United States Court of Appeals

FOR THE EIGHTH CIRCUIT

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Nos. 99-4129EM, 99-4130EM

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_____________ *

*

No. 99-4129EM *

_____________ *

*

United States of America, *

*

Appellee, *

*

v. *

*

Leon J. Howard, Jr., *

* On Appeal from the United

Appellant. * States District Court

* for the Eastern District

_____________ * of Missouri.

*

No. 99-4130EM *

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*

United States of America, *

*

Appellee, *

*

v. *

*

John K. Robinson, *

*

Appellant. *
1The Hon. Charles A. Shaw, United States District Judge for the Eastern District

of Missouri.

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 Submitted: November 14, 2000

 Filed: December 11, 2000

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Before McMILLIAN, RICHARD S. ARNOLD, and BOWMAN, Circuit Judges.

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RICHARD S. ARNOLD, Circuit Judge.

A jury convicted Leon J. Howard and John K. Robinson of the following

offenses: conspiracy to commit wire fraud and interstate transportation of stolen

property, in violation of 18 U.S.C. § 371; thirteen counts of wire fraud, in violation of

18 U.S.C. §§ 1343 and 2; ten counts of interstate transportation of stolen property, in

violation of 18 U.S.C. §§ 2314 and 2; one count of conspiracy to engage in monetary

transactions in criminally derived property that was of a value greater than $10,000, in

violation of 18 U.S.C. § 1956(g)(as it appeared in 1992); and three counts of engaging

in monetary transactions in criminally derived property having a value greater than

$10,000, in violation of 18 U.S.C. §§ 1957 and 2.

On appeal Mr. Robinson asserts that the District Court1 erred in three instances:

(1) in finding that he was an organizer or leader pursuant to U.S.S.G. § 3B1.1(a), (2)

in admitting evidence that Zurich American Insurance Company filed a lawsuit against

a company with which the defendant was associated; and (3) in determining the amount

of the monetary loss for which he was responsible. Mr. Howard argues that the Court

erred in overruling his motion for judgment of acquittal, in finding that he was an

organizer or leader pursuant to U.S.S.G. § 3B1.1(a), and in determining the amount of

the monetary loss for which he was responsible. We affirm. 
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I.

The facts are presented in the light most favorable to the jury's verdict. See

United States v. Maza, 93 F.3d 1390, 1393 (8th Cir. 1996), cert. denied, 519 U.S. 1138

(1997). The facts reveal two schemes. The first scheme, not alleged in the indictment

but relevant for purposes of sentencing, transpired in Iowa. The second scheme was

alleged in the indictment and was the one for which the defendants were convicted. 

In 1992 Mr. Howard and Mr. Robinson, the president of MTL International

Finance, agreed to find investors for the sale and trade of Guaranteed Insurance

Contracts, or GICs. GICs are annuities whose value and payments are guaranteed by

present and future insurance premiums paid to the issuing insurance company.

A. The Iowa Investments

Mr. Howard approached Lyle Pohlman and stated that MTL needed to purchase

a company to sell and trade GICs. Mr. Pohlman sold his corporation, Greystone

International, for $50,000. Barry Balduf, a stockbroker for Bryton Capital

Management, Mr. Pohlman, and Gene Krinn, a Bryton employee, met with officers

from Norwest Bank to open two Greystone accounts. 

Mr. Robinson told Patrick Mitchell and Steve Cameron that MTL had the ability

to invest in the sale and trade of GICs. Mr. Robinson stated that GICs could only be

purchased for ten million dollars, but individual investors could pool their money in a

secured account that would "trigger a line of credit" to purchase the GICs for

approximately 80-85 per cent. of their face value. The GICs could be resold for $10

million, with the investors receiving the profit. Mr. Mitchell and Mr. Cameron each

deposited $25,000 into the Greystone account. Mr. Howard directed Mr. Pohlman to

wire $9,000 to the personal account of one of Mr. Howard's friends. Later, Mr.
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Howard instructed Mr. Pohlman to wire $25,000 to Mr. Howard's account in St. Louis,

Missouri. 

