The Honorable H. Franklin Waters, United States District Judge for t he Western 1 District of Arkansas, sitting by designation.



## United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ No. 97-3207

___________ United States of America, * * Appellee, * * Appeal from the United States v. * District Court for the * District of South Dakota F. Butch Oseby, * * Appellant. *

___________ Submitted: March 10, 1998 Filed: July 8, 1998

___________ Before BEAM and HEANEY, Circuit Judges, and WATERS, District Judge. 1

___________ WATERS, District Judge. F. Butch Oseby appeals his conviction and sentence for conspiring to defraud the United States and giving a gratuity to a public officia l. Oseby contends that the district court erre d when it: (1) unforeseeably expanded a federal statute; (2) improperl y admitted s tatements made by a co-conspirator; and (3) miscalculated loss under th e sentencing guidelines. For the reasons stated below , we affirm Oseby's conviction, but vacate his sentence, and remand for further proceedings consistent with this opinion.The Act defines "excess property" as "any property under the control of an y 2 Federal agency which is not required for its needs and the discharge of it s responsibilities, as determined by the head thereof." 40 U.S.C.A. § 472(e) (1986). The Act defines "surplus property" as " any excess property not required for the 3 needs and the discharge of the responsibilities of all Federal agencies, as determined by the Administrator [of General Services]." 40 U.S.C.A. § 472 (g) (1986). –2– I. Background
A. The Federal Excess Property Program Congress enacted the Federal Property and Admi nistrative Services Act of 1949 (the "Act"), "to provide for the Gover nment an economical and efficient system for (a) the procurement and supply of personal property . . .; (b) the utilization of availabl e property; (c) the disposal of surplus property; and (d) records management." 4 0 U.S.C.A. § 471 (1986). Under the Act, the General Services Administration ("GSA") has the authority to oversee the transfer of all "excess property." See generally 4 0 U.S.C.A. § 483(a)(1) (1986). Excess property is essentially personal property that has outlived its usefulness to a federal agency. "Property that has outlived its usefulness 2 to t he Federal Government is declared 'surplus' and may be transferred to private o r other public entities." Valley Forge Christian College v. Americans United fo r 3 Separation of Church and State, Inc. , 454 U.S. 464, 466-67 (1982) (footnote omitted).
Federal agencies are re sponsible for reporting and transferring excess property, and for filling their requirements for personal property through other federal agencies. See generally 41 C.F.R. § 101-43.102 (1997). A request for personal property must be direc ted to the appropriate GSA regional office which, in turn, screens the request aga inst lists of excess property available. See generally 41 C.F.R. § 101-43.30 2 (199 7). GSA then determines whether to fill the request with available exces s property, or to authorize the purchase of new or replacement property. Id.–3–

Aft er GSA receives a report of excess property, a "screening period" follows

. See 41 C. F.R. § 101-43.001-30 (1997). The screening period is the period durin g whichexcess property is available to federal agencies. A "screener" is an individual who physically visits plac es where excess property is being stored to determine if it is appropriate for the needs of a federal agency.
To minimize delays in screening excess property a nd to make property available
more quickly and efficiently, GSA permits non-federal agency individuals to act a s
screeners f

or federal agencies. See generally 41 C.F.R. § 101-43.315 (1997). A federal ag ency can request that GSA certify an individual as a screener to act as a representative of that federal agency in procuring excess property. Id.
When a screener locates a piece of excess property that a federal agency needs, the agency must request a

pproval from GSA to transfer the property. All transfers of
exces s personal property made between federal agencies are by Standard Form 12 2 ("SF 12 2"). See 41 C.F.R. § 101-43.309-5 (1997). An official from the requestin g federal agency must sign "Block 9" of the SF 122. See41 C.F.R. § 1 01-43.4901-122-1 (1997). The SF 122 is then sent to GSA for approv al. The excess property will not be transferred unless these signatures are obtained.

