Document Info

DocketNumber: 92-1447

Filed Date: 3/23/1994

Status: Precedential

Modified Date: 3/3/2016

  • USCA1 Opinion









    March 23, 1994 UNITED STATES COURT OF APPEALS
    FOR THE FIRST CIRCUIT

    ____________________

    No. 92-1447

    UNITED STATES OF AMERICA,
    Appellee,

    v.

    PETER BRANDON,
    Defendant, Appellant.

    ____________________

    No. 92-1465

    UNITED STATES OF AMERICA,
    Appellee,

    v.

    CHARLES D. GAUVIN,
    Defendant, Appellant.

    ____________________

    No. 92-1466

    UNITED STATES OF AMERICA,
    Appellee,

    v.

    MARVIN GRANOFF,
    Defendant, Appellant.

    ____________________

    No. 92-1467

    UNITED STATES OF AMERICA,
    Appellee,

    v.

    RONALD R. HAGOPIAN,
    Defendant, Appellant.

    ____________________
















    No. 92-1468

    UNITED STATES OF AMERICA,
    Appellee,

    v.

    MOMI A. KUMALAE,
    Defendant, Appellant.

    ____________________

    No. 92-1469

    UNITED STATES OF AMERICA,
    Appellee,

    v.

    OWEN B. LANDMAN,
    Defendant, Appellant.

    ____________________

    No. 92-1470

    UNITED STATES OF AMERICA,
    Appellee,

    v.

    NORMAN D. REISCH,
    Defendant, Appellant.

    ____________________

    No. 92-1471

    UNITED STATES OF AMERICA,
    Appellee,

    v.

    JOHN WARD,
    Defendant, Appellant.

    ____________________

    Before

    Torruella, Circuit Judge,
    _____________
    Campbell, Senior Circuit Judge,
    ____________________
    and Boudin, Circuit Judge.
    _____________
    _____________________














    ORDER OF COURT

    Entered March , 1994


    The opinion of this Court issued on January 31, 1994, is
    amended as follows:

    Page 50, last paragraph, line 3, delete the sentence that
    starts with "For the transactions . . ." and insert the
    following: "Ward helped to solicit the buyers involved in the
    transactions for these counts by telling them that no down
    payments were required."

    Page 51, line 2, delete the sentence that starts with "He
    nevertheless . . ." and insert the following: "He directed one
    of these buyers to provide a down payment check that would be
    funded by someone else and then cashed so that the funds could be
    returned."

    Page 51, line 10, delete "Brandon's insurance company" and
    insert "the buyer's insurance company."

    By the Court:

    Francis P. Scigliano

    Clerk.










































    UNITED STATES COURT OF APPEALS
    FOR THE FIRST CIRCUIT
    ____________________

    No. 92-1447

    UNITED STATES OF AMERICA,

    Appellee,

    v.

    PETER BRANDON,

    Defendant, Appellant.

    ____________________

    No. 92-1465

    UNITED STATES OF AMERICA,

    Appellee,

    v.

    CHARLES D. GAUVIN,

    Defendant, Appellant.

    ____________________

    No. 92-1466

    UNITED STATES OF AMERICA,

    Appellee,

    v.

    MARVIN GRANOFF,

    Defendant, Appellant.

    ____________________





















    No. 92-1467

    UNITED STATES OF AMERICA,

    Appellee,

    v.

    RONALD R. HAGOPIAN,

    Defendant, Appellant.

    ____________________

    No. 92-1468

    UNITED STATES OF AMERICA,

    Appellee,

    v.

    MOMI A. KUMALAE,

    Defendant, Appellant.

    ____________________

    No. 92-1469

    UNITED STATES OF AMERICA,

    Appellee,

    v.

    OWEN B. LANDMAN,

    Defendant, Appellant.

    ____________________












    -2-














    No. 92-1470

    UNITED STATES OF AMERICA,

    Appellee,

    v.

    NORMAN D. REISCH,

    Defendant, Appellant.

    ____________________

    No. 92-1471

    UNITED STATES OF AMERICA,

    Appellee,

    v.

    JOHN WARD,

    Defendant, Appellant.

    ____________________

    APPEALS FROM THE UNITED STATES DISTRICT COURT

    FOR THE DISTRICT OF RHODE ISLAND

    [Hon. Ernest C. Torres, U.S. District Judge]
    ___________________

    ____________________

    Before

    Torruella, Circuit Judge,
    _____________

    Campbell, Senior Circuit Judge,
    ____________________

    and Boudin, Circuit Judge.
    _____________

    _____________________








    -3-














    Dana A. Curhan, by Appointment of the Court, for appellant
    _______________
    Peter Brandon; John A. MacFadyen with whom Richard A. Gonnella,
    __________________ ____________________
    was on brief for appellant Charles D. Gauvin; Thomas J. May, with
    _____________
    whom Carol A. Fitzsimmons and Johnson, Mee & May, were on brief
    ____________________ __________________
    for appellant Marvin Granoff; Barbara A. H. Smith for appellant
    ____________________
    Ronald R. Hagopian; William C. Dimitri, by Appointment of the
    ___________________
    Court, with whom Dimitri & Dimitri, was on brief for appellant
    __________________
    Momi A. Kumalae; Donald P. Rothschild, by Appointment of the
    ______________________
    Court, with whom Tillinghast Collins & Graham, was on brief for
    _____________________________
    appellant Owen B. Landman; Barbara A. H. Smith for appellant
    ____________________
    Norman D. Reisch; and Catherine C. Czar, by Appointment of the
    __________________
    Court, for appellant John Ward.
    Craig N. Moore, Assistant United States Attorney, with whom
    ______________
    Edwin J. Gale, United States Attorney, and Margaret E. Curran,
    ______________ ___________________
    Assistant United States Attorney, were on brief for appellee.



    ____________________

    January 31, 1994
    ____________________































    -4-














    TORRUELLA, Circuit Judge. The eight defendants in this
    _____________

    case were convicted of conspiracy to commit bank fraud under 18

    U.S.C. 371 and of a varying number of bank fraud counts under

    18 U.S.C. 1344 and 2 following a jury trial in the district

    court. They now challenge their convictions and sentences on a

    wide variety of grounds. For the reasons set forth below, we

    affirm all of the convictions except for the bank fraud

    convictions on Counts 24 and 25 against defendant John Ward and

    the bank fraud convictions on Counts 23 through 26 against

    defendant Owen Landman, which we reverse.

    I. BACKGROUND
    I. BACKGROUND

    This case involves an alleged scheme to obtain loan

    financing from a federally insured bank by fraudulently

    representing the existence of down payments required by the bank

    from the investors on whose behalf the loans were made.

    According to the record in this case, viewed in the light most

    favorable to the government, United States v. Van Helden, 920
    _____________ __________

    F.2d 99, 101 (1st Cir. 1990), the facts of this scheme are as

    follows.

    On January 1, 1985, defendant Peter Brandon and two

    others formed a partnership called Dean Street Development ("Dean

    Street")1 for the purpose of buying, developing, and selling

    real estate. Specifically, Brandon planned to buy and renovate


    ____________________

    1 Several partnerships and corporations related to Dean Street
    were also involved in this case. Together they are collectively
    referred to here as "Dean Street." Brandon controlled all of the
    various entities.

    -5-














    motels along the Rhode Island seashore, convert them into

    condominiums and then sell the individual rooms to investors as

    condominium units. As part of this plan, the condominium buyers

    would lease the units back to Dean Street and Dean Street would

    then manage the properties as motels. Under the "lease-back"

    agreement with the buyers, Dean Street would apply the income

    from the operation of the motels to cover the monthly mortgage,

    tax and insurance costs incurred by the unit buyers. Any

    shortfalls in operating costs would be made up by Dean Street,

    leaving the buyers with no monthly costs on their investment.

    In addition, buyers would be allowed to use their units

    for two weeks out of the year. Dean Street would also guaranty

    them a certain level of profit at sale. Some buyers would

    receive rebates for each unit they purchased. In short, the

    buyers would be offered a sweet deal.

    To make the deal even sweeter, Brandon planned to

    arrange all the financing for the buyers. He hoped to obtain

    100% financing, that is, loans for the complete purchase price of

    each unit. With such financing, buyers could invest in the

    project without putting any money down and consequently obtain

    that elusive -- yet apparently not uncommon for the fast-paced

    world of 1980s real estate -- deal of "something for nothing."

    In early 1987, Brandon approached Homeowner's Funding

    Corporation ("Homeowners"), a mortgage broker that acts as an

    intermediary between banks and borrowers, to obtain these "end

    loans" for the buyers. Homeowners' President told Brandon that


    -6-














    100% financing was unavailable for the project. Rather, the best

    Brandon could hope to find was 80% financing with a 20% down

    payment required from the buyers. Homeowners subsequently

    searched for a lender and, after approaching several banks,

    located Bay Loan and Investment Bank ("Bay Loan"), a financial

    institution insured by the Federal Deposit Insurance Corporation.

    Bay Loan agreed to lend buyers of Dean Street's condominium units

    up to 80% of the required purchase price.

    Homeowners, as well as East-West Financial Corporation

    ("East West"), the other mortgage broker involved in this case,2

    acted as brokers and servicing agents for Bay Loan. Bay Loan was

    the actual lender for the Dean Street project and it financed

    every condominium sale involved in the scheme. By prior

    agreement, Homeowners and East West provided the original

    mortgages for the buyers and then sold them to Bay Loan.

    Homeowners and East West would forward all the loan applications

    to Bay Loan for approval prior to providing the mortgages for the

    condominium units.3 The decision of whether to fund a

    particular mortgage rested entirely with Bay Loan and Bay Loan

    ____________________

    2 Toward the end of 1987, Brandon became dissatisfied with what
    he considered the slow pace at which Homeowners was processing
    the loans and, after a dispute with Homeowners, retained the
    services of East West to continue the project. East West
    continued where Homeowners left off with Bay Loan again agreeing
    to act as the end loan financier.

    3 The brokers would not provide the financing to the buyers
    without first getting Bay Loan's agreement to purchase and fund
    the loans. In fact, Homeowner's line of credit for issuing funds
    to the buyers specifically prohibited the disbursement of money
    without a commitment from the ultimate lender, in this case, Bay
    Loan, to fund the loan.

    -7-














    set the terms and conditions of each mortgage.

    As Bay Loan Vice President of consumer lending, Joseph

    Gormley, explained to Brandon, the bank required each buyer of a

    condominium unit to make at least a 20% down payment to the

    seller, Dean Street, before Bay Loan could fund the loans.

    Instead of instructing buyers to provide the required down

    payments, however, Brandon concocted a scheme that permitted

    buyers to avoid the down payments altogether. As a result, he

    was able to pursue his original goal of obtaining 100% financing

    for the condominium project. The scheme was formulated during

    the spring and summer of 1987 when Brandon had several

    discussions with, among other people, his attorney, George

    Marderosian, and co-defendant Norman Reisch, another of

    Marderosian's clients, concerning ways that the 20% down payment

    requirement "might be satisfied by alternative methods or might

    be avoided." During that period, Brandon also told another

    person involved in the conspiracy, Claude Limoges, that the down

    payments would be falsified.

    Brandon planned and employed three basic methods of

    falsifying the down payments. The first method was simply

    providing money to the various buyers which the buyers would then

    use to make the down payments to Dean Street. Usually the money

    came from third-party investors to whom Brandon promised a

    commission for each down payment they funded. Once the buyer

    made the down payment to Dean Street, Dean Street would return

    the money to the investor leaving a paper trail for a down


    -8-














    payment that was never actually made. The second method involved

    obtaining down payment checks from the buyers and promising not

    to cash them. Copies of these nonnegotiated checks would remain

    in the loan file to give the appearance that real funds had

    actually been transferred. The third method was to provide

    second mortgages to the buyers to fund their down payments and

    then to discharge those mortgages after the closings.4

    The first method of avoiding down payments was employed

    from the outset of the scheme. Co-defendants Charles Gauvin and

    Marvin Granoff, two clients of Marderosian, agreed with Brandon

    to purchase some units at the Charlestown Motor Inn. Gauvin and

    Granoff also agreed to provide down payment funds to other buyers

    for subsequent unit sales. Brandon promised them $1000 for each

    unit sold with their down payment funds. In August of 1987,

    Gauvin, Granoff and a third person each purchased four units.

    Marderosian conducted the closing and co-defendant Owen Landman,

    an attorney who shared office space with Marderosian, acted as

    escrow agent. During the closing, Marderosian recorded the

    amount of each down payment ($20,500) on the closing statements -

    - also called the HUD settlement sheets -- as "amounts paid by or

    in behalf of borrower."5

    Gauvin provided the down payment funds for these twelve


    ____________________

    4 Brandon also falsified the loan applications of otherwise
    unqualified buyers.

    5 Throughout the project, the HUD settlement sheets were signed
    by Brandon and the buyers, including those defendants who
    purchased units.

    -9-














    purchases but no actual payment was ever made; instead, the funds

    were passed through Dean Street and returned to Gauvin. At the

    closing, Gauvin delivered twelve separate checks for $20,500 each

    to Marderosian, drawn on an account that only had a $6000 balance

    at the time, and Landman deposited the checks in his escrow

    account. Landman then wrote twelve corresponding checks to

    Marderosian who in turn wrote checks to Dean Street for identical

    amounts of $20,500 each. Two days later, Dean Street wrote

    twelve checks back to Gauvin for the same amounts of $20,500 each

    and Gauvin deposited the money in the original checking account

    to cover his initial twelve checks written as down payments to

    the seller.

    In late August and September of 1987, Gauvin provided

    down payments for the purchase of units at the Charlestown Motor

    Inn and at the Bayside Motel by Reisch and others. As with the

    first purchases, Dean Street returned the down payment money

    within a matter of days and also paid Gauvin an additional $1000

    per unit.

    In the beginning of 1988, Bay Loan began requiring that

    down payments be made with certified funds. Gauvin and Granoff

    agreed to provide buyers with funds so that they could obtain

    certified checks before the closings. In January and February of

    1988, Granoff supplied $470,000 to Marderosian who deposited the

    funds and began distributing the money to prospective buyers.

    The original intention was that Dean Street would pay back the

    money to Granoff a few days after each closing as it had done in


    -10-














    the previous transactions. Brandon, however, never returned the

    money as planned.6

    With no more money coming from Gauvin and Granoff,

    Brandon discussed the possibility of funding buyer down payments

    with Reisch. Reisch had earlier supplied down payment money for

    a buyer and was reimbursed by Dean Street the next day. Reisch

    agreed to provide the money, but only if he could wire the money

    directly to the buyers on a transaction by transaction basis in

    order to avoid having large amounts outstanding. Funds were

    wired to buyers on several occasions and the buyers then wrote

    down payment checks with the money. The checks were either

    deposited in Landman's escrow account or endorsed directly back

    over to Reisch. Those funds deposited in escrow were promptly

    returned to Reisch.

    The second method of falsifying down payments, using

    nonnegotiated checks, was employed less frequently. In October

    of 1987, co-defendants Ronald Hagopian and John Ward purchased

    several units at the Bayside Motel using nonnegotiated checks for

    their down payments. Brandon also enlisted Hagopian and Ward,

    both real estate brokers, to solicit other buyers for the

    project. Hagopian and Ward told several of the buyers they had

    recruited to provide down payment checks which they promised

    would never be cashed. These buyers proceeded to write checks to

    Dean Street and those checks were never negotiated.


    ____________________

    6 Brandon did eventually agree to a repayment schedule but,
    ultimately, none of Granoff's money was ever repaid.

    -11-














    The third method of falsifying down payments was

    through dischargeable mortgages. Joseph Gormley at Bay Loan

    approved a plan for buyers to make only 5% down payments in

    certified funds with the balance of a required 25% down payment

    to be satisfied by a second mortgage provided by Dean Street.

    Dean Street began providing these mortgages to the buyers, but

    the mortgages were promptly discharged7 after the closings

    because Dean Street never actually intended to obligate the

    buyers. The discharges were accomplished by a "purchase price

    adjustment" given to buyers after the sale to "compensate" them

    for promised renovations that Dean Street was suddenly unable to

    make. In reality, the renovations "were never going to happen"

    in the first place.

    At the closings, some of the buyers inquired about the

    second mortgage documents because Brandon had promised a

    discharge and the buyers wanted to know when that would take

    place. The "purchase price adjustment" letters that discharged

    the mortgages were excluded from the closing documentation so the

    bank would not see them. During the closings, Landman gestured

    to several buyers that they should not mention the matter to him.

    Brandon's assistant at Dean Street, co-defendant Momi Kumalae,

    did speak to buyers about the discharges and assured them that

    they would be taken care of. Kumalae also signed many of the

    ____________________

    7 Testimony was offered by defendants to the effect that the
    discharges provided by Dean Street were not legally enforceable
    and that the buyers are still obligated on the mortgages. We
    find this possibility irrelevant as the intent was clearly to
    discharge the mortgages.

    -12-














    discharge letters sent to the buyers.

    Despite the sale of almost 200 units, by the fall of

    1988, the loan proceeds from Bay Loan's financing of unit

    purchases was falling well short of Dean Street's expenses and

    its own debt service. Dean Street quickly fell behind schedule

    in making the mortgage payments on all the Bay Loan condominium

    unit loans, and it eventually stopped making any payments by

    early 1989.

    Between August 1987 and October 1988, Dean Street had

    sold 196 units to 79 different buyers, all financed by Bay Loan

    in 176 separate loans. The face value of the loans was $18.8

    million and Bay Loan actually distributed $17.3 million to

    Marderosian who passed on about $16.9 million to Dean Street (the

    balance was retained as fees or was paid to Landman for escrow

    services). As of the trial, approximately $16.3 million remained

    outstanding on the loans.

    Gormley at Bay Loan, who approved the loans, did not

    know that down payment funds came from sources other than the

    buyers, that some down payments were nonnegotiated checks, that

    second mortgages were being discharged, or that buyers were being

    paid to purchase units. Gormley testified that he would not have

    approved the loans if he had been aware of any of these

    circumstances.

    On February 28, 1991, a federal grand jury sitting in

    the District of Rhode Island handed down a 27-count indictment

    charging the eight appellants and four others with defrauding Bay


    -13-














    Loan, a federally insured financial institution, of approximately

    $18 million. Count 1 charged all twelve defendants with

    conspiracy to commit bank fraud in violation of 18 U.S.C. 371.

    Counts 2 through 27 charged various defendants with individual

    acts of bank fraud, under 18 U.S.C. 1344, based on individual

    loan transactions executed during the scheme to defraud.8 Four

    of the defendants pleaded guilty and did not go to trial. Two of

    the four, George Marderosian and Claude Limoges, testified for

    the government.

    After a trial in the United States District Court for

    the District of Rhode Island, the jury found all the defendants

    guilty of conspiracy and each defendant guilty on multiple counts

    of bank fraud. Some defendants were acquitted on individual bank

    fraud charges as discussed below. This appeal followed.

    II. FAILURE OF THE INDICTMENT TO STATE AN OFFENSE
    II. FAILURE OF THE INDICTMENT TO STATE AN OFFENSE

    Defendants first argue that the indictment failed to

    state an offense with respect to the conspiracy count because it

    did not allege that the United States or one of its agencies was

    the target of the conspiracy. Count I of the indictment charged

    defendants with conspiring to commit an offense against the


    ____________________

    8 One bank fraud count was later dismissed by the government so
    that 26 total counts remained for trial. Brandon was the only
    defendant charged in all of the counts.

    Each bank fraud count charges one or more of the defendants
    with facilitating in some way the fraudulent representation of
    the required down payment for a specific loan for an individual
    condominium unit. Although each unit purchase allegedly involved
    the same fraudulent scheme, only 26 specific executions of the
    scheme were originally charged.

    -14-














    United States in violation of 18 U.S.C. 371 by executing a

    scheme to defraud Bay Loan under 18 U.S.C. 1344. Section 371

    makes it a crime to "conspire either to commit any offense
    ______

    against the United States, or to defraud the United States, or
    __

    any agency thereof" (emphasis added). The Supreme Court held in

    Tanner v. United States, 483 U.S. 107, 128-132 (1987), that in
    ______ _____________

    order to establish a conspiracy to "defraud the United States,"

    under the second clause of 371, the government must prove that

    the target of the fraud was the United States or one of its

    agencies. Id. (finding a recipient of federal financial
    __

    assistance and supervision not to be an agency of the United

    States for purposes of 371). The defendants contend that this

    requirement should be extended to the first clause of 371 for

    alleged conspiracies "to commit any offense against the United

    States."

    18 U.S.C. 371 creates two distinct criminal offenses:

    conspiracies to commit offenses against the United States and

    conspiracies to defraud the United States. See, e.g., United
    ___ ____ ______

    States v. Haga, 821 F.2d 1036, 1039 (5th Cir. 1987). The "any
    ______ ____

    offense" clause of 371 ("to commit offenses against the United

    States") is aimed at conspiracies to violate the laws of the

    United States. It does not refer to a particular victim of a

    particular crime like the second clause does, but instead applies

    generally to federal "offenses." The Tanner requirement should
    ______

    not be extended to a large area of criminal conspiracies, such as

    mail and wire fraud, that victimize persons other than the


    -15-














    government or its agencies but traditionally have been prosecuted

    under the "any offense" clause of 371. See United States v.
    ___ _____________

    Falcone, 960 F.2d 988, 990 (11th Cir.) (en banc), cert. denied,
    _______ ____ ______

    113 S. Ct. 292 (1992) (citing the reasoning in United States v.
    _____________

    Falcone, 934 F.2d 1528, 1548-51 (11th Cir. 1991) (Tjoflat, C.J.,
    _______

    specially concurring, joined by Powell, Assoc. Justice, and

    Kravitch, J.) to overrule its previous extension of Tanner to the
    ______

    "any offense" clause of 371 in United States v. Hope, 861 F.2d
    _____________ ____

    1574 (11th Cir. 1988)); United States v. Loney, 959 F.2d 1332,
    ______________ _____

    1338-40 (5th Cir. 1992); United States v. Gibson, 881 F.2d 318,
    _____________ ______

    321 (6th Cir. 1989). We therefore reject the contention that the

    indictment must assert that the United States or one of its

    agencies was a target of the alleged conspiracy in this case.

    III. MULTIPLICITY OF THE BANK FRAUD COUNTS
    III. MULTIPLICITY OF THE BANK FRAUD COUNTS

    Defendants challenge the validity of the indictment for

    charging twenty-five individual counts of bank fraud under 18

    U.S.C. 1344, when, allegedly, all the counts relate to the

    single execution of one scheme to defraud Bay Loan. An

    indictment is multiplicitous and in violation of the Fifth

    Amendment's Double Jeopardy Clause if it charges a single offense

    in more than one count. United States v. Serino, 835 F.2d 924,
    _____________ ______

    930 (1st Cir. 1987). Under the bank fraud statute, 18 U.S.C.

