UNITED STATES COURT OF APPEALS

FIFTH CIRCUIT

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No. 93-4935

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UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

BRUCE R. WEST, SR.,

Defendant-Appellant.

__________________________________________________

Appeals from the United States District Court

for the Eastern District of Texas

__________________________________________________

(May 31, 1994)

Before WISDOM, BARKSDALE, and EMILIO M. GARZA, Circuit Judges.

EMILIO M. GARZA, Circuit Judge:

Defendant Bruce West, Sr. was tried before a jury and

convicted of ten counts of bankruptcy fraud, in violation of 18

U.S.C. § 152 (1988), eleven counts of money laundering, in

violation of 18 U.S.C. § 1956, and one count of conspiring to

commit bankruptcy fraud, in violation of 18 U.S.C. § 371. West

now appeals his conviction, contending both that the indictment

did not properly charge violations of the bankruptcy fraud and

money laundering statutes and that the district court's admission

of and refusal to admit certain evidence deprived him of a fair

trial. We affirm.
 

1 Jett wrote checks for three payments that were payable

to West; West deposited these checks into an account held by

Exalter, Inc. ("Exalter"), a Texas corporation formed by West and

owned by West's three children. West deposited a fourth check

into an account held by Sandra Malmay, his then-girlfriend; 

Malmay subsequently transferred the proceeds of that check into

Exalter's account. West also deposited three checks, made

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I

Bruce West, Sr., a Texas real estate developer, experienced

serious financial problems as a result of the decline in the

Texas economy during the mid- to late 1980s. West eventually

filed a petition in bankruptcy on April 2, 1990. This criminal

case emanates from West's bankruptcy filing, with many of the

charges contained in the indictment based on three transactions

that West participated in shortly before filing his bankruptcy

petition.

A

In April 1989, West sold his homestead ("Dondi Farms") to

Earlene Jett, as trustee for her son, Scott Mays. West received

$75,000 in cash and a note signed by Jett in the amount of

$277,500 ("the Jett note"). As part of the transaction, West

leased, and held an option to purchase, a lakehouse owned by

Jett. The Jett note was payable in quarterly installments of

$8900; under the terms of the sale contract, however, West

allowed Jett to deduct from the note payments the monies due Jett

as a result of the lakehouse lease. West received ten payments

on the Jett note, all of which are the basis of money laundering

charges.1
payable to Exalter, directly into Exalter's account. West

deposited the final three checks, which were made payable to him,

into Malmay's account; the proceeds from these checks apparently

were not transferred to Exalter's account.

 

2 West also defaulted on a second loan secured by three

relatively worthless over-the-counter stocks.

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In June 1990, West arranged for a third party to purchase

Jett's lakehouse for an amount slightly exceeding its existing

mortgage. After the sale had closed, Jett paid the

excess))$2,613))to West, who subsequently gave the money to Betty

Ruben and Jo Ann Johnson as compensation for finding the buyer. 

Jett also received a refund on her insurance escrow account,

which she paid to West and he then paid to Johnson. West's

involvement with the sale of the lakehouse and its proceeds forms

the basis for a single count of bankruptcy fraud.

B

The second transaction at issue involved the 1989 purchase

of two notes executed by West and held by the Federal Deposit

Insurance Corporation ("FDIC"). In 1984, West purchased a

building in Addison, Texas ("the Broadway building") for

$650,000, financing $350,000 of the purchase price with a loan

from Parkway Bank & Trust ("Parkway"). A deed of trust for the

building secured West's promissory note. In 1988, Parkway

failed, the FDIC was appointed as receiver, and West defaulted on

the loan.2 The FDIC, through bank liquidation specialist

Lawrence Greer, began negotiating with West to work out or

liquidate the loans for the sum of $150,000. West informed Greer
 

3 Although West's brief on appeal suggested that he was

not challenging any of the factual findings made by the jury,

West does argue that the FDIC knew of and encouraged his use of a

straw purchaser. Indeed, at oral argument West's counsel

asserted that two FDIC witnesses))Greer and Walter Keller, who

dealt with West after Greer left the agency))committed perjury by

denying they knew that West was the actual purchaser of the

notes.

 

4 West obtained the $150,000 when Jack Franks))a West

business associate))repaid a loan made by West, which was secured

by a lien on real estate that Franks owned. West previously had

reported to the FDIC that the value of his lien was "materially

affect[ed]" because prior, senior liens on the real estate were

"in default and posted for foreclosure."

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that although he did not have the funds to make payment on the

Parkway notes, he had "arranged for and [had] an agreement from a

company to make it possible to purchase the notes for $150,000." 

After receiving assurances from West that the transaction between

West and North Star Funding ("North Star")))the corporation that

had agreed to purchase the Parkway notes))occurred at "armslength," the FDIC agreed to sell the notes to North Star. 

Unbeknownst to the FDIC, however, North Star had agreed to act as

a nominee, or "straw," purchaser on West's behalf.3 Thus, West

supplied the $150,000 needed to purchase the notes and later

arranged for North Star to foreclose on the notes and sell the

Broadway building to Exalter, his children's corporation.4

C

The third transaction at issue involves Exalter's purchase

and subsequent sale to West of a house in Frisco, Texas ("the

Frisco house"). In June 1989, Richard McCally sold the Frisco

house and an adjacent vacant lot to Exalter in exchange for
 

5 McCally testified that, until the date of closing, he

believed West to be the purchaser. West concedes that he

conducted the negotiations resulting in Exalter's purchase of the

Frisco house.

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$125,000 in cash and the Broadway Building, which McCally valued

at $545,000.5 West subsequently purchased the Frisco house, and

used it as his homestead, from Exalter for $622,500, which

included $312,524 in cash, a personal note in the amount of

$277,500, which was secured by the Jett note, and a promissory

note in the amount of $32,746, which was secured by a first lien

deed of trust on the property. The cash portion of the purchase

price consisted of "loans" previously made by West to Exalter. 

West's transfer of a security interest in the Jett note to

Exalter forms the basis of a single bankruptcy fraud count.

D

West's failure to report his interest in two bank accounts

forms the basis for two additional counts of bankruptcy fraud))

Counts 24(a) and 26. In April 1989, Jack Franks wired $219,930

to Commonwealth National Bank in West's name. Because West did

not have an account at Commonwealth, a bank employee opened an

account in West's name into which the funds could be deposited. 

In May, West ordered the bank to close the account and disburse

the funds as follows: a $150,000 cashier's check payable to the

FDIC listing North Star Funding as the remittitur, which West

subsequently presented to the FDIC in exchange for the Parkway
 

6 This deposit forms the basis for one count of

bankruptcy fraud))Count 7.

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notes; $50,000 deposited into a new account in Exalter's name;6

and the balance of $19,930 in cashier's checks payable to West.

