United States v. Tucker ( 2003 )

  •                                                                  United States Court of Appeals
                                                                              Fifth Circuit
                                                                           F I L E D
                           UNITED STATES COURT OF APPEALS
                                For the Fifth Circuit                     September 5, 2003
                                                                       Charles R. Fulbruge III
                                        No. 02-41104
                             UNITED STATES OF AMERICA,
                                  RICHARD JAMES TUCKER,
                    Appeal from the United States District Court
                          for the Eastern District of Texas
    Before WIENER and BARKSDALE, Circuit Judges, and FURGESON, District
    FURGESON, District Judge:
         Defendant-Appellant Richard James Tucker appeals from a jury
    verdict finding him guilty of one count of securities fraud and one
    count     of   mail   fraud    on   the   ground   that   the   district    court
    improperly excluded his securities expert. Tucker also appeals the
    district court’s 1) failure to submit an element of the crimes
    charged to the jury, 2) misstatement of the intent element in the
           District Judge of the Western District of Texas, sitting by
    jury charge, 3)failure to provide a specific unanimity-of-theory
    instruction    to    the    jury,   and   4)   imposition         of   consecutive
    sentences.     For   the    reasons   stated   below       we    AFFIRM   Tucker’s
    conviction and sentence in full.
                                FACTS AND PROCEEDINGS
         First Fidelity Acceptance Corporation (“FFAC”) was a Nevada
    corporation founded in 1991 and headquartered in Plano, Texas. Its
    purpose was to purchase and sell automobile loans in the form of
    installment sales contracts, secured by automobiles and light
    trucks.   Upon acquiring the automobile loans, FFAC would then
    “package” the loans and sell them to financial institutions and
    large investors.
         Tucker joined FFAC in April of 1992 as a consultant to aid the
    corporation    in    its    first   private    placement         of    asset-backed
    securities. In September of that year, the FFAC Board of Directors
    named Tucker Chief Executive Officer and Chairman of the Board.
    According to Tucker, FFAC was performing exceptionally well from
    1992 until the first quarter of 1996, with total assets worth
    $11,672,000.        The    Government,    however,    maintains         that     FFAC
    experienced mixed financial results from 1991 through 1995, at
    which time FFAC was facing a financial crisis.
         In 1996, FFAC created a wholly-owned subsidiary, Automobile
    Receivables    Corporation       (“FFAC-ARC”),       for        the    purpose     of
    establishing   certain      investment    trusts.      Thereafter,        FFAC-ARC
    organized three trusts with the goal of raising money to be
    borrowed by FFAC and its subsidiaries for investment in automobile
    loans.     In order to generate capital, the trusts facilitated the
    offer and sale of certificates; the minimum investment amount was
         To     entice    potential   investors   to   purchase    the   trust
    certificates, Tucker drafted a Private Placement Memorandum (“PPM”)
    describing the investment, the trust, and the trust’s relationship
    to FFAC.     The PPMs also contained a number of representations
    regarding how FFAC would handle and use the money collected from
    the investors.       Notably, the PPMs promised that (1) the proceeds
    from the sale of the certificates would be used only for the
    purposes denoted in the PPM; (2) the trust at all times would have
    investments and cash with an aggregate value exceeding the balance
    of the certificates; (3) none of the assets in the trust would be
    available to FFAC or its subsidiaries without first paying to the
    trust the entire carrying value of such assets; and (4) investors
    could obtain refunds of their entire investments within ninety days
    of their requests.      Each PPM’s “specific use of proceeds” section
    indicated that the proceeds from the sale of the certificates would
    only be invested in automobile loans and automobile floor planning,
    or placed in insurance reserves or cash reserves.2            Finally, the
    PPMs advised all potential investors that the investments were
            In his appellate brief, Tucker also notes that “the PPMs
    permitted the monies received from investors to be transferred to
    FFAC and, in fact such a scenario was expected.”
    risky and subject to total loss, and that FFAC might be unable to
    sell the loans it acquired with the proceeds from the sale of
         Tucker described the investments as securities in both the
    PPMs and in two Regulation D filings with the United States
    Securities   and   Exchange   Commission    (“SEC”).3       Tucker    also
    represented to the SEC in the Regulation D filings that the money
    raised would not be used for “salaries and fees” or “repayment of
         The   Government   presented   as   part   of   its   case   Tucker’s
    conversations with various securities brokers in which Tucker
    assured them that the proceeds from the certificate sales would be
    used only for the purchase of automobile loans and not FFAC’s
    business costs.    Tucker allegedly made the same statements to a
    member of the FFAC Board of Directors.
         The Government also offered evidence that Tucker prepared
    false financial records demonstrating that the funds raised by the
    sale of the certificates were invested as represented in the PPMs.
    Securities broker Joe Miller testified that his firm continually
    requested from Tucker financial statements reflecting the use of
    the trust funds.     In response, Tucker, in July of 1997, sent
    financial statements to Miller indicating that he had purchased a
    large number of automobile loans with the proceeds, and that each
             See 17 C.F.R. §§ 230.501-.508.
    of the trusts, not FFAC, possessed cash and automobile loans in
    excess   of   the    amounts   invested.   Tucker     made   a   similar
    representation to Miller’s firm in March of 1998, weeks before the
    collapse of FFAC.4
         The Government contended at trial that Tucker did not use the
    majority of the money raised from the sale of the certificates to
    purchase automobile loans.      Instead, Tucker had used substantial
    amounts of the investors’ funds to pay FFAC salaries, rent, legal
    fees, and other operating costs such as travel and entertainment
    expenses.     Moreover, Tucker, it was maintained, had used the
    investors’ funds raised in the third trust to repay investors in
    the second trust who had demanded reimbursement; had paid interest
    and principal on securities that FFAC had issued in 1995, as well
    as debts incurred prior to the creation of the trusts; and had paid
    a settlement in a civil lawsuit against him and FFAC with the
    proceeds of the certificate sales.
         In April of 1998, the Chief Financial Officer of FFAC reported
    to FFAC’s Board of Directors that the corporation was insolvent.
