens worked with the CDC to shred and destroy them, ensuring that the cards would be used only as intended in the vaccination program. The cooperation between the CDC and Walgreens on the disposal of excess cards is further evidence that the federal government had and exercised a continuing responsibility to see that the vaccination cards were used pursuant to the provider agreement. The other aspects of the vaccination program on which Zhao relies are not dispositive of the jurisdictional question either. The supervision-and-control test is fact-sensitive, Os- borne, 886 F.3d at 609, so both the nature of the stolen property and the emergency context in which the vaccination program took place are highly relevant to our analysis. As far as record- keeping requirements and other internal controls go, we might expect the government to treat vaccination cards differ- ently than federal grant money. Federal grants are fungible with other sources of funding, and they carry an obvious risk of misappropriation. Evidence that the government required a third party to keep federal funds separate and traceable and/or to maintain accurate records is important to show that No. 23-3366 13
the funds retained their federal identity. Once a grant “is paid over to the end recipient, utilized, commingled or otherwise loses its identity,” the money ceases to be federal. United States v. Harris, 729 F.2d 441, 447 (7th Cir. 1984) (analogous offense under 18 U.S.C. § 657), quoting United States v. Smith, 596 F.2d 662, 664 (5th Cir. 1979), cited with approval by Brown, 742 F.2d at 362 (affirming section 641 convictions). Unlike money, the vaccination cards, which were de- signed and printed pursuant to federal specifications, were not fungible with other property in the hands of authorized vaccine providers. Because vaccination cards are not fungible with non-federal property, they do not present the tracing problems created by federal grants. Cf., e.g., Harris, 729 F.2d at 446–47 (explaining that government would lose its interest in federal funds if those funds became untraceable). And at the beginning of the vaccination program, the cards’ potential for misappropriation was not obvious. In light of these differ- ences between grant money and vaccination cards, the lack of evidence of extensive recordkeeping and tracking require- ments does not undermine the jury’s verdict, at least as a mat- ter of law. The government did not need to impose such re- strictions—which may have been reasonably rejected as bur- densome and unnecessary to accomplish the goals of the vac- cination program—to retain the cards’ federal character. Finally, the jury could reasonably conclude that the gov- ernment exercised less supervision and control than it might have otherwise due to the magnitude of the public health emergency and the speed at which the government moved to address it. As witnesses testified, the pandemic presented a fluid and constantly evolving situation, requiring the govern- ment and vaccine providers to adjust quickly to new 14 No. 23-3366
information, sometimes on a day-to-day basis. The jury could have reasonably taken emergency conditions into account when determining how much supervision and control the government needed to exercise to maintain the federal char- acter of the cards in Walgreens’ possession. 2 Applying the deference owed to a jury’s verdict of convic- tion, we conclude that a reasonable jury could find that the vaccination cards were government property at the time of conversion. While the government’s control over the vaccina- tion cards was not airtight, it was sufficient to retain the cards’ “federal character,” Kristofic, 847 F.2d at 1298 (internal quota- tion marks omitted), in the context of a public health emer- gency and a vaccination program executed at an unprece- dented pace.
2 Zhao also argued to the jury that the government abandoned the
vaccination cards once they were distributed to Walgreens. Abandoned property cannot be converted. See Morissette v. United States, 342 U.S. 246, 271 (1952). The supervision-and-control test is not intended to resolve whether a theft occurred at all. See Kristofic, 847 F.2d at 1298. But our analysis above shows that a jury could have easily rejected Zhao’s alternative theory. “[P]roperty is considered to be abandoned when the owner, intending to relinquish all rights to the property, leaves it free to be appropriated by any other person.” Toll Processing Services, LLC v. Kastalon, Inc., 880 F.3d 820, 824 (7th Cir. 2018), quoting Bell Leasing Brokerage, LLC v. Roger Auto Service, Inc., 865 N.E.2d 558, 564 (Ill. App. 2007). The vaccination cards were clearly not intended to be appropriated by “any other person.” They were distributed only to authorized pharmacies pursuant to an agreement that specified their intended use, and Walgreens worked with CDC to destroy cards that were not used for that purpose. The weakness of Zhao’s alternative theory reinforces the reasonableness of the jury’s verdict. No. 23-3366 15
B. Response to the Jury’s Question Zhao also argues that the district court plainly erred in re- sponding to the jury’s request for clarification on the defini- tion of government property. The court’s final instructions told the jury that an “item or thing of value belongs to the United States if the federal government maintains sufficient supervision and control over the property after the property was distributed to some other entity.” During deliberations, the jury sent a note to the court asking: “What defines suffi- cient supervision and control?” The court responded: “There is no additional definition of sufficient supervision and con- trol. That is an issue for you to decide.” Plain-error review is not available when the defendant waives his objection in an “intentional relinquishment or abandonment of a known right.” United States v. Olano, 507 U.S. 725, 732–33 (1993), quoting Johnson v. Zerbst, 304 U.S. 458, 464 (1938). Because Zhao expressly approved the district court’s proposed response to the jury’s question, he has waived this argument. See United States v. Protho, 41 F.4th 812, 832 (7th Cir. 2022) (defendant waived challenge to response to jury question by approving response’s proposed lan- guage); United States v. Harden, 893 F.3d 434, 452 n.3 (7th Cir. 2018) (same). Even if plain-error review were available, reversal would not be warranted because the district judge did not err in re- sponding to the jury’s question. See Puckett v. United States, 556 U.S. 129, 135 (2009) (reversal appropriate only if a plain error affected defendant’s substantial rights and seriously af- fected the fairness, integrity, or public reputation of judicial proceedings). District judges have considerable discretion on both whether and how to answer a jury’s question. E.g., 16 No. 23-3366
