United States v. Ross ( 1997 )


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  •                                                        [PUBLISH]
    IN THE UNITED STATES COURT OF APPEALS
    FOR THE ELEVENTH CIRCUIT
    ________________________
    No. 96-3556
    ________________________
    D.C. Docket No. 94-CR-03138-1 LAC
    UNITED STATES OF AMERICA,
    Plaintiff-Appellee,
    versus
    KENNETH D. ROSS,
    JAMES H. ADAMS,
    Defendants-Appellants.
    __________________________
    Appeals from the United States District Court for the
    Northern District of Florida
    __________________________
    (December 19, 1997)
    Before ANDERSON and COX, Circuit Judges, and ALARCÓN*, Senior
    Circuit Judge.
    ____________________
    *Honorable Arthur L. Alarcon, Senior U.S. Circuit Judge for the
    Ninth Circuit, sitting by designation.
    -1-
    ALARCÓN, Senior Circuit Judge:
    Kenneth D. Ross and James H. Adams    appeal from the judgment
    entered following their conviction for wire fraud, interstate
    transportation of money taken by fraud, and conspiracy to commit
    mail fraud, wire fraud, interstate transportation of money
    obtained by fraud, and money laundering.   The Government
    persuaded the jury that Ross and Adams conspired to obtain money
    for their personal use and benefit from two financially troubled
    insurance companies by falsely representing that the loans were
    to be used solely for business purposes.   To disguise their
    intent to channel part of the funds for their personal use and
    benefit, and to escape detection by state insurance regulators,
    Ross and Adams and their co-conspirators created shell
    corporations and contrived deceptive paper transactions that had
    no economic substance.
    Ross and Adams contend that the evidence presented to the
    jury is insufficient to sustain a conviction.   They also argue
    that the court erred in its rulings on the admissibility of
    evidence and in rejecting certain jury instructions.   Finally,
    they assert that the district court miscalculated their sentence
    and applied a sentencing guideline that is unconstitutional.    We
    discuss each of these contentions, and the facts pertinent
    thereto, under separate headings.
    We affirm the judgment of conviction because we conclude the
    evidence is sufficient to persuade a rational trier of fact of
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    the guilt of the accused of each crime, and we hold that the
    court's rulings on the admissibility of evidence and its decision
    to reject defense instructions were free from error.
    We vacate the sentence imposed on each defendant and remand
    for resentencing because the district court failed to make an
    independent finding that it was persuaded beyond a reasonable
    doubt that Ross and Adams conspired to commit the offense of
    money laundering.
    I
    SUFFICIENCY OF THE EVIDENCE
    A.   Background
    Ross and Adams contend that the Government failed to present
    sufficient evidence that they committed any crime.   They argue
    that the Government failed to demonstrate that they defrauded the
    policy holders of Midwest Life Insurance Co. ("MWL") Gulf
    National Life Insurance Co. ("GNL"), and state insurance
    regulators by concealing their intent to divert money for their
    personal use that had been loaned to corporations controlled by
    them, in reliance on false representations that it would be used
    solely for legitimate business purposes -- the purchase of real
    property and a merchant vessel suitable for conversion into a
    gambling casino.
    The evidence is sufficient to support a conviction if,
    "after reviewing the evidence in the light most favorable to the
    prosecution, any rational trier of fact could have found the
    -3-
    essential elements of the crime beyond a reasonable doubt."
    Jackson v. Virginia, 
    443 U.S. 307
    , 319 (1979) (emphasis in the
    original).   "[A]ll reasonable inferences must be drawn in favor
    of supporting the jury's verdict."    United States v. Sawyer, 
    799 F.2d 1494
    , 1501 (11th Cir. 1986) (citing Glasser v. United
    States, 
    315 U.S. 60
    , 80 (1942)).
    Ross began his involvement with GNL in 1989.    At that time,
    Ross was the chief executive officer of Charter Bank, a
    Mississippi savings and loan association.    GNL was experiencing
    financial difficulties because of prior bad investments.    GNL had
    a $1,000,000 unsecured note in its loan portfolio issued to it by
    a failing savings and loan institution.    GNL had a serious
    financial problem:   if the note was not paid, GNL would become
    insolvent.   GNL concluded that it should dispose of the unsecured
    note by using it to purchase real property.    In December 1989,
    GNL purchased the Ensley Shopping Center in Pensacola, Florida
    from Charter Bank for $4,000,000.    As payment for the shopping
    center, GNL assigned the unsecured $1,000,000 note to Charter
    Bank, made a cash payment of $1,000,000, and executed a
    $2,000,000 promissory note secured by a mortgage on the shopping
    center.   The Ensley Shopping Center was operating at a loss prior
    to this transaction.   Ross was forced to resign from Charter Bank
    when it was taken over by the Resolution Trust Company in March
    1990.
    On March 13, 1990, Bobby Shamburger and Gary Jackson, the
    -4-
    controlling stockholders and officers of Southshore Holding
    Company, ("Southshore") opened a bank account in the name of On
    Line Investment Company and wired $900,345.33 to that account.
    MWL was a subsidiary of Southshore.    On March 30, 1990,
    Shamburger and Jackson filed articles of incorporation in Nevada
    for On Line Investment, Inc. ("On Line").    Ross was designated
    president, secretary, and treasurer of On Line.    He was also the
    only person who had the right to withdraw from the On Line
    Investment bank account.
    On Line was originally created as a straw party to conceal
    the transfer of first mortgage loans worth $875,000 from Public
    Investors Life Insurance Co. ("PILICO"), one of the insurance
    companies owned by SouthShore to MWL, another SouthShore
    subsidiary.     PILICO was insolvent at this time and could not
    make payments to its policy holders without an infusion of new
    funds.   MWL had been prohibited from purchasing notes from a
    related company without the consent of the Nebraska Insurance
    Commissioner.    On Line was used to circumvent this restriction.
    Ross purchased the notes from PILICO with the money on deposit in
    the On Line Investment bank account.    Upon receipt of the notes,
    Ross assigned them to MWL.    Ross was paid $20,000 for
    participating in this scheme.
    Ross's next transaction with MWL involved the Tops'l Beach
    and Racquet Club ("the Club"), which was located in Sandestin,
    Florida.   The Club cost $25,000,000 to develop, but it failed to
    -5-
    produce sufficient funds to repay the development loan.    The Club
    was taken over by the NCNB Texas National Bank, which first
    attempted to sell it for $18,000,000.    After several years
    without attracting a purchaser, the bank reduced the asking price
    to $5,450,000.
    The Sandestin Golf Resort ("Sandestin") was located next to
    the Club.   The Bos Holding Company owned Sandestin.   Peter Bos
    was its largest stockholder.   Sandestin went into bankruptcy on
    February 7, 1990.   Bos decided that the acquisition of the Club
    by the Bos Holding Company would create an attractive golf,
    tennis, and beach resort, and reduce overhead and administration
    costs through combined management.    An added incentive was the
    fact that the Club's property included two undeveloped parcels
    that would be suitable for the construction of a hotel or
    condominium.   Bos persuaded the Birmingham-Destin Investment
    Partners ("BDIP") to join him in negotiating for the purchase of
    the Club.   On May 4, 1990, Bos and BDIP formed the Tops'l Holding
    Co. Inc. ("THI") for the purpose of purchasing the Club.
    On the same date, THI signed an agreement to purchase the
    Club.   THI was required to make an initial payment of $200,000 as
    "earnest money."    The purchase and sale agreement provided that,
    upon consummation of the sale, the earnest money would be applied
    to the purchase price.
    THI was unable to raise the balance of the purchase price
    from its investors.   Meanwhile, the BDIP partners concluded that
    -6-
    they did not wish to participate in the purchase of the Club.
    Tom Underwood, a partner in BDIP contacted Ronald Dunston, a
    Florida real estate broker to seek his assistance in locating
    someone who would be interested in purchasing the Club.    Dunston
    informed Underwood that Ross was interested in building a
    beach-front hotel.   Ross met with Underwood in the spring of 1990
    to discuss the proposed purchase of the Club.   Underwood told
    Ross the purchase price would be $5,500,000.
    Ross contacted Shamburger, Jackson, and Jeremiah O'Keefe,
    the president of GNL and owner of GNL's parent company, to see if
    MWL or GNL would lend him the money to purchase the Club.   Each
    company expressed an interest in making the loan.   On May 1,
    1990, Ross presented MWL with a written request for a commitment
    to loan the money required for the purchase of the Club.    On the
    same date, MWL issued a commitment letter in which it indicated
    it would provide the entire $5,500,000.   Jerry Palmer, MWL's
    attorney, testified that MWL did not perform any due diligence to
    determine whether the investment was sound prior to issuing the
    commitment letter.
    Over the next few months, MWL, Ross, Oscar Jordan, a former
    member of the board of directors of Charter Bank and Ross's
    attorney, and representatives of Bos and Sandestin conducted
    negotiations regarding the structure for the purchase of the
    Club.   On June 29, 1990, THI assigned its right to purchase the
    -7-
    Club to On Line1 in exchange for a payment of $200,000 to
    reimburse THI for the earnest money it had paid to the owner of
    the Club.    At this point in time, Ross was in a position to
    purchase the Club because of the $5,500,000 loan commitment he
    had received from MWL.
    In the early part of July 1990, Dennis LaFont, MWL's
    treasurer, informed Shamburger and Jackson that MWL was going to
    have to report a loss of $2,300,000 on its second quarterly
    report to the state insurance regulators in Florida and Louisiana
    for the period ending June 30, 1990.    LaFont was concerned that a
    loss of this magnitude would subject the company to regulatory
    action.
    Shamburger and Jackson told LaFont that MWL was going to
    sell an "option" and realize a $5,000,000 gain.    The term
    "option" was apparently used to refer to the purchase and sale
    agreement for the Club that THI had previously assigned to On
    Line.    Because On Line did not assign its rights under the
    purchase and sale agreement to MWL prior to June 30, 1990, MWL
    could not accurately or legally report that it owned the right to
    purchase the Club prior to June 30, 1990 and that this interest
    was worth $5,000,000.
    To manufacture a paper record that would reflect that MWL
    1
    While Ross was originally the sole stockholder of On
    Line, Gerald Taylor, Ross's accountant, testified that Adams
    acquired fifty percent of the stock in On Line prior to the end
    of July 1990.
    -8-
    had a $5,000,000 asset prior to June 30, 1990, a letter was
    prepared on MWL letterhead which stated that MWL and Ross agreed
    to the termination of MWL's commitment to lend Ross $5,500,000.
    On August 6, 1990, Ross, acting as president of On Line, assigned
    its rights under the purchase and sale agreement to MWL.   No
    consideration was paid by MWL for the assignment.   On the same
    date, MWL assigned its rights under the purchase and sales
    agreement to L'Spot for $5,000,000. Ross was president and
    director of L'Spot.   Adams was also a director.   Ross executed a
    promissory note on behalf of L'Spot in the amount of $5,000,000
    to MWL in exchange for MWL's rights under the purchase and sale
    agreement.   In short, Ross, acting as the president of On Line,
    assigned its right to purchase the Club to MWL for no
    consideration and then bought it back, as president of L'Spot,
    for $5,000,000.   Shamburger and Jackson instructed LaFont to
    reflect the $5,000,000 promissory note MWL received from L'Spot
    on August 6, 1990 as a corporate asset in its second quarter
    report for the period ending June 30, 1990.
    Meanwhile, on July 19, 1990, Adams obtained a commitment for
    a loan of $1,700,000 from MWL for the purchase of a merchant
    vessel large enough to serve as a floating gambling casino.     Also
    in July 1990, Dunston, Ross, Adams, and O'Keefe incorporated a
    company named Casino Beach for the purpose of developing a casino
    at Diamond Head, Mississippi.
    On July 31, 1990, Ross, Adams, Dunston, Shamburger, Jackson
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    Bos, and others met at Sandestin to determine how to accomplish
    the sale of the Club to Ross and Adams.   In preparation for the
    closing of the sale of the Club, Ross and Jordan created a number
    of corporations to receive title to specific portions of the Club
    property.   These corporations included Over Look Corp. ("Over
    Look"), Technology Building, Inc. ("Technology Building"), Sand
    Tops'l Corp. ("Sand Tops'l"), Tops'l Management, Inc. ("TMI"),
    and Tops'l Beach Property, Inc. ("Tops'l Beach").   Ross served as
    president and director for TMI and Over Look, secretary and
    director for Technology Building, and director for Sand Tops'l.
    Adams was named as a director of TMI.   Because the structure of
    the purchase and sale proved to be more difficult than
    anticipated, the closing of the transaction did not occur until
    August 6 and 7.
    The final agreement was complicated.   Pursuant to an
    agreement titled Partial Assignment of Contract Rights ("Partial
    Assignment"), the Club property was divided into four general
    classes of property:   (1) condominiums; (2) the amenities
    including inter alia a retail/office building, restaurant, tennis
    courts, pool house, and all personal property located in or used
    in connection with the various facilities, and all attendant
    contract rights, licenses and permits; (3) the developer rights;
    and (4) the undeveloped parcels 628 and 630.   L'Spot transferred
    its right to acquire the condominium property to Over Look,
    Technology Building, and Sand Tops'l.   L'Spot transferred its
    -10-
    right to acquire, the amenities, the developer rights, and the
    undeveloped parcels 628 and 630 to TMI.
    In exchange for the transfer of the acquisition rights, Over
    Look, Technology Building, and Sand Tops'l each agreed to pay
    approximately one third of the purchase price for the Club.     MWL
    loaned $2,000,000 to each of the three corporations so that they
    could purchase their share of the Club pursuant to the Partial
    Assignment and use the balance for working capital.   The terms of
    the three loans were identical.   They were secured by a mortgage
    on the portion of the property purchased by each corporation.
    Each loan also had as collateral a portion of the property rights
    transferred to TMI under the Partial Assignment.2
    Thus, payment for the $6,000,000 loaned by MWL for the
    acquisition of the Club was assumed by Over Look, Technology
    Building, and Sand Tops'l.   TMI assumed L'Spot's responsibility
    to pay $5,000,000 to MWL for the right to purchase the Club.    As
    further consideration, TMI granted MWL a seven year option to
    acquire a two-thirds interest in parcels 628 and 630 for one
    dollar.   The Partial Assignment states: "The . . . Option may be
    2
    For example, L'Spot's assignment to Technology Building
    set forth in the Partial Assignment provides in relevant part as
    follows:
    Collateral - first mortgage lien on the Technology Assets as
    well as a lien to be granted by [TMI] on [TMI's] development
    rights, general intangibles and management agreement
    relating to income properties constituting Technology
    Assets.
    (Emphasis added).
    -11-
    exercised at any time by providing written notice thereof to
    [TMI] within seven (7) years from the date hereof and by paying,
    at the closing of such exercise, the sum of One Dollar ($1.00) as
    the option price thereof."   L'Spot received a similar seven year
    option to purchase a one third interest in parcels 628 and 630.
    TMI executed a mortgage and security agreement to secure payment
    of the $5,000,000 promissory note, which included property that
    was already pledged as security for the loans totaling $6,000,000
    for the purchase of the Club.3 Parcels 628 and 630 were not
    included in the mortgage agreements.
    As a result of these negotiations, the Club property, which
    was purchased for $5,450,000, was divided into several portions
    and used to secure promissory notes totaling $11,000,000.
    Parcels 628 and 630, however, were not included in the property
    subject to foreclosure upon default.   In addition, these valuable
    properties could be purchased by MWL and L'Spot for an option
    price that totalled two dollars.   Furthermore, notwithstanding
    the fact that the purchase for the Club was $5,450,000, the four
    corporations signed promissory notes and mortgage agreements
    totaling $11,000,000:   $6,000,000 for the purchase money for the
    Club and working capital, and $5,000,000 for the assignment of
    3
    L'Spot's assignment to TMI set forth in the Partial
    Assignment provides in relevant part, "[TMI] shall grant to
    Lender a first mortgage lien upon and a security interest in all
    of the operating properties, the General Intangibles and
    Developer's Rights." (Emphasis added).
    -12-
    MWL's right to purchase the Club.     As discussed above, the
    acquisition and contemporaneous sale by MWL of On Line's right to
    purchase the Club was done for the sole purpose of making it
    appear that MWL had an asset worth $5,000,000 on its June 30,
    1990 statement to the regulators.
    Immediately following the sale, Ross opened a bank account
    for TMI in the AmSouth Bank of Florida ("the TMI account"). He
    also created a cash management account for L'Spot with Merrill
    Lynch Gulfpost/Biloxi ("the L'Spot account").     After the purchase
    of the Club, and the payment of closing costs, $205,000 remained
    from the money MWL loaned to the three corporations.     Shamburger,
    acting on behalf of MWL, agreed to deposit the $205,000 in the
    TMI account for "operating expenses."
    On August 31, 1990, a condominium owned by the Club was sold
    by TMI for $250,844.77.   The condominium was part of the security
    for the purchase price loan.   Instead of using the proceeds of
    the sale to reduce the outstanding balance on the purchase price
