United States v. Lyons Capital Inc ( 2000 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA, 
Plaintiff-Appellee,
v.
LYONS CAPITAL, INCORPORATED, a/k/a  No. 99-4178
Isip of America Financial
Corporation, a/k/a Lyons Mortgage
Brokers Corporation,
Defendant-Appellant.

UNITED STATES OF AMERICA, 
Plaintiff-Appellee,
v.
OTTO VON BRESSENSDORF, a/k/a  No. 99-4179
Ottone Eugeno "Ottone Eugeno
Camelio Bresselhau", a/k/a Baron
Otto Von Bressensdorf, a/k/a Baron,
Defendant-Appellant.

UNITED STATES OF AMERICA, 
Plaintiff-Appellee,
v.
 No. 99-4180
ELENA VON BRESSENSDORF, a/k/a
Elena Bisheff, a/k/a Baroness,
Defendant-Appellant.

2 UNITED STATES v. LYONS CAPITAL, INC.
UNITED STATES OF AMERICA, 
Plaintiff-Appellee,
v.
 No. 99-4193
BARBARA LICHTENBERG, a/k/a Barbara
Lichtenberg-Cooke,
Defendant-Appellant.

Appeals from the United States District Court
for the Eastern District of Virginia, at Richmond.
Robert E. Payne, District Judge.
(CR-98-14)
Argued: October 31, 2000
Decided: December 7, 2000
Before WILKINSON, Chief Judge, and NIEMEYER and
MOTZ, Circuit Judges.
Affirmed by unpublished per curiam opinion.
COUNSEL
ARGUED: Robert James Wagner, WAGNER & WAGNER, Rich-
mond, Virginia; Christopher Ford Cowan, COWAN, NORTH &
LAFRATTA, L.L.P., Richmond, Virginia; Kathleen Spear Rice,
BERLINER, CORCORAN & ROWE, Washington, D.C., for Appel-
lants. James Brien Comey, Jr., Assistant United States Attorney,
Richmond, Virginia, for Appellee. ON BRIEF: Thomas G. Corcoran,
Jr., BERLINER, CORCORAN & ROWE, Washington, D.C.; James
J. Harney, DUVALL, HARRIGAN, HALE & DOWNEY, Fairfax,
Virginia, for Appellant Lichtenberg; Stanley W. Preston, Jr., PRES-
TON LAW FIRM, Richmond, Virginia, for Appellant Lyons Capital.
UNITED STATES v. LYONS CAPITAL, INC. 3
Helen F. Fahey, United States Attorney, Richmond, Virginia, for
Appellee.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
PER CURIAM:
In this case a jury convicted three individuals and a corporation of
conspiracy to commit mail fraud, multiple counts of mail and wire
fraud, and related charges. They appeal, challenging their convictions
and sentences on numerous grounds. Finding no reversible error, we
affirm in all respects.
I.
Over the past two decades, Lyons Capitol, Inc., Otto Von Bressen-
dorf, Elena Von Bressendorf, and Barbara Lichtenberg (collectively
"the conspirators") engaged in a scheme to defraud clients by con-
vincing them to pay thousands of dollars in "advance fees" and pro-
viding almost nothing in return. Ostensibly, Lyons is an investment
banking firm that specializes in helping promising businesses find
financial backing through the private placement of securities and joint
venture partnerships.
In reality, however, Lyons rarely helped clients at all. Instead,
through mailings, websites, unsolicited e-mail, videotapes, and other
means, Lyons attracted mostly nascent companies and individual
entrepreneurs seeking venture capitol. After interested parties con-
tacted Lyons and provided a brief outline of their project, Lyons
employees — often Otto Von Bressendorf — then "screened" the pro-
posals for those with promise and scheduled an initial meeting with
potential clients. Typically, at those meetings, Otto Von Bressendorf,
surrounded by military medals and various other "honors" and
4 UNITED STATES v. LYONS CAPITAL, INC.
"awards," fraudulently told clients that he was a "baron" of German
nobility with extensive connections to the European financial commu-
nity. Clients were also misled to believe that Lyons had an expansive
international investor network, a seventy percent success rate in find-
ing funding for its clients, and had never been the subject of a com-
plaint or lawsuit.