Count 26 charged West with fraudulently transferring and

concealing funds in a second Commonwealth account, which was

opened by Sandra Malmay, West's then-girlfriend, in September

1989. Malmay testified that West directed her to open the

account in her name because he was afraid that any accounts held

in his name would be garnished. Malmay further stated that

checks drawn on the account "mostly" benefitted West and were

paid with funds deposited by West. Moreover, West deposited

several payments made pursuant to the Jett note into the account,

the proceeds of which then were transferred to Exalter.

Count 31 charged West with money laundering. The

transactions underlying this count involved two automobiles))a

1962 Mazda coupe and a 1935 Austin. West failed to list the

Mazda on the appropriate bankruptcy schedules and erroneously

indicated that he held only a one-half interest in the Austin. 

However, West subsequently conveyed the cars to Great Cars, Inc.

("Great Cars") in exchange for a dune buggy and $5,750 cash,

which was deposited into the Malmay account.
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II
 

7 The relevant portion of this statute provides that

"[w]hoever . . . in contemplation of a case under title 11 by or

against him . . . , or with intent to defeat the provisions of

title 11, knowingly and fraudulently transfers or conceals any of

his property" shall be guilty of bankruptcy fraud. 18 U.S.C.

§ 152 ¶ 7.

 

8 With regard to this argument, West does not challenge

the sufficiency of the evidence as to the mens rea requirements

found in paragraph 7 of § 152)) i.e., whether he transferred or

concealed property (1) knowingly, (2) fraudulently, and (3) in

contemplation of a case under title 11 or with intent to defeat

the provisions of title 11. Instead, West argues only that the

government is precluded from prosecuting him for transfers

occurring more than one year prior to the date he filed his

bankruptcy petition.

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West was convicted of several counts of bankruptcy fraud, in

violation of 18 U.S.C. § 152.7 Three of these counts charged

West with fraudulently transferring funds to Exalter during

February and March 1989. West contends that transfers, which

occurred more than one year prior to the filing of his bankruptcy

petition, cannot provide the basis for a § 152 prosecution

because the transfers were "outside the jurisdiction of the

Bankruptcy Code." As support for his construction of § 152, West

points to 11 U.S.C. § 548(a), which allows a bankruptcy trustee

"to avoid any transfer of an interest of the debtor in property

. . . that was made . . . on or within one year before the date

of the filing of the petition." West submits that because the

trustee lacked jurisdiction over the transferred funds, the

government may not prosecute him for bankruptcy fraud.8

We disagree with West's interpretation of § 152. The plain

language of § 152 certainly cannot be read to impose the
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requirement suggested by West. See United States v. Moody, 923

F.2d 341, 347 (5th Cir. 1991) (noting that "words in a statute

are to be given their plain and ordinary meaning"). Moreover, in

light of the explicit intent requirements found in § 152, we will

not transplant from the Bankruptcy Code the additional

requirement that a fraudulent transfer, to be prosecutable as

bankruptcy fraud, must be made within one year prior to the

defendant's filing of his bankruptcy petition. A defendant may

knowingly and fraudulently transfer property in contemplation of

or with the intent to defeat the provisions of Title 11 without

necessarily transferring the property within one year before

filing a bankruptcy petition. Cf. Ralph C. McCullough, II,

Bankruptcy Fraud: Crime Without Punishment, 96 Com. L. J. 257,

268 (1991) ("Theoretically, bankruptcy fraud could occur in

contemplation of an apparently inevitable bankruptcy which the

debtor later managed to escape."). Indeed, a knowledgeable

defendant bent on pursuing a fraudulent course of action would

effect a fraudulent transfer outside the one year period within

which the bankruptcy trustee could rescind it. See United States

v. Dandy, 998 F.2d 1344, 1348 (6th Cir. 1993) (defendant

convicted of bankruptcy fraud when he exercised power over the

bankrupt corporation "for exactly one year and one day in order

to prevent [the bankrupt] from declaring bankruptcy during the

one-year period within which [the defendant's diversion of

assets] could be rescinded as an avoidable transfer under
 

9 Notwithstanding West's contentions to the contrary,

that fraudulent transfers are made in contemplation of title 11

or with the intent to defeat the provisions of title 11))a

question that must be resolved by the jury))provides federal

courts with jurisdiction.

 

10 West alludes to, but does not directly assert, the

argument that his discharge in bankruptcy, entered in a

bankruptcy proceeding to which an agency of the United States was

a claimant, precluded a criminal prosecution for bankruptcy

fraud. To the extent West does assert this argument, however, we

reject it. See United States v. Tatum, 943 F.2d 370, 382 (4th

Cir. 1991) (holding that a discharge in bankruptcy does not

preclude a subsequent criminal prosecution for bankruptcy fraud).

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bankruptcy law"); Stegeman v. United States, 425 F.2d 984, 986

(9th Cir. 1970) (§ 152 "`attempts to cover all the possible

methods by which a bankrupt . . . may attempt to defeat the

Bankruptcy Act through an effort to keep assets from being

equitably distributed among creditors.'") (citation omitted). 

Consequently, we hold that the government may prosecute

individuals under 18 U.S.C. § 152 for transfers of property

occurring more than one year prior to the filing of a petition in

bankruptcy if such transfers are made knowingly, fraudulently,

and in contemplation of a case under title 11 or with intent to

defeat the provisions of title 11.9 Cf. United States v. Grant,

971 F.2d 799, 805 (1st Cir. 1992) (refusing to apply the

"relation back" doctrine developed under the Bankruptcy Act in a

criminal bankruptcy fraud case because the doctrine was not

"designed to insulate bankruptcy fraud, either in the bankruptcy

proceeding itself or in any related criminal proceeding").10
 

11 West's reply brief characterizes his argument as a

challenge to the sufficiency of the evidence or as a claim of

"plain error" under Fed. R. Crim. P. 52(b). We, however, believe

that West's argument properly should be viewed as a challenge to

the sufficiency of the indictment. See United States v.

Cavalier, 17 F.3d 90, 92 (5th Cir. 1994) (rejecting a similar

argument made as a challenge to the sufficiency of the

indictment); United States v. Johnson, 971 F.2d 562, 567 (10th

Cir. 1992) ("Although appellant's argument is characterized as a

challenge to the sufficiency of the evidence, it raises a

question concerning the proper scope of § 1957 and it requires us

to interpret the language of the statute."); United States v.

Jackson, 935 F.2d 832, 839-40 (7th Cir. 1991) (noting that

although the defendant styled a similar argument "in terms of the

sufficiency of the evidence, we believe that it involves a

preliminary question of statutory construction.").

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III

West next challenges the sufficiency of Counts IX through

XVIII and Count XXXI of the indictment, arguing that the

government failed to adequately allege the elements of the

charged offenses)) money laundering, in violation of 18 U.S.C. §

1956.11 "Whether an indictment sufficiently alleges the elements

of an offense is a question of law to be reviewed de novo." 

