Reaffirming IEEPA’s Constitutionality and Clarifying Limits on Mental‑Health and Entrapment Defenses: Commentary on United States v. Zhenyu Wang & Daniel Ray Lane (3d Cir. 2025)

Reaffirming IEEPA’s Constitutionality and Clarifying Limits on Mental‑Health and Entrapment Defenses: Commentary on United States v. Zhenyu Wang & Daniel Ray Lane (3d Cir. 2025)

I. Introduction

This commentary examines the United States Court of Appeals for the Third Circuit’s non‑precedential opinion in the consolidated appeals of United States v. Daniel Ray Lane and United States v. Zhenyu (“Bill”) Wang, decided November 19, 2025, by a panel consisting of Judges Hardiman, Krause, and Freeman, with Judge Krause writing for the Court.

The appellants were convicted in the Eastern District of Pennsylvania for their roles in a scheme involving Iranian oil that was subject to U.S. economic sanctions. They were charged with:

  • Conspiring to engage in, attempting to engage in, and engaging in transactions involving sanctioned Iranian oil, in violation of the International Emergency Economic Powers Act (IEEPA), 50 U.S.C. §§ 1701–1707, and 18 U.S.C. § 371; and
  • Conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h).

On appeal:

  • Wang raised:
    • a constitutional challenge to IEEPA under the nondelegation doctrine;
    • evidentiary challenges to the limitation and exclusion of his mental‑health expert’s testimony (Dr. Barber) under the Federal Rules of Evidence; and
    • a challenge to the denial of his requested jury instruction on mistake of law.
  • Lane argued:
    • that the jury should have found entrapment as a matter of law;
    • that the district court improperly restricted his cross‑examination of a key cooperating witness (Nicholas Fuchs); and
    • that the court’s jury instructions on entrapment were deficient.

Although explicitly labeled “NOT PRECEDENTIAL” under the Third Circuit’s Internal Operating Procedure 5.7, the decision is significant as a persuasive authority. It:

  • reaffirms the constitutionality of IEEPA’s delegation of power to the President;
  • clarifies the limits of using mental‑health evidence to negate mens rea in federal criminal trials;
  • tightens the application of hearsay and expert‑testimony rules (Rules 803(4) and 703) in the context of forensic evaluations requested by defense counsel; and
  • underscores the demanding standards for entrapment defenses and the broad discretion trial courts have over cross‑examination and jury instructions.

The Third Circuit ultimately affirmed all convictions, finding no reversible error in any of the issues presented.

II. Summary of the Opinion

A. Procedural Posture and Charges

The government prosecuted a scheme involving transactions in Iranian oil that had been sanctioned under U.S. foreign‑policy measures implemented via IEEPA. Both Wang and Lane were convicted in the district court of:

  • Sanctions‑related offenses: conspiracy, attempt, and substantive counts regarding transactions involving sanctioned Iranian oil (50 U.S.C. §§ 1701–1707; 18 U.S.C. § 371); and
  • Financial crimes: conspiracy to commit money laundering (18 U.S.C. § 1956(h)).

The district court had jurisdiction under 18 U.S.C. § 3231. The Third Circuit exercised jurisdiction under 28 U.S.C. § 1291.

B. Standards of Review

The Court explicitly set forth the following standards of review:

  • Constitutional challenge to IEEPA: reviewed de novo (citing United States v. Rodia, 194 F.3d 465, 469 (3d Cir. 1999); United States v. Bishop, 66 F.3d 569, 572 n.1 (3d Cir. 1995)).
  • Evidentiary rulings: reviewed for abuse of discretion (citing United States v. Gonzalez, 905 F.3d 165, 195 (3d Cir. 2018)).
  • Issues raised for the first time on appeal: reviewed for plain error (citing Gonzalez, 905 F.3d at 205 n.17; Fed. R. Crim. P. 52(b); United States v. Marcus, 560 U.S. 258, 262 (2010)).