    1344, each execution of a scheme to defraud constitutes a

    separate indictable offense. United States v. George, 986 F.2d
    _____________ ______

    1176, 1179 (8th Cir.), cert. denied, 114 S. Ct. 269 (1993);
    ____ ______

    United States v. Lemons, 941 F.2d 309, 317 (5th Cir. 1991). The
    _____________ ______


    -16-














    central question for determining multiplicity is "whether a jury

    could plausibly find that the actions described in the [disputed]

    counts of the indictment, objectively viewed, constituted

    separate executions of the [bank fraud] scheme." United States
    _____________

    v. Lilly, 983 F.2d 300, 303 (1st Cir. 1992).
    _____

    A number of factors are relevant in determining whether

    a single or multiple executions of bank fraud have taken place,

    including the number of banks, the number of transactions, and

    the number of movements of money involved in the scheme. Lilly,
    _____

    983 F.2d at 305. Each time an identifiable sum of money is

    obtained by a specific fraudulent transaction, there is likely to

    be a separate execution of the scheme to defraud. See, e.g.,
    ___ ____

    United States v. Barnhart, 979 F.2d 647, 650-51 (8th Cir. 1992);
    ______________ ________

    United States v. Mason, 902 F.2d 1434, 1436-38 (9th Cir. 1990);
    _____________ _____

    United States v. Poliak, 823 F.2d 371, 372 (9th Cir. 1987), cert.
    _____________ ______ ____

    denied, 485 U.S. 1029 (1988).
    ______

    The government's position is that each transaction in

    which Bay Loan provided a mortgage (or end loan) to a buyer on

    the basis of a fraudulent representation of a down payment

    constitutes a single, independent execution of the scheme to

    defraud. We think that this position is the correct one when the

    scheme is viewed properly from an objective standpoint. See
    ___

    Lilly, 983 F.2d at 303 (finding that the scheme should be
    _____

    "objectively viewed" to determine multiplicity).

    The basic scheme to defraud Bay Loan involved the

    fraudulent representation of buyers' down payments in order to


    -17-














    obtain loan financing from the bank for Dean Street's condominium

    units. The scheme was not designed to get a set amount, or a

    preconceived sum, of money. Instead, the scheme functioned by

    obtaining as many loans as possible depending on the number of

    buyers Dean Street could recruit to apply for the mortgages. The

    structure of the scheme was such that individual buyers would be

    brought in to submit separate loan applications which would be

    fraudulently prepared and then sent on to Bay Loan for approval

    and the disbursement of the funds for that individual sale. Bay

    Loan approved each loan separately based on each individual

    application and each loan corresponded to an individual piece of

    property, that is, a separate condominium unit. Objectively

    viewed, each loan application appears to be a repeated execution

    of the basic scheme and not simply an additional step or stage of

    one unitary transaction. Although only one bank was involved in

    the scheme, there were over 176 separate loans to 79 different

    buyers involving many separate movements of money from Bay Loan

    to the mortgage brokers and from the mortgage brokers to Dean

    Street during the fifteen months in which the scheme was in

    operation.

    The fact that the end loans were sometimes processed in

    bulk does not alter the essential nature of the scheme.

    Defendants highlight the fact that, on some occasions, groups of

    mortgage applications were supplied to Bay Loan together and Bay

    Loan sometimes wired money to the brokers on a bulk basis. This

    was usually done, however, as a matter of convenience (such as


    -18-














    when several unit purchases closed at the same time) and not as a

    method to package the financing in a way necessary to accomplish

    a unified scheme.9 Arguably, one could view this case as a

    single execution by Dean Street of a broad scheme to use various

    buyers as fronts in order to get financing for a unitary motel

    condominium project. However, we feel it makes more sense to

    look at each mortgage application as an individual attempt to

    fraudulently obtain distinct amounts of money from Bay Loan.

    This is not, as defendants assert, a situation like the

    one in Lilly where a group of fraudulent mortgages was assigned
    _____

    in a single package of documents to the defrauded bank as

    security for one sum of money used to buy a single apartment

    complex. See id. at 302-305. In that case, there was one
    ___ __

    transaction with the defrauded bank which was executed "in order

    to obtain a single loan, the proceeds of which funded a single

    real estate purchase." Id. at 303. Consequently, we found the
    __

    charges based on each mortgage to be multiplicitous. The present

    case is more akin to a check kiting scheme which we characterized

    in Lilly as involving multiple executions of a fraudulent scheme
    _____

    because more than one bank was involved and because, "[m]ore

    ____________________

    9 At one point, Brandon could not guaranty clear title to Bay
    Loan on the condominium units until he sold enough units and
    obtained a large enough chunk of financing to pay off some of the
    original mortgages used to buy the motels in the first place.
    This did necessitate bulk processing of unit mortgages so that
    blocks of financing could be obtained at one time. The execution
    of the fraud, however, still remained the submission of
    individual loan applications as additional buyers were recruited.
    The block processing of loans did not correspond to one loan for
    each motel but were instead an amalgamation of individual loans
    for individual condominium units.

    -19-














    importantly, each check signifies a separate transaction

    requiring a separate issuance of money or credit on the part of

    the victimized bank." Id. at 304.
    __

    Similarly, the other cases cited by defendants that

    invalidate indictments on grounds of multiplicity involve single

    loan transactions instead of the multiple and separate loans

    fraudulently obtained in this case. See United States v. Saks,
    ___ _____________ ____

    964 F.2d 1514, 1526 (5th Cir. 1992) (single loan transaction for

    single piece of property); United States v. Heath, 970 F.2d 1397,
    _____________ _____

    1401-02 (5th Cir. 1992), cert. denied, 113 S. Ct. 1643 (1993)
    ____ ______

    (two loans involved in the case "were integrally related; one

    could not have succeeded without the other" and both were used to

    accomplish essentially one integrated real estate transaction);

    Lemons, 941 F.2d at 316-18 (separate payments of loan proceeds to
    ______

    defendant were installments from a single loan transaction

    involving a single project). We hold, therefore, that each end

    loan provided by Bay Loan was the result of a separate fraud upon

    the bank which the indictment properly charged as an individual

    bank fraud offense.

    IV. SUFFICIENCY OF THE EVIDENCE
    IV. SUFFICIENCY OF THE EVIDENCE

    Seven of the eight defendants argue that the evidence

    introduced at trial was insufficient to support their convictions

    for bank fraud and conspiracy to commit bank fraud.10 They

    ____________________

    10 Brandon does not challenge the sufficiency of the evidence
    against him on appeal. He does argue that certain evidentiary
    rulings deprived him of a fair trial because he was unable to
    present his theory of the case and convince the jury of his
    innocence. This issue is discussed below in Section VII. We

    -20-














    argue, with individual variations, that they did not have the

    requisite knowledge and intent to defraud Bay Loan because they

    did not know of, or intend to violate, any down payment

    requirements of the bank. With the few exceptions previously

    noted, we disagree. Before reviewing the evidence with respect

    to each defendant, we must first address some issues regarding

    the substantive offenses charged in this case.

    A. The Offenses

    1. Bank Fraud

    To prove bank fraud under 18 U.S.C. 1344,11 the

    prosecution must show beyond a reasonable doubt that the

    defendant (1) engaged in a scheme or artifice to defraud, or made

    ____________________

    note for the record that the evidence against Brandon is not only
    sufficient but overwhelming.

    11 At the time when the offenses occurred, 18 U.S.C. 1344
    provided:

    Whoever knowingly executes, or attempts
    to execute, a scheme or artifice -- (1)
    to defraud a federally chartered or
    insured financial institution; or (2) to
    obtain any of the moneys, funds, credits,
    assets, securities, or other property
    owned by, or under the custody or control
    of a federally chartered or insured
    financial institution, by means of false
    or fraudulent pretenses, representations,
    or promises; [shall be guilty of an
    offense against the United States].

    A technical amendment in 1989 deleted the words "federally
    chartered or insured" from the section leaving just "financial
    institution." Pub. L. No. 101-73, Title IX, 961(k), Aug. 9,
    1989, 103 Stat. 500. Apparently, no substantive change was
    intended by this amendment as the definition of "financial
    institution" for all of Title 18, now contained at 18 U.S.C.
    20, still encompasses federally chartered or insured
    institutions.

    -21-














    false statements or misrepresentations to obtain money from; (2)

    a federally insured financial institution; and (3) did so

    knowingly. United States v. Goldblatt, 813 F.2d 619, 623-24 (3rd
    _____________ _________

    Cir. 1987); United States v. Cloud, 872 F.2d 846, 850 (9th Cir.),
    _____________ _____

    cert. denied, 493 U.S. 1002 (1989). The terms "scheme" and
    ____ ______

    "artifice" are defined to include "any plan, pattern or cause of

    action, including false and fraudulent pretenses and

    misrepresentations, intended to deceive others in order to obtain

    something of value, such as money, from the institution to be

    deceived." Goldblatt, 813 F.2d at 624 (citing United States v.
    _________ ______________

    Toney, 598 F.2d 1349, 1357 n.12 (5th Cir. 1979), cert. denied,
    _____ ____ ______

    444 U.S. 1033 (1983)). "The term 'scheme to defraud,' however,

    is not capable of precise definition. Fraud instead is measured

    in a particular case by determining whether the scheme

    demonstrated a departure from fundamental honesty, moral

    uprightness, or fair play and candid dealings in the general life

    of the community." Goldblatt, 813 F.2d at 624; see also United
    _________ ________ ______

    States v. Stavroulakis, 952 F.2d 686, 694 (2d Cir.), cert.
    ______ ____________ ____

    denied, 112 S. Ct. 1982 (1992).
    ______

    The alleged scheme in this case is the fraudulent

    representation of down payments that were not actually paid in

    order to obtain loan financing from Bay Loan. There is little

    doubt that this scheme took place.12 Defendants argue,

    ____________________

    12 Sufficient evidence exists to indicate Bay Loan provided the
    loans for the Dean Street project, required down payments for the
    loans, and approved loans and disbursed money based on the
    understanding that its lending requirement was satisfied. The
    evidence also clearly establishes that no down payments were

    -22-














    however, that they did not know of, or participate in, the

    scheme, and, to the extent that they did participate in

    activities related to the scheme, such actions were not illegal

    because the actions were not intended to deceive or defraud Bay

    Loan. Defendants claim they were either unaware that Bay Loan

    existed or else unaware that Bay Loan had a down payment

    requirement that prohibited the various down payment transactions

    in which they were involved. The central issue on appeal,

    therefore, is whether defendants possessed the requisite

    knowledge and intent.

    "To act with the 'intent to defraud' means to act

    willfully, and with the specific intent to deceive or cheat for

    the purpose of either causing some financial loss to another, or

    bringing about some financial gain to oneself." Cloud, 872 F.2d
    _____

    at 852 n.6 (citations omitted) (finding intent to defraud where

    defendant signed instructions "knowing that the bank could be

    deceived by materially false statements that appeared on the face

    of the instructions"); see also United States v. Saks, 964 F.2d
    _________ _____________ ____

    1514, 1518 (5th Cir. 1992). "It is a well-established principle

    that fraudulent intent may be established by circumstantial

    evidence and inferences drawn from all the evidence." Cloud, 872
    _____


    ____________________

    actually made to Dean Street because the payments were either
    falsified or quickly returned to their source. Defendants did
    present evidence, mostly testimony by Brandon himself, that Bay
    Loan knew and approved of the down payment arrangements.
    However, more than sufficient evidence points to the contrary
    conclusion including the unequivocal testimony of Bay Loan's Vice
    President, Gormley, that the bank never knew of nor approved of
    the skirting of the down payment requirement.

    -23-














    F.2d at 852 n.6 (citations omitted); United States v. Celesia,
    _____________ _______

    945 F.2d 756, 759-60 (4th Cir. 1991); see also United States v.
    ________ _____________

    Mason, 902 F.2d 1434, 1442 (9th Cir. 1990) ("Specific intent is
    _____

    established by 'the existence of a scheme which was reasonably

    calculated to deceive persons of ordinary prudence and

    comprehension, and this intention is shown by examining the

    scheme itself.'" (quoting United States v. Green, 745 F.2d 1205,
    _____________ _____

    1207 (9th Cir. 1984) (additional internal quotation omitted))).

    Defendants argue that the government must prove that

    they knew that the victim of their fraud was a federally insured

    financial institution. We disagree. The status of the victim-

    institution is not a separate knowledge element of bank fraud

    under 1344 but an objective fact that must be established in

    order for the statute to apply. The government produced

    evidence, and defendants do not dispute, that Bay Loan is

    federally insured. This is sufficient to satisfy the requirement

    under 18 U.S.C. 1344 that the defrauded bank be a federally

    insured bank. See United States v. McClelland, 868 F.2d 704,
    ___ ______________ __________

    709-11 (5th Cir. 1989); cf. United States v. Thompson, 811 F.2d
    __ _____________ ________

    841, 844 (5th Cir. 1987) (finding that under 18 U.S.C. 1014,

    which criminalizes the making of false statements to a bank, the

    federal insured status of the victim institution is just a

    jurisdictional requirement and not a knowledge element of the

    offense); United States v. Trice, 823 F.2d 80, 86-87 (5th Cir.
    _____________ _____






    -24-














    1987) (same).13

    We decline to adopt defendants' analogy to one of the

    federal gambling statutes, 18 U.S.C. 1084(a), which we have

    previously held requires knowledge of the interstate nature of

    the wire communication involved in the offense. United States v.
    _____________

    Southard, 700 F.2d 1, 24-25 (1st Cir.), cert. denied, 464 U.S.
    ________ ____ ______

    823 (1983). Our holding in that case rested on the fact that the

    word "knowingly" in the statute could not reasonably refer to

    anything else except the interstate nature of the communication.

    Id. at 24 (noting one cannot unwittingly or unknowingly make a
    __

    wire transmission). That is not the case with the bank fraud

    statute because "knowingly" in 1344 clearly applies to the


    ____________________

    13 We find the language of 1014 sufficiently similar to 1344
    to warrant a similar conclusion about Congress' intent with
    respect to the knowledge requirement in the bank fraud statute.
    18 U.S.C. 1014 states in pertinent part:

    "Whoever knowingly makes any false
    statement or report, or willfully
    overvalues any land, property or
    security, for the purpose of influencing
    in any way the action of . . . any
    institution the accounts of which are
    insured by the Federal Deposit Insurance
    Corporation [shall be guilty of an
    offense against the Unites States]."

    Defendants contend that the use of "knowingly" in this statute
    differs significantly from its use in 1344 which prohibits
    knowingly executing a scheme "to defraud a federally chartered or
    insured financial institution." We reject this contention. The
    placement in 1344 of the words "federally chartered or insured"
    before the word "institution" instead of similar language being
    placed after "institution," as in 1014, simply reflects the
    fact that federal insurance is separately defined in another
    subsection and thus there is no need to use the more awkward
    construction found in 1014. The different word placement is a
    distinction without a difference.

    -25-














    execution of a scheme or artifice to defraud. The word

    "knowingly" is necessary because one can execute a scheme without

    knowing or understanding that it is fraudulent. In fact, that is

    what many of the defendants themselves argue in this appeal: that

    they may have facilitated the false down payments but they did

    not know it violated the bank's requirements. Therefore,

    "knowingly" in 1344 has independent meaning without reference

    to the federally insured status of the financial institution.

    The defendants in this case also argue that the

    government must prove they knew that the end loans were provided

    by Bay Loan and not by some other institution, such as Homeowners

    or East West. In other words, there was no violation of 1344

    because the scheme to defraud was not knowingly targeted at a

    federally insured financial institution, but instead at the non-

    federally insured mortgage brokers.

    Defendants overstate the government's burden. The

    specific intent under 1344 is an intent to defraud a bank, that

    is, an intent to victimize a bank by means of a fraudulent

    scheme. See United States v. Stavroulakis, 952 F.2d 686, 694 (2d
    ___ _____________ ____________

    Cir. 1992); United States v. Mason, 902 F.2d 1434, 1442 (9th Cir.
    _____________ _____

    1990). It has been established that the government does not have

    to show the alleged scheme was directed solely toward a
    ______

    particular institution; it is sufficient to show that defendant

    knowingly executed a fraudulent scheme that exposed a federally

    insured bank to a risk of loss. See, e.g., United States v.
    ___ ____ _____________

    Barakett, 994 F.2d 1107, 1110-11 (5th Cir. 1993), petition for
    ________ ____________


    -26-














    cert. filed, (Sept. 22, 1993) (fraudulent scheme directed at
    ____________

    checking account customers of bank but fraud victimized bank as

    well); United States v. Morgenstern, 933 F.2d 1108, 1114 (2d Cir.
    _____________ ___________

    1991), cert. denied, 112 S. Ct. 1188 (1992) (direct object of the
    ____ ______

    fraud was to steal money from third parties with deposits at the

    defrauded bank).

    We hold that it is also unnecessary for the government

    to prove that a defendant knows which particular bank will be

    victimized by his fraud as long as it is established that a

    defendant knows that a financial institution will be
    _

    defrauded.14 The bank fraud statute was "designed to provide

    an effective vehicle for the prosecution of frauds in which the

    victims are financial institutions that are federally created,

    controlled or insured." S. Rep. No. 225, 98th Cong., 2d Sess.

    377 (1983), 1984 U.S. Code Cong. & Admin. News 3517. In creating

    the statute, Congress noted that "there is a strong Federal

    interest in protecting the financial integrity of these

    institutions, and the legislation in this part would assure a

    basis for Federal prosecution of those who victimize these banks

    through fraudulent schemes." Id. Thus, Congress intended to
    __

    criminalize bank frauds that harm federally insured banks, not

    ____________________

    14 We also reject a related claim made by several defendants
    that the district court had no jurisdiction over their bank fraud
    counts because the target of the alleged bank fraud -- Homeowners
    or East West as opposed to Bay Loan -- was not a federally
    insured financial institution. Bay Loan was in fact victimized
    by defendants' scheme to defraud. In addition, the scheme was
    designed to obtain funds from Bay Loan in particular by
    fraudulently avoiding one of Bay Loan's requirements. This more
    than satisfies the requirements for federal jurisdiction.

    -27-














    just bank frauds directed specifically toward federally insured

    banks. As other courts have noted, "the legislative history

    supports a broad construction of the statutory language" of the

    bank fraud statute. Mason, 902 F.2d at 1442; see also
    _____ _________

    Stavroulakis, 952 F.2d at 694.
    ____________

    Defendants are essentially seeking to sanitize their

    fraud by interposing an intermediary or an additional victim

    between their fraud and the federally insured bank. We reject

    this attempt to escape the reach of the bank fraud statute.

    Instead, we find that defendants need not have had the specific

    intent to defraud Bay Loan so long as they intended to defraud

    some financial institution. The fact that it should turn out

    that the financial institution actually defrauded was federally

    insured is a fortuitous stroke of bad luck for the defendants but

    does not make it any less of a federal crime. In this case,

    evidence beyond a reasonable doubt that defendants fraudulently

    evaded a known down payment requirement, whether thought to be

    imposed by Homeowners, East West, Bay Loan or some other

    financing entity, is sufficient to support a bank fraud

    conviction. Of course, the government must also establish that a

    federally insured bank, Bay Loan, was victimized or exposed to a

    risk of loss by the scheme to defraud. See United States v.
    ___ _____________

    Blackmon, 839 F.2d 900, 906 (2d Cir. 1988). This, however, is
    ________

    not seriously disputed in this case.15

    ____________________

    15 The down payment scheme victimized Bay Loan because it
    devalued the mortgages that the bank was providing. Down
    payments on a loan decrease the risk of default or nonrepayment

    -28-














    Concerns about extending the reach of the bank fraud

    statute into broad new areas of financial activity stem from a

    misunderstanding of the nature of the statute. Financial

    transactions are becoming increasingly integrated and complex as

    more and more financial instruments are securitized and traded on

    national and global markets. Consequently, the effects of

    fraudulent actions against one institution are increasingly

    likely to spill over and detrimentally affect others. As

    Congress' main concern in 1344 was to provide jurisdiction for

    fraudulent schemes that harmed federally chartered or insured

    institutions, the increased risks to the institutions should be

    matched by increased coverage of the statute. We are not

    federalizing criminal transactions previously covered only by

    state law so much as recognizing that those criminal transactions

    ____________________

    by increasing the equity participation of the borrower and giving
    the borrower a larger stake in the venture. The down payments
    consequently have value to the lender bank and the failure to
    make them deprives the bank of this value. Cf. Mason, 902 F.2d
    __ _____
    at 1441-43 (finding intent to commit bank fraud where bank
    exposed to risk of loss through defendants' concealment from the
    bank that its customers were purchasing prostitution services and
    consequently were a greater credit risk to the bank which was
    processing the customers' credit card purchases from defendants'
    escort service).

    The fact that buyers were required to make their down payments
    to the seller, Dean Street, does not mitigate the risk of loss to
    Bay Loan from the down payment scheme. There would still be a
    higher risk of default and the absence of equity participation
    regardless of who was receiving, or failing to receive, the down
    payments. In addition, the value of the condominiums, the bank's
    collateral, becomes an issue where the bank, thinking it is only
    providing 80% of the purchase price, is actually lending 100% of
    the sale price. Ultimately, Bay Loan refused to provide 100%
    financing and explicitly required a down payment; the payment
    became a negotiated term of the mortgage contract and thus had
    some value to Bay Loan.

    -29-














    are becoming more federal in nature.16

    An additional argument defendants make is that the

    government must prove defendants knew that Bay Loan's down

    payment requirement specifically prohibited the funding of

    buyers' down payments by someone other than the buyer.

    Defendants claim that they thought the funding of buyer down

    payments was just some complex financial arrangement,

    "supplemental financing" or required paperwork, and they did not

    know the funding was designed to defraud the bank.

    This misrepresents the nature of the fraud. Although

    Bay Loan did in fact prohibit third party funding of down

    payments, the key misrepresentation in this case was that the

    required down payments were being paid when they actually were

    not. Bay Loan required the buyers to make down payments to the

    seller, Dean Street, and the existence of the payments was

    represented to the bank on the closing settlement sheets. In

    reality, the payments were not being made, either because no

    funds were actually transferred or because the funds were

    ____________________

    16 We do not address whether any scheme to defraud, regardless
    of its intended victim, can be prosecuted under the bank fraud
    statute as long as it has some detrimental effect on a federally
    insured bank. In this case at least, the government did prove
    the scheme was intended to defraud a financial institution:
    Homeowners or East West, if not Bay Loan itself.

    We also do not address possible statutory or jurisdictional
    limitations on the remoteness or foreseeability of the harm or
    the risk of loss to federally insured financial institutions
    beyond which 1344 will no longer apply. We simply note that
    this case presents a situation of direct harm to Bay Loan
    resulting from a scheme specifically designed to fraudulently
    avoid the requirements of that federally insured bank in order to
    obtain funds originating directly from Bay Loan.

