FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA, 

No. 09-10109 Plaintiff-Appellee,

D.C. No. v. 

2:06-cr-00464-

RANDY W. JENKINS, SRB-2

Defendant-Appellant. 

UNITED STATES OF AMERICA, 

Plaintiff-Appellee,

No. 09-10110 v.

D.C. No. IRA W. GENTRY, Jr., AKA Ira

Willie Gentry, AKA Donald Isaac  2:06-cr-00464-

Williams, AKA Don Williams, SRB-1

AKA Fred Koone, AKA Don OPINION

Brown,

Defendant-Appellant. 

Appeal from the United States District Court

for the District of Arizona

Susan R. Bolton, District Judge, Presiding

Argued and Submitted

September 9, 2010—San Francisco, California

Filed January 25, 2011

Before: Betty B. Fletcher, Richard C. Tallman and

Johnnie B. Rawlinson, Circuit Judges.

Opinion by Judge B. Fletcher

1581
COUNSEL

Phillip Edward Hantel, Phoenix, Arizona, for defendantappellant Randy Jenkins.

1586 UNITED STATES v. JENKINS
Daniel Robert Drake, Drake Law PLC, Phoenix, Arizona, for

defendant-appellant Ira W. Gentry.

Frank Phillip Cihlar, Michael Vasiliadis, and Elissa HartMahan, United States Department of Justice, Tax Division,

Washington, D.C.; Frank T. Galati and Reid Charles Pixler,

Office of the United States Attorney, Phoenix, Arizona, for

the plaintiff-appellee.

OPINION

B. FLETCHER, Circuit Judge:

INTRODUCTION

This case arises out of a “pump and dump” scheme during

which Randy Jenkins and Ira Gentry conspired to secretly

acquire millions of shares of UniDyn Corporation stock, artificially inflate its value, sell it for significant profit, and launder the proceeds. After a sixteen-day trial, a jury convicted

Jenkins and Gentry (“Appellants”) of multiple counts of

securities fraud (15 U.S.C. §§ 78ff, 78j(b)1); wire fraud (18

U.S.C. § 1343); international concealment money laundering

(18 U.S.C. § 1956(a)(2)(B)(i)); concealment money laundering (18 U.S.C. § 1956(a)(1)(B)(i)); and transactional money

laundering (18 U.S.C. § 1957(a)). The jury also convicted

each appellant of one count of tax evasion (26 U.S.C. § 7201)

and for conspiracy to defraud the United States and commit

wire fraud, securities fraud, and mail fraud (18 U.S.C. § 371).

The district court sentenced Jenkins to 90-months imprisonment, and Gentry to 180-months imprisonment. In addition,

the district court ordered appellants to forfeit approximately

$9 million in ill-gotten gains to the government. In a related

1Unless otherwise noted, all citations are to the 2006 edition of the

United States Code. 

UNITED STATES v. JENKINS 1587
civil action, the government sought forfeiture of Gentry’s residence. 

Appellants timely appeal both their convictions and sentences. The district court had jurisdiction under 18 U.S.C.

§ 3231. We have jurisdiction under 28 U.S.C. § 1291 and 18

U.S.C. § 3742(a), and we now affirm.

The principal legal issue we face is whether 18 U.S.C.

§ 3292 suspended the running of the statute of limitations for

all counts. Section 3292 permits the district court to suspend

the statute upon finding that the government reasonably

believes evidence of a crime under investigation by a grand

jury is in a foreign country and has requested that evidence.

Subject to defined outer limits, the suspension period lasts

until the foreign government has taken “final action” on the

official request.

Appellants argue that an application to suspend the running

of the statute of limitations must be supported by a sworn affidavit or other material of evidentiary value and that § 3292

does not permit the district court to suspend the statute of limitations if the government applies after the statute has expired.

The fact that the government submitted its official request for

evidence to a foreign government before the expiration of the

statute is irrelevant, they argue. Consequently, they contend

that even though the government submitted a sworn affidavit

in support of its § 3292 application on June 20, 2005, the district court could not suspend any of the pertinent statutes of

limitation that expired before that date. Finally, appellants

argue that Canada took “final action” on or before July 5,

2005, ending the suspension period and rendering several

counts of the indictment untimely. We agree only with appellants’ first contention and conclude that the statute of limitations had not expired on any counts before the grand jury

returned its indictment.

In addition, both appellants contend (1) there was insufficient evidence to support conviction on many counts; (2) the

1588 UNITED STATES v. JENKINS
jury’s instructions on money laundering were reversible error;

and, (3) the district court erred at sentencing in calculating the

amount of loss and number of victims. Jenkins also argues

that his sentence was substantively unreasonable. Gentry

argues that the district court wrongly denied his motion to

sever his trial from Jenkins’s, and that the district court erred

in denying his motion for additional cross examination of a

government witness. We reject each of these claims and

affirm the convictions and sentences.

BACKGROUND

In the early 1990s, Gentry formed Universal Dynamics, a

“vibration testing” company that analyzed the quality of circuit boards using shaking machines. Gentry was the president

and owner of Universal Dynamics. Universal Dynamics also

produced a line of hardware and software products which

controlled the shakers and analyzed results. In 1996, Gentry

learned of attempts to use infrared cameras to identify flaws

in circuit boards. The concept was created by Irene Murphy,

a student at General Motors Institute, but her research

revealed that the technology was not viable for mass production. Gentry claimed to have invented the technology, called

it the “Sterling concept,” and proclaimed that it would revolutionize the industry.

In December 1997, Universal Dynamics merged with a

shell corporation and became UniDyn Corporation. At the

time it was created, UniDyn issued nearly fifteen million

shares of stock to a Bahamian corporation called UniDyn, Inc.

(UniDyn-Bahamas). UniDyn-Bahamas was created by Jenkins, a disbarred attorney and friend of Gentry’s with expertise in setting up offshore corporations. UniDyn-Bahamas was

a nominee entity with no independent business. Its registered

agent and director were figureheads chosen to conceal Gentry

and Jenkins’s control. It later changed its name to Mearns

Acceptance Corporation. 

UNITED STATES v. JENKINS 1589
At its creation, UniDyn also issued approximately eight

million shares to Universal Dynamics. Though the corporate

tax returns and SEC filings for Universal Dynamics indicated

that Gentry was only a minority shareholder, the other alleged

shareholders included aliases for Gentry and Jenkins and the

names of acquaintances who did not, in fact, own stock and

were not aware appellants were using their names. In actuality, Gentry was the sole owner and president of Universal

Dynamics. 

UniDyn was publicly traded on the Over the Counter Electronic Bulletin Board. Because of its low share price (under

$5 per share), it was called a “penny stock.” As a publicly

traded company, UniDyn was required to file annual and

quarterly SEC reports. The reports were required to disclose

any shareholders owning or controlling a 5% or greater interest in the company and to announce any significant events in

the company. SEC filings did not reflect Gentry and Jenkins’s

beneficial ownership of either Universal Dynamics or Mearns.