C. Holdings in Brief

Judge Krause’s opinion, on behalf of a unanimous panel, held:

  1. IEEPA is a constitutional delegation of legislative authority under the nondelegation doctrine, consistent with the earlier Third Circuit decision in United States v. Amirnazmi, 645 F.3d 564 (3d Cir. 2011). Wang’s argument that the executive has expanded its use of IEEPA since that case did not undermine the statute’s “intelligible principle.”
  2. Limitations on Dr. Barber’s mental‑health testimony were proper. Although mental‑health evidence can be used to negate mens rea under United States v. Pohlot, 827 F.2d 889 (3d Cir. 1987), Dr. Barber’s proposed testimony—that social anxiety and PTSD caused Wang to exaggerate his illegal‑oil experience and participate to avoid “losing face”—did not show a lack of intent to commit the charged offenses. Excluding such testimony was within the district court’s discretion.
  3. Wang’s statements to Dr. Barber were inadmissible hearsay and not saved by Rules 803(4) or 703.
    • Rule 803(4) (“statements for medical diagnosis or treatment”) did not apply because Wang’s statements—particularly about his upbringing and circumstances—were made in a forensic evaluation arranged for litigation, not primarily for medical diagnosis or treatment.
    • Rule 703 did not permit Dr. Barber to act as a conduit for relaying Wang’s “self‑serving” narrative; the district court reasonably found that the probative value of disclosing those underlying hearsay statements did not “substantially outweigh” their prejudicial effect.
  4. The district court correctly rejected Wang’s mistake‑of‑law jury instruction. Under United States v. Hoffecker, 530 F.3d 137, 176 (3d Cir. 2008), a defendant is entitled to a specific instruction only if it (1) states the law accurately; (2) is supported by the evidence; (3) is not already covered in substance by the charge; and (4) its omission would deny a fair trial. For Wang, the second and third criteria failed:
    • The evidence showed he knew that dealing in sanctioned Iranian oil was illegal and could have legal consequences.
    • The court’s general instructions on knowledge and mistake adequately communicated that a genuine mistake could negate mens rea, consistent with United States v. Petersen, 622 F.3d 196, 208–09 (3d Cir. 2010).
  5. Lane’s entrapment defense failed as a matter of fact. Applying United States v. Davis, 985 F.3d 298 (3d Cir. 2021), and classic Supreme Court precedent:
    • No inducement: Government agents merely provided an opportunity; they did not use threats, coercion, or improper pressure. The solicitation arose initially from Lane’s own employee, not directly from law enforcement, and the agents repeatedly told Lane he could back out. The potential for large profits did not constitute inducement (citing United States v. Spentz, 653 F.3d 815, 819 (9th Cir. 2011), which in turn cites Sherman v. United States, 356 U.S. 369, 372 (1958)).
    • Predisposition: Lane did not demonstrate reluctance that was overcome by repeated government pressure. Rather, he expressed willingness to participate despite being told he could withdraw (citing United States v. Fedroff, 874 F.2d 178, 183 (3d Cir. 1989)).
  6. Restrictions on Lane’s cross‑examination of Fuchs were within the district court’s discretion. The court properly curtailed questioning about a third party, Samuel Gonzalez, because:
    • There was already ample impeachment material regarding Fuchs; and
    • Shifting blame or knowledge of money laundering to Gonzalez would not meaningfully show that Lane lacked that knowledge.
    The Third Circuit emphasized the “wide discretion in limiting cross‑examination” recognized in cases like United States v. Casoni, 950 F.2d 893, 918 (3d Cir. 1991).
  7. Lane’s challenge to the entrapment jury instruction, raised for the first time on appeal, did not meet the plain‑error standard. The trial court properly defined entrapment and the government’s burden, and reasonably clarified the concept in response to a jury question. Lane failed to show that any alleged deficiency affected his substantial rights or the trial’s fairness (Hoffecker; Marcus).

The Third Circuit accordingly affirmed the judgments of conviction for both defendants.