    -30-














    returned by Dean Street to their source.17 Therefore, the

    government need only prove that defendants knew a down payment

    was required and that no real down payments were actually made.

    It need not establish that defendants knew all of the specifics

    of the down payment requirement such as restrictions on third

    party funding.

    In sum, to prove defendants knowingly engaged in the

    fraud, the government must establish that each defendant knew

    that some financial institution was lending the money for the

    motel-condominium project, knew that a down payment was required

    for these loans, knew that a scheme of one sort or another

    existed to make it appear that the down payments were being made

    when in fact they were not, and finally, that each defendant

    willfully participated in that scheme.

    2. Conspiracy

    Each defendant contests the sufficiency of the evidence

    of his or her knowledge of the conspiracy to defraud Bay Loan and

    his or her level of participation in that agreed upon scheme. To

    prove conspiracy, the government must show the existence of an

    agreement between defendant and another to commit a crime,18

    ____________________

    17 In those cases where Dean Street failed to repay down payment
    funds as promised, the intention was still to do so and to
    execute the same fraud as was executed on the other unit sales.

    18 To the extent that the existence of a conspiracy is at issue,
    the evidence is overwhelming to support the convictions. A
    conspiracy is an agreement to commit a crime and may be inferred
    from the circumstances. United States v. Concemi, 957 F.2d 942,
    _____________ _______
    950 (1st Cir. 1992). Brandon planned and executed a complex
    scheme to defraud Bay Loan that required the cooperation of
    investors, brokers, and other agents involved in facilitating the

    -31-














    that each defendant knew of the agreement, and that each

    defendant voluntarily participated in the conspiracy through

    conduct that was interdependent with the actions of the other

    conspirators. United States v. G mez-Pab n, 911 F.2d 847, 852-53
    _____________ ___________

    (1st Cir. 1990), cert. denied, 498 U.S. 1074 (1993); United
    ____ ______ ______

    States v. Evans, 970 F.2d 663, 668 (10th Cir. 1992), cert.
    ______ _____ ____

    denied, 113 S. Ct. 1288 (1993). The defendants must have both
    ______

    the intent to agree to participate in the conspiracy and an

    intent to commit the underlying substantive offense. G mez-
    ______

    Pab n, 911 F.2d at 853; United States v. Drougas, 748 F.2d 8, 15
    _____ _____________ _______

    (1st Cir. 1984). The government, however, need not prove that

    each defendant knew all of the details and members, or

    participated in all of the objectives, of the conspiracy as long

    as it can show knowledge of the basic agreement. G mez-Pab n,
    ___________

    911 F.2d at 853; United States v. Marsh, 747 F.2d 7, 13 (1st
    ______________ _____

    Cir. 1984). Such proof of knowledge and intent "may consist of

    circumstantial evidence, including inferences from surrounding

    circumstances, such as acts committed by the defendant that

    furthered the conspiracy's purposes." G mez-Pab n, 911 F.2d at
    ___________

    853.

    The government must also establish defendants'

    participation in the conspiracy with the intent to further the

    ____________________

    transactions. Brandon told several co-conspirators of his plans
    to falsify down payments, including Marderosian, Reisch, Gauvin,
    Granoff, Hagopian, and Ward. The evidence indicates these
    defendants agreed to become involved in the conspiracy by
    performing such critical tasks as drawing up mortgage discharges,
    wiring money, and providing down payment checks that would not be
    used.

    -32-














    aims of the conspiracy. Direct Sales Co. v. United States, 319
    ________________ _____________

    U.S. 703, 712 (1943). Once a conspiracy is established, as well

    as defendant's intent to further it, any connection between the

    defendant and the conspiracy, even a slight one, will be

    sufficient to establish knowing participation. Marsh, 747 F.2d
    _____

    at 13.

    In this case, the government must prove that the

    defendants knew there was an agreement to fraudulently represent

    down payments in order to get loans from Bay Loan and that they

    willfully participated in this scheme by taking some overt action

    with the intent to further the scheme's objective. Thus, the

    evidence must be sufficient to establish the intent to commit

    bank fraud as discussed above and, in addition, must also

    establish an intent to commit the fraud in conjunction with the

    broader conspiratorial agreement.

    B. The Case Against Each Defendant

    Our task on review of the verdicts is to examine the

    evidence in its entirety in the light most favorable to the

    government to determine whether a rational trier of fact could

    have found the essential elements of the crime beyond a

    reasonable doubt. The government receives the benefit of all

    legitimate and favorable inferences, and it can prove its case by

    circumstantial evidence without having to exclude every

    reasonable hypothesis of innocence. United States v. McLaughlin,
    _____________ __________

    957 F.2d 12, 18 (1st Cir. 1992); United States v. Boldt, 929 F.2d
    _____________ _____

    35, 39 (1st. Cir. 1991); United States v. Van Helden, 920 F.2d
    _____________ __________


    -33-














    99, 101 (1st Cir. 1990). Below, we review each defendant's case

    individually.

    1. Marvin Granoff

    Granoff was convicted of conspiracy and two counts of

    bank fraud in connection with his purchase of units on one

    occasion and with his funding of buyer down payments on another

    occasion. Granoff argues that the evidence in this case is

    insufficient to show that he was anything more than an innocent

    investor duped by his lawyer, Marderosian, into providing money

    for a project he really did not know anything about. Although

    the evidence against Marvin Granoff reveals a more circumscribed

    role than some of the other defendants, we are not prepared to

    overturn the jury's guilty verdict on either the conspiracy

    charge or on the two counts of bank fraud.

    Sufficient evidence supports the jury's conclusion that

    Granoff knew Bay Loan was funding Dean Street's condominium

    project, that he knew down payments were required from the buyers

    and that he knowingly participated in a scheme to deceive the

    bank into thinking the requirement was satisfied. To begin with,

    Granoff bought four units on one occasion and provided down

    payment funds on another occasion. Both times Bay Loan financed

    the purchases without knowing the required down payments were not

    actually made. Prior to each of these transactions, Granoff

    attended a series of meetings with Brandon concerning the motel

    condominium scheme. Brandon told Granoff that down payments were

    required and that he needed Granoff to provide money for the down


    -34-














    payments of other buyers.19 Granoff agreed to do so.20

    For Granoff's purchase of units at the Charlestown Inn

    ____________________

    19 Specifically, Marderosian testified that Brandon told Gauvin
    and Granoff in the summer of 1987 that "Homeowners required a
    twenty-five percent down payment and while that down payment
    would not be required of Mr. Gauvin and Mr. Granoff, he did have
    the problem of the down payment with subsequent purchasers and he
    asked Mr. Gauvin and Mr. Granoff for their assistance in meeting
    that problem." Despite the offer to "waive" Gauvin and Granoff's
    down payments, checks representing down payments were required
    for their purchases.

    In another meeting, Brandon asked Gauvin and Granoff if they
    were "willing to provide the down payment money for other
    purchasers" and they agreed to do so. Marderosian also testified
    that Brandon told Granoff at a meeting in January of 1988 that he
    needed someone to provide funding for the certified down payment
    funds required from unit buyers. Brandon asked whether Gauvin
    and Granoff were "interested in providing those certified funds"
    and they agreed.

    20 Marderosian testified that Granoff agreed on several
    different occasions to participate in Brandon's scheme and
    referred several times to the "agreement Mr. Gauvin and Mr.
    Granoff made to provide Mr. Brandon with monies for the down
    payments." Despite this, Granoff argues that Marderosian's
    testimony indicates Granoff said little or nothing at the various
    meetings with Brandon and this is insufficient to establish
    Granoff agreed to participate in the conspiracy. The fact that
    Granoff provided $470,000 that was used for down payments
    following the meetings with Brandon in which the agreement was
    discussed, however, is sufficient to support the conclusion that
    Granoff in fact did agree and did participate in the conspiracy.

    Furthermore, Granoff's involvement in the conspiracy was more
    than just the provision of goods and services to an operation
    that he knew might use the funds illegally. See Direct Sales Co.
    ___ ________________
    v. United States, 319 U.S. 703, 711, 713 (1943); United States v.
    _____________ _____________
    Falcone, 109 F.2d 579, 581 (2d Cir.), aff'd, 311 U.S. 205 (1940).
    _______ _____
    The evidence, as we discuss below, indicates that Granoff
    provided money specifically for the purpose of funding down
    payments he knew would be falsified and was promised $1000 per
    unit for his efforts. Granoff's provision of down payment funds
    was a specialized transaction without loan documents or other
    paperwork and did not constitute merely the provision of goods or
    services to the conspiracy. Overall, the evidence is more than
    adequate to support the finding that Granoff adopted the goals of
    the conspiracy as his own and provided the down payment funds to
    further the conspiracy.

    -35-














    in August of 1987, his partner, Gauvin, provided down payments to

    Dean Street on Granoff's behalf in the form of checks that were

    not backed by sufficient funds. Copies of the checks were

    included in the closing files. The "payments" were returned to

    Gauvin two days later when Dean Street wrote identical checks

    back to Gauvin which Gauvin deposited in his account to cover the

    original down payment checks. The fact that Gauvin's checks,

    totalling $246,000, were drawn on an account with only $6000 at

    the time when they were written indicates that there was no

    intent on Gauvin's part to make an actual down payment in the

    first place.21

    Granoff likewise provided down payment funds for other

    buyers and the evidence indicates he did this knowing and

    expecting that the money would be returned to him after the

    closing. Granoff provided $470,000 for down payments on the


    ____________________

    21 Granoff argues that with respect to Count 2, charging him
    with bank fraud in connection with his purchase of a unit at the
    Charlestown Motor Inn, the requisite knowledge element was not
    established. Brandon had told Granoff that the down payment
    would be waived for his purchase and there was nothing, Granoff
    claims, in the closing procedure sufficient to support the
    conclusion that he knew his purchase took place under fraudulent
    pretenses. On the contrary, even if we disregard the reasonable
    possibility that Granoff's partner, Gauvin, told Granoff all
    about the complex recycling transaction Gauvin undertook with the
    checks used for Granoff's down payment, the fact that Granoff
    signed the HUD settlement sheets establishes a sufficient basis
    to conclude Granoff knew he was representing the existence of
    down payments that he was not actually paying. The HUD
    settlement sheet for Granoff's purchases clearly indicated that a
    $20,500 down payment was being paid by the buyer. If indeed
    Granoff was under the impression, up to that point, that the down
    payment had been "waived," the $20,500 figure on the closing
    documents must have tipped him off that something suspicious was
    going on.

    -36-














    Atlantic Inn-Westerly units in the form of two checks, one for

    $270,000 from Marvin Granoff Real Estate and another for $200,000

    from Granoff's Eastern Wire Products Co. In turn, Brandon

    promised to pay Granoff $1000 for each unit sold using Granoff's

    down payment money.

    As it turns out, Granoff was never paid back, but the

    evidence shows that Granoff expected and intended for this money

    to be promptly returned to him after the closings. A recycling

    arrangement had been used earlier for Granoff's own purchase, and

    for subsequent purchases funded by Gauvin, under the initial

    agreement between Granoff, Gauvin, and Brandon. More

    importantly, about two weeks after the first closings involving

    Granoff's $470,000, Gauvin sent a letter to Marderosian, on

    Manchester Associates22 letterhead, complaining that the

    transaction involving the $470,000 was taking too long. The

    letter stated that the transaction involving Granoff's $470,000

    "was to take at most two to three days." Marderosian also

    testified that on a different occasion, Gauvin told Marderosian

    that Gauvin and Granoff "can make money without putting up any

    money." In addition, there was no promissory note or other

    formal documentation to indicate that the $470,000 was normal

    loan financing.23 Consequently, Granoff knew that his money

    ____________________

    22 Manchester Associates was a partnership formed by and
    consisting of Gauvin and Granoff.

    23 Gauvin and Granoff documented a previous loan to Brandon for
    the smaller sum of $200,000 indicating that if they really
    intended the money to be a loan instead of a tool to show down
    payments through a recycling transaction, they would have

    -37-














    was used to create the appearance that down payments were being

    paid when in fact they were not; they were being falsified.

    The arrangement of rapidly recycling "down payment"

    funds through Dean Street meant that, in reality, no down

    payments were being made at all. A paper trail was left in the

    closing files indicating that the buyer had made a down payment

    to the seller, Dean Street, when, in fact, the seller just

    returned the money to its source, effectively rendering that

    paper trail fraudulent. Bay Loan's down payment requirement was

    thus avoided without the bank's knowledge. As a knowing

    participant in this recycling scheme, Granoff possessed the

    necessary intent to defraud and the requisite level of

    involvement in the larger conspiracy to be found guilty of the

    offenses charged.

    Although not essential for upholding Granoff's

    conviction, we also find that the evidence is sufficient to show

    that Granoff knew Bay Loan was loaning the money for the

    condominium units. Granoff bought four units financed by Bay

    Loan and he put up nearly half a million dollars to provide down

    payment funds for other units to be purchased with Bay Loan

    financing. Homeowners furnished a letter at the closings

    including the closing on Granoff's purchases, which Granoff

    attended, stating that Homeowners had "transferred all of its





    ____________________

    documented it.

    -38-














    rights and interests" in the mortgage to Bay Loan.24 Granoff

    had occasion to see the letter and it is not unreasonably to

    assume he also read it.

    Granoff also attended a number of planning meetings

    with Brandon in which plans for closing on various units, the

    funding of down payments, and other details of the scheme were

    discussed. The evidence also indicates Granoff was continually

    kept abreast of various detail of Brandon's scheme; details, one

    could infer, that included the source of the financing. In the

    last half of 1987, Granoff and Gauvin formed a partnership called

    Manchester Associates for the purpose of real estate investment.

    On behalf of Manchester Associates, Gauvin met several times with

    Brandon who discussed his overall plans to close on over 400

    motel units as well as the schedule for those closings. Letters

    referencing these meetings were written on Manchester letterhead

    and one could reasonably infer that Gauvin related the substance

    of the meetings to his partner Granoff.25 One such letter from

    ____________________

    24 There is some dispute whether this letter, which was not
    signed by the parties, was included among the documents at the
    closings. Homeowners' Vice President, Gregory Cambio, testified
    that the letter "was part of the closing package" but also
    testified that it may have been sent after the closing. The
    trial exhibits containing the loan files for each of Granoff's
    purchases do contain the letter which is dated on the same date
    as the closing. However, the file contains both closing
    documents, signed by Granoff, as well as other documents that may
    or may not have been at the closing. The letter, therefore, is
    not dispositive of Granoff's knowledge, but does provide some
    evidence of knowledge that can be considered in conjunction with
    the other circumstantial evidence.

    25 For example, Granoff was cc'd on a letter to Dean Street that
    referenced plans to close on 107 units and discussed the
    repayment of Granoff's $470,000.

    -39-














    Gauvin states that "it would seem that the lending institutions

    will be in a position to begin closing." As Homeowners and Bay

    Loan were the only institutions involved at the time the letter

    was written, the plural reference to "institutions" indicates
    _

    that Gauvin and his partner, Granoff, were aware not only of

    Homeowners but of Bay Loan as well.

    In sum, the evidence indicates that Granoff was aware,

    on a fairly detailed level, of a large real estate scheme whose

    only source of funding happened to be Bay Loan. With substantial

    sums of his own money at stake in this extensive project, Granoff

    was likely to become aware at some point of the source of money

    behind it all. It is not unreasonable to conclude, therefore,

    that Granoff knew of Bay Loan's involvement in the project.

    Furthermore, the fact that Bay Loan was providing the

    financing was known to several others who, like Granoff, were

    involved in buying and investing in the units. Brandon testified

    that he was "completely open" about, and "made no secret" of, Bay

    Loan's involvement. Although Brandon testified that he generally

    told people outside Dean Street that the lender was Homeowners

    and not Bay Loan, he also testified that he told Hagopian, Ward,

    Reisch, and Limoges about Bay Loan's involvement. These people,

    like Granoff, bought units or provided down payment funds and

    were not Dean Street employees. Even an investor named Michael

    Parvin, who bought only one unit, testified that he knew Bay Loan

    was involved. It is not unreasonable, therefore, for a jury to

    conclude that Granoff discovered this fact as well.


    -40-














    Granoff challenges any inferences of criminal knowledge

    or intent drawn from the pool of circumstantial evidence as

    impermissibly based merely on Granoff's association with his co-

    defendants. He claims that amidst the fast-paced wheeling and

    dealing of the 1980s real estate market, investors did not have

    the ability to know all the details and purposes behind every one

    of their transactions. It was common for investors to entrust

    their money to developers and lawyers without learning any of the

    specifics of the various projects in which they were involved.

    Details such as the exact nature of a bank's down payment

    requirement were not, Granoff implies, important enough to be

    discussed between a developer and an investor. Add to these

    circumstances the unscrupulous and deceptive acts of Brandon and

    Marderosian, who allegedly got Granoff into this whole mess, and

    Granoff contends that we cannot help but conclude he was lied to

    about the true nature of the project.

    While it may be true that the typical real estate

    investor in the 1980s would readily put up hundreds of thousands

    of dollars for "down payment funds," expect the money back in a

    few days, and still not suspect he is defrauding a bank, we are

    certainly not prepared, given the facts discussed above, to

    preclude a jury from concluding otherwise. The government need

    not disprove every reasonable hypothesis of innocence, provided

    the record in its entirety supports the jury's verdict. United
    ______

    States v. Ortiz, 966 F.2d 707, 714 (1st Cir. 1992), cert. denied,
    ______ _____ ____ ______

    113 S. Ct. 1005 (1993). In this case, the record does provide


    -41-














    the requisite support. Therefore, we affirm Granoff's

    convictions.

    2. Charles Gauvin

    Gauvin was convicted of conspiracy and five counts of

    bank fraud in connection with his purchase of several units and

    his funding of buyer down payments. Gauvin was Granoff's

    business partner and the more active of the two in their dealings

    with Dean Street. According to the record, he knew at least as

    much as Granoff, and most likely more, about the scheme to

    defraud Bay Loan. Gauvin also participated to a greater extent

    in the scheme than Granoff did. Consequently, there is no need

    to discuss at length the evidence sufficient to support his

    conviction.

    The jury could have found that Gauvin knew Bay Loan was

    providing loans for the condominium project and requiring down

    payments for these loans based on the evidence of the several

    meetings Gauvin attended and correspondence that he exchanged

    with Brandon discussing the condominium projects and his

    agreement with Brandon to provide buyers with down payment funds

    that were required for the financing of the units. The jury

    could infer that Gauvin knew the down payments were not in fact

    being paid in violation of the bank's requirement, and that

    Gauvin willfully participated in the scheme to accomplish this

    fraud, based on the evidence that Gauvin: 1) delivered to Dean

    Street twelve down payment checks backed by insufficient funds

    for the Charlestown closings in August of 1987 and received


    -42-














    twelve equivalent checks back from Dean Street two days later

    which he used to cover his original checks; 2) provided down

    payment money for Reisch and others which was returned to him

    within a matter of days; 3) commented to Marderosian that the

    down payment checks he was providing "did not have to be backed

    by good funds because the timing was so quick" and that he and

    Granoff could "make money without putting up any money;" and 4)

    delivered Granoff's $470,000 in down payment funds to Dean Street

    and wrote in a subsequent letter to Brandon that he expected the

    transaction involving those funds "to take at most two to three

    days."

    Gauvin argues that the evidence of his activities

    clearly indicates a lawful intent in his writing the checks to

    Dean Street. As he testified at trial, Gauvin thought he was

    simply lending money to Dean Street for its condominium project

    and he had no intention that his money be used for fraudulent

    purposes. Evidence in the record indicates that "supplemental

    financing," similar to what Gauvin thought he was providing to

    Dean Street, was a standard practice in the industry. Gauvin

    also testified that he was "surprised" to see his first twelve

    checks come back so quickly. But Gauvin was not so surprised,

    apparently, so as to be tipped off that anything illegitimate was

    going on because such rapid turn around of loans was also a

    standard practice during the real estate boom of the 1980s.

    Gauvin suggests that maybe Dean Street was packaging the

    secondary financing and selling it off at a profit, thus removing


    -43-














    Gauvin's participation as a lender fairly quickly.

    Maybe, but then again, maybe not. The jury considered

    Gauvin's arguments and decided that the evidence proved Gauvin

    knew what was really happening at Dean Street. Our job on appeal

    is to measure the sufficiency of that evidence and not to search

    for every logical or rational conclusion that can be drawn.

    Ortiz, 966 F.2d at 714. Gauvin was told several times that funds
    _____

    were needed to make down payments for buyers. We find it rather

    difficult, therefore, to believe Gauvin thought he was

    legitimately loaning money for down payments when the recipient

    of the payments was giving the money right back to the lender.

    If Gauvin loaned money to a friend to buy a car and then had his

    loan paid off by the car dealership, we might wonder about his

    characterization of the transaction as normal financing. In the

    present case, the suspicious nature of the transactions, combined

    with evidence of the underlying scheme to defraud and an

    agreement between Gauvin and the scheme's mastermind to

    contribute funds to the scheme, is more than ample to support the

    jury's verdict.

    3. Norman Reisch

    Reisch was convicted of conspiracy and seven counts of

    bank fraud. The evidence against Reisch indicates that he knew

    Bay Loan was financing the condominium units, that he knew down

    payments were required for the condominium loans and that he

    knowingly participated in a scheme to recycle funds through

    buyers to make it look like these down payments were actually


    -44-














    being made. Reisch had "at least a dozen" discussions with

    Brandon and Marderosian about the 20% down payment requirement

    and ways that the "requirement might be satisfied by alternative

    methods or might be avoided," including the use of second

    mortgages and loaning the down payment money to the buyers.

    Proof of Reisch's knowing participation in the

    conspiracy is as follows. Reisch bought four Charlestown units

    for which Gauvin provided the down payment funds. At the same

    time, Reisch provided another buyer with down payment money for

    three other units. Dean Street returned the money to Reisch the

    next day. Reisch later agreed with Brandon to wire money for

    down payments directly into buyers' accounts. After each closing

    that utilized Reisch's wired funds, the down payment money was

    returned to Reisch. On some occasions, the buyers' checks to

    Dean Street, which were funded by Reisch, were endorsed directly

    back over to Reisch. Reisch once remarked about this arrangement

    "we would just have to keep bringing the funds back and rolling

    them to wire more funds out for the projects."

    As for Reisch's knowledge of Bay Loan, Brandon

    testified that it was "very probable" that he told Reisch about

    Bay Loan's involvement in the project during a conversation in

    the summer of 1988. The jury could reasonably conclude that

    Reisch had knowledge of Bay Loan even before this conversation.

    Reisch's contact with Brandon and his involvement in the down

    payment scheme was more significant than that of Granoff.

    Because we found sufficient evidence to support the conclusion


    -45-














    that Granoff had knowledge of Bay Loan, we think that, for the

    reasons discussed above, there is also sufficient evidence

    against Reisch.

