United States v. Jones ( 1993 )


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  • December 9, 1993
    UNITED STATES COURT OF APPEALS
    FOR THE FIRST CIRCUIT
    No. 93-1122
    UNITED STATES OF AMERICA,
    Appellee,
    v.
    STEPHEN C. JONES,
    Defendant, Appellant.
    ERRATA SHEET
    Please make the following  correction in the opinion in the  above
    case released on December 3, 1993:
    Page, line 2:    "entences" should be corrected to read
    "sentences"
    UNITED STATES COURT OF APPEALS
    FOR THE FIRST CIRCUIT
    No. 93-1122
    UNITED STATES OF AMERICA,
    Appellee,
    v.
    STEPHEN C. JONES,
    Defendant, Appellant.
    APPEAL FROM THE UNITED STATES DISTRICT COURT
    FOR THE DISTRICT OF MAINE
    [Hon. Gene Carter, U.S. District Judge]
    Before
    Selya and Stahl, Circuit Judges,
    and Fuste,* District Judge.
    Morris M.  Goldings  with  whom  Richard S.  Jacobs  and  Mahoney,
    Hawkes & Goldings were on brief for appellant.
    Margaret  D.  McGaughey,  Assistant United  States  Attorney, with
    whom Jay P. McCloskey, United  States Attorney, and Raymond C. Hurley,
    Assistant United States Attorney, were on brief for appellee.
    December 3, 1993
    *Of the District of Puerto Rico, sitting by designation.
    FUSTE,  District Judge.     Defendant  Stephen C. Jones
    FUSTE,  District Judge.
    was  convicted of  conspiracy to  defraud  two federally  insured
    banks and to  transport forged securities in  interstate commerce
    in  violation  of 18  U.S.C.    2314  (Count  1), bank  fraud  in
    violation  of 18  U.S.C.    1344  (Counts II  and  III), and  the
    interstate transportation of  forged securities in  contravention
    of 18 U.S.C.    2314 (Counts IV and  V).  Jones argues  on appeal
    that (1) a UCC-3  release of collateral form is  not a "security"
    as defined by  pertinent statute and his conviction  on Counts IV
    and V should,  therefore, be reversed; (2) the  judge incorrectly
    gave a  willful blindness  instruction as  to Jones'  intent; (3)
    there was insufficient evidence to support the verdicts; (4)  the
    court erroneously denied a motion to sever Jones' trial from that
    of his  codefendant, and (5)  the sentence was overly  severe and
    was incorrectly based on Jones' occupation as an attorney.
    We conclude that a UCC-3 release of  collateral form is
    not a  security as  provided for in  the applicable  statute, the
    willful blindness instruction was correctly given, and the denial
    of  the motion for  severance was not  an error.   We reverse the
    conviction  on  Counts IV  and  V  and the  consecutive  ten-year
    sentence imposed for the transportation of forged securities.  We
    find  that  there  was  sufficient  evidence  to  support  Jones'
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    2
    conviction on Counts  I, II, and III and  therefore the five-year
    concurrent sentences imposed on those counts shall stand.
    I.
    Background
    Viewing the evidence in the light most favorable to the
    government,  see United States v. Rivera-Santiago, 
    872 F.2d 1073
    ,
    1078-79  (1st  Cir.),  cert.  denied, 
    492 U.S. 910
      (1989), the
    following facts  were established  at trial.    During the  early
    1970s, defendant Stephen C. Jones, together with his father Allan
    and  Jones' codefendant, Robert  Welch, formed a  holding company
    called  Iyanough  Management,  which over  the  years  acquired a
    number of hotels, motels, and  other property.  In 1985, Iyanough
    Management  entered  into  a partnership  known  as  Armory Hotel
    Associates  with a group of contractors  and developers in Maine.