    Thereafter, the Board forced Tucker to resign.      A team charged with
    reviewing the books and records of the trusts and FFAC concluded
    that FFAC was bankrupt and that the trusts held almost no assets of
            Although the Government alleges that Tucker created “bogus
    financial statements,” Tucker asserts that his “records disclosed
    the expenditure of every dollar, whether raised from the investors
    or other sources, and [that] there was no second set of sham
    accounting records.” We find it difficult to reconcile these two
    conflicting statements.
    value.   Those investors who had not withdrawn their investment by
    April 15, 1998, lost the principal of their investment in addition
    to any interest accrued.    The losses incurred by all investors
    totaled over $15 million.
         On November 14, 2001, a federal grand jury in the Eastern
    District of Texas returned a two-count indictment against Tucker,
    charging him with one count of securities fraud and one count of
    mail fraud.5
         The first count accused Tucker of the “[u]se of interstate
    commerce for [the] purpose of fraud or deceit.”6     The indictment
    alleged that Tucker had engaged in all of the activities prohibited
    in 15 U.S.C. § 77q(a)(1), (2), and (3).7   The Government averred in
    the indictment that Tucker’s “scheme and artifice” to defraud was
    evinced in the various statements contained in the PPMs, as set
            15 U.S.C. §§ 77q(a) & 77x (securities fraud); 18 U.S.C. §
    1341 (mail fraud).
            Section 77q, entitled “Fraudulent interstate transactions,”
    makes it a crime:
         for any person in the offer or sale of any securities .
         . . by the use of any means or instruments of
         transportation or communication in interstate commerce or
         by use of the mails, directly or indirectly
         (1) to employ any device, scheme, or artifice to defraud,
         (2) to obtain money or property by means of any untrue
         statement of a material fact or any omission to state a
         material fact necessary in order to make the statements
         made, in light of the circumstances under which they were
         made, not misleading; or
         (3) to engage in any transaction, practice, or course of
         business which operates or would operate as a fraud or
         deceit upon the purchaser. 15 U.S.C. § 77q(a).
             See id.
    forth above.8
         Specifically, count one of the indictment included charges
    that while making certain promises in the PPMs, Tucker neglected to
    disclose to potential investors, inter alia, that: (1) their
    investments would not be held in the trusts but rather deposited
    directly into FFAC’s operating account; (2) the proceeds would be
    used to pay FFAC’s operating costs; (3) previously invested funds
    had not been expended as promised; and (4) the “interest” paid to
    some investors consisted of the proceeds from certificate sales and
    not actual interest earned on investments in automobile loans. The
    Government   averred     that   Tucker    sent   the   fraudulent   PPMs   to
    potential    investors    via   the   United     States   mail,   commercial
    interstate carriers, and interstate facsimile, and that he directed
    the investors to mail payments to FFAC’s offices in Plano, Texas.
    Finally, the Government listed thirteen individuals whom Tucker had
    allegedly swindled, along with the dates of their investments, the
            According to the indictment, Tucker promised in the PPMs
         (1) the investors’ money would be held in the trust, (2)
         the investors’ money would be used to invest in
         automobile loans and not used to pay FFAC’s operating
         costs, (3) the trusts would have investments and cash
         with an aggregate value or “liquidation value” in excess
         of the aggregate balance of the certificates at all
         times, (4) none of the assets of the trusts would be
         available to FFAC or its subsidiaries without first
         paying the trusts the full carrying value of such assets,
         (5) investors could receive their investments back in
         full in less than ninety days after requesting their
         funds, and(6) management of FFAC believed that there were
         no legal proceedings that were likely to have a material
         adverse effect on FFAC.
    amounts, and their out-of-state addresses.
         The second count of the indictment accused Tucker of mail
    fraud.9   This count reiterated the allegations of count one, but
    added that Tucker, in effecting his scheme and artifice to defraud,
    knowingly and willfully caused investors to place into the United
    States mail envelopes addressed to FFAC and containing payment for
    the purchase of the trust certificates.       The Government also
    duplicated the listing of investors in count one.
    I.   Exclusion of Expert Testimony
         A.    Standard of Review
         Tucker argues on appeal that the district court erred in
           The Mail Fraud statute provides:
         Whoever, having devised or intending to devise any scheme
         or artifice to defraud, or for obtaining money or
         property by means of false or fraudulent pretenses,
         representations, or promises, or to sell, dispose of,
         loan, exchange, alter, give away, distribute, supply, or
         furnish or procure for unlawful use any counterfeit or
         spurious coin, obligation, security, or other article, or
         anything represented to be or intimated or held out to be
         such counterfeit or spurious article, for the purpose of
         executing such scheme or artifice or attempting so to do,
         places in any post office or authorized depository for
         mail matter, any matter or thing whatever to be sent or
         delivered by the Postal Service, or deposits or causes to
         be deposited any matter or thing whatever to be sent or
         delivered by any private or commercial interstate
         carrier, or takes or receives therefrom, any such matter
         or thing, or knowingly causes to be delivered by mail or
         such carrier according to the direction thereon, or at
         the place at which it is directed to be delivered by the
         person to whom it is addressed, any such matter or thing,
         shall be fined under this title or imprisoned not more
         than 20 years, or both. 18 U.S.C. § 1341.
    preventing his securities expert from testifying.             We review the
    admission or denial of expert evidence for abuse of discretion.10
    “District    courts   enjoy   wide       latitude    in    determining   the
    admissibility of expert testimony, and the discretion of the trial
    judge and his or her decision will not be disturbed on appeal
    unless manifestly erroneous.”11      If it is found that the district
    court abused its discretion in denying the admission of expert
    evidence, we must then consider whether the error was harmless,
    “affirming the judgment unless the ruling affected a substantial
    right of the complaining party.”12          In the criminal context, in
    assessing whether an error affected a “substantial right” of a
    defendant, the necessary inquiry is “whether the trier of fact
    would have found the defendant guilty beyond a reasonable doubt
    with the additional evidence inserted.”13
         The Supreme Court in Daubert v. Merrell Dow Pharmaceuticals,
    Inc.14 laid down the analytical framework for determining whether
            See Moore v. Ashland Chem., Inc., 
    151 F.3d 269
    , 274 (5th
    Cir.1998) (en banc) (citing General Elec. Co. v. Joiner, 
    522 U.S. 136
            Watkins v. Telsmith, Inc., 
    121 F.3d 984
    , 988 (5th Cir.1997)
    (internal quotations and citations omitted).