Protho, 41 F.4th at 831; United States v. Sims, 329 F.3d 937, 943 (7th Cir. 2003). We consider three factors when reviewing the language of a supplemental instruction or answer to a jury question: “1) whether the instruction as a whole fairly and ad- equately treated the issue; 2) whether the supplemental in- struction was a correct statement of law; and 3) whether the district court answered the jury’s question specifically.” Sims, 329 F.3d at 943. Because the supervision-and-control test is a clear and cor- rect statement of when property distributed to third parties remains a “thing of value of the United States” under section 641, the district court did not err by repeating it. See United States v. Durham, 645 F.3d 883, 894 (7th Cir. 2011); see also Re- public Technologies (NA), LLC v. BBK Tobacco & Foods, LLP, 135 F.4th 572, 580 (7th Cir. 2025) (“It is rare for us to vacate a judg- ment based on a district court’s decision not to issue a clarify- ing response when the initial instruction was a correct state- ment of law.”). Zhao contends that the court should have pro- vided the jury with additional guidance in the form of factors that appellate decisions have considered when applying the supervision-and-control test. In some cases, it may be appropriate to supplement a jury instruction by identifying specific factors for the jury’s con- sideration. The utility of a multi-factor approach likely de- pends on the legal context, the clarity of applicable case law, and the phrasing of the instruction. See United States v. Brown, 726 F.3d 993, 1004 (7th Cir. 2013) (explaining, in context of buyer-seller instructions in drug conspiracy cases, that our cases “do not prohibit a multi-factor approach per se” but do require careful attention to how a multi-factor instruction is formulated), overruled on other grounds by United States v. No. 23-3366 17
Page, 123 F.4th 851, 862 (7th Cir. 2024) (en banc). The district court has substantial discretion to decide whether supple- menting jury instructions with specific factors is appropriate. See United States v. Papia, 560 F.2d 827, 843 (7th Cir. 1977) (“Generally, the necessity, extent and character of supplemen- tary instructions on the law requested by a jury are matters within the sound discretion of the trial court ….”). Reasonable minds could disagree about the utility of a multi-factor approach to defining government property on the facts of this case. Even experienced jurists and attorneys can find multi-factor tests difficult to apply, especially when the factors are unweighted. See Marrs v. Motorola, Inc., 577 F.3d 783, 788 (7th Cir. 2009). The factors that Zhao identifies from our case law are not only unweighted but adapted from a different factual context involving funds instead of tangible items. As we indicated above, some of the factors identified by our case law are tailored to the characteristics of financial instruments. Although those factors provided a good starting point for us to apply the supervision-and-control test to the government’s conduct in this case, they were not necessarily ideal guideposts for a jury composed of laypersons. In light of these features of our section 641 case law, it is far from clear whether further guidance about the supervi- sion-and-control test would have been more likely to help the jurors or confuse them. The district court was best situated to decide which outcome was more likely given Zhao’s offense conduct, the evidence presented, and the parties’ closing ar- guments. Judge Shah acted well within his substantial discre- tion by reiterating the legal standard and leaving the jury to rely on its “intuition and common sense” to evaluate whether the vaccination cards were government property. United 18 No. 23-3366
States v. Johnson, 916 F.3d 579, 586 (7th Cir. 2019) (encouraging district courts to use “simple and succinct instructions [that] invite the jury to rely on its own intuition and common sense in resolving the cases”; affirming jury instructions listing the Duran factors for determining a dealer’s purpose for carrying a weapon). C. Jury Instructions Finally, Zhao challenges the district court’s instructions on the value of the stolen property and Zhao’s knowledge about the stolen property. Because he failed to object to either in- struction on the grounds raised on appeal, we review his chal- lenges only for plain error. Fed. R. Crim. P. 30(d); United States v. Gan, 54 F.4th 467, 478 (7th Cir. 2022); United States v. Wheeler, 540 F.3d 683, 689 (7th Cir. 2008) (raising substantively differ- ent objection is not sufficient to preserve new argument for appeal). Zhao argues that the jury instructions were errone- ous in two respects. First, Zhao takes issue with the court’s instruction about the time at which value is established. Section 641 requires the jury to determine whether the value of the stolen property at issue exceeded $1,000. Consistent with the pattern instruc- tions for this circuit, the district court instructed the jury as follows: “‘Value’ means face value, market value, or a price actually paid for the item in question, whichever is greater. Market value is the price someone would be willing to pay for the item to someone else willing to sell it.” See The William J. Bauer Pattern Criminal Jury Instructions of the Seventh Cir- cuit, at 291 (Instruction for 18 U.S.C. § 641, “Definition of Value”). The court further instructed the jury: “Value is estab- lished at the time of possession rather than at the time of theft.” Zhao argues that the court’s instruction about the time No. 23-3366 19
