### FI LED U.S. COURT O F APP EALS ELEVENTH CIRCUIT A ugu st 26 , 2 004 THO MAS K. KAH N CL ERK

Honora ble Richard W. Goldber g , J udg e, United States Court of International Trade , * sitti ngby desig nation. [PUBLIS H] IN THE UN ITED STATES COURT OF APPEALS FO R T HE EL EV EN TH CIRC UI T

____ ____ ____ ____ ____ ____ N o. 01- 1706 4

____ ____ ____ ____ ____ ____ D . C. D oc ke t N o. 00- 0038 2- CR -T -2 6 UNITED STAT ES OF AMERIC A, Pl ai nt iff -Ap pe ll ee, ve rs us RAN DYW . B LA

NKEN SH IP, TA MMY J. BL AN KENS HI P, a. k. a. T am

m y Bl an ke nshi p N orthr

up, a. k. a. T am

m y N orthr up, a . k. a. T am

m y O w en s, TARAND TRANSPORT, INC., HO WARD L. GL OV ER , D ef en dants -Appe llants .

____ ____ ____ ____ ____ ____ Appeals fr om

the United State s District Court fo r the Mi ddl e D istri ct

of F lor ida

____ ____ ____ ____ ____ ____ _ (A ug us t 26, 200 4) Before TJO FL AT and BL ACK , C ircuit Judg es, and GO LD BE RG , Judge. *2

TJO FL AT , C ircuit Judg e: T he de fe ndants in thi s c as e—Randy Bl an ke nshi p, T am

m y Bl an ke nshi p, H ow ar d G lov er , and T ar an d T ranspo rt , I nc . —w er e co nvi ct ed of avari ety of federa l offenses stem

m ing from

an aff irm ative action fraud schem e they pe rp etrate d r eg ar din g f

ed er al ly f unde d r oa d c onstru ct ionpr oj ec ts. W e co nc lud e that the dis tr ic t c ourt a ct ed pr ope rl y in co nduc tin g aj oin t tri al of the de fe ndants an dth at th e d ef

en d an t s d i dn o ts u ff

eru n du e p re

ju d i ce du e t o th e p ro s ec u t i o n ’s cl osi ng arg um en ts t o th e j ur y . H ow ev er , w e re ve rs e the Bl an ke nshi ps’ c onvi ct ion s fo r m one y

launde ri ng and m ost

of G lov er ’ s c onvi ct ion s f

or m ak ing f al se state m en ts, and r em an d th is c as e to the dis tr ic t c ourt so that the de fe ndants m ay be res en te nc ed . I. Be ca use the de fe ndants are c ha lle ngi ng the ir c onvi ct ion s, w e int er

pr et the fa ct s inthe li ght

m ost f av or ab le to the gov er

nm en t. S ee Unit ed

S ta te s v. Pe nde rg ra ft , 297 F . 3d 1 198, 120 0 n. 1 ( 11th C ir . 200 2) . T he F lor ida D ep ar tm en t of T ranspo rt at ion( the “ FD O T ”) r ec ei ve d gr an ts f ro m the U nit ed

S ta te s D ep ar

tm en t of T ransportation (the “ US DO T” ) to subsid ize construction of Interstate H ighway 4 ( “ I- 4") . A s ac ondi tio n of r ec ei vin g th es e gr an ts, the F D O T w as c ontra ct ua lly obl igate d to e nsur e that at l ea st 1 2% of the U SD O T ’ s f

unds ult im at el y

w en t t o3

“ disadvan taged busin ess enterprises” (“ DBE s”). ADB E is a sm all firm

owned an d c ontro lle d by

aw om anor

m ino ri ty . S ee F la . A dm in. Co de A nn. § 14 - 78 .00 2( 9) . T he c onstru ct ionof

I -4 w as br oke n do w n in to s ev er al sm al le r se gm en ts, inc lud ing the “ 3430 pr oj ec t” and the “ 3431 pr oj ec t. ” T he F D O T c ontra ct ed w ith G ranit e Co nstru ct ion , one of the larg es t c onstru ct ionc om panie s inthe na tio n, to be it s p rime con tra ct oron bo th pro jects . As pa rt o f it s ag reem en t wi th th e FDOT, G ranit e w as r equir ed

to en sur e that at l ea st 1 2% of it s su bc ontra ct s f

or both proje cts we re set a side for D BE s. T o help fulfill thi s requirem ent, G ranite hired H . J. T ru ck ing , ali ce nse d D BE ow ne d by H ow ar d G lov er

( anA fr ic an -A m er ic an ) to pro vi de ha ul in g s erv ic es at t he 34 31 pro ject c on st ru ct io n s it e. H . J. T ru ck ing , how ev er , ne ve r ow ne d m or e than on e dum p tr uc k or ha d any e mp l o ye e s , an ds o wa s u n ab l e t o p e r f o rm s u c h al a r g e p r o

je c t . C o n s e qu e n t l y, G lov er e nte re d in to an or al a gr ee m en t w ithRandy and T am m y Bl anke nshi p ( “ the Bl an ke nshi ps” ), w ho o w ne d T ar an d T ranspo rt , I nc . T he Bl an ke nshi ps a gr ee d to use T ar an d’ s e qui pm en t and e m plo y ee s to do a ll the w ork onthe 343 1 pr oj ec t, w h i l e mak i n g G r a n i t e b e l i e v e th a ti tw a s b e i n g d o n e b y H . J . T r u c k i n g . T a mmy Bl an ke nshi p pr ep ar ed

vari ous doc um en ts, inc lud ing E E O f orm s, sub co ntr ac ts, le as es , and c er

tif ie d payro ll re co rd s, to he lp f ost er the appe ar an ce that H . J.An independe nt contrac tor who owns his or her own truck a

nd perf orms per die m work 1 for a subcontrac tor is called a

n “owne r-ope rator.” Glover e ntere d into a simil ar a g ree ment with J ohn Miller, who owned J.D. Miller & 2 Sons, which was not a c ertified D BE. Conseque ntly , Glover a rra ng ed for both J .D. Miller & S o n s an d T ar an d T r a n s p o rtt o a c tu a l l y

p e r f o r mth e h a u l i n gf o r th e 3 4 3 1 p r o

j e c tth atH . J. Tr uc kin gwa s su

pp os e d to be pe rf

or min g . T he ind ic tme nt i n th is c a se name d M ill e r a nd his c omp any a s c o- de fe nd ants a lon gwi th G lov e r, the B lank e ns hip s, and Ta ra nd , b ut h e su

bs e qu e ntl y enter ed into a plea

agree ment with the Gover nment. Miller and his company wer e dismissed as de fe nd ants , a

nd Mil le r t e sti fi e d at tr ia l a g a ins t G lov e r a nd the B lank e ns hip s. Con se qu e ntl y , h e is no t a pa rt y to t his a pp e a l. M ill e r h a d n o invo lve me nt w iththe 34 30 pr oje c t ( dis c us se d late r i n this P art). 4 T ru ck ing ’ s e m

plo y ee s and o w ne r- ope rator s w er e pe rf orm ing the hauli ng at the 1 co n s t ru ct i o n s i t es , wh en th e p eo p l e d o i n g th e w o rkwe re re al l y u n d erTa ra n d ’s co ntr ol. 2 Gl o v erg av e G ra n i t e t h e a d dre s s o f T ar an dTr an s p o rt as H.J . Tru ck i n g ’s ad dr es s, to w hic h G ranit e se nt i ts p ay m en ts f or the 343 1 pr oj ec t. T he c he ck s G ranit e se nt t o H . J. T ru ck ing ’ s purp orte d a ddr es s w er e, appr opr ia te ly e noug h, m ade out to H. J. T rucking. T o cash these checks, R andy Blankenship opened an acco un t at hi s b an k i n t he na m e o f “ Ran dy Blan ke ns hi p d /b /a / H.J . Truck in g.” He w oul d th ende posi t the c he ck s in to this a cc ount , and w ith in a day w ith dr awm ost or a ll of the de posi te d f

unds and d ep osi t the m

int o T ar an d’ s a cc ount . T he Bl an ke nshi ps k ep t m ost

of thi s m one y , giv ing G lov er apaym en t e ac h m onth f

or us in g h is DBE li cen se . A s th is p lan w as be ing e xe cu te d, Randy Bl an ke nshi p ( posi ng a s an H . J.Fe dera l law provides, 3 I f t

wo or mor e pe rs on s c on sp ir e e ith e r t o c omm it a ny of fe ns e ag ainst the United States, or to def raud the United States, or any ag ency there of in any

manner or for any purpose, a

nd one or more o r s u c hp e r s o n s d o any a c tt o e f f e c t th e o b j e c to f th e c o n s p i r a c y, eac h shall be fined unde r this titl e or imprisoned not more than five y ear s, or both. 5 T ru ck ing r ep re se ntativ e) e nte re d in to anothe r ag re em en t w ithG ranit e to h av e H . J. T ru ck ing pr ovi de hauli ng s er vic es on the 343 0 pr oj ec t a s w el l. B lanke nshi p sig ne d G lov er ’ s nam e to the c ontra ct and s ubm itt ed

avari ety of doc um en ts t o G ranit e to m ak e it se em

a s if H . J. T ru ck ing w as a ct

ua lly pe rf orm ing the w ork on thi s pr oj ec t, a lth oughit

w as r ea lly

be ing don e by

T ar an d. T he r ec or d do es not sugg es t tha t G lov er

kne wanythi ng o f thi s se co nd p ro j ec t; G ranit e se nt p ay

m en t directly to the address it had been giv en for H .J. Tr ucking (w hich, as noted above, w as r ea lly

T ar an d’ s a ddr es s) . T am m y Bl an ke nshi p pr ep ar ed

se ve ra l do cum en ts i n connection with the 34 30 project to m ake it appear a s if H .J. Tr ucking , r ather than Taran d, was ful fil li ng th is co nt ract , as wel l. Fo r re as ons not

appare nt f

ro m the r ec or d, G lov er

w en t t o th e au tho ri tie s and co nf es se d t o h is in vo lv em en t wi th th e Bl an ke ns hi ps reg ard in g t he 34 31 pro ject. A fe de ra l gr an d j ur

y the re af te r re tur ne d am ult ic ount ind ic tm en t a ga ins t the Bl an ke nshi ps, T ar an d, and G lov er . C ount 1 c harg ed

G lov er , the Bl an ke nshi ps, and Tar and with violatin g 18 U.S .C. § 371 for conspiring to d efra ud the federal 318 U.S.C. § 371.

Th is o pin ion

dis c us se s th e c ounts in t

he ind ic tme nt i n th e ir

mos t lo g ic a l or de r, no t in 4 numerica l order. Fe dera l law provides, “ Ex cept a s otherwise pr ovided in this section, whoever , in any 5 matter within the jurisdiction of the . . . Gove rnment of the United States, knowing ly and willfully . . . makes or use s any

false writing or

document knowingthe same to c ontain any materia lly

false, f ictitious, or fraudulent state ment or entry [shall be punished] .” 18 U.S.C. § 1001(a) (3). Count 4 invol ved a subc ontrac t betwee n H.J . Truckingand Ta rand; Count 8 involved a 6 subcontrac t betwee n H.J . Truckingand J.D. Mil ler & Sons. Counts 5-7 and 9-12 involved equipment lea ses betwe en H.J. Truckingand var ious 7 other c ompanies, includingTara nd and J.D. Mil ler & Sons. Counts 13-15 involved the wag e and hour rec ords on the 3431 proje ct. 8 6 gove rn m en t w ithr eg ar d to the 343 1 pr oj ec t. C ount s 4 thr ough15 c harg ed the se 4 sam e parties under 18 U. S. C. § 100 1 with m aking variou s false writings th at w ere 5 int en de d to giv e G ranit e (and, ult im at el y , the U SD O T ) the im pr es sio n th at