    The  purpose of  the partnership  was  to convert  an old  armory
    building in Portland, Maine, into  the Portland Regency Inn.  The
    renovations were  financed through a  loan from Patriot  Bank for
    $8.2 million, which was secured by a mortgage of the building and
    a  security  interest  covering   the  furniture,  fixtures,  and
    equipment of the hotel.  A further cash infusion into the project
    was obtained from the  Berkshire Saving Bank in the form  of a $2
    million irrevocable line of credit, which was secured by a second
    mortgage on  the building and  a second security interest  in the
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    3
    furniture,  fixtures, and equipment  of the hotel.   As a part of
    the original mortgage agreement with  the two banks, Armory Hotel
    Associates signed a  UCC-1 form with each  bank.  This form  is a
    financing statement which certifies that a party holds a security
    interest in  particular property.   The UCC-1  is filed  with the
    Secretary of  State's office  so that any  later parties  will be
    aware that there  is an encumbrance  upon the property.   Each of
    the  mortgage  agreements   with  the  banks  provided   that  no
    additional  encumbrances upon  the collateral could  be incurred,
    and  in the  event that  any  part of  the security  was  sold or
    transferred, the entire mortgage debt would be due and payable on
    demand.  As one of  the partners in the Armory Hotel  Associates,
    Jones signed the notarized mortgage security agreements with both
    banks.
    Beginning  in  1987,   Iyanough  Management  began   to
    experience financial difficulties.  As a measure to generate cash
    flow,  a sale  and lease  back  of the  furniture, fixtures,  and
    equipment  of the  Portland Regency  Inn  was negotiated  through
    broker David  Mudie.   Mudie was originally  led to  believe that
    Iyanough Management owned the Portland Regency and its furniture,
    fixtures and equipment.   Through a search with  the Secretary of
    State's  Office, Mudie  found out  that  Armory Hotel  Associates
    actually owned  the hotel and  its contents,  and discovered  the
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    lien on the fixtures, furniture  and equipment.  As a result,  in
    order  to complete  the sale  and lease  back, Kansallis  Finance
    Ltd.,  the group  financing  the  transaction,  required  that  a
    release of  the security  interests of  Berkshire County  Savings
    Bank and  Patriot Bank be  perfected through the filing  of UCC-3
    forms.   A UCC-3  is a document  which can  be used to  release a
    security interest in certain property which has been memorialized
    in a UCC-1.1   Welch induced employees of  Iyanough Management to
    forge the signatures of the loan officers of the two banks on the
    release forms.   The two forged documents, purporting  to release
    the  interest of the two banks, were  filed with the Secretary of
    State's office in Maine in  August 1987.  Welch also directed  an
    employee to forge the  signature of one of the  Maine partners of
    the Armory  Hotel Associates on  various other forms  required by
    Kansallis.
    One  of Kansallis' prerequisites for the closing was an
    opinion letter from  counsel for Armory Hotel  Associates opining
    that Kansallis was  receiving a  first security  interest in  the
    collateral consisting of the  furniture, fixtures, and equipment.
    Two drafts of  the opinion letter were  sent to Jones at  his law
    firm by the attorney for Kansallis.  The final opinion letter was
    1A UCC-3  can also be  used to  continue, assign or  amend a
    security interest.  When we discuss the document in this case, we
    are referring to its use as a release of a security interest.
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    5
    returned  to Kansallis' counsel  on the letterhead  of Jones' law
    firm,  and  was signed  by  John  Aufiero, counsel  for  Iyanough
    Management.   Aufiero testified  at trial that  he was  given the
    form by Jones to sign.  David Mudie testified that he  spoke with
    Jones  several  times  about the  transaction  and  the documents
    necessary to complete  the arrangement.  When the transaction was
    completed,   the  sum  of   $1,288,533  was  wired   to  Iyanough
    Management's  account.  Approximately $290,000 of the proceeds of
    the loan were  eventually transferred into  an account in  Jones'
    name.
    FBI Agent  James Osterrieder interviewed Jones  as part
    of  his  investigation  of  the  forged  documents.    During the
    interview, Jones stated  that initially it was his  idea to carry
    out  the sale  and lease  back  of the  furniture, fixtures,  and
    equipment, in order to generate cash.  Jones stated  that he knew
    that the  banks had  a lien  on the equipment,  but thought  that
    there was a clause in the  closing document which would allow for
    the sale and lease  back.  Jones also told the  agent that he and
    Welch  had discussed  the need  for a  UCC-3 release  of interest
    before the sale and lease back could proceed, but that Welch said
    that he would take  care of the problem.  Jones  admitted that he
    had seen  a draft  of the  opinion letter  which was required  by
    Kansallis to consummate the sale and lease back deal, and that he
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    arranged to have Aufiero sign the letter because Jones was out of
    town at the time.