B. Amendments to the Indian Self Determination Act The Indian Self Determination Act (the "ISDA"), allows federally recognize d Indian tribes to enter into contracts with the Federal Government to administer a wide variety of programs ("self-determination contracts"). See gen erally 25 U.S.C.A. § 450f (Supp. 1998). Prior to the 1988 amendments to the ISDA, excess property could be transferre d to an Indian tribe by way of donation, but not through the excess federa l property program describe d above. The 1988 amendments to the ISDA provided that the Bureau of Indian Affairs (the "BIA") could donate any BIA excess persona l and real pro perty to an Indian tribe or tribal organization in connection with any self

determination contract. See 25 U.S.C.A. § 450j(f)(2) (Supp. 1998). In addition, theDME was not just in the business of buying and sel ling excess property. It also 4 bought and sold other varieties of equipment. –4– 1988 amendments permit the BIA to acquire excess or surplus property through GSA for use on any self-determination contract, which, in effec t, puts Indian tribes and tribal organizat ions on the same level as federal agencies in regard to the acquisition an d utilization of excess federal property. See 25 U.S.C.A. § 450j(f)(3) (Supp. 1998)
C. Oseby's Role as a Screener In early 1991, Oseby began having discussi ons with Russell Hawkins, chairman of the Sisseton-Wahpeton Sioux Tribe (t he "SWST"), and Gerald German, head of the road maintenance department for the SWST, regarding t he SWST's acquisition and use of e xcess federal property. The SWST had a self-determination contract with th e Federal Government for road maintenance on its tribal lands, and, thus, it could acquire property through the excess federal property program for use on this contract. Hawkins explained to Oseby that if the SWST could sell some of its excess propert y, it could use the money to obtain better equipment for its roads department. In Apr il of 1991, Oseby became a 24.5% shareholder in Dakota Machine Equipm ent ("DME"), a South Dakota corporation. DME bought and sold new and used equipment. The other shareholders
were Warren Barse and Donald L. Jerke. DME became the vehicle for the purchase of excess federal property from the SWST. 4
Thereafter, Oseby became certified as a sc reener for the SWST. Roger Raether
was also appointed as a screener for the SWST. As screeners, Oseby and Raethe r located excess property and transferred it to the SWST. Althou gh excess property may be held at any federal agency, Oseby screened excess property from the Department of Defense. Specifically, Oseby screened property from Department of Defens e fa cilities called Defense Re-utilization and Marketing Offices ("DRMO"). After th e pr operty was transferred to the SWST, the SWST would sell the excess property t o DME. DME would then turn around and sell the excess property for a much larger–5–

price than it paid the SWST. Oseby testified that the SWST received approximatel y 10 % of the proceeds from the sale of excess property. The screeners also received a 13% share of the proceeds. The remainder of the proceeds went to DME.

In order to obtain t

he necessary approval on the GSA transfer form, Oseby had to enlist h is friend, Charles Hacker, who was a BIA employee, and, at one time , married to Gerald German's daughter. Hacker asked for and received authority to sign
as an approving official for all the transfers of excess property to Indian tribes in the country. Hacker signed as the BIA approving official i n Block 9 of the SF 122s for the transfers of

excess property to the SWST. In fact, Hacker gave Oseby pre-signed, or pre-approve d, SF 122s for him to use in acquiring excess property for the SWST

. Thus, in most instances, Hacker never knew what excess property Oseby was s creening until he rece ived a copy of the approved SF 122. Oseby was convicted of givin g Hacker cash payments of several thousand dollars to induce Hacker to participate i n this plan.

Bef ore Oseby began screening property for the SWST, however, Oseby , Hawkins, Raether and others met with various Federal Government officials an d attorneys regarding the legality of the SWST acquiring excess federal property and then im mediately selling it. Oseby contends that he attended several meetings an d discussions on the issue, and, based on the advice of counsel, he believed that it was legal for the SWST to sell excess federal property. Specifically, Oseby received a legal opinionfrom Bert Hirsch, general counsel for the SWST, in which Hirsch stated that once the SWST received excess property, the prop erty became tribal property free and clear of any encumbrances, and, thus, the SWST could dispose of it without restriction.
In the beginning, there was some confusion among employ ees at the Department of Int erior and GSA regarding whether or not tribal organizations could dispose o f excess property as soon as they received it, without ever using th e property, and pocket the proceeds. Due to this confusion, Bobby Givens, Manager of Personal PropertyWe note that the district court instructed the jury that "good faith " was a defense 5 to the c harges against Oseby. Specifically, the court, in Instruction 36, told the jur y that "an honest mistake" in ju dgment does not rise to the level of criminal intent. The court also instructed the jury, howev er, that "mere disagreement" with the law, did not constitute good faith misunderstanding of the law, and as such, was not a valid defense to the charges.
–6– Services of GSA, in a memorandum dated January 22, 1992, halted all transfers o f excess property to the SWST pending further investigation of the issue . Oseby testified that h e received a copy of this memorandum from either Hacker or Raether. In April of 1992, Grant Beattie, Deputy Director of Property Management for GSA, issued a
memoran dum

