### Black Hills Inst. v. United States Dep't of Justice , 967 F.2d 1 

### 1237 (8th Cir. 1992) (civil suit regarding ownership o f Tyrannosaurus rex fossil); Black Hills Inst. v. United State s Dep't of Justice , 978 F.2d 1043 (8th Cir. 1992) (Tyrannosaurus rex civil suit); Black Hills Inst. v. So uth Dakota Sch. of Mines & Tech. , 12 F.3d 737 (8th Cir. 1993) (Tyrannosaurus rex civil suit), cert
. denied , 115 S. Ct. 61 (1994); In re Larson , 43 F.3d 410 (8th Cir. 1994) (district judge's refusa l to recuse self); Black Hills Inst. v. Williams , 88 F.3d 614 (8th Cir. 1996) (Tyrannosaurus rex civil suit). 

# United States Court of Appeals
FOR THE EIGHTH CIRCUIT

___________ No. 96-1419

___________ United States of America, * * Appellee, * * Appeal from the United States v. * District Court for the * District of South Dakota. Peter Larson, * * Appellant. *

___________ Submitted: September 11, 1996 Filed: April 10, 1997

___________ Before MAGILL, JOHN R. GIBSON and BEAM, Circuit Judges.

___________ MAGILL, Circuit Judge.
We revisit this case for the sixth time. Peter Larson appeals his 1 conviction of theft of United States' property, 18 U.S.C. § 641; retention of stolen United States' property, 18 U.S.C. § 641; failure to file a customs report when exporting

### The Honorable Richard H. Battey, Chief Judge, United States 2 

### District Court for the District of South Dakota.
-2- monetaryinstruments, 31 U.S.C. § 5316(a)(1)(A); and failure to file a repo rt when importing monetary instruments, 31 U.S.C. § 5316(a)(1)(A)

. Larson's arguments address the sufficiency of the evidence, the scope of the regulatory definition of monetary instrument, the application of the Sente ncing Guidelines, and the sentencing judge's failure to recus e 2 himself. We affirm.

I.

As pr esident and majority stockholder, Larson headed a commercia l fossil business, the Black Hills Institute of Geological Research (th e Institute). The Institute's activities focused on the collection , prepar ation, and marketing of fossils. The Institute's most notabl e
success story was the discovery of "Sue," a 65-million-year-ol d Tyranno saurus rex fossil. However, with success came not only publi c notori etyand attention, but also the attention of law enforcemen t officials.

On May 14, 1992, federal officials raided the Institute to seiz e evidence

. Among the fossils seized were crinoid fossils, a marin e invertebrate, which Larson had collected from th e Gallatin National Forest in Montana, and various fossils from the Buffalo Gap National Grasslands in South Dakota. Both parcels of land belong to the United States an d Larson had not been authorized to remove the fossils.
In addition, as part of his activities for the Institute, Larso n made repe ated trips to Peru to collect fossils. This collection include d excavation and export of fossilized remains of baleen whales. One suc h fossil, "Maya," was sold to a Japanese

### -3-

buyer for $225,000. Yet, fossils being exported from Peru were presented to customs as having scientific value only.

In prepa ration for a March 1990 trip, Larson withdrew $15,000 fro m the Institute's bank account in order to pay his expenses in Peru , including the cost of fossil collection. When Larson left for Peru o n March 9, 1990, carryi ng more than $10,000, he failed to file Customs Form 4790, a Report of International Transportation of Currency or Monetar y Instrument.
Larson's Institute travel also included a 1991 trip to a Tokyo fossil sho wto sell fossils. While in Japan, Larson purchased $31,700 i n traveler's checks. O n June 8, 1991, Larson returned to the United States withthe traveler's checks. Larson failed to complete Customs Form 4790 which must also be submitted when importing more than $10,000 worth o f monetary instruments into the United States.

Based on the Institute's dinosaur-re lated activities, the government obtained a thirty-nin e count indictment. Larson was charged with thirtysix counts. The char ges focused on the illegal collection of fossils and includ ed counts of conspiracy, obstruction of justice, theft of Unite d States' property, and customs violations. During the course of his trial, Larson unsuccessfully attempted t o have th e trial judge recuse himself. At a status hearing on a possibl e plea bargain discussed in the media, the trial j udge expressed disapproval of th e reported agreement, calling it a government capitulation. In a subseq uent communication, the trial judge stated that his comments wer e
con traryto Federal Rule of Criminal Procedure 11(e), which prohibits a judge's participation in plea agreement discussions.

### -4-

However, he declined to recuse himself. Larson petitioned this Court for
a wr it of mandamus to remove the trial judge, which was denied. In r e Larson , 43 F.3d 410 (8th Cir. 1994).