H . J. T ru ck ing , and n ot T ar an d, w as c oor din at ing the w ork onthe 343 1 pr oj ec t. A m ong the allegedly

false writings were subcon tracts and leases that H. J. T rucking had 6 7 en te re d in to tha t m ad e it ap pe ar that H . J. T ru ck ing ha d th e em plo y ee s and equip m en t ne ce ssary

to fu lf ill it s r es pons ibi lit ie s. T he se c ount s a lso inc lud ed the fa lse w ag e an d ho ur

r ec or ds p ro vid ed

by H . J. T ru ck ing that m ad e it ap pe ar a s if the pe opl e w orkin g onthe pr oj ec t 34 31 c onstru ct ionsit e w er e af fi liate d w ithH . J. T ru ck ing ins te ad

of T ar an d. G lov er , the Bl an ke nshi ps, and T ar an d w er e al so

8 charged w ith three counts of m ail fra ud un der 18 U. S. C. § 134 1 (counts 20 -22),Fe dera l law provides, 9 Whoever, having de vised or intendingto devise any scheme or artifice to defra

ud, or for obtaining mone y

or prope rty

by means of false or fra udulent prete nses, re prese ntations, or promises . . . for the purp os e of

e xec uti ngsu c h s c he me or art if ic e or atte mpt ingso to do . . . knowingly

cause s to be delivere d by mail or such ca

rrier a c c or din gto t

he dir e c tio n th e re on

. . . a ny . . . matte r o r t

hin g , s ha ll be [punished] . 18 U.S.C. § 1341. See supra

note 3. 10 See supra

note 5. 11 Count 17 concer

ns the subcontra ct betwe en Gr anite and H .J . Trucking . 12 Counts 16, 18, and 19 conce rn the wa g e and hour rec ords on the 3430 proje ct. 13 7 because G ranite m ailed H. J. T rucking (really Tarand) three separate c hecks as paym en t f

or the 343 1 pr oj ec t. 9 Co unt 2 of the ind ic tm en t c harg ed

the Bl an ke nshi ps and T ar an d w ith another violatio n of 18 U. S. C. § 371 for conspiring to d efra ud the United States gove rn m en t a

bout the 343 0 pr oj ec t. C ount s 16 -1 9 c harg ed the Bl an ke nshi ps and 10 Tarand with m aking false statem ents in vio lation of 18 U.S. C. § 100 1 to conceal the ir f ra ud r eg ar din g th e 3430 pr oj ec t. S pe ci fi ca lly , the y w er e ch ar ge d w ith 11 fo rg ing G lov er ’ s nam e on the sub co ntr ac t f or the 343 0 pr oj ec t purp orte dly be tw ee n G ranit e an d H . J. T ru ck ing , a s w el l a s su bm itt ing f

al se w ag e an d ho ur 12 re co rd s. C ount s 23 -2 5 of the ind ic tm en t c harg ed

the m w ithm ai l f

ra ud unde r 18 13 U . S. C. § 13 41 b ec au se G ranit e se parate ly m ai le d th em

thr ee c he ck s a s paym en t f orSee supra note 9. 14 18 U. S.C. § 1 95 6( h) make s it a c ri me to “ c on sp ir e [] to c omm it a ny of fe ns e de fi ne d in 15 this section . . . .” Section 1956(a )(1) (B )(i) state s,

Whoever, knowingthat the prope rty involved in a financ ial transac tion repre sents the proc eeds of some form of unla

wful activity , conducts or attempts to conduct such a f inancial transac tion which in fac t involves the proce eds of spe cified un lawf ul a c tiv ity . . . k no wi ngthat th e tr ans a c tio n is de signe d in whole or in pa

rt to conce al or disguise the nature , the location, the source , the owner ship, or the control of the proce eds of spe cified un la w f u l a c ti v it y . . . [s h a ll b e p un is h e d ]. See id. 16 8 the 343 0 pr oj ec t. 14 T he r em ai nde r of

the ind ic tm en t f

oc use d onRandy

Bl an ke nshi p’ s bank tr an sa ct ion s. C ount

3 of the ind ic tm en t c harg ed

the Bl an ke nshi ps and T ar an d unde r 18 U . S. C. § 19 56( h) w ithc onsp ir ac y to launde r m one y . C ount s 26 -3 4 15 we nt on to charge them

with various acts of m oney laundering un der 18 U. S. C. § 19 56( a) f

or tr an sa ct ion s a sso ci at ed

w iththe H . J. T ru ck ing a cc ount Randy 16 op en ed . T he de fe ndants ple d no t gu ilty to ea chc ount . T he y

w er e tr ie d to ge the r, andCount 4 was the fa lse statement convic tion under § 1001 involving a subcontrac t 17 betwee n H.J . Truckingand Ta rand. Count 8 was the fa lse statement convic tion under § 1001 involving a subcontrac t 18 betwee n H.J . Truckingand J.D. Mil ler & Sons. Count 9 wa s th e fa lse state me nt c onvic tio n und e r § 10 01 inv olv inga e qu ipm e nt l e a se 19 betwee n H.J . Truckingand J.D. Mil ler & Sons. 9 with the exception of counts 4 , 8, and 9, the j ury found them

guiltyas 17 18 19 ch arg ed . Fol lo win g s en te nc in g, t he de fen da nt s t oo k t he se ap pe al s. T his opi nio n is or ganiz ed a s f oll ow s. I n P ar

t I I, w e as se ss the de fe ndants ’ claim s that the dist rict court abused its discretion in conductin g a j oint trial, rather than gr an tin g th ei r m oti ons fo r se ve ranc e. P ar t I II e xam ine s G lov er ’ s arg um en t that the G ove rn m en t, in its c los ing arg um en t t o th e j ur y , im pe rm iss ibl y co m m en te d onhis de ci sio n no t t o te sti fy . P ar t I V c onsi de rs the suf

fi ci en cy of the ev ide nc e to s uppo rt

the Bl an ke nshi ps’ m one y launde ri ng c onvi ct ion s un de r co unt s 26-34 (and, by

extension, their conviction for conspiracy to com m it m oney launde ri ng unde r co unt

3) , w hil e Part

Vloo ks t o th e le git im ac y of the de fe ndants ’ co nv ic ti on s u nd er co un ts 5-1 5 fo r m ak in g fa ls e st at em en ts . II. G lov er and the Bl an ke nshi ps f

ile d tw o j oin t pr etri al m oti ons to h av e the ir tr ia ls s ev er ed

f ro m e ac h othe r, c la im ing that the ir de fe nse s w er e m

utu al ly an ta goni sti c. Mi dtr ia l, the Bl an ke nshi ps m ad e w ha t the y la be le d athi rd

m oti onAs dis c us se d late r i n th is Pa rt , a “ mot ion fo r s e ve ra

nc e ” may be ma de on ly

pr ior to 20 tr ia l. Wh e n a

de fe nd ant c la ims midtr ia l th at it wo uld be imp ro pe r t o c ontin

ue wi th a joi nt t ri a l, the question for the court is whethe r to g rant him a mistrial. Under the Double Jeopardy

Clause of the Constitution, U.S . Const. amend. V (“ [N] or shall any person be subject for

the same of

fenc e to be twice put in jeopardy of life or limb . . . .”), a def endant ha s the rig ht to go to ver dict with the jury that is sworn in to hear his c ase. See Wade v. Hunter, 336 U .S. 684, 689, 69 S. C t. 834, 837, 93 L . Ed. 974 (1949) ( acknow ledg ing “ a de fe nd ant’ s v a lue d r ig ht t o h ave his tr ia l c omp le te d b y a pa rt ic ula r t ri buna l” ). I f D e fe nd ants A and B are tr ie d jo int ly , th e y

bo th h ave the c on sti tut ion a l r ig ht t o h ave a ve rd ic t f ro m th e sp e c if

ic j ur y a c tu a l l y h e ar i n gth e i r

c a s e ( w i thd

u e a l l o w an c e s m a d e f

o r a l t e r n at e s an d th e l i k e ) . If De fe nd ant Amov e s mi dtr ia l to se ve r D e fe nd ant B , th e Court c ou ld n ot s imp ly

c ut D e fe nd ant B out of the ca se and or der a new pr ocee ding f

or him. This would violate the Double Jeopardy Clause bec ause suc h sever ance would deny Def endant B the rig ht to a verdic t from his orig inal j ury . S ee , e. g. , Un i t edS t at es v . Bu t l er , 4 1 F. 3 d 1 4 3 5 , 1 4 3 9 (1 1 thC i r. 1 9 9 5 ) ( re v er s i n g a de fe nd ant’ s c onvic tio n in a se c on d tr ia l on

Do ub le Jeop ard

y g ro un ds wh e re the dis tr ic t c ourt in the first trial er

roneously g rante d the Gover

nment’s motion for “se vera nce, or in the alternative, mistrial”); see a lso United States v. Huang , 960 F.2d 1128 ( 2d Cir. 1992) (notingthat wher e a court grants a mistrial as to c erta in co-de fenda nts based on a motion made by other c odefe ndants, the non-movingco-de fenda nts may not be re -tried) . Con se qu e ntl y , th e on ly

wa y to u nd e rs tand a de fe nd ant’ s mi dtr ia l mo tio n f or se ve ra nc e is as a motion to sever

that defe ndant, himself, from the tr ial and allow him to start over with a new jury ; this i s essentially

a motion for a mistrial for that defe ndant. See De pree v. Thomas, 946 F.2d 784, 792 ( 11th Cir. 1991) (noting that a “motion for se vera nce . . . in e ffe ct, was a

motion fo r m istri a l” ); Un ite d St ate s v . H ic kma n, No . 9 4- 58 51 , 1 99 6 U .S. Ap p. L EX I S 10 32 6, at *7 (4 th Cir. May 6, 1996) (“ [T] he mistrial was a nece ssary

conseque nce of

[t he def endant’ s] s ever ance motion . . . .”). A def

endant makinga midtrial motion for sever ance is essentially arguing that circ umstances ha

ve deve loped to the point where it would be unfairly prejudicia l to allow the trial to proce ed. The Double Jeopardy Clause does not prohibit retry ing de fenda

nts who seek mistrials, United St ates v. Scott, 437 U.S. 82, 93, 98 S. Ct . 2187, 2195, 57 L . Ed. 2d 65 (1978) (h old ingthat a

de fe nd ant’ s mo tio n f

or a mis tr ia l is “ a

de lib e rate e le c tio n o n h is p art to f or e g o h is valued r ight to have his guilt or innoce nce de termined by the first trier

of fa ct”) , unless the mistrial is sought due to serious intentional prose cutorial misconduct. Or eg on v. Kenne dy , 456 U.S. 667, 676, 102 S. C t. 2083, 2089, 72 L . Ed. 2d 416 (1982) ( “Only wher e the g overnme ntal c o n d u c ti nqu e s t i o ni s i n t e n d e d t o ‘ g o a d ’ th e d e f

e n d an ti n t o m o v i n gf

o r a m i s tr i a l m ay a defe ndant ra ise the bar

of double jeopa

rdy to a sec ond trial afte r havingsucce eded in a bortingthe first on his own motion.”). Thus, we c onstrue the B lankenships’ midtrial motion for seve ranc e as a re quest that the cour

t gr ant the B lankenships a mistrial. 10 fo r se ve ran ce. The d is tri ctco ur t d en ie d a ll of t he se m ot io ns .

20 T he pe rm iss ibi lity

of j oin t tri al s is gov er

ne d by Ru le s 8 and 1 4 of

theBonne r v. City of Prichar d, 661 F.2d 1206, 1209 ( 11th Cir. 1981) (en ba nc) ( adopting 21 as bindingprec edent a ll decisions of the for mer F ifth Circuit handed down pr ior to October 1, 1981). 11 Fe de ra l R ule s of Cr im ina l P ro ce dur e. R

ule 8( b) state s th at

tw o or m or e de fe ndants m ay be c harg ed

in the sam e ind ic tm en t or inf orm at ion“ if

the y are a lle ge d to have part ic ipate d inthe sam e ac t or tr an sa ct ion , or

in the sam e se ri es of

a ct s or tr an sa ct ion s, c onst itu tin g an of fe nse or of fe nse s. ” F ed . R. Cr im . P . 8( b) . B ec au se neither party

challenges the structure of the indictm ent under this rule, w e need no t co ns id er i t. Ru le 14( a) state s, “ If

the j oin de r of

of fe nse s or de fe ndants in anind ic tm en t, aninf orm at ion , or

ac onso lid at ionf

or tr ia l a ppe ar s to pr ej udi ce ade fe ndant o r the gove rn m en t, the c ourt m ay or de r se parate tr ia ls o f co unt s, se ve r the de fe ndants ’ trials, or provide any

other relief

that j ustice requires.” W e have long recognized that “ a D istrict Court confronted with a Rule 14 Motion for Severance is required to balance any

. . . prej udice [to the defendants] against the interests of judicial ec onom y , ac onsi de ratio n in vol vin g su bst antia l di sc re tio n. ” U nit ed S ta te s v. Mc G uir e, 608 F . 2d 1 028, 103 1 ( 5thCi r. 197 9) . C onse que ntl y , w e re vie wthe 21 d i s t r i c tc o u rt ’s d e c i s i o n f o r ab u s e o f d i s c r e t i o n , a s s e s s i n g e a c h p a rt y’ s c l a i ms separately . W e also em

phasize that, in review ing each of these rulings, we are loo kin g ov er

the sho uld er

of the tr ia l j udge , and m ay

take int o a cc ount

onl y the12

co nsi de ratio ns a ct

ua lly be fo re him

a t the ti m e he r

ule d. I f a de fe ndant m ove s f or se ve ranc e, and e ve nts oc cur la te r at tr ia l tha t the j udge ha d no t be enw ar ne d a bout , we m ay not conclud e that the j udge erred earlier by failing to grant a severance ba se d ontho se late r ev en ts tha t he ha d no w ay of c onsi de ri ng. O f co ur se , in lig ht of such sub sequent events, a defendant m ay again m ove for severance (or, m ore ac curate ly , f

or am istri al , se e supr a not e 18) , and the tr ia l j udge w oul d be in a po si ti on to co ns id er t he en ti ret y of t he si tu at io n. A. Glo ve r arg ue s t ha t h e was sev erel y pre jud ic edby the joi nt tri al in two re spe ct s. F ir st, G lov er

c la im s th at

he w as de nie d af

undam en ta lly

f ai r tr ia l i n vio la tio n of

the F if th A m en dm en t’ s D ue P ro ce ss C lause be ca use he w as not pe rm itt ed to ca ll D on S chuh, one of the Bl an ke nshi ps’ tr ia l atto rn ey s, to the stand as aw itn es s inhis de fe nse . S ec ond, G lov er m ai nta ins that, a s a

r es ult of the j oin t tr ia l, apot en tia lly

e xc ulp at or

y state m en t he m ad e to anothe r w itn es s, T yro ne Red di sh , was ex cl ud edbe cau se itin cri m in at edhi s co -d efen da nt s. Both of Glover’ s claim s fail. First, Glover never presented the district court wit h am ot io n t o s ev er o r a m ot io n fo r a m is tri al on eit he r of th es e g ro un ds . Se co nd, a lth oughhe c ont en ds tha t he w as pr ev en te d f ro m c al lin g S chuh andT y r o n e R e d d i s hw a s anF D O T e mp l o y e e ; G l o v e r a l l e g e d l y t o l d R e d d i s hth atH . J. 22 Tr uc kin gwa s n ot w or

kin gon the 34 31 pr oje c t. 13 Re ddi sh to the stand, the r ec or d de m onstrate s th at he ne ve r ac tua lly

a tte m pte d to 22 do so . A dm itt ed ly , S chuh p ro bably sho uld not have r ep re se nte d th e Bl an ke nshi ps at tr ia l. F lor ida