    Robert Welch pled  guilty to bank fraud  and interstate
    transportation  of forged securities,  and proceeded to  trial on
    the  conspiracy  charge.    At  trial,  Welch  testified that  he
    completed the  arrangement for  the sale  and lease back  without
    telling Jones  the  details of  the transaction,  and that  Jones
    never questioned  Welch about the  deal.  Both  defendants argued
    that  Welch,  working alone,  caused  the UCC-3  documents  to be
    forged  by Iyanough  Management  employees  and  filed  with  the
    Secretary of  State.   Welch was found  guilty of  conspiracy and
    Jones was found guilty on all counts.
    II.
    Discussion
    A.  Release of Collateral as a Security Interest
    Jones first argues that a UCC-3 is not a "security" for
    the purposes of  18 U.S.C.   2314.  18 U.S.C.    2311 defines the
    term "security"  as used in    2314.2  The district  court found,
    2Section 2311 provides:
    "[S]ecurities"  includes   any  note,   stock
    certificate, bond,  debenture, check,  draft,
    warrant, traveler's check,  letter of credit,
    warehouse receipt, negotiable bill of lading,
    evidence  of  indebtedness,   certificate  of
    interest  or  participation  in  any  profit-
    sharing      agreement,      collateral-trust
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    and  the government  argues,  that  a UCC-3  is  analogous to  an
    "instrument  or   document  or   writing . . .  transferring   or
    assigning any right, title or interest  in or to goods, wares and
    merchandise."   We  disagree and  hold  that a  UCC-3 release  of
    collateral  is not  a "security"  for  the purpose  of 18  U.S.C.
    2314.
    Statutory interpretation  is  a question  of  law  and,
    therefore,  is subject  to  de  novo review.    United States  v.
    Taylor, 
    802 F.2d 1108
    , 1112  (9th Cir. 1986), cert.  denied, 
    479 U.S. 1094
     (1987).   It has been  found that Congress  intended a
    broad definition  of securities in  the context of  outlawing the
    transportation of falsely made or forged securities in interstate
    commerce.   United States  v. Speidel, 
    562 F.2d 1129
    ,  1131 (8th
    Cir. 1977),  cert. denied, 
    435 U.S. 915
     (1978).  An  analysis of
    certificate,  preorganization certificate  or
    subscription, transferable  share, investment
    contract, voting-trust certificate;  valid or
    blank  motor  vehicle title;  certificate  of
    interest in property, tangible or intangible;
    instrument or document  or writing evidencing
    ownership of  goods, wares,  and merchandise,
    or  transferring  or   assigning  any  right,
    title, or interest in or to goods, wares, and
    merchandise;  or in  general, any  instrument
    commonly  known  as   a  "security",  or  any
    certificate of interest  or participation in,
    temporary or interim certificate for, receipt
    for,  warrant, or  right  to subscribe  to or
    purchase any of the  foregoing or any forged,
    counterfeited, or spurious  representation of
    any of the foregoing.
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    8
    the   cases  applying   the   definition  of   "security"   under
    section 2314,  however, does  not result  in a  clear picture  of
    exactly what is  encompassed in this broad definition,  or how to
    proceed in determining  whether novel instruments should  also be
    included.
    The  district  court  relied  upon Speidel,  
    supra,
      in
    support of  its finding that a UCC-3 is  a security.  In Speidel,
    the Eighth Circuit held that a quitclaim deed is a security.  The
    court found that  although a quitclaim  deed is  not the type  of
    item  normally considered  as a  security  by the  commercial and
    financial  community, such an instrument is an express conveyance
    of  whatever interest and  title the  grantor has  in a  piece of
    property.  Although it warrants no specific interest in property,
    it does transfer some interest in  property.  Such a deed may  be
    used  to  convey  interests  in  land, to  clear  title  to  land
    encumbered  by  liens  or  to  transmit full  title  to  land  by
    conveying the grantor's entire interest  to any grantee.  After a
    quitclaim deed is conveyed, the grantee holds the entire interest
    which the grantor had owned.