United States v. Shelton, 937 F.2d 140, 142 (5th Cir.), cert.

denied, ___ U.S. ___, 112 S. Ct. 607, 116 L. Ed. 2d 630 (1991). 

To obtain a conviction for money laundering, the government must

prove "[t]hat the defendant 1) conducted or attempted to conduct

a financial transaction, 2) which the defendant knew involved the

proceeds of unlawful activity, 3) with the intent [either] to

promote or further unlawful activity" or to conceal or disguise

the nature, location, source, ownership, or control of the

proceeds of unlawful activity. United States v. Ramirez, 954
 

12 Bankruptcy fraud is a specified unlawful act under the

money laundering statute. See 18 U.S.C. § 1956(c)(7)(D).

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F.2d 1035, 1049 (5th Cir.), cert. denied, ___ U.S. ___, 112 S.

Ct. 3010, 120 L. Ed. 2d 884 (1992); see 18 U.S.C.

§ 1956(a)(1)(A)(i) & (B)(i). The government submits that West

violated the money laundering statute by accepting and depositing

payments received pursuant to the Jett note and his sale of the

two automobiles to Great Cars, Inc., acts that constitute

bankruptcy fraud.12

West contends that the crime of money laundering "must

always have at its core [the] act of taking `dirty money' and

making it `clean.'" In contrast, West submits that "[t]he act at

the core of this case . . . was the taking of `clean money' and

making it dirty.'" In other words, West contends the monies he

received from Jett and Great Cars were not proceeds of some

unlawful activity, but instead constituted the proceeds of lawful

activities))namely, Jett's purchase of Dondi Farms and Great

Cars' purchase of the two automobiles. We disagree. The mere

fact that Jett and Great Cars were innocent third parties))i.e.,

they did not conspire with West to commit bankruptcy fraud))does

not preclude West's conviction for money laundering. Instead,

the checks that Jett and Great Cars gave to West involved the

proceeds of unlawful activity))West's attempts to fraudulently

conceal assets, in contemplation of a case under title 11 or with

intent to defeat the provisions of title 11. Had West not
 

13 In his reply brief, West alludes to the argument that

because the bankruptcy fraud offenses underlying several of the

money laundering counts were completed when West transferred the

security interest in the Jett note to Exalter, subsequent

deposits of payments made on the note could not constitute money

laundering. However, we rejected this very view in Cavalier. 

See 17 F.3d at 93 ("According to Cavalier, one cannot promote a

completed unlawful activity for the purposes of

§ 1956(a)(1)(A)(i). We disagree.") (footnote omitted); see also

United States v. Paramo, 998 F.2d 1212, 1218 (3d Cir. 1993)

(same), cert. denied, ___ U.S. ___, 114 S. Ct. 1076, ___ L. Ed.

2d ___ (1994).

 

14 Our conclusion is supported by United States v. Levine,

970 F.2d 681, 686 (10th Cir. 1992). In Levine, the defendants

engaged in a scheme to hide the existence of four tax refund

checks to which their creditors or the bankruptcy estate was

entitled. The court held that the refund checks, which were

issued by innocent third parties))the Federal government and the

state of Colorado)) "came from an unlawful source as they

emanated from a bankruptcy fraud." Id. Consequently, the court

upheld the defendants' money laundering convictions.

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undertaken such a course of action, he would not have received

any funds from Jett or Great Cars. Consequently, the checks at

issue resulted from West's concealment of assets and, therefore,

constituted the proceeds of West's bankruptcy fraud.13 See

Cavalier, 17 F.3d at 92-93. Accordingly, we conclude that West

was properly charged with and convicted of money laundering.14

IV

West also challenges several evidentiary rulings made by the

district court. We review the district court's determinations as

to the admissibility of evidence using the abuse of discretion

standard. See United States v. McAfee, 8 F.3d 1010, 1017 (5th

Cir. 1993) (exclusion of evidence); United States v. Loney, 959

F.2d 1332, 1340 (5th Cir. 1992) (admission of evidence). 
 

15 West has not alleged that he established, by proffer or

otherwise, that non-FDIC employees Jack Franks, Doug Pennington,

Nathan Reeder, or Philip Palmer ever had dealings with the FDIC

during which they became familiar with the FDIC's routine

practices. See Fed. R. Evid. 602 ("A witness may not testify to

a matter unless evidence is introduced sufficient to support a

finding that the witness has personal knowledge of the matter."); 

Fed. R. Evid. 701 (limiting lay witnesses to giving opinions

based upon first-hand knowledge or observation). Consequently,

the district court did not abuse its discretion in excluding

testimony from those individuals regarding the FDIC's routine

practices.

 

16 "Rule 406, on its face, applies in only two instances: 

(1) to show that an individual acted in conformity with his or

her habit, and (2) to show that an organization acted in

conformity with its routine practice." United States v. RangelArreola, 991 F.2d 1519, 1523 (10th Cir. 1993). Here, the first

application is not relevant as the proffered evidence involves

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A

West first contends that the district court erred in refusing

to allow him to introduce evidence that "it was a routine practice

of the FDIC to sell notes held by a failed institution at a

discount, and that the FDIC frequently allowed parties to purchase

their own discounted note through third parties who were . . .

`straw purchasers.'" West argues that such evidence was both

relevant to the issue whether the FDIC knew that West was using

North Star as a straw purchaser in the Parkway notes transaction

and admissible as a "routine practice" of the FDIC.15

Rule 406 provides that "[e]vidence of the habit of a person or

of the routine practice of an organization . . . is relevant to

prove that the conduct of the person or organization on a

particular occasion was in conformity with the habit or routine

practice."16 Fed. R. Evid. 406. Although "[t]here is no precise
neither Greer's nor Keller's habitual conduct. Thus, to utilize

Rule 406, West must demonstrate that the excluded testimony would

have related the routine practice of the FDIC.

 

17 Additionally, to the extent West asserts that the

district court erred in not allowing him to introduce evidence

regarding the FDIC's policies, we disagree. Rule 406 is concerned

not with an organization's policy, but with specific instances of

conduct. Thus, Rule 406 does not require the district court to

admit evidence pertaining to alleged policies followed by the

FDIC. West does not argue that the policy evidence is admissible

under some other rule, and we therefore do not reach this issue. 

See, however, 23 Charles A. Wright & Kenneth W. Graham, Federal

Practice & Procedure § 5274, at 47 & n.35 (1980), where they

distinguish evidence admissible under Rule 406 from evidence

inadmissible under that Rule but admissible under another Rule,

such as Rule 401.

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formula for determining when a practice becomes so consistent as to

rise to the level of routine," "adequacy of sampling and uniformity

of response are controlling considerations." G.M. Brod & Co. v.

U.S. Home Corp., 759 F.2d 1526, 1533 (11th Cir. 1985) (internal

quotations omitted); see also Reyes v. Missouri Pacific R.R., 589

F.2d 791, 795 (5th Cir. 1979).