In addition to the above misrepresentations, the conspirators hired
various individuals to write "reference" letters to potential clients
falsely testifying to Lyons’s successes. Lyons also provided fraudu-
lent financial statements to Dunn & Bradstreet, which in turn pro-
duced a commercial credit rating that potential clients used in
deciding whether to engage Lyons.
Because of the fraudulent misrepresentations by the conspirators,
hundreds of clients paid thousands of dollars in advance fees for
"legal, underwriting, and marketing expenses." The conspirators
promised that they would use their expertise to help clients create
offering memoranda that would in turn help them get funded from
Lyons’s vast network of international investors; they explained that
this process would take approximately 90-180 days. However, the ini-
tial memoranda, if completed at all, were rarely finished within a
year. The conspirators blamed delays on "particularly uncooperative
clients," when, in fact, they — often Lichtenberg — purposefully
frustrated and prolonged the underwriting process. Because of the
frustration and delay, many clients gave up without having received
anything of value from Lyons. Even clients that completed an offer-
ing memorandum failed to obtain funding for their projects. Indeed,
no former clients testified that Lyons helped them obtain funding.
Following an FBI investigation, the Von Bressendorfs, Lichten-
berg, and the corporation were charged and convicted of numerous
counts of mail fraud, 18 U.S.C. § 1341 (1994), and wire fraud, 18
U.S.C. § 1343 (1994), and of one count of conspiracy to commit
fraud, 18 U.S.C. § 371 (1994); the Von Bressendorfs and Lyons were
also convicted of money laundering, 18 U.S.C. § 1956 (Supp. II
1996).
II.
The conspirators’ first challenge is to the sufficiency of the evi-
dence. "If there is substantial evidence to support the verdict, after
UNITED STATES v. LYONS CAPITAL, INC. 5
viewing all of the evidence and the inferences therefrom in the light
most favorable to the Government, then we must affirm." United
States v. Murphy, 35 F.3d 143, 148 (4th Cir. 1994).
A.
The Von Bressendorfs and Lyons contend that the evidence failed
to prove anything beyond "seller’s talk" or "puffery" and did not
establish material misrepresentations intended to defraud. Our close
review of the record reveals that the government in fact proffered suf-
ficient evidence to prove that they made many material misrepresen-
tations from which the jury was entitled to conclude they intended to
defraud their clients.
Their arguments to the contrary simply constitute attempts to reliti-
gate issues decided at trial by the jury. For example, Otto Von
Bressendorf asserts that the government failed to demonstrate that he
lied about his ancestry and his foreign investment contacts. This argu-
ment, however, amounts to nothing more than an attack on the credi-
bility of a government witness who testified that, upon investigation,
he found nothing in the Austrian archives to support Von Bressen-
dorf’s claim that he was given the title "Baron." We "do not weigh
the evidence or review the credibility of witnesses in resolving the
issue of substantial evidence." United States v. Saunders, 886 F.2d 56,
60 (4th Cir. 1989) (quoting United States v. Arrington, 719 F.2d 701,
704 (4th Cir. 1983)).
Similarly, the conspirators assert that the government failed to
prove that Lyons had less than a seventy percent success rate because
the government produced only sixteen former clients to testify that
Lyons failed them. Those sixteen witnesses assertedly comprised less
than three — not seventy — percent of the projects that the company
accepted over the years. This argument also fails. The FBI obtained,
and the government introduced at trial, a list of 209 Lyons projects
between February 1992 and September 1997, none of which produced
funds for Lyons’s clients. Moreover, despite testimony from sixteen
clients regarding Lyons’s misrepresentations and failures, the conspir-
ators failed to produce even one satisfied customer. It would hardly
have been irrational for the jury to conclude that the conspirators mis-
represented Lyons’s past successes.
6 UNITED STATES v. LYONS CAPITAL, INC.
Lichtenberg argues separately that the evidence fails to support her
conviction for mail fraud, either as a principal or an aider and abettor.