              United States v. Norris,           
    217 F.3d 262
    , 268-69 (5th
    Cir.2000) (citations omitted).
            United States v. Roberts, 
    887 F.2d 534
    , 536 (5th Cir.1989)
    (citing United States v. Lay, 
    644 F.2d 1087
    , 1091 (5th Cir. Unit A
    1981) and United States v. Lueben, 
    812 F.2d 179
    , 187 n.7 (5th
    509 U.S. 579
    expert testimony is admissible under Federal Rule of Evidence 702.15
    “Under Daubert, Rule 702 charges trial courts to act as ‘gate-
    keepers,’ making a ‘preliminary assessment of whether the reasoning
    or methodology underlying the testimony is scientifically valid and
    of whether that reasoning or methodology properly can be applied to
    the facts in issue.’”16 Accordingly, in order to be admissible,
    expert testimony must be both “relevant and reliable.”17        The
    Daubert considerations apply to all species of expert testimony,
    whether based on “scientific, technical, or other specialized
         B.    Analysis
         The district court concluded during trial that Rule 702 barred
    all of the testimony of Tucker’s proposed expert, Joel Held.    The
    reliability of Held’s testimony does not seem to be in dispute.
            Rule 702 of the Federal Rules of Evidence provides:
         If scientific, technical, or other specialized knowledge
         will assist the trier of fact to understand the evidence
         or to determine a fact in issue, a witness qualified as
         an expert by knowledge, skill, experience, training, or
         education, may testify thereto in the form of an opinion
         or otherwise, if (1) the testimony is based upon
         sufficient facts or data, (2) the testimony is the
         product of reliable principles and methods, and (3) the
         witness has applied the principles and methods reliably
         to the facts of the case. FED. R. EVID. 702.
             Pipitone v. Biomatrix, Inc., 
    288 F.3d 239
    , 243-44 (5th
    Cir.2002) (quoting Daubert, 509 U.S. at 592-93).
              Id. at 244 (citing Daubert, 509 U.S. at 589).
             FED. R. EVID. 702; see also Pipitone, 288 F.3d at 244
    (citing Kumho Tire Co. v. Carmichael, 
    526 U.S. 137
    , 147 (1999)).
    For instance, the district court declared that Held was “qualified
    to give opinions on customs and practices that are followed by
    competent     practitioners     in    practicing      security    law   and   the
    preparation of Private Placement Memoranda and Offerings.”                    The
    brunt of the Government’s argument was that Held’s testimony would
    not   have    assisted    the   jury.        The   appropriate    inquiry   here,
    therefore, is “whether expert testimony proffered in the case is
    sufficiently tied to the facts of the case that it will aid the
    jury in resolving a factual dispute.”19
                 1.      Definition of “invest”
          Held was prepared to elucidate the meaning of “invest in
    automobile loans” as that phrase was employed in the “specific use
    of proceeds” section of the PPMs.              Specifically, Held would have
    refuted      the    Government’s     contention      that   an   investment    in
    automobile loans meant only the purchase of the principal amount of
    the loans.         Held would have urged instead that an investment in
    automobile loans entails not only the purchase of                loans, but also
    the operating expenses and costs, such as payment of commissions,
    travel and entertainment, finder’s fees, evaluation services, and
    attorney’s fees.
          This testimony is relevant to the issue of the definition of
    “invest,” as the term was used in the PPMs.                 Thus, the district
    court should have allowed Held to provide the jury with the usage
            Daubert, 509 U.S. at 591 (quoting United States v. Downing,
    753 F.2d 1224
    , 1242 (3d Cir.1985)).
    of the word “invest” within the securities industry.
         We find that the district court’s failure to allow Held to
    testify   as   to   an    expanded   definition     of    “invest,”    although
    improper, was not “manifestly erroneous.”20              While Held’s broader
    definition might have justified some of Tucker’s expenses outside
    the purchase of automobile loans, the Government offered evidence
    that many of Tucker’s expenditures violated even his liberal
    definition.       For    instance,   Tucker,   in   addition   to     using   the
    proceeds for the operating costs of FFAC, also dispersed the funds
    in payment of principal and interest on loans unrelated to FFAC-
    ARC; settlement in a civil lawsuit; and interest and principal to
    investors in the previous trusts, perpetuating what is known as a
    Ponzi scheme.21
         Tucker’s proposed expert testimony would have been limited to
    an understanding of the term “invest in auto loans” that would
    include various operating expenses associated with the purchase of
    automobile loans. Thus, even though the district court should have
    allowed Held to offer a definition that might have justified some
    of Tucker’s expenses, Tucker still deceived the investors by
    spending the money in other unauthorized ways.             Because the expert
             Watkins v. Telsmith, Inc., 121 F.3d at 984 (internal
    quotations and citations omitted).
            The Government also presented evidence that of the proceeds
    raised in the third trust, less than one percent was used to
    purchase automobile loans. Held was not prepared to testify that
    the term “invest” included this kind of minimum purchase of
    automobile loans.
    only addressed a fragment of the misuse of funds, and did not
    address substantial areas of Tucker’s other applications of those
    funds, any error in excluding Held’s testimony in this regard was
    minimal.     Moreover, even if we were to conclude that the district
    court     abused    its     discretion,     Tucker     cannot    demonstrate     how
    excluding the expert testimony affected a substantial right, that
    is, that     Held’s       testimony    regarding      the   meaning   of   the   word
    “invest” would have planted a seed of doubt in the jurors’ minds
    sufficient to acquit him of fraud.
                 2.     Nature of the certificates
         Tucker argues on appeal that Held also sought to testify that
    the certificates issued to the investors were not securities as
    defined by the Securities Exchange Act of 1934.22                 Under the terms
    of the Act, a security does not include “currency or any note,
    draft, bill        of   exchange,     or   banker’s    acceptance     which   has a
    maturity at the time of issuance of not exceeding nine months . .