Engineers at UniDyn and its subsidiaries tested Sterling

between 1998 and 1999, and concluded that the technology

was not commercially viable. Yet, in SEC filings and press

releases, Gentry continued to falsely promote the company’s

prospects. Between 1997 and 2001, among other misrepresentations, Gentry claimed that Sterling was 100% effective at

estimating the life span of circuit boards; UniDyn was pursuing a patent for Sterling; UniDyn had a commitment from

Technet, a Japanese corporation owned by Hiroshi Tsuriya, to

purchase $200 million in Sterling units; Sterling had been

successfully tested by IBM; UniDyn had constructed a Sterling unit ready to be placed with a customer; and UniDyn had

entered into a $900,000 licensing deal for Sterling. In addition, both Gentry and Jenkins posted messages on Raging

Bull, an online investors’s message board, touting UniDyn’s

potential, announcing lucrative deals, and attempting to

assuage concerns about the identities of its largest shareholders, including those in Mearns. 

1590 UNITED STATES v. JENKINS
Having “pumped” the value of UniDyn stock, appellants

proceeded to “dump” their holdings. See United States v. Laurienti, 611 F.3d 530, 534 (9th Cir. 2010) (describing a “pump

and dump” scheme). In early 2000, Gentry and Jenkins

opened accounts for a number of nominee corporations and

individual aliases at Thomson Kernaghan and Union Securities brokerage houses in Canada. Over the next few months,

they transferred millions of UniDyn-shares held by UniDynBahamas and Universal Dynamics to these accounts. Between

March 7 and March 15, 2000, Jenkins and Gentry sold almost

900,000 shares from Universal Dynamics’ Union Securities

brokerage account in Canada, netting proceeds of $1.8 million. Between March and June 2001, they sold millions of

shares of stock from accounts at Thomson Kernaghan, with

net proceeds of over $6 million. Jenkins and Gentry continued

to sell UniDyn stock from the Canadian accounts in the latter

half of 2001 and in 2002.

Jenkins and Gentry wired funds from the Canadian brokerage accounts to a variety of bank accounts in the United

States and abroad. The bulk of the funds were used for personal purchases and investments, including $300,000 in gold

and silver coins and $70,000 in silver bullion in Jenkins’s

name at Monex Deposit Company, a $1.5 million home in

Scottsdale for Gentry, several vehicles, and $30,000 worth of

jewelry. In addition, appellants used approximately $2 million

to make UniDyn appear profitable: $900,000 was used to fund

a purported licensing deal of Sterling’s technology, and $1

million was used to fund a “longtime shareholder’s” investment in UniDyn. Neither Gentry nor Jenkins disclosed on

their 2000 tax returns any income or profits from their nominees’ sales of UniDyn stock. 

The scheme began to unravel in April 2001, when Hiroshi

Tsuriya, the president of Technet, informed a UniDyn subsidiary that he had never entered into an agreement to purchase

over $200 million of Sterling units. Shortly after this information was conveyed to UniDyn’s corporate counsel and board

UNITED STATES v. JENKINS 1591
of directors, Gentry resigned as CEO. In a May 2001 SEC filing, UniDyn’s board of directors announced Gentry’s resignation and stated recent evaluations of Sterling had revealed the

product would have to be delayed and might not be viable.

The price of UniDyn’s stock and volume of shares traded

dropped precipitously.

In 2001, the IRS began investigating Gentry and Jenkins

for tax fraud and, pursuant to a tax treaty, obtained documents

from Canada implicating appellants in securities, mail, and

wire fraud. Pursuant to the terms of the treaty with Canada,

however, the IRS could use those documents only for tax

investigation purposes. On March 16, 2005, the government

sent a request to Canada under the Treaty on Mutual Legal

Assistance in Criminal Matters (“MLAT”), U.S.-Can., March

18, 1985, 24 I.L.M. 1092 (1985), requesting the records of

Union Securities and Thomson Kernaghan accounts linked to

Gentry, Jenkins, and aliases and nominee corporations associated with both.

On March 22, 2005, the government applied ex parte to the

district court seeking suspension of the statute of limitations

pursuant to 18 U.S.C. § 3292. The application included an

unverified copy of the MLAT request and an unsworn memorandum. On March 23, 2005, the court issued an order suspending the statute of limitations, effective as of March 16,

2005. On June 20, 2005, the government submitted a “supplemental application” including a sworn declaration from IRS

Agent Linda Wallace detailing why the government believed

there was relevant evidence in Canada. The court issued a

revised order on June 29, again suspending the statute of limitations as of March 16, 2005.

On May 3, 2006, a federal grand jury returned a fifty-nine

count indictment charging Gentry and Jenkins with tax evasion, concealment money laundering, international concealment money laundering, securities fraud, wire fraud, and

1592 UNITED STATES v. JENKINS
conspiracy. Several counts of the indictment were voluntarily

dismissed by the prosecution before trial. 

After a sixteen-day trial, the jury convicted Jenkins of one

count of conspiracy, two counts of securities fraud, one count

of wire fraud, one count of tax evasion, eleven counts of international concealment money laundering, three counts of concealment money laundering, and three counts of transactional

money laundering. Jenkins was acquitted of three counts of

transactional money laundering and one count of wire fraud.

The jury convicted Gentry of one count of conspiracy, nine

counts of securities fraud, six counts of wire fraud, one count

of tax evasion, eleven counts of international concealment

money laundering, three counts of concealment money laundering, and four counts of transactional money laundering.

Gentry was acquitted of two counts of transactional money

laundering and one count of wire fraud.

The district court held a sentencing hearing on March 2,

2009. The district court applied a twenty-level upward adjustment for the amount of loss and a four-level upward adjustment because there were more than fifty victims. For Gentry,

the district court additionally applied a three-level upward

adjustment because Gentry acted as a manager and two additional levels because he abused a position of public or private

trust. The Sentencing Guidelines recommended life in prison

for Gentry and between 324 and 405 months for Jenkins.

After weighing the factors enumerated in 18 U.S.C.

§ 3553(a), the district court sentenced Gentry to 180 months

and Jenkins to 90 months of imprisonment.

DISCUSSION

I. The District Court Did Not Err in Suspending the

Running of the Statute of Limitations Under 18 U.S.C.

§ 3292 from March 16, 2005 to April 12, 2006.

[1] The statute of limitations for the non-capital federal

offenses involved here is five years. 18 U.S.C. § 3282(a).

UNITED STATES v. JENKINS 1593
Nevertheless, 18 U.S.C. § 3292 extends the limitations period

if evidence of an offense being investigated by a grand jury

is in a foreign country. Section 3292 provides:

(a)(1) Upon application of the United States, filed

before return of an indictment, indicating that evidence of an offense is in a foreign country, the district court before which a grand jury is impaneled to

investigate the offense shall suspend the running of

the statute of limitations for the offense if the court

finds by a preponderance of the evidence that an

official request has been made for such evidence and

that it reasonably appears, or reasonably appeared at

the time the request was made, that such evidence is,

or was, in such foreign country.