    We are unable  to agree with the district  court that a
    UCC-3 is analogous to a quitclaim deed.  Unlike a quitclaim deed,
    the  UCC-3 at issue  in this case  is not effective  by itself to
    transfer or assign a title, right or interest  in or to property.
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    9
    At most,  one could  argue that the  UCC-3 transfers  an interest
    from the secured party back to  the owner of the property.   This
    is a much  more constrained purpose than the potential  uses of a
    quitclaim deed, and only permits a transfer of a limited interest
    to one  particular party, the original owner.  The sole result of
    the filing  of a UCC-3 is  that the owner  of the property  has a
    title free of  encumbrances and can proceed to  transfer the lien
    free  property to  another party.   In  this case, the  UCC-3 was
    merely one step in the process of transferring an interest in the
    fixtures,  furniture, and  equipment to  a  third party,  and was
    insufficient on its own to convey title to the items listed.
    Furthermore,  a   UCC-3  does  not  contain   the  same
    qualities as other  documents which have been  deemed securities.
    In determining whether an instrument is a security,  other courts
    have  examined factors such as  whether the document evidences an
    obligation  for the payment  of money or  represents a particular
    interest in  goods or  property and  has  inherent value,  United
    States v.  Canton, 
    470 F.2d 861
    , 863  (2d Cir. 1972); whether the
    instrument has intrinsic  value and is recognized and  treated as
    having intrinsic value  in the regular channels  of commerce, and
    whether the document could be  sold, United States v. Wexler, 
    621 F.2d 1218
    ,  1224 (2d  Cir.), cert. denied,  
    449 U.S. 841
     (1980);
    whether the  item could be  used as collateral and  represents an
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    10
    acknowledgment of a debt owed  or a contractual obligation to pay
    in the future, United  States v. Austin, 
    462 F.2d 724
    , 736 (10th
    Cir.),  cert. denied,  
    409 U.S. 1048
      (1972); and  whether  the
    document purports to be valuable and is sufficient to establish a
    given right, relationship or property interest.  United States v.
    Johnson, 
    700 F.2d 163
    , 175 (5th Cir. 1983).
    The effect of the forged UCC-3 release here was only to
    terminate the security  interest which the two banks  held in the
    fixtures, furniture, and  equipment of the Portland  Regency Inn.
    By  itself, a  document of  release  has no  value, and  does not
    represent a tangible or intangible valuable property right.  Such
    a form  could not  be sold or  used as  collateral.  It  does not
    represent  an acknowledgment  of  a debt  owed  or a  contractual
    obligation to pay in the future.   The form was valuable only  to
    the Armory Hotel Associates and not to  any third party.  A UCC-3
    serves  merely to  terminate and  not to  transfer or  assign any
    property interest.
    In addition, we recognize  that when, as in  this case,
    there is ambiguity  in a criminal statute, such  ambiguity should
    be  construed  in favor  of  the  defendant.   United  States  v.
    Borowski, 
    977 F.2d 27
     (1st Cir. 1992).   Because we hold  that a
    UCC-3 is not a security as defined for the purposes of  18 U.S.C.
    2314,   Jones'   conviction  on   two   counts  of   interstate
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    11
    transportation of forged securities pursuant to this section must
    be reversed.
    B.  Willful Blindness Instruction
    Next,   Jones  objects   to  the   "willful  blindness"
    instruction given to the jury, arguing that there was no evidence
    that he was  aware that  a crime  was likely in  progress and  no
    evidence that he facilitated it.  A willful blindness instruction
    is  appropriate when  (1) defendant  claims a lack  of knowledge;
    (2) the facts suggest a conscious course of deliberate ignorance,
    and   (3)  the  instructions,   taken  as  a   whole,  cannot  be
    misunderstood by a juror as  mandating an inference of knowledge.