    loan, Ross, with the consent of Shamburger and Jackson, deposited
    the money in the TMI account as "operating expenses."     Later that
    day, Ross transferred $200,000 from the TMI account to the L'Spot
    account.   On September 1, 1990, Ross transferred an additional
    $245,000 to the L'Spot account.
    On September 26, 1990, Ross withdrew $150,000 from the
    L'Spot account and deposited it in his separate personal account
    at Merrill Lynch.   On the same date, Ross executed six checks on
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    his personal Merrill Lynch account payable to himself for a total
    of $119,000.   Two of these checks totalling $96,500 were endorsed
    by Ross and deposited in Adams' account at Merchants and Marine
    Bank.   On October 2 and October 19, 1990, Ross drew two more
    checks totaling $32,600 on his personal Merrill Lynch account and
    deposited them into his account at Jefferson Bank.
    In early October 1990, Ross, acting on behalf of TMI, asked
    GNL to approve a $3,000,000 "construction/operating" loan for the
    Club.   GNL was in serious financial trouble at this time.    It was
    desirous of disposing of the Ensley Shopping Center.   O'Keefe,
    president of GNL, informed Ross and Adams that he would approve a
    loan to TMI of $3,000,000 if they would purchase the Ensley
    Shopping Center from GNL.   To satisfy O'Keefe's counter proposal,
    Adams caused articles of incorporation to be filed for the
    Northgate Corporation of Sandestin ("Northgate").    Adams was the
    only director of Northgate.   Dunston was designated its president
    and secretary.   Its sole purpose was to acquire the shopping
    center.
    GNL retained Florida attorneys Richard Powell and Fred
    Estergren to handle the loan to TMI and the sale of the Ensley
    Shopping Center to Northgate.   By this time, the Resolution Trust
    Corporation had taken control of Charter Bank.   Charter Bank held
    a mortgage on the Ensley Shopping Center as security for its
    $2,000,000 loan to MWL.   Powell became concerned regarding
    whether it was necessary to inform Charter Bank that GNL was
    -14-
    planning to sell the Ensley Shopping Center to another party
    because Charter Bank held the mortgage on this property.    Michael
    Cavanaugh, GNL's attorney, sent a facsimile to Estergren on
    October 19, 1990, informing him that the mortgage did not contain
    a due-on-sale clause.   Accordingly, Estergren did not notify the
    Resolution Trust Corporation or Charter Bank of the proposed sale
    of the Ensley Shopping Center to Northgate.
    Dunston, Ross, Cavanaugh, Jordan, Estergren, and Powell met
    on October 30, 1990 to consummate GNL's loan of $3,000,000 to
    TMI, and the sale of the Ensley Shopping Center by GNL to
    Northgate.    GNL sold the Ensley Shopping Center to Northgate for
    $4,100,000.   As payment to GNL for the acquisition of the Ensley
    Shopping Center, Northgate assumed GNL's obligation to pay
    Charter Bank $1,972,650.29, which was owing on the promissory
    note executed by GNL in favor of Charter Bank.   Northgate also
    executed a promissory note for $1,127,349.31, secured by all of
    Northgate's outstanding stock,4 and a second purchase money
    mortgage.    In addition, Northgate promised to pay GNL $1,000,000
    in cash, no later than October 30, 1990.   The agreement to
    purchase the Ensley Shopping Center was signed by Adams on behalf
    of Northgate.
    On the same date, GNL agreed to loan TMI $3,000,000 based on
    Ross's representation that the money would be used for the Club's
    4
    The record shows that Northgate's stock had no value at
    this time.
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    operating and maintenance expenses.      One million five hundred
    thousand dollars of the loan was secured by mortgages on parcels
    628 and 630, which had been previously left free of debt.        The
    money was disbursed as follows:    First, GNL set up a reserve fund
    for TMI of $1,000,000.    Second, GNL endorsed five checks to TMI
    from different sources totalling $1,040,000.      These checks were
    deposited in the TMI account.    Third, GNL also delivered a check
    for $1,000,000 to TMI drawn on its account at the People's Bank
    in Biloxi, Mississippi.    On October 30, 1990, the date this check
    was issued by GNL, GNL had a total of $41,500.64 in its account
    at the People's Bank.    On the same date, TMI endorsed the
    $1,000.000 check to Northgate.    Northgate then endorsed the same
    check back to GNL.   Thus, Northgate ostensibly met its obligation
    to pay $1,000,000 in cash to GNL as partial payment for the
    purchase of the Ensley Shopping Center by presenting to GNL the
    same check that GNL had issued to TMI with insufficient funds.
    As a result of this sleight of hand, GNL's bank account showed a
    credit of $1,000,000 on November 1, 1990.
    On October 30, 1990, $1,000,000 was transferred by wire from
    TMI account to the L'Spot account.      Immediately after this
    transfer, Ross issued several checks on the L'Spot account.        A
    check in the amount of $499,999.99 was issued to Adams.
    Shamburger received a check for $333,333.33.      Ross also made out
    a check in the amount of $166,666.66 to himself.      Adams,
    Shamburger and Ross deposited the checks into their personal bank
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    accounts.   Jane Masholie, a GNL employee, testified that she
    typed these checks at Ross's direction during the closing of
    GNL's loan to TMI.
    Ross became a consultant for GNL in January, 1991.    On
    January 18 and January 22, 1991, Ross issued four checks to TMI
    totaling $550,000 from the $1,000,000 TMI reserve fund, which was
    created as part of GNL's loan to TMI.    Ross then endorsed each of
    the checks as president of TMI for deposit in the L'Spot account.
    On January 22, Ross issued a check to L'Spot in the amount of
    $100,000, a check for $183,333.33 to Jackson, $183,333.33 to
    Shamburger, $41,666.50 to Adams, and $41,666.50 to himself.     The
    $100,000 check payable to L'Spot was used to acquire a
    certificate of deposit.   It was redeemed, endorsed by Ross, and
    deposited in a bank account opened in the name of Casino Beach.
    In late January, 1991, Ross instructed Ms. Masholie to draft
    several promissory notes payable to the order of L'Spot and to
    back date them so as to make it appear that they were executed on
    the dates that checks had been issued on the L'Spot account.     A
    $150,000 promissory note dated September 26, 1990 was signed by
    Ross, which provided that he would pay L'Spot interest at a rate
    of prime rate floating per annum until paid and payable on
    demand.   A promissory note for $166,666.66, dated October 10,
    1990, was also signed by Ross.    Ms. Masholie testified that she
    made a typographical error in using October 10, 1990 as the date
    the note was executed; Ross had instructed her to use October 30,
    -17-
    1990.   Another note dated October 10, 1990 in the amount of
    $166,666.66 was signed by Adams.    Shamburger signed a promissory
    note for $333,333.33, which was backdated to October 30, 1990.       A
    note for the same amount, also backdated to October 30, 1990, was
    prepared for Jackson, however, it was not signed.
    Ms. Masholie prepared a second set of promissory notes at
    Ross's direction in late January 1991 .    Each was dated January
    24, 1991.    She was told that the amounts should match earlier
    disbursements from the L'Spot account.    Jackson and Shamburger
    each signed notes in the amount of $183,333.33.    Ross and Adams
    each signed notes in the amount of $41,666.50.
    Ms. Masholie also testified that she drafted a promissory
    note from Northgate to L'Spot in the amount of $1,000,000.     The
    note bears the date October 30, 1990.    It was not prepared by Ms.
    Masholie until approximately one year after October 30, 1990.
    On May 14, 1991, Dunston, acting on behalf of TMI, requested
    that MWL waive the restrictions on the use of the money loaned to
    TMI on August 6, 1990 for the purchase of the Club.    The letter
    reads as follows:
    Please accept this letter as a request for
    written waiver of the loan covenants
    specified below which are contained in the
    loan agreement between TOPS'L Management,
    Inc. and Midwest Life Insurance Company dated
    August 6, 1990. This waiver will serve to
    -18-
    document your prior verbal waiver of these
    covenants.
    Section IV, Negative Covenants, Item E,
    "Loans to Others and Investments" prohibits
    transaction with affiliates unless approved
    in advance by the Payee (Midwest Life). At
    December 31, 1990, TOPS'L Management has
    outstanding advances to L'Spot Corporation,
    its parent company, of $2,195,000. In
    addition, TOPS'L Management has obligations
    totaling approximately $802,222 due to Sand
    TOPS'L Corp, Overlook Corporation and
    Technology Building, Inc., affiliates,
    resulting from the purchase of TOPS'L Beach
    and Racquet Club. These transactions appear
    to be violations of the above covenants.
    Please indicate your acceptance of the waiver
    request by signing below. Thank you for your
    cooperation and assistance.
    The waiver request was granted on June 3, 1991.
    Ross received a total of $240,933.16 for his personal
    benefit from the money loaned to TMI by MWL and GNL for the
    purchase and operation of the Club.     Adams received $660,666.49.
    As of the time of trial, neither of them had paid any taxes on
    these amounts, nor had they repaid the amounts reflected on the
    backdated promissory notes.
    Ross and Adams assert that the Government failed to prove
    that they committed any crime.    They argue that the evidence
    shows, instead, that they were involved in complex, but lawful
    financial transactions.
    -19-
    B.   Analysis
    COUNT I -- CONSPIRACY
    We begin our analysis of the sufficiency of the evidence in
    the conspiracy count ("Count I") by examining the theory of the
    prosecution in alleging that Ross and Adams were guilty of
    conspiracy.   "This Court cannot affirm a criminal conviction
    based on a theory not contained in the indictment or not
    presented to the jury."   United States v. Elkins, 
    885 F.2d 775
    ,
    782 (11th Cir. 1989), cert. denied, 
    495 U.S. 1005
     (1990)
    (citation omitted).
    Count I alleged a conspiracy among Ross, Adams, Jordan,
    Dunston, and others to commit the substantive offenses of mail
    fraud, wire fraud, interstate transportation of property taken by
    fraud, and money laundering in order to further a scheme to
    defraud MWL, GNL, Charter Bank, and the states of Mississippi,
    Florida, and Louisiana.   The indictment alleged that the
    defendants' fraudulent scheme included the following objects:
    It was the defendants' objective to fraudulently divert loan
    funds from their intended purposes and thereafter convert
    these stolen funds to the use and benefit of the defendants,
    to include an investment in a Mississippi project to develop
    a gambling casino, without disclosing to the regulatory
    agencies the fact that the funds had been diverted.
    It was further the defendants' objective to create a scheme
    to defraud the people of the States of Florida, Louisiana,
    and Mississippi, and Charter Bank, by using the funds
    illegally obtained from Midwest Life Insurance Company
    (Midwest) and Gulf National Life Insurance Company (Gulf
    National Life) to invest in speculative investments which
    normally would not have been approved as admissible assets
    for these companies by the Insurance Commissions of these
    -20-
    various states without properly disclosing the close and
    affiliated relationships between the true borrowers and the
    principal lending officials for these companies.
    Thus, the Government's theory of prosecution was that Ross
    and Adams conspired to induce two state regulated insurance
    companies to loan money by fraudulently representing that it was
    solely to be used for a legitimate business purpose, without
    disclosing their intent to divert some of these funds for their
    personal use and benefit.   The indictment also alleges that a
    further object of the conspirators was to falsify insurance
    company records to cover up their fraud so as to avoid detection
    by state insurance regulators.
    Having identified the government's theory of prosecution,
    we must next discuss the sufficiency of the evidence of a
    conspiracy.   Participation in a conspiracy to commit a crime may
    be inferred from circumstantial evidence.   See United States v.
    Delgado, 
    903 F.2d 1495
    , 1500 (11th Cir. 1990) cert. denied, 
    498 U.S. 1028
     (1991).   "[C]onspiracy to commit a particular
    substantive offense cannot exist without at least the degree of
    criminal intent necessary for the substantive offense itself."
    Ingram v. United States, 
    360 U.S. 672
    , 678 (1959) (internal
    quotation marks and citation omitted) (alteration in original).
    To establish a conspiracy to commit wire fraud, the government
    must prove (1) an agreement between two or more persons (2) to
    execute a scheme to defraud and (3) the use of either the mails
    -21-
    or wire service in furtherance of the scheme.     See United States
    v. Simon, 
    839 F.2d 1461
    , 1469 (11th Cir. 1988).   Proof of
    specific intent to use the mails or wire service is not required
    to show conspiracy to commit mail or wire fraud.    See United
    States v. Massey, 
    827 F.2d 995
    , 1001-02 (5th Cir. 1987).       Rather,
    "[t]he government's burden . . . is to demonstrate beyond a
    reasonable doubt that [the defendants] agreed to engage in a
    scheme to defraud in which they contemplated that the mails [or
    wire service] would likely be used."   
    Id. at 1002
    .
    There is no dispute regarding the fact that Ross and Adams
    entered into an agreement with MWL and GNL through their
    corporate alter egos to obtain loans for business purposes that
    were subsequently diverted to their personal use and benefit.
    Ross and Adams argue that they committed no crime because there
    was no restriction on the use of the GNL loan and MWL expressly
    waived all earlier violations of the loan agreement on June 3,
    1991.
    In his opening brief, Adams argues that the Government's
    assertion that there were "intended purposes" for the loans made
    by GNL and MWL to the corporations controlled by Ross and Adams
    is inaccurate.   The record is to the contrary.
    The Government presented evidence that TMI obtained a
    $3,000,000 loan from GNL on October 30, 1990 for the specific
    purpose of paying for the cost of repairs and the operation of
    the Club.   The purpose of MWL's loan to L'Spot is clearly
    -22-
    reflected in the commitment letter executed by Jackson on May 1,
    1990, as chairman of the board of MWL.   The commitment letter
    states in pertinent part: "Midwest Life shall lend Five Million
    Five Hundred Thousand ($5,500,000.00) Dollars to be used to
    purchase Tops'l Beach and Racquet Club residential/recreational
    development."   The record shows that on August 6, 1990, Over
    Look, Technology Building, and Sand Tops'L received loans from
    MWL totalling $6,000,000 for the purchase of the Club and working
    capital.
    Alternatively, Adams maintains that, "even if there was an
    agreement about the ``intended purposes' of the loan that was
    breached by Adams or others, the remedy is civil litigation.
    Adams asserts that [t]here is nothing in the law stating that
    this sort of thing would be a criminal felony."   Adams Br. at 16.
    To support this proposition, Adams refers us to United States v.
    Kristofic, 
    847 F.2d 1295
     (7th Cir. 1988).
    A careful reading of the Kristofic decision will readily
    demonstrate that Adams's reliance on it in his challenge to the
    sufficiency of the evidence is misplaced.   Kristofic was
    convicted of converting to her use "a thing of value of the
    United States" in violation of 
    18 U.S.C. § 641
    .   Id. at 1295-96.
    The evidence produced at Kristofic's trial demonstrated that she
    received a loan of $60,000 from the Small Business Administration
    for leasehold improvements, new equipment, and capital for a
    restaurant she had opened the previous year in Chicago.
    -23-
    Kristofic certified that she would use the loan proceeds
    according to the provisions of the loan agreement.    See id. at
    1296.   Less than a month after she received the loan, Kristofic
    closed the restaurant.   None of the funds were put to their
    intended use.    Instead, she paid pre-existing debts, made a down
    payment on a car, made a personal loan of $12,000 to a friend,
    invested money in a bar in Texas, and kept $3,000 in cash.       See
    id.   The Seventh Circuit reversed the judgment in Kristofic.      The
    court held that the Government failed to prove that the defendant
    converted a thing of value of the United States.     The court
    reasoned that "loan proceeds do not remain the property of the
    lender."   Id.   Therefore "Kristofic's misapplication of the funds
    was not a conversion because the government no longer held a
    property interest in them."   Id. at 1297.   The Seventh Circuit's
    opinion in Kristofic is not applicable to any of the issues in
    this case because Ross and Adams were not prosecuted for
    conversion.   They were prosecuted for fraudulently representing
    to MWL and GNL that their corporations intended to use the loan
    proceeds for specific business purposes without disclosing their
    intention to divert some of the money for their personal benefit.
    Thus, unlike the situation in Kristofic, the crimes committed by
    Ross and Adams were completed at the time they made fraudulent
    representations and failed to disclose material facts in order to
    induce MWL and GNL to make the loans.
    Following oral argument, Adams filed a letter with the clerk
    -24-
    of this court in which he advances an additional argument based
    on his reading of the Fifth Circuit's opinion in United States v.
    Grossman, 
    117 F.3d 255
     (5th Cir. 1997).    In Grossman, the
    defendant was convicted of conspiracy to commit wire fraud and
    eleven counts of wire fraud.    Grossman obtained several loans
    from a savings and loan association in order to purchase a real
    estate development known as "the Oaks."    The loans contained the
    following language:   "Borrower represents and warrants lender
    that the loan will be used by borrower for its business and
    commercial purposes and not for personal, family, household or
    agricultural use."    
    Id. at 259
    .
    The Government contended at trial that Grossman violated
    this clause because he used the loan proceeds for business
    purposes unrelated to the business entity named on the loan.      See
    