Ajury convicted Larson of one count of theft of United States ' property not in excess of $100, one count of retention of stolen Unite d States' property not in excess of $100, and two counts of failure to file
a cust oms report when transporting monetary instruments. Larson wa s sentenced to twenty-four months confinement, two years supervised release, a fine of $5000, and a special assessment of $150.

Th e district court's computation of Larson's sentence started wit h the customs violation s. The court began with a base offense level of 11. See U.S.S.G. § 2S1.3 (a base offense level of 6 plus the number of offense levels called for by the value of the funds table in § 2F1.1). The court then f ound that the specific offense characteristic in § 2S1.3(b)(1 ) applied to Larson. T his section dictates an increase by two levels "[i]f the defendant knew or believed that the funds were proceeds of unlawfu l activit y, or were intended to promote unlawful activity." U.S.S.G. § 2S1.3(b)(1). Next the court found that the § 3B 1.1(a) role in the offense adjustment applied. This adjustment mandates a four level increase "[i]f the defendant was an organizer or leader of a criminal activity tha t involved five or more participants or was otherwise extensive." U.S.S.G. § 3B1.1(a). These computations result in an adj usted offense level of 17.

The distr ict court then turned to the property offenses. Retention of sto len United States' property not in excess of $100 and theft o f government property n ot in excess of $100 have a base offense level of 4. U.S.S.G. § 2B1.1. Again the court added four

### -5-

levels pursuant to § 3B1.1(a) for Larson's role in the offense. Thus, the adjusted offense level was 8.
The district court next determined that the combined adjusted o ffense level for multiple counts to be level 17. See U.S.S.G. § 3D1.4(c)

. Finally, looking to the sentencing table, the district court found th e sentencing range to be from twenty-four to thirty months, given Larson's criminal history cate gory of I and his offense level of 17. The district court imposed a sentence of twenty-four months.

On appeal, Larson makes the following arguments: (1) that hi s retention of invertebrate fossils from forest service lands was not a crim e in li ght of forest service regulations permitting the noncommercia l collec tion of invertebrate fossils; (2) that he lacked the requisit e knowledge that it was illegal to take in excess of $10,000 out of th e country without filin g a customs report; (3) that he lacked the requisite knowledge that it was illegal to bring in excess of $10,000 i n restrictivelyendorsed traveler's checks into the country without filing a customs report; (4) that the requirement of fi ling a customs report when bringing in excess of $10,000 into the country does not apply to traveler' s checks restrictively endorsed; (5) that applying § 2S1.3(b)(1) of th e Unit ed States Sentencing Guidelines, which increases the sentence whe n unreported funds are exported for the purpose of illegal activity, wa s improper because he did not intend to use the funds unlawfully; (6) that because Larson's role in the offense was not that of the organizer an d leader of a criminal activity involving five or more participants or that because he was not extensively involved, applying § 3B1.1 of the Sentencin g Guidel ines was improper; and (7) that the sentencing judge improperl y refused to recuse himself following a Rule 11(e) violation.

### -6- II.

Larson's first three arguments concern the sufficiency of th e evidence. In reviewing a claim of insufficiency of the evidence, we ask "whether, after viewing the evidence in the light most favorable to th e prosecution, anyrational trier of fact could have found the essentia l elements of the crime beyond a reasonable doubt." Jackson v. Virginia , 44 3 U.S. 307, 319 (1979) (emphasis in the original). All reasonable inference s are also drawn in fav or of the prosecution. United States v. Perkins , 94 F.3d 429, 436 (8th Cir. 1996), cert. denied , 117 S. Ct. 1004 (1997).

Larson's first argument uses a 1986 Forest Service regulatio n permitting the noncommercial harvesting of invertebrate fossils. See 51 Fed. Reg. 30355-356 (1986), codified at 36 C.F.R. § 261.9(i) (1987)

. Larson claims that this regulation renders his retention of invertebrate fossils, h arvested in 1984 and 1985, not a crime as a matter of law

. Assuming that this regulation benefits Larson, L arson's argument hinges on his fo ssil harvesting having been noncommercial. Thus, Larson contend s that, though he removed the harvested fossils, there is not sufficien t evidence that his fossil harvesting was commerci al. We find this argument to be meritless. Clearly , a rational trier of fact could have found beyond a reasonable doubt that Larson removed the fossils for commercial purposes. Larson wa s the head of a commercial fossil business. The Institute wa s organized to sell fossils such as these. The fossils Larson harvested wer e stored in the Institute's business warehouse. The jury could properly hav e relied on this evidence to infer that the fossil s were taken by Larson for a commercial purpose.

