Petition for Writ of Certiorari — Loe v. United States

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(\) Suprome Court, Us6.

FILED

No.—QO1 481 SEP 1 92001

IN THE

Supreme Court of the United States

BABO BEAZLEY LOE, AND LOE’S HIGHPORT, INC.,

Petitioners,

THE UNITED STATES OF AMERICA,

Respondent.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Fifth Circuit

PETITION FOR WRIT OF CERTIORARI

HERBERT V. LARSON, JR.

700 Camp Street

New Orleans, Louisiana 70130

(504) 528-9500

Attorney for Petitioners

Babo Beazley Loe and

Loe’s Highport, Inc.

QUESTIONS PRESENTED FOR REVIEW

Whether it is objectively unreasonable for an officer to rely

on a search warrant authorizing the seizure of broad

categories of documents unrelated to, but “logical indicators

of” the crimes described in the affidavit in support of the

warrant.

Whether, in a prosecution for money laundering brought

under 18 U.S.C. § 1957, there must be jury unanimity

regarding the specified unlawful activity from which the

laundered funds were derived?

(i)

PARTIES TO THE PROCEEDINGS

IN THE COURTS BELOW

1. Babo Beazley Loe

2. Cornelius Dewitt Loe

3. Loe’s Highport, Inc.

4. The United States of America

TABLE OF CONTENTS

QUESTIONS PRESENTED FOR REVIEW................

PARTIES TO THE PROCEEDINGS IN THE

Ati cee aetna eet itd

STATEMENT OF THE GROUNDS ON WHICH

THE JURISDICTION OF THE COURT IS

iiiistinnencincec

CONSTITUTIONAL AND STATUTORY PROVI-

cea ehh ene inch gh TT RTD Le

I. WHETHER IT IS OBJECTIVELY UNREA-

SONABLE FOR AN OFICER TO RELY ON

A SEARCH WARRANT AUTHORIZING

THE SEIZURE OF BROAD CATEGORIES

OF DOCUMENTS UNRELATED TO, BUT

“LOGICAL INDICATORS OF” THE

CRIMES DESCRIBED IN THE AFFIDAVIT

IN SUPPORT OF THE WARRANT.................

A. The Court of Appeals Has Decided An

Important Federal Question In A Way That

Conflicts With The Relevant Decisions Of

RE SESE Gen ar

(iii)

TABLE OF CONTENTS-—— “Continued

Page

Il. WHETHER, IN A PROSECUTION FOR

MONEY LAUNDERING BROUGHT

UNDER 18 U.S.C. § 1957, THERE MUST

BE JURY UNANIMITY REGARDING THE

SPECIFIED UNLAWFUL ACTIVITY FROM

WHICH THE LAUNDERED FUNDS WERE

SUSE TMUTEPT schshcscuntnciaiabamntecassmnthhodnagabieesbioniinnens 12

A. The Court Of Appeals Has Decided An

Important Federal Question In A Way That

Conflicts With The Relevant Decisions Of

FI Se wiistieainhicassitglosthetasnininsbocdubabsinaticnds 12

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APPENDICES

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TABLE OF AUTHORITIES

CASES Page

Andres v. United States, 333 U.S. 740 (1948)....... 12

Almendarez-Torres v. United States, 523 US.

224 (1998).............. sdibdehhdibiilidiidininaabadiiihissianons 12

Johnson v. Louisiana, 406 U.S. 356 OPT Disinstceces i2

Schad v. Arizona, 501 U.S. 624 (1991)..c.ccecsessesses 12

United States v. Leahy, 82 F.3d 624 (Sth Cir.

SPP wichcnbisninibiihibisniniidinsceacn te to as 12

United States v. Leon, 468 U.S. 897 (1984)........... 11

United States v. Richardson, 526 U.S. 813

ge BREIL ESE NGS EAM aS TEST OE 12, 14, 15

United States v. Sokolow, 91 F.3d 396 (3rd

Cir.1996), cert. denied 519 U.S.1116 (1997).... 12

Warden v. Hayden, 387 U.S. 294 (1967)..........0000. 11

OTHER AUTHORITIES

36 American Criminal Law Rev. 913 (1999)........ 13

See e.g., “A Critical View of Bank Secrecy Act

Enforcement and the Money Laundering

Statutes,” 37 CATH. U.L. Rev. 489 (1998),

ON Ths NID isiictinhechctrisibcdsemaisacs, sieblibainiatebalis 15

’ IN THE

Supreme Court of the Anited States

No.

BABO BEAZLEY LOE, AND LOE’S HIGHPORT, INC.,

Petitioners,

THE UNITED STATES OF AMERICA,

Respondent.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Fifth Circuit

PETITION FOR WRIT OF CERTIORARI

Petitioners Babo Beazley Loe, and Loe’s Highport, Inc.

respectfully request that this Court issue a writ of certiorari to

review the judgment of the United States Court of Appeals

for the Fifth Circuit entered on April 17, 2001, because the

Court of Appeals has decided two important federal questions

in ways that conflict with relevant decisions of this Court.

OPINIONS OF THE COURTS BELOW

The opinion of the United States Court of Appeals for the

Fifth Circuit which gives rise to this petition is United States

v. Loe, et al, reported at 248 F.3d 449 (Sth Cir.2001). A copy

of the opinion is attached to this petition as Appendix A. By

order entered on June 21, 2001, the Court of Appeals for the

Fifth Circuit denied the petitions for panel rehearing, and the

suggestions for rehearing en banc filed herein by Babo

Beazley Loe and Loe’s Highport, Inc. This order is attached

to this petition as Appendix B.

STATEMENT OF THE GROUNDS ON WHICH THE

JURISDICTION OF THE COURT IS INVOKED

On March 4, 1999, following a trial by jury, judgments and

conviction orders were entered against Babo Beazley Loe and

Loe’s Highport, Inc. (LHI) in the United States District Court

for the Eastern District of Texas, Sherman Division. Babo

Beazley Loe was sentenced to 78 months imprisonment, fined

$4,738,201.12, and ordered to pay restitution jointly and

severally with LHI in the amount of $1,735,130.11. LHI was

placed on five years probation, and was fined $4,000,000.

