No. 96-1430

IN THE SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1996

 UNITED STATES OF AMERICA , PETITIONER

v.

PATRICK J. SCHLEIBAUM 


ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE  TENTH  CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

WALTER DELLINGER
Acting Solicitor General

Department of Justice 
Washington, D.C. 20530-0001
(202) 514-2217

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QUESTION PRESENTED

    Whether respondent was entitled to a reversal of
his false-statements conviction under United States
v. Gaudin, 115 S. Ct. 2310 (1995), where the trial
court, without objection, resolved the issue of mate-
riality itself rather than submitting it to the jury.

(I)

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TABLE OF CONTENTS

Page

Opinion below . . . .1
Jurisdiction . . . . 1
Statement . . . . 2
Reasons for granting the petition . . . . 4
Conclusion  . . . . 5
Appendix . . . . 1a

TABLE OF AUTHORITIES

Johnson v. United States, No.96-203(argued Feb.
25 1996) . . . . 4, 5
United States v. Gaudin, 115 S. Ct.2310 (1995) . . . . 3

Statutes:

15 U.S.C. 78j(b) . . . . 2
15 U.S-C. 78ff(a) . . . . 2
18 U.S.C. 1001 . . . . 2, 3, 4

Miscellaneous

Fed. R. Civ. P.52 . . . . 4

(III)

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OCTOBER TERM, 1996

No.

UNITED STATES  OF  AMERICA, PETITIONER

v.

PATRICK J. SCHLEIBAUM

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

    The Acting Solicitor General, on behalf of the
United States of America, petitions for a writ of
certiorari to review the judgment of the United
States Court of Appeals for the Tenth Circuit in this
case.

OPINION BELOW

    The opinion of the en bane court of appeals (App.,
infra, la-74a) is reported at :102 F.3d 1043.

JURISDICTION

    The judgment of the court of appeals was entered on
December 10, 1996. The jurisdiction of this Court is
invoked under 28 U.S.C. 1254(1).

(1)

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2

STATEMENT

    A federal grand jury in the District of Colorado
returned an indictment charging respondent Patrick
J. Schleibaum with making false statements to the
government, in violation of 18 U.S.C. 1001 (Count 1);
and securities fraud, in violation of 15 U.S.C. 78j(b)
and 78ff(a) (Count 2). Following a jury trial in June
1994, respondent was convicted of both charges, sen-
tenced to 24 months' imprisonment, and fined $6,000.
A divided court of appeals, sitting en bane, reversed
respondent's conviction on the false statements
charge, but affirmed on the securities fraud charge.
App.,  infra,  la-74a. 1
    1. Respondent Schleibaum was the chief financial
officer and, later, vice-president of Miniscribe, a
manufacturer of computer disk drives.  In January
1987, respondent and other Miniscribe executives
discovered that the company had an "inventory hole":
a discrepancy between the actual dollar value of the
inventory and the value recorded on Miniscribe's
books.  Because the inventory hole revealed that
Miniscribe had been less profitable than widely
believed, respondent and others sought to conceal it
by falsely inflating the inventory count and hiding the
false count from Miniscribe's auditors.  As a result,
Miniscribe reported false profits in income and quar-

___________________(footnotes)

    1 In a separate three-count indictment, Quentin T. Wiles
was charged with making false statements, securities fraud,
and wire fraud, based on the same fraudulent scheme, and,
following a July 1994 jury trial, was convicted of all charges.
Wiles took an appeal from his conviction, and his appeal was
consolidated with that of respondent.  Following argument, but
before the release of the panel's opinion, a majority of the
court's active judges voted to rehear Part II.A. of the opinion
en bane.

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3

terly earnings statements filed with the SEC. Mini-
scribe also disseminated false information to the pub-
lic through its annual reports and quarterly financial
statements. Relying on those false financial reports,
Standard Chartered Bank of London extended Mini-
scribe $90 million in credit the bank lost $30 million
of that amount as a result of Miniscribe's cover-up of
the inventory hole.  App.,  infra, 2a-15a.
    The misrepresentations contained in Miniscribe's
financial reports to the SEC formed the basis of re-
spondent's conviction under 18 U.S.C. 1001, which
prohibits the making of knowing and willful false
statements in a matter within the jurisdiction of a
federal department or agency.
    2. At respondent's trial, in accordance with then-
existing Tenth Circuit law, the district court ruled
that materiality was a question of law for the court to
decide.  Respondent did not object to that manner of
deciding the materiality element.  Over respondent's
objection, the court then determined that the govern-
ment had met its burden on that element by producing
"some evidence" of the false statements' materiality.
App., infra, 20a.
    3. After respondent was convicted, this Court held
in United States v. Gaudin, 115 S. Ct. 2310 (1995),
that the Constitution requires submission to the jury
of the materiality issue when it is an element of a
charged offense.  On appeal, relying on Gaudin,
respondent argued that his false-statements convic-
tion should be reversed because the district court had
decided the element of materiality without submitting
it to the jury.  Before the release of the panel's opin-
ion, the court of appeals voted to rehear the portion of
the appeal dealing with respondent's Gaudin claim.

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4

    A divided en bane court reversed  respondent's con-
viction under Section 1001.  The majority held that
the type of error that occurred here-a failure to
instruct the jury on an element of the offense-is a
"structural" defect that is not amenable to either
harmless- or plain-error analysis under Federal Rule
of Criminal Procedure 52, but is instead reversible
per se.  See App., infra, 21a-37a, Judge Lucero, joined
by Judge Ebel, agreed with the majority's conclusion
that the failure to submit the materiality issue to the
jury constituted structural error, but dissented from
the majority's holding that such error is immune
from plain-error analysis. Judges Lucero and Ebel
therefore would have remanded to the original panel
for review under Rule 52(b). App., infra, 52a-64a.
Judge Briscoe, joined by Judges Kelly and Henry,
dissented.  In their view, the failure to submit the
materiality issue to the jury did not constitute struc-
tural error, and was therefore subject to plain-error
analysis.  They too would have remanded the case to
the original panel to conduct that analysis. App.,
infra, 64a-74a.

REASONS FOR GRANTING THE PETITION

    In Johnson v. United States, No. 96-203 (argued
Feb. 25, 1996), this Court will consider whether plain-
error analysis is applicable to Gaudin-type errors
that predate the Gaudin decision itself and to which
no objection was made at trial.  Because the legal
issues presented in this case and in Johnson are
essentially identical, this petition should be held
pending the Court's decision in that case.

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5

CONCLUSION

    The petition for a writ of certiorari should be held
pending this Court's decision in Johnson, v. United
States, No. 96-203, and then disposed of accordingly,
Respectfully submitted.

WALTER DELLINGER
Acting Solicitor General

MARCH 1997

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APPENDIX

UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT
       
NOS. 94-1592,95-1022
UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE

v.

QUENTIN T. WILES, DEFENDANT-APPELLANT
UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE

v.

PATRICK J. SCHLEIBAUM, DEFENDANT-APPELLANT
        
[decided Dec. 10, 1996]

Before: SEYMOUR, Chief Judge, and PORFILIO,
ANDERSON, TACHA, BALDOCK, BRORBY, EBEL, KELLY,
HENRY, BRISCOE, LUCERO; and MURPHY, Circuit
Judges, as to Part  II.A.*
Before: BALDOCK, SETH, and BRORBY, Circuit
Judges, as to Parts I.  & II.B-F.**

___________________(footnotes)

    * Prior to release of the panel's opinion in these appeals, a
majority of the court's active judges voted to rehear Part 11.A.
of the opinion en bane. For purposes of oral argument, the
court  consolidated  these  appeals with United States v. Pappert,
No. 95-3071  (lOth Cir.,  filed  March 10, 1995), a portion of which
the court also voted to rehear en bane. The en bane court now
resubmits  Pappert  to the original panel for decision consistent
with Part  11.A. of this opinion.
    **The late Honorable Oliver Seth, United States Senior
Circuit Judge, heard oral argument and participated in the

(la)

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2a

BALDOCK, Circuit Judge.

    Miniscribe was a Colorado-based manufacturer of
computer hard disk drives. These criminal appeals
arise from its management's fraudulent cover-up of a
multimillion dollar inventory overstatement between
December 1986 and January 1989, which falsely in-
flated Miniscribe's profits and accelerated its descent
into  bankruptcy.
    Defendant Patrick J. Schleibaum is the former
chief financial officer and vice president of Mini-
scribe. Schleibaum was charged in a two-count crimi-
nal indictment with making false statements to the
government in violation of 18 U.S.C. 1001, and
securities fraud in violation of 15 U.S.C. 78j(b),
78ff(a) and 17 C.F.R. 240.10b-5.  Schleibaum's trial
commenced in June 1994.  The government called
twenty-nine witnesses over the course of seven days
for its case-in-chief.  Schleibaum's defense consisted
of his testimony and that of Miniscribe's former
director of far east operations.  The jury convicted
Sehleibaum on both counts.  The district court fined
Schleibaum $6,000 and sentenced him to twenty-four
months imprisonment on each count to run con-
currently.
    Defendant  Quentin T. Wiles is the former chairman
of the board and chief executive officer of Miniscribe.
Wiles was charged in a three-count criminal indict-
ment with making false statements to the govern-
ment in violation of 18 U.S.C. 1001, securities fraud

___________________(footnotes)

panel's conference of these appeals. Prior to his death, Judge
Seth concurred in all but Part II.A. of the opinion.  Judge Seth
did not participate in that portion of the opinion, which was
reheard en banc.

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3a

in violation of 15 U.S.C. 78j(b), 78ff(a) and 17 C.F.R.
 240.10b-5,  and wire fraud  in  violation  of  18 U.S.C. 
1343. Wiles'  trial commenced in July 1994.  The gov-
ernment called thirty-four witnesses over the course
of eleven days for its case-in-chief.  Wiles' defense
consisted of twelve witnesses, including himself, over
the course of two and one-half days.  The jury con-
victed Wiles on all three counts.  The district court
fined  Wiles $60,000 and  sentenced him to thirty-six
months imprisonment on. each count to run con-
currently.
    Both Defendants appeal their convictions urging
numerous grounds for reversal.  Because both cases
arise from the same fraudulent cover-up and present
overlapping factual and legal issues, we have con-
solidated our disposition of these appeals.  Our juris-
diction arises under 28 U.S.C. 1291.  We affirm in
part and vacate in part.

I.

    Miniscribe  began  operations  in  1981 in Longmont,
Colorado. Miniscribe was then a privately owned
company manufacturing computer disk drives in the
basement of its founder, Terry Johnson Miniscribe
went public in 1983, but soon grew beyond its
capacity. In 1985, a venture capital group, Hambrecht
& Quist, invested $20,000,000 in Miniscribe and gained
control of its management.  By 1986, Miniscribe was
an overtly profitable, publicly-owned corporation with
operations in Colorado, Hong Kong, and Singapore.
Miniscribe, whose common stock was traded on the
NASDAQ, was subject to the Securities Exchange
Act  of  1934, as well as the rules and regulations of the
Securities and Exchange Commission (SEC).

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4a

Following its change in management, chairman of
the board and chief executive officer Quentin  T. Wiles
headed Miniscribe from his office in Sherman Oaks,
California. Wiles had a reputation as a successful,
demanding executive who expected performance.
Salaries and bonuses at Miniscribe often depended
upon  Miniscribe "making the numbers."
    Assisting Wiles was a management team consisting
largely of certified public accountants.  Patrick J.
Schleibaum initially served as Miniscribe's chief
financial officer.  Wiles' management team also in-
cluded president, `chief operating officer and board
member Gerald Goodman, executive vice president
Jesse C. Parker, director of far east operations Paul
Lyons, division managers Owen P. Taranta and
Warren Perry, and operations controllers Kenneth A.
Huff and Steven Wolfe. William P. Lorea later joined
Miniscribe as chief financial officer when, in the
midst of trouble, Wiles moved Schleibaum to vice
president. Wiles was in constant contact with his
management team through phone calls and faxes, as
many as fifteen of each, every business day.

A.

    Despite reported growth and profitability, Mini-
scribe's financial position began to deteriorate early
in 1987. In January 1987, Miniscribe conducted its
annual inventory count to determine the value of
inventory on hand. The accuracy of the inventory
count was critical to the proper preparation of Mini-
scribe's 1986 year end financial statements.
    Management  retained the independent accounting
firm of Coopers & Lybrand to audit Miniscribe and
verify the accuracy of its inventory count. The stan-

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5a

dard procedure for verifying a company's inventory
count is through a test count-an inventory sampling
deemed representative of  the entire inventory.  Prob-
lems arose when, unbeknownst to the auditors, man-
agement detected an inventory hole of between
$2,000,000 and $4,000,000.
    The inventory hole appeared because the actual
inventory count, and thus dollar value of the inven-
tory, was less than the value of the inventory re-
corded on Miniscribe's books.  When the value of book
inventory is overstated, the cost of goods sold is
correspondingly understated.  The understated cost
of goods sold is then subtracted from net sales
resulting in inflated profits equal to the amount of the
inventory hole or overstatement.
    Huff, Perry and Wolfe discussed the problem with
Schleibaum.  At this point, Wiles was unaware of the
inventory hole.  Schleibaum properly decided to
charge a portion of the hole against an emergency
fired known as inventory reserves.  The remainder of
the hole also should have been charged off or expensed
as a cost of goods sold with a corresponding reduction
in profits.  But when Perry suggested this approach,
Schleibaum balked.  Instead, Schleibaum directed his
subordinates to conceal the remainder of the inven-
tory hole through improper means so that Miniscribe
could continue to "make the numbers." 1.
    With  Schleibaum's knowledge  and  approval, Wolfe
and Perry decided to cover the inventory hole by
falsely inflating the inventory count.  To hide the

___________________(footnotes)

    1 For a good discussion of how income may be manipulated
through inventory accounting, see Belverd E. Needles, Jr.,
Financial Accounting 360-62 (5th ed. 1995).

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6a

false count from the auditors, Wolfe and Perry broke
into the auditors' work trunks at Miniscribe after
business hours and altered the test count to match
the inflated inventory count.  The inflated numbers
were then entered into Miniscribe's computer system
and reflected as additional inventory.  Schleibaum
signed a management representation letter to the
auditors  indicating  Miniscribe's  financial statements
were accurate, including its inventory valuation.
Miniscribe cleared the 1986 audit.
    Miniscribe reported the false profits resulting from
concealment of the inventory hole on its 1986 income
statement and 1987 first quarter earnings statement.
Miniscribe disseminated this information to the
public through its 1986 annual report and 1987 first
quarter financial report. Schleibaum signed the 1986
10-K report and 1987 first quarter 10-Q report which
contained Miniscribe's false financial statements.
Miniscribe filed the 10-K and 10-Q reports with the
SEC as required by law.  Miniscribe's reported suc-
cess allowed the company to raise funds through a
$97,000,000 issue of debentures early in 1987.

B.