    United States  v. St. Michael's  Credit Union, 
    880 F.2d 579
    , 584
    (1st Cir. 1989).    Here, the first  element is obviously present
    since Jones claims  that he was ignorant of any  wrongdoing.  The
    second requirement may  be established from the  evidence adduced
    at  trial.   Jones, as one  of the partners,  signed the original
    mortgage  agreements  with  Patriot  Bank  and  Berkshire  County
    Savings   Bank.    By  signing  these  agreements,  he  displayed
    knowledge  of the encumbrances placed on the fixtures, furniture,
    and equipment of  the Portland Regency Inn.   He also would  have
    known that the  agreements provided that Armory  Hotel Associates
    could  not incur any  additional encumbrances on  the collateral,
    and that the  mortgage would become due and payable if any of the
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    collateral  was sold or transferred.  There was evidence produced
    at trial that Jones  and Welch discussed the need  to obtain cash
    for  Iyanough Management, and  the possibility of  obtaining such
    cash through a deal with Mudie involving a sale of the furniture,
    fixtures, and equipment  of the Portland Regency Inn.   There was
    evidence that  Mudie  discussed  the deal  with  Jones  and  that
    Rodr guez,  the lawyer  for Kansallis,  sent  documents to  Jones
    regarding the deal,  including drafts of the opinion  letter.  In
    its  final form,  this opinion  letter  represented, among  other
    things,  that the  firm was  acting as  counsel for  Armory Hotel
    Associates  and that  there  were no  other  encumbrances on  the
    furniture, fixtures,  and equipment  so that  Kansallis' security
    interest was perfected.  Furthermore, John Aufiero testified that
    Jones brought him the opinion  letter on the letterhead of Jones'
    law firm, and requested that Aufiero sign the document.
    Testimony by the  FBI agent established  that initially
    it  was Jones'  idea to arrange  the sale  and lease back  of the
    furniture, fixtures, and equipment.  Jones told the agent that he
    was  aware of  the banks'  liens on  the equipment but  felt that
    there was some  way out of them.  According to Jones, Welch later
    told Jones that  Welch did not think that  the bank would release
    the collateral, but  that Welch would take  care of it.   The day
    after the money came through  from Mudie and Kansallis, there was
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    13
    evidence   that  Jones   personally  received   checks  totalling
    approximately $290,000.
    This evidence, taken in the light most favorable to the
    government, is sufficient for a  jury to conclude that Jones knew
    about  the deal  with Kansallis and  Mudie, and knew  that such a
    deal would not  be able to  go forward without  a release of  the
    prior security interests held by  the two banks in the furniture,
    fixtures, and equipment of  the Portland Regency Inn.   Moreover,
    there is sufficient  evidence from which  a jury could  conclude,
    that Jones knew  both (1) that the banks  would not release their
    interests unless their mortgages were  paid in full, and (2) that
    the opinion letter  was an alternative  means of representing  to
    Kansallis that the property was no longer encumbered by any prior
    liens.   Even if, as  Welch testified,  Jones was unaware  of the
    actual steps taken by Welch  to release the security interest, we
    find that the  facts established at trial suggest  that this lack
    of  knowledge  could have  been  due  to  a conscious  course  of
    deliberate ignorance on the part of Jones.
    The  jury  instruction  given was  not  likely  to give
    jurors  the  impression  that  they were  compelled  to  make  an
    inference  of  knowledge  on  the  part  of  Jones.    The  judge
    instructed the jury
    [t]hat  in   considering  whether   defendant
    Stephen   Jones   knowingly   committed   any
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    14
    offense, you  may infer but  are not required
    to  infer,  knowledge  on  his  part  from  a
    combination of suspicion  and indifference to
    the  truth  if you  find beyond  a reasonable
    doubt that to have existed on his part. [sic]
    If you find  that he had a  strong suspicious
    [sic] that things were  not what they seemed,
    or that someone  had withheld some  important
    facts, yet that he shut his eyes for  fear of
    what he would learn, you may conclude that he
    acted  knowingly . . . . With  regard to  any
    such  inference you  must  reason with  care.
    You may not draw this inference  or knowledge
    from negligence  or mistake.  I  instruct you
    that  negligence, even  gross negligence,  is
    not  a proper basis  to support a  finding of
    wilfulness,  or  to  support   a  finding  of
    knowledge, nor is error or mistake . . .  I'm
    not suggesting one  way or the other  how you
    should find with  respect to this matter.   I
    am  not suggesting  that  you  make any  such
    finding,  or that if you do, what the finding
    should be.  I'm simply telling you . . . that
    you may infer  knowledge if you  find willful
    blindness to a fact to have occurred.
    This  instruction clearly did not mandate  a finding of knowledge
    on the part of the jury.