After reviewing the record, we conclude that the evidence

offered by West to prove the FDIC's routine practice, when

considered in light of the FDIC's dealings with literally thousands

of debtors during the mid- to late 1980s, "falls far short of the

adequacy of sampling and uniformity of response which are the

controlling considerations governing admissibility."17 G.M. Brod,

759 F.2d at 1533. In fact, West has not attempted to make a

comparison of the number of transactions in which the FDIC

allegedly allowed straw purchasers with the number in which the

FDIC did not. See Simplex, Inc. v. Diversified Energy Sys., Inc.,
 

18 West asserted at oral argument that the FDIC officials

"lied."

 

19 Our conclusion is supported by the policies underlying

Rule 406:

The need for [routine practice] evidence rises out of

the fact that in a large organization it is unlikely

that any individual will remember one of a large number

of repeated transactions, and even if he does, the cost

of finding that person and producing him in court is

disproportionate to the value of his testimony. . . . 

[T]he conduct to be defined as `routine practice' for

purposes of Rule 406 should be of such a nature that it

is unlikely that the individual instance can be

recalled or the person who performed it can be located.

23 Wright & Graham, Federal Practice & Procedure § 5274, at 45-

46. Here, as previously noted, the FDIC officials with whom West

dealt testified at trial that they did not direct West to utilize

a straw purchaser.

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847 F.2d 1290, 1294 (7th Cir. 1988) (noting the "the Rule 406

inquiry also necessitates some comparison of the number of

instances in which any such conduct occurs with the number in which

no such conduct took place") (internal quotation omitted).

Finally, we note that both FDIC officials involved in the

negotiations with West testified that they did not direct West to

utilize a straw purchaser.18 See United States v. Newman, 982 F.2d

665, 669 (1st Cir. 1992) ("[W]e are aware of no case, and the

appellant cites none, in which the routine practice of an

organization, without more, has been considered probative of the

conduct of a particular individual within the organization.").

Consequently, the district court did not abuse its discretion in

finding Rule 406 inapplicable to the evidence presented by West.19
 

20 Fed. R. Evid. 609 provides that the credibility of a

witness other than the accused may be attacked using evidence

that the witness has been convicted of a crime punishable by

imprisonment in excess of one year.

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B

West next contends that the district court erred in allowing

the government to impeach Jack Franks, a prosecution witness, by

means of Franks' prior convictions for mail fraud and two other

felonies. Fed. R. Evid. 607 provides that "[t]he credibility of a

witness may be attacked by any party, including the party calling

the witness."20 However, the government may not introduce evidence

of prior conviction "`under the guise of impeachment for the

primary purpose of placing before the jury substantive evidence

which is not otherwise admissible.'" United States v. Hogan, 763

F.2d 697, 702 (5th Cir. 1985) (quoting United States v. Miller, 664

F.2d 94, 97 (5th Cir. 1981), cert. denied, 459 U.S. 854, 103 S. Ct.

121, 74 L. Ed. 2d 106 (1982)). West argues that the government

introduced evidence at trial regarding Franks' prior convictions

for just such a prohibited purpose))namely, to prove West's guilt

by his association with Franks.

West contends that the sole purpose behind Rule 607 is to

allow the government to "pull the sting" of impeachment))i.e., to

allow the government on direct examination to elicit the fact of

conviction so as to prevent the defendant from exposing the

conviction during cross-examination, thereby giving the jury the

impression that the government was concealing a relevant fact about
 

21 The government argued at trial that the fact of

conviction was admissible because "[i]t is appropriate . . . for

the jury to look at all factors which bear on a witness'

credibility, and . . . prior felony convictions have a tendency

and reason to affect the issue of credibility." West argues that

the government's reason for questioning Franks about his prior

convictions is mere subterfuge. We, however, have approved the

very course of action taken by the government. See United States

v. Woolridge, 572 F.2d 1027, 1029 (5th Cir. 1978) ("The

Government's questioning of its own witness concerning prior

felony convictions was admissible to enable the jury to evaluate

the witness' testimony."); see also United States v. Bileck, 776

F.2d 195, 198 (7th Cir. 1985) ("The candor of the prosecutor in

eliciting the fact that a witness has a felony conviction is to

let the jury know precisely the kind of witness he is relying on. 

Such a technique is proper and often used."); United States v.

Bad Cob, 560 F.2d 877, 883 (8th Cir. 1977) (noting that the

introduction on direct examination of a witness's prior

convictions "serves a twofold purpose: (a) to bring out the

witness' `real character,' the whole person, particularly his

credibility, and (b) to draw the teeth out of the adversary's

probable use of the same evidence on cross-examination"); People

v. Minsky, 124 N.E. 126, 127 (N.Y. 1919) (noting that "when a

disreputable witness is called and frankly presented to the jury

as such, the party calling him represents him for the occasion

and the purposes of the trial as worthy of belief").

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its witness. West submits that the government's intent to use

Franks' convictions as substantive evidence of West's guilt is

clear because West "guaranteed" that he would not impeach Franks

using Franks' three prior felony convictions. Over West's

objections and in spite of West's "guarantee," however, the

district court ruled that the government could introduce evidence

of the prior convictions during direct examination.21

After reviewing the record, we conclude that the government's

primary purpose in calling Franks was not to establish West's guilt

by his association with Franks. Indeed, West admits that Franks'

testimony "played a critical role in several facets of the case."
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Moreover, the government neither emphasized nor urged the jury to

consider Franks' convictions as evidence of West's guilt. Cf.

United States v. Hernandez, 921 F.2d 1569, 1582-83 (11th Cir. 1991)

(despite the absence of a cautionary instruction, the district

court did not abuse its discretion in allowing the government to

introduce a codefendant's guilty plea when the government did not

emphasize it or urge the jury to consider it); United States v.

Gorny, 732 F.2d 597, 604 (7th Cir. 1984) (government's impeaching

its own witness was not reversible error where it did not call the

witness "merely for the purpose of introducing irrelevant evidence

or of establishing the defendant's guilt by association with the

witness"). Finally, the district court instructed the jury that it

was to consider the evidence of Franks' prior convictions "solely

in judging the credibility of the witness" and not to consider the

evidence "for any purpose in judging the innocence or guilt of"

West. See Zafiro v. United States, ___ U.S. ___, 113 S. Ct. 933,

939, 122 L. Ed. 2d 317 (1993) (noting that juries are presumed to

follow their instructions). Accordingly, the district court did

not abuse its discretion in allowing the government during direct

examination to inquire about Franks' prior convictions.

C

Prior to trial, West moved in limine for an order directing

the government to refrain from offering evidence pertaining to

(1) West's fluctuating, and generally declining, net worth,

(2) West's purchase and use of cashier's checks during December
 

22 Fed. R. Evid. 404(b) prohibits the government from

introducing such evidence to demonstrate the defendant's bad

character:

Evidence of other crimes, wrongs or acts is not

admissible to prove the character of a person in order

to show action in conformity therewith. It may,

however, be admissible for other purposes, such as

proof of motive, opportunity, intent, preparation,

plan, knowledge, identity, or absence of mistake or

accident.