    In the spring 1987, Wiles became concerned about
Miniscribe's internal controls and financial strength.
At management's quarterly meeting in July 1987,
Parker expressed concern to Wiles about inventory
control in Miniscribe's far east operations. In August
1987, Wiles traveled to the far east to review Mini-
scribe's operations in Hong Kong and Singapore.
Wiles found a complete loss of inventory control in
Miniscribe's Singapore facility.  Wiles largely blamed
Schleibaum for the loss of inventory control.  Upon

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7a

his return, Wiles  moved  Schleibaum to vice president
and made Taranta acting chief financial officer.
    Wiles believed that if an inventory problem actually
existed, Miniscribe and its officers might be liable to
those investors purchasing the recently issued deben-
tures on the company's reported financial strength.
At Wiles' direction, Taranta and Huff researched the
inventory problem. In the fall of' 1987, Taranta and
Huff  detected a $15,000,000  inventory  hole at Mini-
scribe, the largest  portion  of which  was  located  in the
company's Colorado operation.  At this point, Mini-
scribe's financial statements for 1986 and the first
two quarters of 1987 should have been restated to
reflect a write off of the inventory hole and conse-
quent reduction in profits. Instead, on October 12,
1987, Miniscribe filed a third quarter 10-Q report with
the SEC which failed to account for the problem.
    On October 14, 1987, Miniscribe's management
team met at Wiles' office in Sherman Oaks, Califor-
nia. Those present included Wiles, Schleibaum, Good-
man, Parker, Taranta, and Huff. Directly prior to
the meeting, Goodman informed Wiles of the inven-
tory problem.  Wiles became visibly upset, blaming
Schleibaum  and Goodman for failing to control opera-
tions.  Wiles told Schleibaum and Goodman to stay out
of   the way  Wiles and Taranta would find a solution to
the problem.
    At the meeting, Taranta presented a report which
he and Huff had completed the previous evening.  The
report set forth a detailed analysis of the inventory
hole. In the report, Taranta, proposed to cover -nearly
$8,000,000 of the hole through various means.  Wiles
rejected the idea, telling Taranta and the others to
"think big chunks." Wiles suggested "grossing up"

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8a

or adding value to the inventory.  Schleibaum sug-
gested increasing  the value of fixed assets or failing
to record certain liabilities.  Taranta rejected these
suggestions because the independent auditors might
detect  such  measures.  Without deciding the specifics,
Wiles concluded that management should hide the
inventory hole for the present time.  Wiles directed
Taranta to destroy all copies of the report.  Shortly
thereafter, Schleibaum, Huff, and Taranta met to
discuss the details of the cover-up. 2
    In late October 1987, the stock market declined
sharply.  Miniscribe's reserves were minimal and
unable to absorb a large inventory write off without
affecting profits. Lorea, who Wiles had recently hired
to become Miniscribe's chief financial officer, never-
theless suggested that the time was proper to write
off the inventory hole.  Taranta and Goodman agreed.
Because Miniscribe's stock value already was de-
pressed, a reported  decline in Miniscribe's profits was
unlikely to affect its stock value significantly.  Wiles
rejected the idea.  Instead, Wiles convened a second
meeting of management in November 1987 to discuss
the inventory problem.
    Wiles, Schleibaum, Taranta, Goodman, Huff and
Lorea attended the second meeting on November 17,
1987 in San Francisco at the offices of Hambrecht &
Quist, which continued to control Miniscribe.  The
group discussed the upcoming 1987 audit. Wiles used

___________________(footnotes)
                                           
    2 After meeting with Wiles, members of management
generally would prepare "What I Heard" memos and deliver
them to Wiles.  This way, Wiles could be sure that management
understood his directions. Interestingly, no one attending the
October 14, 1987 meeting prepared a "What I Heard" memo for
Wiles.

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9a

extremely harsh language when addressing the
inventory problem.  Wiles had decided that Miniscribe
could not afford to write off the inventory hole in 1987,
but instead had to cover it up to maintain investor
confidence.  Wiles planned to write off the inventory
hole over  six quarters, beginning with the first quar-
ter of 1988.  Wiles concluded the meeting by scanning
the conference table, stopping at Schleibaum, and
stating to Tarantz "Owen, if anyone doesn't cooper-
ate, or anyone gets in the way, you let me know and
I'll deal with it."
    In December 1987, independent auditors began
preparing  for Miniscribe's 1987 year end audit. Mini-
scribe again faced the problem of clearing the inde-
pendent audit. Taranta and Lorea met with Wiles in
California on December 4, 1987, while enroute to re-
view Miniscribe's far east operations.  Taranta ex-
plained the plan to clear the audit to Wiles.  At the
conclusion of the meeting, Wiles informed Lorea that
because of the inventory problem, Lorea would not
have to sign Miniscribe's 1987 10-K Report. Schlei-
baum later confirmed this with Lorea.  Around the
same time, Wiles also told Goodman to stay clear of
the problem because the government "wouldn't put a
seventy year old man miles in jail." Upon their
arrival in Singapore, Taranta and Lorea met with
Schleibaum, Parker, Lyons, and others to again dis-
cuss the details of covering the inventory hole.
    In mid-December 1987,  Miniscribe's management,
with Wiles' approval and  Schleibaum's assistance,
engaged in an extensive cover-up which included re-
cording the shipment of bricks as in-transit inven-
tory.  To implement the plan, Miniscribe employees
first rented an empty warehouse in Boulder, Colo-

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10a

rado, and procured ten, forty-eight foot exclusive-use
trailers.  They then purchased 26,000 bricks from the
Colorado Brick Company.
    On Saturday, December 18, 1987,  Schleibaum, Tar-
anta, Huff, Lorea and others gathered at the ware-
house.  Wiles did not attend.  From early morning to
late afternoon, those present loaded the bricks onto
pallets, shrink wrapped the pallets, and boxed them.
The weight of each brick pallet approximated the
weight of a pallet of disk drives.  The brick pallets
then were loaded onto the trailers and taken to a farm
in Larimer  County, Colorado.
    Miniscribe's books, however, showed the bricks as
in-transit inventory worth approximately $4,000,000.
Employees at two of  Miniscribe's buyers, CompuAdd
and CalAbco, had agreed to refuse fictitious inventory
shipments from Miniscribe totaling $4,000,000. Mini-
scribe then reversed the purported sales and added
the fictitious inventory shipments into the company's
inventory records.
    Additionally, the officers employed other means to
cover the inventory hole, including: (1) recording the
shipment of nonexistent inventory from Colorado to
the far east, (2) packaging scrap as inventory, (3)
double counting inventory, and (4) failing to record
payables upon the receipt of materials.  These various
means distributed the inventory hole throughout
Miniscribe's three facilities making the problem more
difficult for the independent auditors to detect.
    Again, Schleibaum signed a management repre-
sentation letter to the auditors stating Miniscribe's
1987 financial reports were accurate and truthful.
Miniscribe cleared the independent audit. The result

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11a

of the cover-up was that, for 1987, Miniscribe's book
inventory and reported profits were overstated by
approximately  $15,000,000 and $22,000,000 respec-
tively.  These figures represented 17% of Mini-
scribe's inventory and 70% of its profits for the year.
Despite Wiles' and Schleibaum's earlier representa-
tions,  Wiles directed Lorea to sign Miniscribe's 1987
10-K report to the SEC.
    For the year 1987, Miniscribe reported a 96% in-
crease in revenues over 1986.  Profits before taxes
were $33,000,000, a 44% increase over 1986. Mini-
scribe's net income increased 37% to 82 cents per
share, as compared with 63 cents per share in 1986.
Stockholders equity reportedly increased 53%.  Wiles'
announcement to stockholders in Miniscribe's 1987
annual report stated:  "We achieved the best results
in the company's history and now have ten consecu-
tive quarters of increased revenues and earnings.
. . . 1987 was a great year and the outlook for 1988
looks even better."  Press releases and ads appearing
in the Wall Street Journal touted Miniscribe's re-
ported success.  

c.

    But 1988 saw Miniscribe's house of cards collapse.
As Wiles had planned, Miniscribe wrote off $7,000,000
of the inventory hole over the first three quarters of
1988.  Wiles planned to write off an additional
$3,000,000 of the inventory hole in the fourth quarter

___________________(footnotes)
                            
    3 Consistent with accounting principles, $15,000,000 of
Miniscribe's reported profits was attributable to the $15,000,000
inventory hole, without adjustment for taxes.  The remaining
$7,000,000 of profits was attributable to other adjustments such
as unrecorded liabilities.

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12a

of 1988, and the remainder over the first two quarters
of 1989. Due to market conditions resulting in poor
returns, however, Wiles directed management to
write off only $600,000, attributable to Hong Kong
operations, in the fourth quarter.  Thus, Miniscribe
had written off only $7,600,000 of a planned $10,000,000
write off in 1988.
    Meanwhile, a significant downturn in the market
for hard disk drives during the third quarter of 1988
had concerned Miniscribe's principal lender, Bank of
America. Miniscribe had a fully extended $35,000,000
revolving credit agreement with Bank of America.
The bank rejected Miniscribe's request for further
credit. About that time, however, Standard Chartered
Bank of London  (SCB) approached  Miniscribe about a
lending relationship.
    Officers from SCB met with Wiles in July 1988.
Wiles delivered Miniscribe's false financial reports to
SCB.  Based upon the reports, Miniscribe's projected
outlook, and Wiles' representations, SCB extended
Miniscribe $90,000,000 in credit, $60,000,000 of which
Miniscribe used as working capital.  SCB perfected a
security interest in Miniscribe's inventory and re-
ceivables.  On September 6, 1988, SCB satisfied Mini-
scribe's $30,000,000 indebtedness to Bank of America
with a wire fund transfer through the Federal Re-
serve Bank of Chicago.  On November 15, 1988, and
again on January 3, 1989, Wiles met with officials
from SCB to request additional credit of $30,000,000.
SCB rejected Wiles' request.  SCB eventually lost
$30,000,000 to Miniscribe as a result of  the cover-up.
    Under increasing pressure, Schleibaum resigned
as an officer of Miniscribe in June 1988.  The next
month, Schleibaum accepted a position with Sunward

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13a

Technologies, a parts supplier to Miniscribe.  During
his tenure with Miniscribe, Schleibaum obtained
approximately 116,000 shares of company stock at an
approximate cost of $305,000.00.  Schleibaum obtained
his shares at a price significantly less than market
through incentive stock options related to Mini-
scribe's performance, and through the company's
employee stock purchase plan.  As a top executive of
a publicly-traded company, Schleibaum was well
aware of the SEC's prohibition on insider trading.
Nevertheless, between August 11, 1987 and January
26, 1989,  Schleibaum sold every share of  Miniscribe
he owned  Schleibaum's gross profits totalled
$775,940.00.
    Miniscribe's board of directors convened in Colo-
rado on December 1, 1988.  Wiles suggested to board
member William Hambrecht of Hambrecht & Quist,
whom Wiles had informed of the inventory hole in
January 1988, that Miniscribe report a $40,000,000
loss in the fourth quarter of 1988.  Hambrecht re-
jected the idea, suggesting that such a report would
force Miniscribe's entire board of directors to resign.
Instead, Miniscnibe reported a $14,000,000 loss for the
final quarter of 1988.
    At this point, the outside directors, excepting  Ham-
brecht, remained unaware of the scheme to cover the
inventory hole.  At the meeting, "Goodman submitted a
report to the board which summarized the company's
condition.  The report used phrases such as "weak
cash   position," "weak balance sheet," "cash flow
negative; "living on old products," "not as profitable
as required; and  "out of control."  A dispute arose
between board members Wiles, Goodman, and Russell
Planitzer.  Goodman and Planitzer wanted to issue a

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14a

press release informing the public of Miniscribe's
weak condition.  Wiles reluctantly agreed over
Planitzer's  threat  to resign  from the board.

D.

    In January 1989, Wiles began spending more time at
Miniscribe's headquarters in Longmont, Colorado.
Wiles' plan was first to stabilize the company, then
improve its performance.  On January 3, 1989, Wiles
sent Goodman a memo stating that in the future, "we
-will make not fake our numbers."  But by this time,
Miniscribe's outlook was hopeless.  Wiles had lost
control. Goodman, Parker and Lorea, among others,
noted Wiles' distress.  Wiles resigned his position as
Miniscribe's chief executive officer and chairman of
the board on February 22,1989.
    Between 1985 and 1989, Wiles had acquired 780,517
shares of  Miniscribe's common stock and 1,724 shares
of the company's preferred stock.  Wiles had initially
invested $1,500,000 in Miniscribe in 1985as part of
Hambrecht & Quist's takeover.  Thereafter, he re-
ceived discounted shares through warrants and stock
options.  Between April 27, 1988 and May 11, 1988, less
than one year prior to his resignation, Wiles sold
150,000 shares of Miniscribe's common stock for
$1,700,000.  Wiles' profit before taxes and commissions
amounted to $1,400,000.  Wiles retained over 600,000
shares of  Miniscribe's stock  which eventually became
worthless.
    Richard Rifenburgh became Miniscribe's new
chairman of the board and chief executive officer upon
election at the February 22, 1989 board meeting.
Shortly thereafter,  Rifenburgh directed Parker to
perform an inventory analysis.  Parker informed

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15a

Rifenburgh of the inventory hole and its cover-up.
With the board's approval, Rifenburgh established an
independent evaluation committee to investigate the
matter.
    On April 3, 1989, Rifenburgh issued a press release
informing the public that Miniscribe's past financial
reports could not be relied upon and that the company
would delay releasing its 1988 financial reports pend-
ing the results of the investigation.  Taranta resigned
shortly thereafter.  Miniscribe filed an incomplete
1988 10-K report with the SEC that same month.  In
December 1989, Miniscribe released corrected fina-
ncial statements for 1986, 1987, 1988, and the first half
of 1989.  Early in 1990,  Miniscribe filed for bank-
ruptcy.  NASDAQ delisted Miniscribe's common
stock in February 1990.
    During the investigation, both Wiles and Schlei-
baum contacted  members of Miniscribe's prior man-
agement team and urged them to reveal nothing.
Schleibaum told Wolfe that if no one said anything
only innuendo would exist.  Schleibaum gave Wolfe
the "shush" sign. Similarly, Wiles phoned Goodman
to ask him and Lorea to say that management had
done nothing illegal.

E.

    A  grand  jury  indicted Wiles and Schleibaum sepa-
rately in March 1993.  The indictment against Wiles
alleged his participation in a scheme to defraud the
SEC, SCB, and Miniscribe's shareholders and inves-
tors.  The indictment alleged that Wiles joined the
scheme in August 1987, when he instructed Taranta
and Huff to research  Miniscribe's inventory problem.
According to the indictment, Wiles participation in

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16a

he scheme ended in March 1989 after he instructed
Goodman and Lorea not to incriminate anyone.
    The indictment against Schleibaum similarly
alleged his participation in a scheme to defraud the
SEC and Miniscribe's shareholders and investors.
The indictment alleged that Schleibaum joined the
scheme in January 1987 when he learned of an
inventory hole at  Miniscribe and instructed Wolfe and
Perry to conceal it.  Schleibaum's participation in the
scheme allegedly continued until August 1989 when
he  told  Wolfe  not to reveal any wrong doing.
    Count one of the respective indictments charged
Wiles and Schleibaum under 18 U.S.C.1001 with
making  Miniscribe's  false 1987 10-K report and filing
it with the SEC.  The count alleged that the report's
financial  statements  fraudulently  overstated inven-
tory, income before taxes, and net income for 1987.
    Count two of the respective indictments charged
Wiles and  Schleibaum with securities fraud under 15
U.S.C.  78j(b), 78ff(a), and 17 C.F.R.  240.10b-5. Spe-
cifically, the count alleged that Defendants violated
the securities laws by (1)employing a scheme to
defraud, (2) making untrue statements of material
facts and failing to state material facts, and (3)
engaging in deceitful acts and practices, all of which
defrauded Miniscribe, its shareholders and investors.
    A third count against Wiles alone charged him with
wire fraud under 18 U.S.C.1343.  Specifically, count
three alleged that Wiles, in furtherance of a scheme
to defraud, caused  SCB to make interstate wire trans-
fers from Chicago, Illinois in excess of $70,000,000 for
Miniscribe's benefit 

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17a

II.