stating that representatives of the Department of Interior and th e Department of Health and Human Ser vices had informed GSA that the immediate sale by tribal organizations of excess property was not in compliance with thei r int erpretation of the Act. As a result, Beattie ordered that all SF 122s submitted b y BIAfor excess personal property could only be approved if the excess property was intended for use in connection with a self-determination contract.
Oseby testified that he realized that these memoranda meant that he could n o lo nger screen property that was intended for immediate sale by the SWST. Oseb y furt her testified that he talked to Hacker about the implications of these memoranda. Thereafter, Oseby began sta ting on the SF 122s that the excess property was intended for use "in conjunction with" the SWST's self-determination contract. GSA wa s intentionally given the false impression t hat the SWST did not intend to sell the excess property, and thus, GSA continued to approve the transfers of excess property to the SWST. Oseby testified that he believed that as long as the SWST used the "proceeds" from the sale of excess property on its self-determination contract, then the sale wa s in c ompliance with the Act. Oseby admitted, however, that he understood GSA' s position - he just did not agree with it. 5–7–

D. Co-Conspirator Statements A s earch was conduced of Raether's residence in January of 1994, and several memoranda from Raether to Hawkins regarding the sale of excess property wer e discovered. The memoranda generally state Raether's ide as for fighting the GSA on the issue of whether Indian tribes could sell excess property without using the property

. The language from the memoranda show that Raether was aware of GSA's position that Indian tribes were not permitted by law to sell excess property.
E. Procedural Background The United States orig inally named Hacker, DME, Oseby, Raether and Jerke in an indi ctment charging them with conspiracy to: (1) make false statements of material facts in violation of 18 U.S.C.A. § 1001; (2) misapply tribal funds in violation of 1 8 U.S.C.A. § 666; and (3) convert funds belong ing to Indian tribes or tribal organizations in vio lation of 18 U.S.C.A. § 1163. The defendants filed a motion to dismiss , contendin g that Congress intended to exempt Indian tribes from compliance with th e Act wh en it amended the ISDA in 1988. The district court denied their motions t o dismiss. See United States v. Hacker , 883 F. Supp. 444 (D.S.D. 1994). Raether and Hawkins were ultimately t ried together and were found guilty, however, their verdicts
were overturned and the district court granted a new trial, which this court affirmed

. See United States v. Raether , 82 F.3d 192 (8th Cir. 1996). Raether was subsequently retried alone and was found guilty. He appealed his convictions based on the defense of legal impossibility, and we affirmed his convictions without opinion.

On Septe mber 19, 1996, the government issued an indictment charging Oseb y with consp iracy to: (1) make false statements of material facts in violation of 1 8 U.S.C.A. § 1001; (2) misapply tribal property in violation of 18 U.S.C.A. § 666(a)(1)(A); and (3) convert property belonging to Indian tribes or tribal organizationsCount two of the indictment charged Oseby with knowingly making fals e 6 st atements of material facts in violation of 18 U.S.C.A. § 1001. Count two wa s subsequently dismissed by motion of the United States. The government asserts that Oseby raise s this issue for the first time on appeal. 7 We disagree. Although Oseby never specificallyframed his argument as a violation of his due process rights, he did consistently argue throughout tr ial that the law as decided by the district court in Hacker was not the law at the time Oseby's was screenin g property, and thus, should not be applied to his ca se. Therefore, we find that this issue is properly before the court. –8– in violati on of 18 U.S.C.A. § 1163. Oseby was also charged with bribery of a public 6 official in violation of 18 U.S.C.A. § 201(b). On February 21, 1997, Oseby wa s convictedof conspiracy and of giving an illegal gratuity to a public official, the lesser included offense, in violation of 18 U.S.C.A. 201(c).