Thereafter, Babo Beazley Loe and LHI timely filed their

notices of appeal to the United States Court of Appeals for

the Fifth Circuit. On April 17, 1999, the Court of Appeals

issued an opinion affirming petitioners’ convictions and

sentences in part, and vacating them in part. Both Babo

Beazley Loe and LHI timely filed petitions for panel

rehearing, and LHI filed a suggestion for rehearing en banc,

which was joined by Babo Beazley Loe. On June 21, the

Court of Appeals denied the petitions for rehearing, and the

suggestion for rehearing en banc. In accordance with

Supreme Court Rule 13.3, this petition has been filed within

ninety (90) days of the date of the order denying the petitions

for rehearing, and the suggestion for rehearing en banc.

Accordingly, this Court has jurisdiction over this matter

pursuant to Title 28, United States Code, Section 1254(1).

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

The Fourth Amendment to the United States Constitution

provides as follows:

The right of the people to be secure in their per-

sons, houses, papers, and effects, against unreasonable

searches and seizures, shall not be violated, and no

Warrants shall issue, but upon probable. cause, supported

by Oath or affirmation, and particularly describing the

place to be searched, and the persons or things to be

seized.

The Sixth Amendment to the United States Constitution,

provides, in pertinent part:

In all criminal prosecutions, the accused shall enjoy the

right to a speedy and public trial, by an impartial jury...

Title 18, United States Code, Section 1957, provides in

pertinent part:

§1957 Engaging in monetary transactions in property

derived from specified unlawful activity

(a) Whoever, in any of the circumstances set forth in

subsection (d), knowingly engages or attempts to engage

in a monetary transaction in criminally derived property

of a value greater than $10,000, and is derived from

specified unlawful activity, shall be punished [as

provided by law].

STATEMENT OF THE CASE

In 1946, C.D. Loe, Sr., petitioner Babo Loe’s father-in-law,

was given a lease by the Army Corps of Engineers on a 330

acre tract of land located on Lake Texoma, Pottsboro, in

Grayson County, Texas. Over the next 50 years, his business,

which began as a small bait shop and fishing camp, became

what may be the largest inland marina in the United States.

By 1997, Loe’s Highport Marina comprised approximately

800 boat slips, boat houses, two restaurants, several bars, a

convenience store, a clothing boutique, boat repair facilities,

gasoline docks, and boat sales facilities.

In the Spring of 1990, Lake Texoma experienced the worst

flood in its history. At its height, on May 6, 1990, water was

more than 27 feet above normal, and more than 17 feet above

the height considered a flood by the Corps of Engineers. As a

consequence, the property at Loe’s Highport Marina was

severely damaged, and claims were made against the insurers,

Lexington Insurance Company, and Chubb Insurance

Company. |

Ultimately, Lexington paid out the policy limits (less the

deductible) on a $2.5 million policy, and $638,388.34 on

another policy. Chubb paid claims in the amount of

$1,029,915 on its policy.

In 1994, the marina was again the victim of the weather.

On May 27, 1994, the marina was hit by a windstorm/tornado

that caused extensive damage. Again, claims were made

against the insurer, Marine Office of America Corpora-

tion/Continental Insurance Company. Ultimately, MOAC/

Continental paid claims in the amount of $2,274,905, with

certain other unresolved claims becoming the subject of

litigation.

In 1995, based on a tip from a disgruntled customer, the

Federal Bureau of Investigation began a criminal investi-

gation of the marina, and its owners. This investigation led

the FBI to believe that the marina and its owners were

underreporting their income to the Internal Revenue Service,

and were also underpaying the rental fees due the Corps of

Engineers, which were based on income. In July, 1996, a

search warrant was obtained by the FBI. The affidavit in

support of the warrant provided evidence of the following

offenses: (1) the underreporting of boat sales revenue to the

Corps of Engineers; (2) the the underreporting of of boat sales

revenue to IRS; (3) the failure to pay state sales tax on certain

cash transactions; and (4) the failure to report the cash sales

of certain boats, in violation of the Bank Secrecy Act. The

warrant issued in response to the affidavit listed approxi-

mately fifty-four (54) categories of items to be seized.

On July 8, 1996, about 40 law enforcement agents exe-

cuted the search warrant at the marina, and over a 14 hour

period, seized approximately 300 boxes of documents,

together with computers, and computer files. As a practical

matter, agents seized every document that had any potential

evidentiary value whatsoever. Subsequently, the Government

returned approximately 130 boxes of documents, finding

them to be irrelevant to the Government’s investigation.

This seizure was followed by a grand jury investigation,

which resulted in the indictment of Babo Beazley Loe, LHI,

and others in September, 1997. Significantly, the indictment

charged not only tax fraud, and fraud upon the Corps of

Engineers—the offenses for which the original search warrant

had been issued—but also two large conspiracies to defraud

the insurors of the marina: one conspiracy based upon

insurance claims made in response to the 1990 flood, the

second upon-claims made for the 1994 windstorm/tornado. In

addition, the indictment charged ten (10) counts of money

laundering.

All ten money laundering counts were nearly identical:

each charged a violation of 18 U.S.C. § 1957, each named

only Babo Beazley Loe and LHI as defendants, and each was

based on a monetary transaction that followed the initial

deposit of the checks received from the insurance companies

for losses.

In the indictment, the money laundering charges were set

out in chart form, in columns, with the final column

consisting of a category labeled: SPECIFIED UNLAWFUL

ACTIVITY. For each of the ten counts, this column

contained nothing more than references to the mail and wire

fraud statutes, as follows:!

18 U.S.C. § 1341

18 U.S.C. § 1343

' These counts of the superseding indictment are found at Appendix C.

Prior to the first trial, Babo Beazley Loe moved to suppress

the evidence that had been seized pursuant to the search

warrant, on the grounds that: (1) the warrant itself was

insufficient; and (2) the search of the marina far exceeded the

scope of the warrant; that what had in fact occurred was a

generat exploratory search. This motion was denied by the

district court, which found that although some of the

documents seized were outside the scope of the warrant, those

documents were “logical indicators” of offenses described in

the affidavit in support of the warrant, and thus subject to

seizure.

The petitioners also moved, both pre-trial, and at trial itself,

to dismiss the money laundering counts. Petitioners con-

tended that the general references to the mail and wire fraud

statutes contained in those counts were constitutionally

insufficient? Specifically, the petitioners urged three inter-

related grounds for dismissal: (1) “[t]he indictment fail[ed] to

meet minimal constitutional standards of specificity;” (2) “the

indictment fail[ed] to describe with sufficient particularity an

essential element of the offense charged,” this being the

specified unlawful activity from which the criminal proceeds

were derived; and (3) that as a consequence, “the allegations

contained in the money laundering counts were so vague as to

inadequately describe an essential element of the offense,

[and so] invite variance and provide insufficient protections

against a subsequent prosecution.” These motions were

denied. As a consequence, Babo Beazley Loe and LHI

proceeded to trial not knowing the substantive acts of mail

and wire fraud from which the laundered proceeds were

allegedly derived.