    On appeal, Wiles and   Schleibaum present two com-
mon issues for our consideration. Both Defendants
contend thank (1) the district court's failure to
instruct the jury on materiality as an element of the
false statements charges under 18 U.S.C.  1001,
constitutes reversible error under United States v.
Gaudin, - U.S. -, 115 S.Ct. 2310, 132 L.Ed.2d
444 (1995), a decision rendered after Defendants'
trials  and (2) the securities fraud charges under
15 U.S.C.  78j(b), 78ff(a) and 17 C.F.R. 240.10b-5
were prejudicially duplicitous in that the charges
alleged multiple means by which multiple false
statements and acts constituted only one securities
fraud scheme.
Additionally, Wiles and Schleibaum have preserved
four separate issues for our review.5  Wiles contends:

___________________(footnotes)

    4 Wiles and Schleibaum also challenge the sufficiency of the
evidence which the government presented on the 1001fake
statements charges, specifically on the element of materiality.
The district court overruled Defendants' respective objections
as to the sufficiency of the evidence.  As will become apparent,
a discussion of the sufficiency of the evidence on the element of
materiality is unnecessary given our analysis of this first issue.
    5 Wiles raises two additional claims which he failed to raise
in the district court:  (1) the jury instructions as to the
securities fraud charge improperly expanded the grand jury's
indictment; and (2) the unanimity instruction as to the wire
fraud charge was equivocal; both in violation of the Fifth
Amendment.  Applying the plain error analysis set forth in
United States v. Olano, 507 U.S. 725, 113 S. Ct. 1770, 123
L.Ed.2d 508 (1993), we conclude that Wiles claims do not con-
stitute plain error and thus, he has waived his right to present
these claims on appeal.  See United States v. Lira-Arredondo,
38 F.3d 531, 533 n. 2 (10th Cir.1994) (to preserve error, party

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18a

(1) the government presented insufficient evidence of
Wiles' knowledge of the fraudulent scheme to sustain
his convictions under each of the three counts against
him; (2) venue on the false statements charge under
18 U.S.C. 1001 was improper in Colorado; and (3) the
district court improperly admitted hearsay testimony
as to the wire fraud charge under 18 U.S.C. 1343
based on a "single scheme" theory  Schleibaum's sole
individual contention is that Congress did not intend
 1001's general prohibition against making false
statements to the government to apply to false SEC
filings in view of 15 U.S.C. 78ff, which specifically
prohibits making false statements to the SEC.
    We discuss each issue in turn.

A.

    Wiles  and   Schleibaum    first assert  that the district
court's failure to instruct the respective juries on
materiality as an element of the false statements
charges under 18 U.S.C. 1001, constitutes error
warranting reversal of their 1001 convictions.
Section 1001 provides:

    Whoever, in any matter within the jurisdiction of
    any department or agency of the United States
    knowingly and willfully falsifies, conceals or
    covers up by any trick, scheme, or device a
    material fact, or makes any false, fictitious or
    fraudulent statements or representations, or
    makes or uses any false writing or document
    knowing the same to contain any false, fictitious
    or fraudulent statement or entry, shall be fined

___________________(footnotes)

generally must make timely objection stating specific grounds
therefore).

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19a

    under this title, or imprisoned not more than five
    years, or both.

18 U.S.C.  1001. Count I of the respective indict-
ments charged Wiles and Schleibaum under the
second and third clauses of  1001. The indictments
alleged that both Defendants "did knowingly and
willfully make and cause to be made false, fictitious
and fraudulent statements and a false writing and
document, that is, Miniscribe's Form 10-K Report for
fiscal year 1987,  submitted to the SEC."
    While the second and third clauses of 1001 do not
expressly make materiality an element of the offense,
we have held since 1960 that materiality is an element
of any  1001 offense. Gonzales v. United States, 286
F.2d 118 (10th Cir.1960), cert. denied, 365 U.S. 878,81
S. Ct. 1028, 6 L.Ed.2d 190 (1961).6 Prior to United
States v. Daily, 921 F.2d 994 (10th Cir.1990), cert.
denied, 502 U.S. 952, 112 S. Ct. 405, 116 L.Ed.2d 354
(1991), the government had the burden of proving to
the jury the element of materiality beyond a rea-

___________________(footnotes)

    6 The Supreme Court has granted certiorari  in United
States  v. Wells, 63 F.3d 745 (8th Cir.1995), cert. granted, -
U.S. - 116  S.Ct. 1540, 134 L.Ed.2d 645 (1996), to decide
whether  materiality is an element of an offense under 18
U.S.C. 31014. Section 1014 proscribes the making of "any false
statement or report . . . for the purpose of influencing in any
way" an FDIC insured "restitution. The materiality element of
1014 is directly in issue in United States v. Pappert, No. 95-
3071 (lOth Cir., filed March 10, 1995), which was consolidated
with these appeals for en bane argument on the materiality
issue. Because 1014 is similar but not identical to 1001, the
Supreme Court's discussion of materiality in Wells as an
element of a 1014 offense may, but will not necessarily, affect
our determination that materiality is an element of any  1001
offense.

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20a

sonable doubt. In Daily, however, we overruled our
prior precedent and  held that  materiality  under 1001
was a question of law for the court, "with an atten-
dant reduction  of the government's burden of proof on
this issue." Id. at 1003 n. 9 & 1004.  At the time of
Wiles' and Schleibaum's respective trials, Daily was
still the law of this circuit.  Without objection, the
district court concluded that materiality was a ques-
tion of  law consistent with binding precedent. The
court also concluded, over Defendants' respective
objections, that the government met its burden by
producing "some evidence" of the false statements'
materialist.  The court did not indicate what  eviden-
tiary burden it applied in reaching this conclusion.
    During the pendency of these appeals, the Supreme
Court decided United States v. Gaudin, - U.S.
115 S.Ct. 2310, 132 L.Ed.2d 444 (1995).  The
Court reasoned that a defendant has a right under the
Fifth and Sixth Amendments, U.S. Const. amend. V &
VI, to have a jury determine guilt beyond a reasonable
doubt on every element of a charged offense.  The
Constitution "require[s] criminal convictions to rest
upon a jury determination that the defendant is guilty
of every element of the crime with which he is
charged, beyond a reasonable doubt." Id. at -, 115
S.Ct. at 2313.  Because materiality  is an element of a 
1001 charge, the jury, not the court, must find
materiality.  Id. at - 115 S.Ct. at 2314. 7 Obviously,
Gaudin overruled our prior precedent to the

___________________(footnotes) 

    7 In Gaudin, the Court did not address the issue of whether
materiality is an element of any 1001 offense.  Rather, the
parties agreed that materiality was an element of any false
statements offense under  1001.  Gaudin, - U.S. at -, 115
S.Ct. at 2313-

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21a

contrary. Wiles and  Schleibaum now assert that the
district court improperly decided materiality under 
1001 as a question of law in violation of their right to
a jury trial. U.S. Const. amend. V & VI.

1.

    The district court's failure to instruct the respec-
tive juries on materiality as an element of a  1001
offense undoubtedly constitutes error under Gaudin.
Unless a legal rule is waived, any deviation from the
rule is error. United States. v. Olano, 507 U.S. 725,
732-33, 113 S. Ct. 1770, 1776, 123 L.Ed.2d 508 (1993).
Waiver is the "intentional relinquishment or aban-
donment of a known right." Johnson v. Zerbst, 304
U.S. 458, 464, 58 S.Ct. 1019,1023,82 L.Ed.1461 (1938)}
Wiles and Schleibaum did not intentionally relinquish
or abandon their right to have a jury determine
beyond a reasonable doubt all elements of the 1001
charges.  At the time of their trials, they were not
aware of this right. See Fed. R. Crim.P. 51 ("if a party
has no opportunity to object to a ruling or order, the
absence of an objection does not thereafter prejudice
that party").
    The district court's treatment of materiality as a
question of law under 1001 was quite consistent
with the law prevailing at the time of trial. In
Griffith v. Kentucky, 479 U.S. 314,328, 107  S.Ct. 708,
716, 93 L.Ed.2d 649 (1987), however, the Supreme
Court established that "a new rule for the conduct of
criminal prosecutions is to be applied retroactively to
all cases, state or federal, pending on direct review or

___________________(footnotes)

    8 Forfeiture, as opposed to waiver, is the failure to make the
timely assertion of a right. Olano, 507 U.S. at 733, 113 S.Ct. at
1777.

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22a

not yet final."  9 Gaudin sets forth a constitutional
rule which requires the government in a1001
prosecution to prove materiality to the jury beyond a
reasonable doubt.  Gaudin overrules the prior law of
this circuit and places a higher burden of proof upon
the government than previously when courts deemed
materiality a question of law. See Daily, 921 F.2d at
1003 n. 9 & 1004. - We therefore conclude that Gaudin
must be applied retroactively in accordance with
Griffith.

2.

    Our next task is to determine the nature of the
error, that is, the district court's failure to instruct
the respective juries on materiality as an element of
the  1001 charge.  In a direct criminal appeal, we
generally review error committed in the district
court under Fed. R. Crim.P. 52:

___________________(footnotes)

    9 The only exception to this rule, inapplicable here, is where
the retroactive application of a new rule for the conduct of
criminal prosecutions would raise "due process concerns analo-
gous to the  ex post facto limitations on the retroactive applica-
tion of criminal  statutes." United  States v. Morehead, 959  F.2d
1489, 1511 (10th Cm. 1992).  The Ex Post Facto Clause protects
criminal defendants against legislative enactments that  "retro-
actively alter the definition of crimes or increase the punish-
ment for criminal acts." California Dept. of Corrections v.
Morales, - U.S. -, 115 S.Ct. 1597, 1601, 131 L.Ed .2d  588
(1995).  The Due Process Clause of the Fifth and Fourteenth
Amendments protects criminal defendants against analogous
judicial action.  Thus a court does not apply a newly announced
judicial rule where the new rule either: (1) retroactively alters
the definition of a crime; or (2) increases the punishment of an
offense.  Id.

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23a

Rule 52.  Harmless Error and Plain Error

    (a) Harmless Error.  Any error, defect,
irregularity or variance which does not affect
substantial rights shall be disregarded.
    (b) Plain Error.  Plain errors or defects
affecting substantial rights may be noticed al-
though they were not brought to the attention of
the court.
    According to the plain language of Rule 52, we must
determine whether the error affected substantial
rights under either harmless or plain error analysis.
This means "'the error must have been prejudicial It
must have affected the outcome of the district court
proceedings." Olano, 507 U.S. at 734, 113 S. Ct. at
1777.  The inquiry is the same under either subsec-
tion (a) or (b) "with one important difference." Id.
Where a defendant  has posed a timely objection to the
error, the government bears the burden of proving a
lack of prejudice under Rule 52(a)'s harmless error
analysis.  Where a defendant has failed to pose a
timely objection to the error, the defendant bears the
burden of proving prejudice under Rule 52(b)'s plain
error analysis. Id.  Under either approach, however,
we must be able to determine whether the error
affected a defendant's substantial rights in order to
apply Rule 52.  In other words, we must be able to
evaluate the effect of the error on the reliability of
the jury verdict.  See Sullivan v. Louisiana, 508 U.S.
275, 279, 113 S. Ct. 2078, 2081, 124 L.Ed.2d 182 (1993).
Trial error which occurs during presentation of the
case to the jury may "be quantitatively assessed in
the context of the other evidence presented in order
to determine whether its admission was harmless

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24a

beyond a reasonable doubt."  Arizona v. Fulminante,
499 U.S. 279,307-08, 111 S. Ct. 1246, 1264, 113 L.Ed.2d
302 (1991).
    Although the rare exception, not every error in a
criminal trial may be quantitatively assessed in the
context of the other evidence, and thus, not every
error requires a showing of prejudice or lack thereof.
The Supreme Court has recognized a "special cate-
gory" of errors which must be corrected regardless of
their effect on the outcome of the ease.  Olano, 507
U.S. at 735, 113 S. Ct. at 1778. The Supreme Court has
labeled this category of errors as "structural." Ful-
minante, 499 U.S. at 310, 111 S. Ct. at 1265. A struc-
tural error in a criminal trial always requires rever-
sal of a conviction because such error renders the
trial an unreliable vehicle for the determination of
guilt.  Rose v. Clark, 478 U.S. 570, 577-78, 106 S. Ct.
3101,3105-06,92 L.Ed.2d 460 (1986).  Structural error
constitutes a "defect [ ] in the constitution of  the trial
mechanism" which defies analysis under Fed.R.
Crim.P. 52.  Fulminate, 499 U.S. at 309, 111 S.Ct. at
1265.  Structural error affects the "framework within
which the trial proceeds, rather than simply . . . the
trial process itself." Id. at 310, 111 S. Ct. at 1265.
Structural error creates "consequences that are nec-
essarily unquantifiable and indeterminate."  Sulli-
van, 508 U.S. at 282, 113 S. Ct. at 2083.
    Wiles and Schleibaum suggest that the district
court's failure to instruct the juries on the element of
materiality falls within that "special category" of
errors that does not require a showing of prejudice,
but must be corrected regardless of their outcome on
the case, that is, they argue, the error is "struc-
tural." Because of the importance of the issue and the

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25a

widely differing views among our sister circuits, see
notes 12 & 13 infra, we decide as an en bane court
whether the district court's failure to instruct the
respective juries on the element of materiality under
18 U.S.C. 1001 constitutes structural error, and, if
so, whether that error is reversible per se or subject
to plain error analysis.

a.

    A "strong presumption" exists that even consti-
tutional violations may  be "harmless." Rose, 478 U.S.
at 579, 106 S. Ct. at 3106. The Court on numerous
occasions has held constitutional errors harmless.
See Fulminante, 499 U.S. at 306-07, 111 S. Ct. at 1263
(listing cases). Moreover, the Court has held in a
number of decisions that constitutionally infirm jury
instructions may be harmless. See Yates v. Evatt,
500 U.S. 391,402,111 S. Ct. 1884, 1892,114 L.Ed.2d 432
(1991) (unconstitutional burden-shifting jury instruc-
tion); Carella v. California, 491 U.S. 263, 266, 109
S. Ct. 2419, 2421, 105 L.Ed.2d 218 (1989) (jury instruc-
tion containing erroneous mandatory presumption on
element of intent); Pope v. Illinois, 481 U.S. 497,
502-04, 107 S.Ct. 1918, 1921-23, 95 L.Ed.2d 439 (1987)
(jury instruction misstating element of the offense);
Rose, 478 U.S. at 581-82, 106 S. Ct. at 3107-08 (jury
instruction containing erroneous rebuttable pre-
sumption on element of malice).
    The general rule that constitutional error may be
harmless, however, is subject to the exception for
structural error.  The Supreme Court has held that
some constitutional violations are not susceptible to
harmless error analysis under Fed. R. Crim.P. 52(a)
because they are "structural," and thus presumed
prejudicial. Structural errors "affect[ ] the frame-

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26a

work within which the trial proceeds" and render the
trial fundamentally unfair. Fulminante, 499 U.S. at
310, 111 S.Ct. at 1265.  Without certain basic or
"structural" protections, "a criminal trial cannot re-
liably serve its function as a vehicle for determination
of guilt or innocence, and no criminal punishment
may be regarded as fundamentally fair." Rose, 478
U.S. at 577-78, 106 S. Ct. at 3106.  Examples of struc-
tural errors are exclusion of individuals horn a grand
jury based on race, Vasquez v. Hillery, 474 U.S. 254,
106 S. Ct. 617,88 L.Ed.2d 598 (1986), denial of the right
to self-representation,  McKaslcle  v. Wiggins, 465 U.S.
168,177-78 n. 8, 104 S. Ct. 944,950  n. 8, 79 L.Ed.2d 122
(1984), denial of the right to a public trial, Waller v.
Georgia, 467 U.S. 39,49 n. 9, 104  S. Ct. 2210, 2217 n. 9,
81  L.Ed. 2d  31 (1984), a petit jury's improper selection,
and exposure to pretrial publicity, Sheppard v.
Maxwell, 384 US. 333,86 S. Ct. 1507, 16 L.Ed.2d 600
(1966), denial of the right to counsel, Gideon v.
Wainwright, 372 U.S. 335, 83 S.Ct. 792,9 L.Ed.2d 799
(1963) and Holloway v. Arkansas, 435 U.S. 475, 98
S.Ct. 1173, 55 L.Ed.2d 426 (1978), and potentially
biased judges, Tumey v. Ohio, 273 U.S. 510, 47 S.Ct.
437, 71 L.Ed. 749 (1927).
    In Sullivan v. Louisiana, 508 U.S. 275, 113 S. Ct.
2078, 124 L.Ed.2d 182 (1993), the Supreme Court
unanimously held that a constitutionally-deficient
reasonable doubt instruction was structural.  The
Court reasoned that  "where the instructional error
consists of a misdescription of the burden of proof,
which vitiates all the jury's findings," no jury verdict
of beyond-a-reasonable-doubt exists upon which to
base a harmless error analysis. Id. at 281,113  S. Ct. at
2082 (emphasis in original).  The Court continued:

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27a
 
     There being no jury verdict of guilty-beyond-a-
     reasonable-doubt, the question whether the same
     verdict of guilty beyond-a-reasonable-doubt would
     have been rendered absent the constitutional error
     is utterly meaningless.  There is no object, so to
     speak, upon which harmless error scrutiny can
     operate.  The most an appellate court can conclude
     is that a jury would surely have found petitioner
     guilty beyond a reasonable doubt-not that that
     jury's actual finding of guilty beyond a reasonable
     doubt would surely not have been different absent
     the constitutional error.  That is not enough.  The
     Sixth Amendment requires more than appellate
     speculation about a hypothetical jury's action, or
     else directed verdicts for the State would be
     sustainable on appeal; it requires an actual finding
     of guilty.