II. Violation of Oseby's Due Process Rights 7
Oseby moved to dismiss the conspiracy count based on the defense of lega l impo ssibility. He contended that it was not illegal to sell excess property during th e time he was screening, and thus, conspiracy to sell excess p roperty could not constitute
a c rime. The magistrate denied Oseby's motion, relying on the district court's opinion in Hacker . Oseby does not dispute the validity of the district court's decision in Hacker

. Instead , he argues that Hacker was an unforseen judicial enlargement of the statutes

. Oseby contends that w hen the holding in Hacker was applied retroactively to his case, he w as denied due process of the law. Specifically, Oseby asserts that the court' s instruct ions to the jury, which contained a statement of the law as determined b y Hac ker , substantially prejudiced his defense. The issue of whether a constitutiona l
v i olation has occurred is subject to the court's de novo review

. Stallings v. Delo , 117 F.3d 378, 380 (8th Cir.), cert. denied , 118 S. Ct. 393 (1997).–9–

In Hacker , Judge Piersol thoroughly examined the issue of whether Congres s intended to exempt Indian tribes and tribal organi zations from compliance with the Act. The defendants ass erted that when excess property was donated to a tribe by the BIA, ti tle to the excess property passed to the tribe, and thus, the tribe could dispose of the pro perty without restriction. The district court disagreed with the defendants ' interpretation of the Act and the 1988 amendments to the ISDA an d held that "Congress intended, through the 1988 amendments to the Indian Self-Determination Act, to lessen the reg ulatory requirements that Indian tribes and tribal organizations must meet t o obtain excess federal property for use on Indian self-determination contracts." Hacker , 883 F. Supp. at 448. T he court concluded, however, that as a matter of law, Congress did not int end that the tribes receive "authority to sell excess federal property b y ob taining that property through the GSA screening procedure." Id. Such a grant o f authority w ould have put Indian tribes and tribal organizations at a higher level tha n federal agencies in regard to the utilization of excess property.
Oseby asserts that, although the district c ourt's determination as to the legality of the Indian tribes selling excess federal property may be considered valid by the court, and the jury instructions given may be considered valid statements of the law, the 1994 decision in Hacker

was not foreseeable to Oseby while he operated as a screener for the SWST. Thus, Oseby contends that his due process rights were violated because he did not have fair warning that his conduct was forbidden by the statutes.

Oseb y cites Bouie v. City of Columbia , 378 U.S. 347, 350 (1964), where th e United States Supreme Court restated the basic principle that "a criminal statute must giv e fair warning of the conduct that it makes a crime." Failure of a statute to do s o violates an individual's due process rights.

The cons titutional requirement of definiteness is violated by a crimina l statute that fails to give a person of ordinary intelligence fair notice that his contemplated conduct is forbidden by the statute. The underlyingThe jury was not asked t o decide which substantive offense Oseby committed. 8 They were only asked to find whether he conspired to commit an offense against the United States in violation of 18 U.S.C.A. § 371. –10– principle is that no man shall be held criminally responsible for conduc t which he could not reasonably understand to be proscribed.

Id. , 378 U.S. at 351 (internal quotation marks and citation omitted). In addition, th e Court held that "a deprivation of the right of fair warnin g can result not only from vague statutory language but also from an unforeseeable and retroactive judicial expansion of narrow and precise statutory language." Id. , at 352.
We find Oseby's due process argume nt to be without merit. Even if Hacker was an unforeseeable judicial enlargement of the statutes, Oseby's due process rights would still not have been violated in view of the district court's instructions to the jury. The conduct that Hacker

held is forbidden bythe statutes is not the same conduct for which Oseby was convicted. Hac ker held that selling excess federal property was prohibited by the Act. Oseby was not indicted for, or convicted of, selling excess federal property.

