United States v. Loe ( 2001 )

  •                        Revised May 4, 2001
                          FOR THE FIFTH CIRCUIT
                                No. 99-40454
                                               Plaintiff - Appellee,
    CORNELIUS DEWITTE LOE, JR., also known as C.D. LOE;
                                            Defendants - Appellants.
                            Consolidated with
                            Case No. 99-40495
                                               Plaintiff - Appellee,
                                               Defendants - Appellants.
                            Consolidated with
                            Case No. 99-41470
                                               Plaintiff - Appellee,
                                               Defendants - Appellants.
                            Consolidated with
                            Case No. 00-40690
                                               Plaintiff - Appellee,
                                                     Defendants - Appellants.
                 Appeals from the United States District Court
                       for the Eastern District of Texas
                                   April 17, 2001
    Before HIGGINBOTHAM and DeMOSS, Circuit Judges, and FISH,* District
           Appellants seek reversal of their convictions for conspiracy,
    wire fraud, mail fraud, tax fraud, and money laundering. They
    further challenge the sentence imposed by the district court. We
    are unpersuaded by the majority of their numerous assertions of
    error. However, as the evidence was insufficient to support a
    conviction on three of the money laundering charges, we affirm in
    part, reverse in part, and remand for resentencing.
           Loe's Highport, Inc. operated Loe's Highport Marina, reputedly
    the largest inland marina in the world. Situated on Lake Texoma,
    the marina contains hundreds of boat slips, facilities for the sale
    of boats, a disco, a corporate office, and other facilities.
    Appellants Cornelius and Babo Loe ran the marina, which was located
           District Judge of the Northern District of Texas, sitting by designation.
    on property leased from the U.S. Corps of Engineers. Under the
    lease, the Corps was to receive a percentage of marina revenues.
             In 1990, the lake experienced the greatest flood in its
    history. Appellants submitted millions of dollars in claims to
    their insurers, Lexington Insurance Company and Chubb Insurance
    Company. In the wake of damage caused by a tornado in 1994,
    Appellants submitted additional claims to Continental Insurance
             In 1995, a disgruntled customer of LHI contacted the Federal
    Bureau of Investigations, claiming to be the victim of fraud.
    Further investigation by the FBI indicated that Appellants were
    underreporting boat sales to the Internal Revenue Service and the
    Corps. The FBI obtained a search warrant and seized thousands of
    documents from the marina.
             On September 11, 1997, a grand jury sitting in the Eastern
    District of Texas indicted Appellants and three other individuals1
    on various conspiracy, tax fraud, wire fraud, mail fraud, and money
    laundering      charges.   A   1998   superseding     indictment     charged
    Appellants on thirty-one counts.2 The Government alleged that
    Appellants failed to report millions in boat sales to the IRS and
    the Corps. Appellants were also accused of having defrauded their
           Andrew Scott Howard and Roger Foltz were acquitted. Henry Blume Loe was
    granted a mistrial; he was convicted in a subsequent trial.
           The various counts of the indictment did not uniformly encompass every
    defendant. In addition to the thirty-one substantive counts, the superseding
    indictment contained a forfeiture provision.
    insurers, who collectively suffered millions of dollars in damage
    due to Appellants' submission of altered or fabricated invoices for
    losses and mitigation costs. The indictment alleged that Appellants
    conspired to undertake these unlawful activities, and that they
    used   the     proceeds   of   the   fraud   to   acquire   various   forms   of
    property, including a house in Florida.
           The district court severed the counts and held two trials.
    Appellants were each convicted on some counts and acquitted on
    others. The district court sentenced Cornelius and Babo Loe to jail
    and required the Loes and LHI to pay large fines and restitution
                                     II. CORNELIUS LOE
           Cornelius Loe argues that his conspiracy conviction should be
    reversed, asserting that his prosecution was barred by the statute
    of limitations. The government alleged only one act in furtherance
    of   the    conspiracy    that    fell   within   the   five-year   statute   of
    limitations.3 Cornelius Loe argues that the overt act alleged in
    the indictment could not support a conviction.
               The indictment alleged that the defendants conspired to
    commit the following acts: "To devise and intend to devise a scheme
    and artifice to defraud insurance companies and to obtain money and
               See 18 U.S.C.A. § 3282 (2000) (articulating a five-year limitations
    property by means of false and fraudulent pretenses and promises
    and [to do so in violation of 18 U.S.C.A. § 1341 (mail fraud) and
    in violation of 18 U.S.C.A. § 1343 (wire fraud)]." Given the
    statute of limitations, the Government had to prove an act in
    furtherance     of   the   conspiracy       after    September   11,     1992.   The
    indictment alleged: "On or about December, 1992, BABO BEAZLEY LOE,
    C.D. LOE, JR. and LOE's HIGHPORT, INC. effected a settlement of the
    lawsuit   and   received    a   portion      of     the   fraudulently    obtained
    insurance proceeds."
          These allegations arose out of the following circumstances: In
    July 1991, the Loes' insurer, Lexington, interpleaded $638,388.34
    in state court to determine the portion of proceeds due to the Loes
    and one of their tenants, David Hull. Hull apparently had refused
    to endorse Lexington insurance checks that he received, checks made
    out jointly to him and the Loes.4 According to the Government, the
    vast majority of the interpleaded funds resulted from the insurance
    fraud undertaken by the Loes. On March 27, 1991, the state court
    ordered that $624,867.795 be paid to the Loes and that $15,520.55
    be retained in the court registry. The court's calculation was
    incorrect, as these amounts sum to $640,388.34. The investment firm
           Hull had been the lessee of a restaurant located on the marina. Cornelius
    Loe allegedly attempted to enlist Hull in the conspiracy. In the wake of Hull's
    refusal to participate, the Loes ejected him from the premises and indicated that
    the restaurant would not be reopened. Litigation ensued.
          Each of these sums was paid with interest; the amounts shown reflect only
    handling the proceeds consequently paid the Loes only $622,867.79.
    By subsequent order, the court awarded Hull $13,520.55, leaving
    $2,000    in   the   account.   All    of   these   events    occurred   before
    September 11, 1992.
          Meanwhile, the Loes sued Hull over a debt. In November or
    December, 1992, Hull's attorney and the Loes' attorney negotiated
    a possible settlement of litigation between the two parties. Hull's
    attorney proposed a disposition of the funds remaining in the
    registry   account     from   this    and   earlier   interpleader     actions.
    Following this conversation, Hull's attorney asked the court to
    disburse $17,500 from an earlier interpleader to the Loes, plus the
    $2,000 remaining by mistake, and to disburse the remainder to Hull.
    The motion explained that the $17,500 was actually owed to Hull,
    but should be given to the Loes to settle the debt litigation. The
    court entered an order of disbursement on February 10, 1993.6
          Based on these facts, Cornelius Loe contends, first, that the
    $2,000 payment was merely the "result" of the conspiracy, and not
    its object. He argues that the object of the conspiracy was
    defrauding the insurance company. As the fraud was completed
    outside    the   limitations     period,      Cornelius      argues   that   the
           The motion made clear that LHI was entitled to the $2,000 as a result of
    the prior mistaken order. The court's subsequent order of disbursement
    specifically included a $2,000 disbursement to Babo Loe as trustee of LHI.
    Government can not demonstrate the commission of an overt act in
    furtherance of the conspiratorial agreement.7
             We are unpersuaded by Loe's argument. Receipt of the money was
    an object, and not merely a collateral result, of the conspiracy.
    The indictment so alleged, and a rational trier of fact could have
    arrived at this conclusion.
             Our holding in United States v. Girard8 is instructive. In
    Girard, we reversed the dismissal of an indictment, which the
    district court had found barred by the statute of limitations. The
    defendant in that case had allegedly conspired to defraud the
    government by rigging contract bids. Only the final payment was
    within the statute of limitations; the bid rigging had occurred
    long before.9 We held that the receipt of the money was properly
    alleged as an object of the conspiracy, which did not end until the
    last payment was made. Girard's overt act was the acceptance and
    retention of the payment.10 We made the common sense observation
    that the object of the conspiracy was not the making of rigged bids
    itself, but the subsequent receipt of the proceeds.11 Similarly,
              See Grunewald v. United States, 
    353 U.S. 391
    , 396-97 (1957).
    744 F.2d 1170
     (5th Cir. 1984).
              Girard, 744 F.2d at 1171.
              Id. at 1173.
           Id. at 1172. The cases cited by Cornelius Loe are consistent with this
    reasoning, yet are factually distinguishable. In United States v. Colon-Munoz,
    192 F.3d 210
    , 227-29 (1st Cir. 1999), the court held that obtaining specified
    property was the object of the conspiracy. Following the purchase of the
    property, a conspirator made payments on a loan financing the purchase. The court
    receipt of the $2,000 in this case constituted an overt act falling
    within the limitations period.