Id. at 280, 113 S.Ct. at 2082 (emphasis in original)
(citations omitted). The Court concluded: "The dep-
rivation of that right [to be found guilty beyond a
reasonable doubt of every element of an offense], with
consequences that are necessarily unquantifiable and
indeterminate, unquestionably qualifies as `struc-
tural error.' " Id. at 281-82,113 S. Ct. at 2083.

b.

    As a matter of historical development, the concept
of structural error arose in cases where criminal de-
fendants objected at trial to a specific error, and thus,
the courts examined the error under the harmless
error doctrine.  The reason why structural error
defies harmless error analysis under Fed. R. Crim. P.
52(a), however, is the same reason why structural
error defies plain error analysis under Rule 52(b).

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28a

The Supreme Court has expressly stated that struc-
tural error at trial requires reversal., In Chapman v.
California, 386.U.S. 18, 87 S. Ct. 824, 17 L.Ed.2d 705
(1967), the Supreme Court "recognized that some con-
stitutional errors require reversal without regard to
the evidence in the particular case."  Rose, 478 U.S.
at 577, 106 S. Ct. at 3105 (emphasis added) (citing
Chapman, 386 U.S. at 23 n. 8, 87 S. Ct. at 828 n. 8).
Similarly, in Sullivan, 508 U.S. at 279, 113 S. Ct. at
2081, the Court noted that some constitutional errors
"will always invalidate the conviction." (emphasis
added). A defendant " may assuredly insist upon ob-
servance of . . . [structural] guarantees] even when
the evidence against him is so overwhelming to
establish guilt beyond a reasonable doubt." Carella,
491 U.S. at 268, 109 S.Ct. at 2422 (Scalia, J., con-
curring). E.g., Vasquez, 474 U.S. at 263, 106 S.Ct. at
623 (when judge has financial interest in conviction,
"reversal required" despite any showing of actual
bias, citing Tumery, 273 U.S. at 535, 47 S. Ct. at 445);
Id. (when petit jury selected upon improper criteria
or exposed to prejudicial publicity, Court has "re-
quired reversal: citing Sheppard, 384 U.S. at 351-52,
86 S.Ct. at 1516); Holloway, 435 U.S. at 489, 98 S. Ct.
at 1181 (when defendant is deprived of counsel, "rever-
sal is automatic," citing Gideon, 372 U.S. 335, 83
S. Ct. 792).  Reversal is required because structural
error is a "fundamental flaw [ ]" in the trial process
and "undermines the structural integrity of the
criminal tribunal itself" Vasquez, 474 U.S. at
263-64, 106  S.Ct. at 623 (emphasis added).  Due to the
nature of structural error, whether a defendant
objects (as required for Rule 52(a) analysis) or fails to
object (as required for Rule 52(b) analysis) to such
error at trial is simply irrelevant.

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29a

    In his Gaudin, concurrence, Chief Justice Rehn-
quist noted that the government did not argue, and
the Court did not address, the application of Rule 52
to the trial court's failure to instruct the jury on
materiality under 18 U.S.C. 1001. Gaudin, -
U.S. at "-, 115 S.Ct. at 2321 (Rehnquist, C.J., con-
curring).  The central question in the present ap-
peals, unaddressed in Gaudin, is into which category
the district court's failure to instruct on the element
of materiality belongs:  Is the error non-structural
and subject to analysis under Fed. R. Crim.P. 52, or is
the error structural and presumed to render Defen-
dants' convictions under 18 U.S.C. 1001 fundamen-
tally unfair absent a showing of prejudice?  We believe
Supreme Court precedent requires us to conclude
that the district court's failure to instruct the
respective juries on the element of materiality is
structural and requires us to vacate Defendants' 
1001 convictions. 10

___________________(footnotes)

    10 A situation  may arise when a reviewing  court may
conclude with complete confidence that a failure to instruct on
an element of, an offense did not play a role in the jury's
verdict on that offense.  This is exactly what we concluded
recently in United States v. Mason, 85 F.3d 471 (l0th Cir.
1996), wherein we stated:
    When the only evidence tends to establish an elemental
    fact, or when the parties stipulate to evidence tending to
    establish an elemental fact, the jury must still resolve the
    existence or nonexistence of the fact sought to be proved.
    In contrast, the jury need not resolve the existence of an
    element when the parties have stipulated to the facts which
    establish that element.  In the latter circumstance, the
    judge has not removed the consideration of an issue from
    the  jury; the parties have.  More specifically, by stipulating
    to elemental facts, a defendant   waives  his right to a jury
    trial on that element.

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30a

c.

    The Fifth Amendment requires the federal govern-
ment to prove beyond a reasonable doubt that a
defendant is guilty of every contested element of a
crime.  In re Winship, 397 U.S. 358, 364, 90 S. Ct. 1068,
1073, 25 L.Ed.2d 368 (1970).  The Sixth Amendment
requires  "as its most important element, the right to
have the jury, rather than the judge, reach the
requisite finding of guilty."  Sullivan, 508 U.S. at
277, 113  S. Ct. at 2080.  Together, these rights mean
that a criminal conviction must rest on a jury deter-
mination that the accused  "is guilty of every element
of the crime with which he is charged beyond a
reasonable doubt." Gaudin, - U.S. at -, 115
S. Ct. at 2313.  The Supreme Court's statement in
Cabana v. Bullock, 474 U.S. 376, 106 S. Ct. 689, 88
L.Ed.2d 704 (1986); regarding a trial court's failure to
instruct the jury on an element of a crime, follows
directly from this analysis:
    A defendant charged with a serious crime has the
    right to have a jury determine his guilt or inno-
    cence. . . . Findings made by a judge cannot cure
    deficiencies in the jury's finding as to the guilt or

___________________(footnotes)

Id. at 472 (emphasis added). Thus, where a defendant at trial
stipulates to facts establishing the element and effectively takes
consideration  of  that element  from the jury, a court might
properly  conclude that no error occurred from the failure to
instruct.  See Connecticut v. Johnson, 460 U.S. 73, 87, 103 S. Ct.
969, 977-78, 74 L.Ed.2d 823 (1983) (plurality opinion) (failure to
properly instruct jury on an element of an offense may be
harmless where defendant conceded existence of element).  Be-
cause both Wiles and Schleibaum contested the element of
materiality at their respective trials, we are not confronted
with that situation.

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31a

innocence of a defendant resulting from the
court's failure to instruct it to find an element of
the offense.

Id. at 384-85,106 S. Ct. at 696 (emphasis added).

    To affirm Defendants' convictions under 18 U.S.C.
1001 where the contested element of materiality was
not submitted to the juries not only would deny
Defendants important constitutional guarantees, but
also would require us in undertaking harmless or
plain error analysis to "engage in pure speculation-
[our] view of what a reasonable jury would  have done."
Sullivan,  508 U.S. at 281, 113 S.Ct. at 2082.  But if we
did that, ' "the wrong entity [would] judge the defen-
dant[s] guilty. ' " Id. (quoting Rose, 478 U.S. at 578,
106 S. Ct. at 3106).  The Defendants' right to a jury
trial with the accompanying right to be found guilty
beyond a reasonable doubt of every element of 1001
is a "structural  guarantee" that-

    "reflect[s] a fundamental decision about the
    exercise of official power-a reluctance to entrust
    plenary powers over the life and liberty of the
    citizen to one judge or to a group of judges." A
    defendant may assuredly insist upon observance
    of this guarantee even when the evidence against
    him is so overwhelming as to establish guilt
    beyond a  reasonable doubt.

Carella, 491 U.S. at 268, 109 S.Ct. at 2422  (Scalia, J.,
concurring) (emphasis added). In other words, " `the
question is not whether guilt may be spelt out of a
record, but whether guilt has been found by a jury
according to the procedure and standards appropriate
for criminal trials.' " Id. at 269, 109 S.Ct. at 2422

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32a

(quoting Bollenbach v. United States, 326 U.S. 607,
614,66 S.Ct. 402, 406, 90 L.Ed. 350 (1946)).

    These appeals present a problem unlike those cases
where the trial court instructs a jury to presume an
element of the offense nom underlying predicate
facts. In those instances, the error maybe harmless.
E.g., Row, 478 U.S. at 580-81, 106 S.Ct. at 3107-08.
The question is whether the jury  based  its verdict on
evidence establishing  the presumed element beyond a
reasonable doubt, independent of the presumption.
Yates, 500 U.S. at 404, 111 S.Ct. at 1893.  The predi-
cate facts may conclusively establish the existence of
the element to be presumed so that no rational jury
could  find  the  predicate facts without also finding the
presence of the element.  See Pope, 481 U.S. at
502-503, 107 S.Ct. at 1922, Such a presumption then
may play no significant role in the jury's findings.
Sullivan, 508 U.S. at 281,113 S. Ct. at 2082. A Rule 52
standard that looks at the question of whether the
jury necessarily found the element to be satisfied
based upon underlying findings of fact, rather than
what a hypothetical jury might have found, places the
determination of the element in the "right entity"-
the jury.  In other words, if the element-specfic error
did not prevent the jury from rendering a verdict on
that element, an "object" remains upon which harm-
less or plain error scrutiny can operate, and thus the
error is not structural.  See Sullivan, 508 U.S. at
280,113 S .Ct. at 2082.
    But the essential connection between a presump-
tion and underlying predicate facts is not present
where the error consists of the failure to instruct on
an element of a crime in its entirety.  See id.  When
an instructional error affects a single element, the

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33a

proper "object" of focus is the jury's verdict on that
element. If, as here, the element-specific error, i.e.
the instructional omission, prevents the jury from
rendering a verdict on an element entirely, no
"object" exists upon which harmless or plain error
analysis can operate.  To conclude the error was
harmless or not plain would be the same as directing a
verdict on the element-both would prevent an actual
jury verdict on that element.  Supreme Court prece-
dent precludes us from "conduct[ing] a subjective
inquiry into the juror's minds" in order to uphold a
conviction.  Yates, 500 U.S. at 404, 111 S. Ct. at 1893;
we also Sullivan, 508 U.S. at 278-81, 113 S. Ct. at
2080-83 Yates, 500 U.S. at 402-06, 111 S. Ct. at 1892-94;
Rose, 478 U.S. at 576-79, 106 S. Ct. at 3105-O7.11

___________________(footnotes)

    11 We  are not confronted  with  a situation where failure to
instruct on an element of a crime as to one count of the indict-
ment might  taint convictions on remaining counts. See United
States  v. Pettigrew, 77 F.3d 1500, 1511-12 (5th Cir. 1996) (failu-
re to instruct on substantive count necessarily tainted instruc-
tions on conspiracy count); United States v. Nash, 76 F.3d 282,
285-86 (9th Cir. 1996) (failure to instruct on false statements
charge necessarily tainted instructions on bank fraud charge);
United States v. Johnson, 71 F.3d 139, 145-46 (4th Cir. 1995)
(erroneous instruction in first count incorporated by reference
into second count necessarily tainted convictions on both
counts).  Each count of the respective indictments against
Wiles and Schleibaum charged them with separate and distinct
substantive crimes.  The district court's failure to instruct on
the element of materiality under 1001 had no bearing upon
the instructions which the court tendered on the remaining
counts, Cf.  United  States  v. Winstead, 74 F.3d 1313, 1320 (D.C.
Cir. 1996) (conviction on mail fraud charge which required
jury to find element of materiality sufficient to satisfy court
that jury would have found same statements material on 1001
charge).

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34a

    The Supreme Court very recently shed further
light on the proper manner in which to analyze struc-
tural error. In California v. Roy, - U.S. -, 117
S. Ct. 337, 136  L.Ed.2d 266 (1996), a California state
court instructed a jury that in order to find the
defendant guilty of robbery and murder as an aider
and abettor, the jury must find the defendant helped
the principal "with knowledge of" the principal's
unlawful purpose. "The California Supreme Court
subsequently held in another case that the instruc-
tion was error because it failed to include the
requirement that defendant intended to encourage or
facilitate the crimes. On collateral review, the Su-
preme Court noted

        The specific error at issue here-an error in the
    instruction that defined the crime-is . . . as
    easily characterized as a `misdescription of an
    element' of the crime, as it is characterized as an
    error of `omission.' No one claims that the error
    at issue here is of the `structural sort' that defies
    analysis by `harmless error' standards.

Id. at -, 117 S. Ct. at 339 (internal citations and
quotations omitted). The Court remanded for a deter-
mination of whether the error could be considered
harmless under the standard established in Kotteakos
v. United  States, 328 U.S, 750, 66 S.Ct. 1239, 90 L.Ed.
1557 (1946), namely, whether the error " had substan-
tial and injurious effect or influence in determining
the jury's verdict." Roy, - U.S. at -, 117 S.ct.
at 338 (quoting Brecht v. Abrahamson, 507 U.S. 619,
637,113 S .Ct. 1710,1722,123 L.Ed.2d 353 (1993)).
    Justice Scalia joined the Court's opinion but wrote
separately to explain "what constitutes the harmless-

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35a

ness to which . . . [the] standard is applied." Roy,
- U.S. at -, 117 S. Ct. at 339 (Scalia, J., con-
curring). Relying upon Sullivan, 508 U.S. at 279-80,
113 S. Ct. at 2082, and Gaudin, - U.S. at - -
- 115 S. Ct. at 2319-20, Justice Scalia explained:

    [A] criminal defendant is constitutionally entitled
    to a jury verdict that he is guilty of the crime, and
    absent such a verdict the conviction must be
    reversed no matter how inescapable the findings to
    support that verdict might be. A jury verdict that
    he is guilty of the crime means, of course, a
    verdict that he is guilty of each necessary element
    of the crime. . . .

    The error in the present case can be harmless
    only if the jury verdict on other points effectively
    embraces this one or if it is impossible, upon the
    evidence, to have found what the verdict did find
    without finding this point as well.