Oseby was indicted and convicted of conspi racy to make false statements and/or to misapply and convert tribal property. The conspiracy to make false statement s 8 charge arose from statements made on the SF 122s by Oseby indicating that the excess pro perty was intended for use in conjunction with the SWST's self-determinatio n contract. The excess property was actually intended fo r sale to DME. The government indictedOseby for conspiracy to misapply and convert tribal property because o f evidence that Oseby screened exce ss property on behalf of certain tribal organizations, but did not transfer all of the property to the tribes. For example, there was evidence introduced at trial that showed Oseby screened several graders for the Santa Ana Tribe,–11–

the I sleta Pueblo, and for the SWST. The Santa Ana Tribe only received one of th e three graders screened on its behalf, and DME sold the other two for a profit.

Bot h of these activities were clearly forbidden by the statutes before Hacker

. Specifi cally, § 1001 prohibits anyone from knowingly and willfully making a fals e statement of material fact to a federal agency. In this case, Oseby conspired to make false statements of material facts to GSA, and at the time he contemplated that conduct, he h ad fair warning that he could be held criminally responsible for his actions

. Likewise, §§ 666 and 1163 p rohibit someone from misapplying or converting property belong ing to an Indian tribe or tribal organization. Oseby was indicted for screenin g property on behalf of Indian tribe and converting the property to his own use. There can be no question that Oseby was put on fair notice that such conduct was criminal under the statutes at the time of his actions.
Therefore, we find that no constitutional violation occurred in this case. This was not a situation where a law punished as a crime "an act previously committed, whic h
was innocent w hen done." Davis v. State of Nebraska , 958 F.2d 831, 833 (8th Cir

. 1992).
III. Admissibility of Statements of Co-Conspirator

Under Fe deral Rule of Evidence 801(d)(2)(E), a statement is not hearsay if it is made "by a coconspirator of a party during the course and in furtherance of th e conspiracy." To satisfy the req uirements of this exception, the government must prove by a preponderance of the evidence that "(1) a conspiracy existed; ( 2) that the defendant and declarant were part of the conspiracy; and (3) that the declaration was made during the course and in furtherance of the conspiracy." United States v. Kocher , 948 F.2 d 483, 485 (8th Cir. 1991) (internal quotation marks and citation omitted). A distric t court's deter

mination that the conditions Rule 801(d)(2)(E) have been met is reviewed under the clearly erroneous standard of review. Id.–12–

At t rial, the government offered as evidence against Oseby the memorand a obt ainedduring the search of Raether's residence. The district court received th e memoranda into evidence over Oseby's objection after finding that a conspirac y between Oseby, Raether, Hawkins and Hacker existed, and that the statements wer e made in furtherance of the conspiracy.

On appeal, Oseby contends that there was insufficient evidence to support a finding of a conspiracy. Specifically, Oseby asserts that there was no evidence that he shared a "common goal" with Raether. Oseby also contends that the district court erred when it held the sta

tements were made in furtherance of the conspiracy. We disagree.
"[T]he essential elements of a conspiracy are an agreement with at least one other person w ith the objective to violate the law, coupled with one or more overt acts i n furtherance of the illegal purpose." Uni ted States v. Fetlow , 21 F.3d 243, 247 (8th Cir. 1994). "A criminal conspiracy may be inferred from totally circumstantial evidence." Id. Furthermore, "[o]nce a conspiracy is found, only slight evidence linking a defendant to the conspiracy is necessary to convict." Id.

This court has also held that "[t]he identity and exact participation of the othe r coconspirator s in a conspiracy is not required." United States v. Jankowski , 713 F.2d 394, 397 (8th Cir. 1983).
Secrecy and concealment are essential features of successful conspiracy. . . . Hence the law rightly gives ro om for allowing the conviction of those discovered upon showing sufficiently the essential nature of the plan and their connections with it, without requiring evidence of knowledge of all its details or of the participation of others.