 

23 See Fed. R. Evid. 403 ("Although relevant, evidence may

be excluded if its probative value is substantially outweighed by

the danger of unfair prejudice . . . .").

 

24 We note that West's failure to specifically identify

those portions of the record relevant to his claim of error

borders on waiving any claim of error. See Fed. R. App. P.

28(a)(4) (noting that the argument section of the appellant's

brief "shall contain the contentions of the appellant with

respect to the issues presented, and reasons therefor, with

citations to the . . . parts of the record relied on") (emphasis

-20-

1987 and January 1988, (3) West's participation in cash

transactions involving amounts of $9,500 during December 1987,

January, May and June 1988, and February 1989, and (4) West's

rental or use of one or more safe deposit boxes. The district

court refused to consider the issue until the government sought to

offer the evidence at trial. When the government did offer the

evidence, West argued that the court should exclude it as evidence

offered by the government merely to prove that he was a person of

bad character.22 Alternatively, West contended that the probative

value of the evidence was substantially outweighed by the danger of

unfair prejudice.23 The district court overruled West's objections.

On appeal, West offers the same arguments to convince us that the

district court erred in admitting the challenged evidence.24 The
added). Instead of adhering to the commands of Rule 28, West

merely alleges that the Rule 404(b) evidence at issue was "quite

significant: see Volume 13, pp. 1351-1388, and virtually all of

Vols. 14, 15, and Vol. 16; Government Exhibits 269-363." 

Although West contends that "it is difficult if not impossible to

simply extract those segments of the transcript where the

evidence is addressed," we have reviewed the cited portions of

the record and have found that much))if not most))of the

testimony simply did not pertain to any challenged evidence. 

Moreover, three of the 82 exhibits cited by West are directly

relevant to Count 4 of the indictment, and West failed to object

at trial to 11 additional exhibits when they were offered by the

government. We trust that in the future, counsel will

specifically identify those portions of the record relevant to

the contentions made in the briefs.

-21-

government, on the other hand, contends that the challenged

evidence is relevant both to West's intent))i.e., whether he acted

in contemplation of bankruptcy or with the intent to defeat the

provisions of title 11))and to plan))his scheme to deter and prevent

creditors from tracing funds to which he had access.

When extrinsic offense evidence is offered, Rule 404(b) calls

for a two-step approach. First, evidence of prior extrinsic acts

must be "relevant to an issue other than the defendant's

character." United States v. Beechum, 582 F.2d 898, 911 (5th Cir.

1978) (en banc), cert. denied, 440 U.S. 920, 99 S. Ct. 1244, 59 L.

Ed. 2d 472 (1979). Evidence is relevant when it has "any tendency

to make the existence of any fact that is of consequence to the

determination of the action more or less probable than it would be

without the evidence." Fed. R. Evid. 401. "Second, the evidence

must possess probative value that is not substantially outweighed

by its undue prejudice and must meet the other requirements of Rule

403." Beechum, 582 F.2d at 911.
-22-

1

Evidence of prior extrinsic acts is admissible to prove "plan"

where the existence of a plan is relevant to some ultimate issue in

the case. United States v. Krezdorn, 639 F.2d 1327, 1331 (5th Cir.

1981). For example,

evidence of an extrinsic offense may be admissible when

it logically raises an inference that the defendant was

engaged in a larger, more comprehensive plan. The

existence of a plan then tends to prove that the

defendant committed the charged crime, since commission

of that crime would lead to the completion of the overall

plan. This use of extrinsic evidence to establish the

existence of a plan is allowed by Rule 404(b) because,

[it] involves no inference as to the

defendant's character; instead his conduct is

said to be caused by his conscious commitment

to a course of conduct of which the charged

crime is only a part. The other crime is

admitted to show this larger goal rather than

to show defendant's propensity to commit

crimes.

Id. (quoting 22 Wright & Graham, Federal Practice & Procedure

§ 5244, at 500 (1978) (footnotes omitted)).

Evidence of prior extrinsic acts also is allowed by Rule

404(b) to establish that the defendant acted with the requisite

criminal intent. See United States v. Goodstein, 883 F.2d 1362,

1370 (7th Cir. 1989) ("Fraudulent intent may be proved by

circumstantial evidence."). "Persons whose intention is to shield

their assets from creditor attack [using the bankruptcy laws] while

continuing to derive the equitable benefit of [their] assets rarely

announce their purpose. Instead, if their intention is to be

known, it must be gleaned from inferences drawn from a course of
 

25 West testified that he did not decide to file his

bankruptcy petition until late March 1990.

-23-

conduct." In re May, 12 B.R. 618, 627 (N.D. Fla. 1980).

Consequently, to prove intent, the government may introduce

evidence relevant to establishing that a defendant engaged in a

course of conduct designed to defraud his creditors or the

bankruptcy trustee.

We conclude that the district court did not err in finding

that the evidence offered by the government was relevant to whether

West acted with the requisite intent or whether he acted pursuant

to a plan to defeat the rights of his creditors. For example, the

financial statements prepared on West's behalf indicate that West's

net worth fell dramatically after 1985. Because the deterioration

of West's financial situation bears strongly on both his incentive

and need to seek bankruptcy protection, such evidence is relevant

not only to West's motive for hiding assets from creditors, but

also indicated that it was very probable that he knew that he was

going to file a petition in bankruptcy long before March 1990.25

See 18 U.S.C. § 152 ¶ 7 (noting that the transfer or concealment of

property must occur "in contemplation of a case under title 11" or

"with intent to defeat the provisions of title 11" to constitute

bankruptcy fraud); see also United States v. Lerch, 996 F.2d 158,

162 (7th Cir. 1993) (admission of tax court and bankruptcy court

opinions from prior proceedings was proper under Rule 404(b)

because they demonstrated the defendant's "motive for hiding
 

26 In fact, West testified that by 1988, his net worth was

"pretty well destroyed" and he practiced "survival techniques" in

an effort to keep his business enterprises alive.

 

27 The district court cautioned:

You must not consider [the testimony regarding West's

financial statements and the financial statements

themselves] in deciding if the Defendant Bruce West,

Sr. committed the acts charged in the Indictment. 

However, you may consider this evidence for other

limited purposes. If you find beyond a reasonable

doubt from the other evidence in this case that the

Defendant did commit the acts charged in the

Indictment, then you may consider evidence of these

Financial Statements to determine whether the Defendant

had the state of mind or intent necessary to commit the

crime charged in the Indictment or whether the

Defendant committed the acts for which he is on trial

in this case by accident or mistake.