    Jones  objects that  the court  failed  to utilize  the
    instructions on  willful blindness  which the defendant  offered,
    arguing that his wording  "more properly put such  instruction in
    the  proper  context  for  the  jury."   The  failure  to  give a
    requested  jury  instruction  is reversible  error  only  if "the
    requested   instruction   is  substantially   correct,   was  not
    substantially covered in the charge actually given, and covers an
    important point  in  the trial  so that  the failure  to give  it
    -15-
    15
    seriously impaired  the defendant's  ability to  present a  given
    defense."   United States v.  Nason, No. 92-2303,  slip op. at 11
    (1st Cir. July 9, 1993) (citing United States v. Newton, 
    891 F.2d 944
    ,  949 (1st  Cir. 1989)).   Jones'  argument fails  under this
    test.    Although  his  requested  instruction  is  substantially
    correct, Jones fails to point out in what manner his instructions
    were superior to those given, and a comparison of the two sets of
    instructions shows no material difference in what was conveyed to
    the jury.  There is no suggestion that an important point was not
    conveyed by  the given  instructions.  We  find no  error in  the
    judge's declining to adopt Jones' suggested instructions.
    C.  Sufficiency of the Evidence
    Jones  argues that there  was insufficient  evidence to
    sustain  his conviction.  In  order to successfully challenge the
    sufficiency of the evidence on appeal, a defendant must show that
    no  reasonable   jury  could  have  found  him  guilty  beyond  a
    reasonable doubt.  United States v. Innamorati, 
    996 F.2d 456
    , 469
    (1st  Cir. 1993).   On appeal, we  must view the  evidence in the
    light  most favorable to  the government, "drawing  all plausible
    inferences  in   its   favor  and   resolving   all   credibility
    determinations in line  with the jury's verdict."   United States
    v. David, 
    940 F.2d 722
    , 730 (1st Cir.), cert. denied,     U.S.
    -16-
    16
    (1991).  We will examine the conspiracy and bank fraud charges in
    turn.
    1.  Conspiracy Charge
    Conviction  of  conspiracy   requires  proof  that  the
    defendant  entered into  an  agreement with  another to  commit a
    crime; the agreement need not be express but may be implicit in a
    working  relationship.    Innamorati,  
    996 F.2d at 470
    .    The
    government must prove two kinds of  intent:  intent to agree  and
    intent to commit the crime.  However,  "[t]he government need not
    prove  that  a   co-conspirator  knew  all  of  the   details  or
    participated  in all  of the  objectives  of the  plan."   United
    States v. G mez-Pab n,  
    911 F.2d 847
    , 853 (1st  Cir. 1990), cert.
    denied, 
    498 U.S. 1074
     (1991) (citations omitted).
    In order to convict Jones of conspiracy to  commit bank
    fraud,3 the prosecution must show  that Jones and Welch agreed to
    defraud  Patriot Bank and  Berkshire County Savings  Bank.  Jones
    argues that the fraud perpetrated upon the banks was completed on
    July 23, 1987,  when the forged  UCC-3 forms were filed  with the
    Maine Secretary  of  State, and  that  the only  direct  evidence
    connecting  Jones  to  any fraudulent  activity  was  the opinion
    3Our  disposition of this appeal renders moot any discussion
    of  the part  of the  charge for  conspiracy to  transport forged
    securities in interstate commerce.  For that reason, we limit the
    analysis  to the  sufficiency  of the  charge  for conspiracy  to
    commit bank fraud.
    -17-
    17
    letter dated August  10, 1987.  This claim,  however, ignores the
    evidence that  Jones knew about  the possibility of the  sale and
    lease back  arrangement, and  discussed  with Welch  the need  to
    obtain releases  from the two  banks.  From this,  the jury could
    have inferred  that even if  Jones did not have  actual knowledge
    that Welch was forging the UCC-3 forms,  he knew that there was a
    need to obtain  a release from the  banks, he was aware  that the
    bank would not  allow such a release unless the mortgage was paid
    in full, and he  knew that somehow Welch was going  to "take care
    of it."  Based on this evidence, a reasonable jury could conclude
    that even if there was  no express agreement, Jones sat passively
    by  and let his  partner proceed  with the  sale and  lease back,
    knowing that the  transaction could not be  completed legally and
    would effect a fraud on the new lender.