Ru le of P ro fe ssi ona l C ondu ct

4- 3. 7( a) state s, “ Alaw y er sha ll not ac t a s a dvoc at e at

atr ia l i n w hic h th e law y er is lik el y to be ane ce ssary

w itn es s on be ha lf o f th e cl ie nt ” ex cep t i n c ert ai n s it ua ti on s n ot ap pl ic ab le to th e in st an t ca se . T he f ac t r em ai ns, how ev er , that the c ourt ne ve r pr ev en te d G lov er f ro m c al lin g hi m to the stand. Indeed, the B lankensh ips’ lead counsel, Ronald Cacc iatore, offer ed to m ak e Sch uh av ai labl e to Glo ve r to tes ti fy . Cacci at or e st at edat t ria l, I’ ve ta lke d to Mr . S chuh. I f it w ill a lle viate the pr obl em , he is w ill ing to t es tif y . I c anr ep re se nt t o th e Co urt, ba se d up on m y c onve rs at ion w ithhim , he ha s no r ec or ds. I kno whe doe sn’ t c harg e by the hour an d I do n ot b el ie ve his te sti m ony w oul d im

pe ac h M s. Bl an ke nshi p. Be ca use the dis tr ic t c ourt di d no thi ng t o pr ev en t G lov er f ro m c al lin g S chuh t o th e st an d, we re

ject h is cla im . G lov er ’ s c la im

c onc er nin g R ed dis h bo rd er s oninc ohe re nc e. A t the e nd o f G lov er ’ s c as e, his a tto rn ey state d th at

he w oul d no t be c al lin g T yro ne Re ddi sh t o the w itn es s st an d be ca

use “ [A ssi stant Unit ed

S ta te s A tto rn ey ] Mo or e co rr ec tly14

poi nte d ou t t o m e that I ha d aBr uto n [ v. U nit ed

S ta te s, 391 U . S. 123 , 88 S . Ct . 1620 , 20 L . E d. 2d 4 76 ( 1968 )] pr obl em w ithMr . Re ddi sh, so at this poi nt, w e w ill be r es tin g. ” A ga in, the re is nothin g f or us t o r ev ie whe re be ca

use the de ci sio n no t to c al l R ed dis h w as m ad e by G lov er ’ s a tto rn ey , and w as not im pose d up on G lov er ’ s a tto rn ey

by the dis tr ic t c ourt. Ade fe nse a tto rn ey ’ s pe rs ona l c onc lus ion ab out aw itn es s’ s a

bil ity to te sti fy is not agr ound f or r ev er sa l. T his de ve lop m en t in the m iddle of the trial certainly does not im

pact the legitim acy

of the district co ur t’s i ni ti al de ci si on to ho lda joi nt tri al . B. A t the be gin nin g of

the tr ia l, and the n a ga in m idw ay thr oughtr ia l, the Bl an ke nshi ps m ove d f

or se ve ranc e on the gr ound s of m utu al ly anta goni sti c de fe nse s and G lov er ’ s ou tr igh t ho sti lity tow ar d th em . W e fo cu s onthe pr opr ie ty of the dis tr ic t c ourt’ s late r ru lin g, be ca use if the c ourt w as c or

re ct in de ny ing a m idtri al m oti on f

or m istri al on s ev er an ce -r el at ed gr ound s, it s e ar lie r ru lin gs n ot t o sever—w hen it had even less eviden ce of potential prej udice before it—w ere ne ces sa ril y

co rrec t. Glover e ngaged in a variety of attacks against the Blankenship s both before an d duri ng tri al ; hi s strate gy w as to cl ai m

that he w as an innoc en t vi ct im of the ir15

m an ipu la tiv e sc he m es . F or e xam ple , dur ing apr etri al dis cu ssi on, the tr ia l j udge state d th at

he r em em

be re d se ei ng G lov er

on t el ev isi on s ev er al m onths b ef or e. T he j udge tol d th e Bl an ke nshi p’ s a tto rn ey s th at G lov er “ [w ] as r igh t a dam an t a

bout w ha t ha d be endon e to h im . . . . [ I] f Mr . G lov er ’ s m ind se t i s th e sam e as it

w as on that r ep ort, obv iou sly , he ha s no lov e los t f or [ the Bl an ke nshi ps] . ” I n hi s op en ing state m en t t o th e j ur

y , G lov er ’ s a tto rn ey

de cl ar ed , “ H ow ar d G lov er , a s y ou w ill learn, is a victim

of his own lack of sophist ication. H e is a victim . . . [of] an af fi rm at ive a ct ionpr ogr am w hic h is de sig ne d to he lp p eo ple li ke Mr . G lov er , but ins te ad ha s le d to the c or

ru pti on o f suc h pe opl e as T am m y and R an dy Blankenship . . . .” Afew m inutes later, G lover’ s attorney repeated this th em e,

“ [H ] av ing aD BE m ad e [G lov er ] an e as y m ar k f or tho se w ho h ad

pr ev iou sly co ntr oll ed

the w ork pe rf

orm ed on the se r oa ds, pe opl e lik e T am m y and R an dy Blankenship and their trucking bu siness, Tarand Tr ucking . . . .” G lover’ s attorney c o n c l u d e d , “O n c e yo uh a v e h e a r da l l o f th e e v i d e n c e i n th i s c a s e i tw i l l b e c o me cl ear that the pr ose cu tio n c as t i ts n et too f ar , and tha t whe n it

c au ght the tr ue culprits it also u nfortunately ensnared the innocent Mr. G lover.” He em phasized th is th em e th ro ug ho utth e en ti re t ria l an d i n h is clo si ng arg um en t t o t he jury. D es pit e the se f

ac ia lly pe rs ua siv e fa ct s, pr ec ed en t c om pe ls u s to r ej ec t the Bl an ke nshi ps’ c la im s. I n Z af ir o v. U nit ed

S ta te s, 506 U . S. 534 , 113 S . Ct . 933 ,This holding implicitly overr ules our prior r

ulings in United States v. Esle, 743 F .2d 23 1465, 1476 (11th Cir. 1984) (holdingthat sever ance is require d if “the jury , in order to be lieve the cor e of te stimony

offe red on be half of [a] defe ndant must nece ssarily disbelieve the te stimony offe red on be half of his c o-def endant” ) (mar

ks and citation omitted), and United States v. Rucker, 915 F .2d 1511, 1513 (11th Cir. 1990) (“ [T] he trial judg e should have rea liz ed that the Ruckers w ould present unavoidably antag onistic defense s and orde red se parate trials.”) .

16 122 L . E d. 2d 3 17 ( 1993 ), the S upr em e Co urt se t do w n atw o- ste p te st f or d et er m i n i n g wh et h era d ef en d an ti s en t i t l edt o a n ew tri al du e t o a d i s t ri ct co u rt ’s re fu sa l t o se ve r pr ior

to tr ia l or

to gr an t a

m istri al onc e tr ia l ha s c om m en ce d. F ir st, a de fe ndant m

ust de m onstrate that he w as som eh owpr ej udi ce d by aj oin t tri al . I d. at 538 , 113 S . Ct . a t 93 8. H ow ev er , the Co urt c lari fi ed that “ [m ] utu al ly an ta goni sti c de fe nse s are not pr ej udi ci al pe r se . ” I d. T he Co urt sp ec if ic al ly 23 re j ec te d th e not ionthat de fe ndants w ho h av e co ntr ad ic tor y de fe nse s are inh er en tly prej udiced sim

ply because “ a j ury

will conclude [either] that both defendants are ly ing and c onvi ct

the m both onthat ba sis , or

that at l ea st o ne of

the tw o m

ust be gui lty w ith out r eg ar d to w he the r the G ove rn m en t ha s pr ove d it s c as e be y ond a re as ona ble doubt. ” I d. a t 54 0, 113 S . Ct . a t 32 5- 26. A ft er f ind ing that a

de fe ndant h as suf

fe re d pr ej udi ce und er

ste p on e of

the Za firo test, we then turn to th e second step—determ ining whether severance (or a m istri al ) is the pr ope r re m edy f or that pr ej udi ce . T he Co urt e m pha siz ed , “ Ru le 14 doe s no t r equir e se ve ranc e . . . [ R] athe r, it le av es the ta ilo ri ng o f the r el ie f to b eFor example, in DeL

una v. United States, 308 F .2d 140 (5th Cir. 1962), we r ecognized 24 that a de fe nd ant i s d e nie d a

fa ir tr ia l whe n a

n atto rn e y fo r a c o- de fe nd a

nt c omm e nts on

his e xer c ise of

his F if th Ame nd me nt r ig ht t o r e ma in s ile nt. We h e ld, “ I f a n atto rn e y ' s d

uty to h is client should require him to draw the jury' s attention to the possible infere nce of guilt from a codefe ndant' s silence, the tr ial judge ' s duty is to order that the de fenda nts be tried sepa

rate ly .” I d. at 141. Simi larly , a def

endant’ s Six th Amendment rig ht to cross-examine is violated wher e the court a dmits i nto evidence a mutually incriminatingconfe ssion of a co- defe ndant who does not take the sta

nd. This court has r epeatedly rec og nized that, even if g iven prope r limiti ng instructions, a jury

cannot possibly

be expected to c onsider such a confe ssion ag ainst only

the d e f e n d an t wh o ma d e it . Se e Sc h a f f e r v . U n it e d St ate s , 2 2 1 F . 2 d

1 7 , 1 9 ( 5 th

Ci r . 1 9 5 5 ) ( “ We be lie ve , h ow e ve r, that th e tw o d e fe nd ants we re so ins e pa ra bly c onne c te d th at th e jur

y c ou ld hardly have be en expected to r eturn a verdic t of guilty

ag ainst one and of

not guilty

as to the oth e r. ” ); Un ite d St ate s v . H a up t, 1 36 F .2 d 6 61 , 6 72 (7 th C ir . 1 94 3) (“ We d ou bt i f i t w a s w ith in the re alm of possibilit y

for this jury

to limi t its consideration of the damag ing e ffe ct of such statements mere ly

to the defe ndant ag ainst whom they wer e admitted.”) . 17 granted, if any , to the district court’ s soun d discretion.” Id. at 539, 113 S. C t. at 938. T he re are onl y

tw o c ir cum stanc es in w hic h se ve ranc e is the onl y pe rm iss ibl e rem ed y . [W] he n d efen da nt s p ro pe rly hav e b een joi ne d u nd er Ru le 8(b ), a dis tr ic t c ourt sh oul d gr an t se ve ranc e unde r Ru le 14 o nly if the re is a se ri ous ri sk tha t a

j oin t tri al w oul d c om

pr om ise aspe ci fi c tr ia l r igh t of one of the de fe ndants , or

pr ev en t the j ur

y f ro m m ak ing ar el ia

ble j udgm ent about gu ilt or inno cence. Id . A sid e fr om

the tw o c at eg or ie s of

de fe ndants spe ci fi ed

by the S upr em e Co urt, m ost oth er de fe ndants pr ej udi ce d by aj oin t tri al are e nti tle d on ly to curativ e ins tr uc tio ns. T he f ir st s ce nari o f

or m an da tor

y se ve ra nc e (o r m istri al ) de sc ri be d by the Co urt e xis ts o nly

w he re aj oin t tri al le ad s to the de nia l of ac onst itu tio na l r igh t. 2418

Re gard ing the se co nd s ce nari o m en tio ne d by Z af ir o, the Co urt di d no t c le ar ly expla in wha t i t m eant b y

aj ur y be ing pr ev en te d f

ro m “ m ak ing ar el ia

ble j udgm ent.” Based on the Court’ s ensuin g discus sion, however, as w ell as an ex am inatio n of

sub se que nt p re ce de nt, it

se em s th at

c ourts h av e ap pli ed

thi s ex ce pti on i n pr im ar ily

thr ee sit ua tio ns. Whil e thi s li st a ppe ar s to be f

ai rl y co m pr eh en siv e, it

is qui te pos sib le that othe r fa ct or s c oul d a lso pr ev en t a j ur y f ro m