          Cornelius Loe also contends that actions taken by Hull's
    attorney are not actions taken by conspirators and therefore cannot
    be actions taken in furtherance of a conspiracy.12 This argument
    fails, first, because receipt of the money by the Loes was an overt
    act within the scope of the conspiracy. Moreover, a rational jury
    could   conclude    that   the   Loes,     as   parties   to   the   settlement
    agreement with Hull, took some overt action in connection with the
    terms of the agreement.
          Third, Cornelius Loe argues that, even if the $2,000 payment
    made in February 1993 was an act in furtherance of the conspiracy,
    the indictment failed to allege this act. Loe notes that the
    indictment only alleged the 1992 settlement. In assessing whether
    a conspiracy conviction under 18 U.S.C. § 371 withstands a statute
    of limitations challenge, this Court has held that the overt acts
    alleged in the indictment and proved at trial mark the duration of
    correctly concluded that these later actions were not undertaken in furtherance
    of the conspiracy. See id. In United States v. Davis, 
    533 F.2d 921
    , 926 (5th Cir.
    1976), we found that acts taken after false statements were made to the
    government were not part of a conspiracy. We emphasized that defendants were
    charged with conspiring to violate 18 U.S.C. § 1001, noting that the object of
    this offense was the making of false statements itself. We contrasted that
    offense with conspiracy to defraud the government. See id. at 927-28. As the
    conspiracy at issue in this case involves wire and mail fraud, it is
    distinguishable from Davis.
           See United States v. Manges, 
    110 F.3d 1162
    , 1170 (5th Cir. 1997) (holding
    that, where a conspirator did not mail the letter implicated in mail fraud, the
    mailing by another person was insufficient to support conviction).
    the conspiracy.13 Proof of an unalleged act can not surmount the
    statute of limitations bar.
            Loe's argument fails, however, because the motion to disburse
    the $2,000 was itself part of the settlement, which was negotiated
    in   November       or    December   1992.       The   indictment   indicated    that
    Appellants had "effected a settlement" and "received a portion of
    the fraudulently obtained insurance proceeds." The broad language
    of the indictment was sufficient to encompass the Loes' receipt of
    the $2,000.
            Finally, Cornelius Loe contends that the $2,000 is "interest"
    from the interpled funds and consequently not the insurer's money.
    This        argument     is   creative    advocacy,      but   wrong.     The   $2,000
    unquestionably           represented      the     remainder    of   the     principal
    originally registered with the court.14
            Cornelius Loe further contends that the district court failed
    to properly instruct the jury regarding the statute of limitations
    in its aiding and abetting instruction for the conspiracy count.
    Count 17 of the indictment charged Appellants with (1) conspiring
                See Davis, 533 F.2d at 929.
            Babo Loe adopts Cornelius Loe's arguments. For the reasons given above,
    they also fail. Indeed, Babo Loe's case is much weaker, as the $2,000 check was
    issued in her name.
    to violate the mail and wire fraud statutes, and (2) aiding and
    abetting this conspiracy, violating 18 U.S.C. § 2. As we understand
    his argument, Cornelius Loe asserts that it is unclear from the
    verdict whether the jury convicted him of aiding and abetting or
    for his role as a member of the conspiracy itself. He argues that
    the actus reus of aiding and abetting must itself occur within the
    limitations period. Where the aidor-abettor's acts fall outside
    this period, it is irrelevant that the overt acts taken by the
    conspirators were not time-barred. According to Cornelius Loe, the
    jury should have been informed of this distinction.
          We doubt the validity of Loe's proposition. An aidor-abettor
    is guilty in a derivative sense; his guilt is contingent on the
    acts of another.15 Courts have recognized this relationship by
    holding that aiding and abetting is governed by the statute of
    limitations    applicable     to   the    predicate   offense.16   One   could
    reasonably conclude that, as long as the acts of the conspirator
    were not time-barred, it is of no moment that the aidor-abettor's
    conduct fell outside the limitations period. We need not decide
    this, however, as Cornelius Loe was a party to the Hull litigation.
    A rational jury could have found that any acts of aiding and
            See 18 U.S.C.A. § 2 (2000); United States v. Campbell, 
    426 F.2d 547
    , 553
    (2d Cir. 1970) ("18 U.S.C. § 2 does not define a crime; rather it makes
    punishable as a principal one who aids or abets the commission of a substantive
           See United States v. Musacchia, 
    900 F.2d 493
    , 499 (2d Cir. 1990), vacated
    on other grounds, 
    955 F.2d 3
     (2d Cir. 1991); Campbell, 426 F.2d at 553; United
    States v. Gressett, 
    773 F. Supp. 270
    , 281 (D. Kan. 1991).
    abetting committed by Cornelius Loe fell within the five-year
    limitations period.
          Even if we were to accept Cornelius Loe's argument, however,
    the jury instructions sufficiently informed the jury that the
    conspiracy limitations period applied to the aiding and abetting
    offense.       The   court    admonished     the   jury    to   consider     the
    "instructions as a whole" and to consider the aiding and abetting
    instructions "together" with the conspiracy instructions. We do not
    find that the court abused its discretion in incorporating the
    statute of limitations by reference.17
          Cornelius Loe also challenges the sufficiency of the evidence
    supporting his conviction under Count 17. The applicable standard
    of review requires us to determine whether a reasonable trier of
    fact could have found that the evidence established guilt beyond a
    reasonable doubt.18 The voluminous evidence in the record affirms
    that Loe's challenge is meritless. We decline Loe's invitation to
    re-weigh the credibility of the witnesses.19
              See United States v. Pennington, 
    20 F.3d 593
    , 600 (5th Cir. 1994)
    (reviewing a court's refusal to submit a proposed jury instruction for abuse of
              See United States v. Mergerson, 
    4 F.3d 337
    , 341 (5th Cir. 1993).
            See United States v. Bailey, 
    444 U.S. 394
    , 414-15 (1980) (stating that
    it is for the jury, and not the court, to determine the credibility of
         Loe challenges the jury instructions for the conspiracy, mail
    fraud, and wire fraud counts based on the court's failure to define
    "materiality." Materiality is an element of the offenses of mail
    and wire fraud, and must be included in the jury charge.20 In this
    case,     the   court    instructed     the    jury   that   the   fraud   must   be
    "material;" the only alleged error is its failure to define the
         We review a trial court's refusal to include a requested jury
    instruction for abuse of discretion, according the trial court
    "substantial       latitude      in   formulating     the    charge."22    We    find
    reversible       error    only    where       the   requested      instruction    is
    substantially correct; the actual charge given the jury did not
    substantially cover the content of the proposed instruction; and
    where the omission of the proposed instruction would "seriously
    impair the defendant's ability to present a defense."23
            See Neder v. United States, 
    527 U.S. 1
    , 25 (1999); United States v.
    77 F.3d 1500
    , 1510-11 (5th Cir. 1996).
              The court instructed the jury in the following manner:
         For purposes of both the mail and wire fraud statutes, a "scheme to
         defraud" includes any scheme to deprive another of money or property by
         means of false or fraudulent pretenses, representations, or promises. A
         representation may be "false" when it constitutes a half truth, or
         effectively conceals a material fact, provided it is made with intent to
              Pettigrew, 77 F.3d at 1510.
          The court only deviated from the instruction proposed by
    Appellants in refusing to define "material."24 We have held that
    failure to charge materiality to the jury requires reversal,
    without considering whether the error was harmless.25 However, we
    have not found that failure to define materiality compels the same
    response. This is not a case where the actual instructions failed
    to "substantially cover the content of the proposed instruction."26
    Given the evidence presented at trial, which demonstrated that
    Appellants' fraud increased the insurers' payments by millions of
    dollars, the court's failure to define "material" was nothing more
    than harmless error.27
                                     III. BABO LOE
          Babo Loe contends that she can not be convicted of conspiracy
    on counts 1, 17, and 18, which alleged conspiracy to defraud the
    government and conspiracy to commit mail and wire fraud. She
            The proposed mail fraud instruction included the following definition of
    "materiality": "A statement is material if it has a natural tendency to
    influence, or is capable of influencing a decision by the party to whom the
    representation is made." In contrast, the proposed wire fraud instruction did not
    include a definition of materiality.
              Pettigrew, 77 F.3d at 1511.
              Id. at 1510.
              See United States v. Davis, 
    226 F.3d 346
    , 358-59 (5th Cir. 2000)
    (upholding a jury instruction that failed to define "materiality"). Babo Loe
    adopts Cornelius Loe's argument regarding the jury instructions. The preceding
    analysis applies equally to her case.
    argues, first, that being convicted of conspiring with LHI, which
    she owned, is equivalent to being convicted of conspiring with
    herself. Second, she notes that, with the exception of Cornelius
    Loe, the other alleged co-conspirators were acquitted. She argues
    that she can not be convicted of conspiracy if the other co-
    conspirators were acquitted. Similarly, Babo Loe asserts that, if
    the evidence was insufficient to support Cornelius Loe's conviction
    under count 17, her conviction under that count also can not stand.