    . .”23    Held would have opined that since the certificates at issue
    here were due immediately, they had a maturity date of less than
    nine months and therefore did not qualify as securities.                   Further,
    based on his expertise in the field of securities, Held would have
    testified that “generally companies take the position that notes
    that . . . have nine months or less of maturity and are similar to
               15 U.S.C. § 78a.
               15 U.S.C. § 78c(a)(10).
    commercial transactions, . . . are generally not secured, not
    treated as securities for the purpose of registration with the
    SEC.”     Finally, Held would have posited that the certificates were
    part of a secured transaction regulated by the Uniform Commercial
    Code and not the securities laws.        The basis for this latter
    opinion was the filing of a UCC-1 financing statement on behalf of
    the three trusts, conferring upon each one an equal security
    interest in all of the assets of FFAC.
         Although Tucker raises this point of error on appeal, it is
    apparent from the record that he never intended to submit the
    information described above to the jury.       Rather, Tucker agreed
    throughout the trial that Held’s proffer with regard to the issue
    of whether the certificates were securities was helpful only to the
    district court’s separate legal determination.24    Thus, it was not
    error for the district court to exclude evidence that Tucker never
    intended to have the jury consider in the first place.
         Moreover, even allowing that the district court somehow erred,
    Tucker has failed to show that Held’s testimony with regard to the
    nature of the certificates would have affected the outcome of the
    trial.     The fact that the certificates sold to the investors were
    redeemable on demand does not automatically remove them from
            At three points during the trial, Tucker asserted that whether
    the certificates were securities was a matter of law for the district
    court to decide.
    classification as a security.          In Reves v. Ernst & Young,25 The
    Supreme Court determined that a demand note could properly be
    considered a “security” regulated by the anti-fraud provisions.
    The Reves court rejected the notion that “legal formalisms”26 were
    controlling and instead found that all suspect items should be
    adjudged by the “family resemblance” approach.27           The Supreme Court
    in Reves also found the “fundamental essence of a ‘security’ to be
    its character     as   an   ‘investment.’”28   Under     the   circumstances,
    notwithstanding    Held’s    opinion   that    certain    qualities   of   the
    certificates favored the position that they were not securities, we
    agree with the district court’s legal conclusion that the facts
    494 U.S. 56
            Id. at 61 (noting that “Congress’ purpose in enacting the
    securities laws was to regulate investments, in whatever form they
    are made and by whatever name they are called”).
             Pursuant to the “family resemblance” approach, a court
    must, after concluding that the disputed      transaction does not
    strongly resemble a member of the non-security “family,”
         [f]irst . . . examine the transaction to assess the
         motivations that would prompt a reasonable seller and
         buyer to enter into it . . . Second, [the court must]
         examine the “plan of distribution” of the instrument . .
         . to determine whether it is an instrument in which there
         is “common trading for speculation or investment” . . .
         .    Third, [the court must] examine the reasonable
         expectations of the investing public . . . . Finally,
         [the court must] examine whether some factor such as the
         existence of another regulatory scheme significantly
         reduces the risk of the instrument, thereby rendering
         application of the Securities Acts unnecessary. . . .
    Reves, 494 U.S. at 66-67 (citations and internal quotations
    omitted); see also Trust Co. of Louisiana v. N.N.P. Inc., 
    104 F.3d 1478
     , 1489 (5th Cir.1997).
              Reves, 494 U.S. at 68-69.
    overwhelmingly supported a finding that the certificates were
    indeed securities.29
         Additionally, the record reveals that Tucker was able to
    elicit    the    testimony      regarding    the   UCC-1   financial      statement
    through Patti Plunkett, FFAC’s former Chief Financial Officer.
    Plunkett testified about the existence of the UCC-1 filing and also
    explained that the trustee possessed a first lien position on all
    of the assets of FFAC for the benefit of the investors in the three
    trusts.     Held’s testimony in this regard, which would have merely
    highlighted      these    same     characteristics,        was   cumulative     and
         In light of these matters, Tucker has not convinced us that
    the district court erred.            Certainly, Tucker has not raised a
    plausible suspicion that the trier of fact would not have found him
    guilty beyond a reasonable doubt “with the additional evidence
                3.       Tucker’s     belief     as    to   the      nature    of   the
         Much       of    Held’s     proposed     testimony       centered     on   his
    “understanding from the facts that Mr. Tucker believed, and relied
    upon, advice from counsel and others that the trust certificates
            The district court concluded that a weighing of the four
    family-resemblance   factors   “clearly  indicate[d]  that   the
    certificates sold by FFAC were securities.”
                United States v. Roberts, 887 F.2d at 536 (citations
    involved were not securities, and therefore not regulated by the
    federal securities laws.”31 Tucker’s argument, boiled down, is that
    he cannot be charged with a criminal violation of § 77q(a) if he
    did not subjectively believe that the certificates were securities.
         We believe that Held’s testimony in this regard was nothing
    more than an attempt by Tucker to testify by proxy, that is, to
    elicit the aid of a so-called expert to expound on Tucker’s mental
    state and thereby avoid taking the witness stand and undergoing
    rigorous cross-examination.
         Further, with regard to Tucker’s belief concerning the nature
    of the certificates, the Ninth Circuit has explained that:
          the government is required to prove specific intent only
          as it relates to the action constituting the fraudulent,
          misleading or deceitful conduct, but not as to the
          knowledge that the instrument used is a security under
          the Securities Act. The government need only prove that
          the object sold or offered is, in fact, a security; it
          need not be proved that the defendant had specific
          knowledge that the object sold or offered was a
    Thus, by utilizing this view of specific intent, the Ninth Circuit
    reasoned that the Securities Exchange Act’s raison d’etre, to
    prevent a seller’s fraudulent behavior, was served rather than
             Also in his written proffer, Held stated that he was
    prepared to testify that although he “did not provide Mr. Tucker
    with the original advice that the trust certificates were not
    securities, the law nonetheless supported the proposition.”
             United States v. Brown, 
    578 F.2d 1280
    , 1284 (9th Cir.
    1978); see also Buffo v. Graddick, 
    742 F.2d 592
    , 597 (11th Cir.
    1984); Cook v. State, 
    824 S.W.2d 634
    , 637 (Tex. App.– Dallas 1991).
    undermined.33       The focus is then necessarily on whether a defendant
    possessed the intent to defraud investors, his belief as to the
    nature of the certificates notwithstanding.
          By arguing that the certificates were not securities and
    therefore       not    subject     to   the    anti-fraud   provisions    of    the
    Securities Exchange Act of 1934, Tucker implicitly urges us to
    conclude that he was free to make whatever kind of representation
    he wanted to the potential investors, whether misleading or not.