when value is established misstated the law as set forth in United States v. Brookins, 52 F.3d 615 (7th Cir. 1995). The district court did not err, much less plainly so, by in- structing the jury to consider the value of the vaccination cards while they were in Zhao’s possession. The last para- graph of section 641 permits “a number of different methods of valuation for the purposes of determining whether a viola- tion should be classified and sentenced as a misdemeanor or as a felony.” United States v. Oberhardt, 887 F.2d 790, 792 (7th Cir. 1989). Measuring value at the time of the defendant’s pos- session reflects the value that the stolen property fetches on the “thieves’ market,” which may be substantially higher than other measures of value. See United States v. Ditata, 469 F.2d 1270, 1272 (7th Cir. 1972). Our case law, including Brookins, has long held that the price stolen property fetches on the “thieves’ market” is a permissible measure of value under sec- tion 641. See Brookins, 52 F.3d at 619–20 (“Furthermore, the Court allows the use of a ‘thieves’ market’ as ‘an appropriate method for determining the “market value” of [stolen] goods ....’” (quoting Oberhardt, 887 F.2d at 792)); see also Ditata, 469 F.2d at 1272–73 (district court properly instructed jury to de- termine value of stolen items as of dates of defendant’s pos- session of them instead of date they were stolen; citing cases reviewing section 641 convictions). Determining value at the time of possession was particularly appropriate in this case because the cards’ value on eBay was substantially higher than the per-unit cost the government paid to produce the cards, which it provided for free to Walgreens and other dis- tributors. Second, Zhao argues that the value instruction and the possession-of-stolen-property instruction were erroneous 20 No. 23-3366
because they presupposed that a theft necessarily occurred. This argument is meritless. We “consider the jury instructions in their entirety, rather than in ‘artificial isolation.’” United States v. Webber, 536 F.3d 584, 599 (7th Cir. 2008), quoting United States v. Westmoreland, 122 F.3d 431, 434 (7th Cir. 1997). The value instruction’s reference to the time of theft followed earlier instructions that required the jury to find first whether Zhao stole the property. The possession-of-stolen-property instruction informed the jury that it could infer that Zhao knew the property was stolen only “[i]f” it found that he “was in possession of property that recently had been stolen.” The instruction was worded conditionally and permissively, so it did not assume that a theft occurred. In any event, Zhao cannot establish that any error affected his substantial rights. See Puckett, 556 U.S. at 135. At trial, Zhao did not meaningfully contest the value of the vaccina- tion cards or whether he stole them from Walgreens. On ap- peal, he does not argue that the cards’ price on eBay did not accurately reflect their market value. And although Zhao sug- gests that the government failed to prove that he stole the blank vaccination cards from Walgreens, he does not actually challenge the sufficiency of the evidence for that element of section 641. Regardless, the government presented sufficient evidence at trial for a jury to conclude beyond a reasonable doubt that Zhao knowingly stole vaccination cards from his workplace. AFFIRMED.
Opinion
In the
United States Court of Appeals For the Seventh Circuit ____________________ No. 23-3366 UNITED STATES OF AMERICA, Plaintiff-Appellee, v.
TANGTANG ZHAO, Defendant-Appellant. ____________________
Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:21-cr-00505-1 — Manish S. Shah, Judge. ____________________
ARGUED NOVEMBER 8, 2024 — DECIDED JUNE 23, 2025 ____________________
Before RIPPLE, HAMILTON, and KIRSCH, Circuit Judges. HAMILTON, Circuit Judge. In late 2020, the federal govern- ment implemented a vaccination program to immunize the public against the novel coronavirus, COVID-19. The govern- ment supplied private entities with vaccine doses and ancil- lary supplies at no cost, so long as the entities agreed to com- ply with the terms of a provider agreement. Among the items the government provided were COVID-19 vaccination record cards to be completed and given to each vaccine recipient. 2 No. 23-3366
During the pandemic, defendant-appellant Tangtang Zhao, a pharmacist employed at Walgreens, took blank vac- cination cards from his workplace and sold them on eBay.com for his personal benefit. Zhao was charged with and convicted on twelve counts of theft of government property in violation of 18 U.S.C. § 641. On appeal, he argues that the government presented insufficient evidence to prove that the vaccination cards were government property when he took them from his workplace. He also challenges the trial judge’s response to the jury’s question about the definition of government property and parts of the jury instructions. We affirm. To secure a conviction under section 641, the government had to prove that it maintained sufficient “super- vision and control” over the vaccination cards in Walgreens’ possession. See United States v. Wheadon, 794 F.2d 1277, 1283– 84 (7th Cir. 1986). The government presented evidence that it controlled the use and distribution of the cards, retained ac- cess to the cards for quality assurance purposes, and could terminate Walgreens’ participation in the vaccination pro- gram for failure to comply with the provider agreement. From that evidence, the jury could find that the government’s su- pervision and control over the vaccination cards was suffi- cient to retain their federal character. The trial court also did not err in denying Zhao’s motions for judgment of acquittal, in answering the jury’s question, or in instructing the jury. I. Factual and Procedural Background A. The COVID-19 Vaccination Program The evidence presented at trial established the facts as fol- lows. On January 31, 2020, the Secretary of the Department of Health and Human Services (HHS) declared a national public No. 23-3366 3
health emergency due to the spread of a novel coronavirus known as COVID-19. On March 13, 2020, the President de- clared a national emergency. During the ensuing months, the federal government worked with pharmaceutical and bio- technology companies to develop effective vaccines for COVID-19 with unprecedented speed. The 2023 Nobel Prize in Physiology or Medicine was awarded to Katalin Karikó and Drew Weissman for their discoveries that enabled the de- velopment of effective vaccines using messenger RNA mole- cules. The federal government raced to distribute the new vac- cines as widely and quickly as possible. The government dis- tributed the new vaccines at no cost to providers that enrolled in the Centers for Disease Control and Prevention’s (CDC) COVID-19 vaccination program. At the same time, the federal government contracted with a private company to procure and distribute “ancillary kits” that contained supplies needed to administer the vaccines. The ancillary kits were also pro- vided at no cost to providers authorized to distribute COVID- 19 vaccine doses. The kits included COVID-19 vaccination record cards. The CDC provided a template for the cards’ de- sign specifying their dimensions and contents. The cards fea- tured both HHS’s and the CDC’s official symbols. After the kits were assembled, they were shipped to authorized provid- ers. Pursuant to the procurement contract, the kits, including the vaccination cards, became the federal government’s prop- erty after the government was invoiced, and they remained government property throughout the shipping process. CDC entered into agreements to distribute the vaccine with certain large retail pharmacy corporations, including Walgreens. In January 2021, Walgreens began providing in- 4 No. 23-3366