### The specific reporting statute interpreted by the Ratzla f 3 

### Court, 31 U.S.C. § 5322(a), was subsequently amended by Cong ress to delete the wilfulness requirement. See United States v. Griffin , 84 F.3d 912, 925 (7th Cir.) (noting change in law), cert. denied , 117 S . Ct. 495 (1996); United States v. Zehrbach , 47 F.3d 1252 , 1262 n.7 (3d Cir. 1995) (same).
-7- Next, Larson argues that the governm ent failed to meet its burden of showing that Larson possessed the knowledge that it was illegal to take in
excess of $10,000 out of the country without filing Customs Form 4790. Se e Ratzlaf v. United States , 510 U.S. 135, 137 (1994) (to establish tha t defendant willfully violated reporting statute, the prosecution must prove defenda nt acted with knowledge that conduct was unlawful). We conclud e 3 that there was sufficient evidence to show that Larson had the requisite knowledge.

The record reveals that Larson is anexperienced traveler. Upon reentry into this count ry from a trip abroad, travelers are routinely given
a Customs Form 6059B. This form details the requirement of filing a repor t on Customs Form 4790 when taking out of or bring ing into the United States more than $10,000. Prior to his trip to Peru in1990, Larson had traveled to South America in 1985, 1987, and 1989. These prior trips raise th e strong inference that Larson had repeatedly signed Customs Form 6059B , dec laring that he had read it. This evidence is sufficient for a reasonab le jury to conclude that Larson was aware of the reportin g requirement.

Larson also argues that the government has not met its burden o f showing that he knew that it was illegal to bring more than $10,000 i n traveler's checks in any form into the country without filing a custom s report. Ratzlaf , 510 U.S. at 137 (knowledge requirement). As discussed above, there was sufficient evidence

### 31 C.F.R. § 103.11(m) (1990) provides: 4 

### (m) Monetary instruments. (1) Monetary instrument s include: (i) Currency; (ii) Traveler's checks in any form; (iii) All negotiable instruments (including persona l checks, business checks, official bank checks, cashier' s checks, third-party checks, pr omissory notes (as that term is defi ned in the Uniform Commercial Code), and money orders )
-8- for any reasonable jury to conclude that Larson, as an experience d international traveler, had repeatedly completed Customs Form 6059B and wa s
aware of its contents. Form 6059B explicitly states that the reportin g require ment applies to traveler's checks. See Tr. Ex. 443 (reportin g requirement applies t o "more than $10,000 (U.S. or foreign equivalent, or
a combination of the two) in coin, currency, traveler's checks or bearer instru ments such as money orders, checks, stocks or bonds" (emphasi s added)), reprinted inAppellee's Add. at 3-4.

Custo ms Form 6059B does not distinguish between restrictively an d nonrest rictivelyendorsed traveler's checks. Form 6059B simply list s "trave ler's checks." Therefore, there is sufficient evidence for a
reas onable jury to conclude that Larson was aware that the reportin g requirement applied to all traveler's checks whether restrictively endorse d or not.

III.

Larson no t only argues that he did not have the requisite knowledge that the reporting requirement applied to all traveler's checks, he furthe r argues that the requirement itself does not apply to restrictively endorse d travele r's checks. We find that the reporting requirement applies t o traveler's checks in any form.

The reporting requirement applies to "monetary instruments." 3 1 U.S.C § 5316(a)(1). The 1990 Code of Federal Re gulations defined monetary instruments to include traveler's checks in any form. See 31 C.F.R. § 103.11(m) (1990). The plain meaning of "in 4

### that are either in bearer form , endorsed without restriction,

made out to a fictitious payee (for the purpose of § 103.23), or otherwise in such form that title thereto passes upo n delivery; (i v) Incomplete instruments (including persona l checks, business checks, offic ial bank checks, cashier's checks, third-party checks, promissory notes (as tha t te rmis defined in the Uniform Commercial Code), an d money orders) signed but with the payee's name omitted; and (v) Securities or stock in bea rer form or otherwise in such form that title thereto passes upon delivery. (2) Monetary instruments do not include warehous e receipts or bills of lading.
-9- any form" includes traveler's checks, whether restrictively endorsed o r not. We also r eject Larson's argument that because "monetary instrument" is def ined as including both traveler's checks and "all negotiabl e in struments," 31 C.F.R. § 103.11(m)(iii), that the traveler's check s included must be negotiable. The definition of monetary instrument also includes currency, 31 C.F.R. § 103.11(m)(i), which is not a negotiabl e instrument. Thus, the reference to "all negotiable instruments," 31 C.F.R

. § 103.11(m)(iii), doe s not limit the other sections enumerated within the defini tion of monetary instrument. Second, another provision of th e regulations provides for an exemption for a restrictively endorse d travel er's check "that is in the collection and reconciliation proces s after the traveler's check has been negotiated." 31 C.F.R. § 103.23(c)(8) (199 0). If we were to accept Larson's contention that the reportin g requirement does not apply to restrictively endorsed traveler's checks , this provision

### For sentencing purposes, the district court found that a 5 

### conspiracy existed. The court made this finding despite the fact that the jury was unable to agree on the conspiracy charge. As the district court states: Much has been said about the hung counts. The jury was unable to agree. I referred to them briefly and i n looking at all of the evidence in this case, the Cour t does find that there was this conspiracy to violat e federal law . . . . Tr. of Evidentiary Hr'g at 61. See also Supp. Sentencing Mem. at 8 ("The Court has found by a preponderance of the evidence that a conspiracy existed . . . .").
-10- would be rendered superfluous. Accordingly, we reject this interpretation

. See Dry den v. Lou Budke's Arrow Fin. Co. , 661 F.2d 1186, 1189 (8th Cir

. 198 1) (per curiam) (rejecting interpretation which would render a regulation's provision surplusage).