III. Detailed Analysis

A. The Constitutional Challenge to IEEPA and the Nondelegation Doctrine

1. Legal Background: IEEPA and the Nondelegation Principle

IEEPA authorizes the President, upon declaring a national emergency with respect to an “unusual and extraordinary threat” originating substantially outside the United States, to regulate or prohibit certain economic transactions, including those involving property in which a foreign country or national has an interest. Congress broadly delegated to the Executive the authority to design and implement sanctions regimes, subject to specified findings and periodic reporting.

Under the nondelegation doctrine, Congress may not abdicate its legislative power, but it can delegate broad discretion to the Executive so long as it supplies an “intelligible principle” to guide that discretion. Historically, the Supreme Court has upheld even very broad delegations as long as Congress articulates a general policy, identifies the agency or official, and sets limits on discretion.

2. Third Circuit’s Application: Reliance on Amirnazmi

Wang argued that IEEPA is an unconstitutional delegation of legislative authority, contending that the statute gives the President too much discretion in defining what conduct is criminal (e.g., by issuing sanctions regulations).

The Third Circuit rejected this argument by:

  • Explicitly invoking its prior decision in United States v. Amirnazmi, 645 F.3d 564 (3d Cir. 2011), where it upheld IEEPA against a nondelegation challenge.
  • Reaffirming that IEEPA contains an intelligible principle, because:
    • It limits presidential action to situations involving a declared national emergency concerning an “unusual and extraordinary threat” with a foreign nexus;
    • It structures the President’s authority in terms of specific economic tools (blocking property, regulating transactions) rather than general criminalization; and
    • It is accompanied by procedural safeguards such as reporting requirements and potential congressional termination of a national emergency.

Wang attempted to distinguish Amirnazmi by arguing that the executive branch has since “broadened its use” of IEEPA. The panel responded that:

Even if Wang is correct that the executive branch has broadened its use of IEEPA since Amirnazmi, that would not affect our prior conclusion that the statute satisfies the constitutional requirement of setting out an intelligible principle constraining delegated authority.

In other words, the constitutional analysis focuses on the statutory text and structure, not on how aggressively later Presidents use the authority. So long as the statute’s guiding principle remains intelligible, subsequent executive policy choices do not retroactively render the delegation unconstitutional.

3. Relationship to Other Nondelegation Cases

The Court cited United States v. Rodia, 194 F.3d 465 (3d Cir. 1999), and United States v. Bishop, 66 F.3d 569 (3d Cir. 1995), for the standard of de novo review of constitutional questions, not for substantive limits on delegation.

More broadly, Amirnazmi is consistent with a long line of Supreme Court jurisprudence upholding delegations in areas of foreign affairs and national security, where the Court has typically given Congress and the Executive greater leeway. The Third Circuit’s reaffirmation here signals its unwillingness—at least in a nonprecedential opinion—to narrow its prior endorsement of IEEPA in light of recent scholarly and judicial interest in reviving the nondelegation doctrine.

4. Impact and Implications

While nonprecedential, this opinion is a strong indicator that:

  • The Third Circuit continues to view IEEPA as constitutionally secure against nondelegation challenges.
  • Arguments based on the quantitative expansion of IEEPA’s use (e.g., proliferation of sanctions programs, secondary sanctions, or targeting of more private actors) will likely fail absent a change in Supreme Court doctrine or Congress’s statutory framework.
  • Defendants in sanctions‑related prosecutions in the Third Circuit will face a steep uphill battle if they rely on nondelegation theory as a defense.

Practically, this reinforces the stability of IEEPA-based prosecutions and the predictability of the sanction‑enforcement regime, at least within the Third Circuit.

B. Mental‑Health Evidence, Mens Rea, and Hearsay: Limits on Dr. Barber’s Testimony (Wang)

1. Mental Illness as a Tool to Negate Mens Rea: Pohlot and Its Application

Under federal law, evidence of mental illness can be admissible, not as a generalized “diminished capacity” defense, but to show that the defendant lacked the specific mental state (mens rea) required by the charged offense. The Third Circuit’s leading case, United States v. Pohlot, 827 F.2d 889 (3d Cir. 1987), permits such evidence within narrow confines:

  • It may negate mens rea (e.g., show that the defendant did not intend, did not know, or could not form the requisite purpose).
  • It may not be used to excuse or justify otherwise knowing and intentional conduct (e.g., “I knew it was crime, but my condition made me do it”).