          Her argument is without foundation. This Court has repeatedly
    held that the acquittal of all other co-conspirators does not bar
    conviction for conspiracy.28 We therefore need not address Babo
    Loe's assertion that she can not be convicted of conspiring with
          Babo Loe also contends that the district court erred in
    denying her motion to suppress evidence seized pursuant to the
    search of the marina. As we understand her argument, she asserts
    that all of the evidence should be suppressed because of defects in
    the warrant and its execution. She contends that the warrant was
           See United States v. Zuniga-Salinas, 
    952 F.2d 876
    , 877-78 (5th Cir. 1992)
    (en banc); United States v. Bermea, 
    30 F.3d 1539
    , 1554 (5th Cir. 1994).
            As noted above, the evidence was sufficient to support Cornelius Loe's
    conspiracy conviction under count 17. Moreover, counts 1 and 18 involved
    acquitted conspirators other than LHI. Babo Loe's arguments regarding LHI are
    consequently irrelevant.
    overbroad and that the FBI exceeded the scope of the warrant in
    conducting its search.
         The affidavit upon which the warrant was based provided
    evidence that the Loes (1) had underreported boat sales revenue to
    the Corps; (2) had underreported boat sales revenue to the IRS; (3)
    had not paid state sales tax on cash cover charges obtained from
    bars and restaurants located on the marina; and (4) did not report
    the cash sale of various boats, in violation of the Bank Secrecy
    Act.30 The warrant authorized the search of the following areas: two
    offices on level one of the corporate office building; all of level
    two; the storage area of level three; a tan mobile home designated,
    "Loe's Highport Yacht Sales"; and the safes and vaults of the
    Pompano's Club and Clipper Bar. An attachment to the search warrant
    listed approximately fifty-four categories of items to be seized.
    The warrant did not authorize a search of the Loe's residence,
    which was located on the third floor of the corporate office
         In reviewing the district court's ruling on a motion to
    suppress evidence, we review factual findings for clear error.31 We
    review     de   novo   the   court's   legal   conclusions   regarding   the
    constitutionality of law enforcement action, sufficiency of the
             See 31 U.S.C.A. §§ 5312(a)(2)(T), 5313 (2000).
             See Davis, 226 F.3d at 350.
    warrant, and the reasonableness of an officer's reliance on a
          We address a Fourth Amendment challenge to a seizure conducted
    pursuant to a search warrant by asking, first, whether the seizure
    falls within the good-faith exception to the exclusionary rule.33
    Under the good-faith exception, where a warrant was based on an
    affidavit which was insufficient to establish probable cause, the
    evidence obtained is still admissible if law enforcement officials
    acted in "objectively reasonable good-faith reliance upon a search
    warrant."34 If the good-faith exception applies, we need not examine
    whether the warrant was supported by probable cause.35
          When officers execute a warrant in a manner that offends the
    Fourth Amendment, however, there is no "objectively reasonable
    good-faith reliance." Evidence which falls outside the scope of the
    warrant normally must be suppressed.36 However, two exceptions
    apply. First, items of an "incriminatory character" which are found
    in the course of a legal search, yet which were not described in
    the search warrant, may be seized. Second, officers may seize
              See id.
           See United States v. Davis, 
    226 F.3d 346
    , 350 (5th Cir. 2000); see also
    United States v. Leon, 
    468 U.S. 897
            Davis, 226 F.3d at 351 (quoting United States v. Shugart, 
    117 F.3d 838
    843 (5th Cir. 1997)).
              Davis, 226 F.3d at 351.
              See Horton v. California, 
    496 U.S. 128
    , 140 (1990).
    property which is not described in the warrant if the property
    exhibits a "sufficient nexus" to the crime under investigation.37
    The Fourth Amendment does not countenance, however, a "general,
    exploratory search through personal belongings."38
          Although the bulk of her arguments address the sufficiency of
    the warrant itself, Babo Loe contends that the fourteen-hour search
    of the marina exceeded the scope of the warrant. Agents seized
    several hundred        boxes   of     documents,   of   which   130    boxes   were
    subsequently        returned     as     irrelevant      to   the      Government's
    investigation. Babo Loe fails to cite specific pieces of evidence
    that were seized outside the scope of the warrant. While Babo Loe
    argued to the district court that a variety of broad categories of
    evidence were seized outside the scope of the warrant,39 her brief
    does not indicate whether she is reiterating those arguments on
    appeal. On appeal, she refers only to the seizure of estate
              See Creamer v. Porter, 
    754 F.2d 1311
    , 1318 (5th Cir. 1985).
            The district court examined the following categories of evidence which
    Babo Loe objected to as falling outside the scope of the warrant: (1) various
    date books, organizers, calendars, attendance lists, and Rolodexes; (2) entirely
    personal notes and files; (3) litigation and other legal files, including files
    relating to the Hull litigation; (4) state and federal labor law files; (5) trust
    and estate planning files; (6) gift and estate tax files; (7) files on property
    damage; (8) medical and health insurance files; (9) life insurance files; (10)
    automobile insurance files; (11) other insurance files unrelated to property
    insurance; (12) maps and floor plans; and (13) an audiotape. The district court
    found that, while some of the preceding categories of items appeared to fall
    outside the warrant's scope and did not demonstrate a sufficient nexus to the
    crimes investigated, the officers did not act in "blatant disregard of the search
    planning files, the Loes' personal files, whole computers and
    computer files, and litigation files.
         Although we are troubled by the scope of the search conducted,
    we are unprepared to say that the items seized should be suppressed
    on the basis that they exceeded the terms of the warrant. The
    warrant   specifically   authorized       the   seizure   of   computers   and
    computer files. Although the warrant did not refer to estate
    planning files, it authorized, for example, the seizure of files
    relating to any and all wire transfers and information relating to
    stock/brokerage accounts. Without specifics, we are unable to
    evaluate the merits of Babo Loe's contention that "personal files"
    were seized. Finally, while the warrant did not expressly authorize
    the seizure of litigation files, certain non-privileged documents
    contained within those files may have fallen within the scope of
    the warrant. Again, without specifics, we are unable to conclude
    that any given file was seized improperly.
         Babo Loe also complains of the extensive search of the Loe
    residence. The warrant authorized a search of the third-floor
    storage area. Because the elevator was either locked or inoperable,
    agents could   only   access   the   storage      area    through   the   Loes'
    residence, which was also on the third floor. Despite the warrant's
    failure to authorize a search of the residence, the Government
    argues that a "protective sweep" was necessary.40 The FBI knew prior
    to the search that the Loes were registered gun owners, and a
    search of their persons did not reveal firearms. Although examining
    drawers and closets may or may not have been quick and limited—and
    therefore within the scope of a protective sweep41—we need not
    address this issue. No items from the residence were seized, nor
    was anything from the residence used as evidence at trial.
           Babo Loe further argues that the warrant itself was overbroad
    because it authorized the seizure of many categories of documents
    unrelated to the crimes described in the affidavit. The good-faith
    exception    articulated    above   does      not    apply   where   there   is a
    discrepancy between the assertions in the affidavit and the scope
    of   the   warrant   sufficient     to    make      reliance   on    the   warrant
           While the wisdom of including such a broad array of documents
    in the warrant is questionable, we are unprepared to find the
            A protective sweep is justified when the searching officer reasonably
    believed "that the area swept harbored an individual posing a danger to the
    officer or others." Maryland v. Buie, 
    494 U.S. 325
    , 327 (1990).
           See id. ("A 'protective sweep' is a quick and limited search of premises
    . . . narrowly confined to a cursory visual inspection of those places in which
    a person might be hiding."). But see United States v. Hernandez, 
    941 F.2d 133
    135-38 (2d Cir. 1991) (extending the proper scope of a protective sweep to a
    search for weapons that the arrestee could easily reach).
            See United States v. Davis, 
    226 F.3d 346
    , 352 (5th Cir. 2000); United
    States v. Cherna, 
    184 F.3d 403
    , 409-10 (5th Cir. 1999). Babo Loe does not invoke
    the other bases for not applying the good-faith exception. See Cherna, 184 F.3d
    at 407-08. Given the specificity of the warrant, which lists fifty-four
    categories of evidence, we find that the warrant did not violate the
    particularity requirement of the Fourth Amendment. See United States v.