Roy, - U.S. at - - -, 117 S. Ct. at 339-40
(Scalia, J., concurring) (internal citations and quota-
tions omitted).
    Thus, structural error is not limited to situations
where a constitutional error affects "the entire con-
duct of the trial from beginning to end" Fulminate,
499 U.S. at 309-10, 111 S.Ct. at 1265. Rather, struc-
tural error can exist where a constitutional error
affects a single element and causes the absence of a
verdict on that element. See Roy, - U.S. at - -
- 117 S. Ct. at 339-40 (Scalia, J. concurring). Be-
cause the respective juries in the cases before us did
not render a verdict, formal or otherwise, against
Wiles or Schleibaum on the element of materiality, we
hold that the district court's failure to instruct the

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36a

juries as to the element of materiality under 18
U.S.C. 1001 on Count I of  the respective indictments
is "structural" error and falls within that "special
category of forfeited errors" that does not require a"
showing of prejudice, but rather, must be corrected. 12
 
___________________(footnotes)

    12 To assist in our analysis, we reviewed recent circuit deci-
sions where the district court failed to instruct on a matter that
-the Supreme Court subsequently held was a factual element of
the charged offense. United States v. Baumgardner, 85 F.3d
1305, 1309-10 (8th Cir. 1996); United States v. DiRico, 78 F.3d
732, 736-38 (lst Cir. 1996); and  United States v. Gaudin, 28 F.3d
943,951-52 (9th Cir. 1994) (en bane), aff'd, - U.S. -, 115
S. Ct. 2310, 132 L.Ed .2d 444 (1995), have held that a failure to
instruct on an element of an offense requires reversal. But see
United States v. Keys, 95 F.3d 874, 880-81 (9th Cir. 1996) (en
bane) (Gaudin error subject to harmless error review but re-
versal always required); United States v. Raether, 82 F.3d 192,
194 (8th Cir. 1996) (Gaudin error subject to harmless error
review and reversal not always required). The majority of the
decisions, however, engage, in differing degrees, in an analysis
of the trial record to determine the existence of prejudice, with
varying results. E.g,, United States v. Marder, 48 F.3d 564,
569-71 (lst Cir.), cert. denied, - U.S. -, 115 S .ct. 1441, 131
L.Ed.2d 320 (1995) (failure to instruct on element of knowledge
of unlawfulness on currency structuring offense not prejudi-
cial); Ianniello v. United States, 10 F.3d 59, 62-65 (2d Cir. 1993)
(failure to instruct on requirement of relationship among pre-
dicate acts under RICO not prejudicial); United States v.
Retos, 25 F.3d 1220, 1228-32 [3d Cir. 1994) (failure to instruct
on element of knowledge of unlawfulness on currency structur-
ing offense prejudicial, but expressly declining to adopt per se
rule that omission of essential element of offense constitutes
plain error); United States v. David, 83 F.3d 638, 641-48 (4th
Cir. 1996) (failure to instruct on element of materiality on false
statements charge prejudicial, but expressly declining to adopt
per se rule that omission of essential element of offense con-
stitutes plain error); United States v. Rogers, 18 F.3d 265, 267-
68 (4th Cir.. 1994) (failure to instruct on element of knowledge
of unlawfulness on currency structuring offense constitutes

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37a

Olano, 507  U.S. at 735, 113 S.Ct. at 1778. Because the
error is structural, and thus not amenable to analysis
under Fed. R. Crim.P. 52, or the discretion we possess
thereunder, we vacate Defendants's 1001 convictions
under Count I of the respective   indictments. 13

___________________(footnotes)

plain error, but not expressly labeling error as structural);
United States v. McGuire, 79 F.3d 1396, 1400-05 (5th Cir.)
(plurality) (failure to instruct on element of materiality on
filing false IRS cash receipt form charge prejudicial), reh'g en
bane granted 90 F.3d 107 (5th Cir. 1996); United States v.
Parker, 73 F.3d 48, 50-53 (5th Cir. 1996) (failure to instruct on
requirement of interstate nexus under Hobbs Act not pre-
judicial); United `States v. McGhee, 87 F.3d 184, 185-88 (6th
Cir.) (failure to instruct on element of materiality on false
statement charge not prejudicial), vacated and reh'g en bane
granted 95 F.3d 1335, (6th Cir. 1996); United  States  v. Jones, 21
F.3d 165, 172-73 (7th Cir. 1994) (failure to instruct on element
of knowledge of unlawfulness on currency structuring offense
prejudicial; "no evidence" on element presented United
States v. Kramer, 73 F.3d 1067, 1074-75 (11th Cir. 1996) (failure
to instruct on element of materiality on perjury charge not
prejudicial).
    13 We disagree with those decisions which have labeled the
failure to instruct the jury on an element of an offense as
structural and presumed such failure to be prejudicial, but then
proceeded to uphold the defendant's conviction under the
fourth prong of the plain error analysis. E.g., United States v.
Upton, 91 F.3d 677, 685-86 (5th Cir. 1996); United States v.
Jobe, 90 F.3d 920, 923-24" (5th Cir. 1996); United States W.
Randazzo, 80 F.3d 623, 632 (1st Cir. 1996); United States v.
Ross, 77 F.3d 1525, 1540 (7th Clr. 1996); United  States  v. Allen,
76 F.3d 1348, 1368 (5th Cir.), cert. denied, - U.S. -, 117
S.Ct. 121, 136 L.Ed .2d 71 (1996). These decisions reason that
where the evidence of a defendant's guilt is overwhelming, the
defendant suffered no prejudice, and thus the failure to
instruct did not "seriously affect the fairness, integrity or
public reputation of judicial proceedings." As we have seen,
however, structural error requires reversal in every instance

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38a

B.

    Wiles and Schleibaum also assert that the securi-
ties fraud charge contained in count two of the
respective indictments against them was prejudi-
cially duplicitous. According to Defendants, the
juries may have found them guilty of securities fraud
without having reached a unanimous verdict on the
commission of a particular offense or act of securities
fraud.  The district court rejected Defendants' argu-
ments.  The court reasoned that a unanimity instruc-
tion would alleviate any possible jury confusion and
ensure unanimous verdicts.  We review de novo the
question of whether an indictment is duplicitous.
United States v. Martin, 4 F.3d 757, 759 (9th Cir.
1993).  We conclude that count two of the respective
indictments was not duplicitous and that the unanim-
ity instructions cured any prejudice to the Defen-
dants.
    Duplicity is defined as the joinder of two or more
distinct and separate criminal offenses in the same
count of an indictment. United States v. Haddock,
956 F.2d 1534,1546 (l0th Cir.), reh'g in  part, 961 F.2d
933 (l0th Cir.), cert. denied, 506 U.S. 828, 113 S.Ct. 88,
121 L.Ed.2d 50 (1992).  The dangers of duplicity are
three-fold: (1) A jury may convict a defendant without
unanimously agreeing on the same offense (2) A
defendant may be prejudiced in a subsequent double
jeopardy defense and (3) A court may have difficulty
determining the admissibility of evidence.  United
States v. Sasser, 971 F.2d 470,477 n. 5 (l0th Cir. 1992),

___________________(footnotes)

because such error  " undermines the structural integrity of the
criminal tribunal itself." Vasquez  474 U.S. at 263-64, 106 S. Ct.
at 623.

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39a

cert. denied, 507 U.S. 924, 113 S. Ct. 1292, 122 L.Ed.2d
683 (1993). An indictment that alleges  several means
or methods of committing a single offense, rather
than several  separate offenses, however, is not  neces-
sarily duplicitous.  United States v. Jaynes, 75 F.3d
1493, 1502 n. 7 (l0th Cir. 1996); United States v.
Browning, Inc., 572 F.2d 720, 725 (10th Cir.), cert.
denied, 439 U.S. 822, 99 S.Ct. 88, 58 L.Ed.2d 114
(1978).
    In these cases, count two alleged that as part of the
fraudulent scheme, Wiles and Schleibaum filed false
reports with the SEC. The second count charged
each Defendant with multiple fraudulent sales of
Miniscribe stock.  Additionally, count two of the
indictment against Wiles charged him with issuing
numerous false mailings and press releases.  Count
two of the indictments was necessarily complex be-
cause the fraudulent scheme in which Defendants
participated was complex, extending over the course
of two years.
    But charging a single offense of securities fraud
involving a multitude of ways and courses of action as
a result of an ongoing scheme to defraud does not
render that charge duplicitous. Fed. R. Crim.P. 7(c)
permits the government to allege in a single count
that the defendant committed an offense "by one or
more specified means." United States v. McKneely,
69 F.3d 1067, 1072 (10th Cir. 1995).  We draw a distinc-
tion between an indictment that charges multiple
offenses for distinct and separate" criminal acts in the
same count, and an indictment that charges multiple
means of carrying out one offense associated with a
continuing course of criminal conduct.  Browning,
572 F.2d at 725. As we stated in United States v.

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40a

Crummer, 151 F.2d 958, 964 (10th Cir. 1945), cert.
denied, 327 U.S. 785, 66 S.Ct. 704, 90 L.Ed. 1012
(1946), a case involving a mail fraud scheme in which
defendants unsuccessfully claimed the indictment
was duplicitous:

    The scheme, as laid in the indictment, involved a
    multiplicity of ways and means of action and
    procedure, but it was a single scheme.  And setting
    out the numerous ways and means of action and
    procedure included in the scheme for its accom-
    plishment did not render the indictment duplici-
    tous.

    Because of the complexity of the scheme and the
concern over non-unanimous verdicts, the court
nevertheless tendered a unanimity instruction to the
respective juries as part of their instructions on
count two.  The court instructed each jury that
although individual jurors need not agree on all the
means or methods by which Defendants committed
securities fraud, they must unanimously agree upon
at least one such means or method to convict
Defendants of securities fraud. 14  In this circuit,  such

___________________(footnotes)

    14 The district court submitted the following unanimity
instruction on count two to the jury at Wiles' trial

         Count 2 of the indictment charges the Defendant Wiles
    with a violation of federal law concerning securities fraud.
    The indictment alleged a number of separate means or
    methods by which the defendant is accused of violating this
    law.
         The government is not required to prove all of the means
     or methods alleged in Count 2 of the indictment, but each
     juror must agree with each of the other jurors, however,
     that the same means or method alleged in Count 2 was, in
     fact, engaged in or employed by the defendant in commit-

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41a

an  instruction " 'suffices to instruct the jury that
they  must be unanimous on whatever specifications
they find to be the predicate of the guilty verdict.' "
Sasser, 971 F.2d at 477 (quoting United States v.
Phillips, 869 F.2d 1361, 1366 (10th Cir. 1988), cert
denied, 490 U.S. 1069, 109 S. Ct. 2074, 104 L.Ed.2d 638
(1989)).
    Wiles makes much ado over a question which the
jury submitted to the court during deliberations. The
question read: "Can you clarify the portion of your
instruction to [the] jury regarding the requirement
that we agree unanimously on one of many individual
charges in each count of the indictment." Aplts. App.
Vol. I at 131.  Wiles suggests that the jury's question
illustrates that the jury did not understand the
court's unanimity instruction and that the risk of a
non-unanimous verdict against him was significant
and prejudicial.  Wiles' speculation is insufficient to
cast doubt  upon  the  jury's verdict.
    The court responded to the jury in detail, again
stressing the requirement of unanimity for convic-
tion. 15  We must presume that the jurors remained

___________________(footnotes)

    ting the crime charged in Count 2 of the indictment. The
    jury need not unanimously agree on each means or method,
    but, in order to convict, must unanimously agree upon at
    least one such means or. method as one engaged in by the
    defendant. Unless the government has proven the same
    means or  method to  each of  you, beyond a reasonable doubt,
    you must acquit the defendant of the crime charged in
    count 2 of the indictment.

Aplts. App. Vol. XII at 3354-56. The district court gave this
same instruction to the jury at Schleibaum's trial. Aplts. App.
at 333-35-
    15  The court stated to the jury

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42a

loyal to their oaths and conscientiously followed the
district court's instructions.  Francis v. Franklin,
471 U.S. 307, 324 n. 9, 105 S. Ct. 1965, 1976 n. 9, 85
L.Ed.2d 344 (1985). This assumption is fundamental to
our system of .justice. United States v. Lonedog, 929
F.2d 568, 576 (10th Cir.), cert. denied, 502 U.S. 854,
112 S.Ct. 164,116 L.Ed.2d 129 (1991). A defendant who
urges us "to find jurors unwilling, unable, or incapa-
ble of following a trial court's instructions bear a
heavy burden of persuasion."  United States v.
Carter, 973 F.2d 1509, 1514 (10th Cir. 1992), cert.
denied, 507 U.S. 922, 113  S.Ct. 1289, 122 L.Ed.2d 681
(1993). Wiles has not met this burden.

___________________(footnotes)

    In Count 2, the government alleged that in connection
with the purchases and sales of Miniscribe stock, the defen-
dant, Q.T. Wiles, with knowledge concerning Miniscribe's
inflated inventory, income before taxes and net income, all
resulting from illicit efforts to conceal an inventory short-
fall, one, employed a device, scheme or artifice to defraud.
This refers to the scheme to conceal an inventory shortage.
Or, two, made untrue statements of material facts or made
material omissions of fact causing statements made to be
misleading.  This refers to false statements in the annual
reports. Or, three, engaged in a fraud and deceit upon
Miniscribe shareholders and unwitting purchasers and
sellers of stock.  This refers to  insider  trading, that is,
using insider information on the sale of his stock.  The
government need not prove all three of these means or
methods of committing the crime of securities fraud. It is
necessary, however, before there can be a conviction on this
count, that the jury must unanimously agree that at least
one of these means or methods has been proven beyond a
reasonable doubt, and all jurors must agree on the same
means or method.

Aplts. App. Vol. XII at 3398.

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43a

c.

    Wiles contends the government presented insuffi-
cient evidence of his knowledge of the fraudulent
scheme to sustain the jury's verdicts against him.
The district court summarily rejected this argument.
While a challenge to the sufficiency of the evidence
presents a question of law subject to de novo review,
United States v. Markum, 4 F.3d 891, 893 (10th Cir.
1993), well established  principles govern that review.
    In addressing a sufficiency of the evidence argu-
ment, we examine all the evidence in a light most
favorable to the government and ask whether that
evidence, together with all reasonable inferences to
be drawn therefrom, can support a finding of guilt
beyond a reasonable doubt. United States v. Wacker,
72 F.3d 1453, 1462 (10th Cir. 1995), cert. denied, -
U.S. -, 117 S. Ct. 136, 136 L.Ed.2d 84 (1996). "While
the evidence supporting the conviction must be
substantial and do more  than   raise a mere suspicion of
guilt, it need not conclusively exclude every other
reasonable hypothesis and it need not negate all
possibilities except guilt." United States v. Johnson,
42 F.3d 1312, 1319 (10th Cir. 1994), cert. denied, -
Us. -, 115 S. Ct. 1439, 131 L.Ed.2d 318 (1995) (in-
ternal quotations omitted).  We will overturn a guilty
verdict only if no rational trier of fact could have
found the contested elements of the crime , beyond a
reasonable doubt. United States v. Owens, 70 F.3d
1118,1126 (lOth Cir. 1995).
    Wiles' sufficiency argument need not detain us
long.  To be sure, Wiles denied any knowledge of any
wrongdoing at Miniscribe during the course of the
cover-up. And the jury could have believed him had it

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44a

so chosen, but the jury chose not to believe him.
Instead, the jury chose to believe the myriad of gov-
ernment witnesses who by their testimony, and the
reasonable inferences to be drawn therefrom, impli-
cated Wiles as a keyplayer in the scheme.
    We have carefully reviewed the voluminous trial
record and have no quarrel with the jury's finding
that Wiles knew quite well of the cover-up, and acted
to further its illicit purposes and ultimate aims.  The
testimony of other key players in the scheme, namely
Owen Taranta, Jesse Parker, Kenneth Huff, Warren
Perry, Gerald Goodman, and William  Lorea, as  well as
the testimony of Miniscribe employees Marta Van
Der Schouw, Gene Dehner, Kelly Hicks, and Hannah
Bolster-Valadez, is sufficient to sustain the jury's
finding that Wiles knew of the fraudulent scheme.
" ' To the extent the evidence conflict[ed], we [are
required to] accept the jury's resolution of conflicting
evidence and its assessment of the credibility of
witnesses.' " Owens, 70 F.3d at 1126 (quoting United
States v. Sapp, 53 F.3d 1100, 1103 (10th Cir. 1995),
cert. denied, - U.S. -, 116 S. Ct. 796,133 L.Ed.2d
744 (1996)).      

D.

    Relying on Travis v. United Slates, 364 U.S. 631,
81  S. Ct. 358,  5 L.Ed.2d  340 (1961), Wiles next asserts
that venue on the false statements charge under 18
U.S.C. 1001 was improper in the District of Colo-
rado.  Count one specifically charged Wiles with
causing Miniscribe to make a false 1987 10-K report,
which was filed with the SEC in Washington, D.C.
Wiles argues that the District of Columbia was the
only proper venue.  The district court disagreed, con-
cluding venue was proper in the District of Colorado.