    Like Gauvin and Granoff, Reisch argues that he was just

    making loans that he thought were completely legal. Like Gauvin

    and Granoff, we find this argument unconvincing, especially given

    Reisch's greater involvement in the scheme. We reject, moreover,

    Reisch's application of the holding in United States v. Falcone,
    _____________ _______

    109 F.2d 579, 581 (2d Cir. 1940) (holding the mere delivery of

    goods or services to a conspiracy does not constitute membership

    in the conspiracy), to this case. Reisch's conduct amounted to

    more than a mere delivery of loans to a conspiracy. The evidence

    indicated that Reisch was involved in the planning of the down

    payment scheme and that he played a key role in furthering the

    success of a conspiracy that was starved for new funds before he

    began supplying them. In particular, Reisch provided a specific

    loan arrangement (involving a complex system of wired funds)

    especially tailored to falsifying the down payments. Reisch's

    actions thus were not limited to the mere provision of lending

    services but instead were strong evidence of an intent to further

    the conspiracy.

    4. Ronald Hagopian

    Hagopian was convicted of conspiracy and six counts of

    bank fraud for his role as a broker for Dean Street who solicited






    -46-














    buyers and facilitated their purchases.26 The evidence against

    Hagopian more than adequately establishes his knowledge of Bay

    Loan's down payment requirement and his knowing participation in

    various schemes to fraudulently represent the existence of those

    down payments. To begin with, Brandon testified that he told

    Hagopian about "his relationship" with Bay Loan, which

    establishes Hagopian's knowledge that Bay Loan was providing the

    financing. Hagopian knew a down payment was required for the

    units by virtue of the fact that he provided a down payment check

    for his own purchase, and he discussed down payments with some of

    the buyers he recruited.27

    Hagopian also knew about and participated in the scheme

    to falsify the existence of the down payments. Hagopian

    purchased several condominium units and wrote a corresponding

    down payment check that Dean Street never negotiated. Hagopian

    told the buyers he recruited that they needed to write checks to

    Dean Street for the purchases of their units but that the checks

    would either not be used or would be covered by Dean Street

    itself.28 Hagopian also told some buyers that they would have

    ____________________

    26 The court entered a mid-trial judgment of acquittal for
    Hagopian on one count of bank fraud. Hagopian was also found not
    guilty by the jury on two counts of bank fraud.

    27 In addition, Hagopian's business partner, John Ward, who
    rounded up buyers with Hagopian, told one of these buyers to give
    Ward a check "for the down payment that was required."

    28 In addition, Hagopian was present during several meetings
    with Brandon including one where Brandon told a buyer that there
    were no down payments. Hagopian also told this to the buyer.
    The buyer eventually did produce a down payment check for his
    purchase and the check was never negotiated. Hagopian was

    -47-














    second mortgages to cover part of their down payment but these

    mortgages would later be discharged. All of these schemes were

    actually executed with many of the buyers Hagopian solicited.

    Sometimes Hagopian returned voided or nonnegotiated down payment

    checks back to the buyers. Hagopian also told buyers they would

    be paid for each unit they bought and he usually provided this

    rebate money to the buyers he had solicited after the closings.

    Hagopian adds a new twist to the familiar refrain that

    he thought he was participating in a perfectly legal real estate

    project. He claims that the fact he openly solicited buyers for

    a "no money down" investment opportunity proves that he had no

    knowledge that Brandon's down payment scheme defrauded the bank.

    Hagopian placed public advertisements for the condominiums that

    explicitly promised "no money down." Hagopian contends that

    because Dean Street took care of all the financing, his job was

    limited to soliciting buyers for a type of real estate investment

    that was allegedly common at that time and not in any way

    suspicious.29

    ____________________

    subsequently asked about that check by the buyer who expected it
    to be returned to him and was concerned it might actually be
    cashed. Hagopian said he would look into it.

    29 Hagopian makes a related argument that his conduct did not
    further the conspiracy to a significant degree and that there was
    not sufficient interdependence between Hagopian and the other
    conspirators to establish that he joined the conspiracy as
    required. United States v. Evans 970 F.2d 663, 670 (10th Cir.
    _____________ _____
    1992); United States v. Horn, 946 F.2d 738, 740-41 (10th Cir.
    _____________ ____
    1991). All that is required is that the alleged conspirator
    facilitate the endeavors of other alleged co-conspirators or
    facilitate the venture as a whole. See Evans, 970 F.2d at 670;
    ___ _____
    Horn 946 F.2d at 740-41. The government has more than met this
    ____
    burden.

    -48-














    The evidence clearly supports the jury's conclusion

    that Hagopian did more than innocently broker deals for Dean

    Street. Hagopian told buyers of his "no money down" investment

    opportunity to provide down payment checks that would not be

    cashed and to sign mortgages that would be discharged. His

    "openness" in advertising no money down investments simply shows

    he was actively soliciting buyers to further the scheme. The

    scheme relied on new faces to serve as frontmen for the

    individual bank loans and Hagopian's actions were an integral

    part of furthering the scheme's success.

    Hagopian was not open about the fact that "no money

    down" meant providing false paperwork to the bank so that it

    would think down payments were actually being made. Regardless

    of whether 100% financing was customary at the time and thus not

    suspicious, the fake down payments and fake second mortgages were

    certainly not customary (or if customary in the 1980s, still

    illegal), and the jury was warranted in concluding that Hagopian

    knew this. Finally, the jury could reasonably infer that the

    public advertising was just a necessary, and minor, risk taken by

    Hagopian to attract new buyers and not particularly convincing

    evidence of his innocence.

    5. John Ward

    Ward was convicted of conspiracy and six counts of bank

    fraud for purchasing a unit and for soliciting and facilitating






    -49-














    unit sales.30 The evidence against Ward, at least in terms of

    knowledge and intent, is essentially the same as that against his

    partner, Hagopian, and the two played essentially the same role

    in the conspiracy. Brandon testified that he told Ward about

    "his relationship" with Bay Loan. Ward also knew that down

    payments were required as he was involved in many of the same

    discussions with potential buyers that Hagopian was involved in.

    Specifically, Ward told one buyer to give him a check "for the

    down payment that was required."

    Ward knew down payments were not actually being made as

    his own down payment was not negotiated and he told one buyer,

    whose down payment funds were to be wired into that buyer's

    account, that the down payment check would be cashed the same day

    so that the people wiring the funds "got their money back."

    We reject Ward's assertion that he thought Bay Loan

    approved all of the various down payment shenanigans in which he

    was involved. Ward contends that the down payment arrangement

    that he was aware of was simply a paperwork requirement and not a

    "real" requirement; that is, Ward only knew that some sort of

    paper representing down payments had to exist but thought no real

    funds were actually required from the buyers. We suppose Ward's

    contention is within the realm of the possible. However, the

    jury looked at the intricate down payment arrangements and the

    way Ward explained them to the buyers and found, quite reasonably

    ____________________

    30 The district court entered a mid-trial judgment of acquittal
    in favor of Ward on one count of bank fraud. The jury found Ward
    not guilty on two additional counts of bank fraud.

    -50-














    we think, that Ward knew his actions were a "departure from

    fundamental honesty." Goldblatt, 813 F.2d at 624. The common
    _________

    sense understanding of a down payment is the transfer of actual

    funds from the buyer to the seller or financier. With this in

    mind, it is more than reasonable for a jury to find that once a

    defendant learned of the structure of the down payment

    arrangement used in this case, with no real down payments

    changing hands, the defendant would be tipped off to the fact

    that a fraudulent transaction was contemplated. Even if we

    assume Brandon lied to Ward and told him that Bay Loan directed

    Dean Street to arrange for paper, as opposed to real, down

    payments, the evidence was sufficient to support a finding that

    Ward knew he was engaging in a sham transaction.

    The evidence is also sufficient to prove Ward's willful

    participation in the overall conspiracy and Ward's execution of

    the bank fraud scheme charged in Counts 9, 15, 18, and 19.31

    However, the evidence is not sufficient to show that Ward took

    any actions that would constitute the engagement in bank fraud

    set forth in Counts 24 and 25 of the redacted indictment.32

    Consequently we uphold the convictions on the former counts and

    reverse the verdict against Ward on the latter two counts.

    ____________________

    31 Count 9 charges bank fraud in connection with Ward's purchase
    of a unit at the Bayside Motel. Counts 15, 18 and 19 charge bank
    fraud in relation to unit purchases at the Sandpiper Motel and
    the Hillside Motel that were facilitated by John Ward and others.

    32 Counts 24 and 25 charged Ward and four other defendants with
    defrauding Bay Loan by obtaining an end loan for the purchases of
    units at the Sandcastle Motel by Bruce Schulbaum and John Mills,
    III.

    -51-














    As stated in Count 9, Ward bought a condominium unit at

    the Bayside Motel in October of 1987. The down payment check he

    provided for the sale was never negotiated. This is sufficient,

    given his knowledge discussed above, to support the conclusion

    that Ward never intended to provide real funds for the down

    payment but just paperwork to deceive the bank. Ward's

    conviction for bank fraud on Count 9 is thus upheld.

    The evidence is also sufficient to support the

    conviction on Counts 15, 18 and 19 which each charged Ward with

    bank fraud for facilitating the sale of a separate condominium

    unit. Ward helped to solicit the buyers involved in the

    transactions for these counts by telling them that no down

    payments were required. He directed one of these buyers to

    provide down a payment check that would be funded by someone else

    and then cashed so that the funds could be returned. Ward

    provided the buyers in Counts 15 and 18 with the rebates they

    were promised for purchasing units. For the transaction in Count

    19, the evidence indicates that Ward was the intermediary for the

    funds wired by Brandon to cover the buyer's down payment.

    Brandon's wire transfer was directed to the buyer's insurance

    company to the attention of "John Ward." Thus, we uphold Ward's

    convictions for conspiracy and on Counts 15, 18 and 19.

    The evidence is not sufficient, however, to show that

    Ward engaged in bank fraud with respect to the transactions in

    Counts 24 and 25. Although Ward was present at the closings and

    several of the meetings where down payment arrangements were


    -52-














    discussed for the sales in Counts 24 and 25, there is no evidence

    that Ward said anything to these particular buyers or did

    anything to otherwise facilitate their purchases.33 Ward did

    not provide the buyers in Counts 24 and 25 with rebates as an

    incentive to buy nor did he direct these buyers to falsify their

    down payments.34 As such, Ward neither executed nor aided the

    execution of the scheme to defraud in these two instances.

    Because we see no evidence in the record to support any

    reasonable finding by the jury that Ward played a role in

    obtaining the loans in Counts 24 and 25, we reverse his

    convictions for these two counts.

    6. Owen Landman

    Landman was convicted of conspiracy and six counts of

    bank fraud in connection with his facilitation of down payment

    arrangements for Dean Street.35 Ample evidence exists to

    support the finding that Landman knew a down payment requirement

    existed and that he knew about the various fraudulent methods


    ____________________

    33 Ward was involved in running the newspaper advertisement that
    originally attracted the buyers to the Dean Street project.
    However, that act was not necessarily directed toward these
    specific fraud counts and, while contributing to the fraud, was
    not alone sufficient to constitute an affirmative act of
    facilitation of the fraudulent loan transactions charged in
    Counts 24 and 25.

    34 We note that Hagopian, who was also convicted on these two
    charges and whose conviction we are upholding, did actively
    solicit the buyers, discuss down payment arrangements with them
    (such as dischargeable mortgages), and provide rebate money after
    their purchases.

    35 The jury found Landman not guilty on two counts of bank
    fraud.

    -53-














    used to avoid that requirement. As in Ward's case, however, the

    evidence is not sufficient to show Landman participated in the

    execution of a scheme to defraud for four out of the six bank

    fraud counts.

    Landman acted as an escrow agent for a number of the

    condominium closings and one of his main responsibilities was

    receiving down payments from buyers and transferring them to the

    seller, Dean Street. Marderosian testified that he told Landman

    that Gauvin and Granoff would be funding down payments for the

    initial purchasers and Landman should hold that down payment

    money. Landman knew that the down payment funds were being

    returned to whoever provided them as Landman himself delivered

    the money back to its source on several occasions.36

    Landman also knew about the fraudulent second mortgages

    that were supposed to cover part of the down payment. He knew

    the buyers were signing meaningless promissory notes for second

    mortgages at the closings because Marderosian told him beforehand

    that the mortgages would be discharged. At the closings, several

    buyers asked Landman when the mortgages would be released as

    promised because the discharge letter accomplishing this was not

    part of the closing documents (presumably so Bay Loan would not


    ____________________

    36 Marderosian explained to Landman that Reisch would be wiring
    money directly into buyers' accounts to pay for their down
    payments and that buyers would then write checks to Landman.
    Landman assured Reisch that he would look after the money. The
    evidence indicates that with respect to at least some of the
    transactions, Landman returned the down payment funds that Reisch
    had provided back to Reisch, writing checks back to Reisch from
    the money Reisch had originally given to the buyers.

    -54-














    see the letter). Landman made gestures to these buyers to

    indicate that they should not talk to him about it.37 All

    these facts, taken together, support the jury's conclusion that

    Landman knew that something illegal was being done to get around

    the down payment requirement.

    We reject Landman's argument that there is insufficient

    evidence to prove he knew Bay Loan was the target of the scheme

    to defraud. To begin with, Brandon was "completely open" about

    Bay Loan's involvement and told a number of people involved in

    the scheme. Several buyers testified that they knew about Bay

    Loan, including one person whose only involvement was his

    purchase of a single unit. Landman shared office space with

    Brandon's point man in the scheme, Marderosian, who was

    intimately involved in all the details of the scheme. Finally,

    the closing documents included a letter indicating Bay Loan was

    the ultimate lender;38 Landman acted as escrow agent for many

    ____________________

    37 At one closing, Kumalae "asked Owen if he wanted her to
    address [the mortgage discharge] at the time," and Landman
    responded that it "had nothing to do with him . . . he didn't
    want to know anything about it." Another time "Mr. Landman did
    not want to hear about it in front of us. I do recall him saying,
    his hands saying not in front of me." Still another buyer
    testified that Landman "gestured" when confronted with the
    mortgage discharge issue. Landman argues that his responses and
    gestures could mean he just did not know anything about it and
    could not answer the buyers' inquiries. We find that a
    reasonable jury could also conclude that Landman's actions
    indicated he already knew that something illegal was going on and
    was trying to disassociate himself from it.

    38 As discussed in footnote 24, Homeowners furnished a letter
    stating that they transferred their rights in the mortgage to Bay
    Loan. A similar document was furnished for the transactions
    brokered by East West. Although the same uncertainty regarding
    the presence of the letter at the closings discussed in Granoff's

    -55-














    of the closings and also conducted a few of them himself.39

    Sufficient evidence exists to support the jury's

    verdict on the conspiracy count and on Counts 21 and 22. Counts

    21 and 22 allege bank fraud in connection with the closings of

    two units at the Hillside Motel. The evidence reveals that

    Landman returned the down payment funds provided by Reisch in

    connection with these transactions back to Reisch in violation of

    the down payment requirement.40 In addition, one Dean Street

    employee, Marie Lynch, testified that, in general, she would

    bring buyers' certified down payment checks to Landman after

    money was wired by Reisch to the buyers' accounts to accomplish

    the certification. Lynch testified that she once saw Landman

    write a check to Reisch for the amount of the down payment funds

    she had just brought to him. Lynch did not specify which

    transactions she was referring to in her testimony but the record

    does contain checks written by Landman to Reisch for the exact

    amount of the down payment funds wired by Reisch for the Hillside


    ____________________

    case above also exists with respect to Landman, there is more
    reason to believe Landman saw and read at least one of the
    letters because Landman had greater exposure and familiarity with
    the closing documents.

    39 Marderosian testified that when he prepared Landman for the
    closings which Landman conducted, he "explained what documents
    [Marderosian] would be preparing and that [Landman] had to
    oversee their execution at the closing."

    40 That evidence consists of a check written by Landman to
    Reisch for the exact amount of the funds which Reisch had wired
    into the buyers' accounts for the purchases in Counts 21 and 22.
    As discussed above, at the time Landman wrote the check, he had
    already been told what Reisch was doing and had agreed to look
    after Reisch's money.

    -56-














    purchases referred to in Counts 21 and 22.41 We therefore find

    the evidence sufficient to support the convictions for bank fraud

    charged in Counts 21 and 22. This evidence is also sufficient to

    show willful participation in the conspiracy and thus supports

    Landman's conviction on Count 1.42

    Landman argues that his actions were just a normal and

    proper function of his job as escrow agent. His

    responsibilities, he claims, were strictly limited to receiving

    and distributing money at Dean Street's direction. See United
    ___ ______

    States v. Bruun, 809 F.2d 397, 402-03, 410 (7th Cir. 1987). This
    ______ _____

    "just following orders" defense cannot stand in the face of the

    evidence showing that Landman knew down payments were being

    falsified, that he agreed to safeguard Reisch's down payment

    funds, and that he personally falsified two down payments by

    returning the funds to Reisch. The evidence was sufficient to

    indicate that Landman's intent was to participate in transactions


    ____________________

    41 Although the testimony that Landman "[c]ut a check to Norman"
    Reisch referred to a transaction sometime in the fall of 1988,
    roughly a month after the Hillside closings in Counts 21 and 22,
    it does add some credence to the government's account of
    Landman's involvement in the scheme to defraud.

    42 Landman is wrong in claiming that the jury impermissibly
    ascribed the illegal actions of Marderosian to Landman. Cf.
    __
    United States v. Crocker, 788 F.2d 802, 806 (1st Cir. 1986)
    ______________ _______
    ("[A]scribing criminal liability to [an alleged] conspirator for
    a co-conspirator's acts by way of the adoption mechanism inherent
    in a conspiracy requires that the imputed acts be in furtherance
    of the conspiracy or that they fall within its reasonably
    foreseeable scope."). Returning down payment funds that are
    required by the bank is not only within the foreseeable scope of
    the conspiracy but directly in furtherance of it. The government
    thus established Landman's criminal conduct independently from
    that of Marderosian.

    -57-














    designed to deceive Bay Loan.

    With respect to Counts 23 through 26, relating to

    closings at the Sandcastle Motel, no checks written by, or to,

    Landman that involved down payment funds were in evidence. The

    government stipulated that the relevant checks for these

    transactions were forgeries. In particular, Landman's signature

    on the checks for the Sandcastle transactions were forged by

    Marderosian.43 It is true that Landman conducted the closings

    for the Sandcastle units and thus in some sense facilitated the

    scheme to defraud,44 but that alone is not sufficient to show

    that Landman participated in the relevant act of fraudulently

    violating the down payment requirement for those individual

    transactions. On the contrary, it seems that Landman never saw

    the down payment checks as the money did not go through his

    escrow account. Instead, the checks were transferred directly to

    Reisch.


    ____________________

    43 The existence of forgeries does not, as Landman claims,
    provide conclusive proof of his innocence on all the counts.
    Just because his name was forged on some of the checks does not
    necessarily imply that Landman did not know of, or agree to go
    along with, the conspiracy. In other words, it is not true that
    the forgeries could only indicate that Marderosian was forced to
    go behind Landman's back to accomplish the scheme to defraud.
    For one, Marderosian testified that Landman authorized some of
    the forgeries and indicated that forging Landman's name was a
    method of convenience rather than a way to hide illicit activity
    from Landman. More importantly, Landman did write checks for
    illegal transactions in Counts 21 and 22, which, in conjunction
    with the other proof of Landman's knowledge and intent, is
    sufficient to uphold the conspiracy charge.

    44 Lynch's testimony that Landman wrote a check to Reisch for
    the Sandcastle units is decisively contradicted by the
    government's stipulation that the checks were forgeries.

    -58-














    We note that Landman also conducted closings for units

    at the Atlantic Inn-Narragansett, but the jury acquitted Landman

    on the charges connected to those transactions (Counts 16 and 17)

    apparently because it found the act of conducting the closings

    was, by itself, insufficient to establish the execution of a

    scheme to defraud. For Counts 23 through 26, once the stipulated

    forgeries are removed from consideration, there is similarly

    little evidence to support a conviction beyond the fact that

    Landman conducted the closings. While the jury is not held to

    consistent results, we think that the acquittal on Counts 16 and

    17 reinforces our judgment that (absent some confusion about the

    forged checks),45 there was insufficient evidence to convict on

    Counts 23 through 26. Because the evidence is insufficient to

    prove that Landman executed or aided in the execution of the

    schemes to defraud Bay Loan charged in Counts 23 through 26, we

    reverse his conviction on those counts.

    7. Momi Kumalae

    Kumalae was convicted of conspiracy and three counts of

    bank fraud in connection with various actions she took while




    ____________________

    45 There was apparently some confusion surrounding the exhibits
    containing the forged checks. The government agreed to use the
    checks only against the other defendants, namely Reisch, but
    argued during closing argument that Landman was responsible for
    the checks written to Reisch on the Sandcastle units. The
    government did not explicitly state that Landman signed the
    forged checks; however, it failed to acknowledge the stipulation
    of forgeries and seemed to imply no forgeries existed. In any
    event, we are convinced that the jury improperly considered the
    forged checks in their guilty finding on Counts 23 through 26.

    -59-














    working as an assistant to Brandon at Dean Street.46 The

    evidence establishing Kumalae's knowledge of Bay Loan's down

    payment requirement and the scheme to fraudulently violate it is

    the following: (1) Brandon testified that he told Kumalae about

    his relationship with Bay Loan, (2) an East West employee

    testified that she asked Kumalae to forward information about the

    unit buyers so that she could satisfy the guidelines established

    by Bay Loan; (3) Kumalae was present during some of the

    conversations between Brandon, Ward, Hagopian and a buyer in

    which down payments were discussed; (4) Kumalae was also present

    at a meeting at which Brandon said "they needed to show down

    payments or something so they were going to wire money into the

    accounts or deposit it and they needed one of our checks to prove

    that it came out of our account"; (5) Kumalae told one buyer that

    she needed a check from him and that she would be "doing the

    transactions at the banks"; (6) Kumalae assured one buyer whose

    down payment check had not been negotiated that his check had not

    been used; and, (7) Kumalae instructed another Dean Street

    employee, Marie Lynch, who had asked about the discharges of the

    second mortgages that "there weren't supposed to be any second

    mortgages and to just don't worry about it. They were being

    taken care of."

    The evidence that she willfully participated in this

    scheme is as follows: (1) Kumalae advised buyers of how their



    ____________________

    46 The jury found Kumalae not guilty on one count of bank fraud.

    -60-














    down payment requirement would be satisfied;47 (2) she once

    wired money from her own account to a buyer in order to fund his

    down payment;48 (3) she signed several of the mortgage

    discharge letters provided to the buyers;49 and, (4) she

    received some of the down payment checks, and because several of

    these checks were deposited directly into Reisch's account,

    presumably by Kumalae, she effected the return of down payment

    funds to their source in violation of the down payment

    requirement. All of this evidence is sufficient to support

    Kumalae's bank fraud and conspiracy convictions.