    69 F.3d 723
    , 727 (5th Cir. 1995).
    officers' reliance on the warrant unreasonable. The district court
    found that documents such as real estate and insurance files were
    logical indicators      of   LHI's   gross   fixed   assets.    We   agree. A
    company's gross fixed assets may indicate a failure to report
    income to the IRS and Corps, as well as Appellants' knowledge of
    the unreported income. The twenty-two-page affidavit provided ample
    indication of the Loes' failure to report income to the IRS and
    Corps. Although the warrant authorized seizure of a vast array of
    documents, the crimes alleged in the affidavit could reasonably be
    viewed as requiring a search of this magnitude. The fifty-year
    history of the marina and the scope of the operations under
    investigation lend additional support to the breadth of the search
    warrant. Moreover, the warrant expressly limited the search to a
    portion of the marina's business premises, and nothing was seized
    from the Loes' residence.43 The Loes point to the FBI's prompt
    return of the 130 boxes of irrelevant documents as evidence of the
    warrant's overbreadth. However, this is merely proof that the
    proper breadth of a warrant is always clearer after the fact.
          We find only that the agents' reliance on the warrant was not
    objectively unreasonable and did not indicate bad faith.44
             The search in this case is therefore distinguishable from the "all
    records" search discussed in United States v. Humphrey, 
    104 F.3d 65
     (5th Cir.
    1997). In Humphrey, we recognized that the Fourth Amendment requires "closer
    scrutiny of an all records search of a residence," noting that a search of this
    nature would only be upheld in "extreme cases." See id. at 69 & n.2.
             Cornelius Loe adopts Babo Loe's Fourth Amendment arguments. For the
    reasons given above, these arguments also fail as applied to Cornelius Loe.
         Babo Loe argues that the district court improperly applied the
    Sentencing      Guidelines    in   determining          her   sentence   for   money
    laundering. She contends that fraud was the "essence" of her
    offense. Accordingly, Babo Loe argues that she should have been
    sentenced under the fraud guidelines, not the money laundering
         This Court reviews a court's legal interpretations of the
    Guidelines de novo.45 A sentencing court's refusal to depart from
    the applicable guideline is unreviewable, however, unless the court
    mistakenly believed that it lacked the authority to grant such a
    departure.46 The district court here was aware of its power to grant
    a downward departure.
         Babo Loe attempts to escape this limitation on our power to
    review sentencing decisions. She asserts that a court's application
    of a guideline range is a purely legal interpretation, meriting de
    novo review. We find no error in the sentencing court's decision to
    apply section 2S.1 of the Guidelines to Babo Loe's violation of 18
    U.S.C.     §   1957.   Appendix    A   of       the   Guidelines   indicates   that
    guideline section 2S1.2 corresponds with violations of 18 U.S.C. §
             See United States v. Barbontin, 
    907 F.2d 1494
    , 1497 (5th Cir. 1990).
             See United States v. Powers, 
    168 F.3d 741
    , 753 (5th Cir. 1999).
    1957.47 We would not hesitate to apply de novo review and correct
    a court's misapprehension of this elementary component of the
    sentencing architecture constructed by the Guidelines. However,
    where a court finds that the facts in a section 1957 case are
    sufficiently atypical as to warrant the application of a lower
    guideline range, its decision constitutes a downward departure.48
    The court in such an instance does not misinterpret the Guidelines
    by failing to apply section 2S1.2; it exercises its discretion
    under the facts of that case.49 The sentencing court's refusal to
    apply          a   different   set   of   guidelines   in   this   case   therefore
    constitutes a refusal to grant a downward departure—a decision
    which this Court may not review.
             Babo Loe also challenges her money laundering conviction on
    count 25, arguing that the evidence was insufficient to support the
    verdict. We review the evidence to determine whether a reasonable
    trier of fact could have found that the evidence established guilt
              See U.S.S.G. App. A. (2000); U.S.S.G. § 1B1.2(a); U.S.S.G. § 2S1.2, cmt.
           See United States v. Dadi, 
    235 F.3d 945
    , 954-55 (5th Cir. 2000); United
    States v. Hemmingson, 
    157 F.3d 347
    , 360-63 (5th Cir. 1998). Our Court therefore
    differs from those circuits which view the initial choice of which guideline to
    apply as a question of law subject to de novo review. See United States v. Smith,
    186 F.3d 290
    , 297 (3d Cir. 1999).
             See 18 U.S.C.A. § 3553(b) (2000) (requiring a court to follow the
    applicable guideline unless it finds that "there exists an aggravating or
    mitigating circumstance . . . not adequately taken into consideration by the
    Sentencing Commission").
    beyond a reasonable doubt.50 Babo Loe notes that she spent some of
    the fraudulently obtained money years after having received it. She
    contends that the passage of time negates the inference that she
    knew        that   she    was      spending   "dirty"      funds.     This   argument   is
    meritless. A rational jury could find that she possessed such
    knowledge at the time of the transaction. Babo Loe asks this Court
    to effectively re-weigh the evidence. We refrain from taking such
    a step and reject her sufficiency challenge.51
            Babo Loe argues that the forfeiture of the Florida property
    should be reversed on three grounds: the indictment did not allege
    the extent of her interest in the property; the forfeiture was not
    incorporated             in     the       judgment;     and     the     forfeiture      is
    disproportionate              to    the    offense.   We      reject    each   of   these
            First, the indictment was sufficient. Rule 7(c)(2) of the
    Federal        Rules     of    Criminal     Procedure      states:     "No   judgment   of
    forfeiture may be entered in a criminal proceeding unless the
    indictment or information shall allege the extent of the interest
    or property subject to forfeiture." As this Court has noted, "[t]he
    purpose of the notice of forfeiture in the indictment is to inform
                See United States v. Mergerson, 
    4 F.3d 337
    , 341 (5th Cir. 1993).
                See United States v. Bailey, 
    444 U.S. 394
    , 414 (1980).
    the defendant that the government seeks forfeiture as a remedy."52
    An indictment is sufficiently specific if it "puts the defendant on
    notice that the government seeks forfeiture and identifies the
    assets with sufficient specificity to permit the defendant to
    marshal evidence in their defense."53 Babo Loe asserts that the
    indictment was insufficient because it failed to specify the
    interest in the property that was subject to forfeiture, which the
    court later determined to be 52.6 percent. Rule 7(c)(2) does not
    require the level of detail sought by Babo Loe. She had ample
    notice that the Florida property itself was subject to forfeiture.
    Her defense could not have been jeopardized by the Government's
    failure to more precisely delineate the scope of the forfeiture.54
          Second, the forfeiture was incorporated in the judgment. Rule
    32(d)(2) of the Federal Rules of Criminal Procedure provides: "At
    sentencing, a final order of forfeiture shall be made part of the
    sentence and included in the judgment." In this case, Judge Brown
    indicated      orally   at     the   sentencing   hearing   that   the   Florida
    property would be forfeited. Moreover, the court issued a written
    preliminary order of forfeiture on March 31, 1999. However, the
    judgments of conviction did not refer to the March 31st order or
    discuss forfeiture. Upon the Government's motion, the court entered
            United States v. Puma, 
    937 F.2d 151
    , 156 (5th Cir. 1991) (quoting United
    States v. Cauble, 
    706 F.2d 1322
    , 1347 (5th Cir. 1983)).
              Puma, 937 F.2d at 156.
              See id. at 156-57.
    a nunc pro tunc amendment to the written order describing the
    forfeited property.55 We find nothing objectionable about this
    procedure. Moreover, in the event of a conflict between an oral
    judgment and a written order, the oral ruling prevails.56 The
    court's oral pronouncement on forfeiture, which it issued at the
    sentencing hearing, consequently remains effective in the face of
    a contrary written judgment.
               Finally, the forfeiture is not excessive. The court ordered
    Babo Loe to forfeit only so much of the property as was purchased
    with illegally obtained funds—money that she had no right to in the
    first place.57 We therefore find no disproportionality, let alone
    the    "gross      disproportionality"         required    by   United   States      v.
               Babo Loe argues that the Government failed to adduce evidence
    sufficient        to   support   venue   for     count    19,   mail   fraud.   As    a
    "continuing offense," mail fraud may be prosecuted in "any district
                See Fed. R. Crim. Proc. 36 (2000).
           See United States v. McDowell, 
    109 F.3d 214
    , 217 (5th Cir. 1997); United
    States v. Shaw, 
    920 F.2d 1225
    , 1231 (5th Cir. 1991).
                See United States v. Tilley, 
    18 F.3d 295
    , 300 (5th Cir. 1994).