? Although these money laundering counts were based upon the

conspiracies to defraud the insurance companies, the Government was

compelled to allege substantive violations of the mail and wire fraud

statutes because a conspiracy (18 USC § 371) to violate the mail and wire

fraud statutes is not a specified unlawful activity under 18 USC § 1957.

At trial, during the presentation of the Government's

evidence regarding the money laundering, counsel for LHI

again objected to the vagueness of the charges, and the

vagueness of the Government's proof:

MR. MEADOWS: Prior to trial, Mr. Buffone, on behalf

of the—on the money laundering issue, had filed a

motion objecting to the fact that there were no specific,

specified unlawful activities delineated in the

indictment. We’re now getting ready for a summary

witness to testify with regard to that issue, and we still

have no specific identification of the specified unlawful

activity which relates to each money laundering count.

We have a general description that it goes to Count 17,

but the Government has proved up literally hundreds of

mailings and wirings in this case. And none of which

have been tied into a—in order to give the Defendants

adequate notice on which to base a defense of the charge

of money laundering and what specified unlawful

activity a particularly mailing or wire fraud, that it

relates to. And we would object on that basis and ask

that the Court not allow this witness to testify.

The objection was overruled.

Following their convictions, both Babo Beazley Loe and

LHI appealed, contesting both the legality of the ag and

the validity of the money laundering counts. ,

A. The search

In her appeal, Babo Beazley Loe argued that —

This is the rare case in which the breadth of a search and

seizure was such that a forbidden general exploratory

search under the Fourth Amendment occurred. Thous-

ands of documents not embraced by the allegations of

criminal activity supporting probable cause for issuance

of the warrant were seized, including the altered

documents submitted to the insurance companies in both

trials. Much evidence in both trials, and all summary

testimony in the insurance fraud cases, compared search

documents with original invoices. Attorney client

communictions and personal files were also indis-

criminately seized.

The Court of Appeals disagreed, finding that

[w]hile the wisdom of including such a broad array of

documents in the warrant is questionable, we are

unprepared to find the 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 operatipns under investigation lend

additional support to th¢ breadth of the search warrant.

Morevoer, the warrant expressly limited the search to a

portion of the marina’s ‘business premises, and nothing

was seized from the ’ residence. 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 Gomer after the fact.

(Appendix A, p. 16a). i

Babo Beazley Loe submits, that opinion of Court of

Appeals has improperly expanded\the “plain view” doctrine,

by creating a new category of items that fall within the

exception: items that are “logical indicators” of the offenses

being investigated. This Court never authorized such

seizures, and in fact, such seiz are contrary to the

decisions of this Court. This is the first important federal

question presented in this petition.

B. The money laundering counts

With regard to the money laundering counts, LHI and Babo

Beazley Loe contended on appeal that the § 1957 counts in

the indictment were defective per se, because the counts

failed to describe precisely which act of the hundreds of acts

of mail and wire fraud constituted the specified unlawful

activity at issue. Further, they argued that the indictment in

this case permitted the jury to return a less-than-unanimous

verdict, because it remained unknown whether the jury was

unanimous with regard to the specified unlawful activity

Supporting each separate count of money laundering—i.e.,

did six jurors believe that it was mail fraud, and six believe

that it was wire fraud?

The Court of Appeals rejected both arguments, finding that

[petitioners’] 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 art. (footnote

omitted). 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. (Appendix A, p. 28a) (é¢mphasis

added). ele eesss

After finding the indictment sufficient, the Court. of

Appeals added: “Nor is jury unanimity regarding .the

specified unlawful activity required. Our holding in United

States v. Short, [181 F.3d 620 (Sth Cir.1999)] affirms this

conclusion.”

LHI submits that jury unanimity regarding the specified

unlawful activity is required by the caselaw of this Court, and

that these conclusions by the Court of Appeals present the

second important federal question in this petition.

REASONS FOR GRANTING THE PETITION

I. WHETHER IT IS OBJECTIVELY UNREA-

SONABLE FOR AN OFFICER TO RELY ON A

SEARCH WARRANT AUTHORIZING THE

SEIZURE OF HROAD CATEGORIES OF DOC-

| UMENTS UNRELATED TO, BUT “LOGICAL

INDICATORS ®F” THE CRIMES DESCRIBED

IN THE AVIT IN SUPPORT OF THE

WARRANT.

A. The Court |Of Appeals Has Decided An

Important Federal Question In A Way That

Conflicts With The Relevant Decisions Of This

Court. \

As the Court of Appeals acknowledged, the search warrant

issued in this case authorized the seizure of a “broad” or “vast

array” of documents.’ Anj, as both the district court, and the

Court of Appeals recognized, this “broad array” of documents

included many that on their face were not related to the

offenses described in the afijdavit sworn out in support of the

warrant. Such unrelated documents included categories such

as real estate, and insurance files. These files, and similiar

ones, are the ones from which the Government obtained the

documents it subsequently used to prosecute LHI and Babo

Beazley Loe for defrauding insurance companies.

> The Court of Appeals found that the warrant did not violate the

particularity requirement of the Fourth Amendment, because it divided

this “vast array” into approximately 54 categories of evidence.

In United States v. Leon, 468 U.S. 897 (1984), this Court

delineated a variety of circumstances under which it is not

objectively reasonable for an officer to rely on a search

warrant issued by a neutral and detached magistrate. One

such circumstance is when the nature and scope of the items

described in the warrant is unsupported by the affidavit sworn

out to obtain the warrant. Leon, at 922-923.

Here, the district court and the Court of Appeals were

unable to find a direct connection between the crimes

described in the affidavit, and certain groups of documents,

such as the real estate and insurance files. They were,

however, able to find an indirect connection, by determining

“that documents such as real estate and insurance files were

logical indicators of LHI’s gross fixed assets.” (Appendix A,

p. 16a). The courts reasoned that in turn, such “gross fixed

assets may indicate a failure to report income... . . as well as

. . . » knowledge of the unreported income.” (Appendix A,

p. 16a).

In short, the Court of Appeals determined that the seizure

of an item described in a warrant need not be supported by a

showing that there was a fair probability that it constituted

evidence of a crime. Instead, the fact that documents may

have evidentiary value is now sufficient, if that evidentiary

value is a “logical indicator” of the crime being investigated.