store vaccinations pursuant to its agreement with the CDC. The agreement prohibited Walgreens from selling or seeking reimbursement for the vaccine and ancillary supplies. It re- quired Walgreens to give each vaccine recipient or his or her legal representative a completed vaccination card. The agree- ment also included a hyperlink to a page on the CDC’s web- site that provided updated guidance and required providers to “monitor such identified guidance for updates and comply with such updates.” B. Defendant’s Thefts and Sales of COVID-19 Vaccination Cards Between March 24 and April 13, 2021, defendant Zhao was employed as a pharmacist at a Walgreens administering the COVID-19 vaccines. During this period, he listed 658 COVID- 19 vaccination cards for sale on eBay. He sold 630 of those cards, raising the cards’ price over time from $7.99 each to a high of $10.99 per card. Zhao received at least $5,600 from sell- ing vaccination cards. Some of the people who bought a vac- cination card reported doing so out of fear that unvaccinated people might be arrested or that the vaccination cards might be necessary to obtain food. In the title of the eBay listings and in communications with potential purchasers, Zhao empha- sized the cards’ authenticity. eBay sent Zhao five notices that it had removed his listings because they violated eBay’s government items policy. Zhao’s account was eventually placed on a 10-day selling restriction. After a reporter contacted Zhao through his eBay account, Zhao stopped selling vaccination cards and told eBay users inquiring about additional vaccination cards that his account had been hacked. No. 23-3366 5
C. Criminal Proceedings A grand jury charged Zhao with twelve counts of theft of government property in violation of 18 U.S.C. § 641. 1 The case was tried to a jury. At the close of the government’s case, Zhao moved for a judgment of acquittal on all counts. He argued primarily that the government had not shown that the vac- cination cards were government property at the time he took them. The district court denied the motion, and the jury found Zhao guilty on all counts. After trial, Zhao renewed his motion for judgment of ac- quittal. The district court denied his motion. The court sen- tenced Zhao to a one-year term of probation and imposed a
1 18 U.S.C. § 641 reads as follows:
Whoever embezzles, steals, purloins, or knowingly converts to his use or the use of another, or without authority, sells, conveys or disposes of any record, voucher, money, or thing of value of the United States or of any department or agency thereof, or any property made or being made under contract for the United States or any department or agency thereof; or Whoever receives, conceals, or retains the same with intent to convert it to his use or gain, knowing it to have been embezzled, stolen, purloined or converted— Shall be fined under this title or imprisoned not more than ten years, or both; but if the value of such property in the aggregate, combining amounts from all the counts for which the defendant is convicted in a single case, does not exceed the sum of $1,000, he shall be fined under this title or imprisoned not more than one year, or both. The word “value” means face, par, or market value, or cost price, either wholesale or retail, whichever is greater. 6 No. 23-3366
$5,600 fine. Zhao has appealed. He challenges the denial of his motion for a judgment of acquittal on the ground that the gov- ernment failed to produce evidence sufficient to prove that the vaccination cards remained government property at the time of the theft. He also challenges the district court’s re- sponse to the jury’s request for clarification regarding the def- inition of government property. Finally, he challenges the dis- trict court’s jury instruction defining “value” and its instruc- tion about Zhao’s knowledge. II. Discussion A. Sufficiency of the Evidence Zhao argues primarily that there was insufficient evidence to prove the vaccination cards were government property when he stole them from Walgreens. “We review de novo a district court’s denial of a motion for a judgment of acquittal for insufficient evidence.” United States v. Godinez, 7 F.4th 628, 638 (7th Cir. 2021). We construe the evidence in the light most favorable to the government, and we affirm the jury’s verdict if any rational trier of fact could have found the offense’s ele- ments satisfied beyond a reasonable doubt. Id., citing Jackson v. Virginia, 443 U.S. 307, 319 (1979). “This is usually a high hur- dle for a defendant to clear, but ‘the height of the hurdle de- pends directly on the strength of the government's evidence.’” United States v. Kelerchian, 937 F.3d 895, 907 (7th Cir. 2019), quoting United States v. Garcia, 919 F.3d 489, 496–97 (7th Cir. 2019). To establish a violation of 18 U.S.C. § 641, the government had to prove that Zhao stole or knowingly converted a “thing of value of the United States”—i.e., government property. United States v. Kristofic, 847 F.2d 1295, 1296 (7th Cir. 1988). No. 23-3366 7