    524 U.S. 321
    , 334 (1998). Cornelius Loe adopts Babo Loe's arguments
    regarding the forfeiture. For the reasons given above, they fail as applied to
    his case.
    in    which     such     offense   was    begun,   continued,    or    completed."59
    Although the government must prove venue by the preponderance of
    the     evidence,        circumstantial    evidence     alone   is    sufficient    to
    establish venue.60 On appeal, we view the evidence in the light most
    favorable to the Government, drawing all reasonable inferences in
    favor of the verdict.61
            Babo Loe's contention is meritless. The evidence supports a
    finding that on three occasions she mailed numerous documents from
    locations in the Eastern District of Texas in furtherance of the
    fraudulent       conspiracy.       Babo    Loe   contends   that,     if   the   three
    mailings described above support her conviction on mail fraud, that
    count 19 suffered from duplicity. "An indictment may be duplicitous
    if it joins in a single Count two or more distinct offenses."62
    However, count 19 only alleges a single act of mail fraud. Babo Loe
    also does not claim prejudice as a result of duplicity in count
            Her argument is more appropriately considered as a claimed
    variance.       Variance      results     when   "the   charging      terms   of   the
    indictment remain unaltered, but the evidence at trial proves facts
               18 U.S.C.A. § 3237(a) (2000).
               See United States v. White, 
    611 F.2d 531
    , 534-35 (1980).
               Id. at 535.
               See United States v. Sharpe, 
    193 F.3d 852
    , 870 (5th Cir. 1999).
             See United States v. Drury, 
    687 F.2d 63
    , 66 (5th Cir. 1983) (finding
    that, even if an indictment was duplicitous, there was no prejudice).
    other than those alleged in the indictment."64 The dates of the
    three mailings differ slightly from the date presented in the
    indictment. Moreover, three acts of mail fraud were proven at
    trial,      whereas   the   indictment       only   charged       one   act.   We   are
    unconvinced that this variance affected Appellant's "substantial
    rights."65 Babo Loe does not allege prejudice and we do not discern
    the potential for such prejudice on the facts of this case.
          Babo Loe further contends that the cumulative effect of
    numerous      evidentiary    errors     committed      by    the    district    court
    violated her rights under the Confrontation Clause.66 We review
    evidentiary rulings for an abuse of discretion.67 Although Babo Loe
    provides numerous cites to the record, she fails to indicate how a
    specific      cited    decision    by    the    court       was    erroneous.       More
    fundamentally,        she   concedes     that       none    of     these   decisions
    constituted an abuse of discretion. She argues that the cumulative
    effect of these "errors" was prejudicial to her Sixth Amendment
              Sharpe, 193 F.3d at 866 (quotations omitted).
            See Fed. R. Crim. Proc. 52(a) (2000); Sharpe, 193 F.3d at 866; United
    States v. Faulkner, 
    17 F.3d 745
    , 760 (5th Cir. 1994); United States v. Winship,
    724 F.2d 1116
    , 1122 (5th Cir. 1984).
              U.S. Const. amend. VI.
              See United States v. Pace, 
    10 F.3d 1106
    , 1113-14 (5th Cir. 1993).
               We fail to see how the whole can be greater than the sum of
    its parts. There can be no error if the district court acted within
    its         discretion.    As    the    cumulative    effect     of   such     valid
    discretionary decisions cannot violate the Sixth Amendment, Babo
    Loe's argument fails.68
               Babo Loe contends that the district court denied her right to
    compulsory process by quashing the subpoena duces tecum she had
    issued to the Corps. Under Rule 17(c) of the Federal Rules of
    Criminal Procedure, a district court has discretion to "quash or
    modify        the     subpoena   if    compliance   would   be   unreasonable     or
    oppressive."69 On appeal, Babo Loe must show that (1) the subpoenaed
    document is relevant, (2) it is admissible, and (3) that it has
    been requested with adequate specificity.70 We review the grant of
    a motion to quash for abuse of discretion.71
           Babo Loe's reliance on United States v. Riddle, 
    103 F.3d 423
    , 434-35 (5th
    Cir. 1997), is misplaced. In that case, we held that the cumulative effect of
    actual errors—i.e., rulings in which the district court abused its
    discretion—prejudiced the defendant. We recognize that evidentiary rulings must
    be viewed in context. A decision to exclude evidence may, in light of prior
    evidentiary rulings, constitute an abuse of discretion where that same decision
    would not be erroneous if considered in isolation. Our holding today does not
    deny the path-dependent nature of individual evidentiary rulings. In this case,
    Babo Loe fails to contend or prove that a specific decision was itself erroneous
    in light of prior rulings. We hold that the cumulative effect of a series of
    valid discretionary judgments can not deny defendant's rights under the
    Confrontation Clause.
                Fed. R. Crim. Proc. 17(c) (2000).
                See United States v. Arditti, 
    955 F.2d 3
    31, 345 (5th Cir. 1992).
                See id.
         The district court quashed the subpoena on the basis that it
    lacked the requisite specificity. Babo Loe does not challenge the
    court's finding. Instead, she argues that the court should have
    modified, rather than quashed, the subpoena. This was not an abuse
    of discretion.72
                              IV. LOE'S HIGHPORT, INC.
         LHI argues that the money laundering convictions for counts
    22-24 must be reversed. LHI contends, first, that the evidence can
    not establish that at least $10,000 of the "traced" money was
    fraudulently obtained "dirty money."73 LHI also argues that the
    district court's jury instructions were erroneous. The court told
    the jury that "you may find, but are not required to find, that in
    a [transaction from a commingled fund], as the language of Section
    1957 permits, that the transacted funds, at least up to the full
    amount originally derived from the crime, were the proceeds of the
    criminal activity or derived from that activity."
         As this Court has noted, money is fungible.74 The commingling
    of assets has placed courts in the difficult position of separating
    "clean" from "dirty" funds. Although any accounting method employed
             We note that Babo Loe never filed a request for a modified subpoena.
             See 18 U.S.C.A. § 1957 (2000).
             See United States v. Davis, 
    226 F.3d 346
    , 357 (5th Cir. 2000).
    to        this     end     inevitably      exhibits        certain       "arbitrary"
    characteristics,75 a rule of decision is necessary. In United States
    v. Davis,76 we stated the following rule for section 1957 cases
    involving        commingled    accounts:        "[W]hen    the    aggregate    amount
    withdrawn from an account containing commingled funds exceeds the
    clean funds, individual withdrawals may be said to be of tainted
    money, even if a particular withdrawal was less than the amount of
    clean money in the account."77 Davis also implies the converse—that
    where an         account   contains    clean     funds    sufficient    to    cover a
    withdrawal, the Government can not prove beyond a reasonable doubt
    that the withdrawal contained dirty money.78
              In   this   case,   counts    22-24     were    based    on   transactions
    originating in a $776,742 transfer from an account containing
    $2,205,000 paid by Lexington to the Loes. Of the $2,205,000, only
    $470,790.22 was fraudulently obtained. Since there was enough clean
               See United States v. Moore, 
    27 F.3d 969
    , 976-77 (4th Cir. 1994).
    226 F.3d 346
     (5th Cir. 2000).
           Davis, 226 F.3d at 357; see also United States v. Rutgard, 
    116 F.3d 1270
    1291-92 (9th Cir. 1997) (holding that money from a commingled account is presumed
    to be clean). But cf. United States v. Tencer, 
    107 F.3d 1120
    , 1131 (5th Cir.
    1997) (holding that, for a conviction under section 1956, "it is sufficient if
    the government proves at least part of the money represents [proceeds of mail
    fraud]"). We note that the Fourth and Third Circuits employ a presumption
    contrary to that which we applied in Davis. See United States v. Sokolow, 
    91 F.3d 396
    , 409 (3d Cir. 1996) (articulating presumption that money from commingled
    account is dirty); Moore, 27 F.3d at 976-77 (same). The presumption employed in
    Sokolow and Moore may be constitutionally infirm. Cf. Sandstrom v. Montana, 
    442 U.S. 510
     (1979) (holding that jury instructions creating a conclusive presumption
    against the defendant as to an element of a crime violates the Fourteenth
               Cf. United States v. Poole, 
    557 F.2d 531
    , 535-36 (5th Cir. 1977).
    money in the account to cover the $776,742 transfer, the rule of
    Davis mandates reversal of counts 22-24. No reasonable juror could
    conclude that these money laundering convictions were warranted
    beyond a reasonable doubt.79 Moreover, the jury instructions were
    also plainly inconsistent with Davis. As Babo Loe adopts LHI's
    arguments with respect to counts 22-24,80 her convictions under
    these counts must also be reversed.81
              See United States v. Giraldi, 
    86 F.3d 1368
    , 1371 (5th Cir. 1996).
           Neither party appeals its money laundering convictions under counts 25,
    29, 30, and 31. As discussed in a preceding section of this opinion, Babo Loe's
    sufficiency of the evidence challenge to count 25 is without merit. She did not
    adopt LHI's arguments for purposes of count 25. However, we note that application
    of the Davis rule would not change the outcome of her conviction on this count.