As with the other conspirators, the jury was entitled to convict Lich-
tenberg on the evidence adduced at trial. Contrary to her claims, the
government produced evidence that she lied about the success rate of
the company, lied about being an attorney, and frustrated clients’
attempts to complete the underwriting process, thereby contributing
to the failure of many projects. The record reveals ample evidence
that Lichtenberg was an integral and willing participant in the scheme
to defraud.
B.
The conspirators also contend that the evidence was insufficient to
sustain a conviction for conspiracy to commit fraud in violation of 18
U.S.C. § 371 (1994). First, they contest the sufficiency of the evi-
dence to establish an agreement between the parties. Relying on our
decision in United States v. Giunta, 925 F.2d 758, 766 (4th Cir.
1991), they maintain that we apply "heightened vigilance" to suffi-
ciency claims in conspiracy cases. They fail to acknowledge, how-
ever, that we explicitly overruled Giunta’s "heightened vigilance"
analysis in United States v. Burgos, 94 F.3d 849, 859-60 (4th Cir.
1996) (en banc). Although in this case the government produced no
direct evidence of an agreement to commit mail fraud, "a conspiracy
may be proved wholly by circumstantial evidence." Burgos, 94 F.3d
at 858. The government offered evidence from which a rational jury
could infer beyond a reasonable doubt that the Von Bressendorfs and
Lichtenberg jointly conspired to commit fraud. Indeed, their relation-
ship, length of association, and similar attitude and conduct — e.g.,
lying about the success of the company — all point to the existence
of a conspiracy. See id. (listing factors tending to prove a conspiracy);
United States v. Collazo, 732 F.2d 1200, 1205 (4th Cir. 1984).
The conspirators’ second argument regarding § 371 is equally
unavailing. That statute punishes those that "conspire either to com-
mit any offense against the United States, or to defraud the United
States, or any agency thereof in any manner or for any purpose." 18
U.S.C. § 371. The conspirators contend that "there was absolutely no
evidence, either direct or indirect, of an agreement between the appel-
lants to defraud the United States." To be sure, there is no evidence
UNITED STATES v. LYONS CAPITAL, INC. 7
that they agreed to defraud the United States, but the government pro-
duced ample evidence to prove that they agreed to commit an offense
— wire fraud in violation of § 1343 and mail fraud in violation of
§ 1341 — against the United States. Such evidence suffices to prove
a violation of § 371. See United States v. Ellis, 121 F.3d 908, 913 (4th
Cir. 1997) ("§ 371 extends generally to cover any offense made illegal
by federal law.").
C.
In addition, the Von Bressendorfs and Lyons contend that the evi-
dence was insufficient to prove money laundering in violation of 18
U.S.C. § 1956(a)(1)(A)(i) because the government purportedly did
not prove the use of illegal proceeds to "commit the next step in the
alleged scheme." This argument too is meritless.
Section 1956 does not require proof that a defendant used illegally
obtained money to commit the "next step" in the scheme. Rather, the
government must demonstrate only that a defendant "conducts or
attempts to conduct such a financial transaction . . . with the intent to
promote the carrying on of specified unlawful activity." 18 U.S.C.
§ 1956(a)(1)(A)(i). The government produced ample evidence to sup-
port that conclusion. Indeed, the Von Bressendorfs stipulated that
advance fees were used to pay the bills and "promote and carry on the
business" — a fraudulent business. Thus, their reliance on United
States v. Heaps, 39 F.3d 479 (4th Cir. 1994), is misplaced. In Heaps,
we reversed a money laundering conviction because the defendants
used drug proceeds to pay for drugs previously obtained on credit. In
other words, the money was used to complete a past transaction, not
to further future illegal activity. Heaps, 39 F.3d at 484-86. There was
no evidence in that case that the money was "itself used to promote
an unlawful activity." Id. at 486. In contrast, here the Von Bressen-
dorfs concede that the money they obtained from clients — money
that a jury found was obtained fraudulently — was used to further
their business.
III.