    We   flatly     reject      this   reasoning    and   instead   adopt   the    Ninth
    Circuit’s view that the defendant’s belief concerning the nature of
    the securities is irrelevant. Additionally, we find that Tucker’s
    efforts    to      elicit    factual    testimony     through   his   expert   were
    impermissible.         Therefore, the district court properly excluded
    this portion of Held’s testimony.
                  4.      Regulation D evidence
          Finally, in what would have been Tucker’s response to the
    Government’s presentation of evidence that Tucker had submitted
    various filings with the SEC pursuant to Regulation D, Held sought
    to testify that based on his experience, the lead underwriters of
    the trusts, and not Tucker, were required to comply with the
    regulation. To fall within the safe harbor provision of Regulation
    D, and therefore be immune from certain registration requirements
    with the Securities and Exchange Commission, there can be no more
               Brown, 578 F.2d at 1284.
    than thirty-five unaccredited investors in a given endeavor.34               The
    regulation helps to ensure that mostly “sophisticated” purchasers
    are investing in private placements.
         Tucker does not refute the Government’s contention that he in
    fact filed Regulation D exemptions with the SEC.               Rather, Tucker
    contends he was not responsible for complying with Regulation D
    regarding the permissible number of unaccredited investors.              Thus,
    Tucker    argues    that   Held’s   testimony   was    relevant   as    to   the
    Regulation D information because Held “would have rebutted the
    prosecution’s claim that Mr. Tucker violated Regulation D.”35                The
    district    court    excluded   the   evidence    on    Rule    702    grounds,
    concluding that Held was improperly attempting to evaluate the
    evidence and render his opinion as to what the brokers should have
    drawn from it.
         At trial, the Government brought forth Joe Miller, who is the
    Chief Financial Officer of United Pacific Securities (“UPS”), one
    of the brokers offering the trust certificates.            Miller testified
    that UPS could only monitor the number of unaccredited investors by
    cooperating with the issuer, since it only had the information of
    its own investors.         Miller attested that if there were several
    brokers offering the same investment, it would be impossible to
              See 17 C.F.R. § 230.501-.508.
            Obviously, Held’s beliefs were patently unreliable insofar
    as he would have opined that sellers in the securities industry
    commonly seek Regulation D protection for investments they do not
    consider to be securities.    Thus, Held’s speculative testimony
    regarding Tucker’s intent was properly excluded.
    monitor the number of unaccredited investors without the aid of the
    issuer, in this case, the trusts.                The Government also offered a
    facsimile cover sheet from Tucker to Miller containing notations
    from a conversation between the two.                    Apparently, Miller had
    telephoned Tucker to inquire whether Tucker was monitoring the
    number of unaccredited investors. Miller wrote on the cover sheet:
    “Tucker   says   no   problem       with    non-accredited.      Has   monitored
          The Government also presented the testimony of Plunkett, who
    testified   that      she     tracked      the    number   of   accredited   and
    unaccredited investors in each trust and prepared a spreadsheet
    containing that information, as well as the investors’ names, the
    dates, and amounts of their investments.                Plunkett testified that
    she later noticed Tucker’s assistant concealing the accreditation
    information when faxing the spreadsheet to the broker dealers.
    Plunkett also claimed that Tucker subsequently instructed her to
    prepare two spreadsheets, one with the accreditation information
    and one without.
          Finally, the Government offered the testimony of Adamont
    Georgeson, an attorney who performed legal work for FFAC, regarding
    the contents of a letter he prepared and sent to UPS.                  The letter
    informed UPS that, based on Georgeson’s discussions with Tucker,
    the   investment      would    be    limited       to   accredited   purchasers.
    Georgeson also testified that he had discussed the issue of the
    Regulation D restrictions with Tucker who “was very clear” that
    there would be no unaccredited investors in the investments.
         At the presentation of each of these witnesses, Tucker’s trial
    counsel objected to the testimony on the grounds that Tucker was
    not being charged with a violation of Regulation D.           In response,
    the Court agreed to provide a cautionary instruction advising that
    jury that it could
         not find the Defendant guilty of any crime charged in the
         indictment solely because he may have violated a
         regulation of the Securities and Exchange Commission.
         However, you may but are not required to consider
         evidence of violations of these regulations as you would
         any other evidence in determining whether the Defendant
         had the motive or required intent to commit the crimes
         charged in the indictment.
         In   response,   Held   proposed   to   testify   that   UPS,   FFAC’s
    principal broker, who had the list of investors, was primarily
    responsible for monitoring the number of non-accredited investors.
    According   to   Held,   upon    reaching    thirty-five      unaccredited
    investors, it was incumbent upon UPS, rather than Tucker, not to
    add more unaccredited investors so as to remain within the shelter
    of Regulation D.
         We find that Held’s testimony was not helpful to the trier of
    fact, and therefore was properly excluded by the district court.
    First, in the face of direct evidence that Tucker had doctored the
    spreadsheets which would have demonstrated whether a particular
    investor was accredited or unaccredited, and thereby aided the
    brokers in monitoring the investors’ status, it is difficult to
    perceive how Held’s “specialized knowledge” of the regulation would
    have assisted the jury in any way.       Moreover, the record reveals
    that    UPS   did   in   fact     attempt     to   monitor   its     Regulation   D
    obligations      but     was    thwarted      from   doing    so     by   Tucker’s
    misrepresentations and omissions.             Consequently, even accepting as
    true Held’s assertion that it was the broker’s responsibility, and
    not Tucker’s, to ensure compliance with Regulation D, the facts as
    developed during the course of the trial show that, at any rate,
    Tucker sabotaged this obligation. Thus, the district court weighed
    the value of Held’s testimony, not in a vacuum, but by focusing
    upon the particular facts and circumstances of the case, and
    determined that the testimony would not aid the jury.36                   We concur
    with that conclusion.
    II.    Faulty Jury Charge
           Before the jury retired to deliberate, the district court
    instructed the jury on the laws that Tucker had been charged with
    violating.       With    regard    to   the   securities     fraud    charge,   the
    district court explained the elements of the crime.37                 Although the
    PROCEDURE: EVIDENCE § 6264 at 210 (1997).