            There is much to be said in favor of a "proportionality" rule. Under such
    a rule, courts would treat any withdrawal from an account as containing
    proportional fractions of clean and dirty money. Applying the facts of the
    instant case, "dirty" funds ($470,790.22) comprised approximately 21 per cent of
    the total amount in the account ($2,205,00). Applying this same proportion to the
    withdrawal in question ($776,742), $165,842.42 of the funds withdrawn would be"
    dirty." As this amount exceeds the $10,000 threshold articulated in section 1957,
    LHI's conviction would be justified.
            A proportionality rule would avoid some of the oddities associated with the
    Davis approach. Under Davis, if aggregate withdrawals are less than the amount
    of clean funds in the account, the statute is not violated. However, once
    withdrawals exceed the clean funds in the account, all subsequent transactions
    (including the transaction by which the defendant exceeds the clean-funds
    threshold) are transformed into "dirty" transfers warranting conviction. A
    proportionality rule avoids this somewhat mechanistic result.
            Moreover, a proportionality rule is more sensitive to the fungible nature
    of money. Whereas the Davis rule engages in a presumption that clean money is
    spent before dirty money, a proportionality rule recognizes that a withdrawal
    mirrors the sources of the money in the account. If the account is the product
    of clean and dirty money, a withdrawal should reflect this arrangement in equal
            Finally, this rule would be more faithful to the plain language of the
    statute. The Davis rule allows a court to look at the total number of withdrawals
    from an account, aggregating a series of transactions. See United States v.
    226 F.3d 346
    , 357 (5th Cir. 2000); see also United States v. Heath, 
    970 F.2d 1397
    , 1404 (5th Cir. 1992). However, section 1957 imposes liability on a
    transaction-by-transaction basis. See 18 U.S.C.A. § 1957 ("Whoever . . .
    knowingly engages . . . in a monetary transaction in [dirty money] of a value
    greater than $10,000 . . . shall be punished."). A proportionality rule would
    avoid the aggregation mechanism condoned in Davis and more accurately reflect the
          LHI also argues that the indictments for money laundering were
    defective      because    they   failed    to   list   a   "specified   unlawful
    activity" that was the source of the laundered money. Section 1957
    requires that the defendant (1) knowingly (2) use "criminally
    derived property of a value greater than $10,000" (3) in a monetary
    transaction, and (4) that the property must be "derived from
    specified unlawful activity."82
          Each of the money laundering counts referred to one of the
    counts alleging conspiracy to commit mail and wire fraud. The
    conspiracy counts listed several alleged acts of mail and wire
    fraud. LHI notes that the money laundering counts of the indictment
    did not specify which act of mail or wire fraud was the source of
    the funds. Consequently, LHI argues that the indictment allowed for
    a non-unanimous jury verdict regarding which act of fraud was the
    source of the money.
          This argument misinterprets the term, "specified unlawful
    activity." This term does not imply that the indictment must list
    a specific unlawful act that is the source of the money. Instead,
    the statute proposes "specified unlawful activity" as a term of
    language and purpose of the statute. However, as the Davis rule is binding on
    this panel, see Broussard v. Southern Pac. Transp. Co., 
    665 F.2d 1387
    , 1389 (5th
    Cir. 1982) (en banc), we must apply it to the case at bar, leaving change to a
    case appropriately before the en banc court.
              18 U.S.C.A. § 1957 (2000).
    art.83 A specified unlawful activity is one of a set of federal
    crimes listed in 18 U.S.C.A. § 1956(c)(7). Section 1957 merely
    requires money to be derived from a particular set of federal
    crimes. It        does    not   require     the   indictment      to    specify   which
    unlawful activity generated the funds in question. In any case, we
    note that the money laundering counts of the indictment included
    allegations       sufficient     to   (1)    enumerate     each    element      of   the
    offense;     (2)    provide     Appellants        with   notice    of    the   precise
    transactions for which they were being prosecuted; and (3) prevent
    future prosecutions for the same offense.84 Thus, the indictment was
         Nor     is    jury    unanimity      regarding      the   specified       unlawful
    activity required. Our holding in United States v. Short85 affirms
    this conclusion. In Short, we upheld the conviction of a defendant
    as a "supervisor" of a continuing criminal enterprise.86 We found
    that the jury need not unanimously agree on the identities of the
    five subordinates required to make the defendant a supervisor.87
    Short indicates that contextual, predicate information need not be
    as precisely proven as the defendant's acts. In this case, LHI was
             See 18 U.S.C.A. § 1957(f)(3) (2000).
             See United States v. Flores, 
    63 F.3d 1342
    , 1360-61 (5th Cir. 1995).
    181 F.3d 620
     (5th Cir. 1999).
             See 21 U.S.C.A. § 848 (2000); Short, 181 F.3d at 623-24.
             See Short, 181 F.3d at 623-24.
    indicted for the commission of a single act, engaging in a monetary
    transaction. This act was clearly identified to the jury.88
          LHI further argues that the district court erred in excluding
    the testimony of an expert witness during the trial of counts 7-10.
    These counts accused LHI of having made false statements on a tax
    return, in violation of 26 U.S.C. § 7206(1). The defense expert
    would have testified that LHI overpaid, rather than underpaid, its
    taxes. LHI contends that the district court abused its discretion
    and deprived LHI of its Sixth Amendment right to call witnesses in
    its favor.
          The district court offered three reasons for excluding the
    testimony. First, the court found that the evidence was irrelevant.
    Second, the court expressed serious doubts as to whether tax
    liability could be accurately calculated given the poor condition
    of LHI's books. Finally, the court found that the defense provided
    the Government with inadequate notice that Appellants intended to
    offer the expert's testimony.
            LHI's reliance on United States v. Gipson, 
    553 F.2d 453
     (5th Cir. 1977),
    is misplaced. In that case, we held that jury instructions that did not require
    unanimity regarding the defendant's actus reus violated his Sixth Amendment
    rights. See id. at 458-59. The jurors in Gipson could have disagreed as to
    whether the defendant "received" or "sold" stolen property. Consequently, the
    verdict could not be deemed unanimous. See id. at 458. In contrast, the conduct
    of the defendant in the instant case was identified to the jury.
             LHI challenges each of the preceding bases for the court's
    decision. LHI contends that evidence of tax liability is relevant
    to its motive to make a false statement.89 LHI argues that proof of
    motive tends to prove knowledge and intent. Therefore, if LHI had
    overpaid its taxes, it is less likely that it would have intended
    to make the false statement.
             Although we recognize the intuitive appeal of this syllogism,
    we are unpersuaded by LHI's reasoning. This Court has specifically
    held        that   evidence   of   tax    liability   is   irrelevant   in     false
    statement cases.90 Although reliance on a qualified tax preparer is
    an affirmative defense in such cases,91 LHI does not contend that
    the expert's testimony would have established reliance.
             Even if we found this testimony to be logically relevant to
    LHI's intent, a court could reasonably find that other factors
    outweighed its probative value. The court could have determined
    that evidence of tax liability would confuse the jury, misleading
    it into believing that tax liability is an element of the offense.
    Moreover, the court could have found that such proof would waste
    time on collateral issues.92 Nothing prevented Appellants or their
           Violation of 26 U.S.C. § 7206(1) requires the Government to prove, inter
    alia, that a defendant willfully made and subscribed to false tax returns and
    that it did not believe the returns to be true as to every material matter. See
    United States v. Wilson, 
    887 F.2d 69
    , 72 (5th Cir. 1989).
                See United States v. Johnson, 
    558 F.2d 744
    , 745 (5th Cir. 1977).
                See Wilson, 887 F.3d at 73.
                See Fed. R. Evid. 403 (2000); Johnson, 558 F.2d at 747.
    tax preparers from testifying that they were unaware of their tax
    liability or that they did not intend to make a false statement. We
    find that the court did not abuse its discretion in excluding the
    testimony.93 We therefore need not address the adequacy of the
    court's additional reasons for excluding the testimony.94
             LHI   further   contends    that     the   district   court   erred   in
    computing restitution for the fraudulent invoices submitted to the
    insurers. The district court ordered restitution of the entire
    value of the invoices with no reduction to reflect the actual costs
    that LHI incurred in mitigating losses. It is undisputed that LHI
    expended substantial sums in mitigating damage from the 1990 flood.