“ m aking a reliable j udgm ent.” Fi rs t, se ve ranc e is m an da te d w he re c om pe lli ng e vid en ce that i s no t adm iss ibl e ag ai nst

one or m or e of the c o- de fe ndants is to b e intro duc ed a ga ins t a n o th e r c o - d e f e n d a n t . T h i s i s ac o n c e rn , f o r e x a mp l e , “w h e r e th e . . . g r u e s o me ev ide nc e ag ai nst

one de fe ndant o ve rwhe lm s th e de m ini m us e vid en ce a ga ins t the co-defendant(s), ” U nited States v. G ray , 173 F. Supp. 2d 1, 24 (D .D .C. 2001 ); see, e. g., United State s v. Sam pol, 636 F.2d 621 (D. C. Cir. 1980 ) (m andating sev erance w he re li m iti ng i nstru ct ion s “ co uld not pr ovi de the ir

int en de d pr ote ct iona ga ins t pr ejud ic e in th e fac e o f th is em ot io na l ev id en ce”) . Inge ne ra l, the str ong pr es um pti on i s th at

j ur or s are able to co m partm en ta liz e ev ide nc e by r es pe ct ing li m iti ng i nstru ct ion s sp ec if y ing the de fen da nt s ag ai ns t wh om th e ev id en ce m ay

be co ns id ered .Schlei tells us that severa nce is not re quired simply based on the quantity

of evide nce 25 a dmi ssi ble on ly

a g a ins t ot

he r c o- de fe nd ants . T he oth e r c a se s d isc us se d a bo ve dir e c t c ourt s to loo k to the qu a lity

or natur e of e vid e nc e a dmi ssi ble on ly a g a ins t ot

he r c o- de fe nd ants , to se e if it is of a gruesome, pow erf

ul, or essentially

dispositi ve ty

pe that intrinsically

calls into question a jury ’s ability

or willingne ss to follow lim iting instructions. 19 T he m er e fa ct

that the re m ay

be an ‘ en orm ous dis pari ty in the evidence adm issib le against [one defendant] com pared to the other defendants’ is not a sufficient basis for rever sal. Adefendant does not su ffer com pelling prej udice, suffic ient to m andate a sever ance, sim ply be ca use m uc h of the e vid en ce a t tri al is ap pli ca ble onl y to co de fe ndants . U nit ed S ta te s v. S ch le i, 122 F . 3d 9 44, 984 ( 11th C ir . 199 7) ( m ar ks and c itatio n om itt ed ); se e al so Unit ed S ta te s v. Ba lte r, 91 F . 3d 4 27, 433 ( 3d C ir . 199 6) (“ Pr ej udi ce sho uld

not be f ound in a j oin t tri al j ust

be ca use a ll ev ide nc e ad duc ed is not ge rm an e to a ll co unt s a ga ins t e ac h de fe ndant o r som e ev ide nc e ad duc ed is m or e dam ag ing to one de fe ndant than othe rs . ”) ( quot at ionm ar ks and c itatio ns om itt ed ). S ev er an ce m

ust be gr an te d w he re e vid en ce is adm iss ibl e ag ai nst onl y 25 one de fe ndant o nly

w he re that e vid en ce is so c onvi nc ing that no t e ve n li m iti ng ins tr uc tio ns are li ke ly

to pr ev en t the j ur

y f ro m c onsi de ri ng the e vid en ce a ga ins t a ll co -d ef en dants . “ T he pr es um

pti on tha t a

j ur y w ill a dhe re to a lim iti ng i nstru ct ion ev ap or at es w he re the re is anove rwhe lm ing pr oba bil ity that the j ur

y w ill be una

ble to follow the court’ s instructio ns and the evid ence is devastating to th e defe nse.” U nit ed S ta te s v. Jon es , 16 F . 3d 4 87, 493 ( 2d C ir . 199 4) ; se e al so Unit ed S ta te s v.20

Baker, 98 F.3d 330 (8th Cir. 1996) (rever sing con viction for f ailure to sever where

“ ve ry pr ej udi ci al and h igh ly

inf lam m at or y ” ev ide nc e adm iss ibl e ag ai nst onl y one co -d ef en dant w as intro duc ed

be ca use “ the r isk

of sub stanti al pr ej udi ce f

ro m the spillo ver ef

fect . . . w as too hig h to be cured by less drastic m easures”) ; United States v. Briscoe, 896 F.2d 1476 , 1498 (7th Cir. 1990) (“ Ge nerally , a cautionary ins tr uc tio n w ill be suf

fi ci en t t o c ur e any

unf ai r pr ej udi ce . . . . [ H ] ow ev er , if the evidence cre ates an unacceptably high in fere nce of wrongdo ing against another de fe ndant, the dis tr ic t c ourt sh oul d e ith er e xc lud e the e vid en ce or

se ve r the trials.” ). In such cases, the better course of action is to have separate trials in order to c onf ine suc h po w er fu l e vid en ce to the de fe ndants a ga ins t whom it m ay pr ope rl y be us ed . T he “ re lia ble j udgm en t” e xc ep tio n a lso appl ie s inan e xtr em el y narr ow range of c as es in w hic h th e she er

num be r of de fe ndants and c harg es w ithdif fe re nt standards of proof and culpabi lity , a long with the m assive volu m e of evidence, m ak es it ne ar ly im poss ibl e fo r a j ur

y to j uggl e ev er

ythi ng p ro pe rl y

and a sse ss the gui lt or inn oc en ce of

e ac h de fe ndant i nde pe nde ntl y . S ee U nit ed S ta te s v. Ca ssano, 132 F. 3d 6 46, 651 ( 11th C ir . 199 8) ( “ Ade fe ndant s at isf ie s th e co m

pe lli ng pr ej udi ce r equir em en t by sho w ing that the j ur

y w as una ble to sif t thr oughthe ev ide nc e an d m ak e anind ivi dua liz ed de te rm inatio n a s to e ac h de fe ndant. ” (m ar ksSee, e.g ., United States v. Erwin, 793 F .2d 656, 666 (5th Cir. 1986) (holdingthat 26 se ve ra nc e of a pa rt ic ula r c o- de fe nd ant w a s r e qu ir e d b e c a us e “ [t]he c ha

rg e s a g a ins t he r w e re on ly 21 an d c itatio n om itt ed )) . T his a spe ct of the “ re lia ble j udgm en t” e xc ep tio n is ep it om iz edby Uni te d S ta te s v . Gall o, i n wh ic h t he di st ric t co ur t o bs erv ed , T his c as e is f

ar too e xte nsi ve and i ntr ic at e to e xpe ct that a j ur y w oul d be able to discern the m

yriad of subtle disti nctions and m ental gy ratio ns tha t w oul d be r equir ed by the ine vit ab le ple tho ra

of li m iti ng ins tr uc tio ns n ec es sary . A nd e ve n w he re j ur or s w oul d a t f ir st atte m pt to h ee d th e j udge ’ s a dm oni tio ns, the y c oul d hard ly

be e xpe ct ed

to retain such precise discrim ination s wee ks and m onth s down the line, w he n th ey

r et ir e to d el ibe rate on the ba sis of aw ar eh ouse of

div er se ev id en ce. 668 F. S upp. 736 , 753 ( E . D . N . Y . 198 7) ; se e al so S am pol , 636 F . 2d at 64 7 (rever sing con viction due to failure to grant a sever ance where “ [t] here w as never the c le ar dis tin ct ionbe tw ee n th e dif fe re nt d ef en dants and the e vid en ce a ga ins t each of them

that is called for by

the Constitu tion’s guarantee of a f air trial” ); cf. United States v. Lotsch, 102 F.2d 35, 36 (2d Cir. 1939 ) (H and, J. ) (holding th at severance wa s not required if “ there w as no reasonable groundfor thinking that th e jury cou ldno t k eep sep arat e wha t was rel ev an t t o e ach [de fen da nt ]”). Fi na lly , se ve ranc e is r equir ed und er Z af ir o w he re one de fe ndant i s be ing charged w ith a crim e that, while som ehow re lated to the other defendants or their overall crim inal schem e, is sign ificantly differ ent from

those of the other de fe ndants . 26periphe rally related to those alleg ed ag ainst the other [co-de fenda nts, and] [ a]s the trial prog resse d it became incre asing ly appar ent that ver

y littl e of the mountain of evidenc e wa s usable a g ainst her” ); Sampol, 636 F.2d at 646 (f inding se vera

nce w as re quired whe re a defe ndant was tried f

or makingfalse statements to a g rand jury and misprison of fe lony

in the same trial a s co-de fenda

nts acc used of “ the bombing mur der of two people” ); United States v. Maisonet, No. S3 9 7 Cr . 0 81 7, 19 98 U. S. D ist . L EX I S 96 96 , a t *1 8 ( S.D .N .Y . July

1, 19 98 ) ( “ [Th e de fe nd ant] is not charg ed with any

act of violence, nor

is he cha rg ed with par

ticipating in the posse ssion, sale, or distribution of nar cotics. Given the nature and extent of evidenc e that the Gove rnment will likely

introduce a g ainst both gr oups of co- defe ndants, the potential for prejudice ag ainst [t he defe ndant] arising f

rom a joint trial with either group is substantial.”). We acknowle dg e that our holdingin Cassano comes to the opposite c onclusion. Citi ng 27 se ve ra l pr e -Z a fi ro El e ve nth Cir c uit c a se s, Ca ssa

no state s th at “ [t]he a sse rt ion of mut ua lly antag onistic defense s may satisfy the test for c ompelling pr ejudice . . . [when] the essenc e of one defe ndant’s def

ense [is] contra dicted by

a co- defe ndant’s def

ense.” 132 F.3d at 652 (citing United States v. Perez-Ga rcia , 904 F.2d 1534, 1547 ( 11th Cir. 1990), United States v. Kelso, 863 F .2 d 1 56 4, 15 68 (1 1th

Cir . 1 98 9) , a

nd Un ite d St ate s v . B e rk ow itz, 66 2 F .2 d 1 12 7, 11 32 -3 4 ( 5th Cir . Unit B 19 81 )) (i nte rn a l qu otatio ns omi tte d) . T he Ca ssa no c ourt ’s dis c us sio n o f m utu a lly antag onistic defense s did not cite Z afiro at all, and see ms to be simply a re flec tion of our pre Z afiro policy . We would never theless be bound to follow Cassano unde r our pr ior pane l rule, except that in an ea

rlier c ase, United States v. Strollar, 10 F.3d 1574, 1578 (11th Cir. 1994) (m ark s and

c itatio n o mitte d) , w e e xpre ssl y a do pte d th e Sup re me Court ’s Z a fi ro ana ly sis and he ld that “mutually

antag onistic defense s are not prejudicial pe r se.” We further rec og nized that the best solution in s uch situations is not severanc e, but for the trial judg e to issue prope r limiti ng instructions. Thus, give n this conflict betwee n our 1998 holdingin Cassano and our 1994 holding in Strollar as to whe ther mutually antag onistic defense s are prejudicia l and ca n war rant sever ance , we f

ollow our ea

rlier holding , which is luckily in acc ord with the Supreme Court’ s pronounce ments on the subject. See Clar k v. HousingAuth. of Alma, 971 F .2d 723, 726 n.4 (11th Cir. 1992) (“ Where c ircuit authority is in conflict, the ea

rliest panel opinion re solving the issue in question binds thi s circuit until the court re solves the issue en ba nc.”) . 22 The de fen da nt s i n t hi s ca se are u nabl e to pa ss eit he r st ep of t he Zafir o t es t. First, they

are unable to dem onstrate prej udice. A s Za firo m akes clear , the m ere ex ist en ce of

m utu al ly anta goni sti c de fe nse s is not inh er en tly

pr ej udi ci al . T he

27 Su pr em e Co urt ha s he ld tha t c o- de fe ndants do n ot s uf fe r pr ej udi ce sim

ply be ca use one c o- de fe ndant’ s de fe nse dir ec tly inc ulp at es anothe r, or

it is log ic al ly

im poss ibl e23

fo r a j ur y to be lie ve both c o- de fe ndants ’ de fe nse s. A sid e fr om poi nti ng o ut the ir m utuallyantagonist ic defenses, however, neither the Blankenships nor Glover have sho w n ho wthe j oin t tri al pr ej udi ce d th em in any oth er le ga lly c ogni za ble way . Furthe rm or e, e ve n if the de fe ndants did

suf fe r pr ej udi ce , the y

do n ot f al l w ith in e ith er

of Z af ir o’ s c at eg or ie s of

de fe ndants to w hom

se ve ranc e m

ust be gr an te d. F ir st, puttin g a sid e G lov er ’ s m er itl es s arg um en ts ( dis cu sse d inthe pr ec ed ing S ec tio n) , non e of the de fe ndants c la im

that the y ha d any of the ir subs tanti ve tr ia l- re la te d r igh ts v iol at ed by the j oin t tri al . S ec ond, the re is nothin g ab ou t t he joi nt tri al th atun de rm in edth e rel iabi li ty of th e jury’ s v erd ic t. Specifica lly , ther e w as no particularly powerf ul or disp ositiv e evidence that w as adm issib le against onlyone defendant but no t the other. M oreover, this entire ca se c onc er

ne d th e part ie s’ a lle ge d c ri m ina l a ct s ari sin g ou t of tw o c onstru ct ion contracts being carrie d out at rough ly the sam e tim e. Bec ause the defendants are alleged to have conspi red w ith each other, and the num erous charges concer n es se nti al ly

r el at ed c our se s of

c ri m ina l c ondu ct , it

w as not und uly c onf usi ng t o j oin them for tria l. C onsequ ently , w e re j ect the defe ndants’ cla im that the district court erre d i n d en y in g t he ir m ot io n t o s ev er t he ir t ria ls . W e cannot

he lp b ut r ec ogni ze the ino rd inate , and m ost li ke lyWe also note that in the nea rly analog ous case United States v. Ander son, 879 F.2d 369 28 (8th Cir. 1989), the Eig hth Circuit held that the district court wa s justified in declining to seve r the trial of the c ertified minority contra ctor fr om the trial of the nonminority contra ctors. 24 co unt er pr oduc tiv e, hos til e attit

ude that G lov er ’ s a tto rn ey a dopt ed tow ar d th e Blankenship s throug hout the entire trial ( as evidenced by the com m ents discus sed above). Such vitriolic m

udsli ngin g, howe ver, which need not be repeated here, fr eque ntl y

oc curs w he n de fe ndants r ai se m utu al ly anta goni sti c de fe nse s. A s th e j ur y w as spe ci fi ca lly

ins tr uc te d, the r ep eate d sl an de r of the Bl an ke nshi ps i n Glover’ s openin g statem ent and closin g argum ent was not evidence. T he fac t that a de fe ndant o r his a tto rn ey is “ a de f ac to p ro se cu tor

w ho w ill shi ft

blam e fr om him se lf to [c o- de fe ndants ] . . . [ doe s no t] j ust if [y ] se ve ranc e. ” U nit ed