    Kumalae attempts to rely on cases holding that a

    defendant's mere presence at the scene of the crime or mere

    association with criminals to whom all the evidence at trial

    pertains is insufficient to support a conviction for conspiracy.

    United States v. Ocampo, 964 F.2d 80 (1st Cir. 1992); United
    ______________ ______ ______

    States v. Mehtala, 578 F.2d 6, 10 (1st Cir. 1978); United States
    ______ _______ _____________

    v. Joiner, 429 F.2d 489, 493 (5th Cir. 1970). Kumalae's reliance
    ______

    on these cases is misplaced because the government's case rested


    ____________________

    47 Kumalae told one buyer "no down payments" were required and
    that Brandon was a "stand-up guy" who would "take care of things
    and not to worry." On another occasion she told a buyer that his
    mortgage discharge "would be taken care of after the closing."

    48 This was the basis for the transaction for Count 15 and is
    sufficient to support her conviction on that count.

    49 One buyer testifies that he picked up his discharge letter
    and the letter of another buyer directly from Kumalae. These
    discharges were made for the transactions in Counts 24 and 25.
    We note that the jury acquitted Kumalae on Count 23 presumably
    because there was no such testimony to support Kumalae's
    involvement with the discharge.

    -61-














    on Kumalae's own knowledge of the scheme to defraud based on her

    own statements to others and on a series of actions taken by

    Kumalae herself that directly defrauded Bay Loan. Kumalae's

    argument that she was just acting in good faith by performing

    ministerial duties for Dean Street and nothing more also fails.

    The record is clear that Kumalae wired down payment funds to

    buyers from her own account and signed mortgage discharge

    letters. These actions were not merely "ministerial duties."

    V. SEVERANCE
    V. SEVERANCE

    The district court denied the motions for severance50

    made by several of the defendants51 who argued that they were

    unfairly prejudiced by the evidentiary spillover from the case

    presented against their more culpable co-defendants. The

    defendants' claim is that the joint trial seriously limited the

    jury's ability to sift through all the evidence against each

    individual defendant and increased the risk that the jury would

    base its verdicts on evidence which has no bearing on the guilt

    or innocence of defendants with a more limited involvement in the

    ____________________

    50 The rule authorizing motions for severance states in
    pertinent part:

    If it appears that a defendant . . . is
    prejudiced by a joinder . . . of
    defendants . . . for trial together, the
    court may . . . grant a severance of
    defendants or provide whatever other
    relief justice requires.

    Fed. R. Crim. P. 14.

    51 Granoff, Gauvin, Hagopian, Reisch, Kumalae, and Ward all
    moved for severance before and during trial and all raise the
    issue on appeal.

    -62-














    scheme. Whatever the advisability, in general, of holding mass

    trials in complicated cases with many defendants of varying

    culpabilities, we do not find any significant degree of

    unfairness or prejudice in this case that would warrant a

    reversal of the district court's refusal to sever the trial.

    The decision to grant or deny a motion for severance is

    committed to the sound discretion of the trial court and we will

    reverse its refusal to sever only upon a finding of manifest

    abuse of discretion. United States v. Olivo-Infante, 938 F.2d
    ______________ _____________

    1406, 1409 (1st Cir. 1991); United States v. Natanel, 938 F.2d
    _____________ _______

    302, 308 (1st Cir. 1991), cert. denied, 112 S. Ct. 986 (1992);
    ____ ______

    United States v. Boylan, 898 F.2d 230, 246 (1st Cir.), cert.
    ______________ ______ ____

    denied, 498 U.S. 849 (1990); see also United States v. Searing,
    ______ ________ _____________ _______

    984 F.2d 960, 965 (8th Cir. 1993) ("In the context of conspiracy,

    severance will rarely, if ever, be required."). Defendants

    seeking a separate trial must make a strong showing of evident

    prejudice. United States v. O'Bryant, No. 91-2132, slip op. at 8
    _____________ ________

    (1st Cir. June 29, 1993); United States v. Mart nez, 922 F.2d
    _____________ ________

    914, 922 (1st Cir. 1991). This showing must demonstrate that the

    joint trial prevented the jury from separating the evidence

    against each defendant and reaching a reliable verdict. Zafiro
    ______

    v. United States, 113 S. Ct. 933, 938 (1993); O'Bryant, No. 91-
    _____________ ________

    2132, slip. op. at 8-9.

    There is no indication in this case that the jury was

    unable to distinguish the various charges and defendants or to

    sort properly through the evidence relating to each defendant.


    -63-














    The jury demonstrated its ability to independently assess the

    evidence when it acquitted four of the defendants on individual

    bank fraud counts, see United States v. Figueroa, 976 F.2d 1446,
    ___ _____________ ________

    1452 (1st Cir. 1992), cert. denied, 113 S. Ct. 1346 (1993)
    ____ ______

    (finding acquittals to be a relevant factor in upholding a denial

    of severance); United States v. Dworken, 855 F.2d 12, 29 (1st
    ______________ _______

    Cir. 1988) (same), and when it asked that specific portions of

    the transcript relating to specific defendants be read to them.

    In addition, the trial judge provided a number of limiting

    instructions throughout the trial that alleviated any potential

    prejudice. See Figueroa, 976 F.2d at 1452; United States v.
    ___ ________ ______________

    Tejeda, 974 F.2d 210, 219 (1st Cir. 1992).
    ______

    The degree of prejudicial spillover appears minimal as

    no defendant has demonstrated which, if any, evidence presented

    at trial would have been inadmissible if presented against that

    defendant at a separate trial. The government presented

    sufficient evidence to show that all defendants were involved in

    a single interdependent conspiracy, see Section IX.B., and most
    ___

    of the evidence at trial was related to the development and

    operation of that conspiracy. "Where evidence featuring one

    defendant is independently admissible against a codefendant, the

    latter cannot convincingly complain of an improper spillover

    effect." O'Bryant, No. 91-2132, slip op. at 10 (collecting
    ________

    cases). Moreover, "[e]ven where large amounts of testimony are

    irrelevant to one defendant, or where one defendant's involvement

    in an overall agreement is far less than the involvement of


    -64-














    others, we have been reluctant to secondguess severance denials."

    Boylan, 898 F.2d at 246 (citations omitted). We therefore affirm
    ______

    the judge's decision to deny the severance motions.

    VI. PRETRIAL PUBLICITY
    VI. PRETRIAL PUBLICITY

    On January 1, 1990, the Governor of Rhode Island

    ordered the closure of credit unions in that state insured by a

    private entity known as the Rhode Island Savings Deposit

    Insurance Corporation (RISDIC). After years of risky real estate

    investments, many credit unions were unable to weather the late

    1980s crash in the real estate market and RISDIC could not cover

    their anticipated losses. In the process of closing the credit

    unions, the governor froze the assets of hundreds of thousands of

    angry depositors. The ensuing panic among depositors as well as

    the public hearings, criminal investigations, and civil lawsuits

    received extensive media coverage. The Rhode Island credit union

    crisis, although coexistent with Dean Street's downfall, is not

    related to the present case.

    Defendants raised a series of claims related to the

    district court's alleged failure to shield them from the

    prejudicial effects of publicity surrounding the Rhode Island

    credit union crisis. They argue that their right to an impartial

    jury was jeopardized by the trial court's denial of their change

    of venue motion, their request for individual voir dire, their

    request to question the jurors about losing money in the credit

    union crisis, and their request for a mistrial or curative

    instructions after the admission of certain evidence relating to


    -65-














    the failed credit unions. As we find no significant threat to

    the trial's fairness from the effects of unfavorable publicity,

    we uphold the district court's denial of the motions related to

    prejudicial publicity.

    A. Change of Venue

    The decision to grant a change of venue52 is within

    the sound discretion of the trial court and is reviewed for abuse

    of discretion. United States v. Rodr guez-Cardona, 924 F.2d
    ______________ _________________

    1148, 1158 (1st Cir.), cert. denied, 112 S. Ct. 54 (1991); United
    ____ ______ ______

    States v. Angiulo, 897 F.2d 1169, 1181 (1st Cir.), cert. denied,
    ______ _______ ____ ______

    498 U.S. 845 (1990). Change of venue is proper where the level

    of prejudice against a defendant precludes a fair and impartial

    trial because the community is saturated with inflammatory

    publicity about the case. Rodr guez-Cardona, 924 F.2d at 1158;
    _________________

    Angiulo, 897 F.2d at 1181; United States v. Moreno Morales, 815
    _______ _____________ _______________

    F.2d 725, 731 (1st Cir.), cert. denied, 484 U.S. 966 (1987).
    ____ ______

    Defendants proffered forty-four newspaper articles

    relating to Dean Street and their criminal case, as well as other

    examples from the media which purported to show negative feelings

    stemming from the credit union crisis against those who benefited

    ____________________

    52 The trial court, upon a defendant's motion, will transfer the
    trial to another district

    if the court is satisfied that there
    exists in the district where the
    prosecution is pending so great a
    prejudice against the defendant that the
    defendant cannot obtain a fair and
    impartial trial.

    Fed. R. Crim. P. 21(a).

    -66-














    from failed financial institutions. Defendants claim that this

    demonstrated widespread prejudice among potential jurors against

    them. They argue that the jurors would not distinguish Bay Loan

    from the failed credit unions and consequently the jurors would

    direct their hostility toward those involved in the credit union

    crisis against the defendants at trial.

    We find that the publicity relating to this case did

    not particularly saturate the community with inflammatory

    sentiment nor do we have any reason to believe that the jury was

    anything but impartial. The articles presented by the defendants

    evidence standard factual press coverage of a criminal case and

    are neither inflammatory nor sensational. See Angiulo, 897 F.2d
    ___ _______

    at 1181 (stating that prejudice will not be presumed in the case

    of merely factual reporting, instead "the publicity must be both

    extensive and sensational in nature"). Only five of the forty-
    ___

    seven prospective jurors had ever read or heard about the case

    and none of them sat on the jury. We find nothing in the record

    to indicate that the jurors' feelings about the credit crisis, if

    they had any, impaired their impartiality in the present case.

    The trial judge appropriately cautioned the jury about the need

    to separate the credit crisis from this case and, as discussed

    below, he conducted a voir dire that sufficiently investigated

    possible bias. The trial judge determined that the jurors would

    understand that the credit crisis had no connection to this case

    when he denied the change of venue motion and we find no abuse of




    -67-














    discretion in this conclusion.53

    B. Voir Dire

    Defendants argue that the denial of their request for

    individual voir dire and their request for jurors to be asked

    whether they had lost money in the credit unions jeopardized

    their right to an impartial jury. See Irvin v. Dowd, 366 U.S.
    ___ _____ ____

    717, 722 (1961). Defendants claim that as a result of these

    rulings the court did not adequately investigate possible bias

    against defendants stemming from the credit union crisis. See,
    ___

    e.g., United States v. Gillis, 942 F.2d 707 (10th Cir. 1991).
    ____ _____________ ______

    The trial court has broad discretion in conducting voir

    dire. United States v. McCarthy, 961 F.2d 972, 976 (1st Cir.
    _____________ ________

    1992); Real v. Hogan, 828 F.2d 58, 62 (1st Cir. 1987). "It is
    ____ _____

    more than enough if the court covers the substance of the

    appropriate areas of concern by framing its own questions in its

    own words." Hogan, 828 F.2d at 62 (citations omitted). In this
    _____

    case, the judge adequately probed prospective jurors for possible

    bias related to the credit union crisis54 and specifically

    ____________________

    53 We also reject the allegation of actual juror prejudice based
    on the unsubstantiated claim that there was a chance that actual
    ______
    prejudice existed which could have been revealed if the judge
    asked the right questions during voir dire. As we find no errors
    in the voir dire process, see subsection B, and no other
    ___
    indication of actual prejudice, we find this allegation
    unfounded.

    54 Specifically the judge told prospective jurors:

    One thing I should caution you about is
    some of you may be aware that there has
    been some publicity in Rhode Island
    recently about the credit unions and the
    difficulties that they've experienced,

    -68-














    inquired several times whether any of the jurors or their

    families had "lost money in a bank fraud or anything of that

    sort." One juror responded affirmatively to the court's

    questions in this area and was excused.55 Throughout the voir

    dire, any juror responding to the court's queries was subjected

    to individual questioning by the judge and by counsel. For these

    reasons, we find no errors in the voir dire process.

    C. Prejudicial Evidence

    During the trial, the judge admitted evidence relating

    to some of the failed credit unions and individuals involved in

    the credit union crisis. Specifically, during the government's

    direct examination of Marderosian in which he was questioned

    about the use of Bay Loan funds obtained from the Sandcastle

    closings, Marderosian explained that, in accordance with

    Brandon's instructions, he had deliberately failed to pay a

    preexisting $1.5 million mortgage held by the Rhode Island

    ____________________

    and I want to be sure that everyone
    understands that this case is not in any
    way related to those events. Is there
    anybody who thinks they would have
    difficulty in separating this case from
    anything you might have heard about the
    problems credit unions in Rhode Island
    have experienced?

    55 Defendants make an additional argument that because jurors
    were told that the credit crisis had no relation to this case,
    they did not think losing money in credit unions was important
    before the trial started and thus would not have responded to the
    judge's comments during voir dire. Yet, once evidence linking
    defendants to the credit crisis was presented at trial, see
    ___
    subsection C, the issue of losing money became critical and the
    risk of bias was no longer adequately addressed by the voir dire.
    The creativity of this argument is matched only by its
    improbability and speculative nature. We summarily reject it.

    -69-














    Central Credit Union. Instead, he used the loan proceeds to pay

    off other Dean Street creditors. Included in the lengthy list of

    these creditors admitted at trial were Robert Barbato, Atrium

    Financial, and Davisville Credit Union. All of these entities

    and individuals were involved in the RISDIC credit union

    crisis.56 Defendants objected to the evidence and moved for a

    mistrial arguing that the evidence was irrelevant and highly

    inflammatory.

    The decision to admit or exclude evidence under Fed. R.

    Evid. 40357 is committed to the broad discretion of the trial

    court and we will reverse the court's judgment only rarely and in

    extraordinary compelling circumstances. United States v.
    _______________

    Nickens, 955 F.2d 112, 125 (1st Cir.), cert. denied, 113 S. Ct.
    _______ ____ ______

    108 (1992); United States v. McMahon, 938 F.2d 1501, 1507 (1st
    _____________ _______

    Cir. 1991). Rule 403 requires a balancing of the probative value

    of a piece of evidence against its prejudicial effect. United
    ______

    States v. Rodr guez Cort s, 949 F.2d 532, 540 (1st Cir. 1991).
    ______ ________________


    ____________________

    56 Rhode Island Central Credit Union and the Davisville Credit
    Union were among the institutions closed as a result of RISDIC's
    failure. (Davisville apparently failed despite Dean Street's
    preferred payment on its debt with them). Robert Barbato, who
    purportedly was connected to organized crime, was a heavy
    borrower of the credit unions. Atrium Financial was owned in
    part by one of the key figures in the credit union crisis.

    57 Rule 403 provides in part:

    Although relevant, evidence may be
    excluded if its probative value is
    substantially outweighed by the danger of
    unfair prejudice . . . .

    Fed. R. Evid. 403.

    -70-














    Exclusion is proper only when the probative value is

    "substantially outweighed" by the risk of prejudice. McMahon,
    _______

    938 F.2d at 1508.

    The admitted evidence was relevant to the issue of

    whether Marderosian was stealing the loan proceeds for Bay Loan

    or passing them on as Brandon directed. Marderosian, the

    government's key witness, was attacked by the defense and the

    media as the main culprit in the scheme and the government sought

    to bolster the credibility of his testimony by showing that

    Marderosian did not improperly divert any of the large sums of

    money that he handled into his own pocket. The evidence also

    helped provide a foundation for later expert testimony regarding

    what happened to the funds obtained from Bay Loan in the course

    of the scheme to defraud.

    The relevancy of the evidence sufficiently outweighed

    the minimal prejudicial effect that was created by the brief

    mention of individuals and entities that were connected to the

    credit union crisis. First of all, nothing at trial linked the

    named individuals and entities to RISDIC or the credit union

    crisis. In order to find prejudice, the court would have had to

    infer that the jury had heard of the individuals and entities

    from an external source and also knew of their involvement in the

    credit union scandal.58 Even if the jurors did know of the

    involvement of the named individuals and entities, it is

    ____________________

    58 The judge offered to question the jurors about their possible
    knowledge of the persons named in the disputed testimony but
    defense counsel refused.

    -71-














    doubtful, given the court's various cautioning instructions and

    the voir dire process, that jurors would likely be biased against

    defendants just because certain names were mentioned at trial.

    At most, the jurors might conclude that defendants contributed to

    the failure of at least one credit union by not repaying certain

    loans. The trial judge asked the jurors, however, if they had

    lost any money from bank fraud related schemes and no sitting

    jurors said they had. Thus we have no reason to believe that any

    juror who may have inferred that defendants contributed to the

    credit union crisis would be particularly likely to find

    defendants guilty without fairly considering the evidence.

    Finally, to the extent that the balancing of relevance and

    prejudice was a close call, we find no abuse of discretion and

    uphold the trial court's admission of the disputed evidence.

    VII. EXCLUSION OF EVIDENCE
    VII. EXCLUSION OF EVIDENCE

    During the trial, defendants attempted to proffer

    evidence regarding the allegedly common practice by financial

    institutions of requiring no down payment on the sale of

    commercial real estate. On cross-examination of several

    government witnesses, Hagopian's attorney asked whether it was

    customary during the relevant time period to buy and sell

    commercial properties with no money down and to obtain 100%

    financing. The government objected on relevancy grounds and the

    district court sustained the objections. On another occasion,

    Brandon presented an expert witness, James White, to bolster the

    credibility of certain testimony. Brandon had testified that Bay


    -72-














    Loan Vice President Gormley acknowledged that the proposed end

    loans to unit buyers actually constituted one single commercial

    loan to Dean Street, even though they were to be submitted

    individually as consumer residential loans. Brandon sought to

    present Mr. White's opinion that the loans at issue were more

    consistent with commercial rather than consumer loans. The

    district court again excluded the testimony on relevancy grounds.

    We affirm the trial court's rulings.59

    In general, "[a]ll relevant evidence is admissible" and

    "[e]vidence which is not relevant is not admissible." Fed. R.

    Evid. 402. The district court has broad discretion in making

    relevancy determinations and we must review its decisions only

    for abuse of that discretion. United States v. Griffin, 818 F.2d
    _____________ _______

    97, 101 (1st Cir.), cert. denied, 484 US 844 (1987); United
    ____ ______ ______

    States v. Lamberty, 778 F.2d 59, 61 (1st Cir. 1985). Evidence is
    ______ ________

    relevant if it has "any tendency to make the existence of any

    fact that is of consequence to the determination of the action

    more probable or less probable than it would be without the

    evidence." Fed. R. Evid. 401; Lamberty, 778 F.2d at 61.
    ________

    Defendants argue that the excluded evidence is relevant

    to one of their theories of the case: (1) either that Bay Loan

    knew of and approved their falsification of down payments; or (2)

    that defendants did not know about, or intend to violate, Bay

    Loan's down payment requirement. The proffered evidence,

    ____________________

    59 Because we find the disputed evidence was not relevant to
    defendant's case, we also reject Brandon's argument that the
    trial court impaired his right to present his theory of defense.

    -73-














    however, does not make either of these theories any more likely

    to be true and thus the evidence is irrelevant.

    As for the first theory, Brandon tried to show at trial

    that Bay Loan aggressively purchased non-conforming loans, that

    he openly sought 100% financing from the bank, and that Bay Loan

    agreed to provide the financing without down payments by

    directing Dean Street to falsify the paperwork to show the

    existence of down payments. The expert testimony and the

    government witness's testimony about the common practice of no

    down payment financing may add support to the first two

    assertions, but those assertions are simply not at issue in this

    case. Rather, Bay Loan's alleged approval of false down payments

    is at issue. The defendants, however, have not demonstrated any

    relationship between the proffered evidence that no down payment

    financing was a common practice and the likelihood that Bay Loan

    directed Dean Street to falsify paperwork to misrepresent the

    existence of down payments that were never made.

    The problem with defendants' argument is that no

    connection between the common use of 100% financing and the use

    of false down payments was ever established.60 That is, for

    ____________________

    60 The same problem exists regarding the connection between the
    fake down payments and the expert's distinction between
    residential and commercial loans. Brandon sought to characterize
    the mortgages from Bay Loan as more like commercial than consumer
    loans and thus subject to different standards and policies.
    Specifically, he sought to show that 100% financing was normal
    for commercial loans and to counter the allegedly critical
    contention that residential loans typically require down
    payments. This is basically the same type of evidence as the
    testimony that 100% financing was customary in the industry.
    That is, a showing that Bay Loan's mortgages were commercial

    -74-














    the evidence to be relevant, there must be some reason to believe

    that 100% financing, or no down payment financing, is customarily

    provided in conjunction with paperwork showing fake down

    payments. A no down payment custom does not establish a fake

    down payment custom. The defendants lack, therefore, any

    foundation that would make the proffered evidence relevant.

    "'Trial judges have wide discretion in deciding whether

    an adequate foundation has been laid for the admission of

    evidence.'" Veranda Beach Club Ltd. Partnership v. Western
    ______________________________________ _______

    Surety Co., 936 F.2d 1364, 1371 (1st Cir. 1991) (citing Real v
    __________ ____

    Hogan, 828 F.2d 58, 64 (1st Cir. 1987)); see also United States
    _____ ________ _____________

    v. Young, 804 F.2d 116, 119 (8th Cir. 1986), cert. denied, 482
    _____ ____ ______

    U.S. 913 (1987). No foundation was laid in this case. Even if

    we accept 100% financing was in fact generally common in the

    industry and for Bay Loan, it does not follow that Bay Loan's

    approval of false down payment transactions is any more likely.

    Defendants must provide, for example, some evidence that the

    recording of down payments in no down payment transactions was a

    common formality, perhaps for accounting, tax or bookkeeping



    ____________________

    helps to establish the likelihood that the loans were actually
    "no down payment loans." This still leaves us without the
    missing foundational link -- that no down payment financing is
    somehow associated with falsified down payments.

    In response to Brandon's claim that the government proved its
    case by showing the transactions deviated from the norm, we note
    that the relevant norm is not 100% versus 80% financing but the
    standard method of representing down payments, or lack thereof,
    in loan transactions. Proof of a no down payment norm does not
    establish a fake down payment norm.

    -75-














    purposes,61 or for the convenience of some interested party.

    If such evidence existed, then maybe a sufficient foundation

    would exist for the relevance of 100% financing. However, no

    such foundation is evident in the record.