              Specifically, the district court explained that the
    Government was required to prove beyond a reasonable doubt that:
         (1) the defendant knowingly or willfully (a) employed a
         device, scheme, or artifice to defraud, or; (b) obtained
         money or property by means of an untrue statement of a
         material fact or an omission to state a material fact
         necessary in order to make the statement not misleading,
         in the light of the circumstances under which they were
         made, or; (c) engaged in a transaction, practice, or
         course of business that operated or would operate as a
         fraud or deceit upon the purchaser; (2) that the
         Defendant’s acts or omission were in connection with the
         purchase or sale of securities; (3) that the Defendant
         used, or caused to be used, the United States mail or
    jury charge        did   not   contain   the    phrase   “intent   to   defraud,”
    immediately following the delineation of the elements, the district
    court explained that Tucker acted with the requisite “intent to
    defraud” if he “acted knowingly and with the specific intent to
    deceive, ordinarily for the purpose of causing some financial loss
    to another or [to] bring about some financial gain” to himself.
    The district court also provided the jury with a definition of the
    term        “security”   mirroring   the       definition   contained    in    the
    Securities Exchange Act of 1934.38
           Then, turning to the mail fraud charge, the district court
    spelled out the essential elements of that crime for the jury.39
           other means of transportation or communication                     in
           intestate commerce in furtherance of the scheme.
              The district court described a security as:
           any note, stock, treasury stock, bond, debenture, evidence of
           indebtedness, certificate of interest or participation in any
           profit-sharing   agreement,   collateral-trust    certificate,
           reorganization certificate or subscription, transferable
           share,   investment   contract,    voting-trust   certificate,
           certificate of deposit for a security, fractional undivided
           interest in oil, gas, or other mineral rights, any put call,
           straddle, option, or privilege on any security, certificate of
           deposit, or group or index of securities (including interest
           therein or based on the value thereof), or any put, call,
           straddle, option, or privilege entered into on a national
           securities exchange relating to foreign currency, or, in
           general, any interest or instrument commonly known as a
           “security,” or any certificate of interest or participation
           in, temporary or interim certificate for, receipt for,
           guarantee of, or warrant or right to subscribe to or purchase,
           any of the foregoing. See 15 U.S.C. § 78c(a)(10).
            The district court explained that in order to find Tucker
    guilty of mail fraud, the Government was required to prove beyond
    a reasonable doubt:
         (1) that the defendant knowingly created a scheme to
         defraud, that is made false statements or omission of
    Following the recitation of these elements, the district court
    clarified that “‘knowingly,’ as that term has been used from time
    to   time   in   these   instructions,      means   that   the    act   was   done
    voluntarily      and   intentionally   and    not   because      of   mistake   or
          Tucker raises a number of potential shortcomings related to
    the jury instructions. First, he complains that the district court
    precluded the jury from determining whether the certificates sold
    to the investors were securities, a required element of a charge of
    securities fraud in violation of § 77q(a).             Next, Tucker alleges
    that the district court did not adequately explain the requisite
    criminal intent for a § 77q(a) violation.             Finally, Tucker calls
    attention to the district court’s failure to include in the jury
    charge an instruction on specific unanimity of theory.
          A.    Standard of Review
          Tucker did not raise these objections to the district court’s
    instructions at trial.         Pursuant to Federal Rule of Criminal
    Procedure 52(b), we “may correct forfeited errors only when the
    appellant shows (1) there is an error, (2) that is clear or
          material facts in the offer and sale of securities; (2)
          that the defendant acted with the specific intent to
          defraud; (3) that the defendant mailed something, or
          caused another person to mail something, through the
          United States Postal Service, or through a private or
          commercial interstate carrier, for the purpose of
          carrying our the scheme; and (4) that the scheme to
          defraud employed false material representations.
    obvious, and (3) that affects his substantial rights.”40            Once the
    appellant establishes these factors, “the decision to correct the
    forfeited error is within the sound discretion of the court, and
    the court will not exercise that discretion unless the error
    seriously affects the fairness, integrity, or public reputation of
    judicial proceedings.”41
         B.     Analysis
                1.     Failure to submit “security” element to the jury
         Tucker contends on appeal that the district court committed
    plain error by removing the issue of whether the certificates were
    securities from the jury’s consideration.             As noted above, the
    district court, at Tucker’s urging, determined that whether the
    certificates were securities was purely a legal question.42            Post-
    trial,    the    district   court   issued   a   ruling   finding   that   the
    certificates at issue were, as a matter of law, securities.
         Tucker asserts that the district court did not instruct the
    jury that in order to convict him of either count charged in the
    indictment, it would have to find beyond a reasonable doubt that
    the certificates sold to the investors were in fact securities.
            United States v. Waldron, 
    118 F.3d 369
    , 371 (5th Cir.1997)
    (citing United States v. Blocker, 
    104 F.3d 720
    , 735 (5th
    Cir.1997)); FED. R. CRIM. P. 52(b).
              Waldron, 118 F.3d at 371 (citing Blocker, 104 F.3d at 735).
            It is rather disingenuous for Tucker to argue now that the
    matter of whether the certificates were securities should have been
    submitted to the jury when throughout the trial he argued that it
    was a matter of law to be decided solely by the district court.
    Yet a reading of the jury charge reveals that the district court
    did submit this element to the jury.     The district court explained
    to the jury that the second element, which the Government was
    burdened with proving beyond a reasonable doubt, required a showing
    “that the Defendant’s acts or omissions were in connection with the
    purchase or sale of securities.”       As already noted, the district
    court then provided the jury with the definition of a security.    We
    disagree with Tucker that the district court’s definition of
    “security” was “cursory” and “superfluous.”      Rather, the district
    court furnished the definition of “security” as contained in the
    Securities Exchange Act of 1934.       Most importantly, the district
    court at no time informed the jury that it was not to consider
    whether this element of the crime had been satisfied.
         In refutation of the Government’s claim that the security
    issue was actually delivered to the jury for consideration, Tucker
    points to the district court’s post-trial order finding that the
    certificates were indeed securities.        But the district court’s
    later determination does not change the fact that three months
    prior, the “security” element appeared in the jury charge, and the
    jury made a finding that the certificates were securities in
    arriving at its decision to convict on this charge.      As such, the
    district did not act improperly since it did not preclude the jury
    from making that determination.