In addition to contesting the sufficiency of the evidence, the con-
spirators also argue that prosecutorial misconduct occurred through-
8 UNITED STATES v. LYONS CAPITAL, INC.
out the trial, which entitled them to a mistrial. Our test for
prosecutorial misconduct "generally has two components: that (1) the
prosecutor’s remarks or conduct must in fact have been improper, and
(2) such remarks or conduct must have prejudicially affected the
defendant’s substantial rights so as to deprive the defendant of a fair
trial." United States v. Mitchell, 1 F.3d 235, 240 (4th Cir. 1993)
(internal quotations omitted). See also United States v. Wilson, 135
F.3d 291, 297 (4th Cir. 1998).
The conspirators assert that the prosecutors engaged in misconduct
on a number of occasions. For example, they argue that the govern-
ment’s characterization of Lyons’s business as a "con game, cheat, a
scam, a flim flam" during opening statement amounted to prejudicial
misconduct. These statements, however, reflect an accurate depiction
of what the government set out to prove; judging from the jury ver-
dict, the government succeeded.
The conspirators also object to the prosecution’s redirect examina-
tion of one of the attorneys who wrote "reference" letters to potential
clients; the prosecutor inquired whether the witness was currently
under indictment for securities fraud in another jurisdiction. Defense
counsel objected, the trial judge sustained the objection, and then
instructed the jury to disregard the question. We fail to see any preju-
dice. We presume that jurors follow instructions from the judge. See
United States v. Olano, 507 U.S. 725, 740 (1993). Moreover, we can-
not conclude that this one isolated question in a nine-day criminal
trial, in which the prosecution introduced ample evidence to support
the jury’s verdict, misled the jury or prejudiced any defendant.
Similarly, the conspirators claim that the prosecutors often referred
to Lyons’s "zero" success rate despite testimony as to at least one
closed deal. Again, even if the prosecution statements were improper
— and we do not hold that they were — this small discrepancy did
not prejudicially affect any of defendant’s substantial rights.
Finally, the conspirators argue that the prosecutors asked improper
and misleading questions regarding the application of securities laws.
The gist of the questions at issue was whether "marketing" and "post-
ing" of private placements (mostly preferred stock offerings) through
the Internet would violate securities laws. The conspirators claim that
UNITED STATES v. LYONS CAPITAL, INC. 9
no factual predicate supported these questions because there was no
evidence that private placement postings or marketing appeared on
the Internet. But contrary to their assertions, Lyons’s website adver-
tised private placements and gave explicit instructions about how to
initiate a private placement project with Lyons. The website also con-
tained several pages listing current projects without disclosing
whether they were private placement or joint venture projects. In
addition, while the conspirators may not have violated the law by fail-
ing to secure a securities license, the government argued that their
lack of licensure demonstrated that they were not serious about help-
ing their clients obtain funding; otherwise, they would have been
licensed to handle securities offerings in the United States.
Moreover, even if these questions had lacked a factual predicate,
the conspirators provide no persuasive argument on which to base a
finding that these questions deprived them of a fair trial. These ques-
tions comprised an extremely small portion of the trial in which, as
discussed above, there was ample evidence to sustain the verdict. See
United States v. Harrison, 716 F.2d 1050, 1052 (4th Cir. 1983)
(explaining that the extent of the remarks and strength of other proof
are to be considered in the prosecutorial misconduct calculation).1
Accordingly, we find no prosecutorial misconduct requiring the trial
judge to order a mistrial.
IV.
The conspirators also claim that the district court committed a
number of trial errors.
A.
First, they contend that the trial judge erred by making a biased
comment in front of the jury and subsequently failing to grant a mis-
trial due to that comment. We review for abuse of discretion both a
claim of bias in the conduct of a trial, United States v. Castner, 50
F.3d 1267, 1272 (4th Cir. 1995), and a trial court’s refusal to declare
1
Lichtenberg makes separate claims of prosecutorial misconduct that
amount to nothing more than additional sufficiency of the evidence
claims that are as meritless as those discussed above.
10 UNITED STATES v. LYONS CAPITAL, INC.
a mistrial. United States v. Dorlouis, 107 F.3d 248, 257 (4th Cir.
1997).