We conclude that the reporting requirement found in 31 U.S.C

. § 5316 (a)(1) applies to traveler's checks in any form, whethe r restrictively endorsed or not.

IV.

Larson's next set of arguments addresses the application of th e Sente ncing Guidelines. We find no errors in the district court' s application of the guidelines.

Sec tion2S1.3(b) lists specific offense characteristics fo r sentencing a defendant for failing to file currency and monetary instrumen t reports. U.S.S.G. § 2S1.3(b) (1995). Subsection (b)(1) provides for a tw o level increase where the funds were known to be the proceeds of unlawful activity or intended to promote unlawful activit y. U.S.S.G. § 2S1.3(b)(1) (1995). Here, the district court made two findings of intent to promote unlawful activity. By a preponderance of the evidence, the court foun d bo ththat Larson intended the funds to: (1) promote the unlawfu l exportationof fossils from Peru; and (2) promote an unlawful conspiracy to take fossils from United States' p ublic lands. See Tr. of Evidentiary 5

### Reviewing this finding for clear error, we uphold the distri ct

court's finding that a preponderance of the evidence demonstrates that Larson was involved in a conspiracy to violate federal law

. Uni ted States v. Casares-Cardenas , 14 F.3d 1283, 1288 (8th Cir. ) ("Factual questions regarding sentencing decisions are, of course, reviewed under a clearly erroneous standard."), cert. denied , 115 S. Ct. 147 (1994). Certainly, the district court can find a conspiracy by a preponderance of the evidence, even after the jury has failed to agree on a similar finding applying the higher beyond a reason able doubt standard. See United States v. Watts , 117 S

. Ct. 63 3, 638 (1997) (per curiam) (sentencing court may conside r acquitted conduct if it has been proven by a preponderance o f evidence). In response to Larson's Motion to Supplement the Record, his 6 

### motion for release, and the government's response, this Cour t remanded the case to the district court for the following limited purposes: 1. To review and determine the validity of th e Peruvian violation with respect to the Sentencin g Guidelines applied in this case; and 2. To reconcile the jury's failure to agree on the conspiracy charged in Count I of the indictment with the fi nding of an ongoing conspiracy as discussed in th e Supplemental Sentencing Memorandum filed January 29 , 1996.
Order of Dec. 23, 1996 at 1. This Court is appreciative of th e dis trict court's clarification of its own previous findings

. However, in affirming the dist rict court, this Court does not rely on any n ew findings which may have been made within the distric t court's Response To Limited Remand Order.
-11- Hr'g at 63-64 ("[T]here are two findings that th e Court makes in this case
concer ning 2S1.3(b)(1), to increase the offense level by two levels.") ; Supp. Sentencing Mem. at 5 (noting that "[t]he funds were used to promote the conspiratorial conduct of the illegal removal of fossils from public lands"). 6

### There is no challenge to the fact that the funds wer e 7 

### intended to be used to export fossils from Peru. Rather, th e issue at sentencing was whether the export of fossils was unlawful under Peruvian law. The determination of foreign law is a question o f law that can be established using any relevant source. See Fed. R. Crim. P. 26.1; see also Fed. R. Civ. P. 44.1. The district court found that when Larson traveled to Peru in 1990, commercia l exportation of fossils was an unlawful activity. This finding was based primarily on conflicting expert testimony regarding th e meaning of Peruvian Law No. 24 047. See Tr. of Evidentiary Hr'g at 7-8, 32-33, 62-63; Supp. Sentencing Mem. at 9-10.
-12- On app eal, Larson mistakenly combines the district court's tw o findings of fact, characterizing the district court's findings, i n pertinent part, as:
[T]hat Peter Larson went to Peru to carry on this " conspiracy," even though there was ab solutely no evidence, whatsoever, that Peter L arson, or any other person, for that matter, had an y idea that the law of Per u precluded the excavation of fossils, or an y evidence that the alleged U.S. "conspiracy" eve r extended its misdemeanor tentacles to Peru.