In 1993, a joint venture between MTL and Bushmills Investment, LTD, led to

Casey Paik's investing $250,000. Mr. Paik was informed that MTL could provide

GICs that would be bought at one price and sold at another, with the investors

receiving the profit. 

Mr. Howard told David Hollander that Mr. Robinson was his business associate

and informed Mr. Hollander that he could invest money into a secured account that

would be used to "trigger a line of credit" to purchase the GICs. The profit from the

investment would result from buying the GIC at one price and selling it at another. Mr.

Hollander invested $70,000 in the Greystone account.

Mr. Howard instructed Barry Balduf to issue a $200,000 cashier's check to Joel

Jordan and Kenneth Mitchell, stating that the money was to be used to trigger a $10

million letter of credit to purchase a GIC. Norwest Bank could not verify the line of

credit, but on Mr. Robinson's prompting Mr. Krinn delivered the check to Mr. Jordan

and Mr. Mitchell. Later that day, Mr. Mitchell and Mr. Jordan attempted to cash the

check and wire money to a Swiss account. Mr. Krinn obtained a court order blocking

the wire transfer.

B. The Scheme Charged in the Indictment

Mr. Howard was introduced to Sidney Stires of Stires & Company, a New York

investment firm. He told Mr. Stires that MTL could obtain GICs from major European

insurance companies. Mr. Howard enlisted Stires & Co. to solicit institutional

investors. Using information provided by Mr. Howard and Mr. Robinson, Stires & Co.

prepared a brochure explaining GICs.
2Mr. Walker pleaded guilty to engaging in a monetary transaction in property

derived from specified unlawful activity and agreed to cooperate with the government

in its investigation and prosecution of Mr. Howard and Mr. Robinson.

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Mr. Howard told Harry Walker2 that Mr. Howard and Mr. Robinson had the

exclusive right to sell GICs in this country. Mr. Howard stated that individuals could

pool their money to trigger a leveraged line of credit and receive a profit from the resale

of the GICs. Mr. Walker told Greg Redelico that small investors could pool their

money to trigger a line of credit to purchase GICs. Mr. Redelico solicited Bruce

Perhach, Rick Cyburt, and Dennis Kavanaugh to invest in GICs. Mr. Howard sent Mr.

Walker an investor agreement stating that the money from the investment was to be

deposited in the Greystone account. Later Mr. Robinson opened an MTL account at

Stires & Co. Both he and Mr. Howard instructed Mr. Walker to have the investors

deposit their money into the MTL account at Stires & Co. instead of the Greystone

account. 

Mr. Howard had $60,000 wired from the MTL account at Stires & Co. to his

account in St. Louis. On the same day, he wired $12,000 from his St. Louis account

to an MTL account in California. The next day, $10,000 was wired from the MTL

account at Stires & Co. to Mr. Howard's account in St. Louis. The same day, he wired

$5,000 from his St. Louis account to a MTL account in California. Approximately

$5,000 was wired from the MTL account at Stires & Co. to Mr. Howard's personal

account in St. Louis.

Mr. Walker opened a corporate investment account at Stires & Co. under the

name of Equity Action. Mr. Robinson and Mr. Howard told Mr. Walker that the

profits from GIC transactions would be deposited in the Equity Action account at Stires

& Co. Mr. Walker also opened a Equity Action account in Pennsylvania.
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Mr. Walker wired $70,000 from the Equity Action account at Stires & Co. to an

Equity Action account in Pennsylvania. Mr. Howard directed Mr. Walker to wire

$40,000 from the Equity Action account in Pennsylvania to Mr. Howard's account in

St. Louis. Mr. Howard then wired $10,000 from his St. Louis account to the MTL

account in California. Later, approximately $5,000 was wired from the MTL account

at Stires & Co. to Mr. Howard's account in St. Louis. The next day, Mr. Howard wired

approximately $4,000 from his account in St. Louis to the MTL account in California.

Mr. Walker wired $50,000 from the Equity Action account at Stires & Co. to the

Equity Action account in Pennsylvania.