During the examination of a government witness, the district court
asked the prosecutor to identify the number of the exhibit being
shown the witness. The judge explained that he wanted the exhibit
number on the record because "it won’t be me, I will be long gone
when this case is being considered by the Court of Appeals and they
want to be able to look at [the exhibit]." The conspirators immediately
objected to the use of "the Court of Appeals" and moved for a mis-
trial, which the district court denied. They argue that the judge abused
his discretion in refusing to grant a mistrial, asserting that the com-
ment expressed his belief that they would be convicted and subse-
quently appeal.
The trial judge’s statement could not have prejudiced the jury
unless the jurors knew that only a criminal defendant — and not the
government — has an absolute right to appeal. See United States v.
Martin Linen Supply Co., 430 U.S. 564, 568 (1977).2 Moreover, the
judge’s comment in this case was one short, insignificant remark in
a nine-day trial. Cf. United States v. Fuller, 162 F.3d 256 (4th Cir.
1998) (upholding a conviction despite a far more prejudicial judicial
comment). Finally, the judge gave an appropriate curative instruction.
By his comment, the trial judge did not express his views about the
credibility of witness testimony, cf. Quercia v. United States, 289
U.S. 466, 471-72 (1933); Fuller, 162 F.3d at 260, or add to the con-
spirators’ burden of proof, Bihn v. United States, 328 U.S. 633, 637
(1946). Rather, the district judge made an inconsequential and inno-
cent remark that he later cured with an appropriate instruction. Nei-
ther his comment nor his refusal to grant a mistrial constitutes an
abuse of discretion.
B.
According to the government, the conspirators furthered their
"scheme to defraud" by paying individuals to write "reference" letters
2
In fact, a defense attorney conceded at oral argument that it would be
a "stretch" to think that most jurors are aware of that rather counter-
intuitive fact.
UNITED STATES v. LYONS CAPITAL, INC. 11
to prospective clients expounding upon, among other things, Lyons’s
past successes. During the testimony of a "reference" attorney, the
prosecutor asked where he obtained his knowledge of these "suc-
cesses." The attorney replied that his knowledge came from Otto Von
Bressendorf, at which time defense counsel objected on grounds of
attorney-client privilege. The trial judge overruled that objection, and
Lyons Capital and the Von Bressendorfs now appeal that ruling. We
review determinations as to the existence of attorney-client privilege
for clear error. United States v. Aramony, 88 F.3d 1369, 1389 (4th
Cir. 1996).
Communications between attorney and client are privileged only if
the client "intended [the information] to be kept confidential." In re
Grand Jury Proceedings, 727 F.2d 1352, 1355 (4th Cir. 1984). It is
clear from the nature of the communication between Otto Von
Bressendorf and the "reference" attorney, that Von Bressendorf did
not intend to keep this information confidential, but rather fully
expected the attorney to share the "successes" of his company with
potential clients as a means of attracting new business. Accordingly,
the district court did not err in overruling the objection.
C.
The conspirators also assert that the district court erred in several
evidentiary rulings. We review such decisions for abuse of discretion.
United States v. Ward, 171 F.3d 188, 195 (4th Cir.), cert. denied, 120
S.Ct. 137 (1999).
1.
Prior to trial, the defense deposed a German newspaper editor, who
testified that one of his reporters investigated Otto Von Bressendorf’s
background and determined that he was indeed a baron. The govern-
ment objected on hearsay grounds to the introduction of this deposi-
tion at trial; the district judge sustained the objection. The
conspirators claim that this was in error because the Federal Rules of
Criminal Procedure allow the use of "a deposition, so far as otherwise
admissible under the rules of evidence." Fed R. Crim. P. 15(e). They
contend that the deposition is "otherwise admissible" under Rules
804(b)(1) and 803(19) of the Federal Rules of Evidence. Rule
12 UNITED STATES v. LYONS CAPITAL, INC.
804(b)(1) allows the admission of former testimony if the declarant
is unavailable - which he was in this case — and Rule 803(19) per-
mits testimony, which would otherwise be hearsay, regarding:
Reputation among members of a person’s family by blood,
adoption, or marriage, or among a person’s associates, or in
the community, concerning a person’s birth, adoption, mar-
riage, divorce, death, legitimacy, relationship by blood,
adoption, or marriage, ancestry, or other similar fact of per-
sonal or family history.