    2.  Bank Fraud Charges
    In order to convict Jones of bank fraud under 18 U.S.C.
    1344(1), the  jury had to  find beyond a reasonable  doubt that
    Jones "engaged  in or attempted to engage  in a pattern or course
    of conduct designed  to deceive a federally chartered  or insured
    financial institution into releasing property, with the intent to
    victimize the  institution by exposing it to  actual or potential
    loss."  United States  v. Ragosta, 
    970 F.2d 1085
    , 1089 (2d Cir.),
    cert.  denied,       U.S.       (1992) (quoting  United States v.
    -18-
    18
    Stavroulakis, 
    952 F.2d 686
    , 694 (2d Cir. 1992)).   The element of
    intent can  be established  through  circumstantial evidence  and
    inferences drawn from evidence presented at trial.  Id. at 1090.
    The  same evidence which serves to sustain a conviction
    for conspiracy to commit bank fraud will suffice to affirm Jones'
    conviction  for  bank  fraud under  a  willful  blindness theory.
    Jones knew that a sale and lease back of the furniture, fixtures,
    and equipment was being planned.  He knew that Kansallis required
    a release of  the banks' interest and  that such a release  would
    not  be granted unless  the mortgage was  paid off.   Even if, as
    Welch testified, Jones never found out about the forgery and just
    trusted  Welch  to  work  out  a deal  which  would  provide  the
    desperately needed  cash, a  rational jury  could have  concluded
    that  Jones deliberately  shut  his eyes  to what  was occurring.
    "The  purpose  of the  willful  blindness  theory  is  to  impose
    criminal liability on  people who, recognizing the  likelihood of
    wrongdoing,  nonetheless   consciously  refuse   to  take   basic
    investigatory steps."  United  States v. Rothrock, 
    806 F.2d 318
    ,
    323  (1st  Cir. 1986).    The  evidence  presented at  trial  was
    sufficient for a conviction on the counts of bank fraud.
    D.  Motion to Sever
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    19
    Jones moved  for severance  of his trial  from that  of
    codefendant Welch under Fed.  R. Crim. P. 14.4   The court denied
    his motion, holding that Jones failed to persuasively demonstrate
    that  he would  incur  prejudice at  trial  as  a result  of  the
    joinder.   Jones appeals the denial, arguing that he was a victim
    of the prejudicial spillover of evidence against his codefendant,
    who  had already pled  guilty to the  substantive counts charged.
    In addition, Jones  suggests that the jury may have held him to a
    higher standard than Welch since Jones was an attorney.  Finally,
    Jones argues that the joinder improperly placed him in a position
    where, in order to exercise his Fifth Amendment privilege against
    self-incrimination,  he  was  forced to  accept  an  adverse jury
    inference.
    The grant or  denial of a motion for  severance is left
    to  the discretion of the trial  court and will only be disturbed
    for an  abuse of that discretion.   United States  v. Porter, 
    764 F.2d 1
    , 12 (1st Cir. 1985).  For reasons of judicial economy, co-
    4Fed. R. Crim. P. 14 provides in part:
    If  it  appears  that  a   defendant  or  the
    government  is  prejudiced  by a  joinder  of
    offenses or of defendants in an indictment or
    information or  by  such  joinder  for  trial
    together, the court may order an election  or
    separate trials of counts,  grant a severance
    of  defendants  or   provide  whatever  other
    relief justice requires.
    -20-
    20
    conspirators are generally tried together absent a strong showing
    of prejudice.  United States v. Perkins, 
    926 F.2d 1271
    , 1280 (1st
    Cir. 1991).   In order  to obtain  a severance, a  defendant must
    show  that substantial prejudice,  amounting to a  miscarriage of
    justice,  would result  from a  joint  trial.   United States  v.
    Sabatino, 
    943 F.2d 94
    , 96 (1st Cir.  1991).     Mere speculative
    allegations as to possible prejudice from joinder  do not sustain
    the burden of  showing an abuse of discretion in denying a motion
    for severance.