13 R. at 1380.

-24-

assets"). Moreover, the financial statements generally were

consistent with West's testimony that his net worth reached its

peak of between seventeen and nineteen million dollars in 1985 and

declined precipitously thereafter.26 Finally, we note that the

district court gave the appropriate limiting instruction.27

Consequently, the district court correctly found that the financial

statements were relevant to the issue of intent. See United States

v. Haymes, 610 F.2d 309, 311-12 (5th Cir. 1980) (in bankruptcy

fraud case, testimony given by the defendant's secretary that he

was concerned about his company's "grave financial condition and

the likelihood it would fall into bankruptcy" was relevant to

intent; when determining when the defendant began acting with the
 

28 The district court instructed the jury as follows:

I want to instruct you that you may not consider [the

testimony regarding West's use of cashier's checks and

the checks themselves] in deciding if the Defendant

Bruce R. West, Sr. committed the acts charged in the

Indictment. However, you may consider this evidence

for other very limited purposes.

If you find beyond a reasonable doubt from other

evidence in this case that the Defendant did commit the

acts charged in the Indictment, then you may consider

evidence of the checks that have just been admitted

into evidence for other very limited purposes, to which

you may consider to determine whether the Defendant had

the state of mind, and I'm talking about the Defendant

Bruce R. West, Sr., had the state of mind or intent

necessary to commit the crime charged in the Indictment

or whether the Defendant acted according to a plan or

in preparation for commission of a crime.

14 R. at 1432.

-25-

requisite intent, "[a] jury must be allowed to put two and two

together").

The evidence regarding West's purchase and use of cashier's

checks during December 1987 and January 1988 also was relevant to

the issue whether West acted with the requisite intent. Miriam

Lewis, West's secretary, testified as to why West directed her to

cash various checks and obtain cashier's checks:

We had conversations about certain checking accounts that

had been attached over periods of time. [West stated,]

"If the money wasn't in a checking account, it couldn't

be attached."

Moreover, the pattern of check use is similar and relatively close

in time to the transactions undergirding the instant case, and the

district court cautioned the jury not to use the evidence

improperly.28 See Lerch, 996 F.2d at 162 (admission of tax court
 

29 Lewis also related that West began talking to her about

declaring bankruptcy in early 1987 and that those conversations

occurred with increasing frequency between that time and 1990.

 

30 See 31 U.S.C. § 5313(a) (requiring financial

institutions involved in a cash transaction exceeding $10,000 to

file a report with the Secretary of the Treasury).

 

31 We note that the district court again cautioned the

jury as to the appropriate use of this evidence:

Ladies and Gentlemen of the jury, any testimony with

regard to obtaining cashier's checks for $9500 and any

-26-

and bankruptcy court opinions from prior proceedings proper under

Rule 404(b) because the "events underlying both opinions are . . .

similar and close in time to the instant case").

The government next introduced evidence pertaining to West's

participation during December 1987, January, May and June 1988, and

February 1989 in cash transactions involving amounts of $9,500.

Lewis testified that starting in 1987, the amount of cash West

obtained from various accounts that he had access to increased

dramatically.29 Prior to 1987, Lewis would cash checks only for

travel expenses and petty cash. After a conversation with West

during which they discussed the federal law requiring banks to

report certain cash transactions to the Internal Revenue Service,30

however, West directed Lewis to cash several checks in amounts of

$9,500, thereby avoiding the reporting requirements. Thus, this

evidence is relevant to whether West acted with the intent to

defeat the provisions of the Bankruptcy Code and whether he acted

pursuant to a plan to defeat the rights of his creditors.

Consequently, the evidence was admissible under Rule 404(b).31
such checks admitted into evidence and testimony

regarding them is not to be considered by you in

deciding if the Defendant committed the acts charged in

the Indictment. However, you may consider this

evidence for other very limited purposes.

If you find beyond a reasonable doubt from other

evidence in this case that the Defendant Bruce West,

Sr. did commit the acts charged in the Indictment, then

you may consider evidence of the checks obtained in the

amount of $9500 and testimony regarding them for other

very limited purposes. You may consider them to

determine whether the Defendant had the state of mind

or intent necessary to commit the crime charged in the

Indictment or whether the Defendant acted according to

a plan or in preparation for commission of a crime.

14 R. at 1440.

-27-

Finally, we conclude that the district court did not err in

admitting the evidence regarding West's rental or use of various

safety deposit boxes. Lewis testified that during or after March

1989, as part of the duties relating to her employment with West,

she went with West's daughter to First City Bank, where the

daughter removed cash from a safety deposit box. Lewis and the

daughter then proceeded to "several different banks and got

cashier's checks." Lewis mailed the cashier's checks to Jack

Franks, one of West's business associates. This evidence was

relevant to the issue of intent because it indicated the existence

a plan to hide West's assets and avoid attachment of his bank

accounts, thereby defrauding his creditors.

2

West next contends that even if the challenged evidence was

relevant under Rule 404(b), the district court should have excluded

the evidence pursuant to Rule 403 because its probative value was
-28-

substantially outweighed by the danger of unfair prejudice. We

must determine "whether the danger of undue prejudice outweighs the

probative value of the evidence in view of the availability of

other means of proof and other facts appropriate for making

decisions of this kind under Rule 403." Fed. R. Evid. 404(b)

advisory committee's note. "The exclusion of evidence under Rule

403," however, "should occur only sparingly." United States v.

Pace, 10 F.3d 1106, 1115 (5th Cir. 1993); see also United States

v. McRae, 593 F.2d 700, 707 (5th Cir.) (noting that Rule 403's

"major function is limited to excluding matter of scant or

cumulative probative force, dragged in by the heels for the sake of

its prejudicial effect"), cert. denied, 444 U.S. 862, 100 S. Ct.

128, 62 L. Ed. 2d 83 (1979).

At trial, the only real issue in dispute involved West's

intent))i.e., whether he acted in contemplation of declaring

bankruptcy or with intent to defeat the Bankruptcy Code. Direct

means of proof tending to make the existence of criminal intent on

West's part more probable than it otherwise would be is generally

unavailable in bankruptcy fraud prosecutions. See In re May, 12

B.R. at 627. Consequently, Rule 404(b) evidence indicating that

West acted with the requisite intent was extremely important to the

government's case. Furthermore, the prior acts occurred relatively

close in time to the conduct charged in the indictment, thereby

increasing the probative value of the 404(b) evidence. See United

States v. Rubio-Gonzalez, 674 F.2d 1067, 1075 (5th Cir. 1982)
 

32 In addition to the instructions given when the district

court admitted the challenged evidence, see notes 27, 28, and 31

supra, the court gave the following instruction immediately

before deliberations began:

During the course of the trial, testimony or evidence

was presented to you concerning alleged acts committed

by the Defendant Bruce R. West, Sr. in addition to what

has been alleged in the Indictment . . . . Such acts

do not constitute any offense charged in the Indictment

in this case, but it would, at most, constitute

evidence of acts other than those alleged in the

Indictment.