S ta te s v. Andrea s, 23 F. Supp. 2d 835, 847 (N. D. Ill. 1998 ). 28 Be fo re le av ing the m atte r of pr ej udi ce ari sin g f

ro m the j oin t tri al , w e fe el it is p ar tic ularl y appr opr ia te to voi ce our

sho ck and d isg ust

a t the de ci sio n of G lov er ’ s a tto rn ey , A ssi stant F ed er al P ubl ic D ef en de r A dam

A lle n, to atte m

pt t o inf lam e the j ur

y by unn ec es sari ly

inj ec tin g r ac e ev enf

urthe r int o an a lr ea dy co nte nti ous tr ia l. A lle n de cl ar ed in his ope nin g st at em en t, “ T he e vid en ce w ill showthat H ow ar d G lov er is 52 y ears old

and h e w as bor

n and r ai se d inasm al l town c al le d M ulb er

ry . . . atown w hic h is unf

ortun at el y

m ost f am ous fo r its ly nc hin gs . . . . ” L at er

in the tr ia l, A lle n c al le d D ar le ne Bu tle r, G lov er ’ s si ste r, to25

the w itn es s st an d. F oll ow ing som e pr el im inary que sti ons ab out

he r ba ck gr ound , he im m ed ia te ly a ske d th e fo llo w ing que sti ons: Q : An dwa s yo u r

b r o t h e r , M r . Gl o v e r , b o rn i n M u l b e rr y? A: Yes , he was . Q : D o yo ukn o ww h e r e th e t o w no f M u l b e rry g e t s i t s n a me f r o m? A: F rom a tre e, and of course, that tree is ca lled the Mulberry tree. Q: Is th ere a ny un fo rtu na te hi st ory su rro un di ng . . . A t this poi nt, the c ourt c ut o ff A lle n’ s qu es tio nin g and h el d asid eb ar , a t whic h th e fo llo w ing e xc hange tr an spi re d: T H E CO U RT : M r. A lle n, w ha t i n th e w or ld are y ou d oin g? A re y ou g oin g to t al k a bout ahangi ng? MR. AL LEN: W ell, Y our Honor, in opening, I had indicated that Mr. Glo ve r cam e fro m

a sm al l t own whi ch was fa m ou s fo r lynch in gs . I was jus t g oi ng to . . . T H E CO U RT : T he Mu lbe rr y T re e an d th e ly

nc hin g of an A fr ic an A m er ic an , is that whe re y ou’ re goi ng? MR . A L L EN : I w as n’ t go ing to go– T H E CO U RT : Wha t w er e y ou g oin g into? MR . A L L EN : I w as going to go in to that Mulb erry is fam ous for lynch in gs . . . . T H E CO U RT : F or

w ha t r ea son? W

hy in the w or ld w oul d y ou w an t t o i nt e r j e c tr a c e i nt o t hi s? MR . A L L EN : Y our

H onor , I thi nk p ar

t of the r ea son to b e qua lif

ie d D BE is th aty ou co m e fro m

a ba ck gr ou ndof d is ad va nt ag ed .

. . . THE COURT: [Y]ou ’re no t g oi ng to pl ay th e rac e car d h ere. W e co m m en d th e dis tr ic t c ourt f

or takin g th e ini tiativ e to i m m ed ia te ly e nd A lle n’ s im

pr ope r lin e of

que sti oni ng. W e ca

nnot say w he the r thi s w as an a tte m pt to a ppe al spe ci fi ca lly

to the A fr ic an -A m er ic anm em be rs of the j ur y , to inf lam e the26

en tir e j ur y a ga ins t the Bl an ke nshi ps, or w as sim ply ac as e of unm ist ak ab ly

poo r j udgm en t. A lle n’ s st ar

k a dm iss ion , “ I w as goi ng t o go int o th at Mu lbe rr y is fam ous fo r ly

nc hin gs. . . [ , ] ” be lie s any not ionthat the se que sti ons w er e as ke d in good f ai th. T he re w as no b as is wha tso ev er f or the intro duc tio n of

suc h c oll at er al , im m at er ia l, and i ntr ins ic al ly inf lam m at or y te sti m ony . T he dis tr ic t c ourt’ s ti m el y int er ve nti on i s a ll that pr ev en te d th e j ur y f ro m be ing ta int ed

by the se vitri oli c co ns id erat io ns . T he se que sti ons vio la te d num er ous ru le s of e vid en ce , and c am e pe ri lou sly cl ose to cr oss ing the li ne int o an e thi ca l vi olatio n ( a re sul t w e do n ot f or ec los e shou ld the dist rict court choose to further investigate this m atter). Such uncons cionable appeals und erm ine the standards of decency and integrity

that m em be rs of the bar ar e sw or

n to uph old , and r ed

uc e the sol em

n de lib er at ion s of the c ourtr oom

to little m or e than th e ravin gs o f the m ob. Whil e de fe ndi ng the ac cu se d is anob le c al lin g, A lle n’ s be havio r w as ac re dit ne ith er to his pr of

es sio n, his c oll ea gue s, nor

the A m er ic anc ri m ina l j ust ic e sy ste m ; su chba se ta ct ic s are the ve ry an ti th es is of o ursyste m

of r eas on ed , im

pa rti al jus ti ce. III . G lov er arg ue s th at

the G ove rn m en t i m

pe rm iss ibl y

c om m en te d init s c los ing ar gum en t onhis f

ai lur e to t es tif

y . T he pr ose cu tio n arg ue d:27

[T he Bl an ke nshi ps’ and G lov er ’ s a tto rn ey s] are absol ute ly r igh t, and the Jud ge w ill ins tr

uc t y ou tha t the G ove rn m en t be ar s th e bur de n of proof in this case. W e bear the burden of proof in every crim inal case, proof bey ond a reasonable doub t. And the Defe ndants, as they s i tth e r e , d o n ’th a v e t o p r o v e an yth i n g . Th e y d o n ’th a v e t o t e s t i f y, they don’t have to prove a thing. B ut, I subm it to y ou that if they w an t y ou t o be lie ve af

ac t i s tr ue , the n th ey ’ re j ust

li ke e ve ry

body el se . They ha ve a bu rd en th en to pro ve th atfact . T he und er lin ed

por tio n of the pr ose cu tio n’ s arg um en t i s le ga lly inc or re ct . W ith the e xc ep tio n of

c er ta in a ff irm at ive de fe nse s, se e U nit ed S ta te s v. G ray , 260 F . 3d 1267 , 127 8 ( 11th C ir . 200 1) ( “ Co ngr es s is e nti tle d to shi ft the bur de n of

pr oof to the de fe ndant f

or an a ff irm at ive de fe nse . ”) , ade fe ndant i s ne ve r obl igate d to pr ove anythi ng t o aj ur

y , and a j ur y is en tit le d to be lie ve ade fe ndant’ s c la im s r eg ar dle ss of whether

he offer s proof to sub stantiate them . The B lankensh ips, for e xam ple, ar gue d th at

the y a ct ed in good f ai th thr ough out

the ir int er ac tio ns w ithG ranit e an d G lov er . I t w as not

the Bl an ke nshi ps’ r es pons ibi lity to pr ove thi s; i t w as the Gov ern m en t’s t o d is pr ov e it . Whil e w e re co gni ze the blatant i m pr opr ie ty of the pr ose cu tor ’ s il lconsidered statem ents, w e do not believe theyrise to the level of a constitu tional vio la tio n. I n U nit ed

S ta te s v. K

now le s, w e he ld: T he F if th A m en dm en t pr ohi bit s apr ose cu tor f ro m c om m en tin g di rect ly or in di rect ly on ade fen da nt ’s fai lu re t o t es ti fy . A pr ose cu tor ’ s st at em en t vi olate s th e de fe ndant' s r igh t t o r em ai n si le nt i f ei the r (1 ) the state m en t w as m an if es tly int en de d to be ac om

m en t on28

the de fe ndant’ s f

ai lur e to t es tif

y ; or ( 2) the state m en t w as of

suc h a charac ter that a j ury

would naturally

and necessarily

take it to be a co m m en t onthe f

ai lur e of the a cc use d to te sti fy . T he que sti on i s no t w he the r the j ur

y pos sib ly or e ve n pr oba

bly w oul d vi ewthe r em ar

k in th is m an ne r, bu t wh et he r th e jury nece ss ari ly w ou ldha ve do ne so . 66 F . 3d 1 146, 116 2- 63 ( 11th C ir . 199 5) ( m ar ks and c itatio ns o m itt ed ). Whe n th e pr ose cu tor ’ s c om

m en t i s vi ew ed

in lig ht o f his im

m ed ia te ly pr ec ed ing r em ar

ks, it be co m es appare nt tha t ne ith er pr ong of the K now le s te st i s m et . H e expr es sly re co gni ze d th e co nst itu tio na l r igh t of the de fe ndants to re m ai n si le nt and d id n ot expr es sly c as t a spe rs ion s onthe ir

c hoi ce to do s o. Mo re ove r, aj ur y m ay w el l have interpreted his statem ents as refe rring to the failure of the def ense as a whole, rathe r than th e de fe ndants the m se lve s th ro ugh te sti m ony , to pr ove the ir poi nts (thoug h, a s di sc uss ed

above , it w as inc or

re ct to im ply that the y w er e re qui re d to do so) . F ina lly , w e re co gni ze that this one iso la te d c om m en t oc curr ed

in the m ids t of a lengthy closing argum ent. Asolitary com m ent would have to be m uch m ore prej udicial to th e defe ndant in som e w ay before w e re verse a c onvi ction on that ba si s. Co ns eque nt ly, we rejectGlo ve r’s req ue stfora ne w tri al . IV. The B lankensh ips and Tarand were convicted und er 18 U .S .C. § 19 56( a) (1 )( B) (i ), w hic h e sta bli she s punis hm en ts f

or any one w ho: knowing[ly ] . . . conducts o r attem pts to con duct such a financial29

tr an sa ct ionw hic h inf

ac t i nvol ve s th e pr oc ee ds o f spe ci fi ed unl aw fu l ac tiv ity —kn ow ing that the tr an sa ct ionis de sig ne d inw hol e or in part —t o c onc ea l or

dis gui se the na tur e, the loc at ion , the sourc e, the ow ne rs hip , or

the c ontro l of

the pr oc ee ds o f spe ci fi ed unl aw fu l act iv it y [.] Randy Bl an ke nshi p r ec ei ve d c he ck s m ad e out to “ H . J. T ru ck ing ” fr om G ranit e Co nstru ct ion . B ec au se his bank w oul d no t a llo whim to de posi t those c he ck s in to his pe rs ona l a cc ount , he c re at ed ane wa cc ount

und er the nam e of

“ Randy Bl an ke nshi p d/

b/a H . J. T ru ck ing . ” [h er ei na ft er , the “ D BAA cc ount ”] H e w oul d de posi t e ac h c he ck

f ro m G ranit e int o hi s d/

b/a a cc ount , im

m ed ia te ly w ri te out a ne wc he ck

dr awn onthi s d/

b/a a cc ount f or the a m ount

of the de posi t, and d ep osi t th atch eckin to hi s p ers on al acco un t. W e do n ot b el ie ve ar ea sona ble j ur or c oul d have c onc lud ed

be y ond a re as ona ble doubt tha t this c ondu ct f al ls w ith in the f

ed er al m one y

launde ri ng statut e be ca

use the re w as ins uf

fi ci en t e vid en ce to de m onstrate that B lanke nshi p kne wthat hi s a ct ivi tie s w er e de sig ne d to c onc ea l “ the na tur e, the loc at ion , the source, the ownership, or the control of the proceeds. ” 18 U. S. C. § 13 56( a) (1 )( B) (1 ). W e ba se thi s c onc lus ionon tw o im portant f ac tor s. F ir st, a t a ll tim es , the m one y

w as in ana cc ount

w ithBl an ke nshi p’ s nam e on i t; the onl y dif fe re nc e be tw ee n th e ac co unt s w as that the D BAA cc ount a lso c ont ai ne d H . J. Tr ucking ’ s nam e. Sec ond, when Blankenship depo sited the m oney into th e D BA30