The key question here under section 641 is whether the gov- ernment maintained a property interest in the vaccination cards at the time of theft or conversion. See United States v. Maxwell, 588 F.2d 568, 573 (7th Cir. 1978). To answer that ques- tion in this case, both parties cite a line of cases involving funds stolen after the government distributed them to third parties. Those cases establish that legal title is not dipositive. Rather, property distributed to a third party remains govern- ment property within the meaning of section 641 if “the fed- eral government still maintained supervision and control over the funds at the point when the funds were converted.” United States v. Wheadon, 794 F.2d 1277, 1283–84 (7th Cir. 1986). Although money is not perfectly analogous to tangible items like the vaccination cards in this case, the federal fund- ing cases provide a useful starting point for our analysis. In each case, the defendants were involved in administering fed- erally funded programs from which they misappropriated money. See Kristofic, 847 F.2d at 1299. In Wheadon, for exam- ple, we affirmed the convictions of the executive director of a local housing authority who had been siphoning federal funds allocated for low-income housing projects. 794 F.2d at 1279–80. Regardless of the federal program at issue, we ap- plied “the supervision and control test to determine owner- ship as between the federal government and an organiza- tional ‘conduit’ for federal funds.” Kristofic, 847 F.2d at 1299 (footnote omitted). This case involves the same basic inquiry. The vaccination cards indisputably belonged to the federal government before they were delivered to Walgreens. At that point, Walgreens took possession of the cards as an organizational conduit for 8 No. 23-3366
the government’s vaccination program. If the government maintained enough supervision and control over the vaccina- tion cards in Walgreens’ possession to retain the cards’ “fed- eral character,” id. at 1297–98 (internal quotation marks omit- ted), the cards were government property for purposes of sec- tion 641 at the time Zhao stole them from his workplace. Determining whether the government maintained suffi- cient supervision and control over stolen property in a third party’s possession requires a fact-intensive inquiry. Case law in this circuit and others has identified several categories of evidence that may be relevant and probative, including: whether the government retained a reversionary interest; whether the government restricted the use of the property; whether the government imposed internal controls; whether the government had the right to inspect or access the private entity’s records; statutory or regulatory provisions governing the property; and whether the government had the right to terminate the contract or cut off funding to the private entity. See Wheadon, 794 F.2d at 1284–85; United States v. Scott, 784 F.2d 787, 790–91 (7th Cir. 1986); Maxwell, 588 F.2d at 571–72; see also United States v. Osborne, 886 F.3d 604, 611–12 (6th Cir. 2018) (summarizing relevant factors identified by Sixth Cir- cuit and other circuits’ case law). But courts “have not explic- itly indicated the relative importance or weight of the various factors,” Osborne, 886 F.3d at 612, and other factors may be relevant depending on the case. After taking a fresh look at the evidence presented at trial, we agree with the district court’s analysis. The vaccination cards were distributed to private entities like Walgreens as part of a government-led program to develop and distribute vaccines for COVID-19 as rapidly as possible. The No. 23-3366 9
government presented evidence that the participants in the vaccination program shared a collective understanding that the cards were government property until given to a vac- cinated patient. Most revealing, Walgreens’ Director of Im- munizations testified that he understood the vaccines and an- cillary kits to be property of the federal government because they were provided free of charge. That understanding is corroborated by the CDC’s June 11, 2021 announcement that “all USG-furnished ancillary materi- als, including COVID-19 Vaccination Record Cards, have re- mained property of the United States Government for exclu- sive use in the CDC COVID-19 Vaccination Program since the program’s inception.” Upon announcement, that language was expressly incorporated into the provider agreement. Alt- hough all of Zhao’s sales occurred before that June 2021 an- nouncement, a jury could reasonably infer that the announce- ment was an accurate statement of the cards’ status since the inception of the vaccination program—especially since in February 2021, before defendant’s charged conduct, the CDC posted an update on its website saying that the COVID-19 vaccines remained government property until administered to the vaccine recipient. The vaccines and ancillary kits were distributed for the same purpose and governed by the same agreements, so the status of the vaccines could fairly be im- puted to the vaccination cards as well. The government also placed restrictions on how the vac- cination cards were to be used. The provider agreement pro- hibited Walgreens from selling the vaccination cards. The agreement also required Walgreens to issue completed cards to each vaccine recipient or her legal representative. As the district court explained, a jury could have inferred from this 10 No. 23-3366
condition that Walgreens was prohibited from handing out blank vaccination cards. The government also had the right to inspect the vaccination cards in the custody of the pharma- cies. It could also terminate participation in the vaccination program for non-compliance with the terms of the provider agreement, including those pertaining to the vaccination cards. The government’s use restrictions, right to access vac- cination cards in Walgreens’ custody, and right to terminate provider agreements together signaled that the government maintained sufficient supervision and control over the cards for them to retain their federal character. Zhao emphasizes that the government did not retain a re- versionary interest in the vaccination cards and that certain aspects of the vaccination program were not tightly con- trolled. For example, the government did not impose record- keeping requirements to track unused vaccination cards or is- sue guidance about how to store or secure blank cards. If the government has a revisionary interest in the prop- erty in question, that is a “particularly compelling” piece of evidence of control and supervision, though a reversionary interest is not necessary to establish control and supervision. Wheadon, 794 F.2d at 1285; see also Osborne, 886 F.3d at 617 (“Although failing to retain a reversionary interest alone may not be fatal, it does require showing a greater exercise of su- pervision or control via other means ….”). Many of our cases upholding section 641 convictions rely, in part, on the govern- ment’s right to demand repayment of surplus funds. See, e.g., Scott, 784 F.2d at 790–91; United States v. Mitchell, 625 F.2d 158, 161 (7th Cir. 1980); Maxwell, 588 F.2d at 572. In the absence of a reversionary interest, we have upheld a section 641 convic- tion based on evidence of more onerous use and tracking No. 23-3366 11