Appellant' s Br. at 35. However, the district court made two distinc t factual findings of i ntent, either of which could sustain the application of § 2S1. 3(b)(1). Cf. United States v. Smith , 905 F.2d 1296, 1299-130 0 (9th Cir. 1990) (affirming sentencing based on district court' s altern ative, but not inconsistent, fact finding that gun was inoperabl e revolver or pellet gun). Because the district c ourt's finding that Larson intended to promote the conspiracy is sufficient to support the applicatio n of § 2S1.3(b)(1), we need not reach the question of whether Larson' s exportation of fossils from Peru was unlawful under Peruvian law. 7 We conclude that the district court's finding that Larson intende d the funds to promote an unlawful conspiracy was not clear

### Larson furt her claims that, as applied to him, amendment 345 8 

### to the Introductory Commentary of Chapter 3, Article B of th e Sentencing Guidelines violates the Ex Post Facto clause of th e Constitu tion. U.S. Const. art. I, § 9, cl. 3. The November 1 , 1990 a mendment calls for the consideration of all conduct i n determining a defendant's role in an offense, not just the e lements and a cts cited in the count of conviction. See U.S.S.G. amend

. 345. If a change in the Sentencing Guidelines does not amount to a s ubstantive change in law, but merely restates or clarifie s existing law, the change does not offend ex post facto concerns

. See Unit ed States v. Cooper , 35 F.3d 1248, 1252 (8th Cir. 1994) , cert. granted & opinion vacated , 115 S. Ct. 1820 (1995), prio r opinion reinstated , 63 F.3d 76 1, 763 (8th Cir. 1995) (per curiam), cert. denied , 116 S. Ct. 1548 (1996). Because amendment 345 only
-13- error. U nited States v. Mitchell , 31 F.3d 628, 633 (8th Cir. 1994 ) (stand ard of review). The conspiracy involved the Institute's illega l appr opriation of fossils from United States' public lands. There i s sufficient evidence to conclude, for both Larson 's exportation of funds to Peru, whi ch were then used to acquire fossils that were later sold, an d Larson's direct importation of funds from Japan, were intended by Larson to p roduce proceeds for the Institute that would promote its ongoin g conspiratorial enterprise. Therefore, because the funds that Larson faile d to report were to aid an unlawful conspiracy, the two level increase calle d for by § 2S1.3(b)(1) of the Sentencing Guidelines was properly applied.

Larson next argues that the district court improperly applie d Sentencing Guideline § 3B1.1(a). Section 3B1.1 lists adjustments based on the defendant's role in the offense. Subsection (a) provides for a four level incr ease where the defendant's role was that of an organizer o r leader of a criminal activity that involved five or more participants or was otherwise extensive. See U.S.S.G. § 3B1.1(a).

The distr ict court's interpretation of the Sentencing Guidelines is
a question of law subject to de novo review, while its factua l determinations are su bject to review only for clear error. United States

v. Lamere , 980 F.2d 506, 510 (8th Cir. 1992). We find that, as the head of the business, Larson's role in the illegal fossil related activities wa s that of an organizer or leader of five or more participants or wa s otherwise extensive. The applicationof § 3B1.1(a) was therefore proper. 8

### clarifies the interpretation of § 3B1.1, it is not a substantiv e

change in the guideline. United States v. Montague , 29 F.3d 317, 324 n. 5 (7th Cir. 1994); United States v. Mir , 919 F.2d 940, 94 5 (5thCir. 1990). Thus, applying the amendment to conduct befor e its a doption does not violate the Ex Post Facto clause. Unite d States v. Scarano , 975 F.2d 580, 587 (9th Cir. 1992); contra United States v. Saucedo , 950 F.2d 1508, 1513-16 (10th Cir. 1991).
-14- V.
Finally, Larson argues that the dist rict court erred when it refused to recuse itself. We disagree.

To mandate recusal of a judge because of opinions formed in th e course of proceedings , a judge must display such a deep-seated favoritism
or an tagonism that fair judgement is impossible. See Liteky v. Unite d States , 51 0 U.S. 540, 555 (1994). "Thus, judicial remarks during th e
course of a trial that are critical or disapproving of, or even hostile to , counsel, the parties, or their cases, ordinarily do not support a bias or partiality challenge." Id.

Federal Rule of Criminal Procedure 11(e) states that attorneys fo r eachside may engage in discussions with a view toward reaching a ple a agreement and that the court shall not participate in these discussions. "Courts have consistently interpreted Rule 11(e) as a bright line rul e barring any court participation in the plea

### In this Cou rt's rejection of defendant's petition for a writ 9 

### of mandamus, Adams was noted for the proposition that, assuming a vio lation of Rule 11(e), the defendant could request a differen t sentencing judge. See In Re L arson , 43 F.3d at 416 n.7. However, this invitation to request a new sentencing judge was not a declaration of an entitlement to a new sentencing judge.
-15- bargaining process." In Re Larson , 43 F.3d at 415 (citing United States v. Olesen , 920 F.2d 538, 540 (8th Cir. 1990)).