    id.
       Grossman argued that he was not guilty of fraudulently using
    the loan proceeds because the language in the clause allowed him
    to use it for business purposes related to any of his real estate
    holdings.   See 
    id. at 260
    .    The Fifth Circuit held that
    Grossman's interpretation of the clause was reasonable, although
    not the only possible interpretation, and stated that "the
    alleged breach of this clause does not support a finding of
    fraudulent intent on the part of Michael Grossman."    
    Id.
    Adams contends that appellants' interpretation of the loan
    agreements that they could use the loan proceeds for their
    personal benefit was a reasonable interpretation of the loan
    -25-
    agreements.   This argument finds no support in the record.    The
    intended purpose for the loans made by MWL and GNL is free from
    any ambiguity.   MWL loaned three corporations $6,000,000 for the
    purchase of the Club and working capital.   GNL loaned TMI
    $3,000,000 to pay for repairs and operating expenses of the Club.
    MWL and GNL did not loan any money to Ross or Adams, nor did
    either company authorize the three corporations or TMI to make a
    personal loan to Ross or Adams.
    Appellants appear to argue that the failure of GNL expressly
    to prohibit the diversion of loan funds obtained for enumerated
    business purposes justifies their failure to disclose that they
    intended to use the money for their personal benefit.   Appellants
    have not cited any authority for this bold proposition.   We
    reject it as frivolous.
    Appellants concede that the diversion for their personal
    benefit of money loaned by MWL for the purchase of the Club
    violated restrictions contained in the written loan agreement.
    They maintain, however, that the subsequent waiver of the
    violation of the loan agreement immunizes them from prosecution
    for their conduct and the failure to disclose their fraudulent
    intent in applying for the loan.   This argument ignores the fact
    that the fraud was accomplished and the money was diverted
    approximately eight months before the waiver was obtained.
    Ratification or condonation is not a defense for past criminal
    behavior.   See Gilbert v. United States, 
    359 F.2d 285
    , 287 (9th
    -26-
    Cir. 1966); 1 Charles E. Torcia, Wharton's Criminal Law § 45
    (15th ed. 1993).
    The evidence, viewed in the light most favorable to the
    Government, was sufficient to persuade a rational juror beyond a
    reasonable doubt that Ross and Adams conspired to induce GNL and
    MWL to loan money for business investments without disclosing
    their intent to divert funds for their personal use and benefit.
    This conduct threatened the interests of the policy holders and
    deliberately interfered with the ability of the state insurance
    commissioners to regulate the activities of these companies and
    deter a use of their assets that would jeopardize their solvency.
    The record shows that in March 1990 Ross entered into an
    agreement with Shamburger and Jackson to disguise from insurance
    regulators the purchase by MWL of first mortgage loans from a
    related company.    To carry out this deception, On Line, a shell
    corporation, was created.    Ross, as the president of On Line,
    purchased the first mortgage loans from a bank account opened and
    funded by Shamburger and Jackson, and then assigned the loans to
    MWL.    Ross was paid $20,000 for writing a check, in his capacity
    as the president of On Line, to purchase the loans and executing
    an assignment of the loans to MWL.
    A rational juror could also infer from the evidence that
    Ross and Adams conspired with Shamburger and Jackson to conceal
    from state insurance regulators the fact that MWL had a deficit
    of $2,300,000 for the second quarter of 1990.    This deception was
    -27-
    accomplished by using On Line as a conduit to effect transfer of
    THI's right to purchase the Club to MWL.    First, THI assigned the
    Club purchase agreement to On Line.    Then, Ross, as president of
    On Line, assigned the Club purchase agreement to MWL for no
    consideration.   MWL, in turn, assigned the Club purchase
    agreement to L'Spot.   Ross, as president of L'Spot, executed a
    $5,000,000 promissory note in exchange for MWL's interest in the
    Club purchase agreement.   L'Spot's promissory note was entered as
    a $5,000,000 asset in MWL's second quarterly report even though
    it was not executed until August 6, 1990, approximately five
    weeks after the second quarter had ended.   Thus, instead of
    reporting a $2,300,000 loss, this sham transaction permitted MWL
    to report a profit of $2,700,000.
    Ross and Adams participated in similar trickery to disguise
    GNL's fragile financial condition while at the same time
    negotiating a $3,000,000 loan for the Club's construction and
    operating expenses.    As discussed above, GNL promised to loan TMI
    $3,000,000 if Ross and Adams would purchase the Ensley Shopping
    Center for $4,100,000.   Ross and Adams created Northgate for this
    purpose.   Adams was its sole director.   In payment for the Ensley
    Shopping Center, Northgate assumed GNL's obligation to pay the
    remaining balance of $1,972,650.69 owed by GNL to Charter Bank
    for its 1989 acquisition of the Ensley Shopping Center, executed
    a promissory note for $1,127,349.31 in favor of GNL, and endorsed
    and handed to GNL's representative the same $1,000,000 check that
    -28-
    GNL had issued to TMI as part of GNL's $3,000,000 loan to TMI.
    This transaction created the illusion that GNL sold a shopping
    center for $4,100,000 that it had purchased the previous year for
    $4,000,000 from Charter Bank.   In fact, GNL received a worthless
    check with a face value of $1,000,000; a promissory note for
    $1,127,349.31 secured by all of Northgate's outstanding stock,
    which had no value on October 30, 1990; and a second mortgage on
    the Ensley Shopping Center.   Based on all the evidence presented
    by the Government concerning the conduct of Ross and Adams, a
    rational juror could be persuaded beyond a reasonable doubt that
    Ross and Adams agreed to the purchase of Ensley Shopping Center
    to assist O'Keefe in his efforts to mask GNL's perilous financial
    condition from policy holders and insurance company regulators
    and to strip GNL of approximately $1,000,000 for their personal
    use and benefit.
    The evidence outlined above demonstrates that Ross and Adams
    perpetrated a fraud by withholding material facts regarding their
    intention to use for their personal use and benefit money loaned
    for business purposes.   The evidence is also sufficient to
    demonstrate that a wire transmission was used to accomplish their
    fraudulent scheme to withhold from the Charter Bank and the
    Resolution Trust Corporation material facts that may have alerted
    them to take action to prevent use of the Ensley Shopping Center
    as a pawn in their scheme to obtain $1,000,000 from GNL for their
    personal use and benefit.   We later discuss the sufficiency of
    -29-
    the evidence to commit the substantive offense of wire fraud.
    Ross and Adams also contend that the evidence is
    insufficient to persuade a rational juror that the defendants
    conspired to commit the offense of interstate transportation of
    money taken by fraud.    We discuss below appellants' challenge to
    the sufficiency of the evidence to support their conviction of
    the substantive offense of interstate transportation of money
    taken by fraud.    Our determination that the evidence was
    sufficient to satisfy a rational juror beyond a reasonable doubt
    that Ross and Adams committed the crime of interstate
    transportation of money by fraud answers their contention that
    the evidence was insufficient that this crime was an object of
    their conspiracy.
    We are persuaded that the evidence was sufficient to
    persuade a rational trier of fact beyond a reasonable doubt that
    Ross and Adams conspired to commit the crimes of wire fraud and
    interstate transportation of money taken by fraud.    We need not
    consider whether the evidence is sufficient to support a judgment
    of conviction for conspiring to commit the crime of money
    laundering.    A guilty verdict in a multi-object conspiracy will
    be upheld if    the evidence is sufficient to support a conviction
    of any of the alleged objects.    See Griffin v. United States, 
    502 U.S. 46
    , 56-60 (1991).
    -30-
    COUNT VI -- WIRE FRAUD
    Ross and Adams also challenge the sufficiency of the
    evidence that they committed the crime of wire fraud as alleged
    in Count VI of the indictment.    They argue that the facsimile
    from Michael Cavanaugh, GNL's legal counsel, to Fred Estergren,
    who represented GNL in closing the Ensley Shopping Center sale to
    Northgate, is insufficient to constitute wire fraud because there
    is no evidence in the record that it was sent in furtherance of a
    fraudulent scheme.
    Count VI reads as follows:
    1. From on or about November 1, 1989 and continuously
    thereafter up to and including the date of this indictment,
    the defendants, KENNETH D. ROSS, JAMES H. ADAMS, OSCAR
    JORDAN, and RONALD DUNSTON, along with others, knowingly and
    willfully devised a scheme to defraud, or for obtaining
    money or property by means of false pretenses and
    representations or promises well knowing at the time that the
    pretenses, representations, and promises would be and were false
    when made, and which scheme and artifice so devised and intended
    to be devised by the defendants was in substance as described in
    Count I of this indictment, which description is expressly
    incorporated herein and made a part hereof as if set forth
    word by word, line by line.
    2. On or about October 19, 1990, in the Northern District
    of Florida and elsewhere, the defendants, KENNETH D.
    ROSS, JAMES H. ADAMS, OSCAR JORDAN, and RONALD DUNSTON,
    for the purpose of execution of the aforementioned
    scheme and attempting to do so, in furtherance thereof,
    did knowingly transport and cause to be transmitted by
    wire in interstate commerce between the State of
    Mississippi and Destin, Florida, a letter from Michael
    Cavanaugh to Fred Estergren regarding the Due on sale
    clause contained in the Charter Bank mortgage,
    along with this mortgage and promissory note.
    In order to establish a violation of § 1343, the government
    -31-
    must prove beyond a reasonable doubt that a defendant "(1)
    intentionally participated in a scheme to defraud; and (2) used
    wire communications to further that scheme."    United States v.
    Brown, 
    40 F.3d 1218
    , 1221 (11th Cir. 1994).    Further, "[e]ach
    party to a continuing conspiracy may be vicariously liable for
    substantive criminal offenses committed by a co-conspirator
    during the course and in furtherance of the conspiracy,
    notwithstanding the party's non-participation in the offense or
    lack of knowledge thereof."   United States v. Mothersill, 
    87 F.3d 1214
    , 1218 (11th Cir.), cert. denied sub nom.     ___ U.S. ___, 
    117 S. Ct. 531
    , 136 L. Ed. 2d. 416 (1996).   "[A] court need not
    assess the individual culpability of a particular conspirator
    provided the ``substantive crime was a reasonably foreseeable
    consequence of the conspiracy.'"   
    Id.
     (quoting United States v.
    Alvarez, 
    755 F.2d 830
    , 849-50 (11th Cir. 1985).
    A rational juror could infer beyond a reasonable doubt that
    Ross and Adams intentionally participated in a scheme to defraud
    the policy holders of GNL by falsely representing that TMI
    required a loan of $3,000,000 to fund operational expenses
    without disclosing that their true intent was to divert
    approximately $1,000,000 for their personal use and benefit on
    the same date the business loan to TMI was consummated.    To carry
    out their scheme, Ross and Adams agreed to purchase the Ensley
    Shopping Center from GNL.   Because Ross was the chief executive
    officer of Charter Bank in 1989 when GNL purchased the Ensley
    -32-
    Shopping Center from Charter Bank, he was aware that Charter Bank
    held a mortgage on that property.       Ross was also aware that
    Charter Bank had failed in March 1990 and had been taken over by
    the Resolution Trust Company.    Nevertheless, he and Adams did not
    notify Charter Bank or the Resolution Trust Corporation that GNL
    intended to convey the Ensley Shopping Center to Northgate,
    Adams's alter ego corporation.
    Ross retained Florida attorneys Richard Powell and Fred
    Estergren to close the loan to TMI.       Powell and Estergren
    discovered in their title search that Charter Bank held a
    mortgage on the Ensley Shopping Center.       Estergren drafted a
    document entitled "Consent to Sale" for Charter Bank's signature.
    It provided that for a consideration of $10, Charter Bank
    consented to the sale of the Ensley Shopping Center to Northgate.
    The proposed agreement also noted that GNL would remain liable to
    Charter Bank pursuant to its promissory note and the mortgage.
    Estergren consulted with Michael F. Cavanaugh, a GNL board member
    and its chief counsel, for his opinion regarding whether Charter
    Bank should be notified of the proposed sale of the Ensley
    Shopping Center because of the fact that it held the first
    mortgage on that property.   Cavanaugh sent a facsimile memorandum
    from his Mississippi office, which stated:       "I am forwarding the
    current Mortgage on the Ensley Property.       I do not find a ``due on
    sale provision'.   Under Florida law could we sell the property as
    an Assumption and not trigger the due on sale."
    -33-
    Estergren testified that Cavanaugh's memorandum persuaded
    him that he should "forget" about providing Charter Bank or the
    Resolution Trust Corporation with notice of the proposed sale of
    the Ensley Shopping Center.    Accordingly, the Consent to Sale
    document was not sent to Charter Bank.
    Ross and Adams argue that Cavanaugh's fax cannot be the
    basis for a conviction under § 1343 because its contents were not
    fraudulent or untrue.    The Supreme Court, however, has rejected
    an identical argument in the mail fraud context.     In Schmuck v.
    United States, 
    489 U.S. 705
     (1989), the Court stated that even
    "``innocent' mailings--ones that contain no false information--may
    supply the mailing element."    
    Id. at 715
     (quoting Parr v. United
    States, 
    363 U.S. 370
    , 390 (1960)).     The defendants' conviction
    under the wire fraud statute is subject to the same analysis.
    See Carpenter v. United States, 
    484 U.S. 19
    , 25 n.6 (1987) ("The
    mail and wire fraud statutes share the same language in relevant
    part, and accordingly we apply the same analysis to both sets of
    offenses here.").    Therefore, the fact that the facsimile
    memorandum may have been correct that the Charter Bank mortgage
    did not have a due-on-sale clause did not prevent the jury from
    concluding that Cavanaugh's fax to Estergren furthered the
    fraudulent scheme.     Had Charter Bank or the Resolution Trust
    Corporation been notified of the proposed sale of Ensley Shopping
    Center, they may have been able to take action to prevent it.
    Ross and Adams also argue that they were not aware that
    -34-
    Cavanaugh had wired the memorandum to Powell and Estergren.
    "Where one does an act with knowledge that the use of the
    [interstate wires] will follow in the ordinary course of
    business, or where such use can reasonably be foreseen, even
    though not actually intended, then he ``causes' the [interstate
    wires] to be used."     Pereira v. United States, 
    347 U.S. 1
    , 8-9
    (1954).   Ross and Adams incorporated Northgate in Florida.         GNL
    was a Mississippi corporation.    It was clearly foreseeable that a
    transaction between corporations in two states would involve
    interstate wire transfers.
    Finally, Ross urges us to reverse his wire fraud conviction
    because "the government failed to prove that the actions of Mr.
    Ross and the other named defendants caused any defrauding in that
    a victim lost any money or property."      Ross Br. at 19.   He
    further states there was "absolutely no evidence that Charter
    Bank lost anything as a result of the wire fraud or the ``Ensley'
    real estate transaction between Gulf National Life Ins. Co. and
    Northgate Corporation of Sandestin, Inc."      
    Id. at 20
    .    This
    argument lacks merit.    Punishment under the wire fraud statute is
    not limited to successful schemes.      "A scheme to defraud need not
    be carried out to constitute a violation of the mail and wire
    fraud statutes.   These statutes punish unexecuted, as well as
    executed, schemes."   Pelletier v. Zweifel, 
    921 F.2d 1465
    , 1498
    (11th Cir. 1991); see United States v. Patterson, 
    528 F.2d 1037
    ,
    1041 (5th Cir. 1976) ("[t]here is no necessity for the government
    -35-
    to prove actual financial loss").       The Government merely needs to
    show that the accused intended to defraud his victim and that his
    or her communications were "``reasonably calculated to deceive
    persons of ordinary prudence and comprehension.'"      Pelletier, 
    921 F.2d at 1498-99
     (quoting United States v. Bruce, 
    488 F.2d 1224
    ,
    1229 (5th Cir. 1973)).   The record demonstrates that the
    Government satisfied this burden as to both defendants.
    We conclude from our review of the evidence that it is
    sufficient to persuade a rational juror beyond a reasonable doubt
    that Ross and Adams knowingly caused a facsimile memorandum to be
    transmitted by wire between the states of Mississippi and Florida
    to further their scheme to defraud GNL's policy holders by
    diverting money loaned for business purposes for their personal
    use without alerting the Resolution Trust Corporation that the
    Ensley Shopping Center was being sold to a straw corporation
    controlled by Adams.
    COUNT VII -- INTERSTATE TRANSPORTATION OF STOLEN PROPERTY
    Ross and Adams also challenge the sufficiency of the
    evidence to support their conviction of transferring more than
    $5,000 in interstate commerce.    Count VII states:
    On or about October 30, 1990, in the Northern District of
    Florida and elsewhere, the defendants, KENNETH D. ROSS,
    JAMES H. ADAMS, OSCAR JORDAN, and RONALD DUNSTON, did
    knowingly and willfully transport and cause to be
    transported in interstate commerce between Destin,
    Florida, and the State of Mississippi, goods,
    securities, or money, to-wit: funds in
    the amount of One Million dollars ($1,000,000.00), knowing
    the same to have been stolen, converted and taken by fraud.
    -36-
    "A conviction under 
    18 U.S.C. § 2314
     requires ``(1) knowledge that
    certain property has been stolen or obtained by fraud, and (2)
    transporting it, or causing it to be transported, in interstate
    commerce."   United States v. Hartley, 
    678 F.2d 961
    , 986 (11th
    Cir. 1982) (quoting Pereira v. United States, 
    347 U.S. 1
    , 9
    (1953)).
    Ross and Adams assert that this count was impermissibly
    vague because there were two separate transfers between Florida
    and Mississippi on October 30, 1990 involving funds in the amount
    of $1,000,000.   They contend that it is unclear whether Count VII
    referred to the unfunded check for $1,000,000 provided by GNL to
    TMI and endorsed back to GNL or the $1,000,000 TMI received from
    GNL at the loan closing.   The defendants did not object to the
    vagueness of Count VII at trial.   When there has not been a prior
    objection to the form of the indictment, we will review a
    challenge to the indictment only for clear and prejudicial error.
    See United States v. Harrell, 
    737 F.2d 971
    , 981-82 (11th Cir.
    1984).
    After reviewing the record, we conclude that Count VII was
    not impermissibly vague and that its general description of the
    crime did not cause any prejudice to the defendants.   During
    closing arguments, the Government stated that the basis for the
    interstate transportation of stolen property charge was the money
    that GNL deposited in the TMI account following the loan closing
    -37-
    on October 30, 1990.   The Government argued:
    The funds are put in the Tops'l Management account for
    Tops'l's operating purposes - for Tops'l's operating
    purposes. They're immediately transferred from the AmSouth
    Florida bank account, Tops'l, to the L'Spot account in
    Mississippi. That's one of the crimes, interstate
    transportation and money laundering.
    Ross's counsel agreed with the Government that the basis for
    Count VII was the $1,000,000 TMI received at the loan closing.
    During Ross's closing argument, he stated:
    Count VII charges that the defendants moved in interstate
    commerce $1,000,000 to Tops'l Management. . . . . That
    when this money from Gulf National as a result of that
    October 30      closing - you remember, there were five
    checks that Mr.
    Cavanaugh from Gulf National brought to the closing at Fort
    Walton, and he gave those five checks to Mr. Ross and they
    were deposited in the Tops'l Management account in Destin.
    And the government alleges that right there, that was stolen
    property - that was stolen property. And I believed I
    understood that the government's theory for taking that
    position that this was stolen property was because
    representations apparently were made that the purpose of the
    loan was supposed to be to make improvement, but that, they
    used the money for different purposes.
    This is the only logical interpretation of Count VII.    Count VII
    clearly identifies "funds in the amount of One Million Dollars"
    as the property transported through interstate commerce by the
    Ross and Adams.   The defense did not have any difficulty at trial
    discerning the nature of the allegations in Count VII.   It is
    clear that Count VII referred to the $1,040,000 deposited in
    -38-
    TMI's account and not to the insufficient funds check that was
    endorsed back to GNL.
    Having concluded that Count VII is not impermissibly vague
    or ambiguous, we must also consider whether the evidence
    presented to the jury was sufficient to persuade a rational jury
    beyond a reasonable doubt that Ross and Adams violated § 2314 by
    causing the $1,000,000 in loan funds to be transported from
    Florida to Mississippi.   As discussed above in our analysis of
    the sufficiency of the evidence to support the conspiracy count,
    the Government demonstrated that Ross knew these funds were
    obtained by fraud.   There was testimony that Ross represented
    that the $3,000,000 was for the Club's operating expenses.    Ross
    transferred $1,000,000 to himself, Adams, and Shamburger on the
    same date that they were deposited by GNL into TMI's account in
    Florida.   Ross's act of diverting the GNL loan funds from their
    intended purpose clearly furthered the conspiracy.    As a
    co-conspirator, Adams was liable for any substantive offense
    committed by Ross in furtherance of the conspiracy to defraud the
    insurance companies, its policy holders, and the state insurance
    regulators.   See United States v. Mothersill, 
    87 F.3d 1214
    , 1218
    (11th Cir.) cert. denied sub nom.     ___ U.S. ___, 
    117 S. Ct. 531
    ,
    