. . . .

(b) Except as provided in subsection (c) of this section, a period of suspension under this section shall

begin on the date on which the official request is

made and end on the date on which the foreign court

or authority takes final action on the request.

(c) The total of all periods of suspension under this

section with respect to an offense —

(1) shall not exceed three years; and

(2) shall not extend a period within which a criminal

case must be initiated for more than six months if all

foreign authorities take final action before such a

period would expire without regard to this section.

Appellants first contend that the district court erred in suspending the running of the statute of limitations based on the

government’s March 22, 2005, application, because the application did not satisfy the evidentiary requirements of subsec1594 UNITED STATES v. JENKINS
tion (a)(1). Second, appellants argue that the district court

erred in concluding that the government’s June 20, 2005 “supplement” to the March application cured any error and suspended the running of the statute of limitations on nine

counts, the limitations period of which had expired between

the March 16 MLAT request and the June 20 application.

Third, appellants contend that Canada’s July 5, 2005 response

constituted a “final action” ending the suspension period

under subsection (b), and that the statute of limitations on six

counts thus ran before the indictment on May 3, 2006.

We review de novo a district court’s denial of a motion to

dismiss an indictment because of the statute of limitations.

United States v. DeGeorge, 380 F.3d 1203, 1213 (9th Cir.

2004). Any factual findings underlying the denial are

reviewed for clear error. Id.

A. Evidence Necessary to Support an Application Under

§ 3292.

[2] Before suspending the running of the statute of limitations, the district court must find by a preponderance of the

evidence that (1) an official request has been made for the

evidence and (2) it reasonably appears or appeared at the time

the request was made that the evidence of the crime is or was

in a foreign country. 18 U.S.C. § 3292(a)(1). “[T]he government has some burden to establish, as opposed to being able

to merely assert without support, that the foreign evidence it

seeks meets the section’s requirements.” DeGeorge v. U.S.

Dist. Ct. for Cent. Dist. of Cal., 219 F.3d 930, 937 (9th Cir.

2000); see also United States v. DeGeorge, 380 F.3d at 1215

(stating that district courts should not “simply rubber-stamp

the government’s request” but should “hold the government

to its burden.”).

[3] The Ninth Circuit has never addressed the issue of

whether a § 3292 application must be supported by evidence

of particular value. However, the Eleventh Circuit squarely

UNITED STATES v. JENKINS 1595
confronted this question in United States v. Trainor, 376 F.3d

1325, 1330-35 (11th Cir. 2004). In Trainor, the court held that

a § 3292 application must be supported by materials that “include or [are] accompanied by some indicia of reliability.” Id

at 1331. The court concluded that because § 3292 extends the

limitations period (itself designed to ensure the reliability of

evidence) and an application under § 3292 is made ex parte,

the government must meet a “minimum evidentiary burden.”

Id. at 1332. 

According to Trainor, the § 3292 preponderance standard

is quite broad. Id. at 1332-33. The government can satisfy its

burden of proof under § 3292(a)(1) “by including a sworn or

verified application containing the necessary factual information, testimony by Government officials, affidavits, declarations, exhibits, or other materials of evidentiary value,” even

including hearsay evidence. Id. Nevertheless, a “mere summarization of the evidence in the Government’s possession . . .

standing alone, does not satisfy the Government’s burden.”

Id. at 1333; see also United States v. Wilson, 322 F.3d 353,

363 (5th Cir. 2003) (holding that the government did not meet

its § 3292(a)(1) burden when it presented “circumstantial evidence of questionable origin” and the testimony of a witness

“wholly without personal knowledge” of the issues).

[4] Trainor is consistent with § 3292 and this circuit’s precedent. See United States v. DeGeorge, 380 F.3d at 1215;

DeGeorge v. U.S. Dist. Ct., 219 F.3d at 937. Accordingly, we

hold that when the government moves to suspend the statute

of limitations under § 3292, it must present “something with

evidentiary value . . . tending to prove it is reasonably likely

that evidence of the charged offenses is in a foreign country”

— not merely unsupported assertions. See Trainor, 376 F.3d

at 1332-34.

[5] The government contends that the MLAT request submitted with the March 16, 2005 application contained the necessary indicia of reliability, as it was (1) sixteen pages long

1596 UNITED STATES v. JENKINS
and included significant detail on the facts of the investigation

and (2) prepared pursuant to the United States’s treaty obligations with Canada. We need not decide that question. Whether

or not the March 22, 2005 application was sufficient, the government’s June 20, 2005 “supplemental application” clearly

was adequate. The June 20 application included the sworn

declaration of IRS Agent Linda Wallace, who described the

IRS’s investigation, the grand jury investigation and the evidence already recovered from Canada tending to indicate that

further evidence of the offenses was abroad. Agent Wallace’s

declaration bore the necessary indicia of reliability and supported the district court’s finding, by a preponderance of the

evidence, that the government reasonably believed evidence

of appellants’ crimes was in Canada. 

[6] We hold that the district court did not err on June 29,

2005, in issuing an order suspending the statute of limitations.

Because § 3292 clearly states that the suspension period

begins on the date the official request to the foreign government is made, the district court did not err in ordering the suspension period to begin on March 16, 2005, when the

government submitted its MLAT request to Canada. See 18

U.S.C. § 3292(b); United States v. Bischel, 61 F.3d 1429,

1434 (9th Cir. 1995).

B. Timing of a § 3292 Application

Appellants next contend that the district court erred in suspending the statute of limitations on counts two, four, twelve,

twenty-four, twenty-six, thirty-five to thirty-seven, fifty-three

and fifty-four, because the statute of limitations for those

counts expired before the government applied for suspension

under § 3292. Appellants argue that § 3292 does not authorize

a district court to “revive” an already expired statute of limitations, regardless of whether the government makes its official

request for evidence from the foreign country before the statute expires. Our ruling in Bischel, 61 F.3d at 1434, forecloses

appellants’ argument.

UNITED STATES v. JENKINS 1597
In Bischel, defendant was indicted in 1992 for criminal

conduct occurring before 1985. 61 F.3d at 1431-32. As here,

the district court issued an order suspending the running of the

statute of limitations under § 3292, effective from the date of

the government’s official request for the evidence. Id. Bischel

“contend[ed] that the district court erred in holding that the

statute of limitations was suspended as of July 27, 1989, when

the letters rogatory were issued, instead of November 20,

1989, when the order suspending the statute was entered, on

the ground that a § 3292 order cannot revive or extend a

period of limitations.” Id. at 1434. The court disagreed, stating “the statute plainly contemplates that the starting point for

tolling the limitations period is the official request for evidence, not the date the § 3292 motion is made or granted.” Id.