              2.   Failure to submit proper charge on § 77q(a) intent
         The Government indicted Tucker for violating § 77q(a), which
    prohibits the fraudulent offer or sale of securities in interstate
    commerce.43   In criminal prosecutions, violations of § 77q(a) are
    charged simultaneously with § 77x which contains the applicable
    mens rea.44     Accordingly, § 77x provides that only “willful”
    violations of § 77q(a) trigger criminal liability.45
         Tucker complains that with regard to the § 77q(a) violation,
    the district court failed to instruct the jury that in order to
    convict, it needed to find that he acted with the specific intent
    to defraud.    According to Tucker, the root of the problem is the
    district court’s direction that the jury could convict upon finding
    that Tucker acted knowingly or willfully.     To be sure, the federal
    pattern jury charge for this crime employs the phrase “knowingly
    and deliberately.”46 Further, Tucker argues that since the district
    court did include the phrase “intent to defraud” in the elements of
              15 U.S.C. § 77q(a).
              Id. §§ 77q(a) & 77x.
           Section 77x provides that:
         Any person who willfully violates any of the provisions
         of this subchapter, or the rules and regulations
         promulgated by the Commission under authority thereof, or
         any person who willfully, in a registration statement
         filed under this subchapter, makes any untrue statement
         of a material fact or omits to state any material fact
         required to be stated therein or necessary to make the
         statements therein not misleading, shall upon conviction
         be fined not more than $10,000 or imprisoned not more
         than five years, or both. 15 U.S.C. § 77x.
              2B FED. JURY PRAC. & INSTR. § 62.03 (5th ed.).
    mail fraud, there exists a real possibility that the jury believed
    the definition provided for that phrase related only to the mail
    fraud count.         Thus, Tucker believes that the jury might have
    convicted him on a finding of lesser intent than that which is
    required by § 77x.         Finally, Tucker faults the district court for
    failing to define the term “willfully” in the charge.              All of these
    arguments fail.
          With regard to district court’s substitution of “or” for “and”
    in the phrase “knowingly or willfully” in the jury instructions, we
    find that this typographical mistake constitutes an obvious error.
    However, the district court’s placement of the definition of
    “intent to defraud” immediately following the elements of the first
    count      effaced   any   confusion   the   jury   might   have   encountered
    concerning the requisite mens rea. In addition, even assuming that
    the jury convicted Tucker on the “lesser” criminal intent of
    “knowingly,” the definition of that term provided to the jury in
    the   mail    fraud    count   –   voluntarily   and   intentionally     –   was
    sufficiently like “willfully” to remove any doubt regarding the
    applicable mental state.
          Tucker’s second complaint that the district court failed to
    add “intent to defraud” into the elements of a § 77q(a) violation
    is equally unavailing.         The district court’s instructions mimicked
    the federal pattern jury charge, which makes no mention of “intent
    to defraud.”47       Thus, the failure to include that phrase within the
                2B FED. JURY PRAC. & INSTR. § 62.03.
    essential elements of a § 77q(a) violation cannot constitute
    reversible error.
           Finally, Tucker does not point to any case requiring the trial
    court to define within the jury charge “willfully,” as that term is
    referred to in § 77x.
           The Government points out that the evidence presented in the
    case clearly bespoke of willful, fraudulent behavior on the part of
    Tucker.       The Government produced evidence that Tucker purposefully
    deceived the brokers, investors, regulators, and FFAC’s Board of
    Directors. The Government also offered proof that Tucker concealed
    financial information, falsified financial summaries, drafted the
    PPMs, and controlled and directed the transfer of all of the
    investors’ money.        Tucker did not rebut this evidence with his own
    fact witnesses.
           All of these factors, taken together, indicate that although
    the instructions concerning the requisite intent in the first count
    were    not    “faultless,”   they   nonetheless      provided   the    jury   an
    adequate understanding of the intent element.48                 Certainly, the
    forfeited       errors   alleged   by   Tucker   do    not   leave     us   “with
    substantial and ineradicable doubt whether the jury has been
    properly guided in its deliberations.”49
                   3.   Failure to charge jury on specific unanimity of
             Pierce v. Ramsey Winch Co.,               
    753 F.2d 416
    , 425 (5th
    Cir.1985) (citations omitted).
         Tucker asserts that the district court further erred by not
    including a specific unanimity-of-theory instruction in the jury
    charge.    Each count of the indictment identified thirty mailings,
    each one creating a separate act of securities and mail fraud.50
    Thus, Tucker argues that in the absence of a specific unanimity
    instruction, the jurors might have convicted him despite internal
    disagreement about which mailing or mailings he initiated.
         Tucker points to two Fifth Circuit decisions which he urges
    are controlling.       In the first, United States v. Gibson, we
    considered a defendant’s timely objection to “a court instruction
    that may have judicially sanctioned a non-unanimous verdict.”51          We
    found such an instruction to be reversible error.                Presently,
    Tucker’s reliance on Gibson is unfounded since he has not alleged
    that the district court affirmatively instructed the jury to
    disregard unanimity while deliberating.
         In the second, United States v. Holley,52 a jury convicted the
    defendant of two counts of perjury.         Each count alleged that the
    defendant    had    made    multiple   statements,   any   one   of   which
    established criminal liability. Before submitting the instructions
            Sanders v. United States, 
    415 F.2d 621
    , 626 (5th Cir.1969)
    (reiterating that “[i]t is settled that each separate use of the
    mails in the execution of a scheme to defraud constitutes a
    separate offense”)(citations omitted)).
    553 F.2d 453
    , 457 (5th Cir. 1977).
    942 F.2d 916
     (5th Cir.1991).
    to the jury, the defendant in Holley “specifically objected to the
    charge because it contained no . . .    requirement . . . that all of
    the jurors concur in the knowing falsity of at least one particular
    statement.”53    Finding   the   indictment   to    be   duplicitous,   we
    concluded that there was a “reasonable possibility that the jury
    was not unanimous with respect to at least one statement in each
    count” and ordered a new trial.54      Significantly, in Holley, the
    defendant lodged explicit objections to the charge; here, Tucker
    complains after having forfeited any potential errors in his
    charge, with his only relief residing in his ability to convince us
    that one or more of the errors he cites were clear and affected his
    substantial rights.