Fed. R. Evid. 803(19) (emphasis added).
The conspirators argue that the editor’s statement should have been
admitted because it concerned Otto Von Bressendorf’s "reputation . . .
in the community" regarding his "ancestry" and "family history." But
no record evidence demonstrates that the editor’s information was
based on Otto Von Bressendorf’s "reputation . . . in the community."
The editor simply testified that his reporter told him this following an
unspecified background investigation. During deposition, the editor
admitted that he did not know where the reporter obtained his infor-
mation. See 31 Michael Graham, Federal Practice and Procedure: Evi-
dence § 6770 (Interim ed. 1997) ("The witness called to testify to
such reputation must be shown to . . . be familiar with the reputa-
tion.") (emphasis added).
Even if the defense had offered proof that the editor’s testimony
stated facts based on Von Bressendorf’s "reputation . . . in the com-
munity" it was inadmissible. The Advisory Committee Note to Sec-
tion 803(19) provides:
Trustworthiness in reputation evidence is found "when
the topic is such that the facts are likely to have been
inquired about and that persons having personal knowledge
have disclosed facts which have thus been discussed in the
community; and thus the community’s conclusion, if any has
been formed, is likely to be a trustworthy one." 5 Wigmore
§ 1580, p. 444, and see also § 1583.
UNITED STATES v. LYONS CAPITAL, INC. 13
Fed. R. Evid. 803(19) advisory committee’s note (emphasis added).
Moreover, as the Third Circuit recently held, "reputation testimony
arises from sufficient inquiry and discussion among persons with per-
sonal knowledge of the matter to constitute a trustworthy ‘reputa-
tion.’" Blackburn v. United Parcel Serv., Inc., 179 F.3d 81, 100 (3d
Cir. 1999). The defense offered no evidence that Otto Von Bressen-
dorf had a trustworthy reputation in his community as a baron, or oth-
erwise. In fact, when presented at deposition with two documents
disputing Otto Von Bressendorf’s claim to nobility, the editor readily
admitted that "my doubts grow."
In sum, the district court’s decision to exclude the deposition
hardly constituted an abuse of discretion.
2.
The conspirators also contend that the district court erred in admit-
ting testimony of an IRS agent regarding Lyons’s federal income tax
returns and internal financial statements. They assert that this testi-
mony was both irrelevant and violated Federal Rule of Evidence
404(b) because it impermissibly introduced evidence of prior bad acts
to prove their "criminal propensity." These arguments have no merit.
This evidence was highly relevant and "admissible to prove involve-
ment in the charged [offense] and not simply to prove similar acts."
United States v. Dozie, 27 F.3d 95, 97 (4th Cir. 1994).
The government elicited the agent’s testimony to demonstrate that
Lyons’s financial statements were "grossly overstated" when com-
pared to its tax returns. Lyons provided these overstated statements
to Dunn & Bradstreet as the basis for assigning a "rating" to Lyons.
Dunn & Bradstreet in turn provided its ratings to potential clients,
who consulted the ratings in deciding whether to employ Lyons’s
"services." Therefore, the financial overstatements were relevant and
furthered the scheme to defraud. The testimony also tended to prove
that the conspirators falsely told clients that the advance fees were
required to cover "legal, underwriting, and marketing expenses." In
fact, according to this testimony, fees paid to Lyons were often used
for the Von Bressendorfs’ personal expenses.
14 UNITED STATES v. LYONS CAPITAL, INC.
In sum, the challenged testimony provided "direct evidence of the
scheme to defraud." United States v. Loayza, 107 F.3d 257, 264 (4th
Cir. 1997).
D.
Defendants assert that the district court erroneously instructed the
jury with regard to the element of "materiality" under the mail and
wire fraud statutes. 18 U.S.C. §§ 1341, 1343. Conviction under
§ 1341 and § 1343 requires a fact finder to determine that a "scheme
to defraud" involved "material" — as opposed to inconsequential —
falsehoods. Neder v. United States, 119 S.Ct. 1827, 1839-41 (1999).