    136 L. Ed. 2d 416
     (1996).
    -39-
    II
    EXCLUSION OF EVIDENCE OFFERED BY ADAMS
    Adams maintains that the district court erred in excluding
    three defense exhibits designated as "Adams 7," "Adams 11," and
    "Adams 12," which were offered to prove that MWL and GNL did not
    lose any money as a result of the loans they made to the
    corporations controlled by Ross and Adams.    This court reviews a
    district court's evidentiary rulings for "a clear abuse of
    discretion."   United States v. Sellers, 
    906 F.2d 597
    , 601 (11th
    Cir. 1990).
    Adams 7 included all records of the sales of the Club
    property.   It showed that MWL received $8,700,000 from the sale
    of property that served as security for the money loaned to
    Overlook, Technology Building, and Sand Tops'l for the purchase
    and operation of the Club.    Adams 11 contained an appraisal of
    the Ensley Shopping Center.    Adams 12 showed that GNL sold
    parcels 628 and 630 for $3,700,000 on September 30, 1994.      Adams
    contends that these exhibits tend to prove that he did not intend
    to steal, convert, or take any money by fraud.
    The district court did not abuse its discretion in denying
    admission of these exhibits into evidence.    Ross and Adams
    committed fraud by diverting for their personal use and benefit
    money that was loaned for business purposes to TMI, Overlook,
    Technology Building, and Sand Tops'l.    MWL and GNL did not loan
    any money to Ross and Adams.    Ross and Adams did not furnish any
    -40-
    security for the money they obtained by diverting funds loaned to
    the corporations for business purposes.   The fact that the
    property that was used to secure payment of the $3,700,000
    business loan may have subsequently appreciated in value is not
    relevant to the questions whether Ross and Adams falsely
    represented that the money was to be used for business purposes
    and whether they failed to disclose that their true intent was to
    divert the loan proceeds for their personal use and benefit.
    III
    ALLEGED INSTRUCTIONAL ERROR
    A.   Failure to Inform the Jury of the Factual
    Allegations in the Indictment
    Ross and Adams assert that the district court erred in
    failing to inform the jury of the factual allegations of each
    count of the indictment.   Adams's counsel requested a theory of
    defense instruction to the jury.   Counsel explained that the
    proposed instruction was necessary because the jury would receive
    the prosecution's theory of the case from the indictment.     When
    informed by the court that it did not intend to give the
    indictment to the jury, Adams's counsel stated that "if the jury
    did not get the indictment, I would withdraw the theory of
    defense instruction."   The prosecutor informed the court that
    without receiving a copy of the indictment, the jury would not be
    able to agree unanimously on which overt act had been proved
    without being informed about each of the 206 overt acts listed in
    -41-
    the indictment.   Adams's attorney then suggested that the defense
    could stipulate that the jury should be instructed that "the
    parties have agreed that at least one overt act has been proven."
    After conferring with the prosecutor, Adams's counsel made the
    following statement:
    Here's what we propose, Judge, that the
    indictment not be given to the jury, that the
    theory of defense instruction be withdrawn,
    and that we amend the jury instructions under
    your 4.1 general conspiracy continued, and
    I've got language written out that Mr. Beard
    and I and the other defense lawyers have
    agreed on, if I could come up and show you.
    The prosecutor and defense counsel agreed that the court
    should inform the jury that "the parties agree that an event or
    transaction occurred which may be considered an overt act, but
    the defendants disagree that a conspiracy existed."   The district
    court accepted the agreement.   In accordance with this
    stipulation, the court did not give the indictment to the jury.
    The court's decision to deny the prosecutor's request that
    the indictment be given to the jury was based on the stipulation
    of counsel that the indictment should not be given to the jury.
    Thus, any error in failing to give the indictment to the jury was
    invited.   It is "a cardinal rule of appellate review that a party
    may not challenge as error a ruling or other trial proceeding
    invited by that party."   Crockett v. Uniroyal, Inc., 
    772 F.2d 1524
    , 1530 n.4 (11th Cir. 1985) (citing United States v. Males,
    