Mr. Howard directed Mr. Walker to wire $10,000 from the Equity Action

account in Pennsylvania to Mr. Howard's account in St. Louis. The next day, Mr.

Walker wired $15,000 from the Equity Action account at Stires & Co. to the Equity

Action account in Pennsylvania. Mr. Walker sent a $5,000 check to Mr. Perhach and

a $3,000 check to Rick Cyburt as the "profit" from their investment. 

Eugene Harrow referred Josef Green and John Marino to Mr. Walker. Mr.

Green was told that his money would remain in a secured account. He invested

$500,000 in the Equity Action account at Stires & Co. Mr. Marino deposited $100,000

into the Equity Action account at Stires & Co.

Mr. Walker wired $500,000 from the Equity Action account at Stires & Co. to

the Equity Action account in Pennsylvania. Mr. Howard, Mr. Robinson, and Mr.

Walker agreed that Mr. Walker would wire transfer $420,000 to Mr. Howard's St.

Louis account. Later, Mr. Howard wired $155,000 to the California MTL account. 

After trial, the jury found both defendants guilty of the charges in the

indictments. The jury found, in effect, that defendants' representations were false.

They had no authority to sell GICs on behalf of any European insurance company or

anybody else, and they had no intention of paying over to investors profits in the
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amounts promised. The District Court sentenced Mr. Robinson to 87 months (7 years

and three months) of incarceration and three years of supervised release. Mr. Howard

received 120 months imprisonment (10 years) and three years of supervised release.

We discuss each defendant's assignments of error in turn.

II.

A.

First, Mr. Robinson contends that the Court erred in sustaining the government's

request that he receive an aggravating-role enhancement as an organizer or leader of

criminal activity pursuant to U.S.S.G. § 3B1.1(a). Mr. Robinson argues that the key

determinations under U.S.S.G. § 3B1.1 are control and organization, and that he did

not control or organize the acquisition of funding for the GICs. We disagree. 

In determining a defendant's level of participation in criminal activity, the trial

court looks at the offense of conviction and any relevant conduct, including the

defendant's participation in all aspects of the scheme. See United States v. Hanley, 190

F.3d 1017, 1034 (9th Cir. 1999) (holding that the district court did not err in

considering defendant's role in the entire wire-fraud scheme in applying a four-level

increase for his role in a money-laundering scheme); United States v. Coon, 187 F.3d

888, 899 (8th Cir. 1999), cert. denied, 120 S. Ct. 1417 (2000) (holding that the court

should consider the overall conspiracy and all its relevant conduct in applying U.S.S.G.

§ 3B1.1 to a RICO case). A court of appeals will reverse a trial court's determination

of a defendant's role in an offense only for clear error. United States v. Dijan, 37 F.3d

398, 403 (8th Cir. 1994), cert. denied, 514 U.S. 1044 (1995). 

There is sufficient evidence in the record to show that Mr. Robinson had a

controlling role in the acquisition of funds for the investments in GICs. He solicited

investments from Patrick Mitchell and Steve Cameron. He entered into an agreement
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with Bushmills Investment, LTD which led to the Paik investment. He opened an

account in the name of MTL with Stires & Co. into which he directed Mr. Walker to

have the investors deposit their money.

Moreover, "[w]e define the term 'organizer or leader' broadly." United States v.

Grady, 972 F.2d 889 (8th Cir. 1992) (per curiam). A close link to the source of the

product which is the underlying basis of the criminal activity is evidence that a

defendant is an organizer or leader. See id. (holding defendant's "sole access to the

money orders, which were the essential ingredient of the crime," was sufficient to make

him an organizer or leader."); United States v. Williams, 902 F.2d 675, 678 (8th Cir.

1990) (holding defendant's "presence and control over the principal instrumentality of

this criminal scheme" was sufficient to make him a leader or organizer). Decisionmaking authority is also strong evidence that a defendant is an organizer or leader.

Dijan, 37 F.3d at 403-04.