Even assuming that the district court was correct that its comments violate d Rule 11(e), we do not find that the violation of Rule 11(e) i n this case mandated a new sentencing judge. Recusal is required only if th e viola tion is such that the sentencing judge has displayed such a deep

seated favoritism or antagonism that fair judgment is impossible. Se e Liteky , 510 U.S. at 555. Here, we do not find t he requisite level of bias or partiality.

Larson cites United States v. Adams , 634 F.2d 830 (5th Cir. 1981) , in support of his argument that a Rule 11(e) violation mandates a new tria l judge for sentencing. However, Adams is distinguishable. In Adams , the 9 trial judge participated in the plea agreement d iscussions up to the point of seemingly preapproving the agreement and the trial judge became upset whe n the plea bargain was not taken. Id. at 832-33. In this case, th e trial court did not participate to any comparable degree. Furthermore, th e Fifth Circuit in Adams did not find that constitutionally prohibite d prejudice required a new sentencing judge; rather, that court used it s supervisory power over the lower federal court. Id. at 836.

### -16- VI.

For the above reasons, the judgment of the district court i s affirmed.
BEAM, Circuit Judge, concurring and dissenting.

I am troubled by the result we reach in this case. Nonetheless, I reluctantly concur in the court’s opinion affirm ing the guilt phase of the trial, although, in my view, the convictions barely survive reasonabl e analysis on both the law and the facts. I do believe, however, that the sentencing process was fatally flawed and should be reversed. Accordingly , I concur in part and dissent in part.

As the co urt notes, this case had its genesis in a quarrel over the
care , custody and ownership of the 65-million-year-old remains of a tyrannosaurus rex nam ed “Sue” discovered in 1990 on a South Dakota ranch. Black Hills Inst. of Geological Research v. United States Dep’t of Justice , 967 F.2d 1237, 1238-3 9 (8th Cir. 1992) ( Black Hills I ). The roots of the dispute appear to extend into the murky depths of an earlier and ongoing argument between and among public, academic and commercial collectors and curato rs vying for control of archaeological remains worldwide. Th e criminal prosecutorial arm of the United States was apparently recruited to participate in this continuing battle and it, in turn, enlisted the aid of the Federal Bureau of Investigation and the South Dakota National Guard

. Id. at 12 39. This resulted in an armed invasion of the Institute’ s headquarters in Hill City, South Dakota, designed to carry out a search fo r and accomplish the seizure of Sue. Id.

### This sum would apparently be “net” the cost of excavation of 10 

### the fossil, which cost purport edly amounted to $209,000. The land owner also received and apparently retained $5,000 paid by th e Insti tute for permission to excavate. We denied a claim by th e Instit ute for the excavation costs by affirming the distric t court’ s disallowance of an equitable or statutory lien for thi s amount. Black Hills Inst. of Geological Research v. Williams , 88 F.3d 614 (8th Cir. 1996) ( Black Hills V ).
-17- The criminal act alleged at that time was a violation of th e Antiquities Act, 16 U.S.C. § 433. Black Hills Inst. of Geological Researc h

v. United States Dep’t of Justice , 978 F.2d 1043, 1044 (8th Cir. 1992 ) ( Black Hills II ). The maximum punishment for violating the Antiquities Ac t is a $500 fine and ninety days imprisonment. 16 U.S.C. § 433. Thi s purported transgression seems to have long since been forgotten, and Sue is nowhere to be found within the four corners of the present crimina l prosecution.

Abit ter legal battle between the United States and the Institut e
over ownership of Sue continued for several years with this court acting
as part-time umpire. Black Hills Inst. of Geological Research v. Sout h Dakota S ch. of Mines & Tech. , 12 F.3d 737 (8th Cir. 1993) ( Black Hill s III ). Although not apart of the record, press reports indicate that the beneficial owner of the land upon which the discovery was made has no w emerged tr iumphant, and he proposes to auction Sue off to the highes t bidder, public, private, academic or collector t hrough the good offices of the fabled Sotheby’s Auction House in New York, New York. The estimated value is in the area of one million dollars. Malcolm W. Browne, “Well- 10 Preserved T. Rex Bones May Get $1 Million at Auction,” N.Y. Times , Nov. 16 , 1996 at 1, 8.

At th e same time, the criminal indictment limped along until lat e 1994 when a South Dakota newspaper disclosed tha t the case was about to be concluded through a plea agreement favorable to

### -18-

Larson. In re Larson , 43 F.3d 410, 411 (8th Cir. 1994) ( Black Hills IV ). At that point, the trial judge, in admitted violation of Federal Rule of Crimin al Procedure 11(e), upset progress toward the consummation of th e apparent arrangement, describing it, in part, (b ased on what the judge saw in the newspaper) as a “capitulation by the government.” Id. This, o f course, sent the fede ral prosecutors scurrying back to the drawing board. The recent thirty-nin e count prosecution resulted, with thirty-six of the counts directed at La rson. After trial, the jury convicted Larson of two minor counts of theft involving property of less than $100 in value and tw o rather exotic customs violations both involving activities carried out in foreign nations: one occurring prior to the disc overy of Sue and one prior to the search of the Institute’s headquarters.