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45a

    Venue in federal criminal prosecutions is a ques-
tion of fact which the government must prove. Wilkett
v. United  States, 655 F.2d 1007, 1011 (10th Cir. 1981),
cert. denied, 454 U.S. 1142, 102  S. Ct. 1001, 71 L.Ed.2d
294 (1982).  Unlike the elements of the substantive
crime, however, the government must prove venue
only by a preponderance of the evidence. Id. More-
over, the district court decides the propriety of venue
in a particular district. Fed.R.Crim.P. 18.
    In reviewing a challenge to venue, we view the
evidence in a light most favorable to the government
and ask whether the government proved by a prepon-
derance of the evidence, director circumstantial, that
the crime charged occurred within the district of
prosecution.  United States v. Rink, 778 F.2d 581,
584 (10th Cir. 1985).  Applying this standard, we agree
with the district court that venue on the 1001
charge was proper in the District of Colorado.
    We begin with U.S. Const. art. III, 2, which pro-
vides that the  "trial of all crimes . . . shall be held in
the state where the said crimes shall have been
committed."  This requirement is reiterated in the
Sixth  Amendment and codified in Fed. R. Crim.P. 18,
which provides that criminal prosecutions "shall be
had in a district in which the offense was committed."
(emphasis added).  Rule 18 recognizes that criminal
acts may extend beyond the borders of a single
district.  Congress addressed the issue of venue in
multidistrict crimes  in 18 U.S.C.  3237(a):

        Except as otherwise expressly provided by en-
    actment of Congress, any offense against the
    United States begun in one district and completed
    in another, or committed  in more than one district,
    may be inquired of and prosecuted in any district

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46a

    in which such offense was begun, continued, or
    completed.

Because 1001 does not contain an express venue pro-
vision, we rely on  3237(a). See United States v.
Ryan, 894 F.2d 355,360 (1990).
    
    In Travis, the government charged the defendant
with violating 18 U.S.C. 1001.  The Supreme Court
addressed the issue of venue under 18 U.S.C. 
3237(a).  The defendant, a union officer, filed false non-
Communist affidavits with the National Labor Rela-
tions Board (NLRB) in Washington, D.C. The defen-
dant made and executed the affidavits in Colorado.
The Court held that venue was improper in the Dis-
trict of Colorado. "Where Congress is not explicit,
`the locus delicti must be determined from the nature
of the crime alleged and the location of the act or acts
constituting it.' " Travis, 364 U.S. at 635,81 S.Ct. at
361 (quoting United States v. Anderson, 328 U.S. 699,
703,66 S. Ct. 1213,1216,90 L.Ed. 1529 (1946)).
    Unlike the SEC rules and regulations which bound
Wiles, however, the applicable law in Travis did not
require the filing of any statement with the govern-
ment. Rather, the filing of the non-Communist affida-
vits was voluntary, but a condition precedent to the
union invoking the investigatory powers of the
NLRB.  The Court stated "[T]he National Labor
Relations Act, with which we are concerned, did not
require union officers to file non-Communist affida-
vits.  If it had, the whole process of filing . . . might
logically be construed to constitute the offense."
Travis, 364 U.S. at 635,81 S. Ct. at 361.
    Section 1001 specifically proscribes the making of
false statements to the government. In Wiles' ease,

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47a

the law required Miniscribe to make a 1987 10-K
Report and file it with the SEC. 15 U.S.C.  78m(a);
17 C.F.R.  240.13a-1, 249.310.  A knowing or willful
failure to make and file the required 10-K Report is a
crime.  15 U.S.C.  78ff. Thus, we conclude that "the
whole process of filing . . . constitutes] the offense"
in this instance. Id.  This includes the District of
Colorado where the false 10-K was made. See United
States v. Zwego, 657 F.2d 248, 251 (l0th Cir. 1981),
cert. denied, 455 U.S. 919, 102 S. Ct. 1275, 71 L.Ed.2d
460 (1982) (in prosecution for making false statements
to federally insured bank, venue is proper where
statements were "prepared, executed, or made," or re-
ceived by bank).

E.

    Wiles finally asserts that the district court improp-
erly admitted hearsay testimony on count three's
wire fraud charge under 18 U.S.C. 1343.  Count
three alleged Wiles' participated in a scheme designed
to defraud Standard Chartered Bank (SCB) into
lending Miniscribe monies.  Wiles does not challenge
the admission of any particular statement by any
particular witness on count three.  Rather, Wiles
claims that the government's evidence did not
establish that his involvement with SCB on behalf of
Miniscribe was part of any fraudulent scheme.  Thus,
according to Wiles, any hearsay testimony as to
Wiles' negotiations with SCB and Miniscribe's re-
sulting loan agreement with SCB was inadmissible.
We disagree.
    At the close of the government's case-in-chief, the
court concluded that the government had established
a common fraudulent scheme among Miniscribe's
management, and that Wiles participated in that

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48a

scheme from October 14, 1987 through February 1989.
The court ruled that under Fed.R.Evid. 801(d)(2)(E),
hearsay testimony of the scheme's participants was
admissible on all counts of the indictment against
Wiles.16 We review the district court's decision to
admit testimony under the hearsay exception of Rule
801(d)(2)(E) for an abuse of discretion. United States
v. Olive, 69 F.3d 1057, 1066 (10th Cir. 1995), on reh `g,
80 F.3d 1466 (10th Cir.), cert. denied, - U.S. -,
117 S.Ct. 265,136 L.Ed.2d 189 (1996).
    Rule 801(d)(2)(E) excepts from the definition of
hearsay  "a statement by a coconspirator of a party
during the course and in furtherance of the conspir-
acy," where the statement is offered against the
party. Fed.R.Evid.  801(d)(2)(E).  The party need not
be charged with conspiracy.  The rule applies where
the evidence shows two or more individuals acting in
concert despite the absence of a conspiracy charge.
United  States v. Durland, 575 F.2d 1306, 1308 (10th
Cir.1978).

___________________(footnotes)

16 The district court stated:

    [W]ith respect to the admissibility . . . under 801(d)(2)(E)
of the statements by co-conspirators that are therefore not
hearsay, I'm finding that by a preponderance of the
evidence that . . . the Government has proved the defendant
began participation in the conspiracy . . . at the October
14, 1987 meeting.  And, that it continued . . . through the
dates of the charges in the indictment here which go to
February of 1989. It's actually March of 1989 in the indict-
ment . . . but I find that it continued through February
of 1989. And that among the participants were all those
who were present at the October 14, 1987 meeting and, of
course, a number of other persons.

Aplts. App. Vol. X at 2714.

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49a

    The evidence against Wiles plainly established that
he acted in concert with other members of Mini-
scribe's management team in concealing the inven-
tory hole beginning at management's quarterly
meeting on October 14, 1987. The evidence further
supports the district court's finding that Wiles'
participation continued through February 1989 when
he resigned.  Wiles' argument that defrauding SCB
was not a consideration in the decision to conceal the
inventory hole is misplaced., We stated in United
States v. Russell, 963 F.2d 1320, 1322 (10th Cir.), cert.
denied, 506 U.S. 898, 113 S. Ct. 280, 121 L.Ed.2d 207
(1992):

    [Conspirators are responsible for crimes com-
    mitted "within the scope of the unlawful project"
    and thus "reasonably foreseen as a necessary or
    natural consequence of the unlawful agreement."
    . . . [A] conspiracy, once instituted, continues to
    exist until it is abandoned, succeeds, or is other-
    wise terminated by some affirmative act, such as
    withdrawal by the defendant.

(quoting Pinkerton v. United States, 328 U.S. 640,
647-48,66 S. Ct. 1180,1184,90 L.Ed. 1489 (1946)).

    The fraud Wiles perpetrated on SCB was a fore-
seeable and natural consequence of the scheme to
conceal the inventory hole and falsify Miniscribe's
financial statements.  Large businesses naturally
look to banks to supply working capital through lend-
ing agreements.  Miniscribe was no different.  Banks
in turn naturally rely on the financial statements of
the business and the representations of its manage-
ment to determine the nature and extent of the loan.
SCB was no different.  At the time of SCB's loan
agreement with Miniscribe, Wiles' participation in

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50a

the fraudulent scheme was ongoing. The district
court did not abuse its discretion in concluding that
hearsay testimony offered against Wiles was admissi-
ble under Fed.R.Evid. 801(d)(2)(E) to prove the wire
fraud charges against him.

F.

    Lastly, Schleibaum argues that making false
statements to the SEC cannot serve as the basis for
his conviction under 18 U.S.C.  1001. Schleibaum
asserts that Congress intended the government to
prosecute the making of false statements to the SEC
under 15 U.S.C. 78ff alone.  The district court re-
jected Schleibaum's argument.  We review the
district court's interpretation of a criminal statute
d[e]  novo,  United  States  v. Rothhammer, 64 F.3d 554,
557 (10th Cir. 1995), and also reject Schleibaum's
argument.
    The general prohibition against making false
statements to the government is contained in the
United States Criminal Code at 18 U.S.C. 31001. A
specific prohibition against making false statements
to the SEC is contained in the Securities Exchange
Act of 1934 at  15 U.S.C.  78ff.  Section 78ff provides:
    [A]ny person who willfully and knowingly makes,
    or causes to be made, any statement in any applica-
    tion, report, or document required to be filed under
    this chapter or any rule or regulation thereunder
    .  . . which statement was false or misleading with
    respect to any material fact, shall upon conviction
    be fined not more than $1,000,000, or imprisoned
    not more than 10 years, or both. . . .
    15 U.S.C.  78ff. Congress passed the Securities Ex-
    change Act of 1934 shortly before passing the general
     

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51a

prohibition against, making false statements to the
government. Unlike 1001, materiality is an express
element of  making a false statement under  78ff.
    The only decision to address Schleibaum's argu-
ment is United States v. Bilzerian, 926 F.2d 1285 (2d
Cir.), cert. denied, 502 U.S. 813, 112 S. Ct. 63, 116
L.Ed.2d 39 (1991). Using general principles of statu-
tory construction, a divided panel of the Second
Circuit held that nothing in the legislative history of
either  78ff or 1001 indicated that the latter could
not be used to charge the making of false statements
to the SEC.  The court noted the general rule that
criminal statutes may overlap: " [W]hen an act vio-
lates more than one criminal statute, the Government
may prosecute under either so long as it does not
discriminate against any class of defendants.'" Id. at
1300 (quoting United States v. Batchelder, 442 U.S.
114,123-24,99 S. Ct. 2198,2204,60 L.Ed.2d 755 (1979)).
The legislative history did not indicate whether Con-
gress so tight to restrict prosecutions under 1001 by
enacting  78ff, and the proximity of the laws' enact-
ments did not persuade the court that Congress
intended such a result.
    The dissent, upon which Schleibaum relies, noted
that in the Second Circuit materiality under the
second and third clauses of  1001 was not an element
of the offense.  E.g., United States v. Elkin, 731 F.2d
1005, 1009 (2d Cir.), cert. denied, 469 U.S. 822, 105
S. Ct. 97, 83 L.Ed.2d 43 (1984), overruled by United
States v. Ali, 68 F.3d 1468, 1474-75 (2d Cir. 1995)
(materiality is an element of any 1001 offense), on
reh'g, 86 F.3d 275 (2d Cir.1996).  The dissent reasoned
that the court's holding made the materiality element
of  78ff superfluous. Bilzerian, 926 F.2d at 1305

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52a

(Winter, J., dissenting). The dissent concluded that
the government should not be permitted to charge a
defendant under  1001 and obtain a conviction for
conduct proscribed by  78ff without having to prove
materiality because Congress could not have intended
such a result. Id.
    We do not share the dissent's concern. As we
previously noted, in the Tenth Circuit materiality
has long been an element of any false statements
offense under 51001. Gonzales, 286 F.2d at 120.  The
government must prove a false statement's material-
ity under both 78ff and $1001.  Thus, permitting the
government to charge the making of false statements
to the SEC under 1001 does not render the material-
ity  element of  78ff superfluous in the Tenth Circuit.
Without any express indication the Congress in-
tended otherwise, we join the Second Circuit and
conclude that both 78ff and 1001 proscribe the
making of false statements to the SEC, and the gov-
ernment may prosecute such conduct under either
statute.
    For the reasons contained in Part II.A. of the
opinion, Wiles' and Schleibaum's convictions on Count
I of the respective indictments charging them with a
violation of 18 U.S.C. 1001 are vacated.  For the
reasons contained in Parts II.B-F. of the opinion, the
district court's judgments are affirmed in all other
respects.

    AFFIRMED IN PART, VACATED IN PART, and
REMANDED for further proceedings consistent with
this opinion.

    LUCERO, Circuit Judge, with whom EBEL, Circuit
Judge, joins, concurring in part, dissenting in part.

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53a

    Recognizing that the Wiles, Schleibaum and Pap-
pert cases present a common issue, one created by the
Supreme Court decision in United States v. Gaudin,
- U.S. -, 115 S.Ct. 2310,132 L.Ed.2d 444 (1995),
this court agreed to consider two related questions en
bane: (1) "whether the failure to instruct the jury on
the issue of materiality . . . constitutes a structural
error"; and if so, (2) "whether the error is reversible
per se or reviewable under the plain-error analysis
set out in United States v. Olano, [507 U.S. 725, 113
S. Ct. 1770, 123 L.Ed.2d 508] (1993)." En Bane Order
(June 3, 1996).  I concur in the majority's conclusion
as to the first question.  But I dissent horn its "per
se" resolution of the second.  The mere classification
of an error as "structural" does not automatically
dictate reversal under Fed. R. Crim. P. 52(b) plain-
error review. 1
    From its earliest roots, plain-error review has been
discretionary.  Wiborg v. United States, one of the
first statements of the common law rule, holds that
"if a plain error was committed in a matter so
absolutely vital to defendants, we feel ourselves at
liberty to correct it," even if the defendant has "not
duly excepted" the error. 163 U.S. 632, 658, 659, 16

___________________(footnotes)

    1 Because we decide only the common legal issues of the
three cases en bane, we should not purport to apply the com-
mon legal rule to the disparate facts of each case.  Rather, all
three cases should be resubmitted to the panels to decide the
outcome under the rule we enunciate today.  See Turner V.
Small Business Admin. (In re Turner), 84 F.3d 1294, 1299
(l0th Cir. 1996) (en bane) (deciding en bane issue as a matter of
law and remanding to panel for further consideration in light
of new rule).

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54a

S.Ct. 1127, 1137, 1138, 41 L.Ed. 289 (1896) (emphasis
added).2
    Over time, appellate discretion to correct for plain
error came to be exercised solely for the limited pur-
pose of avoiding miscarriages of justice.  See United
States v. Young, 470 U.S. 1,15,105 S.Ct. 1038,1046,84
L.Ed.2d 1 (1985). In United States v. Atkinson, the
Court established a different approach to plain error
while maintaining the discretion of earlier cases. In
what has come to be known as the Atkinson standard,
the Supreme Court held that "[i]n exceptional cir-
cumstances, especially in criminal cases, appellate
courts . . . may, of their own motion, notice errors
to which no exception has been taken . . . [if they]
seriously affect the fairness, integrity or public
reputation of judicial proceedings." 297 U.S. 157, 160,
56 S. Ct. 391,392,80 L.Ed. 555 (1936) (emphasis added).
    Referring to unoticed structural errors, the
Court in Olano subsequently noted that "[t]here may
be a special category of forfeited errors that can be
corrected regardless of their effect on the outcome."
507 U.S. at 735, 113 S. Ct. at 1778 (emphasis added).
Finally, Rule 52(b) is couched in discretionary terms:
"Plain errors or defects affecting substantial rights
may be noticed although they were not brought to the
attention of the court."  Fed.R.Crim.P. 52(b) (em-
phasis added); compare Fed.R.Crim.P. 52(a) ("Any
error, defect, irregularity or variance which does not
affect substantial rights shall be disregarded." (Em-
phasis added)). The Supreme Court has carefully

___________________(footnotes)

    2 The drafters of the federal rules cite Wiburg for the
common law rule. Fed. R. Crim. P. 52(b) (advisory committee
note).