(emphasis added). Indeed, “[t]he statute itself specifies the

only relevant time the application must be made: ‘before

return of an indictment.’ ” Id. (quoting United States v. Miller,

830 F.2d 1073, 1076 (9th Cir. 1987)). 

[7] Under Bischel, the only temporal requirements of a

§ 3292 application are (1) that the official request for evidence in a foreign country be made before the statute of limitations expires and (2) that the application for suspension be

submitted to the district court before the indictment is filed.

61 F.3d at 1434; see also United States v. Daniels, No. C 09-

00862 MHP, 2010 WL 2680649, at *5-6 (N.D. Cal. July 6,

2010) (analyzing the holding of Bischel). We recognize that

there is disagreement among the circuits on this issue. Compare United States v. Kozeny, 541 F.3d 166, 174 (2nd Cir.

2008) (“The fact that the statute requires a retroactive starting

date for the suspension period does not speak to whether

applications for suspension must be filed before the statute of

limitations has otherwise run.”), with United States v. Hoffecker, 530 F.3d 137, 163 n.4 (3rd Cir. 2008) (stating that a

majority of the panel believed “there is no reason why a case

seemingly barred by the statute of limitations cannot be

revived by a § 3292 application made before the Government

has received all of the requested foreign evidence”), cert.

1598 UNITED STATES v. JENKINS
denied Hoffecker v. United States, 129 S. Ct. 652 (2008).

Nevertheless, Bischel remains binding in this circuit.2

[8] Because the March 16 MLAT request was submitted

before the statutes of limitations had run on any counts, the

government’s June 20 application revived any statutes of limitations that had expired in the period between the MLAT

request and the application to suspend. The district court thus

did not err in suspending the statute of limitations, effective

March 16, 2005, for all counts.

C. Final Action Under § 3292.

[9] Section 3292(b) provides that, subject to the outer limits provided in subsection (c), the period of suspension shall

end on the date on which the foreign authority from whom

evidence is requested “takes final action on the request.” Final

action is a dispositive response to each item set out in the official request, including a request for certification. United

States v. Hagege, 437 F.3d 943, 955-56 (9th Cir. 2006);

United States v. DeGeorge, 380 F.3d at 1215.

2Appellants argue Stogner v. California, 539 U.S. 607 (2003) overruled

Bischel. In Stogner, the Court held that “a law enacted after expiration of

a previously applicable limitations period violates the Ex Post Facto

Clause when it is applied to revive a previously time-barred prosecution.”

Id. at 632-33. Stogner likely overruled the portions of Bischel concluding

that enactment of a law extending the statute of limitations does not violate the Ex Post Facto clause when applied to crimes committed before the

law was enacted. See Bischel, 651 F.3d at 1435-36. However, Stogner’s

holding does not affect the portions of Bischel relevant to this case. See

Marks v. United States, 430 U.S. 188, 191 (1977) (“The Ex Post Facto

Clause is a limitation upon the powers of the Legislature, and does not of

its own force apply to the Judicial Branch of government.”) (citation omitted); Bischel, 651 F.3d at 1434 (“Here, however, it isn’t a new statute that

is the culprit, but its judicial application.”). Because 18 U.S.C. § 3292 was

enacted in 1984 — long before appellants committed their crimes — Bischel remains good law as applied to this case. See Act of Oct. 12, 1984,

Pub. L. No. 98-473, § 1218(a), 98 Stat. 1837. 

UNITED STATES v. JENKINS 1599
Appellants argue that Canada took “final action” on the

request on or before July 5, 2005. If that is true, the suspension period would have lasted 111 days and accordingly, the

statutes of limitations on six counts would have run by January 15, 2006, months prior to indictment. The government

however contends that final action did not occur until April

12, 2006. If the government is correct, the suspension period

was 492 days, and all counts of the indictment were timely.

We agree with the government.

The March 16, 2005 MLAT letter requested certified copies of all records created or obtained by Thomson Kernaghan

and Union Securities between September 1, 1999 and July 1,

2000, relating to “any and all accounts held or controlled” by

Gentry, Jenkins and several aliases and nominee corporations.

Canada first responded in a letter dated June 27, 2005,

informing the government that Thomson Kernaghan’s bankruptcy trustee had located accounts for the listed corporations

but was unable to locate accounts for Gentry, Jenkins or any

of their aliases. The letter then instructed the United States to

submit a supplemental request for the corporate records, without reference to accounts held or controlled by Gentry or Jenkins. It closed: “Please advise how you wish us to proceed.”

On July 5, 2005, the Canadian government sent another

response, this time informing the United States that it had

located copies of the Union Securities accounts for Universal

Dynamics, but had not located accounts for Gentry, Jenkins,

their aliases, and one nominee corporation. The response

included authenticated copies of the located Union Securities

records.

On September 1, 2005, in response to the June 27, 2005 letter, the government sent a supplemental request for assistance,

specifying its desire to obtain certified copies of the Thomson

Kernaghan records associated with appellants’ nominee corporations and omitting any mention of the individual

1600 UNITED STATES v. JENKINS
accounts. Canada responded to that request on April 12, 2006,

when it provided certified copies of the Thomson Kernaghan

account records for appellants’ nominee corporations.

We find that the June 27 and July 5 responses were interim

communications that did not constitute final action for the

purposes of § 3292. The facts of this case are strikingly similar to those in Hagege, 437 F.3d at 955-56. In Hagege, the

Israeli government responded to a request for certified records

with uncertified records and a letter stating “in the future,

should you need certified copies . . . please let me know.” Id.

at 956. This response, Hagege held, did not constitute a final

action because the Israeli government had not provided a certificate of authenticity, nor had it indicated it would not comply with the request for certification. Id. 

Similarly, the July 5 response was not a final action

because it did not provide a dispositive response on every

item requested — it only provided the certified records from

Union Securities, not Thomson Kernaghan. The June 27 letter

did not provide the requested records for corporations associated with Gentry and Jenkins; it also did not indicate that the

Canadian government would not provide those records.

Rather, the June 27, 2005 response specified further steps

needed to acquire the certified records sought from Thomson

Kernaghan. The government took those steps, and final action

in this case occurred on April 12, 2006, when Canada provided certified copies of the corporate records at Thomson

Kernaghan. Until that date, the United States did not have a

dispositive response on every item initially requested. 

[10] In sum, we hold that the government’s June 20, 2005

application was sufficient to suspend the statute of limitations

for all counts, effective March 16, 2005. The suspension

period lasted until Canada took final action on April 12, 2006;

no counts of the indictment were time barred. 

UNITED STATES v. JENKINS 1601
II. There Was Sufficient Evidence To Support Each

Conviction.