    Jones  failed to  show that  the  presence of  Welch at
    trial was so  prejudicial as to warrant severance.   Welch argued
    at  trial that  there was  no  conspiracy between  Jones and  him
    because Welch  operated on his  own to perpetrate the  fraud upon
    the  banks  and  the  transportation  of  the  forged  documents.
    Several times on the stand Welch emphasized that he  was the only
    one responsible for the criminal  acts.  Such evidence could only
    be helpful  to Jones' claim that  he had no knowledge  of Welch's
    activity.
    Jones'  claim of a spillover effect is also unavailing.
    The  danger which  is to be  prevented is  that the jury  will be
    unable to separate  the evidence against different  defendants or
    that evidence which is admissible against only one defendant will
    be used by the jury  against a co-conspirator.  See Perkins,  926
    -21-
    21
    F.2d at 1281.  Usually,  however, any prejudice caused by joinder
    is  best  dealt  with  through   instructing  the  jury  to  give
    individual consideration  to each  defendant.   United States  v.
    Bruner,  
    657 F.2d 1278
      (D.C. Cir.  1981).   Here,  there is  no
    evidence, and  Jones has  not identified any,  that the  jury was
    unable  to evaluate separately and  fairly the guilt or innocence
    of each  defendant.  The judge instructed  the jury that a guilty
    plea by Welch could not  be considered as evidence against Jones,
    and  also  noted that  each  defendant should  be  given separate
    consideration.  He informed the  jury that any evidence which was
    admitted solely  against one  defendant could  not be  considered
    against the other defendant.
    Jones  argues that  the jury  may  have held  him to  a
    higher standard of conduct than  Welch because he is an attorney.
    However,  Jones presents no  evidence that his  occupation caused
    the  jury to view  him more harshly.   In any  event, Jones could
    have requested a special jury instruction that attorneys are held
    to the same standard  of conduct as others, and failed  to do so.
    See  United States  v. Picciandra,  
    788 F.2d 39
    , 46  (1st Cir.),
    cert. denied, 
    479 U.S. 847
     (1986).
    Finally,  Jones claims that  the joinder, combined with
    the willful blindness instruction, forced  him to risk an adverse
    inference  on  the part  of  the  jury  by exercising  his  Fifth
    -22-
    22
    Amendment privilege not  to testify.  In Porter,  we rejected the
    argument  that  the  antagonistic defense  of  a  codefendant was
    grounds  for  severance  of  trial  because  it  would  force the
    defendant to  testify in violation  of the Fifth Amendment.   
    764 F.2d at 14
    .   The  need for  severance  to protect  Jones' Fifth
    Amendment rights was even more minimal, since Welch's defense was
    completely in line  with Jones' claim of innocence.   The joinder
    had no impact on Jones' Fifth  Amendment rights and there was  no
    abuse of discretion in the trial court's refusal of the motion to
    sever.
    E.  Severity of Sentence
    Jones  objects  to  the   length  of  the  fifteen-year
    sentence by the trial court.  He argues that a five-year sentence
    would be appropriate  for a first time offender  such as himself.
    Because  we   reverse  Jones'  conviction   for  the   interstate
    transportation of forged  securities, his sentence is  reduced to
    five years  for conspiracy  to commit bank  fraud and  five years
    each for two counts of bank fraud, to be served concurrently.  We
    see no  reason  to  alter  Judge  Carter's  assessment  and  pre-
    guideline sentencing  on Counts I,  II, and III.   Therefore, the
    sentence on  the remaining  counts will stand  as crafted  by the
    trial judge.  See United  States v. Jim nez-Rivera, 
    842 F.2d 545
    ,
    548 (1st Cir.), cert. denied., 
    487 U.S. 1223
     (1988).
    -23-
    23
    III.
    Conclusion
    Because we  hold that a  UCC-3 is not a  "security" for
    the purpose of  18 U.S.C.   2314, Jones' conviction  on Counts IV
    and  V for the interstate transportation  of forged securities is
    reversed.  Sufficient  evidence was adduced  at trial to  convict
    reversed
    Jones of conspiracy and bank fraud on Counts I, II, and  III, and
    the  trial court  did not  abuse  its discretion  by denying  the
    motion to sever Jones'  trial from that of his codefendant.   For
    these reasons, Jones'  convictions for conspiracy and  bank fraud
    are affirmed.
    affirmed
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    24