    715 F.2d 568
    , 571 (11th Cir. 1983)).
    -42-
    B.   Denial of Proposed Instructions
    Ross argues that the court erred in refusing his request
    that the court instruct the jury that the loan agreement was
    valid although it was not in writing and that a borrower does not
    commit a crime if he or she uses the proceeds of a loan for
    purposes that vary from the terms of the loan agreement.      This
    court reviews a district court's rejection of a proposed jury
    instruction for abuse of discretion.      See United States v.
    Gonzalez, 
    975 F.2d 1514
    , 1571 (11th Cir. 1992).
    Ross requested that the court instruct the jury as follows:
    The Court instructs the jury that in order to
    constitute a loan, there must be a contract
    whereby, in substance one party transfers to
    the other a sum of money which that other
    agrees to repay absolutely, together with
    such additional sums as may be agreed upon
    for its use. If such be the intent of the
    parties, the transaction will be considered a
    loan without regard to its form. While a
    note would certainly be evidence of a loan,
    it is not a prerequisite for the transaction
    to be a loan.
    No issue was raised at trial or in argument that required
    the court to give this instruction.      It was undisputed at trial
    that MWL and GNL loaned money to four corporations and that the
    loan    agreements were in writing.     There was no evidence that any
    money was loaned to Ross and Adams for their personal use and
    benefit.    The factual question presented to the jury was whether
    the loans were obtained by fraud.
    -43-
    -44-
    Ross also requested the following instruction:     "The court
    instructs the jury that it is not unlawful for a borrower to use
    loan proceeds for other purposes than those specific purposes
    expressly made to the lender in order to originally secure the
    loan."     This instruction was patterned after the holding in
    United States v. Kristofic.     As discussed above, the rule
    announced in Kristofic is not applicable to a case such as this
    one where the loan was obtained by fraudulent misrepresentations
    and the withholding of material facts.     The district court did
    not abuse its discretion in rejecting each of these instructions.
    IV.   ALLEGED SENTENCING ERRORS
    Ross and Adams also challenge the legality of the
    district court's sentencing decision.     They contend that the
    district court erred as a matter of law in its interpretation and
    application of the sentencing guidelines.     "The question about
    whether a particular guideline applies to a given set of facts is
    a question of law, and thus this issue is subject to de novo
    review."     United States v. Shriver, 
    967 F.2d 572
    , 574 (11th Cir.
    1992) (citation omitted).
    The conspiracy charged in Count I of the indictment
    contained multiple objects.     Each object was also alleged as a
    substantive offense in separate counts.     The jury found Ross and
    Adams guilty of conspiracy to commit mail fraud, wire fraud,
    interstate transportation of money obtained by fraud, and money
    laundering.     Ross and Adams contend that the district court erred
    -45-
    in applying the money laundering guidelines in view of the fact
    that the jury found them not guilty of the substantive money
    laundering count.    They assert that "[g]iven the jury's finding
    of a substantive offense of wire fraud and of interstate
    transportation, but not of money laundering, it stands to reason
    that the conspiracy verdict likely was for conspiring to commit
    fraud and/or interstate transportation and not for conspiracy to
    launder money."    Adams Br. at 40.    It is not surprising that Ross
    and Adams did not cite any authority for this proposition.      It is
    contrary to well established law.      This argument fails to
    recognize the distinction between the existence of proof
    necessary to demonstrate a conspiracy to commit a criminal act,
    such as money laundering, and the evidence that must be produced
    to sustain a conviction for the substantive offense of money
    laundering.   In United States v. Griffin, 
    699 F.2d 1102
     (11th
    Cir. 1983), this court held that because the crime of conspiracy
    is a separate offense, a conviction for conspiracy will stand
    even if the evidence is insufficient to support a conviction for
    the substantive offense also pled as an object of the conspiracy.
    See 
    id. at 1107
    .    Thus, the fact that the jury acquitted Ross and
    Adams of money laundering does not demonstrate, as argued by
    Adams, that "the acquittal here on money laundering charges and
    the conviction for fraud and interstate transportation of stolen
    property established that the object of the conspiracy was not
    -46-
    money laundering but fraud and interstate transportation."    Adams
    Reply Br. at 19.
    Unfortunately, Ross and Adams did not request that the jury
    be provided with a special verdict that would have required the
    jury to specify the objects of the conspiracy Ross and Adams
    conspired to commit.    For that reason, we have no way of
    determining whether the jury was unanimously persuaded beyond a
    reasonable doubt that Ross and Adams conspired to commit money
    laundering.
    The jury was properly instructed that the Government was not
    required to prove that Ross and Adams committed each of the
    crimes charged as objects of the conspiracy, provided that the
    jury unanimously agreed on which of the offenses they conspired
    to commit.    The Supreme Court instructed in Griffin v. United
    States, 
    502 U.S. 46
     (1991), that a general guilty verdict in a
    multi-object conspiracy will stand even if the evidence is
    insufficient that the accused conspired to commit one of the
    objects.   See 
    id. at 48-58
    .   Because we have concluded that the
    evidence is sufficient to demonstrate that Ross and Adams
    conspired to commit wire fraud, we have affirmed the judgment
    regarding the conspiracy charge pursuant to Griffin.    Griffin
    does not, however, provide any guidance concerning the applicable
    sentencing guideline that must be applied in a multi-object
    conspiracy where the jury's verdict does not specify which
    offense the defendants conspired to commit.    That precise
    -47-
    question was addressed by this court in United States v.
    McKinley, 
    995 F.2d 1020
     (11th Cir. 1993).       In McKinley, the court
    framed the issue as follows:        "When defendants are convicted on a
    count charging a conspiracy to commit more than one offense, but
    the jury's verdict does not specify which of those offenses the
    defendants conspired to commit, which offense guideline applies
    at sentencing?"      
    Id. at 1022
    .    This court held that "[t]he
    Sentencing Guidelines answer this question in § 1B1.2(d), its
    accompanying commentary and the grouping rules of Chapter 3, Part
    D."     Id.
    Section 1B1.2(d) provides:      "A conviction on a count
    charging a conspiracy to commit more than one offense shall be
    treated as if the defendant has been convicted on a separate
    count of conspiracy for each offense the defendant conspired to
    commit."      U.S.S.G.§ 1B1.2(d).   Application Note Five sets forth
    the sentencing procedure that should be followed when a general
    verdict is tendered by the jury in a multi-object conspiracy
    case:
    Particular care must be taken in applying
    subsection (d) because there are cases in
    which the verdict or plea does not establish
    which offense(s) was the object of the
    conspiracy. In such cases, subsection (d)
    should only be applied with respect to an
    object offense alleged in the conspiracy
    count if the court, were it sitting as a
    trier of fact, would convict the defendant of
    conspiring to commit the object offense.
    Id. comment (n.5).
    -48-
    In McKinley, this court interpreted the words "were it
    sitting as a trier of fact" in Application Note 5 to mean "that
    the court must find beyond a reasonable doubt that the defendant
    conspired to commit the particular object offense."     
    995 F.2d at 1026
    .     Ross and Adams argue that we should not follow this
    court's holding in McKinley that a trial judge should apply
    § 1B1.1(d) and Application Note 5 under these circumstances
    because this court did not consider the constitutionality of
    § 1B1.2(d) and Application Note 5 in that decision.     Here, Ross
    and Adams first presented their constitutional challenge to
    § 151.2(d) and Application Note 5 during the sentencing
    proceedings.     Ross and Adams's argument can be summarized as
    follows:
    1.     Proof that the accused conspired with others to commit
    an offense is an element of the crime of conspiracy.
    2.     An accused has a constitutional right to have a jury
    determine whether the Government has presented sufficient
    evidence of each element of the crime alleged in the indictment.
    3.     Where, as here, it is unclear whether the jury was
    persuaded beyond a reasonable doubt that the accused conspired to
    commit the crime of money laundering, the Fifth and Sixth
    Amendments preclude the trial judge from punishing the accused
    for conspiracy to commit money laundering.
    While this court has not previously addressed the question
    whether § 1B1.2(d) and Application Note 5 deprive a defendant of
    -49-
    rights protected by the Fifth and Sixth Amendments, five circuits
    have discussed this issue.    We conclude that the reasoning of
    those circuits that have determined that § 1B1.2(d) and
    Application Note 5 do not violate the Constitution is more
    persuasive.
    Citing only United States v. Owens, 
    904 F.2d 411
     (8th Cir.
    1990), United States v. Garcia, 
    37 F.3d 1359
     (9th Cir. 1994),
    cert. denied, 
    514 U.S. 1067
     (1995), United States v. Pace, 
    981 F.2d 1123
     (10th Cir. 1992), cert. denied sub nom, 
    507 U.S. 966
    (1993), and United States v. Bush, 
    70 F.3d 557
     (10th Cir. 1995),
    cert. denied, ___ U.S. ___, 
    116 S. Ct. 795
     (1996), Ross and Adams
    argue that "the holdings of several circuits, applying the Fifth
    and Sixth Amendments, would require that the defendant be
    sentenced on the basis of the conspiracy objective yielding the
    lowest base offense level."    Adams Br. at 41.
    None of the cases cited by Ross and Adams holds that
    § 1B1.2(d) and Application Note 5 violate the Fifth and Sixth
    -50-
    Amendment.   Two of them do not discuss § 1B1.2(d) and Application
    Note 5.   A third decision involves a pre-guidelines sentence.
    The fourth decision contains dictum concerning § 1B1.2(d) that
    relies on the dictum in the pre-guidelines case.
    In United States v. Owens, the appellant was charged in one
    count with conspiracy to distribute and possess with intent to
    distribute and attempt to manufacture
    "methamphetamine/amphetamine."       Id. at 412.   The jury was
    instructed that "[y]ou must ascertain whether or not the
    substance in question in this case was in fact
    methamphetamine/amphetamine."       Id. at 413.    "The jury returned a
    general verdict of guilty."     Id. at 414.   In the presentence
    report, the probation officer recommended that "the court
    determine Owens's offense level on the assumption that the
    conspiracy's purpose had been to manufacture and distribute
    methamphetamine."    Id. at 413.    A calculation of the sentence
    based on an assumption that the controlled substance was
    amphetamine would have resulted in a sentencing range of 41-51
    months.   The range for an equivalent amount of methamphetamine
    was 63-78 months.   The court found that the conspiracy invoked
    methamphetamine.    See id.
    The Eighth Circuit held that "[b]y instructing the jury on
    an ``either/or' basis with respect to the two substances and by
    failing to enable the jury to indicate which of the substances it
    found the conspiracy to have involved, the district court
    -51-
    elicited an ambiguous verdict of guilty with two possible
    alternative interpretations."         Id. at 415.    The court held that
    "[u]nder the circumstances of this case, the district court erred
    in sentencing Owens based on the alternative which yielded a
    higher sentencing range."      Id.
    The Eighth Circuit did not discuss the constitutionality of
    § 1B1.2(d) or Application Note 5.           Furthermore, there is no
    indication in the Owens opinion that the district court
    determined that the evidence was sufficient to persuade it beyond
    a reasonable doubt that the controlled substance was
    methamphetamine.    In this matter, unlike the situation in Owens,
    the district court did not give an ambiguous "either/or"
    instruction to the jury.
    In United States v. Garcia, the defendant was charged with
    conspiracy.    The charge alleged five objects of the conspiracy.
    See 
    37 F.3d at 1369
    .     Four of the objects involved possession
    with the intent to distribute cocaine and heroin.           In the fifth
    object of the conspiracy, the indictment alleged that the
    defendant used a communications facility in committing drug
    offenses.     See 
    id.
       The jury returned a general verdict of
    guilty.   See 
    id.
        Thus, the defendant was found guilty of
    conspiracy to possess heroin and cocaine.           The district court
    imposed a maximum fifteen year sentence on the conspiracy charge
    based on the allegations that the object of the conspiracy was
    the possession of heroin and cocaine.           See 
    id.
       The Ninth Circuit
    -52-
    reversed holding that "[i]n the absence of a special verdict,
    there was no way for the sentencing judge to know which object
    was the necessary element to constitute the crime."   
    Id. at 1370
    .
    In a footnote, the Ninth Circuit stated as follows:
    We note that the sentencing guidelines
    in section 1B1.2(d) (n.5) state that when the
    verdict in a multi-object conspiracy does not
    establish which offense was the object of the
    conspiracy, the court is to decide the object
    of the conspiracy. The note specifies that
    the court can do so "if the court, were it
    sitting as a trier of fact, would convict the
    defendant of conspiring to commit that object
    offense."
    The case at hand is a pre-guidelines
    case, but we acknowledge that the rationale
    of this holding casts doubt on the
    constitutionality of the provision of the
    sentencing guidelines, because that provision
    permits a judge rather than the jury to find
    the facts necessary to establish an element
    of the crime. The submission of a special
    verdict form would forestall any such issue.
    