Jenkins and Gentry allege insufficient evidence to support

conviction on eight counts of securities fraud, six counts of

wire fraud, twenty-four counts of money laundering, and one

count of tax evasion. A court reviewing for sufficiency of the

evidence must first “view[ ] the evidence in the light most

favorable to the prosecution” and then determine whether

“this evidence, so viewed, is adequate to allow any rational

trier of fact to find the essential elements of the crime beyond

a reasonable doubt.” United States v. Nevils, 598 F.3d 1158,

1163-64 (9th Cir. 2010) (en banc) (alteration and citation

omitted). 

When “faced with a record of historical facts that supports

conflicting inferences” a reviewing court “must presume —

even if it does not affirmatively appear in the record — that

the trier of fact resolved any such conflicts in favor of the

prosecution, and must defer to that resolution.” Jackson v.

Virginia, 443 U.S. 307, 326 (1979). Reversal is warranted

when the evidence so construed “may still be so supportive of

innocence that no rational juror could conclude that the government proved its case beyond a reasonable doubt” or is “insufficient to establish every element of the crime.” Nevils, 598

F.3d at 1167. Applying these standards to the facts of this

case, we conclude there was sufficient evidence to support

conviction on all counts.

A. Materiality in Securities Fraud

[11] Appellants argue there was insufficient evidence that

the statements at issue in the securities fraud counts were

material. Under 15 U.S.C. § 78j(b), any person who uses or

employs a manipulative or deceptive device in connection

with the sale of any security commits securities fraud. SEC

Rule 10b-5, implementing the statute, forbids the making of

“any untrue statement of a material fact.” 17 C.F.R.

1602 UNITED STATES v. JENKINS
§ 240.10b-5(b). Materiality is an element of securities fraud.

In re Cutera Secs. Litig., 610 F.3d 1103, 1108 (9th Cir. 2010)

(“Central to a 10b-5 claim is the requirement that a misrepresentation or omission of fact must be material.”)

For purposes of securities fraud, “materiality depends on

the significance the reasonable investor would place on the

withheld or misrepresented information.” Basic Inc. v. Levinson, 485 U.S. 224, 240 (1988). A statement is material if “a

reasonable investor would have considered it useful or significant.” United States v. Smith, 155 F.3d 1051, 1064 (9th Cir.

1998). The standard of materiality is an objective one. United

States v. Reyes, 577 F.3d 1069, 1076 (9th Cir. 2009).

Appellants first contend that the government failed to prove

that their misrepresentations had any effect on UniDyn’s

stock prices or the behavior of independent investors. They

argue instead that UniDyn’s stock rose due to external market

forces, namely, the dot-com bubble. This argument fails.

Materiality in securities fraud does not depend on demonstration of a market reaction to the misstatements. No. 84 Empl’rTeamster Joint Council Pension Trust Fund v. Am. West

Holding Corp., 320 F.3d 920, 934-35 (9th Cir. 2003). Nor is

the reliance of individual investors required to find a 10b-5

violation by misrepresentation. See S.E.C. v. Rana Research,

Inc., 8 F.3d 1358, 1364 (9th Cir. 1993).3

[12] The evidence at trial proved that appellants made false

3Appellants also argue that because the government failed to conclusively prove that any investors were influenced by false press releases to

purchase UniDyn stock, the press releases were not material for wire fraud

purposes. Materiality is an element of wire fraud. See Neder v. United

States, 527 U.S. 1, 20 (1999). But a statement is material for wire fraud

purposes only if it has the “natural tendency to influence or be capable of

influencing [the person to whom] it was addressed.” United States v.

Gaudin, 515 U.S. 506, 509 (1995) (internal quotation marks omitted).

There is no requirement that the statements actually influence those to

whom they are addressed. 

UNITED STATES v. JENKINS 1603
statements about the viability of UniDyn’s products, its transactions and business dealings, and the identity of its shareholders. “[I]nformation regarding a company’s financial

condition is material to investment.” Reyes, 577 F.3d at 1076;

see also Warshaw v. Xoma Corp., 74 F.3d 955, 959-60 (9th

Cir. 1996) (statements failing to disclose concerns regarding

the safety of a product were material). A reasonable investor

would have wanted to know that UniDyn’s allegedly lucrative

transactions were shams, that Gentry and Jenkins controlled

millions of shares of UniDyn stock, and that Sterling’s release

was not imminent. We conclude that the SEC filings were

false and material.

Jenkins contends that Raging Bull message board posts giving rise to two counts of securities fraud were not material

because “vague” posts on an internet message board would

not be important to a reasonable investor. Jenkins’s posts to

Raging Bull clearly concerned material information. See

Basic Inc., 485 U.S. at 240; Reyes 577 F.3d at 1075. We are

not persuaded by Jenkins’s argument that posts on an internet

message board, regardless of their content, can never be

important to a reasonable investor. At trial, the government

introduced evidence that Gentry closely monitored posts on

Raging Bull and instructed employees to post positive comments and counteract negative ones. It also introduced evidence that one of UniDyn’s board members and shareholders

read Raging Bull to keep apprised of information about the

company. This was sufficient to allow the jury to conclude

that the Raging Bull posts were material. Cf. United States v.

Phillip Morris USA, Inc., 566 F.3d 1095, 1122-23 (D.C. Cir.

2009) (holding that tobacco company’s continuous denials of

the link between cancer and smoking indicates that such

information was material, regardless of the fact that denials

were contrary to all available scientific evidence).

B. Variance Between Indictment and Evidence on Count

Seventeen.

[13] Gentry argues that the evidence was insufficient to

support his conviction on count seventeen (securities fraud)

1604 UNITED STATES v. JENKINS
because the indictment referred to false and misleading statements made on Form 10-Q filed with the SEC on April 2,

2001, but the evidence introduced at trial related to a fraudulent form 10-K filed on the same date. Because Gentry did not

raise this argument below, we review for plain error. United

States v. Olano, 507 U.S. 725, 732 (1993). To prevail, appellants “must show (1) that there was error, (2) that the error

was plain and (3) that the error affected [ ] substantial rights.”

United States v. Alghazouli, 517 F.3d 1179, 1188 (9th Cir.

2008), cert. denied Alghazouli v. United States, 129 S. Ct. 237

(2008). Even if appellants make all three of these showings,

we should reverse “only if the error seriously affects the fairness, integrity, or public reputation of judicial proceedings.”

Id. at 1188.

[14] The primary difference between a form 10-K and a

form 10-Q is the time it is filed: a 10-K is filed yearly and a

10-Q is filed quarterly. However, both the 10-K and the 10-Q

require the company to disclose information about its financial condition, operations, and the owners of its securities.