    What defendants were really trying to show is that the

    bank or its officials were themselves perpetrating some sort of

    fraud and the defendants were unwittingly caught up in it. This

    assertion, however, also lacks foundational support. The

    defendants want the proffered evidence to establish that Bay Loan

    was in the practice of providing 100% financing and thus likely

    to be providing 100% financing in this case as well, regardless

    of whether such financing involved fake down payments, kickbacks

    or fraudulent paperwork. This formulation, however, obscures the

    real issue: if Bay Loan intended to provide 100% financing, or if

    defendants thought down payments were waived, why did they have

    to take actions to falsify down payments? To satisfy this

    requisite foundational question, the defendants had to show

    either that, (1) officials at Bay Loan stood to reap some

    personal gain by offering loans with no down payments in

    violation of the bank's requirements and thus needed to falsify

    ____________________

    61 Brandon claims that Bay Loan directed him to falsify down
    payments so that the bank could package the commercial loans as
    residential loans. Were his claim true, however, it would not
    make the common practice of providing commercial loans, and the
    100% financing such loans allegedly involve, any more relevant to
    the issue of why the falsification of down payments is
    justifiable. Still lacking is some indication that the common
    practice of lending money without down payments makes it more
    likely that the bank would find it necessary to mischaracterize
    loans and consequently direct Dean Street to produce false down
    payment paperwork.

    -76-














    down payments to hide the violation from bank superiors; or (2)

    the bank as a whole stood to reap some gain by lending money

    under false pretenses, perhaps to deceive their creditors,

    shareholders, or regulators.62 In the absence of some evidence

    supporting these two propositions, the custom of 100% financing

    or the characterization of the loans as commercial as opposed to

    residential does not make Bay Loan's approval of fraudulent down

    payments any more likely to be true. Again, the foundational

    link is simply missing.

    The excluded evidence is similarly irrelevant to

    defendants' lack of knowledge or intent to defraud Bay Loan.

    Defendants claim that evidence that 100% financing was a standard

    practice supports their claim that they did not know or suspect

    anything was unusual or illegal about the loan transactions they

    participated in. Again, what is at issue is the existence of

    falsified down payments. There is no basis for finding that

    defendants were more likely to think that their actions to

    facilitate the documentation of nonexistent down payments were

    somehow legitimate just because 100% financing was customary. To

    put it another way, the proffered evidence does not make the

    false down payment maneuvers less likely to tip off the

    defendants to the illegal nature of the transaction without some

    foundation connecting 100% financing to creative down payment

    ____________________

    62 Defendants presented evidence that Bay Loan was knowingly
    lending in violation of other requirements it imposed, not the
    least of which was the requirement that buyers live in the
    condominiums they purchased which was impossible given the units
    were to be operated as motels.

    -77-














    paperwork of some kind. Defendants were not engaged in what

    appeared to them to be a "no down payment transaction"; they were

    doing what appeared to them to be a transaction where a paper

    down payment was documented and recorded but not actually paid.

    The no down payment custom would only be relevant to intent if

    that custom involved something even vaguely similar to this sort

    of paper down payment. Because no such foundation exists on the

    record, and because we find no abuse of discretion on the part of

    the trial court in refusing to allow the jury to assume or infer

    that foundation, we uphold the exclusion of the proffered

    evidence.63

    VIII. PREJUDICE FROM COMMENTS REGARDING DEFENDANTS' ETHNICITY
    VIII. PREJUDICE FROM COMMENTS REGARDING DEFENDANTS' ETHNICITY

    During the fifth day of trial, the government's main

    witness, Marderosian, testified about a comment made by defendant

    Landman concerning the religious affinity between Landman and co-

    defendant Reisch. Marderosian was describing on direct

    examination the arrangement for Reisch to wire down payment money

    into buyers' accounts. The arrangement was designed, in part, to

    allay Reisch's concern that too much money would be outstanding

    between the time he provided funds to the buyers and the time the

    funds were returned to him by Dean Street. In reference to a



    ____________________

    63 Unlike the cases cited by defendant that have held that a
    certain custom or practice in an industry may be relevant to the
    defendant's case, United States v. Aversa, 984 F.2d 493 (1st Cir.
    _____________ ______
    1993) (en banc); United States v. Seelig, 622 F.2d 207 (6th
    ______________ ______
    Cir.), cert. denied, 449 U.S. 869 (1980); United States v. Riley,
    ____ ______ _____________ _____
    550 F.2d 233 (5th Cir. 1977), the proffered custom in this case
    is unrelated to the alleged illegal activity.

    -78-














    discussion between Marderosian and Landman,64 the government

    asked: "What, if anything did Mr. Landman say to you about

    concerns expressed by Mr. Reisch?" Marderosian responded:

    Mr. Landman stated to me on one occasion,
    I am not sure if it was that occasion,
    that Mr. Reisch appeared comfortable
    doing it this way and part of the reason
    for that, Mr. Landman explained, was that
    Mr. Landman was involved and he was
    Jewish and Mr. Reisch was Jewish and that
    the level of comfort shouldn't be
    underestimated by me.

    Defendants did not immediately object to this statement

    after it was made; however, Reisch's attorney moved to dismiss

    later that same day. The judge denied the motion and also denied

    later defense motions for a mistrial. Defendants argue that the

    testimony invited the jury to make the impermissible inference

    that members of the same religion would be more likely to trust

    each other and join in a conspiracy and also that the testimony

    may have provoked anti-Semitic feelings among jurors. When

    defendants first raised their objections, the trial judge asked

    counsel what they wanted him to do and the judge offered to try

    and ferret out any possible anti-Semitism on the jury. Counsel's

    only request was for dismissal. Counsel did not request further

    questioning of the jury on this matter and expressed displeasure


    ____________________

    64 Marderosian's testimony about Landman's statement properly
    falls under the co-conspirator exception to the hearsay rule,
    Fed. R. Evid. 801(d)(2)(E), because the evidence clearly
    establishes beyond a preponderance of the evidence that
    Marderosian, Landman and Reisch were all members of the
    conspiracy and the statement was made during the course of and in
    furtherance of the conspiracy. See United States v. Angiulo, 897
    ___ _____________ _______
    F.2d 1169, 1201-02 (1st Cir.), cert. denied, 498 U.S. 845 (1990).
    ____ ______

    -79-














    with the possibility of providing curative instructions because

    "instructions would only magnify the problem."

    Under these circumstances, we do not think that the

    trial court's actions constitute reversible error despite the

    possible inappropriateness of the testimony. The level of

    prejudice, if any, was not sufficiently significant to overturn

    the judge's decision to accept the defendants' tactical choice to

    forgo more appropriate methods of addressing the potential

    prejudice in favor of the unrealistic and unnecessary solution of

    a dismissal or a new trial. Cf. United States v. De La Cruz, 902
    __ _____________ __________

    F.2d 121, 124 (1st Cir. 1990) (noting the reluctance of this

    court to require trial judges to override plausible strategic

    choices on the part of counsel in the context of remedying

    potential prejudice); United States v. Goldman, 563 F.2d 501, 505
    _____________ _______

    (1st Cir. 1977), cert. denied, 434 U.S. 1067 (1978) (refusing to
    ____ ______

    reverse verdict in trial with prejudicial references to religion

    because the trial judge gave curative instructions).

    The prejudicial effect of Marderosian's statement

    appears quite limited. The reference to defendants' Judaism was

    the only such mention of religion at trial. It amounted to one

    brief sentence in nineteen days of testimony and argument. There

    was no subsequent reference to the challenged testimony nor did

    the government use the issue of religious affinity in its closing

    argument. The inference of Jewish affinity was not, as defendant

    Landman claims, central to the government's case. The basis of

    Landman's agreement to participate in the conspiracy was not his


    -80-














    promise to protect the interests of Reisch but his agreement with

    Marderosian and Brandon to facilitate the unit sales without down

    payments. As discussed above, see Section IV.B.6, the record
    ___

    contains sufficient facts regarding Landman's actions and

    statements made by, and to, him to support his knowledge and

    participation in the conspiracy. None of these facts have

    anything to do with Landman's supposed religious affinity with

    Reisch.65 Likewise, the evidence against Reisch centers around

    his agreement with Brandon to provide money to the scheme and not

    around his relationship with Landman. In fact, Landman was

    acquitted by the jury on two bank fraud counts that involved the

    funding of down payments by Reisch in which Landman conducted the

    closings. This indicates that the jury was not prejudiced and did

    not rely on the disputed testimony in its verdict.

    Nothing like the serious prejudicial circumstances

    found in United States v. Rodr guez Cort s, 949 F.2d 532 (1st
    ______________ ________________

    Cir. 1991) (finding reversible error from ethnically prejudicial

    evidence), exists in this case. In Rodr guez Cort s, the
    _________________

    district court had found a defendant's Colombian identification

    card admissible based on the impermissible assumption that

    Colombians were more willing to trust fellow Colombians than

    anyone else, and therefore, defendant was likely to be involved

    ____________________

    65 There is also sufficient testimony, quite apart from the
    disputed comment, that Landman agreed to look after Reisch's
    interests. Marderosian testified that Reisch told Landman that
    "he wanted Mr. Landman to look out for his interest to protect
    his money to the extent possible." Landman later told
    Marderosian "he would try to protect Mr. Reisch to the extent
    possible."

    -81-














    with his Colombian co-defendants. Id. at 540. This connection
    __

    was emphasized in the government's closing argument. Id. at 541.
    __

    Here, there was no objection to the relevancy of Marderosian's

    statement and thus no ruling based on an impermissible inference.

    The judge recognized the potential for prejudice and offered to

    take steps to rectify the problem. More importantly, the

    government did not invoke any inferences based on religious

    affinity in its final argument before the jury. Similarly,

    United States v. Cruz, 981 F.2d 659 (2d Cir. 1992), and United
    _____________ ____ ______

    States v. Doe, 903 F.2d 16 (D.C. Cir. 1990), are distinguishable
    ______ ___

    from the present case because those cases involved the

    government's explicit use of the impermissible reasoning, upon

    extensive direct examination and on summation, for crucial parts

    of its theory of the case.

    Defendants suggest there was an element of

    prosecutorial misconduct in eliciting the disputed testimony from

    Marderosian. Marderosian had made a similar statement about

    defendants' Judaism when he testified before the grand jury and

    the pattern of questioning prior to Marderosian's statement at

    trial could be construed as an attempt to elicit the same

    testimony from him a second time. At the bench conference with

    the judge, the prosecutor denied knowing beforehand that

    Marderosian would make the comment about defendants' religion and

    claimed to have instructed Marderosian to limit his testimony to

    the fact that Landman said Reisch felt comfortable with the

    arrangement. While the circumstances are somewhat troubling, we


    -82-














    do not find sufficient evidence of prosecutorial misconduct to

    reverse the verdicts in this case, especially in light of the

    absence of any reference to the religious comment in the

    government's summation. Compare Goldman 563 F.2d at 504-05
    _______ _______

    (prosecutor, on summation, referred to fact defendant was wearing

    "what they call in the Jewish religion a yamaka [sic]" and that

    the symbol he was wearing "has been defamed, defiled and

    scandalized").

    IX. JURY INSTRUCTIONS
    IX. JURY INSTRUCTIONS

    Defendants make three challenges to the jury

    instructions in this case.66 They allege that the trial judge

    failed to provide proffered instructions concerning the required

    proof of intent for conspiracy and the possibility of multiple

    conspiracies. They also argue that it was error for the judge to

    give an instruction concerning willful blindness.


    ____________________

    66 Defendant Granoff makes an additional argument that the trial
    judge erroneously failed to instruct the jury that they must find
    that defendants knew of Bay Loan's federally insured status and
    that defendants knew Bay Loan was the target of the scheme to
    defraud. Because we found that neither of these elements were
    required for a conviction under the bank fraud statute, see supra
    ___ _____
    Section IV, the trial court did not err in refusing to give the
    proffered instructions.

    The trial judge was thus correct in instructing the jury that:

    it is not necessary for the Government to
    prove that the Defendant knew the
    identity of the particular financial
    institution or that the Defendant knew
    that that institution was Federally
    chartered or insured. . . . It must,
    however, prove that the Defendant
    intended to defraud a financial
    institution.

    -83-














    A. The Direct Sales Conspiracy Instruction
    ____________

    The defendants proffered a jury instruction67 based

    on the rule derived from Direct Sales Co. v. United States, 319
    ________________ _____________

    U.S. 703, 711, 713 (1943), that one who supplies goods to another

    knowing that the recipient will use them for an illegal purpose

    cannot, on that basis alone, be found guilty of conspiring with

    the recipient. Rather, for the supplier to be culpable, he or

    she must have the intent to further, promote, and cooperate in

    that illegal purpose. Id.; United States v. Falcone, 109 F.2d
    __ _____________ _______

    579, 581 (2d Cir.), aff'd., 311 U.S. 205 (1940). The district
    _____

    court did not give the defendants' proffered instruction but

    instead instructed the jury that "to be a member of a conspiracy,

    a Defendant must have willfully joined it or participated in it


    ____________________

    67 The instruction stated, in pertinent part:

    You are instructed that a person who may
    have furnished goods, money or services
    to another person who he knows is or will
    be engaged in criminal activity . . .
    does not by furnishing such goods, money
    or services necessarily become a member
    of the conspiracy. Instead, . . . the
    government must show beyond a reasonable
    doubt that the defendant was aware of the
    conspiracy and knowingly and voluntarily
    joined it with the intent of furthering
    its illegal aims.

    To reiterate, it is not enough that the
    Government prove that a particular
    defendant acted in a way that furthered
    the purposes or objectives of the
    conspiracy. Instead the Government must
    prove beyond a reasonable doubt that the
    defendant acted while knowing of the
    unlawful agreement and with the intention
    to participate in it.

    -84-














    for the purpose of advancing or furthering its unlawful

    purposes." The court also stated that the government must prove

    each defendant's "intent to participate in the unlawful scheme."

    Defendants argue that this instruction inadequately addressed the

    intent requirement laid out in Direct Sales and Falcone.
    ____________ _______

    The trial court's failure to give a proffered

    instruction will not be reversed unless that instruction is (1)

    substantively correct; (2) was not substantially covered in the

    charge actually given; and (3) concerned an important point such

    that the failure to give it seriously undermined the defendant's

    ability to present a particular defense. United States v.
    ______________

    McGill, 953 F.2d 10, 13 (1st Cir. 1992); United States v.
    ______ _____________

    Perkins, 926 F.2d 1271, 1283 (1st Cir. 1991). In this case,
    _______

    defendants fail to get past the second prong of the test.

    The district court's instruction, which states that a

    defendant must have "the purpose of advancing or furthering" the

    unlawful purpose of the conspiracy, substantially covers the

    substance of defendant's proffered instruction. The judge also

    informed the jury that defendant had to "willfully join[]" the

    conspiracy, that defendant had to have both the intent to agree

    to join the conspiracy and the specific intent to commit bank

    fraud, and that defendant had to have the intent to participate

    in the unlawful scheme. All of these instructions together more

    than adequately address the requirements of Direct Sales and
    ____________

    Falcone that defendant must join the conspiracy with the specific
    _______

    intent to accomplish its illegal purpose. See United States v.
    ___ ______________


    -85-














    Arias-Santana, 964 F.2d 1262, 1268 (1st Cir. 1992) (finding no
    _____________

    error where jury charge covered the substance of defendant's

    requests); McGill, 953 F.2d at 12-13 (same). We have upheld the
    ______

    adequacy of nearly identical instructions in the past. See
    ___

    United States v. Hensel, 699 F.2d 18, 37-38 (1st Cir. 1983).
    _____________ ______

    The defendants focus on the fact that the trial judge

    did not explicitly state that mere knowledge by the defendant

    that the goods he or she provides to a conspiracy will be used

    illegally is not sufficient to prove an intent to join the

    conspiracy. This instruction, defendants allege, is necessary to

    properly define "intent to participate" or "intent to join" a

    conspiracy. Without an expression of the innocent case, they

    add, the instructions leave open the door for the impermissible

    inference that a defendant can be guilty of conspiring to defraud

    Bay Loan simply by providing money to Dean Street knowing it

    would be used illegally. Defendants claim that because the murky

    distinction between lawful cooperation and illegal participation

    is especially close in this case, the district court had a

    special obligation to be clear.

    In some situations, this type of "negative" Direct
    ______

    Sales instruction might be required, but we see nothing in the
    _____

    facts of this case that makes the distinction between simply

    knowing of the illegal nature of the scheme and agreeing to

    further the scheme particularly crucial to the defense. The

    central defense of most defendants was that they did not know

    that Dean Street was doing anything illegal in obtaining the


    -86-














    loans. Once knowledge of illegality is established, the evidence

    of defendants' participation, as opposed to merely providing

    goods and services to the conspiracy, is overwhelming and not, as

    defendants assert, a close call. See supra Section IV.
    ___ _____

    In any event, we think the trial court's instructions

    were quite clear that (1) "[i]n order to be a member of a

    conspiracy, a Defendant must have willfully joined it or

    participated in it for the purpose of advancing or furthering its

    unlawful purpose"; and (2) that defendant must have both an

    intent to agree to join the conspiracy and the specific intent to

    commit bank fraud. These instructions adequately defined the

    requisite "intent to participate" and foreclosed any inference

    that knowingly providing goods to a criminal enterprise is itself

    sufficient to support a finding of intent to join the conspiracy.

    The trial court need not employ the most elegant or concise

    phraseology nor must it incorporate the precise language of

    defendants' request as long as the instructions taken as a whole

    "accurately communicated the meat of the defense's theory."

    McGill, 953 F.2d at 12. In this case, the court's instructions
    ______

    adequately communicated the defendants' theory that mere

    knowledge and assistance, without an intent to further the

    enterprise, is not enough.

    B. Instruction On Multiple Conspiracies

    The defendants also challenge the trial court's refusal

    to instruct the jury as to the possibility of multiple




    -87-














    conspiracies.68 Such an instruction was warranted, they claim,

    because the evidence indicated that different defendants had

    different relationships with Dean Street and were involved in

    separate schemes. Although the judge may have erred in refusing

    to charge multiple conspiracies, we find insufficient prejudice

    to warrant a reversal of the convictions.

    A trial court should grant a defendant's request for a

    multiple conspiracy instruction if, "on the evidence adduced at

    trial, a reasonable jury could find more than one such illicit

    agreement, or could find an agreement different from the one

    charged." United States v. Boylan, 898 F.2d 230, 243 (1st Cir.
    _____________ ______

    1990); see also United States v. Dennis, 917 F.2d 1031, 1033 (7th
    ________ _____________ ______

    Cir. 1990); United States v. Dwyer, 843 F.2d 60, 61-62 (1st Cir.
    _____________ _____

    1988). As it is highly likely that the voluminous and complex

    record in this case, viewed in the light most favorable to the

    ____________________

    68 The defendants' proffered instruction stated in part:

    Where persons have joined together to
    further one common unlawful design or
    purpose, a single conspiracy exists. By
    way of contrast, multiple conspiracies
    exist when there are separate unlawful
    agreements to achieve distinct purposes.
    . . . .
    In deciding whether a single overall
    conspiracy as charged in the indictment
    has been proven beyond a reasonable doubt
    you should look at whether there were
    multiple agreements reached, whether
    there were additions or withdrawals of
    alleged conspirators, and most
    significantly, whether the evidence shows
    beyond a reasonable doubt that all of the
    alleged conspirators directed their
    efforts toward the accomplishment of a
    common goal or overall plan.

    -88-














    defendants, would allow for a plausible conclusion that more than

    one conspiracy took place, we start from the assumption that the

    trial court erred in its failure to give the multiple conspiracy

    instructions. Our task, then, is to determine if the degree of

    prejudice from the possible error necessitates a reversal. We

    find that it does not.

    We will reverse a court's erroneous refusal to give a

    substantively correct instruction only when that instruction

    concerned an important point such that the failure to give it

    seriously undermined the defendant's ability to effectively

    present a given defense. United States v. McGill, 953 F.2d 10,
    _____________ ______

    13 (1st Cir. 1992); United States v. Perkins, 926 F.2d 1271, 1283
    _____________ _______

    (1st Cir. 1991). In the context of alleged multiple

    conspiracies, the defendant's main concern is that jurors will be

    misled into attributing guilt to a particular defendant based on

    evidence presented against others who were involved in a

    different and separate conspiratorial scheme. Dwyer, 843 F.2d at
    _____

    62; United States v. Flaherty, 668 F.2d 566, 582 (1st Cir. 1981).
    _____________ ________

    The prejudice we must guard against, therefore, is evidentiary

    spillover resulting from trying defendants en masse for distinct
    __ _____

    and separate offenses committed by others. Kotteakos v. United
    _________ ______

    States, 328 U.S. 750, 756-77 (1946); see also Blumenthal v.
    ______ _________ __________

    United States, 332 U.S. 539, 558-60 (1947).
    _____________

    We find the risk of evidentiary spillover to be

    significantly limited in this case because we fail to see which,

    if any, pieces of evidence would not be relevant to and


    -89-














    admissible against any of the defendants individually. Although

    the record does not foreclose the possibility of multiple

    conspiracies, the evidence convincingly indicates the existence

    of a single, unified conspiracy in which all the defendants

    participated. Thus, all of the evidence would have been

    available to the jury for consideration of the government's

    single conspiracy claim against each defendant regardless of the

    possibility of multiple conspiracies.

    Determining the number of conspiracies in a particular

    case depends on a variety of factors including the "nature,

    design, implementation, and logistics of the illegal activity;

    the participants' modus operandi; the relevant geography; and the

    scope of coconspirator involvement." Boylan, 898 F.2d at 241;
    ______

    United States v. Rivera-Santiago, 872 F.2d 1073, 1079 (1st Cir.),
    _____________ _______________

    cert. denied, 492 U.S. 910 (1989). A single conspiracy exists
    ____ ______

    where the totality of the evidence demonstrates that "'all of the

    alleged co-conspirators directed their efforts towards the

    accomplishment of a common goal or overall plan.'" Boylan, 898
    ______

    F.2d at 242 (quoting United States v. Drougas, 748 F.2d 8, 17
    ______________ _______

    (1st Cir. 1984)); United States v. Bello-P rez, 977 F.2d 664,
    ______________ ___________

    667-68 (1st Cir. 1992).

    The conspiracy in this case consisted of a scheme to

    obtain financing for a condominium project by falsely

    representing the existence of down payments that were never made.