While t he matter probably should have been disposed of by the ple a agreement reported in the press, I now reluctantly agree with the cour t that, given the test we must apply at this point, United States v

. Shoffner , 71 F.3d 1429, 1433 (8th Cir. 1995) (re view must be in light most favorable to verdict); United States v. Jenkins , 78 F.3d 1283, 1287 (8th Cir. 1996) (reverse only if a jury must have entertained reasonable doubt) , there is enough credible and admissible evidence to affirm the convictions
even though they are based upon hotly disputed, barely viable and generall y unenforced legal theories. Indeed, as correctly pointed out in Larson’s brief, good faith disagreement exists as to the proper interpretation of both the foreign law involved and the federal statutes and rules enforced in this prosecution. I disagr ee, however, with the sentence imposed. In its sentencin g guideline calculations, the trial court seems to have generously exercised its di scretion to enhance the penalties arising from the defendant’ s participation in relatively minor

### The probation officer’s sent encing guideline calculation for 11 

### the trial court, made via the presentence report, proposed n o enhancement for Larson’s role in the offense and no enhancem ent for any purported obstruction of justice, leading to an offense level no higher than 12, which, in t urn, provided for a sentence of from 10 to 16 months with the option of one half of the time bein g served under supervised release. I agree with this more minima l analysis contained in the presentence report.
T he judge’s exact words were that he found “based upon th e 12 

### greater weight of the evidence, a conspiracy . . . .” Sentencing Tr. at 30. Although he did not use the term “preponderance,” I assume that the judge’s expression is equivalent.
-19- crimes. Further, the weighty sentence was, in my view, inappropriate give n the questionable presentations at trial concerning the existence of and th e substance of the Peruvian law at issue. Overall, the penalty proces s resulted in a prison sentence well above that ca lled for given the minimal and un certain nature of the offenses, especially the theft offense s involving property of less than $100 in value. 11

Sentencin g enhancements based on uncharged or acquitted conduct, as in this case, must re ly on behavior that is (1) proven by a preponderance of the evidence and (2) part of the “relevant conduct” of the offense of conviction. A review of the trial record shows that the rulings survive the evidentiary standard, but fail the nexus requirement. Althoughacquitted of all conspiracy allegations by the jury, th e district judge found, for sentencing purposes, that a conspiracy to collec t fos sils from federal land existed. Sentencing Tr. at 30. All of th e 12 enhancements flow from this finding. Since it i s reversible error to fail to impose applicable enhancements, Hall v. Unite d States , 46 F.3d 855, 859 (8th Ci r. 1995), it is difficult to evaluate the enhancements withou t addressing the predicate finding of conspiracy.

### The only enhancements at issue are those attached to Counts 1 3 

### XX and XXX (the customs violations). Counts II and VII added n o units to Larson’s combined offense level and so did not increas e his sentence. See U.S. Sentencing Guidelines Manual § 3D1.4 an d Evidentiary Hr’g at 3 (Jan. 16, 1996).
-20- While my

review of the transcript left me convinced that there was no conspiracy, there was some evidence supportin g the government’s theory. Furthermore, I have n ot located a case reversing a sentencing enhancement
on the grounds that the acquitted conduct was insufficiently proven. In this case, however, t here seems to have been s ome predisposition to find that a conspiracy did, indeed exist. Tr. of Hr’gat 26-27 (Sept. 21, 1994) (comments regarding plea bargain reported by press).

The enha ncements were then imposed on the grounds that the custom s violations in some way advanced this judge-found conspiracy. Althoug h 13 rele vant conduct is defined broadly, U.S. Sentencing Guidelines Manua l (“Guidelines”) § 1B1.3(a)(2), the concept is not without limits. Offenses
cons tituting part of a common scheme or plan must be “‘substantiall y
con nected to each other by at least one common factor, such as commo n victims, common accomplices, common purposes, or similar modus operandi .’” United St ates v. Sheahan , 31 F.3d 595, 599 (8th Cir. 1994) (quotin g Gui delines § 1B1.3, comment (n.9)). This determination is reviewed fo r clear error. United States v. Balano , 8 F.3d 629, 630 (8th Cir. 1993).