Ac count, neither G ranite nor any one else had any way of determ ining what subs equently

happened to it. As w ith all bank accounts , the D BA Ac count was pr ivate ; no one ( oth er

than B lanke nshi p, a s th e ac co unt hol de r) ha d any

w ay of dis co ve ri ng i ts b al an ce , w ha t de posi ts o r w ith dr aw al s w er e m ad e, or the sourc e of any of the f unds in the a cc ount . C onse que ntl y , Bl an ke nshi p di d no t r ec ei ve —and could no t reasonably

have anticipated rece iving —any m arginal increase in secrecy by m ovi ng the m one y

f ro m one a cc ount

w ithhis nam e on i t t o anothe r ac co unt w ithhis nam e on i t at the sam e bank. I nde ed , a s th e ch ar t i n th e ind ic tm en t i tse lf show s, any one loo kin g a t hi s pe rs ona l a cc ount w oul d be able to te ll im

m ed ia te ly the origin of its revenue stream . W e theref ore fa il to un derstand how the transfer co uld have be enint en de d to c onc ea l or dis gui se “ the na tur e, the loc at ion , the source, the ownership, or the control of the proceeds. ” 18 U. S. C. § 1 35 6( a)(1 )(B) (1 ). Furthe r supp ortin g our co nc lus ionis the f ac t tha t the tr an sf

er w as appare ntl y m oti va te d by

ac onc er n e nti re ly unr el at ed

to co nc ea lm en t. P er

ha ps the m ost pe rs ua siv e ev ide nc e of

thi s a lte rn at e m oti ve is Randy ’ s un co ntr ad ic te d te sti m ony that he ha d in iti al ly

a tte m pte d to de posi t the c he ck s f ro m G ranit e dir ec tly

int o hi s ow n a cc ount . H e se t up the D BAA cc ount onl y w he n th e bank r ef

use d to de posi t G ranit e’ s c he ck s in to h is o ri gin al a cc ount . T his str ongl y sug ge sts that hi s purp ose31

in s ettin g up the D BAA cc ount w as not to co nc ea l the m one y

or it s or igi ns, but si m pl y to be ab le to acce ss it . E ve n if the j ur y dis re gard ed

Randy ’ s a dm itt ed ly

se lf -s er vin g te sti m ony , it

is str ongl y c or ro bor at ed by the f ac t tha t B lanke nshi p pe rf orm ed the m ini m

um num ber of transactions rea sonablynecessary to allow him

to spend th e m oney from Gr anite. He did no t shuffle the funds aroundnum erous interm ediary ac co unt s inor de r to h ide the tr ue sourc e of

the m one y . Mo re ove r, he did nothin g at any ti m e to d iss oc ia te him se lf e ith er f ro m the m one y

se nt b y G ranit e or

the ac co unt s in to whic h it

w as be ing de posi te d. F ina lly , the und isp ute d f ac t r em ai ns that no thi ng a

bout the tr an sa ct ionsug ge sts am oti ve to co nc ea l the e xis te nc e or so ur ce o f th e fu nd s o r hi s re la ti on sh ip to th em . Inc as es w he re ade fe ndant d oe s no t vi olate an a ff irm at ive duty

to dis cl ose financial inform ation, cf. United State s v. W ard, 197 F.3d 1076 , 1080 (11th Cir. 1999 ) (“ [D ef

en dant] c onc ea le d th es e ac co unt s f ro m the [ bankr

upt cy ] tr ust ee by fa ili ng t o di sc los e the m . ”) , one of the f ac tor s to w hic h w e loo k inde te rm ini ng whether a defe ndant’s behavior constitutes “ concealm ent” is whether he engages in unne ce ssary

tr an sa ct ion s to a dd e xtr a “ de gr ee s of se paratio n” be tw ee n hi m se lf an d th e sour ce of

the f unds . F or

e xam ple , in U nit ed

S ta te s v. Ma

j or s, 196 F . 3d 1206 , 121 4 ( 11th C ir . 199 9) , w e state d, “ Mov ing m one y thr oughalarg e num

be r of32

ac co unt s ha s, in lig ht o f oth er e vid en ce . . . a lso be enf

ound to supp ort the de sig n el em en t of

m one y launde ri ng, e ve n w he n a ll the a cc ount s to w hic h th e de fe ndant transferr ed the m oney

and from which he w ithdrew w ere in his o wn nam e. ” Se e al so Unit ed

S ta te s v. D obbs , 63 F . 3d 3 91, 397 ( 5thCi r. 199 5) ( “ T he pur pose of the m one y launde ri ng s ta tut e is t o r ea chc om m er ci al tr an sa ct ion s in te nde d ( at le as t i n part ) to d isg uis e the r el at ion shi p of the it em pur ch as ed

w iththe pe rs on p ro vid ing the pr oc ee ds and tha t the pr oc ee ds u se d to m ak e the pur ch as e w er e obt ai ne d f ro m il le ga l ac ti vi ti es .”). Su chtr an sa ct ion s are r eg ar de d w ithan a ddi tio na l de gr ee of ske pti ci sm w he n th ey

inv olv e ac co unt s th at

c annot e as ily be li nke d to the de fe ndant. F or in st an ce, i n Un it edSta te s v . Thayer, 20 4 F .3d13 52 , 13 54 -5 5 (1 1t h C ir. 2 00 0) , we uphelda defe ndant’s conviction because she funne le d pr of

its f ro m [ he r co rp or at ionw hic h w as br eakin g th e law ] to [anothe r co rp or at ionshe ow ne d] and o the r fi ct iti ous bank a cc ount s and then eventuallyto her personal account. [ This] evidence w as pla inl y suf fi ci en t t o pr ove that L ipt on i nte nde d to c onc ea l the f unds that w er e ge ne rate d f

ro m he r fr au dul en t c om

pany that e nga ge d in ill eg al a ct ivi tie s. Se e al so Unit ed

S ta te s v. Ru dis ill , 187 F . 3d 1 260, 126 8 ( 11th C ir . 199 9) (uphold ing defendant’s m oney laundering conv iction where f unds from

an illegal te le m ar ke tin g f ra ud s ch em e w er e de posi te d into the a cc ount s of ar el igi ous or ga ni zat io n c on tro ll edby ano th er o rg an iz er o f th e sc he m e).33

O f co ur se , w e have ne ve r lim ite d c ri m ina l l ia bil ity und er thi s st at ute to ca se s in vol vin g alon g se ri es of tr an sa ct ion s; a s § 1 356( a) m ak es c le ar , e ve n on e tr an sa ct ionc anbe e noug h. F or e xam ple , in U nit ed

S ta te s v. S tark e, 62 F . 3d 1 374, 1377 ( 11th C ir . 199 5) , w e uphe ld a m one y launde ri ng c onvi ct iona ga ins t a defendant who did not hing m ore than take curr ency from undercover agents which he had reason to believe was drug-r elated, go to h is bank, and purchase cashiers ch eck s m ad e o ut to th os e ag en ts . W it ho ut m uc h a na lysis or d is cu ss io n, we af fi rm ed his c onvi ct ionbe ca

use w e fo und the re w as e noug h e vid en ce f or aj ur y to co nc lud e that the tr an sa ct ion s “ w er e de sig ne d to c onc ea l the f unds or the sourc e of the funds.” Id. at 1384. T he crux of ca ses like Starke, however, is that the m oney is be tt er co nc eal edor c on ceal ab le aft er t he tra ns act io n t ha n b efo re. In sh or t, t hi s ca se do es no t h av e an y of t he in di ci a o f m on ey

lau nd eri ng we dis cu sse d inMa

j or s: Evidence that m ay

be considered when deter m ining whether

a tr an sa ct ionw as de sig ne d to c onc ea l i nc lud es , a m ong oth er s, statem ents by

a defe ndant prob ative of intent to conceal; unu sual secrec y surrounds the transaction; structuring the transaction in a way to avoidattention; d epositin g illegal profits in th e bank account of a le git im at e busi ne ss; hig hly ir re gul ar f eatur es of the tr an sa ct ion ; us ing third parties to conceal the real owner; a series of unusual financial m oves cum

ulating in the transaction; or expert testim ony on practices of c ri m ina ls. Ma j or s, 196 F . 3d at 12 13 n . 18 ( quot ing U nit ed S ta te s v. G ar ci a- E m anue l, 14 F . 3d34

1469 , 147 5- 76 ( 10th C ir . 199 4) ) (i ta lic s om itt ed ). F urthe rm or e, a ff irm ing the Bl an ke nshi ps’ c onvi ct ion s w oul d e xte nd the m one y launde ri ng s ta tut e to v irtua lly any f inanc ia l transa ct ion s in vol vin g th e pr oc ee ds o f al le ge dly unl aw fu l a ct ivi tie s, a re sult di rectly

at odds with the text and pu rpose of the statute. C f. GarciaE m anue l, 14 F . 3d at 14 74 ( hol din g th at w e m ust e nga ge in “ the dif

fi cu lt ta sk o f se paratin g m one y

launde ri ng, w hic h is pun ish ab le by up t o tw en ty

y ears in pr iso n, fr om m er e m one y

spe ndi ng, w hic h is le ga l. . . . I f tr an sa ct ion s are e nga ge d inf or pr es en t pe rs ona l be ne fi t, and n ot t o c re at e the appe ar an ce of le git im at e w ea lth , th ey do no t v io la te th e m on ey lau nd eri ng st atut e.”). W e have pr ev iou sly

he ld tha t “ the e vid en ce of c onc ea lm en t m

ust be subs tanti al . ” Ma

j or s, 196 F . 3d at 12 13. G ive n th e pe rs ua siv e explana tio n Blankenship offer ed for the transfer, the lack of even cir cum stantial evidence reasonably

suppo rting any

other m otive, and the undeniabl e fa ct that the transfer its el f co uld

not r ea sona bly have be enanti ci pa te d to have f urthe re d any

of the goa ls pr ohi bit ed

by the m one y

launde ri ng s ta tut e, no r ea sona ble j ur or c oul d have co nc lud ed

be y ond a re as ona

ble doubt tha t B lanke nshi p in te nde d to c onc ea l the funds. I n any

e ve nt, the G ove rn m en t’ s pr oof of suc h in te nt w as c er

ta inl y not

“ subs tantial,” a s required by Maj ors. E ven if we believed this to be a close c ase, the rule of lenity

would com

pel us to in terpret the statute as e xcludin g the condu ct35

at iss ue f ro m the sc ope of

m one y launde ri ng, the re by

giv ing the Bl an ke nshi ps the be ne fi t of the doubt. U nit ed

S ta te s v. I nc le m a, N o. 03- 1458 4, 200 4 U . S. App. LE XI S 5793, at *11 (11th Cir. Mar . 29, 2004 ) (“ [W ] hen there ar e tw o rational readings of a cr im inal statute, one harsher than the other, the rule of lenity dictates that w e ar e to c hoos e the hars he r one onl y w he n C ongr es s ha s sp oke n inlangua ge th atis cle ar an d d efi ni te .”) (q uo ta ti on m ark s an d c it at io n o m it te d) . W e al so n ote that our re sol uti on o f thi s is sue is larg el y in ac co rd w iththe Si xt h C irc ui t’s ru li ng in Uni te d S ta te s v . McGah ee, 2 57 F.3d52 0 (6 th Cir . 20 01 ). Inthat c as e, one of

the de fe ndants , D ougl as Mc G uir e, w as asup er vis or in the Ci ty of Me m phi s’ s of fi ce of H ousi ng and C om

m uni ty D ev el opm en t ( H CD ’ s) . Ac oco nspi rator

w ho w orke d f

or H CD dr af

te d c he ck s f

ro m H CD to Mc G uir e, w ho de po si te d t he m

in to an acco un t d es ig na te d “ Dou gl as McGu ire d/b/ a W. G. W ill iam s E nte rp ri se s. ” Mc G uir e the n w ro te se ve ra l c he ck s f ro m that a cc ount

to co ve r his pe rs ona l e xpe nse s. H e w as c onvi ct ed of se ve ra l c ount s of