Here, the facts bear witness to Mr. Robinson's decision-making authority and his

self-proclaimed "close link" to the scheme's source. Mr. Robinson ordered Gene Krinn

to give the cashier's check to Joel Jordan and Kenneth Mitchell. He provided

information on the source of GICs for the Stires & Co. marketing brochure. He opened

an MTL account with Stires & Co. He contacted Mr. Walker and directed him to have

investors deposit their money into the MTL account at Stires & Co. He sent letters to

Mr. Walker stating that profits from the GIC transactions would be deposited into the

Equity Action account, and that Mr. Walker was responsible for making payments to

his investors. Mr. Robinson, along with Mr. Howard and Mr. Walker, agreed to wire

funds from the Equity Action account in Pennsylvania to Mr. Howard's St. Louis

account. Furthermore, Mr. Robinson's "close link" manifests itself through his

representations to Mr. Mitchell and Mr. Cameron that he had the relationship with the

issuing insurance companies necessary to purchase GICs. We hold that the District

Court's determination that Mr. Robinson was a leader or organizer was not clearly

erroneous. 
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Next, Mr. Robinson contends that the Court erred in admitting evidence that

Zurich American filed suit against him. In May and June of 1993, an attorney for

Zurich American Insurance Company wrote Mr. Robinson and demanded proof of his

authority to represent Zurich American in the trade of GICs. Mr. Robinson stated that

he thought he had implied authority through an unnamed European insurance syndicate.

Zurich American filed a civil suit which was settled with Mr. Robinson agreeing not

to claim that he represented Zurich American in the trade of GICs. Mr. Robinson

argues that this evidence should have been excluded under Rule 404(b) of the Federal

Rules of Evidence. According to Mr. Robinson the evidence was not probative but

highly prejudicial and inflammatory. We disagree.

Under Rule 404(b) of the Federal Rules of Evidence, evidence of prior bad acts,

though inadmissible to show that a person acted in conformity with the prior acts, may

be admissible for other purposes, such as proof of motive, opportunity, intent, and

absence of mistake or accident. Fed. R. Evid. 404(b). Such evidence is admissible if

it is " '(1) relevant to a material issue; (2) proved by a preponderance of the evidence;

(3) higher in probative value than in prejudicial effect; and (4) similar in kind and close

in time to the [event at issue].' " Berry v. Oswalt, 143 F.3d 1127, 1132 (8th Cir. 1998)

(quoting United States v. Aranda, 963 F.2d 211, 215 (8th Cir.1992)).

An appellate court reviews a district court's evidentiary decisions for abuse of

discretion. United States v. Mosby, 101 F.3d 1278, 1282 (8th Cir. 1996), cert. denied,

520 U.S. 1254 (1997). This Court "will reverse only when such evidence clearly had

no bearing on the case and was introduced solely to prove the defendant's propensity

to commit criminal acts." United States v. Brown, 148 F.3d 1003, 1009 (8th Cir.

1998), cert. denied, 525 U.S. 1169 (1999). 

The investments alleged in the indictment occurred after Mr. Robinson settled

with Zurich American. The knowledge possessed by Mr. Robinson when he (or agents

of MTL) made representations to the investors involved in the indictment is highly
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probative. Evidence of Zurich American's suit against Mr. Robinson and MTL

established that Mr. Robinson was on notice that he did not have Zurich American's

permission to claim that he represented it in the sale and trade of GICs. His settlement

of the suit was an admission that he had no such authority. We see no abuse of

discretion in the District Court's determination that the probative value of this evidence

substantially outweighed any prejudicial effect. See United States v. Derring, 592 F.2d

1003, 1007 (8th Cir.1979) (holding the Court does "not reweigh the value of the

material against its potential for harm to the defendant, but determines only whether the

district judge abused his discretion in admitting it"). 