    Id.
     at 1371 n.4.
    The Ninth Circuit's comment in Garcia is clearly obiter
    dictum since the Sentencing Guidelines were not applicable
    because the alleged criminal conduct occurred prior to the
    effective date of the statute.    More importantly, the holding in
    Garcia, that a special verdict is required in a multi-object
    conspiracy so that the district court can determine which object
    was the necessary element to constitute the crime, is contrary to
    the law of this circuit.   In McKinley, the district court denied
    the defendant's motion that the jury be provided with a special
    -53-
    verdict form.   See 
    995 F.2d at 1023
    .    In framing the issue
    regarding the validity of the sentence, this court stated that it
    would address "the appropriate method for determining the
    applicable offense guideline for a conviction on a count charging
    a conspiracy to commit more than one offense when the jury's
    verdict does not establish which of these offenses were objects
    of the conspiracy."   
    Id. at 1024
    .
    As discussed above, this court held in McKinley that where a
    jury has returned a general verdict on a multi-object conspiracy
    charge, the district court may treat the conviction as a
    determination that the defendant was convicted on a separate
    count of conspiracy for each offense the defendant conspired to
    commit only if the court finds beyond a reasonable doubt that the
    defendant conspired to commit that offense.    See 
    id. at 1026
    .
    In United States v. Pace, the defendants were charged with a
    conspiracy with two objects:   (1) possession with intent to
    distribute "methamphetamine/amphetamine" and (2) an attempt to
    manufacture methamphetamine.   See 
    981 F.2d at 1126
    .    The district
    court submitted a general verdict form to the jury without
    objection from defense counsel.   See 
    id. at 1127
    .     The jury
    convicted the defendants of conspiracy and the Tenth Circuit
    affirmed the conspiracy conviction.     See 
    id. at 1129
    .   The court
    also held, however, that the sentence on the conspiracy count
    could not stand because "the jury might have convicted defendants
    -54-
    based on conspiracy to possess with intent to distribute
    amphetamine . . . ."   
    Id.
    The Tenth Circuit did not discuss whether § 1B1.2(d) or
    Application Note 5 violated the Fifth or Sixth Amendments.      More
    recently, in United States v. Bush, the Tenth Circuit quoted from
    the Ninth Circuit's dictum in United States v. Garcia regarding
    the Ninth Circuit's "doubt" about the constitutionality of
    § 1B1.2(d) and Application Note 5.     See Bush, 
    70 F.3d at 561
    .
    The Tenth Circuit's comment was also dictum because the issue
    before it did not concern a general verdict in a multi-object
    conspiracy.   Section 1B1.2(d) and Application Note 5 only apply
    to general verdicts tendered in multi-object conspiracy cases.
    Instead, the question presented to the Tenth Circuit was whether
    the appellant intended to plead guilty to conspiracy to
    distribute cocaine base, conspiracy to distribute cocaine powder,
    or both.   See 
    id. at 562
    .   The indictment alleged that the
    defendant had conspired to distribute "cocaine (powder) and/or
    cocaine base (crack)."   
    Id. at 559
    .    The district court
    calculated the offense based on the assumption that the object of
    the conspiracy was to distribute cocaine base.    See 
    id. at 560
    .
    The Tenth Circuit affirmed the sentence despite the ambiguity in
    the indictment because it determined that the evidence in the
    record was sufficient to show that the defendant intended to
    plead guilty to conspiracy to distribute cocaine base.       See 
    id. at 562
    .
    -55-
    The question whether a sentencing decision made pursuant to
    § 1B1.2(d) and Application Note 5 violates the Fifth and Sixth
    Amendments was squarely addressed by the Third Circuit in United
    States v. Conley, 
    92 F.3d 157
     (3rd Cir. 1996), cert denied, ___
    U.S. ___, 
    117 S. Ct. 1244
     (1997).     In Conley, the Third Circuit
    held that a sentence imposed following a general verdict of
    guilty on a multi-object conspiracy charge does not violate the
    Fifth and Sixth Amendments if the court, in formulating its
    sentencing decision, finds beyond a reasonable doubt that the
    defendant committed each object of the conspiracy.    See id. at
    165-69.   The court reasoned as follows:
    We start our analysis of this Sixth
    Amendment argument with McMillan v.
    Pennsylvania, 
    477 U.S. 79
    , 
    106 S.Ct. 2411
    , 
    91 L.Ed.2d 67
     (1986). There the Supreme Court
    permitted a state to treat conduct which
    arguably was an element of a criminal
    offense, the visible possession of a weapon
    during certain offenses, as a sentencing
    factor. As a result, the trial court rather
    than the jury would determine whether the
    sentencing factor was present and would do so
    by the preponderance of the evidence. The
    Court in reaching its result explained:
    While ``there are obviously
    constitutional limits beyond which the
    States may not go in this regard,'
    ibid., ``[t]he applicability of the
    reasonable-doubt standard . . . has
    always been dependent on how a State
    defines the offense that is charged in
    any given case.'
    