restrictions than those shown by the evidence in this case. See, e.g., Wheadon, 794 F.2d at 1284–85 (upholding conviction based on evidence that federal government retained control through quarterly reports; access to all records of third party; imposing duty to maintain and keep accurate records on third party; right to terminate any contract; right to cut off funding and to approve any disbursements; right of prior approval on all contracts, proposals, and appropriations; and right to con- duct on-site inspections). We need not decide whether the extent of supervision and control shown here would be sufficient in a case of money sto- len or embezzled from a recipient of federal funds. On the facts of this case, with the stolen vaccination cards, the ab- sence of more onerous conditions of participation in the vac- cination program does not undermine the jury’s verdict. The purpose of the supervision-and-control test is to resolve “the jurisdictional question whether the crime committed had been against the federal government.” Kristofic, 847 F.2d at 1299. Federal jurisdiction is satisfied by the federal govern- ment’s “continuing responsibility to see that the federal funds are spent as Congress intended.” United States v. Hamilton, 726 F.2d 317, 321 (7th Cir. 1984) (analogous crime under 18 U.S.C. § 665), cited with approval by United States v. Brown, 742 F.2d 359, 362 (7th Cir. 1984) (affirming section 641 convictions). A reasonable jury could conclude that, under the circum- stances of the vaccination cards’ distribution, the absence of a reversionary interest in the cards did not diminish or elimi- nate the government’s responsibility to see that the vaccina- tion cards were used only as intended. A procurement official testified that the government’s decision not to seek the return of unused ancillary supplies was motivated by concern about 12 No. 23-3366
storage conditions and COVID-19 transmission. The jury could have credited this testimony and concluded that the government’s cautious approach to disposing of excess vac- cination cards promoted the goals of the vaccination program without diminishing the federal character of the vaccination cards. Further, even though the provider agreement did not include a mechanism for returning surplus vaccination cards, Walgreens did not act as if it had the right to use or dispose of excess cards as it pleased. Rather than find another use for excess cards, Walgreens worked with the CDC to shred and destroy them, ensuring that the cards would be used only as intended in the vaccination program. The cooperation between the CDC and Walgreens on the disposal of excess cards is further evidence that the federal government had and exercised a continuing responsibility to see that the vaccination cards were used pursuant to the provider agreement. The other aspects of the vaccination program on which Zhao relies are not dispositive of the jurisdictional question either. The supervision-and-control test is fact-sensitive, Os- borne, 886 F.3d at 609, so both the nature of the stolen property and the emergency context in which the vaccination program took place are highly relevant to our analysis. As far as record- keeping requirements and other internal controls go, we might expect the government to treat vaccination cards differ- ently than federal grant money. Federal grants are fungible with other sources of funding, and they carry an obvious risk of misappropriation. Evidence that the government required a third party to keep federal funds separate and traceable and/or to maintain accurate records is important to show that No. 23-3366 13
the funds retained their federal identity. Once a grant “is paid over to the end recipient, utilized, commingled or otherwise loses its identity,” the money ceases to be federal. United States v. Harris, 729 F.2d 441, 447 (7th Cir. 1984) (analogous offense under 18 U.S.C. § 657), quoting United States v. Smith, 596 F.2d 662, 664 (5th Cir. 1979), cited with approval by Brown, 742 F.2d at 362 (affirming section 641 convictions). Unlike money, the vaccination cards, which were de- signed and printed pursuant to federal specifications, were not fungible with other property in the hands of authorized vaccine providers. Because vaccination cards are not fungible with non-federal property, they do not present the tracing problems created by federal grants. Cf., e.g., Harris, 729 F.2d at 446–47 (explaining that government would lose its interest in federal funds if those funds became untraceable). And at the beginning of the vaccination program, the cards’ potential for misappropriation was not obvious. In light of these differ- ences between grant money and vaccination cards, the lack of evidence of extensive recordkeeping and tracking require- ments does not undermine the jury’s verdict, at least as a mat- ter of law. The government did not need to impose such re- strictions—which may have been reasonably rejected as bur- densome and unnecessary to accomplish the goals of the vac- cination program—to retain the cards’ federal character. Finally, the jury could reasonably conclude that the gov- ernment exercised less supervision and control than it might have otherwise due to the magnitude of the public health emergency and the speed at which the government moved to address it. As witnesses testified, the pandemic presented a fluid and constantly evolving situation, requiring the govern- ment and vaccine providers to adjust quickly to new 14 No. 23-3366
information, sometimes on a day-to-day basis. The jury could have reasonably taken emergency conditions into account when determining how much supervision and control the government needed to exercise to maintain the federal char- acter of the cards in Walgreens’ possession. 2 Applying the deference owed to a jury’s verdict of convic- tion, we conclude that a reasonable jury could find that the vaccination cards were government property at the time of conversion. While the government’s control over the vaccina- tion cards was not airtight, it was sufficient to retain the cards’ “federal character,” Kristofic, 847 F.2d at 1298 (internal quota- tion marks omitted), in the context of a public health emer- gency and a vaccination program executed at an unprece- dented pace.