This holding is contrary to the requirement that there be a

nexus between the item to be seized, and the criminal

behavior being investigated. Warden v. Hayden, 387 US.

294, 307 (1967).

In the investigation of financial crimes, all documents and

data relating to money, property, and business transactions

are roqiam id “logical indicators” of something that ultimately

can be corinected to such offenses. If the exception created

by the Court of Appeals is permitted to stand, it will swallow

the rule. This Court should grant certiorari to consider the

important federal question of whether it is legally sufficient

for an item to be a “logical indicator” of a crime.

Il. WHETHER, IN A PROSECUTION FOR MONEY

LAUNDERING BROUGHT UNDER 18 U.S.C.

§ 1957, THERE MUST BE JURY UNANIMITY

REGARDING THE SPECIFIED UNLAWFUL

ACTIVITY FROM WHICH THE LAUNDERED

FUNDS WERE DERIVED? :

A. The Court Of Appeals Has Decided An

Important Federal Question In A Way That

Conflicts With The Relevant Decisions Of This

Court.

In United States v. Richardson, 526 U.S. 813 (1999), this

Court held that “federal crimes are made up of factual

elements . . . ,” and that “[c]Jalling a particular kind of fact an

‘element’ carries certain legal consequences.” Richardson,

526 U.S. at 817, citing Almendarez-Torres v. United States,

523 U.S. 224, 229 (1998).

One consequence is that a federal jury cannot convict a

defendant of a federal crime unless and until that jury

unanimously finds that the Government has proved each and

every factual element of the federal crime beyond a

reasonable doubt. Richardson, id., citing Johnson v.

Louisiana, 406 U.S. 356, 369-371 (1972), Andres v. United

States, 333 U.S. 740 (1948), and Fed.R.Crim.Proc.3 l(a).

One of the factual elements of 18 USC § 1957 is that the

“property” involved in the monetary transaction must in fact

be derived from specified unlawful activity. Every Court of

Appeals to address the question has so held. United States v.

Leahy, 82 F.3d 624, 635 (Sth Cir.1996); United States v.

* See also Schad v. Arizona, 501 U.S. 624 (1991), which discusses the

difference between an element of an offense, and the means of satisfying

that element of the offense.

Sokolow, 91 F.3d 396 (3rd Cir.1996), cert. denied, 519 U.S.

1116 (1997); 36 American Criminal Law Rev. 913 (1999)—

“The Act criminalizes only those transactions that actually

involve the proceeds of a ‘specified unlawful activ-

ity.”"(footnote omitted). In fact, as can be seen from the jury

instructions given at the trial of this matter, the district court

told the jury that the fourth element of money laundering was

as follows:

Fourth: The criminally derived property must also, in

fact, have been derived from a specified unlawful

activity; ...

Thus, as a matter of logic, and the law, at the trial in this

proceeding, there had to be juror unanimity regarding the

property’s derivation from specified unlawful activity.

In this case, however, the court’s jury instruction’ per-

mitted the jury to convict LHI and Babo Beazley Loe of

money laundering even though there may have been

Significant disagreement among the jurors as to whether the

proceeds were derived from mail fraud, or from wire fraud, or

both; and even though there may have been significant

disagreement as to which precisely which acts of mail fraud,

or wire fraud, constituted the source of the proceeds.

In its resolution of the question, which had heretofore

never been addressed by any court of appeals, the Court of

Appeals for the Fifth Circuit concluded that in money

laundering cases under § 1957, the Sixth Amendment’s

* In its charge to the jury, the district court defined “specified unlawful

activity” as follows: “The term specified unlawful activity includes

violations of the mail fraud statute, 18 U.S.C., Section 1341, and the wire

fraud statute, 18 U.S.C. Section 1343. It does not include a violation of

Title 18, United States Code Section 371, the conspiracy statute. I have

previously instructed you on the elements of these offenses and you

should apply those instructions in evaluating this element of the money

laundering offenses.”

requirement of unanimity reaches only the fact of derivation

from specified unlawful activity, ie, only to the question of

whether the money was actually derived from the “set” of

crimes embraced by the term “specified unlawful activity.”

In the eyes of the Court of Appea s, jury unanimity as to the

“category” of crime, (i.e., mail fraud, wire fraud) creating the

illicit funds is not required—much less jury unanimity as to

the specific offense within a category. In reaching these

conclusions, the Court of Appeals did not even so much as f

mention this Court’s opinion in Richardson. This was error.

In Richardson, this Court drew a clear distinction between

the means used to commit an element of a crime, which do

not require jury unanimity, and the elements themselves—

which do. In determining the category into which the Court

would place the statute under consideration in Richardson, 21

U.S.C. § 848—the continuing criminal enterprise statute—the

Court looked to three things: (1) the language of the statute;

(2) the breadth of the statute; and (3) the Court’s settled

policy against interpreting a statute in a way that engenders

constitutional issues, if a reasonable alternative interpretation

poses no constitutional questions.

If 18 U.S.C. § 1957 is examined in light of these three

factors, it is plain that the Court of Appeals erred. The term

“specified unlawful activity” is not a “term of art,” it is a

congressional limitation on the types of activity that can

produce “dirty” money, ie., money that will subject the

persons conducting financial transactions with it to federal

prosecution. More importantly, a specified unlawful activity

is in fact a “predicate offense”in a money laundering

prosecution. Before convicting a defendant of a violation of

§ 1957, the jury must find, beyond a reasonable doubt, that an

offense listed in § 1956(c)(7) has been committed, and that

the offense gave rise to the funds at issue in the charged

transaction. If unanimity as to the source of the funds is not

required, then there cannot, in fact, ever be true unanimity as

to the money laundering transaction itself.

cereeeerremerenreiiiiiiiiiiitiliiiacaaaai iis)

Further, given the original breadth of the Statute, which has

been repeatedly criticized for criminalizing routine comer-

cial transactions,° the interpretation given it by the Court of

Appeals for the Fifth Circuit creates precisely the types of

dangers warned against in Richardson. Permitting a jury to

avoid discussion of which specified unlawful activity it

believes the money came from “will cover up wide

disagreement about just what the defendant did, or did not

do.” Richardson, at 819. Further, if a jury is not required to

determine which specified unlawful activity generated the

funds that were allegedly laundered, the there is the risk that a

jury will conclude that whether there is smoke (some type of

underlying criminal activity), there must be fire—money

laundering.