    Id. at 83-85
    , 
    106 S.Ct. at 2415
     (quoting
    Patterson v. New York, 
    432 U.S. 197
    , 211 n.
    12, 
    97 S.Ct. 2319
    , 2327 n. 12, 
    53 L.Ed.2d 281
    -56-
    (1977)). The Court analyzed the Sixth
    Amendment claim tersely:
    Having concluded that Pennsylvania may
    properly treat visible possession as a
    sentencing consideration and not an
    element of any offense, we need only
    note that there is no Sixth Amendment
    right to jury sentencing, even where the
    sentence turns on specific findings of
    fact.
    Id. at 92, 
    106 S.Ct. at
    2419 (citing Spaziano
    v. Florida, 
    468 U.S. 447
    , 459, 
    104 S.Ct. 3154
    , 3161, 
    82 L.Ed.2d 340
     (1984)).
    It is clear from McMillan, that if
    section 1B1.2(d) is, in the words of
    McMillan, properly a "sentencing
    consideration," then the section does not
    infringe the Sixth Amendment right to jury
    trial. The Chief Justice's concurring
    opinion in United States v. Gaudin, ___ U.S.
    ___, ___, 
    115 S.Ct. 2310
    , 2321, 
    132 L.Ed.2d 444
     (1995), is in harmony with McMillan.
    There the Chief Justice noted that:
    Nothing in the Court's decision stands
    as a barrier to legislatures that wish
    to define--or that have defined--the
    elements of their criminal laws in such
    a way as to remove issues such as
    materiality from the jury's
    consideration. We have noted that the
    definition of the elements of a criminal
    offense is entrusted to the legislature,
    particularly in the case of federal
    crimes which are solely creatures of
    statute.
    