In Wang’s case, his expert, Dr. Barber, would have testified that:

  • Wang suffered from social anxiety and PTSD; and
  • These conditions caused him to:
    • pretend to have experience in illegal oil transactions; and
    • participate in the scheme so as not to lose “face” before co‑conspirators.

The Third Circuit held that such testimony did not truly negate mens rea. At most, it described:

  • Why Wang chose to commit the offense (social/psychological motives), not whether he:
    • understood that the transactions were illegal; or
    • intended to engage in conduct prohibited by IEEPA and the money‑laundering statutes.

Because the proposed testimony did not show a lack of intent, the district court did not abuse its discretion in limiting or excluding it. This reinforces Pohlot’s line: mental‑health evidence is admissible only when it genuinely undermines the existence of the required mental state, not when it simply makes the defendant appear less morally blameworthy.

2. Hearsay and Rule 803(4): When Are Statements “for Medical Diagnosis or Treatment”?

Wang also sought to introduce, via Dr. Barber, his own statements made during her pre‑trial evaluation. The government objected as hearsay. Wang invoked Federal Rule of Evidence 803(4), which creates a hearsay exception for:

Statements that are made for — and are reasonably pertinent to — medical diagnosis or treatment.

The Third Circuit agreed with the district court that Rule 803(4) did not apply here, emphasizing:

  • The purpose of the evaluation: Dr. Barber was retained by defense counsel to evaluate Wang for trial, not for ongoing or prospective treatment.
  • The content of the statements: Much of what Wang recounted concerned his upbringing in China and his narrative of the events, tailored to support a legal defense that he lacked intent or was less blameworthy.

The Court contrasted these facts with:

  • United States v. Gonzalez, 905 F.3d 165, 199–201 (3d Cir. 2018), where Rule 803(4) covered statements made by a victim to a therapist she had long consulted for treatment about her symptoms and emotional state; and
  • United States v. Iron Shell, 633 F.2d 77, 84 (8th Cir. 1980), where statements to a physician about a sexual assault were admitted because the victim had no reason to provide them other than to receive treatment.

From these comparisons, the Third Circuit distilled a key principle: the Rule 803(4) exception is limited to statements whose primary purpose is diagnosis or treatment, not those made in a forensic setting primarily to help a litigant’s case.

In practical terms, this decision:

  • Heavily disfavors the admission of a defendant’s self‑serving narrative offered to an expert retained specifically for litigation under Rule 803(4).
  • Signals that courts will carefully scrutinize whether “for treatment” is genuine or pretextual.

3. Rule 703: Expert Reliance on Inadmissible Facts vs. Using Experts as a Hearsay Conduit

Wang alternatively argued that his statements should come in under Rule 703, which permits experts to base their opinions on otherwise inadmissible facts or data if experts in the field would reasonably rely on those types of facts. However, Rule 703 also governs when those underlying facts may themselves be disclosed to the jury:

If the facts or data would otherwise be inadmissible, the proponent of the opinion may disclose them to the jury only if their probative value in helping the jury evaluate the opinion substantially outweighs their prejudicial effect.

The district court:

  • Allowed Dr. Barber to testify about her methods and conclusions; but
  • Prohibited her from relaying Wang’s “self‑serving” statements essentially verbatim to the jury.

The Third Circuit endorsed that approach, citing Marvel Characters, Inc. v. Kirby, 726 F.3d 119, 136 (2d Cir. 2013), and Malletier v. Dooney & Bourke, Inc., 525 F. Supp. 2d 558, 666 (S.D.N.Y. 2007), for the proposition that Rule 703 is not a “conduit” that allows parties to smuggle hearsay before the jury under the guise of expert reliance.