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55a

avoided mandating automatic reversal for plain
errors.  In a case arising from our circuit, the Court
unambiguously states that  "a per se approach to
plain-error review is flawed."  Young, 470 U.S. at 16
n. 14, 105 S. Ct. at 1047 n. 14.

    The court today ignores this long line of authority.
Although the  majority claims the mantle of Supreme
Court precedent, I do not believe any case supports a
rule that strips appellate courts of discretion to
review cases for plain errors merely because they are
labeled "structural." 3 The majority cites Olano for
the proposition that "structural" error falls within
that " `special category of forfeited errors' that does
not require a showing of prejudice, but rather, must
be corrected." Maj. Op. at [102 F.3d at] 1061-62 (em-
phasis in original).  Olano states no such principle, It
holds that "this issue need not be addressed." Olano,
507 U.S. at 735, 113 S. Ct. at 1778.  It does no more
than suggest that under the third prong of plain-error
analysis there are some errors that may auto-
matically affect substantial rights without a showing
of prejudice, and that "can" be corrected. Id.
    The inescapable import of  the majority's opinion is
that the error asserted here escapes review under
plain-error's fourth prong, the Atkinson standard.

___________________(footnotes)    
                                       
    3 The majority cites Rose v. Clark, 478 U.S. 570, 577, 106
S.Ct. 3101, 3105-06, 92 L.Ed.2d 460 (1986), and Sullivan v.
Louisiana, 508 U.S. 275, 279, 113. S. Ct. 2078, 2081-82, 124
L.Ed.2d 182 (1993), for the proposition that structural errors
mandate reversal. These cases, like all the others cited by the
majority on the question of structural error, address harmless,
not plain errors. The language in Rose and Sullivan, although
broad, cannot be read outside of the harmless-error context. See
infra at [102 F.3d at] 1070,

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56a

Sea Maj. Op. at [102 F.3d at] 1062 n.13. To the extent
the majority relies on Olano, it is mistaken. The
Supreme Court majority in Olano never considers
whether the error before it "would have warranted"
correction under the fourth prong of the plain-error
test, because it concludes that the error (allowing
alternate jurors to participate in the jury
deliberations) was not prejudicial and therefore did
not "affect substantial rights." See Olano, 507 U.S.
at 741, 113 S. Ct. at 1781. It thus never `reaches the
issue before us. Justice Stevens, however, speaking
for three members of the Court, views the error in
Olano as structural and necessarily affecting the
defendant's substantial rights, thus satisfying the
third prong of plain-error review. Id. at 743-44, 113
S. Ct. at 1782-83 (Stevens, J., dissenting).  While
Justice Stevens concludes that under harmless-error
review the error is automatically reversible, id. at
744, 113 S. Ct. at 1783, he continues
    Reading "substantial rights" the same way in
    Rule 52(b) as in Rule 52(a) does not, of course,
    eliminate the difference between cases in which no
    objection is made and those in which one is. A
    nonforfeited error affecting substantial rights
    must be corrected under Rule 52(a).  A forfeited
    error, however, even if it is plain and affects
    substantial rights, "may" be corrected at the
    discretion of the reviewing court under Rule 52(b).
    It is this distinction between automatic and dis-
    cretionary reversal that gives practical effect to
    the difference between harmless-error and plain-
    error review, and also every incentive to the defen-
    dant to raise objections at the trial level.

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57a

Id. (citation omitted). Hence, the only three members
of the Supreme Court to have addressed the precise
issue before us would find fault with the result we
reach today.4
    The Supreme Court's rejection of an automatic rule
of reversal makes good sense.  Such a rule could free a
defendant even though the structural error did not
seriously affect the "fairness, integrity or public
reputation of judicial proceedings." Olano, 507 U.S.
at 732, 113 S. Ct. at 1776 (quotation omitted). More-
over, automatic reversal omits appellate analysis of
the entire record under the Atkinson standard, thus
preventing the Supreme Court from reviewing our
decision to correct the error for an abuse of discre-
tion. See Young, 470 U.S. at 15-16, 105 S.Ct, at 1046
(majority opinion), at 22 n.1, 105 S. Ct. at 1049 n. 1
(Brennan, J. concurring in part and dissenting in
part). Notwithstanding the uninterrupted line of
cases giving appellate courts discretion to correct
plain error, the majority is enamored of its per se rule
and claims that the Supreme Court requires it. I
disagree.

___________________(footnotes)

    4 On this point, the Supreme Court has recently granted
review of an unpublished Eleventh Circuit decision, United
States v. Johnson, No. 95-2417, 82 F.3d 429 (11th Cir.), cert.
grunted, - U.S. - 117 S. Ct. 451, 136 L.Ed.2d 346 (1996),
that may resolve the issues before the en bane court. More-
over, our inquiry in the Pappert case is complicated by the fact
that the Supreme Court has yet to decide whether materiality
is an element of the 1014 offense, let alone whether the error
falls within a special category of eases that would mandate
reversal under harmless-error analysis.  See United  States  v.
Wells, 63 F.3d 745 (8th Cir. 1995), cert granted, - U.S. -,
116 S.Ct. 1540, 134 L.Ed.L2d 645 (1996).

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58a

    The majority's preoccupation with the per se rule
stems from its focus on the interrelationship between
harmless-error review and structural errors.  Harm-
less-error analysis, under which all of the structural
error cases cited by the majority were decided, serves
a different function from plain-error review.  Harm-
less-error rules were adopted to avoid automatic
reversal for trivial errors that have no effect on the
outcome of a trial.  See Roger J. Traynor, The Riddle
of Harmless Error 13-14 (1970).  Such rules "serve a
very useful purpose in sofar as they block setting
aside convictions  for small errors or defects that have
little, if any, likelihood of  having changed the result of
the trial " Chapman v. California, 386 U.S. 18,22,87
S.Ct. 824,827,17  L.Ed.2d 705 (1967).  In the same vein,
the Court notes " that the harmless error doctrine is
essential to preserve' the `principle that the central
purpose of a criminal trial is to decide the factual
question of the defendant's guilt or innocence.'"
Arizona v. Fulminate, 499 U.S. 279, 308, 111 S. Ct.
1246, 1264, 113 L.Ed.2d 302 (1991) (quoting Delaware
v. Van Arsdall, 475 U.S. 673, 681, 106 S. Ct. 1431, 1436,
89 L.Ed.2d 674 (1986]).
    Errors involving the presentation of the case to the
jury, labeled "trial errors," may be "quantitatively
assessed in the context of other evidence presented in
order to determine whether their admission was
harmless beyond a reasonable doubt." Id. at 307-08,
111 S. Ct. at 1264.  Other errors, labeled structural,
are regarded as "defects in the constitution of the
trial mechanism, which defy analysis by `harmless-
error' standards." Id. at 309, 111 S. Ct. at 1265.  These
latter errors share "a similar structural defect af-
fecting the framework within which the trial pro-

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59a

ceeds, rather than simply an error in the trial process
itself." Id. at 310, 111 S. Ct. at 1265.  Such errors
create "consequences that are necessarily unquan-
tifiable and indeterminate." Sullivan v. Louisiana,
508 U.S. 275,282,113 S.Ct. 2078, 2083, 124 L.Ed.2d 182
(1993). In cases marred by structural error it is im-
possible to review for harmless error and "quantita-
tively assess[ ] [the effect of the error] in the context
of other evidence presented." Fulminante 499 U.S.
at 308, 111 S. Ct. at 1264.  For this reason, the "affect-
ing substantial rights" third prong of Olano is
assumed satisfied even without proof of prejudice.5

___________________(footnotes)

    5 The distinction between trial and structural error was
born in controversy in the 1991   Fulminante decision. Justice
White, speaking for four dissenters, called the distinction a
"meaningless dichotomy," noting "our jurisprudence on harm-
less error has not classified so neatly the errors at issue." 499
U.S. at 290-91, 111 S.Ct. at 1254-55.  Chief Judge Harry T.
Edwards refers to it as a "distinction that I find baffling and
mostly unhelpful."  Harry T. Edwards, To Err is Human, But
Not Always Harmless: When Should Legal Error Be Toler-
ated?, 70 N.Y.U. L..Rev. 1167, 1207 (1995).  If the essential dis-
tinction between trial and structural errors lies in their
susceptability to being quantitatively assessed in the context of
other evidence presented the jury, see Fulminate, 499 U.S. at
307-08, 111 S.Ct. at 1263-64, the framework is flawed because
the cases labeled as structural and trial errors do not accurately
divide on the basis of the feasibility of appellate review. See
Charles J. Ogletree, Jr., Arizona v. Fulminate:  The Harm of
Applying Harmless Error to Coerced Confessions, 105 Harv.
L.Rev. 152, 164-66 (1991).  In essence, the Court has not yet
"clearly articulated] the structure that structural errors
undermine." Id. at 164.
    At the margin, there is much disagreement about which
label to affix to a given error.  This point is well demonstrated
by the views of my separately dissenting colleague, Judge
Briscoe, who would pigeonhole Gaudin error in the "trial-

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60a

    I part with the majority to the extent that it re-
gards structural error as automatically deeming
judicial proceedings fundamentally unfair, thereby
escaping fourth-prong Atkinson review. Maj. Op. at
[102 F.3d at] 1062 n.13. Such an approach  is both over-
inclusive and under-inclusive.  Some errors, the
admission of a coerced confession, for example, might
seem of a sufficiently grave magnitude that "a crimi-
nal trial cannot reliably serve its function as a vehicle
for determination of guilt or innocence, and no
criminal punishment may be regarded as fundamen-
tally fair. Rose v. Clark, 478 U.S. 570, 577-78, 106
S.Ct. 3101, 3106, 92 L.Ed.2d 460 (1986).  Coercing a
confession by physical force or psychological
torture-the Court draws no distinction between the
two, see, e.g., Rogers v. Richmond, 365 U.S. 534, 540,
81 S.Ct. 735, 739, 5 L.Ed.2d 760 (1961)-so deeply
offends the sense of justice of a civilized society, see
Fulminate, 499 U.S. at 293, 111 S.Ct. at 1256 (White,
J., dissenting), that every practicable step should be
taken to eradicate the practice.  Yet Fulminante

___________________(footnotes)

error" box, as well as by the wide range of views  noted at
footnotes 12 and 13 of the majority opinion. The problem with
affixing the "structural" label is that it denotes harmless-error
consequence, while merely connoting the level of egregiousness
of the error to the extent that it requires correcting error that
does not affect the fundamental fairness of the trial's result, it
fuels the criticism of the criminal process that a "guilty defen-
dant is let free on a mere technicality."  If the distinction
between trial and structural error is to be imported into plain-
error analysis, in order to exercise appellate discretion the
temptation would be to divine different  levels of structural
error, some warranting reversal, others not.  The majority
avoids this Dantean spectacle by ignoring its discretion under
plain-error review altogether.  Judge Briscoe does so by calling
the error under review "trial error."

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61a

specifically holds that admission of a coerced
confession into evidence is not structural error.
Rather, such admission is subject to harmless-error
review precisely because it does not affect the
structure within which the trial proceeds. Id. at 309-
11,111 S.Ct. at 1264-66.  As wrong as it is to allow the
jury to consider a coerced confession, that flaw is not
structural, and it does not escape harmless-error
review.
    By contrast, the claimed error in these cases, that
of taking an element of the offense away from the
jury, is structural in the sense defined by Ful-
minate and applied in Sullivan.  Yet I cannot
conclude that this error requires reversal in every
case, regardless of the posture in which it was raised.
True, this error defies harmless-error review.  This
is because we cannot meaningfully contemplate its
effect on the jury's deliberation-the nature of the
error was to remove an issue from the jury.  Plain-
error review, as noted above, has a different focus
than harmless-error review it concerns the error's
effect on the fairness of the proceedings.  Given that
different focus, an error in the structure of the pro-
ceedings that defies harmless-error review remains
subject to plain-error analysis.  In some cases, such
as where there is overwhelming evidence on an
element and the defendant never even contested its
factual predicate, the judicial proceedings, taken as a
whole, might be considered eminently fair despite the
structural error.
    Because a defendant may either waive or forfeit
almost any constitutional right, see Olano, 507 U.S.

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62a

at 731, 113 S. Ct. at 1776, plain-error  review 6. acts to
safeguard the fundamental justice and fairness em-
bodied in the judicial process.  Contrary to the major-
ity's assumption, plain-error review does not look
merely at what the jury might have done had the
defendant not forfeited his right.  SeeYoung, 470
U.S. at 15-16, 105 S.Ct. at 1046-47.  While "[a] defen-
dant may assuredly insist upon observance of [the
jury trial] guarantee even when the evidence against
him is so overwhelming as to establish guilt beyond a
reasonable doubt," Carella v. California, 491 U.S.
263, 268, 109 S.Ct. .2419, 2422, 105 L.Ed.2d 218 (1989)
(Scalia, J., concurring), where the defendant fails to

___________________(footnotes)

    6 In their briefing en bane, appellants argue that harmless-
error, rather than plain-error review is applicable to cases such
as this, where the opportunity to object was foreclosed by the
then-current state of the law.  Because the constitutional right
only arose after trial, appellants contend that they did not
"forfeit" any right.  Strictly speaking, appellants are correct.
Cases  such as this do not involve the forfeiture of existing
rights.  Nevertheless, courts generally apply plain-error, not
harmless-error review in such situations. See, e.g., United
States V. Randazzo, 80 F.3d 623, 631 (lst Cm. 1996) (applying
plain-error review); United States v. Washington, 12 F.3d
1128, 1138-39 (D.C. Cir.) (same), cert. denied, - Us. -,
115 S. Ct. 98, 130 L.Ed.2d 47 (1994); but see United States v.
Keys, 95 F.3d 874, 878 (9th Cm. 1996) (en bane) (applying
harmless-error review).  I believe that application of plain-
error review in this case strikes the proper balance between the
defendants' interest in having a new right considered on direct
review, and the judicial system's interest in orderly administra-
tion of cases and finality of proceedings in which the trial court
acted properly under the then-existing law.  See Randazzo, 80
F.3d at 631-32.

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63a

insist on observance of this guarantee at trial we are
under no obligation to restore it for him on appeal. 7
The majority's conclusion misreads plain-error
law.  It gives shrewd attorneys the opportunity to

___________________(footnotes)

    7 In footnote 10, the majority announces an exception to the
rule that Gaudim errors are structural and must be reversed in
all circumstances.  This exception, for cases in which the defen-
dant stipulates to removal of an element, is of limited utility
and should have no bearing on our ability to review for plain
error.  I agree that if a defendant stipulates to an element of
the offense, it is not error to remove it from the jury's con-
sideration.  See United States v. Mason, 85 F.3d 471, 472 (10th
Cir. 1996). But because the "structuralness" of Gaudin-type
error arises born the denial of the defendant's right to have
the jury decide each element of the offense beyond a reasonable
doubt, an informal concession of an element by the defendant
or his attorney would not remove his right to a jury determina-
tion of that element.  See 2 Wayne R. LaFave & Jerold H.
Israel, Criminal Procedure 21.1(h) (1984) (jury trial may only
be waived by  "express and intelligent consent of the defen-
dant," and should be made personally by defendant, either in
writing or in open court); see  at so Fed. R. Crim.P. 23(a) (waiver
of jury trial must be in writing).
    While the majority suggests that "[a] situation may arise
when a reviewing court may conclude with complete confi-
dence that a failure to instruct on an element of an offense did
not play a role in the jury's verdict on that offense," applying
footnote 10 to anything short of a stipulation would engage us
in determinations of  "harmless structural error."  See.
California v. Roy, - U.S. -   -, 117 S.ct. 337,339-
40, 136 L.Ed.2d 266 (1996) (Scalia, J., concurring) (where an
element of the offense was not presented to the jury, the error
can be harmless "only if the jury verdict on other points
effectively embraces this one or if it is impossible, upon the
evidence, to have found what the verdict did find without
finding this point as well.").  In any event, whether or not the
error is deemed structural, it should not limit our review for
plain error.