Lastly, Mr. Robinson contends that the Court erred in increasing his offense level

by 11 levels. According to U.S.S.G. § 2F1.1(b)(1) ". . . If the loss exceeded $2,000,

increase the offense level as follows: . . . (L) More than $800,000 add 11." However,

Mr. Robinson argues that the loss was more than $500,000 and less than $800,000 so

that the increase would be ten under U.S.S.G. § 2F1.1(b)(1)(K). Mr. Robinson asserts

that the total loss resulting from the indicted offenses was $720,000, and that he should

not be charged with the losses from the Iowa investors, which totaled $370,000, since

these losses were not charged in the indictment. We disagree.

A district court's determination of whether particular acts fall within the scope

of relevant conduct under U.S.S.G. § 1B1.3 is a factual determination subject to review

for clear error. United States v. Plumley, 207 F.3d 1086, 1091(8th Cir. 2000). "[T]he

focus is on the specific acts and omissions for which the defendant is to be held

accountable in determining the applicable guideline range, rather than on whether the

defendant is criminally liable for an offense as a principal, accomplice, or conspirator."

U.S.S.G. § 1B1.3, comment (n. 1); see also U.S.S.G. § 1B1.3, comment (nn. 9 and 10).

Mr. Robinson's actions in Iowa "were part of the same course of conduct or

common scheme or plan as the offense of conviction." U.S.S.G. § 1B1.3(a)(2). Mr.

Robinson told Mr. Mitchell and Mr. Cameron, both Iowa investors, that they could
3Mr. Robinson argues that the $8,000 returned to Mr. Perhach and Mr. Cyburt

should not be included in the total loss. Even so, the subtraction of these recovered

amounts fails to affect Mr. Robinson's offense level.

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pool their money to "trigger a line of credit" to purchase the GICs, which would then

be resold at a profit. This claim was identical to the ones made by Mr. Howard, Mr.

Walker, and Mr. Redelico to the investors involved in the indicted offenses.

What is more, Mr. Robinson's actions in Iowa and the criminal activity in the

indictment involve the same modus operandi. Either Mr. Robinson, Mr. Howard, or

Mr. Walker was responsible for the withdrawal and wire transfer of investor funds to

unauthorized accounts. Both in Iowa and in the offenses charged here, either Mr.

Robinson or Mr. Howard secured the services of well-respected and unsuspecting

businesses such as Bryton and Stires & Co. to aid in their scheme. The Court's

determination that Mr. Robinson's activities in Iowa were relevant conduct under

U.S.S.G. § 2F1.1 and should be added to the total loss resulting from the criminal

activity alleged in the indictment was not clearly erroneous.3

B. 

Mr. Howard first claims that the Court erred in denying his motion for judgment

of acquittal. Mr. Howard argues that there was insufficient evidence to show he

knowingly participated in a fraudulent scheme or that he participated in money

laundering or in a scheme to wire transfer money in excess of $5,000 knowing that the

sums were obtained by fraud. We disagree. 

In reviewing the denial of a motion for acquittal on the ground of insufficiency

of the evidence, we review the evidence in the light most favorable to the verdict, and

reverse only if no reasonable jury could have found the defendant guilty beyond a

reasonable doubt. United States v. Whitehead, 176 F.3d 1030, 1041 (8th Cir. 1999).
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" 'The government is given the benefit of any reasonable inferences drawn from the

evidence.' " United States v. Garfinkel, 29 F.3d 1253, 1257 (8th Cir. 1994) (quoting

United States v. Patterson, 886 F.2d 217, 218 (8th Cir.1989)). The essential elements

of a crime may be proved by circumstantial evidence. Holland v. United States, 348

U.S. 121, 140 (1954); United States v. Valverde, 846 F.2d 513, 515 (8th Cir. 1988).

There is sufficient evidence in the record upon which a reasonable jury could

have found Mr. Howard guilty beyond a reasonable doubt. Mr. Howard told David

Hollander that his $70,000 investment would be used to "trigger a line of credit" which

would be used to buy and sell GICs. This was the same claim made by Mr. Robinson

to Mr. Mitchell and Mr. Cameron. It was the same claim made by Mr. Redelico to

Messrs. Cyburt, Perhach, and Kavanaugh, and it was the same claim made by Mr.

Walker to Josef Green. 