The money laundering statutes now play a very important

role in federal prosecutions. The decision of the Court of

Appeals for the Fifth Circuit in this case is significant for that

reason alone—it represents the first appellate interpretation of

this aspect of the money laundering statutes. More critical,

however, is the fact that the result reached by the Court of

Appeals will undoubtedly result in the even greater use of the

money laundering statutes, because the Court of Appeals has

interpreted them in a way that dramatically lowers the

Government’s burden of proof. Certiorari should be granted

to review this important federal question.

* See e.g., “A Critical View of Bank Secrecy Act Enforcement and the

Money Laundering Statutes,” 37 CATH. U.L. Rev. 489 (1988), John K.

Villa.

CONCLUSION

Wherefore, the foregoing reasons considered, this Court is

respectfully urged to grant this petition for a writ of certiorari.

Respectfully submitted,

HERBERT V. LARSON, JR.

700 Camp Street

New Orleans, Louisiana 70130

(504) 528-9500

Attorney for Petitioners

Babo Beazley Loe and

Loe’s Highport, Inc.

APPENDICES

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

Case No. 00-40690

No. 99-40454, Consolidated with Case No. 99-40495,

Consolidated with Case No. 99-41470, Consolidated

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

CORNELIUS DEWITTE LOE, JR., also known as C.D.

LOE; BABO BEAZLEY LOE; LOE’s HIGHPORT, INC.,

Defendants-Appellants.

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

LOE’s HIGHPORT, INC.; BABO BEAZLEY LOE,

Defendants-Appellants.

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

BABO BEAZLEY LOE; LOE’S HIGHPORT, INC.,

Defendants-Appellants.

38 a ee

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

LOE’S HIGHPORT, INC.,

BABO BEAZLEY LOE;

Defendants-Appellants.

Appeals from the United States District Court

for the Eastern District of Texas. 4:97-CR-71-2.

Paul N. Brown, U.S. District Judge.

April 17, 2001, Decided

OPINION BY: PATRICK E. HIGGINBOTHAM

OPINION

PATRICK E. HIGGINBOTHAM, Circuit Judge:

Appellants seek reversal of their convictions for conspir-

acy, 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 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 Corporation.

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

individuals' on various conspiracy, tax fraud, wire fraud, mail

fraud, and money laundering charges. A 1998 superseding

indictment charged Appellants on thirty-one counts.” The

Government alleged that Appellants failed to report millions

in boat sales ¢o the IRS and the Corps. Appellants were also

accused of having defrauded their 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

' 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.

on others. The district court sentenced Cornelius and Babo

Loe to jail and required the Loes and LHI to pay large fines

and restitution damages.

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.’ 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 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

> See 18 U.S.C.A. § 3282 (2000) (articulating a five-year limitations

period).

the Loes.* 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 $624,867.79 ° 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 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 _cntered an order of disbursement on February 10,

1993. a

* 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 him from the

premises and indicated that the restaurant woul, not be reopened.

Litigation ensued. .

* Each of these sums was paid with interest; the amounts shown reflect

only principai.

* 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 disburse-

ment specifically included a $2,000 disbursement to Babo Loe as trustee

of LHI.

sc aergesnmnnenpenememnemeesemns ict eo WARY PION

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 Government can not demonstrate the commission of

an overt act in furtherance of the conspiratorial agreement.’

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. Girard * 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.” 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.’°

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.'' Similarly, receipt of the

” See Grunewald v. United States, 353 U.S. 391, 396-97, 1 L. Ed. 2d

931, 77 S. Ct. 963 (1957).

® 744 F.2d 1170 (Sth Cir. 1984).

° Girard, 744 F.2d at 1171.

' Td. at 1173.

'! Id. at 1172. The cases cited by Cornelius Loe are consistent with this

reasoning, yet are factually distinguishable. In United States v. €olon-

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 correctly concluded that these later actions were

$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.'” 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 pay-

ment 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 as-

sessing 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 the conspiracy.'? Proof

of an unalleged act can not surmount the statute of limita-

tions bar.

not undertaken in furtherance of the conspiracy. See id. In United States

v. Davis, 533 F.2d 921, 926 (Sth 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 (Sth 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).

” See Davis, 533 F.2d at 929.-

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 settle-

-ment” 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.'*

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 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.

'* Babo Loe adopts Comelius 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.

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.’ Courts have recognized this

relationship by holding that aiding and abetting is governed

by the statute of limitations applicable to the predicate

offense.'© 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 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 con-

spiracy instructions. We do not find that the court abused its

discretion in incorporating the statute of limitations by

reference. '’

Cormelius Loe also challenges the sufficiency of the

evidence supporting his conviction under Count 17. The

applicable standard of review requires us to determine

' 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 crime.”).

'* 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).

'” See United States v. Pennington, 20 F.3d 593, 600 (Sth Cir. 1994)

(reviewing a court’s refusal to submit a proposed jury instruction for

abuse of discretion).

Se ce

10a

whether a reasonable trier of fact could have found that the

evidence established guilt beyond a reasonable doubt.'* 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. ws

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.”’ In this case, the court instructed the jury that

the fraud must be “material;” the only alleged error is its

failure to define the term.”'

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.” 7” 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 instruc-

'8 See United States v. Mergerson, 4 F.3d 337, 341 (Sth Cir. 1993).

'9 See United States v. Bailey, 444 U.S. 394, 414-15, 62 L. Ed. 2d 575,

100 S. Ct. 624 (1980) (stating that it is for the jury, and not the court, to _

determine the credibility of witnesses).

S. Ct. 1827 (1999); United States v. Pettigrew, 77 F.3d 1500, 1510-11

(Sth Cir. 1996). ?

2! 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 defraud.

” Pettigrew, 77 F.3d at 1510.

lla

tion; and where the omission of the proposed instruction

would “seriously impair the defendant’s ability to present

a defense.” 7°

The court only deviated from the instruction proposed by

Appellants in refusing to define “material.”** We have held

that failure to charge materiality to the jury requires reversal,

without considering whether the error was harmless.2°

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.”*° 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.2’

Ill. BABOLOE -

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 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,

9 Id.

“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.

6 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.

Macnee

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12a

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.”* We therefore need

not address Babo -Loe’s assertion that she can not be

convicted of conspiring with LHI.”

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 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.’ The warrant

78 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 (Sth Cir.

1994).

?° As noted above, the evidence was sufficient to support Cornelius

Loe’s conspiracy conviction under count 17. Moreover, counts | and 18

involved acquitted conspirators other than LHI. Babo Loe’s arguments

regarding LHI are consequently irrelevant.