Compare U.S. SEC, Form 10-Q, http://www.sec.gov/about/

forms/form10-q.pdf, with U.S. SEC, Form 10-K, http://

www.sec.gov/about/forms/form10-k.pdf. The evidence at trial

showed the form 10-K was fraudulent for the reasons alleged

in the indictment — it failed to disclose Gentry’s ownership

of millions of shares of UniDyn Stock and falsely represented

that UniDyn had patents pending for Sterling. Furthermore,

the type of form is not an element of the offense. See 15

U.S.C. § 78ff (making it a crime to make or cause to be made

a false or misleading statement in any application, report or

document required to be filed pursuant to the chapter or regulations); 17 C.F.R. § 240.10b-5(b) (applying to any untrue

statement of material fact). Even though the indictment was

erroneous, the error did not relieve the government of proving

every element of the offense, and did not prejudice Gentry.4

See Nevils, 598 F.3d at 1167.

4For similar reasons, we reject Gentry’s argument that the evidence at

trial constructively amended count seventeen, warranting reversal.

UNITED STATES v. JENKINS 1605
C. Specific Intent To Commit Wire Fraud.

[15] Wire fraud has three elements: (1) a scheme to

defraud; (2) use of wires in furtherance of the scheme; and (3)

a specific intent to deceive or defraud. United States v. Green,

592 F.3d 1057, 1064 (9th Cir. 2010). Jenkins contends that

the government failed to prove an element of wire fraud

because it did not demonstrate that his February 13, 2001 post

on Raging Bull was made with the specific intent to participate in a scheme to defraud. We disagree.

[16] Specific intent can be established by circumstantial

evidence. United States v. Rogers, 321 F.3d 1226, 1230 (9th

Cir. 1993) (holding that misrepresentations and omissions are

sufficient from which to infer intent to defraud). The scheme

itself may be probative circumstantial evidence of the intent

to defraud. United States v. Sullivan, 522 F.3d 967, 974 (9th

Cir. 2008). Jurors considered evidence that Jenkins helped

create all of the offshore corporations holding UniDyn stock,

helped to sell the stock, and helped to move the various proceeds to accounts controlled by appellants, and, further, that

his posts on Raging Bull were false and misleading. The jury

convicted Jenkins of conspiracy to (1) commit securities and

wire fraud and (2) defraud the United States government.

From this evidence, a reasonable juror could infer that Jenkins

intended to defraud investors. 

D. Tax Evasion

On appeal, Gentry argues for the first time that the there

was insufficient evidence to support his conviction for tax

Although an indictment, once returned by the grand jury, may not thereafter be broadened, except by the grand jury, minor differences between

indictment and the proof at trial can be dismissed as a mere variance.

United States v. Hartz, 458 F.3d 1011, 1019-20 (9th Cir. 2006). If the variance does not alter the behavior for which defendant was charged, the conviction may stand. Id. at 1021. Because the type of form filed is not a

necessary element of securities fraud, any variance from the charging document did not alter the behavior for which Gentry was convicted. There

was no prejudice to Gentry. 

1606 UNITED STATES v. JENKINS
evasion under 26 U.S.C. § 7201. Because Gentry did not preserve this issue at the close of trial, we review for plain error.

Olano, 507 U.S. at 732. 

[17] The existence of a tax deficiency is an element of tax

evasion under 26 U.S.C. § 7201. Boulware v. United States,

552 U.S. 421, 424 (2008). Gentry argues that Agent Kathleen

Cornelius (the IRS agent who calculated the gain Gentry realized from UniDyn stock sales) gave little explanation of how

she calculated the deficiency and did not consider Gentry’s

testimony about his basis in the shares, which would have offset any gains realized by the sales. The record does not compel a conclusion that Agent Cornelius’ calculation was

incorrect.

E. Financial Transactions and Concealment Money 

Laundering

Appellants were convicted of “concealment money laundering” under 18 U.S.C. § 1956(a)(1)(B)(i), which makes it a

crime for a person to conduct a financial transaction that

involves use of the proceeds of a specified unlawful activity,

“knowing that the transaction is designed in whole or in part

. . . to conceal or disguise the nature, the location, the source,

the ownership, or the control of the proceeds of specified

unlawful activity . . . .” A “financial transaction” under 18

U.S.C. § 1956(c)(4) must itself affect interstate or foreign

commerce in a way, or use a financial institution that is

engaged in or affects interstate or foreign commerce. Jenkins

argues that there was insufficient evidence from which a reasonable juror could find that the conduct charged in six counts

qualified as “affecting interstate or foreign commerce.” 

[18] The six counts involved transfer of funds by wire and

writing checks to fund investments and to purchase vehicles.

These acts affect interstate commerce and certainly are financial transactions. See 18 U.S.C. § 1956(c)(4)(i) (transfer of

funds by wire is a financial transaction); 18 U.S.C.

UNITED STATES v. JENKINS 1607
§ 1956(c)(4)(ii), (c)(5) (use of monetary instruments, including checks, is a financial transaction); 18 U.S.C.

§ 1956(c)(4)(iii) (transactions involving transfer of title to a

vehicle is a financial transaction); United States v. Evans, 272

F.3d 1069, 1080 (8th Cir. 2001) (holding that the purchase of

an automobile from a commercial dealer unquestionably has

an effect on interstate commerce). There was sufficient evidence from which a juror could find that Jenkins engaged in

financial transactions to support conviction on the money

laundering counts.

F. International Concealment Money Laundering

Appellants were also convicted of several counts of international concealment money laundering under 18 U.S.C.

§ 1956(a)(2)(B)(i), which applies to transfers of funds into the

United States from a foreign country, or vice-versa. Gentry

contends that there was insufficient evidence that the funds in

counts thirty-five to forty-five actually traveled into or out of

the United States. Gentry argues that while Thomson Kernaghan was a Canadian brokerage firm, and Global Bank of

Commerce Swiss American Bank Limited was in Antigua, the

debiting banks for the transfers at issue were located in New

York City. Thus, he concludes, the funds themselves never

crossed United States borders, even if the orders to transfer

them came from originating banks abroad.

[19] The only witnesses to testify about the process of

international wire transfers were Agent Cornelius and Gentry.

Agent Cornelius testified that the funds originated wherever

the “originator” bank was located. During her testimony, the

government introduced into evidence two summary exhibits,

pursuant to Federal Rule of Evidence 1006,5 illustrating the

5Federal Rule of Evidence 1006 permits the contents of voluminous

writings which cannot conveniently be examined in court to be presented

in the form of a chart, summary, or calculation, provided the original writings are available to the parties. In this case, the charts summarized bank

records and checks introduced into evidence. 

1608 UNITED STATES v. JENKINS
flow of funds from Canada to the United States, and from the

United States to Antigua. Though Gentry disputed the accuracy of the summary charts and Agent Cornelius’s testimony,

where the evidence supports either of two constructions, we

must assume that the jury resolved this dispute in favor of the

government and defer to that resolution. Jackson, 443 U.S. at

326.

G. Profits v. Proceeds in Money Laundering

As a final basis to challenge their money laundering convictions, appellants argue that the government failed to prove

that the funds at issue were the “profits” of specified unlawful

activity, rather than the “proceeds” (meaning gross receipts)

of that activity.6 To establish the “profits” of a specified

unlawful activity, the prosecution “needs to show only that a

single instance of specified unlawful activity was profitable

and gave rise to the money involved in a charged transaction.”