By implicitly concluding that the probative value of Wang’s statements did not “substantially outweigh” their prejudicial effect, the district court acted within its discretion. The appellate court’s affirmation reinforces several key points:

  • Experts may rely on a defendant’s statements when forming opinions, but that does not automatically entitle the defendant to present those statements to the jury substantively.
  • Courts will be especially skeptical when the statements are obviously self‑exculpatory or tailored to minimize culpability.
  • Defense counsel should expect to present the expert’s conclusions, not a narrative re‑telling of the defendant’s version of events via the expert.

4. Impact on Mental‑Health Defenses and Forensic Evaluations

The combined effect of the Court’s rulings on Dr. Barber’s testimony is to:

  • Narrow the circumstances under which mental‑health evidence can practically negate mens rea.
  • Clarify that forensic examinations conducted solely or primarily for litigation purposes will rarely support Rule 803(4) admission of the defendant’s statements.
  • Reinforce the gatekeeping function of Rule 703 to prevent experts from becoming vehicles for self‑serving hearsay.

For defense practice, this suggests:

  • Forensic experts should be used sparingly and strategically, with a clear theory of how the mental condition genuinely undercuts the statutory mental state.
  • Where possible, records or experts tied to long‑standing therapeutic relationships (rather than litigation‑driven evaluations) may better support hearsay exceptions like Rule 803(4).

C. Mistake of Law, Knowledge, and Jury Instructions (Wang)

1. The Hoffecker Standard for Defense Instructions

Wang contended that the district court erred in refusing his requested specific instruction on mistake of law. Under United States v. Hoffecker, 530 F.3d 137, 176 (3d Cir. 2008), a defendant is entitled to a requested theory‑of‑defense instruction only if:

  1. It is a correct statement of law;
  2. The defense theory is supported by the evidence;
  3. The instruction is not substantially covered by the charge as given; and
  4. The omission of the instruction would deprive the defendant of a fair trial.

The Third Circuit focused on prongs (2) and (3).

2. Evidence of Knowledge vs. Claimed Mistake

The Court concluded that Wang’s proposed mistake‑of‑law instruction lacked evidentiary support because:

  • The evidence showed that Wang knew transacting in sanctioned Iranian oil was illegal; and
  • He understood his participation could have legal consequences.

The panel emphasized that even if Wang lacked the practical means to fully carry out his role (e.g., he might have exaggerated his capabilities), this does not negate his knowledge that the scheme was unlawful.

The Court accordingly treated this as a case where the evidence strongly supported knowledge and intent, leaving no non‑frivolous evidentiary basis for a mistake‑of‑law theory. Without such a foundation, a separate, more detailed instruction was unnecessary.

3. Overlap with General Mens Rea Instructions: Petersen

The Third Circuit further held that the district court’s existing jury instructions already covered, in substance, Wang’s requested instruction. The charge:

  • Explained that the government had to prove Wang acted “knowingly”; and
  • Made clear that a mistake could negate mens rea if it meant the defendant did not act knowingly.

This aligns with United States v. Petersen, 622 F.3d 196, 208–09 (3d Cir. 2010), which recognizes that an instruction defining “knowledge” and explaining that honest mistakes can undermine that element may suffice without requiring a separate, labeled “mistake-of-law” instruction.

Put differently, the jury was told that if Wang genuinely did not understand what he was doing or thought it was lawful, he should be acquitted. The fact that the charge did not label this theory as “mistake of law” was not prejudicial.

4. Practical Effect

This ruling underscores:

  • Courts will not give special mistake‑of‑law instructions absent a concrete evidentiary basis suggesting actual confusion about legality.
  • Generic mens rea instructions, properly framed, can sufficiently incorporate the possibility that mistake (of fact or law, depending on the statute) might negate the mental state.
  • Defense counsel should not expect success with abstract mistake‑of‑law theories when the record demonstrates the defendant clearly knew the conduct was illegal.

D. Entrapment, Predisposition, and Government Conduct (Lane)

1. Entrapment Framework: Inducement + Lack of Predisposition

Entrapment is a complete defense when:

  1. The government induces the defendant to commit the offense; and
  2. The defendant was not predisposed to engage in the criminal conduct before the government’s intervention.