United States v. Kroh , 915 F.2d 326, 334 (8th Cir. 1990) (internal quotation marks and citation omitted).–13–

In addit ion, in United States v. Rosnow , 977 F.2d 399, 405 (8th Cir. 1992), we stated that "it is not necessary to show that all the conspirators were involved in each transaction or that all the conspirators even knew each other."
However, for a wheel conspiracy to exist those people who form th e wheel's spokes must have been aware of each other and must d o something in furtherance of some single, illeg al enterprise. Otherwise, the conspiracy lacks the rim of the wheel to enclose the s pokes. If there is not s o me interaction between those conspirators who form the spokes of the whe el as to at least one common illegal object, the wheel is incomplete , and two or more conspiracies rather than one are charged.

Id. (internal quotation marks, citations and brackets omitted). In other words, " a common purpose of a single enterprise must mot ivate each participant and each act and
m e re knowledge of another similarly motivated conspiracy or an overlap in personnel do[es] not prove one overall agreement." Id. (internal quotation marks, footnote and citations omitted).

It is undisputed that both Oseby and Raether acted as screeners for the SWS T under the direction of its tr ibal chairman, Hawkins. There was evidence produced that showed Oseby and Hawkins agreed that Oseby would screen property for the SWST and that the SWST would sell the property to DME. Furthermore, the governmen t introduced evidence that Oseby, Hacker and Raether had met, on at least one occasion, to discuss this plan. Th ere was also evidence that Oseby and Raether both attended a meeting in Washington, D.C., in August of 1991, where the legality of selling exces s federal property was discussed. In addit ion, Oseby testified that in early 1992, after he received copies of GSA's memoranda, he talked to Hacker about the implications o f GSA's position. Raether's memoranda show that he was also concerned about GSA's p o sition and that he and Hawkins had been communicating about what could be done to circumvent GSA's new policy.–14–

In re viewing the record, we conclude that the district court was not clearl y
erroneous in finding that a conspiracy existed between Hawkins, Oseby, Raether and Hacker. There was sufficient evidence that all of the con spirators acted with a common purpose of screening excess property for immediate sale by the trib es in order to receive
a percentage of the proceeds, and that they conspired to make false statements on the SF 122s a nd/or misapply tribal property in order to accomplish their goal. We als o conclude there was sufficient evidence that the statements in Raet her's memoranda were made during the course and in furtherance of the conspiracy. Indeed, the statement s reflected Raether's ideas for "getting around" GSA's interpretation of the Act.

Oseb y also disputes the district court's ruling on the admission of certai n deposition t estimony. Hawkins did not testify at Oseby's trial, and thus, a portion o f his deposition testimony was read t o the jury by Oseby's counsel. The court, under the completeness doctrine, allowed the government to read an additional portion of th e deposition into evidence. This additional portion contained a statement by Hawkins that Raether gave him a $10,000 cash "loan" sometime in 1993. Hawkins testified tha t Raether told him he did not h ave to pay back the loan and that Raether only pressured him for repayment after the government began investigations against him. Oseby asserts that the statements were prejudicial because in 1993, Oseby was no longer a screener, and he could not have been part of the conspiracy at that time.

Federal Rule of Evidence 106 is commonly referred to as the "Rule o f Completeness." It provides that "[w]hen a writing or recorded statement or part thereof is introduced by a party, an adverse party may require the introduction at that time of any other part or anyother writing or recorded statement which ought in fairness to be considered contemporaneously with it." The advisory committee notes to Rule 10 6 state t hat one of the considerations for this rule is to avoid "the misleading impression created by taking matters out of context."Oseby was convicted under 18 U.S. C.A. § 371, which is conspiracy to commit 9 an offense against the United States. Under § 2X1.1, the base offense level fo r conspiracy is "[t]he base offense level from the guideline for the substantive offense, plus any adjustments from such guide line for any intended offense conduct that can be established with reasonable certainty." U.S.S.G. § 2X.1.1(a). Thus, to determin e Oseby' s offense level the district court must look to the guideline for the substantiv e offense. In this case, because the jury did not de liver a guilty verdict as to any specific substantive offense, the district court used § 2F1.1, which is the appropriate guideline for18 U.S. C.A. § 1001. We note, however, that the appropriate guideline for 1 8 U.S.C.A. § 666(a)(1)(A) is 2B1.1, or § 2F1.1, and for 18 U.S.C.A. § 1163 it is § 2B1.1. The probation officer and the district court found § 2F1.1, for offense s involvin g fraud, most applicable to Oseby's offense. Section 2B1.1 is for most forms of property offenses, e.g. , theft or embezzlement. It appears, however, that the total offense level would have been the same under ei ther guideline. See U.S.S.G. § 2B1.1.