3° See 31 U.S.C.A. §§ 5312(aX(2{T), 5313 (2000).

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13a

authorized the search of the following areas: two offices on

level one of the corporate office building; al! 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 building. :

In reviewing the district court’s ruling on a motion to

Suppress evidence, we review factual findings for clear

error.’ We review de novo the court’s legal conclusions

regarding the constitutionality of law enforcement action,

sufficiency of the warrant, and the reasonableness of an

Officer’s reliance on a warrant.°”

We address a Fourth Amendment challenge to a seizure

conducted pursuant to a search warrant by asking, first,

whether the seizure falis within the good-faith exception to

the exclusionary rule.? 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.” ** If the good-faith exception applies, we need not

examine whether the warrant was supported by probable

cause.*>

3! See Davis, 226 F.3d at 350.

32 See id.

3 See United States v. Davis, 226 F.3d 346, 350 (5th Cir. 2000); see

also United States v. Leon, 468 U.S. 897, 82 L. Ed. 2d 677, 104 S. Ct.

3405 (1984). i

* Davis, 226 F.3d at 351 (quoting United States v. Shugart, 117 F.3d

838, 843 (Sth Cir. 1997)).

*5 Davis, 226 F.3d at 351.

a RAM aT tS OBL

l4a

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.*°

However, two exceptions apply. First, items of an “incrim-

inatory 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 property which is

not described in the warrant if the property exhibits a

“sufficient nexus” to the crime under investigation.’” The

Fourth Amendment does not countenance, however, a

“general, exploratory search through personal belongings.” **

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,” her brief does not indicate whether

36 See Horton v. California, 496 U.S. 128, 140, 110 L. Ed. 2d 112, 110

S. Ct. 2301 (1990).

37 See Creamer v. Porter, 754 F.2d 1311, 1318 (Sth Cir. 1985).

Id.

*? 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

lSa

she is reiterating those arguments on appeal. On appeal, she

refers only to the seizure of estate 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 docu-

ments 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.“” The FBI knew prior to the search that the

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

warrant.”

“ 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.” Alaryland v. Buie, 494 U.S. 325, 327, 108 L. Ed. 2d

276, 110 S. Ct. 1093 (1990).

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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 sweep *'—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 over-

broad 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 unreasonable.”

While the wisdom of including such a broad array of

documents in the warrant is questionable, we are unprepared

to find the 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

*' 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 (Sth 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. Kimbrough, 69 F.3d 723, 727 (Sth Cir. 1995).

17a

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 reason-

ably 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.*? 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.”

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 guidelines.

This Court reviews a court’s legal interpretations of the

Guidelines de novo.” A sentencing court’s refusal to depart

“ The search in this case is therefore distinguishable from the “all

records” search discussed in United States v. Humphrey, 104 F.3d 65 (Sth

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. agi

“ Cornelius Loe adopts Babo Loe’s Fourth Amendment arguments.

For the reasons given above, these arguments also fail as applied to

Cornelius Loe.

“5 See United States v. Barbontin, 907 F.2d 1494, 1497 (Sth Cir. 1990).

18a

from the applicable guideline is unreviewable, however,

unless the court mistakenly believed that it lacked the

authority to grant such a departure.*° 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 interpre-

tation, 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 wo.

2S1.2 corresponds with violations of 18 U.S.C. § 1957."

would not hesitate to apply de novo review and ir 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.“* 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.‘

The sentencing court’s refusal to apply a different set of

“ See United States v. Powers, 168 F.3d 741, 753 (Sth Cir. 1999).

*” 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 (Sth Cir. 2000);

United States v. Hermingson, 157 F.3d 347, 360-63 (Sth 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”).

19a

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 beyond a reasonable doubt.*° 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.”

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 io the offense. We reject each of these

contentions.

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, “the purpose of the notice of forfeiture in the

” See United States v. Mergerson, 4 F.3d 337, 341 (Sth Cir. 1993).

‘| See United States v. Bailey, 444 U.S. 394, 414, 62 L. Ed. 2d 575, 100

S. Ct. 624 (1980). :

20a

_indictment is to inform the defendant that the government

seeks forfeiture as a remedy.” ** 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.” ** 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.™

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

i forfeiture. Upon the Government’s motion, the court entered

a nunc pro tunc amendment to the written order describing

the forfeited property.*> 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

RAL AL yA to SABAH he A SN I NA Re ME InN

2 United States v. Puma, 937 F.2d 151, 156 (Sth Cir. 1991) (quoting

United States v. Cauble, 706 F.2d 1322, 1347 (5th Cir. 1983)).

3 Puma, 937 F.2d at 156.

4 See id. at 156-57. :

°° See Fed. R. Crim. Proc. 36 (2000).

ee eer me |

2la

prevails.°° 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.*’ We therefore find no

disproportionality, let alone the “gross disproportionality”

required by United States v. Bajakajian.**

Babo Loe argues that the Government failed to iduce

evidence sufficient to support venue for count 19, mail fraud.

As a “continuing offense,” mail fraud may be prosecuted in

“any district in which such offense was begun, continued, or

completed.” ~ Although the government must prove venue

by the preponderance of the evidence, circumstantial

evidence alone is sufficient to establish venue.” On appeal,

we view the evidence in the light most favorable to the

Government, drawing all reasonable inferences in favor of the

verdict.°!

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

*° See United States v. McDowell, 109 F.3d 214, 217 (Sth Cir. 1997);

United States v. Shaw, 920 F.2d 1225, 1231 (Sth Cir. 1991).

*” See United States v. Tilley, 18 F.3d 295, 300 (Sth Cir. 1994).

*® $24 U.S. 321, 334, 118 S. Ct. 2028, 141 L.~Ed. 2d 314 (1998).

Cornelius Loe adopts Babo Loe’s arguments regarding the forfeiture. For

the reasons given above, they fail as applied to his case.

*° 18 U.S.C.A. § 3237(a) (2000).

® See United States v. White, 611 F.2d 531, 534-35 (1980).

®! Id. at 535.

22a

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.” 2 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 19.”

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 other than those alleged in the indictment.”

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.” © Babo Loe does

| not allege prejudice and we do not discern the potential for

! such prejudice on the facts of this case.

| G.

Babo Loe further contends that the cumulative effect of

numerous evidentiary errors committed by the district court

violated her rights under the Confrontation Clause. We

review evidentiary rulings for an abuse of discretion.”