The Third Circuit has recently reaffirmed this framework in United States v. Davis, 985 F.3d 298, 306–07 (3d Cir. 2021). Classic Supreme Court authority (United States v. Russell, 411 U.S. 423 (1973); Sherman v. United States, 356 U.S. 369 (1958)) and Third Circuit precedent (United States v. Marino, 868 F.2d 549 (3d Cir. 1989); Fedroff) guide the analysis.

On appeal, the jury’s rejection of an entrapment defense will be set aside only if no reasonable jury could have concluded that the defendant was not entrapped.

2. No Government “Inducement”: Mere Opportunity Is Not Enough

To establish inducement, Lane had to show more than that the government gave him an opportunity to commit the offense. As the Supreme Court explained in Russell:

Entrapment occurs only when the criminal conduct is the product of the creative activity of law‑enforcement officials.

The Third Circuit reiterated that inducement requires government conduct that is:

  • More than offering an opportunity; and
  • Involves improper tactics such as:
    • coercion,
    • threats,
    • intimidation, or
    • extraordinary pressure (as in some Marino scenarios).

Applied to Lane, the record showed:

  • The initial opportunity arose not directly from the government, but from Lane’s own employee, Nicholas Fuchs.
  • Undercover government operatives repeatedly assured Lane and co‑conspirators that they could withdraw at any time.
  • The allure of the substantial financial reward for laundering proceeds of illegal sales, while substantial, is not, by itself, “inducement.” The panel cited United States v. Spentz, 653 F.3d 815, 819 (9th Cir. 2011), relying on Sherman, to emphasize that high potential profits alone do not transform lawful undercover activity into entrapment.

Thus, a reasonable jury could find that any criminal decisions Lane made were his own, not the product of coercive law‑enforcement conduct.

3. Predisposition: Reluctance vs. Willing Participation

The second element of entrapment is lack of predisposition. Predisposition generally asks whether the defendant was:

  • ready and willing to commit the crime whenever the opportunity arose; or
  • instead, a normally law‑abiding citizen who would not have committed the offense but for government pressure.

Fedroff emphasizes that a key indicator is whether the defendant:

evidenced reluctance to engage in criminal activity which was overcome by repeated Government inducement.

The Court found that Lane’s behavior did not show such reluctance:

  • He repeatedly signaled his willingness to participate in the scheme.
  • He did so even after being told that he could back out.
  • There was no pattern of initial hesitation overcome by persistent government cajoling.

Lane also argued that evidence related to the legality of transactions in Russian oil (as opposed to Iranian oil) should have been admitted to show that he was not predisposed to commit the Iranian‑oil offenses. The panel noted—correctly and succinctly—that the legality of other conduct (Russian oil trading) was irrelevant to predisposition to engage in this illegal scheme (sanctioned Iranian oil).

Given the record, the Court held that a reasonable jury could find that Lane was predisposed and not entrapped, thus precluding reversal.

4. Takeaways on Entrapment

The opinion reinforces several entrenched principles in entrapment jurisprudence:

  • Entrapment is hard to prove. A defendant must show both improper government conduct and lack of predisposition; failing either element is fatal.
  • Profit motives are not inducement. That a scheme promises large financial reward is typically not enough; the government is allowed to present lucrative criminal opportunities without automatically entrapping people.
  • Reluctance matters. The Court is especially alert to whether a defendant initially resists and is then pressured into crime, or engages willingly once the opportunity appears.

For practitioners, this means entrapment defenses must be fact‑intensive and supported by credible evidence of both excessive government pressure and a genuinely reluctant defendant.

E. Limits on Cross‑Examination: The Attempt to Shift Blame to Gonzalez (Lane)

1. The Dispute Over Cross‑Examining Fuchs About Gonzalez

Lane claimed that the district court erred by restricting his ability to cross‑examine Nicholas Fuchs regarding Samuel Gonzalez, described as a money launderer and drug dealer whom Fuchs contacted in connection with the scheme.