–15– The district court overruled Oseby's objec tion at trial. The court determined that the additional portion of the deposition testimony that the government wanted read to the ju ry was just a continuation of previous testimony. The standard of review of a district court's evidentiary ruling is abuse of discreti on. United States v. J.L.K., Jr. , 880 F.2d 993, 995 (8th Cir. 1989). We conclude that the district court did not abuse it s discretion when it permi tted the government to read the additional portion of Hawkins' testimony.
IV. Loss under § 2F1.1 of the Sentencing Guidelines
Oseby challenge s the district court's calculation under the sentencing guidelines of the amo unt of loss associated with his fraud. At the sentencing hearing, the district court determined that the loss was $424,432. Accordingly, the base offense level was increased by nine levels. See U.S.S.G. § 2F1.1(b)(1)(J) (1995). The district court 9Oseby contended that the amount of loss should be set at $55,129. Tha t 10 am ount reflected the $424,432, less $297,375 worth of inventory that was seized b y the Federal Government and $71,928 in interest expense. The district court found that it was inappropriate to deduct those amounts.
In Wells we held that "the method used by a sentencing court to determ ine 'loss' 11 depends, in the first instance, on the court's factual findings of the intent of th e defendant to cause loss and on the court's factual finding of the extent of actual loss." Id. , at 747. The guidel ines provide that the loss for sentencing purposes is the greater of the intended loss or the actual loss. See U.S.S.G. § 2F1.1 App. Note 7. –16– determined the

loss by the gross margin on the sales of excess property by DME from 1991 to 1994. 10

We revie w a district court's factual findings of loss under § 2F1.1, using th e clearly erroneous standard of review. United States v. Morris , 18 F.3d 562, 570 (8th Cir. 1994). We revie w a district court's application and construction of the sentencing guidelines de novo. United States v. Wells , 127 F.3d 739, 746 (8th Cir. 1997).

Incalculating the amount of loss, the district court stated that it was looking at the intende d loss to the victim and the actual loss, whichever was greater. With tha t principle in m ind, it set the amount of loss at $424,432. The district court failed t o specify, however, whether that amount represented the intended loss or the actual loss, or both. In addition, the court did not make a factual finding as to the time span over

11 which th e conspiracy occurred. The district court set the amount of loss at the gros s margin for excess property sales from 1991 to 1994, but the court did so without first determini ng that the conspiracy actually existed over that entire period of time

. Furthermore, the court failed to consider whether Oseby was part of the conspiracy for the entire period.

The sen tencing guidelines provide that the base offense level and the specifi c offense characteristics shall be determined on the basis of:–17–

(A) all acts and omissions committed, aided, abetted, counseled , commanded, induced, procured, or willfully caused by th e defendant; and (B) in th e case of a jointly undertaken criminal activity . . ., al l reasonablyforeseeable acts and omissions of others in furtherance of the jointly undertaken criminal activity,
that o ccurred during the commission of the offense of conviction, i n preparat ionfor that offense, or in the course of attempting to avoi d detection or responsibility for that offense. . . .
U.S.S.G. § 1B1.3(a)(1) (1995).
The Application Note 2 to § 1B1.3 states:
[b]ecause a count may be worded broadly and include the conduct o f many participants over a period of time, the scop e of the criminal activity jointly undertaken by the defendant ("jo intly undertaken criminal activity") is not necessarily the same as the scope of the entire conspiracy, and henc e relevant conduct is not necessarily the same for every pa rticipant. In order to determine the defendant's accountability f or the conduct of others under sub section (a)(1)(B), the court must first determine the scope of th e crimi nal activity the particular defendant agreed to jointly undertake. . . . The conduc t of others that was both in furtherance of, and reasonabl y foreseeable in connection wit h, the criminal activity jointly undertaken by the def endant is relevant conduct under this provision. The conduct o f others that was not in furtherance of the criminal activity jointl y under taken by the defendant, or was not reasonably foreseeable i n connec tionwith that criminal activity, is not relevant conduct under thi s provision. U.S.S.G. § 1B1.3 App. Note 2 (1995).–18–