You must not consider any of this evidence in

deciding if the Defendant Bruce R. West, Sr. committed

the acts charged in the Indictment. . . . However, you

may consider this evidence for other, very limited,

purposes.

If you find beyond a reasonable doubt from other

evidence in this case that the Defendant Bruce R. West,

Sr. did commit the acts charged in the indictment, then

you may consider evidence of the other acts allegedly

committed on other occasions to determine:

One, whether the Defendant Bruce R. West, Sr. had

the state of mind or intent necessary to commit the

crime charged in the Indictment;

Two, whether the Defendant Bruce R. West, Sr. had

the motive or the opportunity to commit the acts

charged in the Indictment, or;

Three, whether the Defendant committed the acts

for which he is on trial by accident or mistake.

26 R. at 3219-20.

-29-

(upholding trial court's decision pursuant to Rule 404(b) to admit

evidence of 10-year-old acts). Finally, the district court

properly instructed the jury on four occasions as to the

limitations on consideration of the extrinsic offense evidence.32

See United States v. Elwood, 999 F.2d 814, 817 (5th Cir. 1993) (no

Rule 403 breach where the trial court instructed the jury on three

occasions of the limitations in the consideration of extrinsic

offense evidence). Consequently, we conclude that the district
 

33 Section 41.001 of the Texas Property Code provides that

a homestead is "exempt from seizure for the claims of creditors." 

Tex. Prop. Code Ann. § 41.001 (Vernon Supp. 1994).

 

34 At trial, the government had the burden of proving that

West "knowingly and fraudulently [transferred] or [concealed] any

of his property" "in contemplation of a case under Title 11 . . .

or with intent to defeat the provisions of Title 11." 18 U.S.C.

§ 152 ¶ 7. Thus, if West acted in good faith, he could not have

acted with the fraudulent intent necessary to support a

conviction for bankruptcy fraud. See United States v. Zehrbach,

___ F.3d ___, 1994 WL 96690, *4 (3d Cir. Mar. 28, 1994); see also

McCullough, Bankruptcy Fraud, 26 Com. L.J. at 267 ("The role of

advisors, such as attorneys, may affect a finding of intent."). 

-30-

court did not breach Rule 403 by admitting the Rule 404(b)

evidence.

D

West's final assertion is that his trial was rendered

fundamentally unfair because the district court refused to allow

two bankruptcy experts))Philip Palmer and William H. Brister))to

testify regarding the relationship between the Texas Homestead Act33

and federal bankruptcy law. West contends that such testimony

would have demonstrated that he at all times acted in good faith,

and thus was relevant to the issue of his intent.34 Here, West's

good faith defense was centered upon his asserted reliance on the

advice of his bankruptcy counsel))Philip Palmer))and his

accountant))Nathan Reeder. Although both Palmer and Reeder

testified they advised West to structure the Dondi Farms, Broadway

building, and Frisco house transactions as he did and that the

transactions were lawful, West contends that the district court

erred in not allowing him to demonstrate "that it was reasonable to
 

35 West informed the district court that Brister and

Palmer

would . . . have been able to testify to the Texas

Homestead Law concerning the use of proceeds from the

sale of a homestead for a six-month period, the

reinvestment of those proceeds in a new homestead, and

the exempt nature of the note payments [as] such

proceeds.

25 R. at 3131.

 

36 The district court, in fact, comprehensively explained

to the jury West's advice of counsel defense:

The defense in this case contends that the actions of

Bruce R. West, Sr. concerning the acquisition of the

Parkway Notes from the FDIC, the foreclosure of the

-31-

follow [the advice supplied by Palmer and Reeder]))a showing that

of necessity would include some explanation of . . . what a Texas

homestead exemption was, and how one could lawfully preserve it,

under bankruptcy law."35

Under Fed R. Evid. 702, "[i]f scientific, technical, or other

specialized knowledge will assist the trier of fact to understand

the evidence or to determine a fact in issue, a witness qualified

as an expert by knowledge, skill, experience, training, or

education may testify thereto in the form of an opinion or

otherwise." Here, the critical issue at trial was whether West

acted in good faith and relied upon the advice of counsel. Thus,

the district court correctly allowed West to testify that he at all

times relied in good faith upon the advice of experts and both

Palmer and Reeder to testify that they advised West to structure

the transactions as he did.36 Cf. Miller v. United States, 120 F.2d
Broadway Building, Exalter's involvement in the

exchange of the Broadway Building for the Frisco House,

the subsequent transfer of the Frisco House to West,

Sr. and the associated transfer of funds by West, Sr.,

did not constitute a fraud on West, Sr.'s creditors,

the trustee in bankruptcy, or any other person, and

that such transactions were structured based on advice

from his attorney and accountant.

. . . .

If, before taking the actions charged in the

Indictment, Bruce West, Sr., while acting in good faith

and for the purpose of securing advice on the

lawfulness of his possible future conduct, sought and

obtained the advice of an attorney or accountant whom

he considered to be competent, and made a full

disclosure of all important and material facts of which

he had knowledge or had the means of knowing, and acted

in accordance with the advice his attorney or

accountant gave following this full report or

disclosure, then the Defendant would not be willfully

or deliberately doing a wrong in performing or omitting

some act the law forbids or requires.

However, reliance upon the advice of an attorney

or an accountant is not an absolute defense to the

crimes charged in the Indictment. Rather, it is a

circumstance which you should consider in determining

whether a Defendant was acting in good faith or without

fraudulent intent. No one can willfully and knowingly

violate the law and excuse himself by simply claiming

that he followed the advice of an attorney or

accountant. Rather, for advice of an attorney or

accountant to be considered as a circumstance that

disproves fraudulent intent, the evidence must show

that the advice was given after a Defendant made a full

and accurate report or disclosure to his attorney or

accountant of all the important and material facts of

which the Defendant Bruce R. West, Sr. had knowledge or

had the means of knowing. The evidence must also show

that the Defendant acted in accordance with the advice

that his attorney or accountant gave following this

full report or disclosure.

Whether Defendant Bruce West, Sr. acted in good

faith for the purpose of truly seeking guidance as to

questions about which he was in doubt, and whether he

made a full and complete report or disclosure to his

attorney or accountant, and whether he acted in

accordance with the advice received, are all questions

for the jury to determine.

-32-
26 R. at 3251-53. On appeal, West does not independently

challenge the jury instructions, but instead contends that the

district court's refusal to allow expert testimony, in light of

the jury instructions, rendered his trial fundamentally unfair. 

To the extent West intended to challenge the sufficiency of the

jury instructions, he has failed to brief the issue and,

therefore, has waived it. See Edmond v. Collins, 8 F.3d 290, 292

n.5 (5th Cir. 1993).

 

37 Indeed, the issue of intent was squarely placed before

the jury in light of West's explicit testimony that he never

acted with the intent to defraud his creditors, the bankruptcy

trustee, or anyone else.