         The guiding principle here should be our pronouncement in
    Gibson that “absent competent evidence to the contrary, a court has
    no reason to assume that an inconsistent or compromise verdict is
    not unanimous, and therefore has no justification for inquiring
    into the logic behind the jury's verdict.”55       Moreover, we affirmed
    in Holley that a specific unanimity-of-theory charge was required
    under those circumstances where “there exists a genuine risk that
    the jury is confused or that a conviction may occur as the result
    of different jurors concluding that a defendant committed different
              Id. at 929.
              Gibson, 553 F.2d at 457 (citations omitted).
         Other than his bare assertion that the error “was plain and
    substantially prejudiced [him],” Tucker does not corroborate his
    claim of prejudicial error with a modicum of evidence tending to
    show that     the   jury   was   confused   or    possessed   any   difficulty
    reaching a unanimous verdict.57       Thus, even if we were to conclude
    that the district court’s failure to include an instruction on
    specific unanimity of theory established clear error so as to have
    affected his substantial rights, Tucker cannot convince us that our
    failure to correct the error will “seriously affect[] the fairness,
    integrity, or public reputation of judicial proceedings.”58
    III. Double Jeopardy
         As a final point of error, Tucker maintains that the district
    court’s imposition of consecutive sentences caused him to be
    punished twice for the same offense in violation of the Fifth
    Amendment    protection    against   double      jeopardy.    Multiplicitous
    indictments, or indictments that charge a single offense in several
    counts, raise this concern.59         “A defendant must challenge the
    multiplicity of an indictment before trial or forfeit the issue. .
            Holley 942 F.2d at 926 (citations and internal quotations
            The Government directs our attention to the fact that the
    jury took only thirty-six minutes to deliberate before finding
    Tucker guilty.
            United States v. Waldron, 118 F.3d at 371 (citing Blocker,
    104 F.3d at 735).
               United States v. Reedy, 
    304 F.3d 358
    , 363 (5th Cir.2002).
    . .        He may, however, raise claims about the multiplicity of
    sentences for the first time on appeal.”60                We have consistently
    held that “[t]he test for determining whether the same act or
    transaction      constitutes     two    offenses   or    only    one   is   whether
    conviction under each statutory provision requires proof of an
    additional fact which the other does not.”61
          In     United   States    v.     Bruce,   this     Court   considered     the
    similarities between the crimes of mail fraud and securities fraud
    and concluded that “there is one element in 77q(a) which is not
    present in § 1341 – the offer or sale of a security.”62 Tucker
    argues that by contrast, the district court deleted this sole
    distinction by instructing the jury that, with regard to the count
    of mail fraud, it could convict Tucker upon a finding that he
    “knowingly      created   a    scheme    to   defraud,    that   is    made   false
    statements or omissions of material facts in the offer and sale of
    securities.”      Tucker avers that the district court’s inclusion in
    the mail-fraud charge of the one distinguishing element between the
    two crimes rendered them one and the same.
            Id. at 364 (citing United States v. Soape, 
    169 F.3d 257
    265-66 (5th Cir.1999) and United States v. Cooper, 
    966 F.2d 936
    940 (5th Cir.1992)).       Although Tucker mainly contests the
    multiplicitous nature of the jury charge and subsequent sentencing,
    he also points out the similarities between the counts charged in
    the indictment. Tucker has clearly forfeited any consideration of
    the latter.
                Reedy, 304 F.3d at 363. (citations omitted).
                United States v. Bruce, 
    488 F.2d 1224
    , 1230 (5th Cir.1973).
         We agree with the Government’s supposition that the district
    court     was   merely   copying   the   Fifth   Circuit   pattern   jury
    instructions when it described the scheme or artifice to defraud.
    Indeed, the first essential element for the crime of mail fraud in
    the pattern jury charge is as follows: “First: That the defendant
    knowingly created a scheme to defraud, that is _______ [describe
    scheme from the indictment] . . . .”63      Moreover, the pattern jury
    instructions provide:
         It is not necessary that the government prove all of the
         details alleged in the indictment concerning the precise
         nature and purpose of the scheme, or that the mailed
         material was itself false or fraudulent, or that the
         alleged scheme actually succeeded in defrauding anyone,
         or that the use of the mail was intended as the specific
         or exclusive means of accomplishing the alleged fraud.64
    Although the district court did not include this instruction in its
    jury charge, the comment nonetheless evinces the drafters’ intent
    to clarify the scheme underlying the allegation of mail fraud,
    rather than an intent to add an additional element to the crime.
    As such, the description of the scheme need not be proved to
    establish Tucker’s guilt for the crime of mail fraud, and the
    sentences imposed were not multiplicitous.
         The district court erred in not allowing Tucker’s expert
    witness to endorse an expanded interpretation of the term “invest,”
    and thereby refute the Government’s more restrictive meaning.         But
              PATTERN CRIM. JURY INSTR. Fifth Circuit. § 2.59.
    because Held’s explanation would have accounted for only a small
    portion of the widespread misuse of the proceeds, the district
    court’s error does not constitute grounds for reversal.
         We reject Tucker’s argument that the district court improperly
    excluded evidence pertaining to the nature of the certificates,
    having found that it was never Tucker’s aim to submit this issue to
    the jury.
         Similarly, we find that the district court properly excluded
    Held’s testimony as to Tucker’s belief about the nature of the
         The district court did not abuse its discretion by excluding
    Held’s expert opinion that it was incumbent upon the underwriters
    and not Tucker to comply with Regulation D since this information
    would not have assisted the jury.
         Turning to the jury charge, we conclude that the district
    court did   submit   the   issue   of    whether   the   certificates   were
    securities to the jury and therefore did not err by withholding
    this element.   Moreover, Tucker cannot demonstrate that either the
    district court’s jury instruction with respect to the intent
    element of a § 77q(a) violation, or its failure to instruct the
    jury on specific unanimity of theory, amounted to clear error
    sufficient to reverse the conviction.
         Finally, Tucker failed to substantiate his claim that the
    sentences imposed were multiplicitous in violation of the Fifth
    Amendment protection against double jeopardy.