    Id.
     (Rehnquist, C.J., concurring) (internal
    quotation marks omitted). We must decide,
    therefore, whether the determination of the
    object of a multi-object conspiracy following
    a general verdict of guilty properly can be
    deemed the ascertaining of a sentencing
    consideration or whether such a determination
    is beyond the "constitutional limits"
    referred to in McMillan, 
    477 U.S. at 85
    , 106
    -57-
    S.Ct. at 2415, and Patterson v. New York, 
    432 U.S. 197
    , 210, 
    97 S.Ct. 2319
    , 2327, 
    53 L.Ed.2d 281
     (1977).
    This issue is controlled by the Court's
    holding in Griffin v. United States, 
    502 U.S. 46
    , 
    112 S. Ct. 466
    , 
    116 L.Ed.2d 371
    , where
    the Court rejected the due process argument
    that a general verdict of guilty in a
    multi-object conspiracy verdict could not
    stand if the evidence to support a conviction
    for conspiracy to commit one of the objects
    was insufficient. The Court reached that
    result notwithstanding its almost
    contemporaneous holding in Sullivan v.
    Louisiana that the prosecution "must persuade
    the factfinder ``beyond a reasonable doubt' of
    the facts necessary to establish each of
    [the] elements" of the crime. 
    508 U.S. 275
    ,
    278, 
    113 S.Ct. 2078
    , 2080, 
    124 L.Ed.2d 182
    (1993). As the Court explained in Sullivan,
    "the jury verdict required by the Sixth
    Amendment is a jury verdict of guilty beyond
    a reasonable doubt." 
    Id. at 278
    , 
    113 S.Ct. at 2081
    .
    If, as Conley asserts, it were
    constitutionally impermissible to treat the
    object of a multi-object conspiracy
    indictment as a sentencing factor rather than
    as an element of the crime, then it is
    difficult to understand how the Griffin
    Court, consistently with Sullivan, could have
    permitted a conspiracy conviction to stand
    when there was insufficient evidence to
    support a conviction for one of the objects.
    After all, if each object of the conspiracy
    had been an element of the crime then under
    well-established law the defendant in Griffin
    would have been entitled to an acquittal
    since the proofs could not support the charge
    that she conspired with respect to one
    object. Thus, while Conley argues that
    violation of each object of the conspiracy
    must be considered a separate element of the
    offense for the purpose of his Sixth
    Amendment right to a jury trial, it is clear
    from Griffin that making the object of a
    conspiracy charged under 
    18 U.S.C. § 371
     a
    -58-
    matter for the sentencer rather than an
    element of the crime does not violate the
    Sixth Amendment."
    Id. at 165-66.
    In addressing the Fifth Amendment, the court stated:
    As we have indicated, Conley also argues
    that his sentence violates the Due Process
    Clause of the Fifth Amendment because the
    district court's power to make the crucial
    finding that an object of the conspiracy was
    money laundering. Here we are guided by the
    Court's holding in McMillan. There the Court
    considered a Pennsylvania statute which
    subjected defendants convicted of certain
    felonies to a mandatory minimum sentence of
    five years imprisonment if the sentencing
    judge found, by a preponderance of the
    evidence, that the person "visibly possessed
    a firearm" during the commission of the
    offense. The Court found that the
    preponderance of the evidence standard was
    constitutional but explained that "in certain
    limited circumstances Winship's
    reasonable-doubt requirement applies to facts
    not formally identified as elements of the
    offense charged." McMillan, 
    477 U.S. at 86
    ,
    
    106 S.Ct. at
    2416 (citing In re Winship, 
    397 U.S. 358
    , 
    90 S.Ct. 1068
    , 
    25 L.Ed.2d 368
    (1970)).
    Id. at 168.
    In United States v. Manges, 
    110 F.3d 1162
     (5th Cir. 1997),
    relying on Conley, the Fifth Circuit rejected a claim that
    § 1B1.2(d) and Application Note 5 are unconstitutional.    See id.
    at 1179.   The Second Circuit has also held that § 1B1.2(d) and
    Application Note 5 involve "valid sentencing considerations and
    not the violation of any Sixth Amendment guarantee."   United
    -59-
    States v. Malpeso, 
    115 F.3d 155
    , 168 (2d Cir. 1997) (citing
    United States v. Conley, 
    92 F.3d 157
    , 168 (3rd Cir. 1996), cert.
    denied, ___ U.S. ___, 
    117 S. Ct. 1244
     (1997)).
    We also agree with the Third Circuit's analysis in Conley.
    Accordingly, we hold that § 1B1.2(d) and Application Note 5 do
    not violate the Fifth and Sixth Amendments.
    We next turn to the question whether the district court's
    determination that money laundering was an object of the
    conspiracy was consistent with McKinley's interpretation of
    § 1B1.2(d) and Application Note 5.      To comply with § 1B1.2(d) and
    Application Note 5, where the jury's verdict does not establish
    which offense was the object of the conspiracy, "the court must
    find beyond a reasonable doubt that the defendant conspired to
    commit the particular object offense."     McKinley, 
    995 F.2d at 1026
    .
    The district court did not make an express finding that Ross
    and Adams conspired to commit the offense of money laundering.
    The court explained its decision to apply the money laundry
    guideline as follows:
    And under the evidence as I heard it,
    accepting the jury's verdict of conspiracy,
    they would have a basis in the facts to
    determine that they had conspired to commit
    money laundering. And, therefore, that is an
    appropriate guideline if for no other reason
    my factual determination that there is
    sufficient evidence in the record that the
    jury made that finding as well as the others.
    I might add, just to cover the record. So I
    -60-
    do find that it's appropriately scored under
    the money laundering guideline.
    The district court did not state that it had determined that
    the evidence was sufficient to persuade it beyond a reasonable
    doubt that Ross and Adams conspired to commit the offense of
    money laundering.   Because of the court's comment that the
    evidence was sufficient for the jury to determine that Ross and
    Adams conspired to commit money laundering, we cannot say with
    any degree of certainty that the court made an independent
    determination of this fact.   McKinley compels us to vacate the
    sentencing decision and remand for appropriate factual findings.
    See 
    id. at 1026
    .
    Ross and Adams also contend that the district court selected
    the wrong subsection of U.S.S.G. § 2S1.1(a) as a standing point
    for the calculation of their sentence.   The Government argues
    that this issue was waived because it was not raised properly.
    In view of our conclusion that we must vacate the sentence, we
    decline to resolve this dispute.   Upon remand, both sides will
    have an opportunity to present their conflicting views to the
    district court in a timely manner.
    Adams asserts that the district court erred in concluding
    that he is liable for a total of $1,702,599.64 laundered by all
    the conspirators without supporting this conclusion with
    appropriate findings.   We decline to consider this question in
    view of the fact that we have concluded that this matter must be
    -61-
    remanded for appropriate findings regarding whether the money
    laundering guidelines are applicable.
    V.   ASSIGNMENT TO A DIFFERENT JUDGE
    Ross and Adams request that we order this matter assigned to
    a different judge upon remand.    They argue that in denying their
    motion for bail on appeal, the district court stated that even if
    it had sentenced the defendants under a fraud guideline, "this
    range of loss would lead to a guidelines calculation resulting in
    a term of imprisonment longer than the likely duration of their
    appeal."   Adams Br. at 53.   Ross and Adams argue that
    reassignment is required because the district court's comment
    demonstrates that the district court has prejudged what it would
    do in the event this court vacated its sentence.    We disagree.
    The district court judge's comments at the bail hearing do not
    support an inference that he will fail to consider the evidence
    presented at the sentencing hearing upon remand or that he will
    refuse to follow the law.
    CONCLUSION
    We AFFIRM the judgment of conviction on each count.    We
    VACATE the sentences and REMAND for resentencing.
    -62-
    

Document Info

Docket Number: 96-3556

Filed Date: 12/19/1997

Precedential Status: Precedential

Modified Date: 3/3/2020

Authorities (30)

Glasser v. United States ( 1942 )

R. Milo Gilbert v. United States ( 1966 )

United States v. Gordana Kristofic ( 1988 )

United States v. Thomas Griffin ( 1983 )

United States v. Juan Delgado, Dagoberto Silva, Henry ... ( 1990 )

United States v. Jhon Jairo Gonzalez ( 1992 )

United States v. Clinton Manges David Wayne Myers and Carl ... ( 1997 )

United States v. G. Cecil Hartley, Travis Dell and Treasure ... ( 1982 )

united-states-v-norris-mothersill-aka-warren-c-whylley-errol-morrison ( 1996 )

United States v. Otto Pace, Travis D. Leonard, and Clifton ... ( 1992 )

United States v. Steven Sawyer, Harvey M. Bloch, Allen C. ... ( 1986 )

United States v. Augustin Alvarez, Oscar Hernandez, Mario C.... ( 1985 )

United States v. Floyd Cornelius Bush, III ( 1995 )

United States v. Louis Malpeso, AKA Bobo Robert Gallagher ... ( 1997 )

United States v. J. L. Patterson, Jr. ( 1976 )

Ronald O. Pelletier v. Gary D. Zweifel, Ronald O. Pelletier ... ( 1991 )

United States v. August Males, Jr. ( 1983 )

United States v. Donald Vivian Owens, III ( 1990 )

United States v. Paul S. Shriver ( 1992 )

United States v. Kevin McKinley Seamus Moley, Joseph ... ( 1993 )

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