-33-

968, 970 (10th Cir. 1941) (stating that the defendant may buttress

his testimony of lack of intent "with testimony of relevant

circumstances, including conversations had with third persons or

statements made by them, tending to support his statement that he

had no intent to defraud"). Moreover, the district court further

allowed Palmer to testify that: (1) West made full disclosure

regarding the transactions; (2) he advised West that the Frisco

house transaction "was a legal and proper transaction"; (3) the

Frisco house transaction caused no harm to West's creditors;

(4) the Jett note was exempt from the claims of creditors; (5) the

Jett note retained its exempt status after the Frisco house

transaction because it was "used in the acquisition of the new

homestead which is what [the homestead] exemption is all about";

and (6) he advised West that West was free to use payments made

both pursuant to the Jett note and after West had sought bankruptcy

protection because such payments were exempt. Consequently, West's

defense))that he in good faith relied on the advice of counsel))was

squarely placed before the jury.37 Because the typical juror is
 

38 Garber was one of only two or three persons in the

world whose blood was known to contain a certain valuable

antibody. She thus was able to generate substantial income by

-34-

qualified to determine intelligently and to the best degree

possible both the reasonableness of a client relying upon the

advice of an attorney and accountant retained to render such advice

and whether the client did so in good faith after making full

disclosure, expert testimony as to the legal basis underlying the

advice))i.e., the reasonableness of their interpretation of the

provisions of the Texas Homestead Act))would not have assisted the

jury. See Fed. R. Evid. 702 advisory committee's note (noting that

the test "for determining when experts may be used" is "the common

sense inquiry whether the untrained layman would be qualified to

determine intelligently and to the best possible degree the

particular issue without enlightenment from those having a

specialized understanding of the subject") (internal quotation

omitted). Accordingly, the district court did not abuse its

discretion in refusing to admit expert testimony regarding the

Texas Homestead Act.

West nonetheless contends that precedent required the district

court to admit the experts' testimony. West primarily relies upon

United States v. Garber, 607 F.2d 92, 97-100 (5th Cir. 1979) (en

banc), where we held that because the taxability of the unreported

income at issue was uncertain as a matter of law, the trial court

erred in excluding the testimony of an expert about the unresolved

nature of the law.38 We find Garber inapposite given the
selling her blood plasma. Because Garber failed to report this

income, the government prosecuted her for the willful evasion of

income taxes. At trial, the government conceded that the

taxability of income generated by selling blood plasma was an

issue of first impression. Thus, Garber sought to introduce the

testimony of a certified public accountant that a recognized

theory of tax law supported Garber's belief that such income was

not taxable. Considering the question of taxability to be one of

law, the trial court refused to allow the proffered testimony and

instructed the jury that the income Garber received from the sale

of her blood was taxable. Garber, 607 F.2d at 94-96. We

reversed Garber's conviction, holding that the expert's testimony

was relevant to the issue of Garber's intent:

The tax treatment of earnings from the sale of blood

plasma or other parts of the human body is an

unchartered area in tax law. The parties in this case

presented divergent opinions as to the ultimate

taxability by analogy to two legitimate theories in tax

law. The trial court should not have withheld this

fact, and its powerful impact on the issue of Garber's

willfulness, from the jury.

Id. at 99.

 

39 In prior cases, we have "limited Garber to its bizarre

facts))where the level of uncertainty [of the applicable law]

approached legal vagueness." United States v. Daly, 756 F.2d

1076, 1083 (5th Cir. 1985) (citing United States v. Burton, 737

F.2d 439, 443-44 (5th Cir. 1984)).

-35-

substantial differences between the facts of that case and the case

sub judice.

39 For example, the trial court in Garber refused to

allow the defendant to present any testimony suggesting that the

law supported her actions. Id. at 99 ("By disallowing [the

expert's testimony] that a recognized theory of tax law supports

Garber's feelings, the court deprived the defendant of evidence

showing her state of mind to be reasonable."). Here, however, the

district court allowed West to testify both that he consulted with

Reeder and Palmer before structuring the Dondi Farms, Broadway
 

40 West's reliance upon Cheek v. United States, ___ U.S.

___, 111 S. Ct. 604, 112 L. Ed. 2d 617 (1991), United States v.

Onumonu, 967 F.2d 782 (2d Cir. 1992), and United States v.

Lankford, 955 F.2d 1545 (11th Cir. 1992), is similarly misplaced. 

Cheek, which merely held that the jury in a criminal tax fraud

case must be allowed to consider the defendant's subjective

understanding of the legality or illegality of his acts, 111 S.

Ct. at 609-11, does not provide West with any support because the

district court allowed the jury to consider West's subjective

intent. Lankford held that the trial court erred in totally

excluding expert testimony relevant to the defendant's intent to

commit tax fraud. 955 F.2d at 1551 & n.14 (expert testimony as

to whether a campaign contribution should be classified as a gift

or as income, an issue about which most jurors "simply lack the

specialized knowledge, background, and experience needed to

assess the reasonableness of the" defendant's gift/income

characterization). In Onumonu, the defendant, an alimentarycanal drug smuggler on trial for importing heroin, testified that

he thought he was smuggling diamonds, not heroin. The trial

court excluded expert testimony offered by the defendant

regarding the feasibility and profitability of smuggling diamonds

in the alimentary canal. The Second Circuit held that the trial

court erred in excluding such testimony because it was relevant

to the defendant's intent and the average juror knows very little

"about the feasibility of internally smuggling diamonds by

swallowing [diamond-filled] condoms." 967 F.2d at 788. We find

the latter cases distinguishable from the case at bar, where West

testified as to both his subjective intent and his reliance upon

the advice of his retained experts and West's attorney and

accountant each testified regarding the advice they gave West.

-36-

Building, and Frisco house transactions and that he followed their

advice. Additionally, the district court allowed both Palmer and

Reeder to testify that they advised West to structure the

transactions as he did and that the transactions were perfectly

legal. Thus, West's reliance upon Garber is misplaced.40 Moreover,

West has not argued on appeal that the relevant law was unsettled,

that he or his advisors subjectively saw any such uncertainty, or

that his advisors explained the Texas Homestead Act to him in

anything other than very general terms. See United States v.
-37-

Harris, 942 F.2d 1125, 1132 n.6 (7th Cir. 1991) (noting that where

the defendant or his tax advisors may have subjectively, but

wrongly, seen an ambiguity, the defendant may present evidence to

the jury demonstrating the basis of the erroneous, good faith

belief). The typical juror is perfectly capable of determining,

based on the evidence presented, whether West acted in good faith,

disclosed all the relevant facts, and then acted in reliance upon

the advice obtained. Consequently, we must reject West's

contention that the district court erred in excluding the proposed

testimony regarding the provisions of the Texas Homestead Act. Cf.

United States v. Burton, 737 F.2d 439, 444 (5th Cir. 1984) (noting

that the trial court "ordinarily will be the sole source of the

law").

V

For the foregoing reasons, we AFFIRM the judgment of the

district court.