    Although some of the details and tactics changed throughout the

    scheme, the main objective, structure, intended victim, and modus


    -90-














    operandi remained constant: the continuous recruitment of unit

    buyers to submit loan applications to Bay Loan in which the down

    payments were falsified in order to fraudulently avoid the bank's

    down payment requirement, followed by the disbursement of Bay

    Loan's loan proceeds to Dean Street. Defendants all worked

    together interdependently to further the entire scheme. Hagopian

    and Ward recruited buyers, Gauvin, Granoff and Reisch provided

    the buyers with down payment funds, Kumalae and Landman

    facilitated the fraudulent representation of the down payments,

    and Brandon coordinated the entire conspiracy. With the

    exception of Gauvin and Granoff, all of the defendants played

    essentially the same role throughout the entire operation of the

    conspiracy.69 Gauvin and Granoff stopped providing down

    payment funds after Brandon stopped giving them their money back;

    however, negotiations between Brandon and the two continued until

    the scheme ended. Regardless, the cessation of Gauvin's and

    Granoff's funding did not represent the end of one conspiracy and

    the beginning of a second one but a snag in the ongoing operation

    of the single conspiracy. See United States v. Aracri, 968 F.2d
    ___ _____________ ______

    1512, 1522 (2d Cir. 1992) (finding acrimony among participants of

    conspiracy consistent with single conspiracy).

    Defendants' arguments for distinguishing different

    conspiracies have all been previously rejected and none of the

    factors they highlight indicates the existence of multiple


    ____________________

    69 Hagopian and Ward joined the scheme just two months after the
    first condominium sales.

    -91-














    conspiracies. The presence of different methods of falsifying

    the down payments -- e.g., recycled funds, nonnegotiated checks,

    dischargeable mortgages -- does not create separate conspiracies.

    See, e.g., Aracri, 968 F.2d at 1521-23; United States v. Aponte-
    ___ ____ ______ _____________ _______

    Su rez, 905 F.2d 483, 486-88 (1st Cir.), cert. denied, 498 U.S.
    ______ ____ ______

    990 (1990); United States v. Crosby, 294 F.2d 928, 945 (2d Cir.
    _____________ ______

    1961), cert. denied, 368 U.S. 984 (1962). This is especially
    ____ ______

    true because the various methods were used interchangeably and

    often simultaneously in furtherance of an identical objective.

    Likewise, the differing relationships various defendants had with

    the head conspirator, Brandon, does not signify that multiple

    conspiracies existed. See United States v. Bello-P rez, 977 F.2d
    ___ _____________ ___________

    664, 668 (1st Cir. 1992); United States v. Townsend, 924 F.2d
    _____________ ________

    1385, 1389 (7th Cir. 1991) ("The crime of conspiracy focuses on

    agreements, not groups.").70 The fact that different

    defendants were involved in separate transactions for the

    purchase of different properties at different motels is not

    significant so long as there is a single continuing plan. See
    ___

    Boylan, 898 F.2d at 242; Drougas, 748 F.2d at 8; United States v.
    ______ _______ _____________

    ____________________

    70 The present conspiracy is not, as defendants allege, the type
    of conspiracy discussed in Kotteakos, 328 U.S. at 753-55, where
    _________
    different conspirators had separate and independent relationships
    with the hub conspirator and were thus separate spokes on a
    rimless wheel. Here, all the defendants were part of an
    integrated, interdependent scheme in which each defendant
    depended upon and was connected to the others. The scheme could
    not function without a steady stream of new buyers recruited by
    Hagopian and Ward. New buyers were useless, however, unless they
    could get down payment funds provided by Gauvin, Granoff, and
    Reisch. In turn, down payment funds could not be properly
    recycled or falsified to defraud the bank unless Landman and
    Kumalae facilitated the transactions.

    -92-














    Kelley, 849 F.2d 999, 1003 (6th Cir.), cert. denied, 488 U.S. 982
    ______ ____ ______

    (1988). Finally, the fact that Dean Street was engaged in other

    licit and illicit commercial enterprises does not relate to the

    present case against defendants and is irrelevant.

    Almost all aspects of the government's case describing

    the scheme to defraud Bay Loan were relevant to each defendant's

    respective role in the conspiracy. Thus, we see no risk that the

    jury based a defendant's conviction on evidence relating to an

    unrelated offense. The lack of prejudice is underscored by the

    fact that ample evidence was presented against each individual

    defendant based on each defendant's actions and statements. See
    ___

    supra Section IV. The jury did not need to rely on evidence
    _____

    relating specifically to other defendants in order to convict.

    In addition, the judge repeatedly cautioned the jury to assess

    the evidence separately against each defendant.71 See Boylan,
    ___ ______

    898 F.2d at 244 (finding similar instructions contributed to

    protecting defendant's rights).

    C. Willful Blindness Instruction

    ____________________

    71 The district court also told the jury to determine each
    charge against each defendant based only on the evidence against
    that defendant on that charge. More significantly, the judge
    also cautioned the jury:

    to consider only the evidence regarding
    that Defendant's actions or the actions
    of individuals belonging to a conspiracy
    to which that Defendant also belonged.
    That is to say, it would be improper to
    return a guilty verdict with respect to a
    Defendant based on evidence relating to
    acts committed by someone belonging to a
    conspiracy of which the Defendant was not
    a member.

    -93-














    The district court instructed the jury that "in

    deciding whether a Defendant acted knowingly, you may infer

    knowledge of a fact if you find beyond a reasonable doubt that

    the Defendant deliberately closed his or her eyes to a fact that

    otherwise would have been obvious to that Defendant."72 The

    evidence supporting this instruction related only to defendant

    Landman but the instruction was given generally for all

    defendants without any mention of Landman's name. Defendants

    claim the instruction was reversible error because it was not

    applicable to this case and because it caused the jury to convict

    defendants without finding sufficient evidence of knowledge

    beyond a reasonable doubt.

    We find, first of all, that the instruction was


    ____________________

    72 The rest of the court's willful blindness instruction stated:

    In order to infer knowledge, you must
    find that two things have been
    established.

    First, that the Defendant was aware of a
    high probability of the fact in question.

    And second, that the Defendant
    consciously and deliberately avoided
    learning of those facts. That is to say,
    that the Defendant willfully made himself
    blind to those facts. It is entirely up
    to you to determine whether a Defendant
    deliberately closed his or her eyes to
    the facts and, if so, what inference, if
    any, should be drawn.

    However, it is important to bear in mind
    that mere negligence or mistake in
    failing to learn the facts is not
    sufficient. There must be a deliberate
    effort to remain ignorant of the facts.

    -94-














    appropriate and accurate as to defendant Landman; hence, no error

    was made in his case. The trial court may instruct the jury

    concerning willful blindness when a defendant claims a lack of

    knowledge, the facts support an inference of defendant's

    conscious course of deliberate ignorance, and the instruction,

    taken as a whole, cannot be misunderstood by a juror as mandating

    the inference of knowledge. United States v. St. Michael's
    _____________ _____________

    Credit Union, 880 F.2d 579, 584 (1st Cir. 1989); United States v.
    ____________ _____________

    Picciandra, 788 F.2d 39, 46 (1st Cir.), cert. denied, 479 U.S.
    __________ ____ ______

    847 (1986). More specifically, the instruction is proper when

    there is evidence to "support the inference that the defendant

    was aware of a high probability of the existence of the fact in

    question and purposely contrived to avoid learning all of the

    facts in order to have a defense in the event of a subsequent

    prosecution." United States v. Rivera, 944 F.2d 1563, 1571 (11th
    _____________ ______

    Cir. 1991) (citing United States v. Alvarado, 838 F.2d 311, 314
    ______________ ________

    (9th Cir. 1987), cert. denied, 487 U.S. 1222 (1988)).
    ____ ______

    The core of Landman's defense as argued at trial was

    that he was simply doing his job as an escrow agent in receiving

    and dispersing funds at the direction of Dean Street and that he

    did not know that the transactions he was involved in were

    illegally defrauding the bank.73 As discussed in Section IV,

    ____________________

    73 Landman made this argument in various motions before the
    judge and before the jury which satisfies the first requirement
    that the defendant claim a lack of knowledge. It is not the
    case, as Landman argues, that a defendant must testify or present
    evidence indicating a lack of knowledge before a willful
    blindness instruction can be deemed appropriate. See United
    ___ ______
    States v. Lizotte, 856 F.2d 341, 343 (1st Cir. 1988).
    ______ _______

    -95-














    sufficient evidence exists that Landman knew down payments were

    required. The evidence also supports the conclusion that Landman

    knew about the scheme to fraudulently represent the existence of

    down payments.74 However, on cross-examination, the defense

    attempted to impeach Marderosian's testimony that he told Landman

    about the dischargeable second mortgages to be given to the

    buyers which called into question a key piece of evidence

    regarding Landman's knowledge. There was, nevertheless, evidence

    that Landman tried to avoid learning of particular buyers' use of

    dischargeable mortgages for their down payments. During several

    closings Landman was asked by buyers about the second mortgages.

    On one occasion, he told the buyer that he "didn't want to know

    anything about it." At other times, Landman gestured in a way

    that one buyer described as trying to say "not in front of me."

    This evidence is sufficient to support the district

    court's willful blindness instruction. The attempt to avoid

    discussion of dischargeable mortgages with the buyers can be

    interpreted as a "pattern of behavior predicated upon a knowledge

    of the conspiracy together with a desire to limit inculpatory

    evidence of complicity." United States v. Ciampaglia, 628 F.2d
    _____________ __________

    632, 643 (1st Cir.), cert. denied, 449 U.S. 956, 1038 (1980).
    ____ ______

    ____________________

    74 We reject the argument that proof of direct knowledge
    precludes a willful blindness instruction that is otherwise
    appropriate. As long as separate and distinct evidence supports
    a defendant's deliberate avoidance of knowledge and the
    possibility exists that the jury does not credit the evidence of
    direct knowledge, a willful blindness instruction may be
    appropriate. See Lizotte, 856 F.2d at 343; United States v.
    ___ _______ ______________
    Ochoa-Fabi n, 935 F.2d 1139, 1142 (10th Cir. 1991), cert. denied,
    ____________ ____ ______
    112 S. Ct. 1565 (1992).

    -96-














    The actual instructions given by the district court were proper

    and cannot be misunderstood as mandating an inference of

    knowledge. See St. Michael's, 880 F.2d at 585 (finding similar
    ___ ______________

    language proper); United States v. Ochoa-Fabi n, 935 F.2d 1139
    _____________ ____________

    (10th Cir. 1991), cert. denied, 112 S. Ct. 1565 (1992) (same);
    ____ ______

    United States v. Hiland, 909 F.2d 1114, 1130 (8th Cir. 1990)
    ______________ ______

    (same). Significantly, the court said the jury "may infer
    ___

    knowledge" (emphasis added) and that it was "entirely up to" the

    jury to find deliberate blindness. See Ciampaglia, 628 F.2d at
    ___ __________

    642.75

    Unlike the case against Landman, the evidence did not

    warrant a willful blindness instruction for the other seven

    defendants. This left the trial judge with a difficult decision.

    He could either, (1) give no willful blindness instruction even

    though it was warranted; (2) give the instruction only for

    defendant Landman and thus highlight the evidence against him; or

    (3) give a general instruction for all the defendants. We do not

    think the judge erred by choosing the third option.

    ____________________

    75 The holding in United States v. Mankani, 738 F.2d 538, 547 &
    _____________ _______
    n.1 (2d Cir. 1984) does not apply in this case. First of all, at
    most, Mankani stands for the specific proposition that a
    _______
    "conscious avoidance" instruction cannot be used to establish
    membership in a conspiracy and not the more general proposition
    that the instruction is never proper in a conspiracy case. The
    willful blindness instruction in this case had to do with the
    finding that "defendant acted knowingly" and not with a finding
    that defendant willfully joined the conspiracy. In any event, to
    the extent our holding in this case differs from that in Mankani,
    _______
    we agree with the Seventh Circuit that a willful blindness
    instruction can be permissible with respect to a conspiracy
    charge. United States v. D az, 864 F.2d 544, 549 (7th Cir.
    _____________ ____
    1988), cert. denied, 490 U.S. 1070 (1989) (citing United States
    ____ ______ _____________
    v. Kehm, 799 F.2d 354, 362 (7th Cir. 1986)).
    ____

    -97-














    Assigning error to the district court's decision to

    give the general instruction puts the court in an impossible

    position because the government is entitled to the willful

    blindness instruction as to Landman and the judge is entitled in

    turn to give an instruction that would not turn the spotlight on

    a single defendant. On the facts of this case, we are satisfied

    that the jury could be expected to apply the instruction properly

    to defendants whose conduct arguably calls for that application

    and not randomly or recklessly to defendants who do not deserve

    the instruction. It is common during multi-defendant trials for

    the court to give a number of boilerplate instructions --

    concerning, for example, a missing witnesses, accomplice

    liability, or withdrawal from the conspiracy -- that are

    pertinent, on particular facts, to only one defendant and not to

    the others. The instruction in this case is similar in many

    respects to these other instructions and is equally appropriate

    given the risk of prejudice to the other defendants is low. We

    do not exclude the possibility that, on particular facts, it

    might so mislead a jury to give a general instruction, rather

    than one tailored to a specific defendant or rather than no

    instruction at all, as to be an abuse of discretion, but we

    emphasize that judgments of this kind are primarily entrusted in

    the trial judge who inevitably has a superior feel for the

    dynamics of the trial and the likely reaction of the jury.

    The danger of an improper willful blindness instruction

    is "'the possibility that the jury will be led to employ a


    -98-














    negligence standard and convict a defendant on the impermissible

    ground that he should have known [an illegal act] was taking

    place.'" United States v. Littlefield, 840 F.2d 143, 148 n.3
    ______________ ___________

    (1st Cir.), cert. denied, 488 U.S. 860 (1988) (quoting United
    ____ ______ ______

    States v. White, 794 F.2d 367, 371 (8th Cir. 1986)) (additional
    ______ _____

    citation omitted). In this case, as in Littlefield, 840 F.2d at
    ___________

    147-48, the willful blindness instruction clearly had little, if

    any, effect on the jury's verdict. First of all, unlike those

    cases where insufficient facts were present to support any

    willful blindness instruction at all, see, e.g., United States
    ___ ____ _____________

    v. Barnhart, 979 F.2d 647, 651-53 (8th Cir. 1992); United States
    ________ _____________

    v. Alvarado, 838 F.2d 311, 316 (9th Cir. 1987), cert. denied, 487
    ________ ____ ______

    U.S. 1222 (1988), this case involved an instruction that was

    proper for at least one defendant. The jury had an opportunity

    to correctly apply the instruction and was less likely to

    improperly consider a defendant's willful blindness in

    conjunction with facts that only supported that defendant's

    direct knowledge, or complete lack of knowledge. Thus, there was

    little risk that the jury was confused into convicting a

    defendant who merely should have known about the criminal

    venture. See United States v. D az, 864 F.2d 544, 551 (7th Cir.
    ___ _____________ ____

    1988); see also Rivera, 944 F.2d at 1570-71.
    ________ ______

    In addition, the instructions properly and clearly

    directed the jury not to find knowledge based on mere negligence

    and extensively instructed the jury as to the requirements for

    finding knowing participation in the conspiracy and knowing


    -99-














    execution of bank fraud. See Littlefield, 840 F.2d at 147-48;
    ___ ___________

    D az, 864 F.2d at 551. The court instructed the jury that "mere
    ____

    negligence or mistake in failing to learn the facts is not

    sufficient" and that a defendant's willful ignorance had to be

    deliberate beyond a reasonable doubt. Throughout the

    instructions, the court told the jury that the government had to

    prove each and every element of the offenses, including those

    elements requiring knowledge, beyond a reasonable doubt. For

    example, knowing participation in the scheme to defraud required

    the actions of each defendant to be "done voluntarily and

    intentionally and not because of mistake or accident or some

    other innocent reason." The court was clear that to prove

    participation in a conspiracy, the government must show that a

    "defendant knew of the existence of the conspiracy and its

    unlawful purpose" and the court added that "knowledge and

    willfulness like all of the other elements of a crime must be

    established beyond a reasonable doubt." Twice the district court

    explained that actual proof of knowledge was essential "to insure

    that no one will be convicted for an act that he or she did not

    intend to commit or the nature of which he or she did not

    understand."

    The instructions, taken as a whole, went a long way

    toward curing any possible prejudice that may have resulted from

    the willful blindness instruction. As evidence of this, the jury

    delivered verdicts that demonstrated it was not confused or

    affected by the willful blindness instruction. Three defendants


    -100-














    were acquitted on multiple bank fraud counts and a fourth was

    acquitted on one count of bank fraud. Defendant Landman was

    acquitted on one count in which the principal witness testified

    that Landman did not want to know about the second mortgage

    discharges. Thus, it appears that the jury declined to apply the

    willful blindness instruction when it was given the first clear

    opportunity to do so. We therefore find no error in the court's

    decision to give a general willful blindness instruction.

    X. REHEARING OF TESTIMONY BY THE JURY
    X. REHEARING OF TESTIMONY BY THE JURY

    Defendant Gauvin assigns error to the district court's

    failure to read back certain testimony to the jury in response to

    the jury's request. Four days into the jury's deliberations, the

    jury asked to rehear several areas of testimony. One jury

    request stated: "We would also like to review the testimony of

    Mr. Marderosian concerning a meeting in which Mr. Gauvin,

    Mr. Granoff and Mr. Brandon discussed the purchase of Pidge and

    Meeting Street." As several references were made to Pidge and

    Meeting Street it was not clear which discussion the jury was

    referring to. The court and the attorneys spent nearly two days

    trying to cull together the parts of the transcript that related

    to all of the requested subject matter. At one point, the court

    suggested, and the prosecutor later argued, that the entire

    transcript of Marderosian's testimony should be provided to the

    jury, but counsel for Granoff objected to this suggestion.

    The court read to the jury a portion of Marderosian's

    testimony relating to Pidge and Meeting Street and to a meeting


    -101-














    where the Pidge project was discussed. Against the objection of

    Gauvin's counsel, the court stopped reading the transcript just

    before testimony concerning additional meetings relating to the

    same deal as the one involving Pidge and Meeting Street but not

    specifically mentioning Pidge or Meeting Street. We find no

    abuse of discretion in the trial judge's decision not to read

    additional portions of the transcript.

    The decision to reread testimony rests entirely upon

    the trial court's sound discretion. United States v. Akitoye,
    _____________ _______

    923 F.2d 221, 226 (1st Cir. 1991); United States v. Argentine,
    ______________ _________

    814 F.2d 783, 787 (1st Cir. 1987) (citing United States v.
    ______________

    Almonte, 594 F.2d 261, 265 (1st Cir. 1979)). The exercise of
    _______

    that discretion should not be disturbed absent good reason.

    Argentine, 814 F.2d at 787.
    _________

    In this case, the trial judge, with advice of counsel,

    reviewed the record for two days in order to locate material

    responsive to the jury's request. Faced with a request for

    testimony relating to a meeting discussing "Pidge and Meeting

    Street" and faced with multiple references to Pidge and Meeting

    Street in the record, the judge decided to read testimony

    concerning a meeting where Pidge was mentioned but not to read

    testimony relating to a subsequent meeting in which Pidge and

    Meeting Street were not mentioned. We find this decision to be

    appropriately within the judge's discretion.

    The fact that the omitted testimony concerned the same

    deal as the one involving Pidge and Meeting Street and the fact


    -102-














    that it also contained some discussion of down payment

    arrangements does not suggest any abuse of discretion. First of

    all, to the extent the omitted testimony is crucial to Gauvin's

    defense, as he claims, we find the testimony to be more

    inculpatory in nature than exculpatory.76 More importantly,

    the judge was attempting to respond appropriately to a jury

    request that turned out to be far from narrowly focussed. See
    ___

    ____________________

    76 The omitted testimony included the following:

    A. Mr. Brandon explained to Mr. Gauvin
    and Mr. Granoff that Homeowners required
    a twenty-five percent down payment and
    while that down payment would not be
    required of Mr. Gauvin and Mr. Granoff,
    he did have the problem of the down
    payment with subsequent purchasers and he
    asked Mr. Gauvin and Mr. Granoff for
    their assistance in meeting that problem.

    Q. What, if anything did Mr. Gauvin
    respond?

    A. Mr. Gauvin, as I recall, initially,
    didn't quite understand what Mr. Brandon
    wanted and after further explanation,
    Mr. Gauvin responded that he might be
    interested under some circumstances in
    helping out.

    Q. What about Mr. Granoff?

    A. I believe Mr. Granoff indicated his
    consent also.

    Defendant Gauvin claims this testimony was crucial to his
    defense because it corrects a mischaracterization in the
    government's closing argument about what Marderosian said about
    the down payments. Defense counsel explicitly told the jury to
    review the testimony regarding the alleged mischaracterization.
    We have some doubts, given the request for a meeting concerning
    "Pidge and Meeting Streets," that this particular request was
    related to the issue of the alleged mischaracterization. In any
    event, we find no abuse of discretion in the judge's decision
    that the omitted material was not what the jury was looking for.

    -103-














    Akitoye, 923 F.2d at 226. The extra burdens on the court created
    _______

    by rehearing testimony is relevant to judging the reasonableness

    of the court's refusal to read back testimony to the jury. See
    ___

    id. If the trial judge had searched for all the testimony
    __

    related to the deal involving Pidge and Meeting Street or all the

    discussions of down payment arrangements for that deal, the judge

    would have had to spend considerably more time and effort than he

    had already expended. Such extra effort was not required.

    XI. REFUSAL TO APPOINT PARALEGAL FOR BRANDON
    XI. REFUSAL TO APPOINT PARALEGAL FOR BRANDON

    Defendant Brandon alleges that the trial court's denial

    of his request for a court-appointed paralegal denied him his due

    process right to present a defense. Prior to the indictment, the

    Federal Bureau of Investigation took possession of 137 file boxes

    from Dean Street's offices which contained documents kept by Dean

    Street. Although Brandon was given complete access to the files,

    he claims that without the services of a paralegal he and his

    court-appointed attorney were incapable of meaningfully examining

    the contents of the files, effectively denying him access to

    potentially exculpatory evidence. Brandon and his attorney did

    spend four hours one afternoon examining the contents of three of

    the file boxes.

    Defendant cites Brady v. Maryland, 373 U.S. 83 (1963),
    _____ ________

    and its progeny for the proposition that his due process rights

    were violated. Brady requires the government to disclose any
    _____

    exculpatory evidence that is "material either to guilt or to

    punishment." Brady, 373 U.S. at 87. Before we even reach the
    _____


    -104-














    issue of whether the lack of paralegal services effectively

    constituted a failure of the government to disclose evidence, we

    must first consider whether the defendant established that the

    file boxes contained potentially exculpatory, or even material,

    evidence in the first place.

    To establish a violation of Brady, a defendant must
    _____

    provide the court with some indication that the materials to

    which he or she needs access contain material and potentially

    exculpatory evidence. See United States v. Bagley, 473 U.S. 667,
    ___ _____________ ______

    674 (1985); cf. United States v. Mateos-S nchez, 864 F.2d 232,
    __ _____________ ______________

    240 (1st Cir. 1988) (holding that a Criminal Justice Act rule, 18

    U.S.C. 3006A(e)(1), which provides for the provision to

    defendants of necessary investigative or other services, requires

    a defendant to make at least some showing why the requested

    assistance would produce evidence "likely to be pivotal to his

    defense"). In his initial request before the trial court and

    subsequently on appeal, the defendant speculated that the Dean

    Street files might contain exculpatory evidence. Brandon never

    presented, however, any supporting evidence or arguments to

    indicate this was, in fact, the case. Because Brandon did not

    make any showing at all as to the nature of the disputed

    materials, we find no error in the court's refusal to appoint a

    paralegal for Brandon's defense.