2 Zhao also argued to the jury that the government abandoned the
vaccination cards once they were distributed to Walgreens. Abandoned property cannot be converted. See Morissette v. United States, 342 U.S. 246, 271 (1952). The supervision-and-control test is not intended to resolve whether a theft occurred at all. See Kristofic, 847 F.2d at 1298. But our analysis above shows that a jury could have easily rejected Zhao’s alternative theory. “[P]roperty is considered to be abandoned when the owner, intending to relinquish all rights to the property, leaves it free to be appropriated by any other person.” Toll Processing Services, LLC v. Kastalon, Inc., 880 F.3d 820, 824 (7th Cir. 2018), quoting Bell Leasing Brokerage, LLC v. Roger Auto Service, Inc., 865 N.E.2d 558, 564 (Ill. App. 2007). The vaccination cards were clearly not intended to be appropriated by “any other person.” They were distributed only to authorized pharmacies pursuant to an agreement that specified their intended use, and Walgreens worked with CDC to destroy cards that were not used for that purpose. The weakness of Zhao’s alternative theory reinforces the reasonableness of the jury’s verdict. No. 23-3366 15
B. Response to the Jury’s Question Zhao also argues that the district court plainly erred in re- sponding to the jury’s request for clarification on the defini- tion of government property. The court’s final instructions told the jury that an “item or thing of value belongs to the United States if the federal government maintains sufficient supervision and control over the property after the property was distributed to some other entity.” During deliberations, the jury sent a note to the court asking: “What defines suffi- cient supervision and control?” The court responded: “There is no additional definition of sufficient supervision and con- trol. That is an issue for you to decide.” Plain-error review is not available when the defendant waives his objection in an “intentional relinquishment or abandonment of a known right.” United States v. Olano, 507 U.S. 725, 732–33 (1993), quoting Johnson v. Zerbst, 304 U.S. 458, 464 (1938). Because Zhao expressly approved the district court’s proposed response to the jury’s question, he has waived this argument. See United States v. Protho, 41 F.4th 812, 832 (7th Cir. 2022) (defendant waived challenge to response to jury question by approving response’s proposed lan- guage); United States v. Harden, 893 F.3d 434, 452 n.3 (7th Cir. 2018) (same). Even if plain-error review were available, reversal would not be warranted because the district judge did not err in re- sponding to the jury’s question. See Puckett v. United States, 556 U.S. 129, 135 (2009) (reversal appropriate only if a plain error affected defendant’s substantial rights and seriously af- fected the fairness, integrity, or public reputation of judicial proceedings). District judges have considerable discretion on both whether and how to answer a jury’s question. E.g., 16 No. 23-3366
Protho, 41 F.4th at 831; United States v. Sims, 329 F.3d 937, 943 (7th Cir. 2003). We consider three factors when reviewing the language of a supplemental instruction or answer to a jury question: “1) whether the instruction as a whole fairly and ad- equately treated the issue; 2) whether the supplemental in- struction was a correct statement of law; and 3) whether the district court answered the jury’s question specifically.” Sims, 329 F.3d at 943. Because the supervision-and-control test is a clear and cor- rect statement of when property distributed to third parties remains a “thing of value of the United States” under section 641, the district court did not err by repeating it. See United States v. Durham, 645 F.3d 883, 894 (7th Cir. 2011); see also Re- public Technologies (NA), LLC v. BBK Tobacco & Foods, LLP, 135 F.4th 572, 580 (7th Cir. 2025) (“It is rare for us to vacate a judg- ment based on a district court’s decision not to issue a clarify- ing response when the initial instruction was a correct state- ment of law.”). Zhao contends that the court should have pro- vided the jury with additional guidance in the form of factors that appellate decisions have considered when applying the supervision-and-control test. In some cases, it may be appropriate to supplement a jury instruction by identifying specific factors for the jury’s con- sideration. The utility of a multi-factor approach likely de- pends on the legal context, the clarity of applicable case law, and the phrasing of the instruction. See United States v. Brown, 726 F.3d 993, 1004 (7th Cir. 2013) (explaining, in context of buyer-seller instructions in drug conspiracy cases, that our cases “do not prohibit a multi-factor approach per se” but do require careful attention to how a multi-factor instruction is formulated), overruled on other grounds by United States v. No. 23-3366 17
Page, 123 F.4th 851, 862 (7th Cir. 2024) (en banc). The district court has substantial discretion to decide whether supple- menting jury instructions with specific factors is appropriate. See United States v. Papia, 560 F.2d 827, 843 (7th Cir. 1977) (“Generally, the necessity, extent and character of supplemen- tary instructions on the law requested by a jury are matters within the sound discretion of the trial court ….”). Reasonable minds could disagree about the utility of a multi-factor approach to defining government property on the facts of this case. Even experienced jurists and attorneys can find multi-factor tests difficult to apply, especially when the factors are unweighted. See Marrs v. Motorola, Inc., 577 F.3d 783, 788 (7th Cir. 2009). The factors that Zhao identifies from our case law are not only unweighted but adapted from a different factual context involving funds instead of tangible items. As we indicated above, some of the factors identified by our case law are tailored to the characteristics of financial instruments. Although those factors provided a good starting point for us to apply the supervision-and-control test to the government’s conduct in this case, they were not necessarily ideal guideposts for a jury composed of laypersons. In light of these features of our section 641 case law, it is far from clear whether further guidance about the supervi- sion-and-control test would have been more likely to help the jurors or confuse them. The district court was best situated to decide which outcome was more likely given Zhao’s offense conduct, the evidence presented, and the parties’ closing ar- guments. Judge Shah acted well within his substantial discre- tion by reiterating the legal standard and leaving the jury to rely on its “intuition and common sense” to evaluate whether the vaccination cards were government property. United 18 No. 23-3366