Lane’s apparent goals were:

  • To undermine Fuchs’s credibility further by exploring his interactions with Gonzalez; and
  • To shift knowledge of money laundering away from Lane to Gonzalez (i.e., suggesting Lane was less sophisticated and less culpable).

2. The Court’s Deference to Trial‑Level Discretion

The Third Circuit emphasized that trial courts have “wide discretion in limiting cross‑examination,” citing United States v. Casoni, 950 F.2d 893, 918 (3d Cir. 1991). Here, the district court found:

  • Further questioning about Gonzalez had limited probative value, given that Fuchs had already been extensively impeached.
  • Attempting to attribute knowledge to Gonzalez would not directly show that Lane himself lacked knowledge about money laundering.

The appellate court agreed. Evidence about a third party’s knowledge cannot substitute for direct evidence about the defendant’s state of mind. Moreover, courts may limit tangential cross‑examination that would confuse issues, waste time, or add marginal value to impeachment that is already robust in the record.

The decision illustrates that:

  • Sixth Amendment confrontation rights do not guarantee boundless cross‑examination.
  • Trial judges may restrict collateral lines of attack when the basic opportunity to impeach credibility has been afforded.

F. Entrapment Jury Instructions and Plain‑Error Review (Lane)

1. Lane’s Challenge and the Plain‑Error Standard

Lane argued, for the first time on appeal, that the trial court’s entrapment instruction did not give the jury enough guidance and that his proposed alternative instruction might have led to a different verdict.

Because he did not raise the objection below, the Third Circuit reviewed only for plain error (Fed. R. Crim. P. 52(b); Marcus). Under this standard, Lane had to show:

  1. There was an error;
  2. The error was “plain” (clear or obvious);
  3. The error affected his substantial rights (usually meaning it affected the outcome); and
  4. Even then, that the Court should exercise its discretion to correct the error because it seriously affected the fairness, integrity, or public reputation of judicial proceedings.

2. Adequacy of the Entrapment Instruction

The panel held that:

  • The district court properly defined the elements of entrapment and the government’s burden; and
  • The court “sufficiently” responded when the jury asked for clarification.

Lane also claimed that the jury did not receive specific “facts” that his preferred instruction would have emphasized—such as his alleged reluctance or the influence of the profits. The Third Circuit dismissed this line of argument because:

  • Many of the supposed “facts” were not supported by the record (e.g., Lane’s claimed reluctance); and
  • Even if some were true (e.g., attraction to profit), they would still not establish entrapment as a matter of law.

Thus, Lane could not show that any deviation from his preferred wording was erroneous, let alone plainly erroneous and prejudicial.

3. Broader Lesson: High Bar for Instructional Error on Appeal

In combination with the Hoffecker standard already discussed for Wang’s mistake‑of‑law instruction, this part of the opinion confirms:

  • Appellate courts rarely overturn convictions based on alleged jury‑instruction defects, especially when:
    • The basic legal standard was correctly stated; and
    • The dispute concerns nuance or emphasis rather than fundamental misstatements of law.
  • Plain‑error review, in particular, is stringent: defendants must show not only error, but also clear prejudice.

IV. Complex Concepts Simplified

Below is a concise explanation of key legal concepts used in the opinion.

1. IEEPA (International Emergency Economic Powers Act)

  • A federal statute giving the President broad authority to regulate economic transactions in response to foreign threats during declared national emergencies.
  • Often used to implement sanctions on foreign governments, individuals, or sectors (e.g., Iranian oil).

2. Nondelegation Doctrine

  • Constitutional principle that Congress cannot hand over its core legislative power to another branch.
  • However, Congress may delegate broad regulatory authority if it provides an “intelligible principle” to guide the delegate’s actions (e.g., limiting power to respond to “unusual and extraordinary threats”).

3. Mens Rea

  • Latin for “guilty mind.” Refers to the mental state required by a criminal statute (e.g., “knowingly,” “intentionally,” “willfully”).
  • To convict, the government must usually prove both actus reus (the act) and mens rea (the mental state).

4. Entrapment

  • A defense asserting that the government caused a normally law‑abiding person to commit a crime they otherwise would not have committed.
  • Requires proof that:
    1. The government induced the offense (more than just offering an opportunity); and
    2. The defendant was not predisposed to commit the crime.