Although Babo Loe provides numerous cites to the record,

* See United States v. Sharpe, 193 F.3d 852, 870 (Sth Cir. 1999).

® See United States v. Drury, 687 F.2d 63, 66 ( Sth Cir. 1983) (finding

that, even if an indictment was duplicitous, there was no prejudice).

“ 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 (Sth Cir. 1984).

U.S. Const. amend. VI.

®” See United States v. Pace, 10 F.3d 1106, 1113-14 (Sth Cir. 1993).

ee ee

23a

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 rights.

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.”

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.” 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

“ Babo Loe’s reliance on United States v. Riddle, 103 F.3d 423, 434-

35 (Sth 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).

24a

specificity.” We review the grant of a motion to quash for

abuse of discretion. ”'

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.”

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.””°

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.”* The

commingling of assets has placed courts in the difficult

position of separating “clean” from “dirty” funds. Although

any accounting method employed to this end inevitably

exhibits certain “arbitrary” characteristics,” a rule of deci-

” See United States v. Arditti, 955 F.2d 331, 345 (Sth Cir. 1992).

"! See id.

7 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 (Sth Cir. 2000).

75 See United States v. Moore, 27 F.3d 969, 976-77 (4th Cir. 1994).

25a

sion is necessary. In United States v. Davis,’ we stated the

following rule for section 1957 cases involving commingled

accounts: “When ‘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.” ”” 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.”

In this case, counts 22-24 were based on transactions

originating in a $776,742 transfer from an account contain-

ing $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 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.’” Moreover, the jury instructions were also

"226 F.3d 346 (Sth 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 (Sth 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, 61 L. Ed. 2d 39, 99 S. Ct. 2450 (1979) (holding that jury

instructions creating a conclusive presumption against the defendant as to

an element of a crime violates the Fourteenth Amendment).

”® Cf. United States v. Poole, 557 F.2d 53 1, 535-36 (Sth Cir. 1977).

” See United States v. Giraldi, 86 F.3d 1368, 1371 (Sth Cir. 1996).

26a

plainly inconsistent with Davis. As Babo Loe adopts LHI’s

arguments with respect to counts 22-24," her convictions

under these counts must also be reversed.”

A proportionality rule would avoid some of the oddities

associated with the Davis approach. Under Davis, if aggre-

gate 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 proportions.

Finally, this rule would be more faithful to the plain

language of the statute. The Davis rule allows a court to look

* 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 approx-

imately 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.

27a

at the total number of withdrawals from an account,

aggregating a series of transactions. See United States v.

Davis, 226 F.3d 346, 357 (Sth 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 aggre-

gation mechanism condoned in Davis and more accurately

reflect the 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 (Sth Cir.

1982) (en banc), we must apply it to the case at bar, leaving

change to a case appropriately before the en banc court.

. B.

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) know-

ingly (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.” ©

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.

*" 18 ULS.C.A. § 1957 (2000).

28a

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 art.’ 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 Appel-

lants with notice of the precise transactions for which they

were being prosecuted; and (3) prevent future prosecutions

for the same offense.* Thus, the indictment was sufficient.

Nor is jury unanimity regarding the specified unlawful

activity required. Our holding in United States v. Short ®

A | affirms this conclusion. In Short, we upheld the conviction of

a defendant as a “supervisor” of a continuing criminal

agree on the identities of the five subordinates required to

make the defendant a supervisor.*’ Short indicates that

contextual, predicate information need not be as precisely

proven as the defendant’s acts. In this case, LHI was indicted

for the commission of a single act, engaging in a monetary

transaction. This act was clearly identified to the jury.™

8 See 18 U.S.C.A. § 1957(f)(3) (2000).

* See United States v. Flores, 63 F.3d 1342, 1360-61 (Sth Cir. 1995).

* 181 F.3d 620 (Sth Cir. 1999).

% See 21 U.S.C.A. § 848 (2000); Short, 181 F.3d at 623-24.

*? Sze Short, 181 F.3d at 623-24.

** LHI’s reliance on United States v. Gipson, 553 F.2d 453 (Sth 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

‘eee eer er eG

29a

©.

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 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.®’ 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

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.

* 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 (Sth Cir. 1989).

30a .

irrelevant in false statement cases.” Although reliance on a

qualified tax preparer is an affirmative defense in such

cases,”! 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.”

Nothing prevented Appellants or their 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 testi

mony.’ We therefore need not address the adequacy of the

court’s additional reasons for excluding the testimony.”

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

® See United States v. Johnson, 558 F.2d 744, 745 (Sth Cir. 1977).

*! See Wilson, 887 F.2d at 73.

% See Fed. R. Evid. 403 (2000); Johnson, 558 F.2d at 747.

% See United States v. Willis, 38 F.3d 170, 174 (Sth Cir. 1994) (stating

that a court’s decision to exclude expert testimony is reviewed for abuse

of discretion).

* Babo Loe adopts the preceding argument, which fails for the reasons

given above.

3la

the district court, LHI contends that court abused its dis-

cretion in failing to offset LHI’s expenses from the restitution

amount.”°

- 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 position would normally be entitled to a

reduction in the restitution award,” 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 discretion.”’

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 United States v. Chaney, 964 F.2d 437, 451-52 (Sth Cir. 1992)

(articulating an abuse-of-discretion standard for restitution calculations).

*° 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.

32a

DISSENT:

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

33a

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 under-

stated the amount of income to the marina.

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

payment.

I think it is critically important to note that in the subparts

of Count 17 of the indictment, headed “THE CONSPIR-

ACY”, “THE SCHEME TO DEFRAUD”, and the “MAN-

NER AND MEANS”, there is absolutely no mention what-

soever 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.

34a

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

iawsuit 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 !7 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,

35a

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 “con-

structive receipt” by the defendants of the cash proceeds by

the placing of the funds in the registry of the court as

36a

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 error.

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 deter-

mination are for the most part well established. In Grune-

wald v. United States, 353 U.S. 391, 1 L. Ed. 2d 931, 77

S. Ct. 963 (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.

| TDS RE eee

37a

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,

19 L. Ed. 2d 1055, 88 S. Ct. 926 (1968). This rule of

construction in favor of the defendant has been recently

recognized by our Circuit in United States v. Meador, 138

F.3d 986 (Sth 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 (Sth

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, 87 L. Ed. 368, 63 S. Ct. 268 (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, 25 L. Ed. 2d 156,

90 S. Ct. 858 (1970). Finally, in United States v. Marion, 404

U.S. 307, 322, 30 L. Ed. 2d 468, 92 S. Ct. 455 (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

38a

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 prejudiced.