“ concealm ent” m oney

laundering. T he Governm ent claim ed “ that when McGuire wr ote checks on the bus iness account or converted the m oney to cash, he w as co nc ea lin g th e fa ct

that he il le ga lly

obt ai ne d th e funds fr om

[ H CD ] and tha t the funds w er e earm ar

ke d f or c er ta in p ro pe rt ie s. ” I d. a t 52 7. T he T en th C ir cu it re ve rs ed , hol din g, “ Mc G uir e’ s c ondu ct doe s no t e vid en ce ade sig n to c onc ea l the36

pr oc ee ds o f ill eg al a ct ivi ty . T he c he ck s dr awn onthe a cc ount w er e not int en de d to co nc ea l ho whe got

the f unds , but m er el y to co nve rt

the m to liquid a sse ts. N or w er e the tr an sa ct ion s de sig ne d to c re at e the appe ar an ce of le git im at e w ea lth . T he fu nd s wer e tr an sm it te d i n adi rect , ord in ary, an d o pe n m an ne r.” Id . at 5 28 . H er e, of c our se , Bl an ke nshi p tr an sf er re d th e funds to h is p er sona l bank account (at the sam e bank) before spendin g them . As discussed above, however, thi s di d no t i n any

w ay a ff or d hi m any m ar gin al inc re as e in s ec re cy , or se rv e to dis soc ia te him se lf

f ro m the f unds in any

w ay . C onse que ntl y , sin ce Mc G ah ee he ld t h a tth e d i r e c te x p e n d i tu r e o f f u n d s f r o m a“d/b / aa c c o u n t ” w i t h ap e r s o n ’s n a me w as not m one y launde ri ng, w e ar e re luc tant t o c onc lud e that the sim ple tr an sf er of tho se f unds int o th e de fe ndant’ s pe rs ona l a cc ount ( w hic h a lso ha s hi s nam e on i t) is m on ey lau nd eri ng . Thi s s eem s t o b e a s im

pl e cas e o f go ve rn m en ta l o ve rrea ch in g. Th us , we re ve rs e the Bl anke nshi ps’ and T ar an d’ s c onvi ct ion s onthe m one y launde ri ng counts (Coun ts 26-34 ), as w ell as their conviction for conspi racy to launder m oney (C ount 3) , and d ir ec t the dis tr ic t c ourt t o e nte r a j udgm en t of a cquitta l onthe se co un ts . V. O n l y G l o v e r

c h a l l e n g e s h i s § 1 0 0 1 c o n v i c t i o n s . T h o u g h h i s b r i e f c l a i msGlover w as ac quitted of the § 1001 fa lse-stateme nt char g es in counts 4, 8, and 9. 29 37 onl y that the dis tr ic t c ourt l ac ke d j ur isd ic tio n ov er the se c harg es , the Governm ent’ s brief urges us to construe his claim as an attac k on th e sufficiency of th e ev id en ce s up po rti ng hi s § 10 01 co nv ic ti on s. Acce pt in g t hi s i nv it at io n, we w ill de te rm ine w he the r the e le m en ts o f § 10 01 w er e co rr ec tly int er pr et ed and sa tis fi ed in thi s c as e. S ec tio n Adis cu sse s th e “ fa lsi ty ” re qui re m en t of § 10 01, w hil e Se ct ionB dis cu sse s w he the r the state m en ts at i ssu e w er e “ w ith in the juri sd ic ti on ” o f th e fed eral go ve rn m en t. A. Se ve ra l of

G lov er ’ s c onvi ct ion s w er e unde r § 10 01( a) (3 ) fo r m ak ing f al se w ri tin gs. C ount s 4- 15 o f the ind ic tm en t c harg ed G lov er w ith“ know ing ly

and w ill fu lly m ak [i ng] and u s[ ing ] af al se w ri tin g and d oc um en t, kno w ing the sam e to co nta in m at er ia lly

f al se , f ic tit iou s and f

ra udul en t st at em en ts and e ntr ie s. ” T he allegedly false docum ents includ ed subcon tracts and equipm ent leases into which H . J. T ru ck ing ha d e nte re d ( co unt s 5- 7 and 1 0- 12) , a s w el l a s w ag e an d ho ur 29 reco rd s H.J . Truck in g h adsu bm it te d (c ou nt s 1 3- 15 ). Fo r a co nvi ct ionto be sus ta ine d un de r § 10 01( a) (3 ), it is im pe rativ e that the

“ w ri tin g or

doc um en t” be “ fa lse . ” W e do n ot t ak e iss ue w iththe “ fa lse ne ss” of the w ag e an d ho ur

r ec or ds a ddr es se d inc ount s 13 -1 5 be ca use tho se r ec or ds s ta te f

ac ts38

that are sim

ply untrue. H owever , w e ar e unconvin ced that the contracts and leases at issue in the oth er c ount s can be considered “ false. ” T he te rm s “ fa lse le as e” and “ fa lse c ontra ct ” do n ot f re que ntl y appe ar in fe de ra l j ur isp ru de nc e. B as ed on o ur ana ly sis of

both th e te xt o f § 10 01 and the ca se law , it

appe ar s th er e ar e onl y

tw o w ay s inw hic h ac ontra ct c anpos sib ly

be considered “ false. ” Fir st, a c ontract is false if a person forges or alter s it. L ike a fo rg ed bir th c er tif ic at e or c ount er fe it curr en cy , the doc um en t i tse lf w oul d be , qui te li te ral ly, fal se . Fo r ex am ple , in U nit ed

S ta te s v. H oll ey , 826 F . 2d 3 31 ( 5thCi r. 198 7) , the d e f e n d an t s w e r e b o t h e mp l o ye e s o f th e f e d e r a l g o v e rn me n t ’s F a rme r s H o me A dm ini str at ion( “ FH A ”) . O ne of the de fe ndants , H oll ey , w as r es pons ibl e fo r aw ar din g F H Ac ontra ct s to pr ivate c ontra ct or s to r ep ai r farm er s’ hom es in his co unty . H is c o- de fe ndant, H y land, w as an F H Ains pe ct or and w as ine lig ibl e to re ce ive suc h c ontra ct s. T o c ir cum ve nt this r equir em en t, H y land f or ge d hi s ste pson ’ s si gnatur e on d oz en s of c ontra ct s to m ak e it ap pe ar a s if the c ontra ct s w er e be ing aw ar de d to the ste psonr athe r than H y land. H oll ey , kno w ing of the fo rg er y , ne ve rthe le ss a

ppr ove d th e co ntr ac ts. S uc h c ontra ct s w er e undo ubt ed ly

“ fa lse ” w ith in the c or e m eanin g of the te rm . S ee a lso U nit ed S ta te s v. V oor

he es , 593 F.2d 346 , 349 (8th Cir. 1979 ) (a ffirm ing a convictio n for a f alse lease where39

the defendant “ placed [a third party ’ s] signature on th e lease without [the third party ’ s] kno w le dge . . . . T his a lte re d le as e fo rm ed the ba sis of

c ount 3 of the in di ct m en t, upo n wh ic h [d efen da nt ] was co nv ic te d.” ). This is not the case here, however. T he leases and subcontract at issue wer e betwee n H. J. T rucking and Tarand, and the Governm ent does no t contend th at any one oth er

than th e ow ne rs of

H . J. T ru ck ing and T ar an d si gne d th em or subs eque ntl y

a lte re d th em . C onse que ntl y , the c ontra ct s are not “ fa lse ” in the se nse th atan y on e o th er t ha n t he pu rp or te d s ig na to rie s ac tu al ly creat edth em . The only other way

in which a contrac t can be “ false” is if it contains factual m isr ep re se ntatio ns. F or

e xam ple , in U nit ed

S ta te s v. Je spe rs en , 65 F . 3d 9 93 ( 2d Ci r. 199 5) , the de fe ndant, Je spe rs en , w as am an ag er a t the I RS r es pons ibl e fo r hiring cont ractors to perf orm m aintenance w ork on the IRS buildin g. Jespersen m ad e one of

the c ontra ct or s to w hom he r eg ularl y

aw ar de d su chw ork r em ode l hi s kit ch enc ount er s and p or chsto rm w ind ow s f

or f re e. I n 19 92, a ft er

thi s r em ode lin g w as c om ple te d, agr an d j ur

y be gan in ve sti ga tin g Je spe rs en ’ s r el at ion shi p w iththe contractor. Jespersen had the contractor draw up a c ontract “ indicat[ing] that Je spe rs enha d pa id $ 3, 000 as an in iti al de posi t, and h ad m ad e ad dit ion al paym en ts of $3, 000 an d $3 , 600 on N ove m be r 29, 198 8 and D ec em

be r 16, 198 8, re spe ct ive ly , ” fo r the r em ode lin g w ork inJe spe rs en ’ s ho m e. T he c ontra ct or ba ck -40

da te d th e co ntr ac t, and the de fe ndant s ign ed it w ithaba ck -d at ed

sig na tur e an d turned it over to a grand jury as evidence that he had not been rece iving fre e w ork fr om the c ontra ct or . S uc h ac ontra ct is cl earl y a“ fa lse doc um en t, ” in tha t i t co nt ai ne d s ev eral affi rm at iv e st at em en ts of f actth atwere b la ta nt ly unt ru e. A ga in, thi s is not

the c as e he re . T he re is not asin gle f al se state m en t i n any of the e qui pm en t l ea se s m en tio ne d inc ount 5- 7 and 9 -1 2. T he se doc um en ts m er el y state w ha t the le sso r an d le sse e ag re e to d o. T he G ove rn m en t arg ue s, of co ur se , that the se doc um en ts are inh er en tly “ fa lse ” be ca

use ne ith er

party a ct ua lly i n t en d edt o ca rry t h ro u g h o n th ei r p ro m i s es . S up er fi ci al l y, th e G o v ern m en t ’s argum ent is quit e persuasive. Courts have recognized in m any contexts that

“ unde r se ct ion100 1, apr om ise m ay a m ount to a ‘ fa lse , f

ic tit iou s or

f ra udul en t’ statem ent if it is m ade w ithou t any present intention of perf orm ance and under ci rc um stanc es suc h th at

it pla inl y , a lbe it im

pli ci tly , r ep re se nts the pr es en t ex ist en ce of

an in te nt t o pe rf

orm . ” U nit ed

S ta te s v. S hah, 44 F . 3d 2 85, 294 ( 5th Ci r. 199 5) . Many

c ourts o f ap pe al s have uph el d c onvi ct ion s of de fe ndants w ho m ade prom ises or guarantees concerning their future ac tions that, at the tim e they m ade those prom ises, they had no int ention o f carry ing ou t. Most of these c ases inv olv e fa lse guarante es m ad e on a ppl ic at ion s f

or gov er nm en t be ne fi ts o r pr ogr am s. S ee , e . g. , E lm or e v. U nit ed S ta te s, 267 F . 2d 5 95, 603 ( 4thCi r. 195 9)41

(uphold ing conv iction of defendant who certifie d that he would use wheat pu rch as edwit h g ov ern m en t as si st an ce fo r fee di ng li ve st oc k b ecau se “ 15 U.S.C.A. § 71 4m (a ) shou ld b e int er pr et ed to [p ro hib it] not

onl y f al se state m en ts o f ex ist ing fa ct but a lso f al se and f ra udul en t pr om ise s w hic h th e m ak er doe s no t i nte nd t o pe rf orm ”) ; C or co ran v. U nit ed S ta te s, 229 F . 2d 2 95 ( 5thCi r. 195 6) ( upho ldi ng § 10 01 c onvi ct ionof

ve te rans who o bta ine d G . I. loans t o purc ha se hou se s by fal se ly clai m in g o n l oa n app li cat io ns th atth ey in te nd edto li ve in th os e h ou se s) . T his c as e is e as ily

dis tin gui sha

ble . Whe n ape rs on m ak es ac er tif ic at ionon an application for a governm ent program , he is actually certify ing th at he believes tho se state m en ts c onc er

nin g hi s f uture be havio r ar e tr

ue . F or ins tanc e, in C o r c o r a n , v e t e r a n s ap p l yi n g f o r l o a n a s s i s t a n c e h a dt o p r o mi s e th a t , a tth e t i me the y f ill ed out the appl ic at ionf

or gov er nm en t a ssi stanc e, the y

a ct ua lly int en de d to liv e in the hou se the y

w er e buy ing . T he Co rc or andoc um en t w as n’ t a c ontra ct ; i t was an ap pl ic at io n. Contracts, in contrast, are m uch different. Acontract is a docum ent that serves only

to establish a legal r elationshi p between tw o parties; it gives each party nothi ng m ore than a legal expectancy in having the other party either perform or (gener ally ) re spon d in dam ages. See, e. g., Mississi ppi Valley G en er at ing Co . v. U nit ed S ta te s, 147 Ct . Cl . 1, 34 ( 1959 ) (B yran, J. , c onc ur ri ng)42