Although the conspirators concede that the district court instructed the
jury as to materiality, they nonetheless maintain that a subsequent
"misinstruction" was "tantamount to a failure to instruct the jury on
materiality."
The challenged instruction stated "that it is not a defense to the
charge that the alleged victim or victims were gullible or that a rea-
sonably prudent person would not have been deceived." This instruc-
tion correctly stated the law that victim gullibility does not exculpate
the defendants. See Neder, 119 S.Ct. at 1841 (requiring proof of
actual reliance would "clearly be inconsistent with the [mail and wire
fraud] statutes"); see also United States v. Colton, 2000 WL 1648877*10 (4th Cir. Nov. 3, 2000) ("If a scheme to defraud has been or is
intended to be devised, it makes no difference whether the persons the
schemers intended to defraud are gullible or skeptical, dull or bright.
These are criminal statutes, not tort concepts.") (quoting United States
v. Brien, 617 F.2d 299, 311 (1st Cir. 1980)). Thus we find no error.
E.
The conspirators also appeal the district court’s failure to instruct
the jury that they were not required to obtain a SEC license. "A dis-
trict court’s refusal to provide an instruction requested by a defendant
constitutes reversible error only if the instruction: (1) was correct; (2)
was not substantially covered by the court’s charge to the jury; and
(3) dealt with some point in the trial so important, that failure to give
the requested instruction seriously impaired the defendant’s ability to
UNITED STATES v. LYONS CAPITAL, INC. 15
conduct his defense." United States v. Lewis, 53 F.3d 29, 33 (1995)
(quotations omitted).
We are unable to determine if the proposed instruction was correct,
because the record contains no proposed instruction. And while the
court did not "substantially cover" the issue in its charge to the jury,
the "failure to give the requested instruction" did not "seriously
impair" the conspirators’ ability to conduct their defense.3 The securi-
ties issue consumed a minuscule portion of the trial, and the govern-
ment’s closing statement contained only one passing mention of the
lack of a securities license. Accordingly, we do not find that the
absence of this jury instruction warrants reversal.
V.
Finally, the conspirators challenge their sentences on several
grounds.
A.
Lichtenberg raises two Sentencing Guidelines issues. We review
the district court’s legal interpretations of the Sentencing Guidelines
de novo, but review factual findings for clear error. United States v.
Jones, 31 F.3d 1304, 1315 (4th Cir. 1994).
She appeals the two-level enhancement imposed for her use of a
"special skill, in a manner that significantly facilitated the commis-
sion or concealment of the offense." U.S.S.G. § 3B1.3. Lichtenberg
argues that the district court found her special skill to be the ability
to "dupe" people, which is "included in the base offense level," of her
fraud convictions. She claims that the sentence therefore violates
U.S.S.G. § 3B1.3, which provides that the "adjustment may not be
employed if . . . [the] skill is included in the base offense level."
3
In this case, it is even unclear whether the trial judge "refused" the
jury instruction. The available record reflects that the prosecutors
acceded to the jury instruction, but for unknown reasons the judge failed
to give such an instruction. Moreover, because Defendants failed to
object to the absence of this instruction when asked by the judge if there
were any objections, we review this question for plain error.
16 UNITED STATES v. LYONS CAPITAL, INC.
In fact, the sentencing court clearly found that Lichtenberg’s skill
was more than the mere ability to "dupe" clients. The sentencing court
reasoned:
[T]he record is that she possessed sufficient indicia and
knowledge of legal requirements of the underwriting pro-
cess to successfully dupe many people, including some law-
yers, into believing she was an expert in the area, and these
people relied on her advice and expertise in preparing offer-
ing memoranda.
Indeed, the court found that Lichtenberg’s "underwriting expertise
here is not a skill possessed by members of the general public. So she,
in fact, had a special skill." Lichtenberg employed her special skill
and knowledge to defraud Lyons’s clients and thus properly received
the § 3B1.3 enhancement.