The guidelines offer several helpful illustrations, one of w hich is applicable to the present facts:

Defe ndants H and I engaged in an ongoing marihuana importatio n con spiracy in which Defendant J was hired only to help off-load a single shipmen t. Defendants H, I, and J are included in a single count charging conspiracy to import marihuana. Defenda nt J is accountable for the entire single shipment of marihuana he helped i mport under subsection (a)(1)(A) and a ny acts and omissions in furtherance of the importation of tha t shipment that were reasonabl y foreseeable. . . . He is not accountable for prior or subsequent shipments o f marihuana imported by Defendants H or I b ecause those acts were not in furtherance of his jointly undertake n criminal activity (the importation of the single shipment of marihuana). U.S.S.G. § 1B1.3 App. Note 2(c)(3) (1995).

We acknowledge that Oseby was not hired for a single transfer of exces s property, and that he was involved in the ongoing conspiracy to make false statements and/or to misapply tribal property. However, there is evidence that he quit screening in November of 1992, and te ndered his shares in DME back to the corporation in May of 1993. We have held that a person cannot be held liable for the losses ca used by other conspira tors in the scheme prior to the time the person entered the conspiracy. Se e United States v. Cain , 134 F.3d 1345, 1349 (8th Cir. 1998). It seems logical that a person shoul d also not be held responsible for the losses that occur after he exits th e conspiracy. This is especially t rue in a case where that person is a minor participant in the conspiracy, as the district court found Oseby was in this conspiracy.

In addi tion, after a careful review of the record, we question whether there was "jointly undertaken crimi nal activity" prior to GSA issuing its memorandum in January of 1992. While there is no doubt that Oseby and Raether were screening property i n 1991 for the SWST, and DME was buying it for immediate sale, Oseby was not charged with conspiracy to sell excess federal property. It wasn't until January of 1992,–19–

that Oseby and the others began to conspire to make false statements on the SF 122s in order to avoid GSA's new policy on transferring excess federal property. Indeed, prior to GSA's memo randum in January of 1992, there was no reason to conspire to mak e false statem ents because GSA was approving all of the transfers of excess property to the tribes without questioning t he tribes' intentions. In addition, the incidents that gave rise t o the charge for conspiracy to misapply tribal property did not occur until lat e 1991, or early 1992.

The refore, we conclude that the case should be remanded for the purpose o f al lowing the district court to make factual findings as to when the conspiracy began

. In addition , the case is remanded for the district court to make factual findings as t o whether Oseby had jointly undertaken any criminal activity after November 30, 1992. Once the district court makes such factual determinations, it should clearly state it s method for calculating loss, and determine loss by the greater of the intended loss or the actual loss.
Oseby conte nds that since he was only a 24.5% shareholder in DME, however, itwas u nfair of the district court to attribute all of DME's profits from the sale of th e
excess federal property to him. The fact that Oseby did not personally reap 100% of the profits from the sale of the excess property is not relevant in calculating either the intended loss or actual loss.
Oseby also contends that the amount of loss should have been decreased by the amount of DME's interest expense for the rel evant time period. When the district court calculated the loss, it properly took into account DME's expenses in repa iring the excess property, as both parties concede much of the equipment was in poor condition at the time itwas screened and needed repairing before it could be sold. DME's interes t expense, however, does not reduce the amount of loss.–20–

We also reject Oseby's argument that he never intended to harm the SWST

. There was evidence at trial that the SWST was not aware that DME was selling th e excess equipment at such an increased price over the pric e it paid the SWST. As stated abov e, Oseby testified that DME only paid the SWST approximately10% of th e proceeds from the sale of the excess equipment. In addition, there was evidence that Oseby, on at least one occasion, screened property on behalf o f the Santa Ana Tribe but converted the property to his own use.

V. Conclusion
In summary, we affirm Oseby's co nviction, but vacate his sentence. We remand to the district cour

t for further factual findings in accordance with this opinion, and for re-sentencing based on such factual determinations.
A true copy.

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