    This is not a Catch-22 situation in which defendant

    cannot make the initial showing needed to get a paralegal without

    first having a paralegal to assist in making the initial showing.


    -105-














    Instead, the defendant can establish the possible existence of

    material and exculpatory evidence by, at the very least,

    describing the kinds of documents that might be in files which,

    if they were found, might exculpate the defendant.77 At most,

    defendant and counsel could have spent a few more afternoons

    looking in the files for representative samples of documents that

    might be useful to the defense. We do not think this places too

    much of a burden on defendant or defendant's counsel.

    XII. CUMULATIVE EFFECT OF ERRORS
    XII. CUMULATIVE EFFECT OF ERRORS

    Defendants argue that the cumulative effect of numerous

    alleged errors made before and during the trial deprived them of

    a fair trial and enabled the jury to convict despite the lack of

    evidence against each individual defendant. Our review of the

    record and trial proceedings as a whole does not reveal pervasive

    unfairness or any error or combination of errors that deprived

    the defendants of due process. See United States v. Barnett, 989
    ___ _____________ _______

    F.2d 546, 560 (1st Cir.), cert. denied, 114 S. Ct. 148 (1993);
    ____ ______

    United States v. Steffen, 641 F.2d 591, 598 (8th Cir.), cert.
    _____________ _______ ____

    denied, 452 U.S. 943 (1981). We thus conclude that defendants
    ______

    received a fair trial.

    XIII. SENTENCING
    XIII. SENTENCING

    ____________________

    77 Brandon posits in his brief that the files may have contained
    a letter from Bay Loan acknowledging that no down payments were
    required. This example was not pointed out to the trial judge.
    Even if the example was presented at trial, however, it would
    probably not, by itself, be sufficient to establish the existence
    of material exculpatory evidence without some additional
    substantiation. Defendant made no claim as to the probability
    such a letter exists nor provided an affidavit that he received
    such correspondence.

    -106-














    A. Amount of Loss and Relevant Conduct

    Defendants attack the district court's determination

    and apportionment of Bay Loan's losses for the purpose of

    calculating their sentences under the Sentencing Guidelines.78

    The district court set the offense level for each defendant based

    on the actual loss to Bay Loan resulting from the scheme to

    defraud. See U.S.S.G. 2F1.1; United States v. Haggert, 980
    ___ _____________ _______

    F.2d 8, 11-12 (1st Cir. 1992). The court arrived at a figure of

    $11.4 million by reducing the outstanding principal amount of the

    fraudulently obtained end loans by, among other things, the value

    of the collateral used to secure them. The court then included

    the entire amount of the loss in the calculation of each

    defendant's offense level under 2F1.1. The resulting total

    offense level was set by adding an 11-level increase to the base

    offense level because the total loss was over $5,000,000, the

    highest point on the loss scale at that time. U.S.S.G.

    2F1.1(b)(1).

    The defendants first challenge the district court's

    valuation of the collateral used to secure the loans. We review

    the valuation for clear error. United States v. St. Cyr, 977
    _____________ _______

    F.2d 698, 701 (1st Cir. 1992). Determination of actual loss need

    not be precise; "[t]he court need only make a reasonable estimate

    of the range of loss, given the available information." U.S.S.G.

    2F1.1 comment note 8.

    ____________________

    78 The district court applied the 1988 version of the Sentencing
    Guidelines and therefore all citations, unless otherwise
    indicated, are to that version.

    -107-














    The court determined the value of the collateral used

    to secure the loan after an evidentiary hearing with respect to

    the amount of loss. At this hearing, the court heard testimony

    by Bay Loan's president and a real estate appraiser called by the

    defense. The court also reviewed exhibits containing information

    on the value of each of the motel condominiums. Defendants argue

    that the $2.7 million dollar figure chosen by the court as the

    total value of the collateral (the motels) was improperly based

    on a 1991 appraisal as opposed to an earlier 1989 appraisal for

    $7.8 million. Defendant seems to argue that the earlier

    appraisal is the more accurate one because it was made closer to

    the time of the crime and because the latter appraisal is more

    likely to be affected by causes not related to the actions of

    defendants. Given the evidentiary basis -- a professionally

    prepared appraisal -- for the trial court's determination of

    loss, however, we do not see any error, let alone clear error, in

    the court's decision to choose the lower valuation of the

    collateral.

    A more significant objection raised by many of the

    defendants is that the court improperly assigned to each of them

    the entire value of the loss regardless of their degree of

    participation in the scheme to defraud Bay Loan. The Guidelines

    provide that for conspiracy convictions, relevant conduct

    "includes conduct in furtherance of the conspiracy that was known

    to or was reasonably foreseeable by the defendant." U.S.S.G.

    1B1.3(a)(1) comment note 1; see also United States v. O'Campo,
    ________ ______________ _______


    -108-














    973 F.2d 1015, 1023 (1st Cir. 1992). This language has been

    subsequently clarified to state that relevant conduct includes

    "all reasonably foreseeable acts and omissions of others in

    furtherance of the jointly undertaken criminal activity."

    U.S.S.G. 1B1.3(a)(1)(B), 1993 Guidelines. The clarification

    was designed to highlight the distinction between the scope of

    criminal liability and the scope of sentencing accountability.

    Regardless, "[t]he central concept then is foreseeability."

    O'Campo, 973 F.2d at 1023.
    _______

    There is first the question in this case of whether the

    district court applied the correct standard of foreseeability.

    Defendants argue that instead of limiting the determination of

    losses that each individual defendant could foresee solely to

    those losses connected with the criminal activity that a

    particular defendant agreed to jointly undertake,79 the court

    simply held all the defendants responsible for all the losses

    attributable to the entire scope of the conspiracy. See, e.g.,
    ___ ____

    United States v. Lanni, 970 F.2d 1092 (2d Cir. 1992). While it
    _____________ _____

    is true that the criminal venture a defendant intended to join is


    ____________________

    79 The 1993 Guidelines define, in a rather unilluminating
    fashion, "criminal activity the particular defendant agreed to
    jointly undertake" as "the scope of the specific conduct and
    objectives embraced by the defendant's agreement." U.S.S.G.
    1B1.3 comment note 2, 1993 Guidelines. The Guidelines go on to
    point out that "the criminal activity that the defendant agreed
    to jointly undertake, and the reasonably foreseeable conduct of
    others in furtherance of that criminal activity, are not
    necessarily identical." Id. In other words, one can reasonably
    __
    foresee conduct in furtherance of an agreed upon enterprise even
    though one did not specifically agree to join in that particular
    conduct. Id.
    __

    -109-














    not necessarily the same as the scope of the entire conspiracy,

    U.S.S.G. 1B1.3 comment note 2, 1993 Guidelines, there is no

    reason why a defendant cannot intend to join and thus foresee the

    operation of the entire conspiracy. As the Guidelines

    acknowledge, the two can be coterminous, although "not

    necessarily" so.

    In this case, the district court did find the scope of

    the conspiracy and the scope of the foreseeable conduct in

    furtherance of each defendant's jointly undertaken criminal

    activity to be the same. The judge held the defendants

    responsible for "acts of co-conspirators to the extent that those

    acts were committed in furtherance of the conspiracy and were

    known to or reasonably foreseeable by the Defendant." The judge

    then recited all the actions taken by each defendant which

    indicated they were involved in the entire breadth of the

    conspiracy.80 Most telling is the judge's statement during

    sentencing that "the agreement that each [defendant] entered into

    was to participate in a continuing scheme to obtain loans from

    Bay Loan by means of fraudulent misrepresentations." Although

    the sentencing judge did not employ all the expository language

    recently added to the Guidelines, it is evident from the record

    that he conducted the proper analysis. We thus see no error in


    ____________________

    80 This is not a case where the sentencing court merely found
    that the defendant "knew what was going on." See O'Campo, 973
    ___ _______
    F.2d at 1025. The judge in this case recounted specific facts
    regarding each individual defendant which indicated that each
    defendant embraced the full scope of the scheme to defraud Bay
    Loan. See id. at 1025-26 n.11.
    ___ __

    -110-














    the district court's application of the Guidelines.

    Several defendants contend that some portion of the

    loss was not foreseeable to them because of their limited

    participation in the scheme. Each claims the court should have

    reduced by some unspecified amount the loss attributable to him

    or her as relevant conduct. The determination of what a

    defendant can foresee for the purposes of determining relevant

    conduct at sentencing is inherently fact-bound and, consequently,

    reviewable only for clear error. United States v. Innamorati,
    _____________ __________

    996 F.2d 456, 489 (1st Cir. 1993).

    All the defendants, except Hagopian, Ward and Kumalae,

    were involved in the scheme to defraud Bay Loan from the very

    beginning. Before the scheme was first executed, Brandon

    discussed with Reisch methods to avoid making down payments on

    the end loans. The first unit sales were made to Gauvin and

    Granoff with Landman acting as escrow agent. The involvement of

    these defendants continued throughout the scheme and we find no

    clearly discernable limits to the scope of the criminal venture

    in which they agreed to participate such that the district court

    erred in finding all the losses from the entire conspiracy to be

    foreseeable. The fact that Gauvin and Granoff stopped lending

    down payment funds after February of 1988 does not absolve them

    of responsibility for the continued actions of the conspiracy to

    obtain more loans from Bay Loan. The issue is not whether the

    two continued to commit acts in furtherance of the scheme but

    whether, at the time of the relevant conduct, they reasonably


    -111-














    could have foreseen the actions of the other members of the

    conspiracy. The evidence, particularly the ongoing

    correspondence with Brandon made until the end of the scheme,

    clearly indicates that Gauvin and Granoff not only could foresee

    the continued sale of condominium units, they actually knew about

    it.81

    We have recently held that a defendant's base offense

    level cannot be based on knowledge of historic facts. O'Campo,
    _______

    973 F.2d at 1022-26. Thus, with respect to Hagopian, Ward and

    Kumalae, losses attributable to fraudulent activity that occurred

    before they became involved in the conspiracy cannot be

    considered as relevant conduct. See id. The judge's error82
    ___ __

    in this regard, however, had no effect on their sentences so we

    find no reason for reversal on this issue.

    Hagopian and Ward did not become involved in the

    ____________________

    81 We disagree with Gauvin and Granoff that the evidence clearly
    indicates some kind of withdrawal from the conspiracy so that the
    scope of the criminal venture in which they participated was
    limited to something less than the entire conspiracy. The trial
    judge carefully considered this issue and we see no clear error
    in his rejection of their arguments.

    Similar arguments are made by Hagopian, Ward and Reisch to the
    effect that they were not responsible for sales arranged by other
    brokers or funded by other people. These arguments are
    unavailing. The defendants agreed to participate in the entire
    operation, even though their individual role may have been
    limited to a specific function within the broader scheme.
    Consequently, only a showing of the foreseeability of the other
    co-conspirators' conduct is required to find that conduct
    relevant for sentencing purposes. That standard, as the
    sentencing judge correctly found, was clearly met.

    82 We note that, to the district judge's credit, the O'Campo
    _______
    decision settling this issue was not handed down until after the
    judge conducted the sentencing of the defendants in this case.

    -112-














    conspiracy until after October of 1987, after all of the

    Charlestown units had already been sold. Kumalae did not join

    until after some units had already been sold at the Bayside, the

    second motel involved in the scheme. It may well be arguable

    that the total losses to Bay Loan resulted from conduct occurring
    ______

    after the participation of these three defendants. When

    Hagopian, Ward and Kumalae joined the conspiracy, payments were

    being made on the end loans. It was not until the scheme to

    defraud expanded to more and more condominium units that it began

    to collapse under its own weight as additional loan funds from

    Bay Loan were required to pay off the existing obligations. The

    conduct of Hagopian, Ward and Kumalae, therefore, contributed to

    the overall losses to Bay Loan which took place when the loans

    defaulted.

    More importantly, however, even if the losses resulting

    from the loans made for the Charlestown and Bayside units are

    excluded from the loss calculation for Hagopian, Ward and

    Kumalae, the total would still be well over $5 million, the

    highest level under the 1988 version of U.S.S.G. 2F1.1. A

    lion's share of the loans were made for units in the five other

    motels after all the defendants had joined the conspiracy.

    Therefore, any error in apportioning losses was harmless because

    it did not affect the offense level assigned to each

    defendant.83

    ____________________

    83 We also find no error in the district court's refusal to take
    into account multiple causes for Bay Loan's losses in determining
    the sentences. "'[T]he victim loss table in U.S.S.G.

    -113-














    B. Upward Adjustments for More Than Minimal Planning

    Defendants Granoff, Ward and Landman argue that the

    district court committed clear error by imposing a two-level

    increase in their offense levels, pursuant to U.S.S.G.

    2F1.1(b)(2)(A), for more than minimal planning.84 "More than

    minimal planning" is defined as:

    [M]ore planning than is typical for
    commission of the offense in a simple
    form. "More than minimal planning" also
    exists if significant affirmative steps
    were taken to conceal the offense.

    "More than minimal planning" is deemed
    present in any case involving repeated
    acts over a period of time, unless it is
    clear that each instance was purely
    opportune. Consequently, this adjustment
    will apply especially frequently in
    property offenses.

    U.S.S.G. 1B1.1, comment note 1(f).

    We review the district court's minimal planning

    ____________________

    2F1.1(b)(1) presumes that the defendant alone is responsible for
    the entire amount of victim loss specified in the particular loss
    range selected by the sentencing court.'" United States v.
    ______________
    Shattuck, 961 F.2d 1012, 1016 (1st Cir. 1992) (quoting United
    ________ ______
    States v. Gregorio, 956 F.2d 341, 347 (1st Cir. 1992)). The
    ______ ________
    Guidelines treat multiple causation only as a possible ground for
    downward departure -- a matter within the sound discretion of the
    sentencing court. Shattuck, 961 F.2d at 1017; Gregorio, 956 F.2d
    ________ ________
    at 346-48. In this case, the sentencing court, upon extensive
    consideration of the issue, declined to grant such a departure.
    None of the factors that defendants point to as allegedly
    contributing to Bay Loan's losses are so compelling as to
    convince us that the court erred in reaching its decision.

    84 To the extent defendant Gauvin also appeals this decision by
    reference in his brief to arguments made by the other defendants
    we find no error. As there is no error with regard to defendant
    Granoff, there can also be no error for Gauvin whose involvement
    in the scheme was greater than Granoff's. The same applies to
    defendant Hagopian whose involvement was greater than defendant
    Ward's.

    -114-














    assessment only for clear error. United States v. Beauchamp, 986
    _____________ _________

    F.2d 1, 5 (1st Cir. 1993). We are not inclined to reverse a

    finding of more than minimal planning unless the evidence compels

    the conclusion that defendant's actions were purely opportune or

    "spur of the moment." Gregorio, 956 F.2d at 343; United States
    ________ _____________

    v. Fox, 889 F.2d 357, 361 (1st Cir. 1989) ("We cannot conceive of
    ___

    how obtaining even one fraudulent loan would not require more

    than minimal planning.").

    In light of the rather complex and sophisticated scheme

    involved in this case, we find any assignment of error to the

    sentencing judge's ruling that the defendants engaged in more

    than minimal planning to be rather far-fetched. In any event,

    the judge made more than adequate findings based on the record to

    support his decision. The judge found that Ward took the

    initiative to find buyers for the scheme and helped falsify down

    payments which constituted "repeated acts" over a period of time.

    Ward protests that there is no evidence that he "initiated" any

    of the contacts with the buyers. This is mere quibbling. Ward

    was actively involved in the recruitment process, he told buyers

    no down payments were required, he told buyers to provide down

    payments checks that he knew would not be negotiated, and he

    provided buyers with rebates for their purchases. Any one of

    these facts would support a finding of more than minimal

    planning.

    As for defendant Granoff, the district court found that

    the scheme to defraud Bay Loan involved more planning than is


    -115-














    typical for commission of the offense in its simple form.

    Looking at the scheme as a whole, this fact is indisputable. But

    this fact is also true when viewed from the perspective of

    Granoff's specific involvement. Granoff first met with Brandon

    in the summer of 1987 to discuss the condominium project and

    eventually he agreed to purchase some units and to fund buyer

    down payments. Pursuant to this agreement, Granoff purchased

    four units in August of 1987 in which funds were recycled via a

    sophisticated arrangement. Five months later, he provided

    $470,000 to Dean Street on the understanding it would be returned

    to him after it was used to fund buyers' down payments. Granoff

    also formed a partnership with Gauvin to invest in the Dean

    Street project. All of these activities reflect a significant

    level of involvement in the scheme. We therefore find no error

    in his case.

    Finally, the sentencing judge found that Landman

    engaged in "repeated acts" during the scheme in his role as

    escrow agent or closing attorney for most of the loan

    transactions. There is no basis for any error in his case.

    C. Denial of Role-In-The-Offense Decrease for Marvin Granoff

    Defendant Granoff claims the court erred in finding he

    was not a minor participant and thus not entitled to a decrease

    in his offense level pursuant to U.S.S.G 3B1.2(b). "[A] minor

    participant means any participant who is less culpable than most

    other participants." U.S.S.G. 3B1.2(b) comment note 3, 1993

    Guidelines. No defendant, however, is automatically entitled to


    -116-














    a reduction, even if the defendant happens to be less culpable

    than his or her co-defendants. United States v. Valencia-Lucena,
    _____________ _______________

    925 F.2d 506, 514 (1st Cir. 1991); United States v. Rexford, 903
    ______________ _______

    F.2d 1280, 1282 (9th Cir. 1990). The sentencing court has broad

    discretion in determining whether this downward departure is

    appropriate and we will reverse only if the evidence

    overwhelmingly demonstrates that the defendant played a part that

    makes him substantially less culpable than the average

    participant in the convicted offense such that the court's

    decision was clearly erroneous. Gregorio, 956 F.2d at 344;
    ________

    United States v. Ocasio, 914 F.2d 330, 333 (1st Cir. 1990).
    _____________ ______

    Although the district court found that Granoff was less

    culpable than the major participants in the scheme like Brandon,

    the court found that Granoff did play more than a minor role.

    The $470,000 Granoff provided to fund buyer down payments was a

    significant contribution to the scheme to defraud Bay Loan. We

    find that the record supports the court's finding that Granoff

    was not less culpable than most of the other defendants let alone

    substantially less culpable than an average defendant and we

    therefore affirm Granoff's sentence.85


    ____________________

    85 Granoff also claims that the district court erroneously
    failed to depart downward based on his age and physical
    condition, pursuant to U.S.S.G. 5H1.1 and 5H1.4. This issue
    is not properly before the court because defendant did not seek a
    downward departure on this basis during sentencing. See United
    ___ ______
    States v. Slade, 980 F.2d 27, 30 (1st Cir. 1992). The issue of
    ______ _____
    age and health were raised only with respect to the range of the
    sentence and to bail pending appeal. Thus, the issue of
    departure based on age and physical condition was not preserved
    for appeal.

    -117-














    D. Costs of Supervised Release and Special Assessments

    The government correctly concedes that our decision in

    United States v. Corral, 964 F.2d 83, 84 (1st Cir. 1992) mandates
    _____________ ______

    that we find erroneous the court's decision to impose costs of

    supervised release on five defendants found to be indigent for

    purposes of a punitive fine. We therefore reverse the imposition

    of supervised release costs on defendants Brandon, Ward, Landman,

    Hagopian, and Kumalae.

    Brandon further argues that because he is indigent, the

    district court was without authority to order him to pay either

    restitution or the statutory assessments. In imposing an order

    of restitution, the district court must consider not only the

    amount of the victim's loss but also "the financial resources of

    the defendant, the financial needs and earning ability of the

    defendant and the defendant's dependents, and such other factors

    as the court deems appropriate." 18 U.S.C. 3664(a); United
    ______

    States v. Savoie, 985 F.2d 612, 618 (1st Cir. 1993).
    ______ ______

    In this case, the sentencing judge considered the

    required factors and, without error, arrived at the conclusion

    that a $500,000 restitution order, payable after the three year

    period of supervised release, was appropriate. Specifically, the

    judge stated: "[I]n arriving at that figure, Mr. Brandon, I

    recognize that based on the pre-sentence report, you don't appear

    to have any assets at the present time but it appears that you

    have the prospect of receiving or inheriting some assets in the

    future." The court also noted that a man of Brandon's talents


    -118-














    ought to be able to obtain gainful employment upon release.

    Although the restitution order may be burdensome, and

    although it may be true to some extent that "if a defendant is

    indigent for purposes of one [fine], he must be indigent for

    purposes of the other." United States v. Labat 915 F.2d 603, 607
    _____________ _____

    (10th Cir. 1990), we do not think Corral's ban on imposing
    ______

    certain fines on indigent defendants extends to restitution

    orders. Corral dealt specifically with the interplay of two
    ______

    provisions of the United States Sentencing Guidelines, U.S.S.G.

    5E1.2(a) and 5E1.2(i). Corral, 964 F.2d at 84. We found in
    ______

    that case that because the fine imposed under 5E1.2(i) was an

    additional fine to be instituted only in conjunction with the

    punitive fine imposed under 5E1.2(a), the former could not be

    imposed once the latter was waived because of defendant's

    indigency. Id. In the case of restitution, however, a separate
    __

    statutory scheme has been established which includes its own

    independent consideration of defendant's ability to pay. 18

    U.S.C. 3664. Therefore, the district court's determination of

    indigency under U.S.S.G 5E1.2(a) in the present case is

    independent of and does not affect its ruling on restitution.86

    The judgments are affirmed except that the judgment of
    _______________________________________________________


    ____________________

    86 To the extent Brandon also challenges the $50 statutory
    assessment fee imposed for each count (totaling $1300) by the
    district court pursuant to 18 U.S.C. 3013, we find no error.
    The assessment fee is mandatory; the judge has no discretion to
    waive it based on the defendant's ability to pay nor does the
    Constitution require him to do so. United States v. Nguyen, 916
    _____________ ______
    F.2d 1016, 1020 (5th Cir. 1990); United States v. Rivera-V lez,
    _____________ ____________
    839 F.2d 8, (1st Cir. 1988).

    -119-














    conviction of defendant Ward on Counts 24 and 25 and the judgment
    _________________________________________________________________

    of conviction of defendant Landman on Counts 23 through 26 are
    _________________________________________________________________

    vacated and their cases are remanded for resentencing. The
    _________________________________________________________________

    district court's imposition of costs for supervised release are
    _________________________________________________________________

    vacated for defendants Brandon, Landman, Hagopian, Ward and
    _________________________________________________________________

    Kumalae.
    _______










































    -120-