Lichtenberg also challenges the 14-level increase that the judge
applied because the fraud caused a loss that exceeded $5 million. See
U.S.S.G. § 2F1.1(b)(1)(O). She argues that the district court erred by
attributing all losses to her conduct. But the district court specifically
found that Lichtenberg "was so intimately involved in the operations
and in effectuating the frauds that were the business of this company
that it would defy reality to believe that she shouldn’t be held
accountable under the reasonably foreseeable standard that applies to
determine what losses she is to be held accountable for." The sentenc-
ing court also noted that even if Lichtenberg could not be held respon-
sible for all of the $9.9 million in losses, she was certainly responsible
for at least $5 million of the losses, and thus deserved the 14-level
increase.
B.
Finally, the conspirators assert that restitution ordered pursuant to
the Mandatory Victims Restitution Act ("MVRA"), 18 U.S.C.
§ 3663A, 3664 (Supp. II 1996), violated the Ex Post Facto Clause.
The MVRA applies to post-1996 convictions, 18 U.S.C. § 2249 (stat-
utory notes), and does not require the sentencing court to consider the
defendant’s ability to pay restitution. See 18 U.S.C. § 3663A(a)(1).
The MVRA amended the Victim and Witness Protection Act
UNITED STATES v. LYONS CAPITAL, INC. 17
("VWPA"), 18 U.S.C. § 3664(a) (Supp. II 1990), which, by contrast,
did require the sentencing court to consider the defendant’s ability to
pay when ordering restitution. The conspirators argue that applying
the MVRA to conduct that occurred before 1996 disadvantaged them
and increased the severity of their punishment in violation of the Ex
Post Facto Clause.
Although several circuits have held that application of the MVRA
to criminal conduct committed before its enactment violates the Ex
Post Facto Clause, see, e.g., United States v. Edwards, 162 F.3d 87,
92 (3d Cir. 1998); United States v. Siegel, 153 F.3d 1256, 1260 (11th
Cir. 1998); United States v. Williams, 128 F.3d 1239, 1241 (8th Cir.
1997); United States v. Baggett, 125 F.3d 1319, 1322 (9th Cir. 1997);
United States v. Thompson, 113 F.3d 13, 15 n.1 (2d Cir. 1997), we
have not yet decided the issue. See United States v. Karam, 201 F.3d
320, 330 & n.13 (4th Cir. 2000). Nor need we do so in this case.
This is so because all of the presentence reports in this case contain
sections regarding the conspirators’ "Ability to Pay" and explicit
information regarding their income and assets. The district judge not
only adopted the presentence reports, he also addressed the conspira-
tors’ available income and assets, and appointed a Trustee/Special
Master to provide, inter alia, "a statement as to the amount of money
available for making restitution." We have made clear that "a sentenc-
ing court satisfies its duty [under the VWPA] to make specific find-
ings if it adopts a presentence report ‘that contains adequate factual
findings to allow effective appellate review of the fine or restitution.’"
Id. at 329 (quoting United States v. Castner, 50 F.3d 1267, 1277 (4th
Cir. 1995)). See also United States v. Dawkins, 202 F.3d 711, 716
(4th Cir. 2000) (upholding restitution order because the court
"adopted the proposed findings of the presentence report, which con-
tained a section concerning Dawkins’ financial condition"). Cf.
United States v. Ubakanma, 215 F.3d 421, 428 n.7 & 429 (4th Cir.
2000) (vacating and remanding a restitution order in part because the
presentence report made no recommendation as to restitution).
Accordingly, the conspirators’ ex post facto claim fails.4
4
The conspirators also raise an ineffective assistance of counsel claim,
but because it does not "conclusively appear" from the record that they
18 UNITED STATES v. LYONS CAPITAL, INC.
VI.
In sum, we have carefully reviewed the record and the arguments
of all the parties and affirm the conspirators’ convictions and sen-
tences in all respects.
AFFIRMED
received constitutionally ineffective assistance, their claims must be
raised "in the district court by a collateral challenge pursuant to 28
U.S.C. § 2255, rather than in the appellate court by direct appeal." United
States v. Smith, 62 F.3d 641, 651 (4th Cir. 1995).