    On the basis of evidence submitted to the district court, LHI
    contends that court abused its discretion in failing to offset
    LHI's expenses from the restitution amount.95
             LHI's argument is meritless. The court found that neither the
    fraudulent invoices nor other evidence credibly reflected the
    actual expenses incurred by LHI. LHI was unable to provide reliable
    evidence supporting its claims. Although a defendant in LHI's
            See United States v. Willis, 
    38 F.3d 170
    , 174 (5th Cir. 1994) (stating
    that a court's decision to exclude expert testimony is reviewed for abuse of
             Babo Loe adopts the preceding argument, which fails for the reasons given
              See United States v. Chaney, 
    964 F.2d 437
    , 451-52 (5th Cir. 1992)
    (articulating an abuse-of-discretion standard for restitution calculations).
    position          would    normally    be   entitled       to   a   reduction   in   the
    restitution award,96 the absence of credible evidence to support a
    claim of mitigation loss would preclude such an offset. We find
    that        the    court's      decision    did    not     constitute   an   abuse     of
                                           V. CONCLUSION
            We AFFIRM the conviction of Appellants as to all counts except
    counts 22-24.             As   the   evidence     was    insufficient   to   support   a
    verdict, we REVERSE the convictions of Babo Loe and LHI on counts
    22-24 and REMAND to the district court for resentencing.
                See U.S.S.G. § 2F1.1, cmt. note 8 (2000).
            Cornelius Loe adopts the preceding argument. For the reasons articulated
    above, this argument fails as applied to his case.
    DeMOSS, Circuit Judge, dissenting:
         With all due respect, I cannot join in the generalizations and
    circuitous reasoning by which the majority concludes that the
    conduct charged in Count 17 of the indictment was not barred by the
    five-year statute of limitations.     Count 17 of the indictment
    charged a conspiracy (in violation of § 371) “to defraud insurance
    companies and to obtain money and property by means of false and
    fraudulent pretenses and promises by use of facilities of the U.S.
    mail (in violation of § 1341) and by use of transmissions in
    interstate commerce by means of wire communications (in violation
    of § 1343).
         The elements of the offense prohibited by § 371 are (1) the
    making of an agreement by two or more persons to violate a criminal
    statute of the United States, and (2) the doing by one or more such
    persons of any act to effect the object of such conspiracy, i.e.,
    the violation agreed upon.     In this case, Count 17 charges a
    conspiracy to violate § 1341 (mail fraud) and § 1343 (wire fraud).
    The elements of the offense of mail fraud are (1) the devising of
    a scheme to defraud or for obtaining money or property by means of
    false or fraudulent pretenses, representations, or promises, and
    (2) placing any matter or thing in the U.S. mails for the purpose
    of executing such scheme.    The elements of wire fraud are (1)
    devising a scheme to defraud or for obtaining money or property by
    means    of   false    or    fraudulent    pretenses,     representations,        or
    promises,     and   (2)     transmitting   by     means   of    wire,   radio,    or
    television communication in interstate or foreign commerce any
    writing, sign,        signal,   picture,     or   sound   for    the    purpose   of
    executing such scheme.
          In the indictment in this case, Count 17 contains a separate
    section headed “THE SCHEME TO DEFRAUD.”              That portion of Count 17
    states that the defendants “would submit or cause to be submitted,
    false and fraudulent claims to the insurance companies covering the
    losses caused by the 1990 flood in order to inflate the loss to the
    marina and the restaurants.”          This portion of Count 17 goes on to
    indicate that the false and fraudulent claims “would be false and
    fraudulent in one or more of the following ways” and there follows
    six     separate      subparagraphs    specifically       describing       various
    fictitious claims, duplicate invoices, invoices for losses which
    had not actually occurred, invoices which were altered to increase
    the amount of expenditure made, fictitious corporations that were
    formed to be third-party contractors, and false claims for business
    interruption loss which understated the amount of income to the
          There then follows another subpart of Count 17 headed “MANNER
    AND MEANS” which alleges the manner and means by which the scheme
    to defraud would be accomplished as follows:
                                            1)The     defendants
              would systematically inflate casualty and business
              interruption losses to the property and businesses
              of LOE’S HIGHPORT, INC.
                                            2)The      defendants
              would submit, or cause to be submitted, via the
              United States Postal Service or by means of
              interstate wire communications, false claims to the
              insurance companies covering such losses for
         I think it is critically important to note that in the
    subparts of Count 17 of the indictment, headed “THE CONSPIRACY”,
    “THE SCHEME TO DEFRAUD”, and the “MANNER AND MEANS”, there is
    absolutely no mention whatsoever of any controversy between the
    defendants and David Hull, who leased a portion of the marina
    premises for operating a waterfront restaurant. Likewise, there is
    no mention of any kind of any controversy with David Hull regarding
    distribution of insurance proceeds in connection with the 1990
    flood damage.
         Count 17 further alleged in 22 separate subparagraphs overt
    acts which   the    defendants   committed   on   specific   days   and   in
    specific manner.     The first 20 of these subparagraphs allege overt
    acts which expressly include references to use of facilities of the
    U.S. Postal Service or interstate wire communications.          The first
    20 of these overt acts allege conduct occurring on dates that were
    more than five years prior to the filing of the initial indictment
    in this case.      The overt act in paragraph 21 is alleged to have
    occurred on November 26, 1990, which is more than five years prior
    to the filing of the original indictment in this case on September
    21, 1997; and this subparagraph contains absolutely no allegation
    of any kind relating to the use of facilities of the U.S. Post
    Office or any interstate wire transmission facility.               The conduct
    described in subparagraph 21 is the filing of a lawsuit against
    David   Hull,   individually,     and   in   his   capacity   as     Waterfront
    Restaurant.     David Hull is not a named co-conspirator in the
    indictment nor is he named as an unindicted co-conspirator.
         The last overt act alleged in Count 17 reads as follows:
                                             22)On     or    about
               December, 1992, BABO BEAZLEY LOE, C.D. LOE, JR. and
               LOE’S HIGHPORT, INC. effected a settlement of the
               lawsuit and received a portion of the fraudulently
               obtained insurance proceeds.
    While the date of December 1992 would be within five years of the
    filing of the initial indictment, there is absolutely nothing in
    this subparagraph 22 which specifies the use of any U.S. Post
    Office facility nor any interstate wire transmission facility.
    Neither § 1341 nor § 1343 makes a crime            out of merely fraudulent
    misrepresentations     or     false   promises;    rather,    each    of   these
    statutory provisions makes a crime out of (1) use of the U.S. mails
    (§ 1341) or (2) transmission of a matter by interstate wire
    communications for the purpose of “executing” some fraudulent
    scheme.     I   find   very    convincing    the    arguments   advanced      by
    defendant, C. D. Loe, Jr., (and adopted by Babo Beazley Loe and
    Loe’s Highport, Inc.) that no such conduct on the part of any of
    the defendants was alleged in subparagraphs 21 and 22 of Count 17,
    and there is no testimony in this record that any such conduct did
    occur.   The   language   in   paragraph   22   of   Count   17   that   the
    defendants “effected a settlement of the lawsuit” refers to the
    lawsuit described in paragraph 21, which was filed on November 26,
    1990. In this lawsuit, the Loes sought recovery of money loaned to
    David Hull.    There is no factual allegation and no factual proof
    that the settlement of that lawsuit was the result of anything sent
    by the U.S. mail nor any matter transmitted by wire communication.
    There is no factual allegation nor any factual proof that the
    settlement of such lawsuit was the result of any conduct that was
    false, fraudulent, or misleading.       There is no factual allegation
    and no factual proof that the insurance company that was the victim
    of the scheme to defraud alleged in subparagraphs one through 20 of
    Count 17 even knew of such settlement, much less that it was
    motivated to take any action based thereon.          To the contrary, the
    record evidence in this case is clear and unequivocal that the
    insurance company had paid all sums of money which it intended to
    pay on the “fraudulent” claims submitted by the Loes for the 1990
    flood damage by July 11, 1991, some 14 months prior to September
    12, 1992, the date upon which the five-year statute of limitations
    cut off would be applicable.       In my view, when the insurance
    company deposits into the registry of the court a sum of money
    which it considers to be full and final payment for all of the
    costs and losses sustained in the 1990 flood damage at the Loes’
    marina,    the   fraud   and    misrepresentations      would    be   complete
    regardless of whether the Loes ever withdrew the money from the
    registry of the court or not.                 Surely, actual receipt by a
    defendant of the cash proceeds of his fraudulent conduct cannot be
    an essential element of the offense; and “constructive receipt” by
    the defendants of the cash proceeds by the placing of the funds in
    the registry of the court as occurred in this case should start the
    running of the statute of limitations.            All of the funds paid by
    the insurance company on the basis of fraudulent loss claims were
    deposited into the registry of the state court (a total of close to
    $2 million), and all but $2,000 of that sum was withdrawn by the
    defendants more than five years prior to the filing of the first
    indictment in this case.            While it is true that the $2,000 was
    disbursed from the registry of the court within five years prior to
    the filing of the first indictment, I think even the majority would
    agree with me that the facts clearly indicate that the defendants
    had absolutely nothing to do with the delay in disbursement.              That
    delay was the result of (1) errors and omissions on the part of the
    state     district   court     in    framing   the   disbursal   order,    (2)
    unauthorized decisions by the investment company holding the funds
    to give greater weight to the state judge’s language as to the
    amount to be retained rather than the amount to be paid to the
    defendants, and (3) a failure on the part of counsel for the
    defendants to promptly call for a correction of this mathematical
         With surprising candor, the government recognizes that the
    only way it can avoid application of the five-year statute of
    limitations to Count 17 is to persuade the Court that the conduct
    described in overt act 22 (i) constitutes an act by one or more of
    the defendants and (ii) constitutes an act “to effect the object of
    the conspiracy” alleged in Count 17.    In my view, the conduct in
    overt act 22 was neither.