United States v. Santos, 553 U.S. 507, 520 (2008) (Scalia, J.,

joined by Souter, Thomas, & Ginsburg, J.J., a plurality joined

by Stevens, J.). The factfinder need not consider the “profitability of some entire criminal enterprise.” Id. “What counts

is whether the receipts from the . . . unlawful act exceeded the

costs fairly attributable to it.” Id. The government met its burden here.

[20] The evidence at trial established that all of the funds

involved in the money laundering transactions were derived

from the sale of UniDyn stock held in accounts at Thomson

Kernaghan and Union Securities. A reasonable juror could

6

In United States v. Santos, 553 U.S. 507, 509, 523 (2008), a plurality

of the Court held that the rule of lenity demanded that the term “proceeds”

in 18 U.S.C. § 1956(a)(1) be construed to mean profits rather than

receipts. After Santos, Congress amended the money laundering statute to

define proceeds to include the gross receipts of unlawful activity. 18

U.S.C. § 1956 (c)(9). The amendment became effective May 20, 2009.

Because defendants were indicted on May 3, 2006, Santos governs this

case. 

UNITED STATES v. JENKINS 1609
have concluded that those funds were the receipts of appellants’ securities fraud and wire fraud.7

 There was also sufficient evidence to support the jury’s conclusion that those

receipts exceeded the costs fairly attributable to securities

fraud and wire fraud. Agent Cornelius testified that, for each

account from which funds were laundered, she calculated the

“net proceeds” in the account, meaning the total amount realized from the sales of stock less any commissions paid. No

evidence indicated that any funds in the Canadian accounts

were used to defray the costs of appellants’ securities fraud

and wire fraud (for example, by paying for the costs of wiring

false press releases). The evidence was sufficient to allow a

reasonable juror to conclude that the funds laundered were the

profits of securities fraud and wire fraud. 

III. The Money Laundering Instructions Did Not

Prejudice Appellants.

[21] Defendants next contend that the money laundering

instructions were reversible error. In order to convict defendants of international concealment money laundering, the statute requires the government to prove that defendants’

movement of funds out of or into the United States was

designed to conceal the nature, location, source, or ownership

or control of the profits of specified unlawful activity. 18

U.S.C. § 1956(a)(2)(B)(i) (emphasis added). Similarly, in

order to prove that defendants concealed money as part of a

7Gentry argues that the money laundered could not be the profits of

unlawful activity, because his securities and wire fraud convictions were

based on acts committed on or after April 17, 2001 and the bulk of the

money laundering transactions occurred on or before April 12, 2001.

However, the Government introduced extensive evidence of misrepresentations in Raging Bull posts, press releases and SEC filings that occurred

between 1997 and April 2001. Those misrepresentations concerned the

very subjects underlying Gentry’s securities fraud convictions: the viability of Sterling, the profits of UniDyn, and the identity of its investors. This

was sufficient to allow the jury to conclude the funds were the receipts of

prior, uncharged securities fraud. 

1610 UNITED STATES v. JENKINS
money laundering scheme, the government had to prove that

defendants knowingly used the proceeds of a specified unlawful activity in a financial transaction, knowing that the transaction was intended to conceal the nature, location, source,

ownership, or control of the proceeds of specified unlawful

activity. 18 U.S.C. § 1956(a)(1)(B)(i) (emphasis added). The

statutory definition of specified unlawful activity includes

securities fraud and wire fraud. See 18 U.S.C.§ 1956(c)(7)(A)

(incorporating offenses listed in 18 U.S.C. § 1961(1)). 

In this case, rather than use the term “specified unlawful

activity,” the jury instructions used the term “prior criminal

activity.” Appellants argue the instructions permitted the jury

to convict them of laundering money that was not the proceeds of securities fraud or wire fraud. Because appellants did

not object to the jury instructions at trial, we review for plain

error. Alghazouli, 517 F.3d at 1188. 

[22] “It is well-established that a trial court errs if it fails

to instruct the jury on an element of a charged offense.” Id.

at 1189 (citing United States v. Gaudin, 515 U.S. 506, 509-11

(1995)). However, we hold that the error did not affect appellants’ substantial rights. For an error to affect substantial

rights, “in most cases it means that the error must have been

prejudicial.” Alghazouli, 517 F.3d at 1190. When determining

prejudice, the court does not examine the jury instructions in

isolation. Id. It may take into account the evidence presented

at trial. See United States v. Nguyen, 565 F.3d 668, 677-78

(9th Cir. 2009) (concluding that plainly erroneous jury

instructions did not affect substantial rights where there was

significant, uncontested evidence of the missing element presented at trial).

[23] Taking into account the other crimes charged and the

evidence introduced at trial, we cannot conclude that, had the

money laundering instructions included the term “securities

fraud and wire fraud” instead of “prior criminal activity,”

there is a reasonable probability the jury’s verdict would have

UNITED STATES v. JENKINS 1611
been different. Four facts support our conclusion. First, the

jury instructions, while erroneous, clearly required the jury to

find that the money was derived from prior criminal activity.

Cf. Alghazouli, 517 F.3d at 1191 (stressing that the danger of

an instruction for conspiracy to commit money laundering

that failed to mention the element that the funds be derived

from specified unlawful activity is that the jury might be persuaded to convict even though the laundered money was

derived from legal activity). Second, appellants do not argue

that the funds at issue were derived from anything other than

the sale of UniDyn stock. Third, the jury convicted Jenkins

and Gentry of multiple counts of securities and wire fraud, so

it was well aware of the nature of the illegal activity from

which the money was derived. See id. at 1191-92. Finally, the

only other crimes charged were tax evasion (for failing to

report income derived from the sales of UniDyn stock) and

conspiracy to commit securities fraud and wire fraud. Thus,

it is virtually impossible that the jury convicted appellants of

money laundering on a finding that the funds involved anything other than the proceeds of securities fraud and wire

fraud.

IV. Gentry Fails to Prove that the Trial Court

Erroneously Denied His Additional Motions

Gentry argues that the district court erroneously denied two

motions made during trial. First, he argues the district court

erroneously denied his motion to sever his trial from Jenkins’s, because Jenkins’s trial strategy was to downplay his

culpability in comparison to Gentry’s. A district court’s denial

of a motion to sever is reviewed for abuse of discretion.

United States v. Decoud, 456 F.3d 996, 1008 (9th Cir. 2006).

“The test for abuse of discretion by the district court is

whether a joint trial was so manifestly prejudicial as to require

the trial judge to exercise his discretion in but one way, by

ordering a separate trial.” Id. (internal quotation marks and

citation omitted). 