States v. Johnson, 916 F.3d 579, 586 (7th Cir. 2019) (encouraging district courts to use “simple and succinct instructions [that] invite the jury to rely on its own intuition and common sense in resolving the cases”; affirming jury instructions listing the Duran factors for determining a dealer’s purpose for carrying a weapon). C. Jury Instructions Finally, Zhao challenges the district court’s instructions on the value of the stolen property and Zhao’s knowledge about the stolen property. Because he failed to object to either in- struction on the grounds raised on appeal, we review his chal- lenges only for plain error. Fed. R. Crim. P. 30(d); United States v. Gan, 54 F.4th 467, 478 (7th Cir. 2022); United States v. Wheeler, 540 F.3d 683, 689 (7th Cir. 2008) (raising substantively differ- ent objection is not sufficient to preserve new argument for appeal). Zhao argues that the jury instructions were errone- ous in two respects. First, Zhao takes issue with the court’s instruction about the time at which value is established. Section 641 requires the jury to determine whether the value of the stolen property at issue exceeded $1,000. Consistent with the pattern instruc- tions for this circuit, the district court instructed the jury as follows: “‘Value’ means face value, market value, or a price actually paid for the item in question, whichever is greater. Market value is the price someone would be willing to pay for the item to someone else willing to sell it.” See The William J. Bauer Pattern Criminal Jury Instructions of the Seventh Cir- cuit, at 291 (Instruction for 18 U.S.C. § 641, “Definition of Value”). The court further instructed the jury: “Value is estab- lished at the time of possession rather than at the time of theft.” Zhao argues that the court’s instruction about the time No. 23-3366 19
when value is established misstated the law as set forth in United States v. Brookins, 52 F.3d 615 (7th Cir. 1995). The district court did not err, much less plainly so, by in- structing the jury to consider the value of the vaccination cards while they were in Zhao’s possession. The last para- graph of section 641 permits “a number of different methods of valuation for the purposes of determining whether a viola- tion should be classified and sentenced as a misdemeanor or as a felony.” United States v. Oberhardt, 887 F.2d 790, 792 (7th Cir. 1989). Measuring value at the time of the defendant’s pos- session reflects the value that the stolen property fetches on the “thieves’ market,” which may be substantially higher than other measures of value. See United States v. Ditata, 469 F.2d 1270, 1272 (7th Cir. 1972). Our case law, including Brookins, has long held that the price stolen property fetches on the “thieves’ market” is a permissible measure of value under sec- tion 641. See Brookins, 52 F.3d at 619–20 (“Furthermore, the Court allows the use of a ‘thieves’ market’ as ‘an appropriate method for determining the “market value” of [stolen] goods ....’” (quoting Oberhardt, 887 F.2d at 792)); see also Ditata, 469 F.2d at 1272–73 (district court properly instructed jury to de- termine value of stolen items as of dates of defendant’s pos- session of them instead of date they were stolen; citing cases reviewing section 641 convictions). Determining value at the time of possession was particularly appropriate in this case because the cards’ value on eBay was substantially higher than the per-unit cost the government paid to produce the cards, which it provided for free to Walgreens and other dis- tributors. Second, Zhao argues that the value instruction and the possession-of-stolen-property instruction were erroneous 20 No. 23-3366
because they presupposed that a theft necessarily occurred. This argument is meritless. We “consider the jury instructions in their entirety, rather than in ‘artificial isolation.’” United States v. Webber, 536 F.3d 584, 599 (7th Cir. 2008), quoting United States v. Westmoreland, 122 F.3d 431, 434 (7th Cir. 1997). The value instruction’s reference to the time of theft followed earlier instructions that required the jury to find first whether Zhao stole the property. The possession-of-stolen-property instruction informed the jury that it could infer that Zhao knew the property was stolen only “[i]f” it found that he “was in possession of property that recently had been stolen.” The instruction was worded conditionally and permissively, so it did not assume that a theft occurred. In any event, Zhao cannot establish that any error affected his substantial rights. See Puckett, 556 U.S. at 135. At trial, Zhao did not meaningfully contest the value of the vaccina- tion cards or whether he stole them from Walgreens. On ap- peal, he does not argue that the cards’ price on eBay did not accurately reflect their market value. And although Zhao sug- gests that the government failed to prove that he stole the blank vaccination cards from Walgreens, he does not actually challenge the sufficiency of the evidence for that element of section 641. Regardless, the government presented sufficient evidence at trial for a jury to conclude beyond a reasonable doubt that Zhao knowingly stole vaccination cards from his workplace. AFFIRMED.
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