         The case law precedents which should guide our determination
    are for the most part well established.     In Grunewald v. United
    353 U.S. 391
     (1957), the Supreme Court clearly held that in
    order for the government to sustain a conviction for conspiracy
    against a statute of limitations defense, the government must prove
    that the conspiracy was still in existence as of the limitations
    bar date and that at least one overt act by a defendant was
    performed after that date. Likewise, the Supreme Court has clearly
    stated that when doubt exists about the statute of limitations in
    a criminal case, the limitations period should be construed in
    favor of the defendant.   See United States v. Habig, 
    390 U.S. 222
    226-27 (1968). This rule of construction in favor of the defendant
    has been recently recognized by our Circuit in United States v.
    138 F.3d 986
     (5th Cir. 1998).    The question of whether a
    prosecution is barred by the statutes of limitations is a question
    of law, subject to plenary review on appeal in this Circuit.
    United States v. Manges, 
    110 F.3d 1162
    , 1169 (5th Cir. 1997).                      In
    Manges, our Court stated:
                                              Shanklin claims that
                he was prosecuted in violation of the applicable
                five-year statute of limitations. See 18 U.S.C. §
                3282. With respect to the conspiracy count only,
                we agree. Our review is plenary.
    Id. at 1169 (emphasis added).          The Supreme Court has also clearly
    held that “statutes of limitations normally begin to run when the
    crime is complete.” Pendergast v. United States, 
    317 U.S. 412
    , 418
    (1943).    And the text of the five-year statute (18 U.S.C. § 3282)
    expressly states that the five-year limit applies “except as
    otherwise    expressly      provided    by    law.”     In    light    of    these
    principles, the Supreme Court has held that “the doctrine of
    continuing       offenses    should     be    applied    in     only    limited
    circumstances” and should not be reached unless the explicit
    language    of   the   substantive     criminal   statute     compels       such   a
    conclusion.”      Toussie v. United States, 
    397 U.S. 112
    , 114 (1970).
    Finally, in United States v. Marion, 
    404 U.S. 307
    , 322 (1971), the
    Supreme Court stated that statutes of limitations,
                represent legislative assessments of relative
                interests of the State and the defendant in
                administering and receiving justice; they “are made
                for the repose of society and the protection of
                those who may (during the limitation) ... have lost
                their means of defense.”    These statutes provide
                predictability by specifying a limit beyond which
                there is an irrebuttable presumption that a
              defendant’s      right    to   a    fair   trial   would   be
    Id. (citation omitted).
         In addition to the foregoing Supreme Court authority, we have
    clear holdings by panels of this Circuit to guide us in this case.
    In the early case of United States v. Davis, 
    533 F.2d 921
     (5th Cir.
    1976), our Court wrestled with a controversy very similar to the
    one in this case.     In Davis, the indictment charged conspiracy to
    violate 18 U.S.C. § 1006 by agreeing to make false, fictitious, and
    fraudulent statements and representations to the Department of
    Labor Manpower Administration, an agency of the United States
    Government.    Only two of the eight overt acts set forth in the
    indictment were alleged as occurring within the five-year period of
    the statute of limitations.        The defendant in Davis asserted that
    the two overt acts which happened within the five-year limitations
    period did not constitute acts in furtherance of the conspiracy
    alleged and our Court agreed.       Relying on most of the Supreme Court
    law referred to earlier, our Court concluded that the prosecution
    of Davis was barred by the statute of limitations and granted a
    judgment of acquittal.
         Similarly, in United States v. Manges, supra, a panel of our
    Court addressed specifically the circumstances of a charge of
    conspiracy to violate the mail fraud statute against a defendant’s
    contention    that   it   was   barred   by   the    five-year   statute   of
    limitations.   In reversing the conviction of the defendant on this
    conspiracy count, our Court pointed out that the conspiracy statute
    (18 U.S.C. § 371) “explicitly provides that for the crime of
    conspiracy to be complete, one or more of the conspirators must
    have performed an act to bring about the object of the conspiracy.
    This language cannot be stretched to include the posting of a
    letter by a non-conspirator.”
           In my view, our Circuit holdings in Davis and Manges, provide
    much clearer and better instruction as to the disposition of this
    case now before us than does our holding in United States v.
    744 F.2d 1170
     (5th Cir. 1984), which is the centerpiece and
    corner-stone of the government’s theory in this case.                  In Girard,
    the grand jury indicted the defendants for conspiring to defraud
    the United States in violation of 18 U.S.C. § 371.                  The indictment
    alleged      that   the   scope   of    the    conspiracy    encompassed      three
    purposes:      (1) to secure the contract for Girard Plumbing; (2) to
    obtain Housing Authority funds under the contract; and (3) to
    conceal the fraudulent nature of the bidding from the appropriate
    authorities.        The government asserted that the last payment due
    under the contract occurred on a date inside the five-year statute
    of limitations. In light of this payment, our Court concluded that
    the conspiracy continued until this last payment was received and
    that   the    acceptance    of    the   last    payment     under    the   contract
    satisfied the requirement that an overt act in furtherance of the
    conspiracy occurred within the proscribed time frame.
           I note that the majority does not say that they are bound by
    the prior decision in Girard, but merely categorize that decision
    as “instructive.”       I have no quarrel with our Court’s holding in
    Girard based on the express circumstances described therein, but I
    disagree wholeheartedly with the majority’s conclusion that it
    provides even “instructive” help in deciding the issue here in Loe.
    The   distinctions     between      Girard       and   Loe   are    fundamental    and
    significant.       In Girard, the charge was conspiracy to defraud the
    United   States     directly      under    §   371;    in    Loe,   the   charge   was
    conspiracy to commit mail fraud and wire fraud against a private
    insurance company.       In Girard, there were express allegations of
    three purposes for the conspiracy which included receipt of the
    funds to be paid by the United States Government under the contract
    with Girard which was fraudulently secured; and such allegations
    tied in neatly with the fact of final payment by the United States
    Government to Girard on the contract within the five-year statute
    of limitations.      I challenge my colleagues in the majority to find
    similar express allegations in the language of Count 17 of the
    indictment of this case.          As I have described previously, in Count
    17    there   is   nothing   in    the     subparts     thereof     describing     The
    Conspiracy, The Scheme to Defraud, and The Manner and Means which
    can be connected with or anticipates in any way the allegations in
    subpart 22 of the overt acts.            Finally, in Girard, it is clear that
    the final payment on the contract came from the United States
    Government agency that was the victim of the fraudulent bidding
    scheme.   In contrast, here, it is clear even from the majority’s
    opinion that the insurance company that was the target and victim
    of the alleged mail and wire frauds deposited a final payment into
    the registry of the court in the sum of $638,388.34 in July of
    1991, some 14 months outside of the five-year limitations period,
    which started on September 11, 1992.          And in March 1992, some six
    months outside of the limitations period, the state district court
    ordered that $624,867.79 be paid to the Loes, which was their true
    and rightful share of the insurance proceeds deposited into the
    registry of the court. The $2,000 which was ultimately distributed
    to Babo Loe as Trustee for Loe’s Highport in January or February
    1993, was a part of the sum previously ordered to be distributed in
    March   1992   by   the   district   court.    There   is,   therefore,   no
    allegation in Count 17 and no proof thereof cited by the government
    that would indicate any payment by the insurance company that was
    the victim of the alleged frauds to the defendants during the five-
    year period of limitations.
         For all of the foregoing reasons, I respectfully dissent from
    the portion of the majority opinion that affirms the convictions
    and sentences of the defendants relating to Count 17.          In my view,
    Count 17 was clearly barred by the statute of limitations, and the
    convictions and sentences of defendants based on Count 17 should be
    vacated and set aside.        For two of the defendants, Babo Loe and
    Loe’s Highport, Inc., vacation of these convictions and sentences
    would not produce any significant reduction in the sentences that
    they   received   under   other   convictions   from   this   indictment.
    However, as to defendant, C. D. Loe, Jr., whose only conviction was
    under Count 17, vacation of the conviction and sentence on Count 17
    would relieve him of being a convicted felon and the burden of
    having to respond in fines and restitution obligations after his
    release from prison.