5. Predisposition

  • Whether the defendant was inclined or willing to commit the offense before government involvement.
  • Courts look at factors like prior similar conduct, readiness to participate, and whether reluctance was overcome by government pressure.

6. Hearsay and Rule 803(4)

  • Hearsay: an out‑of‑court statement offered to prove the truth of what it asserts, generally inadmissible unless a rule or statute provides an exception.
  • Rule 803(4): allows admission of statements made for, and reasonably pertinent to, medical diagnosis or treatment (e.g., describing symptoms or medical history to a doctor for treatment). Not meant for litigation‑driven forensic evaluations.

7. Rule 703 — Bases of an Expert’s Opinion

  • Experts can base opinions on facts or data that may themselves be inadmissible, if such reliance is standard in the field.
  • But the underlying facts/data may be disclosed to the jury only if their probative value in evaluating the expert’s opinion substantially outweighs any prejudicial effect.
  • Experts cannot be used as “mouthpieces” to relay self‑serving hearsay to the jury.

8. Mistake of Law vs. Mistake of Fact

  • Mistake of fact: misperception about facts (e.g., “I thought the oil was from a non‑sanctioned country”). Can sometimes negate mens rea.
  • Mistake of law: misunderstanding about whether conduct is legally prohibited (e.g., “I knew it was Iranian but thought sanctions did not apply to this transaction”). Usually not a defense unless the statute makes knowledge of unlawfulness an element, or in rare circumstances involving specific reliance on official interpretations.

9. Standards of Appellate Review

  • De novo: appellate court gives no deference to the lower court and decides the question as if it were new (used for pure questions of law, such as constitutionality).
  • Abuse of discretion: appellate court defers to the trial court unless its decision was arbitrary, irrational, or based on an error of law (commonly used for evidentiary rulings).
  • Plain error: a very demanding standard used when an issue is raised for the first time on appeal. Requires a clear error that affects substantial rights and seriously impacts fairness or integrity.

V. Conclusion

The Third Circuit’s decision in United States v. Zhenyu Wang and United States v. Daniel Ray Lane, though nonprecedential, offers a detailed snapshot of how federal courts are presently handling complex issues at the intersection of national‑security sanctions, mental‑health evidence, sophisticated undercover operations, and jury‑instruction challenges.

Key takeaways include:

  • IEEPA remains constitutionally solid under the nondelegation doctrine, and expanding executive use of sanctions powers does not by itself unsettle prior judicial approval of the statute’s “intelligible principle.”
  • Mental‑health evidence is tightly cabined. Under Pohlot, it is admissible only to genuinely negate the mens rea element, not to provide an explanatory or sympathetic account of why a defendant knowingly joined a conspiracy.
  • Forensic evaluations for litigation are poor vehicles for hearsay exceptions. Statements to experts retained by counsel primarily for trial are not “for treatment” under Rule 803(4) and will often be excluded when offered substantively via Rule 703.
  • Mistake‑of‑law defenses require concrete evidentiary support. Courts will rely on general mens rea instructions unless a specific, supported mistake theory justifies a tailored charge.
  • Entrapment defenses remain difficult to sustain. Offering a lucrative criminal opportunity is not, without more, inducement, and the absence of clear reluctance undercuts claims of lack of predisposition.
  • Trial courts retain broad discretion in managing cross‑examination and in framing jury instructions, with appellate correction limited to clear cases of abuse or plain error.

In the broader legal landscape, this opinion underscores the judiciary’s continued deference to the executive’s foreign‑affairs authority under IEEPA, while also demonstrating a robust insistence on traditional evidentiary discipline and on narrow, fact‑based applications of defenses like diminished mens rea and entrapment. For lawyers practicing in sanctions‑related prosecutions and complex federal criminal cases, it serves as a useful, if nonbinding, roadmap of the Third Circuit’s current thinking.

Case Details

Year: 2025
Court: Court of Appeals for the Third Circuit

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