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64a

engage in improper gamesmanship at no risk to their
clients, and is inappropriate as a matter of policy.
One need not exercise asymptotic levels of imagina-
tion to conceive that under the rule announced today,
counsel may deliberately overlook a structural error
in the trial proceeding, such as a faulty reasonable
doubt instruction to the jury, see Sullivan, 508 U.S.
275, 113 S. Ct. 2078, knowing that if the jury convicts,
her client will nonetheless be guaranteed a new trial.
The whole purpose of distinguishing between harm-
less-error and plain-error review is to eliminate these
tactics.  We should leave plain-error review for its
intended purpose: correcting those errors under Rule
52(b) which "seriously affect the fairness, integrity
or public reputation of judicial proceedings."
    For the foregoing reasons, while I join in the
court's conclusion as to Part 11.A.2.C., I respectfully
dissent from the court's resolution of the second
question before us, Part II.A.2.b.  I would hold that
failure to instruct under Gaudin is not error that
automatically mandates reversal.  I would analyze the
facts of each case under the fourth prong, the Atkin-
son standard of plain-error review, as required by
Olano.  I would resubmit the individual cases back to
the original panels for decisions pursuant to this
standard.

    BRISCOE, Circuit Judge, dissenting:

    Two issues are presently before this court for en
bane consideration: (1) "whether the failure to in-
struct the jury on the issue of materiality . . .
constitutes a structural error"; and, if so, (2)
"whether the error is reversible per se or reviewable
under the plain error analysis set out in United
States v. Olano, [507 US. 725, 113 S. Ct. 1770, 123

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65a

L.Ed.2d 508] (1993)." In answering these questions, I
conclude failure to instruct the jury on the issue of
materiality is not structural error.  Therefore, I
dissent from the majority's conclusion as to the first
question.  I agree that failure to instruct on the
element of materiality is error, but whether it is
reversible error presents a question beyond those
designated by this court for en bane review.  Answer-
ing the first question in the negative, I need not reach
the second question.  Because 1 conclude the error is
not structural, I would apply the plain error analysis
of Rule 52(b) in the absence of a timely objection at
trial.  However, given the unique circumstance
created in these cases as a result of an intervening
change in the settled law of this circuit, I would
require the government to bear the burden of proving
the  absence of prejudice because defendants' failure to
object was the result of their reliance upon settled
law.  See United States v. Viola, 35 F.3d 37,42 (2d Cir.
1994), cert. denied - U.S. -, 115 S. Ct. 1270, 131
L.Ed.2d 148 (1995).  I would resubmit the individual
cases to the original panels for decision pursuant to
these standards.  I express no opinion regarding
whether the convictions of the defendants should be
vacated, as those questions are more appropriate for
the panel in each case to decide.
    In a recent decision by the Supreme Court in a
habeas case, California v. Roy, - U.S. -, 117
S. Ct. 337, 136 L.Ed.2d 266 (1996), the Court addressed
the principal question before this court-whether
failure to include an instruction on an element of a
charged offense is structural error.  The Court

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66a

determined whether a Chapman 1 or a Kotteakos 2
standard for harmless error should be applied in a
habeas case where the petitioner alleged the jury
instructions underlying his conviction omitted an
element of the charged offense.  The majority opinion
noted that if the omission had been a "structural
defect," no form of harmless error analysis could be
applied.  The majority held that a Kotteakos harmless
error standard inquiring as to whether there is a
"'grave doubt as to the harmlessness of an error'"
would apply to the habeas review of Roy's conviction.
The Court did not conclude that omission of an in-
struction on an element of an offense was structural
error requiring automatic reversal, but rather
referred to the error throughout its opinion as "trial
error" 3 and ultimately remanded the case for further
review under the harmless error standard it deline-
ated.
    Justice Scalia, concurring in Roy, agreed that
omission of an instruction on an element of the crime
is not itself structural error, but clarified that the
error could be harmless only if the reviewing court on
remand had the requisite degree of confidence that
the jury necessarily found the existence of the
omitted element.  Without such a finding by the jury,
reversal would be required under the principles of
Sullivan v. Louisiana, 508 U.S. 275, 113 S.Ct. 2078,
124 L.Ed.2d 182 (1993).  Interestingly,  Justice Scalia

___________________(footnotes)

    1 Chapman v. California, 386 U.S. 18, 87 S. Ct. 824, 17
L.Ed.2d 705 (1967).
    2 Kotteakos v. United States, 328 U.S. 750, 66 S. Ct. 1239, 90
L.Ed. 1557 (1946).
    3 The Court explicitly noted that the Kotteakos standard
does not apply to structural errors.

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67a

cited United States v. Gaudin, - U.S. -, 115
S. Ct. 2310, 132 L.Ed.2d 444 (1995), in reaching the
conclusion that absence of a formal verdict on a single
element of an offense would not require automatic
reversal.
    The fact that Roy arises in the context of habeas
review rather than in the context of a direct appeal is
irrelevant.  Although this distinction affects which
harmless error standard applies, it does not alter the
Court's conclusion that the omission of an instruc-
tion on an element of a crime is a "trial error."
    The majority has compiled a list of eases where the
error established by appellant required automatic
reversal.  Errors which require automatic reversal
are structural errors.  See, e.g., Sullivan, 508 U.S. at
282, 113 S. Ct. at 2083 (there are two classes of con-
stitutional error-"trial error" subject to harmless
error analysis, and "structural error" requiring
automatic reversal) (Rehnquist,  C.J., concurring).
Not all constitutional violations require automatic
reversal. Chapman, 386 U.S. 18, 87 S. Ct. 824. Only
the most exceptional do. See, e.g., Rose v. Clark, 478
U.S. 570, 578, 106 S. Ct. 3101, 3106, 92 L.Ed.2d 460
(1986).  As I read the majority, opinion, it does not add
another constitutional right to the list of rights
which will require automatic reversal if violated.
Instead, the majority opinion holds that failure to
instruct the jury on the element of materiality is an
example of an error identified as "structural error" in
Sullivan-the right to a jury determination of guilt
on each element of the charged offense beyond a
reasonable doubt.  I disagree that absence of an
instruction on materiality conclusively establishes a

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68a

violation of this basic Sixth Amendment right and is
thus, by itself, structural error.

    Appellate courts should uphold the verdict reached
in the district court unless, after inquiry, it is clear
that reversal is unavoidable to protect the defendant's
right to a fair trial.
    
    [I]f the defendant had counsel and was tried by an
    impartial adjudicator, there is a strong presump-
    tion that any other errors that might have
    occurred are subject to harmless-error analysis.
    The thrust of the many constitutional rules gov-
    erning the conduct of criminal trials is to ensure
    that those trials lead to fair and correct judg-
    ments. Where a reviewing court can find that the
    record developed at trial establishes guilt beyond a
    reasonable doubt, the interest in fairness has been
    satisfied and the judgment should be affirmed. As
    we have repeatedly stated, "the Constitution en-
    titles a criminal defendant to a fair trial, not a
    perfect one."
Rose, 478 U.S. at 579, 106 S.Ct. at 3106 (citations
omitted).

    Even if Roy were completely distinguishable from
the question we face, the cases decided by the
Supreme Court which have identified the type of
Sixth Amendment violation requiring automatic
reversal do not support a conclusion that the error
here requires automatic reversal and is therefore
structural.  The error of omitting an instruction on
materiality does not preclude us from evaluating
whether the evidence established guilt beyond a
reasonable doubt or whether the jury rendered a
verdict satisfying the interest of  fairness.

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69a

    In  Sandstrom  v. Montana, 442 U.S. 510, 523-24, 99
S. Ct. 2450, 2458-59, 61 L.Ed.2d 39 (1979), the Court
held that an instruction creating a presumption of
malice violated due process by shifting the burden of
proof on intent to the defendant, contrary to In re
Winship, 397 U.S. 358, 90 S. Ct. 1068, 25 L.Ed.2d 368
(1970) (holding due process of law required conviction
by proof beyond a reasonable doubt).  In Rose, the
Court addressed a question that Sandstrom left
unanswered-whether a Sandstrom error required
automatic reversal or, instead, was subject to a
harmless error analysis.  The Court in Rose noted
that a directed verdict for the prosecution would
violate the Sixth Amendment right to a jury trial in
serious criminal cases and would require automatic
reversal. "Where that right [to a jury verdict] is
altogether denied, the State cannot contend that the
deprivation was harmless because the evidence estab-
lished the defendant's guilty the error in such a case
is that the wrong entity judged the defendant guilty."
478 U.S. at 578, 106 S. Ct. at 3106. However, the Court
noted that a Sandstrom error was distinguishable
from a directed verdict in that the jury still con-
sidered the disputed element.  The Court reasoned it
was possible that no jury could have found defendant
committed the criminal act without also implicitly
finding malice was established beyond a reasonable
doubt. In such a case, the erroneous instruction on
malice "is simply superfluous." Rose, 478 U.S. at 581,
106 S. Ct. at 3107.  Despite the erroneous instruction,
there would be no constitutional violation because the
jury would have found " `every fact necessary' to
establish every element of the offense beyond a
reasonable doubt." Id.

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70a

    Thus, in Sandstrom, the Court held an erroneous
instruction regarding the presumption of an element
could produce a constitutionally deficient verdict. In
Rose, the Court held that where an erroneous set of
instructions to the jury does not "altogether den[y]
the possibility that the jury found " `every fact
necessary' to establish every element of the offense
beyond a reasonable doubt: it is proper to inquire
whether there has in fact been a violation of this
constitutional right before requiring that the verdict
be reversed. 478 U.S. at 578, 581, 106 S.Ct. at 3106,
3107.  Hence, while an erroneous instruction alone is
not structural error requiring automatic reversal, it
may, in a given case, prejudice the defendant's sub-
stantial right to a jury verdict on each element of a
charge.  Whether an erroneous instruction violated
the defendant's substantial rights in a given case is
exactly the type of inquiry a Rule 52 analysis serves
to answer.
    The implications of Sandstrom and Rose to the
present case are clear. As in Sandstrom, the Court
in Gaudin identified an error capable of resulting in a
constitutionally deficient verdict.  As in Sandstrom,
the constitutional right at risk is the right to a
determination by a jury on each element of the offense
beyond a reasonable doubt.  As in Rose, we now face
the question of whether a particular error in in-
structing a jury till always deny the Sixth Amend-
ment right to a jury finding of guilty on each element
and therefore automatically require reversal, or
whether in some eases the instructional error will
not violate this Sixth Amendment right, providing
defendant with an imperfect but fair trial.

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71a

    The question before us assumes the jury was
instructed on all but one element of the subject
offense. Unlike the case where there is a directed
verdict for the prosecution, in a case where an
instruction on a single element is omitted, the right
to a jury trial is not "altogether denied."  Had the
predicate facts so conclusively established material-
ity  that no rational jury could reach the verdicts
rendered without also finding the materiality element
to be satisfied, failure to instruct on the element of
materiality would be superfluous.  If the jury implic-
itly found the materiality element was satisfied, it is
of no constitutional moment that the district court,
acting outside its authority, found the element to be
satisfied as well.4   As in Rose, it is conceivable both
that the error could occur and that the constitutional
right at issue could be preserved intact.5  Thus,

___________________(footnotes)

    4 In such a case, the jury would have fulfilled its constitu-
tional function to "stand between the accused and a potentially
arbitrary or abusive Government that is in command of the
criminal sanction." United States v. Martin Linen Supply Co.,
430 U.S. 564, 572,97 S.Ct. 1349, 1355, 51 L.Ed.2d 642 (1977).
    5 The majority opinion is largely consistent with the view I
have set out. In footnote 10, the opinion states "A situation
may arise when a reviewing court may conclude with complete
confidence that a failure to instruct on an element of the
offense did not play a role in the jury's verdict on that offense.
. . . Because both Wiles and  Schleibaum contested the element
of materiality at their respective trials, we are not confronted
with that situation."
    Similarly, in applying Roy, the majority notes its finding of
structural error is based in part on the fact discerned from the
Wiles and Schleibaum case records that the juries "did not
render a verdict, formal or otherwise, . . . on the element of
materiality."  I disagree with the majority's view that the
broad and far-reaching generic questions we have instructed

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72a

absence of an instruction on materiality is dis-
tinguishable from the absence of a reasonable doubt
instruction in Sullivan, where a harmless error
analysis was simply impossible as there could be no
basis in the record to conclude the jury implicitly
applied a reasonable doubt standard because lack of
such an instruction "vitiates all the jury's findings."
508 U.S. at 281, 113 S.Ct. at 2082.  It is precisely the
ability to review the record and render a meaningful
determination as to whether an error affected a
defendant's substantial rights that distinguishes a
trial error from a structural error. Fulminate, 499
U.S. at 307-08, 111 S. Ct. at 1264.  Where the jury has
not received an instruction on reasonable doubt, a
reviewing court will always remain in serious doubt
that the defendant's basic Sixth Amendment rights
have been adequately safeguarded. In contrast, where
the jury has not received an instruction on material-
ity, a reviewing court will not always harbor such
uncertainy .

___________________(footnotes)

the parties to brief can be answered by reference to the facts of
two of the three cases we have consolidated herein. We have
agreed to address whether failure to instruct on the element of
o materiality is structural error.  We have not limited our
questions to the particular facts developed in Wiles and
Schleibaum. To the extent the majority reasons that Wales'
and Schleibaum's convictions should be vacated because after
looking at the appellate records the majority is convinced the
jury did not render "a verdict, formal or otherwise it has
engaged in a form of the Rule 52 analysis which I advocate.
The majority apparently does not vacate the convictions simply
because of a missing instruction.  The majority finds the
missing instruction merits reversal because it cannot find that
the jury "otherwise" satisfied defendants' Sixth Amendment
rights.

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73a

    The majority contends reversal is required because
Rule 52 review would require a "wrong entity "'-the
appellate court-to make the determination on
materiality. A Rule 52 standard that looks at the
question of whether the jury found the missing
element to be satisfied, rather than what a reasonable
jury would have found, places the determination of
materiality in the "right entity"-the jury.  Applying
such a Rule 52 standard does not offend the Sixth
Amendment by placing the determination of guilt
outside of the jury. See Roy, - U.S. at - - -
117 S. Ct. at 339-40; Sullivan, 508 U.S. at 280, 11;
S. Ct. at 2082 Carella v. California, 491 U.S. 263,
268-70,109 S.Ct. 2419,2422-23, 105 L.Ed.2d 218 (1989);
Rose, 478 U.S. at 580-81, 106 S.Ct. at 3107; cf United
Brotherhood of Carpenters & Joiners of America v.
United States, 330 U.S. 395,408,67 S. Ct. 775,782, 91
L.Ed. 973 (1947), Bollenbach v. United States, 326
U.S. 607,614-15, 66  S. Ct. 402,406,90  L.Ed. 350 (1946)
(strength of evidence no substitute for actual jury
finding).  Here, it is not conclusively established that
the constitutional rights identified in Sullivan as the
basis for an automatic reversal have been violated by
the absence of a materiality instruction alone.  By
labeling the absence of a materiality instruction as
structural error, the majority opinion requires a new
trial without regard to whether the constitutional
guarantee to a fair trial before an impartial jury has
been satisfied.
    I conclude failure to instruct the jury on the
element of materiality, by itself, is trial error.  As
trial error, it is subject to analysis for plain error
under Rule 52(b) in the absence of a timely objection
at trial.  However, as the failure to object was the

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74a

result of defendants' reliance upon the settled law of
this circuit, the government should  bear the burden  of
proving the absence of prejudice. See Viola, 35 F.3d
at 42.
    KELLY and HENRY, Circuit Judges, join in the fore-
going dissent.