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 (Sth Cir. 1976), our Court wrestled with a contro-

versy 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 con-

cluded 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.” 5 ‘2

39a

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. Girard, 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

40a

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 Septem-

ber 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 op on 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

4la

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 indict-

ment. 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.

42a

APPENDIX B

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 99-40454, Consolidated with Case No. 99-40495,

Consolidated with Case No. 99-41470,

Consolidated with Case No. 00-40690

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

CORNELIUS DEWITTE LOE, JR., also known as C.D.

LOE; BABO BEAZLEY LOE; LOE’s HIGHPORT, INC.,

Defendants-Appellants.

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

Loe’s HiGHPORT, INC.; BABO BEAZLEY LOE,

Defendants-Appellants.

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

BABO BEAZLEY LOE; LOE’S HIGHPORT, INC.,

Defendants-Appellants.

43a

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

BABO BEAZLEY LOE; LOE’s HIGHPORT, INC.,

Defendants-Appellants.

Appeals from the United States District Court

for the Eastern District of Texas.

June 21, 20001, Decided

JUDGES: Before HIGGINBOTHAM and DeMOSS, Circuit

Judges, and FISH,” District Judge.

OPINION: ON PETITIONS FOR REHEARING AND

REHEARING EN BANC

PER CURIAM:

In a footnote, the panel opinion states that “neither party

appeals its money laundering convictions under counts 25,

29, 30, and 31.” United States v. Loe, 248 F.3d 449, 467 n.80

(Sth Cir. 2001). The opinion should have indicated that

neither party challenges its conviction under these counts on

the grounds discussed in that section of the opinion, that the

evidence was insufficient to establish that at least $10,000 of

the “traced” funds was fraudulently obtained. As the opinion

recognizes in the same footnote, Babo Loe raised a more

general sufficiency challenge to Count 25, which the opinion

rejected. Both Loe’s Highport, Inc. and Babo Loe also

appealed their convictions on counts 25, 29, 30, and 31 ona

distinct rationale, arguing that the indictment allowed for a

non-unanimous jury verdict. This Court was unpersuaded by

* District Judge of the Northern District of Texas, sitting by

designation.

44a

Appellants’ contention and affirmed the convictions on these

counts.

With the clarification of this order, the Petitions for Panel

Rehearing are DENIED. No member of this panel nor judge

in regular active service on the court having requested that the

court be polled on Rehearing En Banc (Fed. R. App. and Sth

Cir. R. 35), the Petitions for Rehearing En Banc filed by

Appellants Loe’s Highport, Inc. and Cornelius Dewitte Loe,

Jr. and Appellee are also DENIED.

45a

APPENDIX C

COUNTS 22-31

VIOLATION: 18 U.S.C. § 1957 & 2 (Engaging in

Monetary Transaction in Property Derived From

Specified Unlawful Activity & Aiding and Abetting)

PENALTY: A fine of not more than $250,000 (or an

alternate fine of not more than twice the amount of the

criminally derived property involved in the

transaction) or imprisonment for not more than 10

years, or both. A term of supervised release of not

more than 3 years. )

MANDATORY ASSESSMENT; $50 per count

On or about each of the dates set forth below, in the

Eastern District of Texas, the Defendants, BABO BEAZLEY

LOE and LOE’S HIGHPORT, INC., did knowingly engage

and attempt to engage in the below-listed monetary

transactions by, through or to a financial institution, affecting

interstate or foreign commerce, in criminally derived property

of a value greater than $10,000, that is the deposit,

withdrawal, transfer, or exchange of funds or monetary

instruments in the amounts described below, such property

having been derived from a specified unlawful activity, that

is, mail fraud and wire fraud, 18 U.S.C. §§ 1341 and 1343.

46a

O} FUNDSOR Bernsen ORIGINAL | SPECIFIED

U| MONETARY DATE & RECIPIENT | SOURCE OF |UNLAWFUL

N| INSTRUMENT PROCEEDS | ACTIVITY

T AMOUNT

Bank United Lexington

Miller, Johnson & for further Insurance IBUSC

Kuehn; Loe’s Hi 1 Veser credit to First | Company draft}, 4.7

22)port Account " $208 100.56 | Southwest Co.,| #850576 paid |, 9 1) ¢ ¢.

#85230515; Wi eaics Loe’s Hi on flood loss |,44,°

Transfer Account Gescribed in

#8000207087 Count 17

Lexington

Miller, Johnson& Greenwood Insurance IgUSC

Kuehn; Loe’s 11/12/92 Trust Book | Company draft 1341 ‘ii

23) Highport Account $95,000.00 _ [Entry (@5.95%;|#850576 paid on}, « (.

#85230515; ar maturity date flood loss 44,

Transfer 11/12/97) described in

Count 17

Lexington

Miller, Johnson& First Gibraltar | Insurance suse

Kuehn; Loe’s wie Bank Book | Company draft oa

24! Highport Account $95,000.00 ENtY (@ 6.00%, #850576 paidon| ie iisc

#85230515; oer maturity date flood loss one

Transfer 11/12/97) described in

Count 17

The Citizens and Chubb Insurance|

Southern National Company draft

of Florida; #2468159 paid |18 U.S.C.

35| Campbell, 12/16/93 ee va on business [1341

Dettman & $965,000.00 , ae interruption and| 18 U.S.C.

McKinley, Inc.; flood losses 1343

Trust Account described in

Check #0198 Count 17

47a

ks a Van Kampen

— eran” | exo

ie Gime Capital for Insurance

United Savings further credit to | Company Draft 18 U.S.C.

30, Assetietion of 06/27/95 Babo Loe; -#861502 paid on 1341

Vitis Gentiles $196,000.00 Account restaurant 18 U.S.C.

of deposit #59-8000- contents flood 1343

#3720268592 and 597399(Prime |loss described in

#3720268584 Income Rate Count 17

Trust)

Van Kampen

Bank United; wire Anan Lexington

transfer of Cope - Insurance

further credit to

proceeds from Rint anee Company Drat 18 U.S.C.

31| United Savings 06/27/95 CD. Loe Jr: #861502 paid on 1341 _

Association of $98,000.00 provaton 4 59- restaurant 18 U.S.C.

Texas certificate of 8000- contents flood 1343

deposit : loss described in

#3720268576 eT Oni?

Rate Income

Trust)

All in violation of Title 18, United States Codes, Sections

7 and 2.

195

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.