The only Eighth Circuit case exploring the limits of 1B1.3(a)(2) is United States v. Ballew , 40 F.3d 936 (8th Cir. 1 994). Ballew was convicted of wire and mail fraud for falsely reporting to his insurance carrier that his truck was stolen. Investigation of the fraud revealed Ballew’ s involvement in several automobile thefts. Some parts from stolen vehicles had been put

### -21-

into the truck. The district court relied on th e thefts to impose a fivelevel increase in Bal lew’s base offense level. We affirmed the sentence, reasoning that Ballew’s use of parts from the stolen vehicles disguised th e truck so he could continue using it. Id. at 943. In dissent, Judge Heane y argued that “the asserted connection is too tenu ous to bind together these two di screet, identifiable units of crime into a single continuin g offense.” Id. at 945. Evenif Ballewis correctly decided, the nexus between th e convic tions and the enhancements in Larson’s case is considerably mor e tenuous.

Section 3B1.1(a) calls for a four-level increase for a defendant’ s leader ship role. The district court did name five conspirators , Evi dentiaryHr’g at 64-65 (Jan. 16, 1996), but only Larson and hi s girlfriend were present for the actual customs v iolations. The court does not address this issue at all; it simply asserts that the leadershi p enhanc ement was appropriate because Larson was a principal of th e Institute. Ante at 13.

Simil arly, section 2S1.3(b)(1) adds two levels when the defendan t knew the f unds were proceeds of unlawful activity or were intended t o promote unlawful acti vity. Both the district court and this court assert that this enhancement was appropriate because the funds from the customs violations were purpo rtedly intended to aid the United States conspiracy. The v ast majority of section 2S1.3(b)(1) cases involve the use o f drug proceeds. E.g. , United States v. Mitchell , 31 F.3d 628, 633 (8th Cir

. 1994). There is only one case applying a 2S1.3( b)(1) enhancement based on the prospective use of funds. In United States v. Packer , 70 F.3d 357, 36 1 (5th Cir. 1995), cert. denied , 117 S. Ct. 75 (19 96), the defendant planned to use the funds in

### -22-

question to support himself and his girlfriend in their flight to avoid he r arrest. The court af firmed because the whole purpose of the transactions was the financing of the flight. Id.

Unlike Packer , the government here provided no evidence abou t Larson’s plans for the money. The only arguable nexus between the trips and the fossil conspiracy is the general business done by the Institute. The ex hibits do demonstrate that the Japanese travelers’ checks wer e deposited into the In stitute’s account and the Peruvian travelers’ checks
were purchased with Institute money. One defendant did testify that the busines s was conducted to “support our, I guess, habit of collecting ” fossils. Trial Tr. a t 2902. These general connections were all that was established under even the most charitable reading of the record. Thi s str etches the concept of relevant conduct well beyond Ballew . Further , there was no evidence at all about either the intended or the actual use of these monies.

Ac cordingly, I would affirm the convictions but, given the Rul e 11( e) violation, I would remand the case to the district court fo r resentencing before another judge. We noted in our opinion in Black Hills IV that precedent supports sentencing by a different judge under these sam e circumsta nces. 43 F.3d at 416, n.7 (citing United States v. Adams , 63 4 F.2d 830, 835-54 (5th Cir. Unit A Jan. 1981)). Indeed, the decision by th e court to deny Larson’s request for recusal of th e trial judge seems to run contra to our recent decision in United States v. Washington , No. 96-2586 (8th Cir. Mar. 24, 1997). In Washington we stated:

Ru le 11(e)(1) of the Federal Rules of Criminal Procedur e provides that the district court “shall not partici pate” in any discussions concerning a possible plea agreement. This is an “absolute prohibition.” United States v. Adams , 634 F.2d 830, 835 (5th Cir. 1981).

### -23- . . . . [Rule 11(e)(1)] also furthers “the sound principle that th e interests of justice are best served if the judge r emains aloof from all discussions pre liminary to the determination of guilt or innocence so that his impartiality and objectivi ty shall not be open to any question or suspicion when it becomes his duty to impose sentence.” United States v. Werker , 535 F.2d 198 , 203 (2d Cir. 1976); accord Barrett , 982 F.2d at 195 ; Adams , 634 F.2d at 840.

Id. slip op. at 6-7.

In Washington , the court construed our earlier opinion in BlackHills IVand did not find “plain error” when the trial judge, who had als o acknowledged a Rule 11(e)(1) violation, failed to recuse himself sua spont e from the sentencing phase of the trial. Id. slip op. at 7-8. However, th e court, by inference, seems to have held that a “request [for] a different
sen tencing judge” by Washington would have made recusal mandatory. Id

. In this case, Larson timely demanded the recusal of the trial judge citing , int er alia , our Adams footnote in Black Hills IV as authority for th e request. Appellant’s App. at 57-58. Thus, under our decisions in Black Hills IVand Washington , denial of Larson’s motion for recusal wa s reversible error.
According ly, I concur in that part of the court’s opinion affirming the conviction. I dissent from the court’s view that the sentencin g procedure and the sentence were within the established law of this circuit

.

### -24- A true copy.

Attest:

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