1612 UNITED STATES v. JENKINS
[24] Gentry has not met this burden. The possibility of

acquittal in a separate trial is not itself sufficient to require

severance. Id. In addition, because appellants were charged

with conspiracy, a joint trial was particularly appropriate.

Zafiro v. United States, 506 U.S. 534, 536-37 (1993). 

Gentry also argues that the district court violated his constitutional right to confrontation when it denied his motion to

conduct additional cross-examination of Hiroshi Tsuriya,

whom Gentry claimed signed a $200 million contract to purchase Sterling. “[A] limitation on cross examination does not

violate the Confrontation Clause unless it limits relevant testimony and prejudices the defendant.” United States v.

Rodriguez-Rodriguez, 393 F.3d 849, 856 (9th Cir. 2005).

[25] Gentry has not demonstrated that the district court

limited relevant testimony. Tsuriya testified during a video

deposition that he never signed a contract and that the signature on the alleged nineteen-page contract was not his. On

cross examination, Tsuriya admitted that in 1999, he had (at

Gentry’s request) signed a single-page document without

reading it and faxed it to Gentry. Tsuriya testified that he had

not seen the document since. Gentry has not demonstrated

how the document Tsuriya admits to signing (which Gentry

admits is “innocuous”) was relevant or how his inability to

conduct additional cross-examination in respect to it prejudiced his defense. 

V. The District Court Did Not Err at Sentencing

Appellants first argue that the district court committed procedural error at sentencing by miscalculating the amount of

loss and number of victims. We review a sentencing court’s

application of the Guidelines to the case, including its calculation of the Guidelines range, for abuse of discretion. United

States v. Carty, 520 F.3d 984, 993 (9th Cir. 2008) (en banc),

cert. denied Zavala v. United States, 553 U.S. 1061 (2008). A

district court’s findings of fact at sentencing must be supUNITED STATES v. JENKINS 1613
ported by a preponderance of the evidence, unless the sentencing factor has an “extremely disproportionate effect on

the sentence relative to the offense of conviction,” in which

case findings of fact must be supported by clear and convincing evidence. United States v. Dare, 425 F.3d 634, 642 (9th

Cir. 2005). We hold that the district court did not err, either

procedurally or substantively, at sentencing.

A. Amount of Loss

Loss calculation is highly individualized and fact specific;

the same method is not necessarily appropriate in all cases.

United States v. Zolp, 479 F.3d 715, 718 (9th Cir. 2007). The

Sentencing Guidelines offer several possible approaches to

loss calculation. U.S. SENTENCING GUIDELINES MANUAL

§ 2B1.1 cmt. 3(A) (2009). Typically, loss is the greater of

actual loss (“the reasonably foreseeable pecuniary harm that

resulted from the offense”) or intended loss (“the pecuniary

harm that was intended to result”). Zolp, 479 F.3d at 718-19.

The sentencing court uses the gain that resulted from the

offense as an alternative measure of loss “only if there is a

loss but it reasonably cannot be determined.” U.S. SENTENCING

GUIDELINES MANUAL § 2B1.1 cmt. 3(B)(2009).

In this case, because the loss amount increased the base

offense level by twenty, the district court required the Government to provide “clear and convincing” evidence of the

loss amount.8 At sentencing, the district court considered two

options: a loss amount of $26 million (calculated by multiplying the average price of UniDyn stock during the conspiracy

less the residual value of the stock after the scheme ended by

8The district court was overly cautious in adopting the clear and convincing standard. Sentencing enhancements based entirely on the nature

and extent of the conspiracy, as opposed to acquitted or uncharged conduct, typically do not require proof by the clear and convincing standard.

United States v. Armstead, 552 F.3d 769, 777 (9th Cir. 2008); United

States v. Harrison-Philpot, 978 F.2d 1520, 1524 (9th Cir. 1992). 

1614 UNITED STATES v. JENKINS
the number of outstanding shares), and a loss amount of $9

million (based on the court’s measure of appellants’ ill-gotten

gains subject to forfeiture). The district court believed that the

evidence of ill-gotten gains was “so clear and convincing”

that it chose to adopt that measure of loss over the “more controversial and disputable” amount based on stock prices.

[26] The sentencing guidelines clearly permitted the district court to adopt this method of calculating loss. Further,

the district court’s factual finding that appellants realized

approximately $9 million of ill-gotten gains was made after a

hearing during which the court heard arguments by both parties, considered all of the evidence introduced at trial, and

reviewed evidence not introduced at trial. This factual finding

was not clearly erroneous. The district court did not err in calculating the amount of loss.

B. Number of Victims

[27] Appellants challenge the court’s determination that

there were more than fifty victims of their schemes, arguing

that there was no evidence of any loss to individuals resulting

from their conduct. We disagree. The district court correctly

required proof by a preponderance of the evidence that there

were more than fifty victims. United States v. Showalter, 569

F.3d 1150, 1160 (9th Cir. 2009). The sentencing judge

reviewed approximately sixty victim impact statements, SEC

filings submitted into evidence stating that there were approximately 2500 shareholders of UniDyn stock, and evidence at

trial demonstrating that 17 million shares of UniDyn stock

were held in street names. The court’s factual finding of more

than fifty victims was not clearly erroneous. There was no

error in sentencing.9

9We reject Gentry’s argument that the district court erred when it made

a two-level upward adjustment for abuse of public trust under U.S. Sentencing Guidelines Manual section 3B1.3 and a three-level upward adjustment for his role as manager under section 3B1.1. The Sentencing

Guidelines specifically provide that an enhancement “based upon an abuse

of a position of trust . . . may be employed in addition to an adjustment

under § 3B1.1. . . .” U.S. Sentencing Guidelines Manual § 3B1.3. 

UNITED STATES v. JENKINS 1615
C. Substantive Unreasonableness

Finally, Jenkins contends that his sentence is substantively

unreasonable. Jenkins was sentenced to ninety months in

prison, a term half as long as Gentry’s and significantly below

the Guidelines range of 324 to 405 months. In determining

substantive reasonableness, we must consider the “totality of

the circumstances,” including the degree of variance for a sentence imposed outside of the Guidelines range, giving “due

deference to the district court’s decision that the § 3553(a)

factors, on a whole, justify the extent of the variance.” Carty,

520 F.3d at 993 (quoting Gall v. United States, 552 U.S. 38,

51 (2007)).

[28] In this case, the district court considered that Jenkins

used his expertise and legal training to create a web of fictitious offshore companies to perpetrate fraud, that he had been

involved in illegal schemes to avoid taxes for twenty years

and that he refused to acknowledge those schemes’ illegality.

However, the court considered “most significantly” that Jenkins was “less culpable” than Gentry and did not receive large

profits from the fraud. Giving due deference to the sentencing

judge, Jenkins’s ninety-month sentence was substantively reasonable.

CONCLUSION

We AFFIRM appellants’ convictions and sentences.

1616 UNITED STATES v. JENKINS