There is also evidence that Mr. Howard knew that Mr. Walker would procure

other investors. Mr. Howard provided a form contract to Mr. Walker which stated that

investors should deposit their money into the Greystone account. Mr. Howard

instructed Mr. Walker to add language to the investment agreements stating that

"100 %" of the investor's money would stay in a secured account for the "duration," and

that only the investors would have access to the account. 

Furthermore, Mr. Howard knew that the accounts from which he had money

transferred contained investor money. Mr. Howard caused Mr. Pohlman to wire money

from the Greystone account to unauthorized accounts in St. Louis after the Mitchell and

Cameron deposits. Mr. Robinson and Mr. Howard instructed Mr. Walker to have the

investors deposit money into the MTL account at Stires & Co. Subsequently, Mr.

Howard received several wire transfers of money from the MTL account at Stires &

Co. to his account in St. Louis. On several occasions Mr. Howard received money

from investor accounts and then wired money from his St. Louis account to an MTL
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account in California. We hold that the District Court did not err in denying Mr.

Howard's motion for judgment of acquittal.

Second, Mr. Howard claims that the Court improperly determined that he was

subject to a four-level enhancement pursuant to U.S.S.G. § 3B1.1 for having an

aggravating role in the offense. At sentencing, Mr. Howard conceded that if the

District Court found that the scheme was "otherwise extensive that there would be an

enhancement." Howard Sentencing Hearing Transcript at 11. In reply, the District

Court stated, "in the Court's mind . . . this operation was quite extensive . . . So that

objection is overruled." Id. Below, Mr. Howard did not base his objection to the

enhancement on the Court's finding that he was an leader or organizer, but on whether

the scheme was "otherwise extensive." Therefore, we do not reach the merits of Mr.

Howard's claim that he was not a leader or organizer because it is raised for the first

time on appeal. See Dorothy J. v. Little Rock Sch. Dist., 7 F.3d 729, 734 (8th Cir.

1993). 

Lastly, Mr. Howard claims that the Court erred in finding the amount of loss with

which he was associated pursuant to § 2F1.1(b)(1)(L). In arriving at the total monetary

loss of $1,090,000 the Court added the losses suffered by both the Iowa investors and

the investors in the indicted criminal activity. Mr. Howard argues that the losses

attributed to him were not reasonably foreseeable acts by others that he would have

known about or anticipated. We find no merit in this contention.

A district court's determination of whether particular acts fall within the scope

of the relevant conduct sentencing guideline, U.S.S.G. § 1B1.3, is subject to review for

clear error. United States v. Sheahan, 31 F.3d 595, 599 (8th Cir. 1994). The evidence

suggests that the criminal activity in Iowa, like that charged here, was a joint effort by

Mr. Howard and Mr. Robinson. Mr. Howard solicited Mr. Hollander using the same

representations Mr. Robinson made to the Iowa investors. Moreover, soon after Mr.

Robinson's solicitation prompted Steve Cameron and Patrick Mitchell to deposit money
4Mr. Howard also argues that Mr. Hollander's loss of $70,000 should not be

included in the total loss because Mr. Hollander recovered his investment in a separate

suit. However, even if $70,000 were subtracted from the total loss attributed to Mr.

Howard, there would be no change in his resulting offense level. Moreover, Mr.

Howard's motions asking that certain investigative reports and material be turned over

to him, and that his appointed counsel be removed from the case, are denied.

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into the Greystone account, Mr. Howard arranged a wire transfer from the Greystone

account to his friend's personal account.

Likewise, Mr. Howard knew that Mr. Walker would recruit other investors. Mr.

Howard faxed a sample contract to Mr. Walker instructing potential investors into

which account to deposit their money. He told Mr. Walker what terms should appear

in the contract. Morever, Mr. Howard knew that the accounts from which he arranged

transfers contained investor funds. Thus, the losses resulting from the indicted criminal

activity as well as that taking place in Iowa were reasonably foreseeable to Mr.

Howard, and the Court committed no clear error in attributing those losses to him.4

The judgments are affirmed.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.