(“ Ac ove nant o f a co ntr ac t i s aple dge –som ethin g ‘ m or e than apr om ise and l es se [s i c] t h an an Oa t h ’–t o p er fo rm orre s p o n di n d amag es .” ) ( emp h as i s ad d ed ), re v ’d on oth er grounds, U nited States v. Mississipp i Va lley Ge nerating Co., 364 U.S . 520, 81 S . Ct . 294 , 5 L . E d. 2d 2 68 ( 1961 ). I t i s no t i lle ga l f or aparty to br ea cha contract; a c ontract gives a party two equally

viable optio ns (perform

or pay com pensation ), betwee n which it is generally at liberty to choose. A“prom ise” contained in a contract is not a certification th at the prom isor will actually perform the spe ci fi ed

a ct s, or pr es en tly int en ds t o pe rf

orm tho se a ct s, but

is ins te ad

agr an t of a le ga l ri gh t t o t he ot he r pa rty to e it he r en joy pe rfo rm an ce o r rec ei ve da m ag es . In de ed , the w hol e not ionof “ ef fi ci en t br ea ch ” is tha t a

party sho uld abr ogate it s contractual responsibil ities if a m ore profitable opportun ity com es along. Se e T hy sse n, I nc . v. S . S. F ortun e St ar , 777 F . 2d 5 7, 63 ( 2d C ir . 198 5) ( “ [B ] re ac he s of co ntr ac t tha t are in fa ct

e ff ic ie nt and w ea lth -e nhanc ing sho uld be e nc our ag ed , an d . . . suc h ‘ ef

fi ci en t br ea ch es ’ oc cur w he n th e br ea ch ing party w ill sti ll pr of

it aft er co m pe ns at in g t he ot he r pa rty for i ts ‘ ex pe ct at io n i nt eres t.’”). Moreover, a party

has the power to w aive its rights un der a c ontract—that is, a par ty m ay choose not to enforce a

contract if the other side bre aches. In re G ar funkl e, 672 F . 2d 1 340, 134 7 ( 11th C ir . 198 2) ( “ Aparty m ay w ai ve any

r igh t which it is legally

entitled to, includin g rights secured by contract. ”). Acontract43

does not state or im

ply that either party

will ac tually

enforce its contractual oblig ations. It is nothin g m ore than an instrum ent which gives each party the legal right to do so; how they

choose to exercise that power (or whether they ever int en de d to e xe rc ise it

a t a ll) is a m atte r be y ond the f our c or ne rs of the doc um en t, and has no im

pact on whether the c ontract itself is “ false. ” T he G ove rn m en t m ay

be c or re ct in al le gin g th at

the part ie s to the c ontra ct s at iss ue e nte re d in to the m

in ba d f ai th, w ithan in te nt t o m isl ea d G ranit e an d th e FD O T . T ha t i s, H . J. T ru ck ing pr oba bly ne ve r ac tua lly

int en de d to le as e equip m en t fr om any of the c om panie s w ithw hom

it e nte re d in to l ea se s. H ow ev er , e ve n if that i s tr ue , the c ontra ct

did nothin g m or e than gi ve H . J. T ru ck ing the le ga l r igh t t o le as e the e qui pm en t and t o su e fo r br ea chof c ontra ct if the oth er party r ef use d to carr y thr oughon i ts p ro m ise s. T he str ong lik el iho od tha t ne ith er party subj ec tiv el y

int en de d to c ar

ry thr oughon the se sub co ntr ac ts o r le as es doe s no thi ng to unde rm ine the ir

le ga l e ff ic ac y . T he e nf

or ce ab ili ty

of ac ontra ct

de pe nds on i ts objec tive representations rather than parties’ subjective intentions. See United St at es v. W eave r, 905 F . 2d 1 466, 147 3 ( 11th C ir . 199 0) ( “ Wha t c ontro ls i s up on what the parties agreed, not up on what they did no t agree. T he contract, once cr eate d, is to b e int er

pr et ed in ac co rd an ce w iththe obj ec tiv e im port of it s unam big uous te rm s. ”) . A s Ju sti ce H olm es w ro te , “ T he lawha s no thi ng t o do w ith44

the a ct ua l st at e of

the part ie s’ m ind s. I n c ontra ct , a s e lse w he re , it m ust go b y ex te rn al s, and j udge part ie s by the ir c ondu ct . ” O liv er

W en de ll H olm es , T he Co m m on L aw242 ( H ow e ed . 196 3) ; se e al so A . Co rb in, Co rb in o n C ontra ct s, § 9 ( 1952 ) (“ It

is by the c ondu ct

of the tw o part ie s, by

the ir bod ily m an if es ta tio ns, that w e m ust de te rm ine the e xis te nc e of w ha t i s c al le d a gr ee m en t. ”) . T he c ontra ct s at iss ue a ct ua lly c re at ed the le ga l r igh ts the y

pur porte d to c re at e; the c re at ionof suc h le ga l r igh ts i s th e sol e pur pose of ac ontra ct . P re se ntatio n of ac ontra ct

to a thi rd party doe s no t c onve y

an im pli ci tly guarante e ei the r that the part ie s to the co ntr ac t i nte nde d to pe rf

orm , or that the y int en de d to a ct

ua lly e nf or ce the ir co ntr ac tua l r igh ts. Ac ontra ct is nothin g m or e, and n oth ing le ss, than w ha t i t actua ll y st at es . Con se qu en tl y , th ou gh th e co nt ract s i n o ne sen se m ay be “ sh am s,” in tha t ne ith er

party e ve r int en de d to e nf

or ce the ir c ontra ct ua l r igh ts, thi s do es not render the c ontracts “ false. ” O u r ap p r o a c h i n th i s c a s e s t r o n g l y r e s e mb l e s th a tt a k e n b y t h e S up r e me Co urt i n U nit ed

S ta te s v. W ill iam s, 458 U . S. 279 , 102 S . Ct . 308 8, 73 L . E d. 2d 767 (1 982) . I n W ill iam s, the de fe ndant h ad a cc ount s inm

ult ipl e banks. T he gove rn m en t c la im ed

that he de posi te d c he ck s dr awn onhis f ir st a cc ount

w iththe bank h old ing his se co nd a cc ount , kno w ing f ull w el l tha t the re w er e ins uf fi ci en t funds to cover this deposi t. H e w as prosecuted under 18 U.S .C. § 1014 , which45

p r o h i b i t s mak i n g “f

a l s e s t a t e me n t s ” t o f

e d e r a l l y i n s u r e db a n k s . T h e S up r e me Co urt ov er

tur ne d hi s c onvi ct ion , hol din g: Although petition er deposited several checks that w ere not supported by suf fi ci en t f unds , that c our se of

c ondu ct did not inv olv e the m ak ing of a ‘fals e st at em en t,’ for asi m pl e rea so n: tec hn ic al ly spe ak in g, a ch ec k is not

af ac tua l a sse rt iona t a ll, and the re fo re c annot be charac terized a s ‘ true’ or ‘ false. ’ Petitioner’ s bank checks served onlyto direct the draw ee banks to pay the fac e value to the bearer , w hil e co m

m itt ing pe tit ion er

to m ak e good

the obl igatio ns i f the bank dis hono re d th e dr af

ts. E ac h c he ck

did not , in te rm s, m ak e any rep res en ta ti on s as to th e st at e o f pe ti ti on er’s b an k b al an ce. Id. at 284-85 , 102 S. Ct. at 3091. T he Court further held, “ [I] f Congress rea lly set out to en ac t a

na tio na l ba d c he ck

lawin § 10 14, it

did so w ithape cu liar ch oic e of la ng ua ge an d i n a n u nu su al ly back ha nd edm an ne r.” Id . at 2 87 , 10 2 S . Ct. at30 93 . The Co ur t co nc lu de d, G i v e n th i s b a c k g r o u n d

— as t a tu t e th a ti s n o tu n a mb i g u o u s i n i t s t e rms and that if applied here w ouldrender a wide r ange of conduct violativ e of fe deral law , a legislative his tory

that fails to evidence congression al aw areness of the statute’ s claim ed scope, and a subject m atte r that tra dit ion al ly

ha s be enr eg ulate d by

state law—w e be lie ve that a narr owint er

pr et at ionof

§ 10 14 w oul d be c onsi ste nt w ithour us ua l ap pr oa ch to th e co ns tru ct io n o f cri m in al st atut es . Id . at 2 90 , 10 2 S . Ct. at30 94 . The Supr em e Co ur t’s re as on in g app li es wit h e qu al for ce i n t he in st an t ca se . L ike ac he ck , ac ontra ct

is not af ac tua l a sse rt ion , and the re fo re c annot be ch ar ac te ri ze d a s “ tr

ue ” or “ fa lse . ” Jus t a s ac he ck

giv es it s r ec ipi en t the le ga l r igh tTh e dis se nt c onte nd s th at th e Sup re me Court ’s ho ldi ngin Wi lli ams w a s su bs e qu e ntl y 30 g iven a na

rrow inter pretation by

United States v. Swear inge n, 858 F.2d 1555 ( 11th Cir. 1988) (p e r c ur iam) . In Sw e ari ng e n, the de fe nd ant a nd on e of his fr ie nd s, Mil lia

n, e a c h o wn e d a

n a uto de a le rs hip that w a s in

pe rp e tua l ne e d o f c a sh . Wh e n th e de fe nd ant n e e de d f un ds , h e wo uld prepa re a “dra ft” that “ repr esente d to the Ba nk that Milli an had pur chase d a ca r fr om [ the defe ndant] and would pay for the c ar by

honoringthe dra ft.” I d. at 1556. The ba nk then cr edited the def endant’ s acc ount by

the amount of the dr aft. When the ba nk attempted to collec t the draf t from Millian, Milli an would g ive his bank a dr aft fr om the defe ndant, showingthat the def endant had purc hased a

car from him and would pay for the c ar by

honoringthe dra ft. “The draf ts [ the defe ndant] and Milli an dre w on ea ch other and pre sented to the [bank] invol ved fic titious automobile sales.” I d. We found the dra fts to be “f alse re prese ntations” and a ffirme d Swear inge n’s convictions under 18 U .S.C. § 371. The dissent contends that, on this basis, we should find the 46 to paym ent either fr om

the bank or the drawe r, so too a contract gives the oth er party the le ga l r igh t e ith er

to pe rf orm an ce or

c om pe nsatio n. Whil e a ch ec k, by it s te rm s, doe s no t “ m ak e any r ep re se ntatio ns a s to the state of pe tit ion er ’ s bank ba lanc e, ” id. a t 28 4- 85, 102 S . Ct . a t 30 91, ac ontra ct doe s no t m ak e any re pr es en ta tio ns a s to aparty ’ s in te nti on t o pe rf orm ins te ad of pay ing dam ag es , or to e xe rc ise it s r igh ts unde r the c ontra ct . Jus t a s ac he ck is not “ fa lse ” sim

ply be cau se ne it he r th e d rawerno r th e d rawee in te nd s t ha t t he dra wee ca sh it , a c o n tr a c ti s n o tf

a l s e s i mp l y b e c au s e n e i t h e r p a rt y i n t e n d s t o e n f

o r c e i t . F i n a l l y, and perhaps m ost persuasiv ely , j ust as there is no evidence that Congress in tended § 10 14 t o be ana tio na l ba d c he ck law , dis pla ci ng v as t am ount s of state le gis la tio n, the re is no e vid en ce that C ongr es s in te nde d § 1 001 to b e a na tio na l “ fa lse contract” law , occ upy ing an area that has been a cornerstone of the com m on law f o r th e b e t t e r

p a rto f ami l l e n n i u m. 30repr esentations in t he lea ses and subc ontrac ts to be false state ments and af firm Glover ’s c onvic tio ns . T he pr ob le m w iththi s argume nt i s th at th e re pr e se ntatio ns of pa st f a c t in the dr a ft s in Swearing en ar e totally

differ ent from the c reation of prospec tive leg al rig hts by the lease s and subcontrac ts in thi s case . As the Swea ring en cour

t expl ained, “ The dra fts wer e in the for m of an e nv e lop e . O n it s f

a c e , th e e nv e lop e bo re a

de sc ri pti on

and the sa le s p ri c e of

the ve hic le purportedly

sold; insi de, the e nvelope c ontained the doc uments nece ssary to transfe r title to [ the defe ndant] or Mill ian. These documents we re of course false, in that the pa rties did not intend them to evidence a g enuine tra nsaction.” I d. We held that “through the enve lope dra fts involved in this case the De fenda

nt made fa lse fac tual asser tions with t he spec ific intent to defr aud the Ba nk.” I d. at 1557. The dra fts in Swearing en conta ined empirica lly falsifiable fac tual asser

tions concer

ning the pa st— fo r e xamp le , th at th e de fe nd ant h a d a c tua lly so ld M ill ian a

c ar. In th is c a se , in

c ontr a st, Glover did a ctually

enter into lega lly

binding lea ses and subc ontrac ts with the other par ties to the a g re e me nts . T he a g re e me nts are e xac tly wh at th e y

purp or t to be —le g a lly

e ff e c tiv e ins tr

ume nts that a c tua lly

e sta bli shri g hts and

re sp on sib ili tie s. Whe the r o r n ot G lov e r i nte nd e d in the futur e to exercise his rights under those a g ree ments, for e x ample by takingcustody

of the ve hicles over w h i c hh e h a d

l e g a l l y a c qu i r e d a l e a s e h o l d

i n t e r e s t , i s ane n t i r e l y

s e p ar at e qu e s t i o n . In Swe ari ng e n, on

the oth e r h and , th e pa st s a le s u po n whic h th e dr a ft s w e re ba se d n e ve r, in f a c t, occur red. Conseque ntly , our conc lusion is entirely consistent with this precede nt. 47 Fi na lly , if the re r em ai ns d oubt

a s to w he the r the te rm

“ fa lse ” in § 100 1 shou ld b e int er

pr et ed a s e xte ndi ng t o c ontra ct

ua l pr om ise s, the r

ule of le nity co ns tru es us to rul e in fav orof t he de fen da nt s an d c on st ru e th e st atut e n arro wly. See I nc le m a, 20 04 U.S. App . LEXIS 57 93 , at * 11 . In light of these po we rful considerations, as a m atter of law, we are force d to ov erturn Gl ov er’s co nv ic ti on s u nd er co un ts 5-7 an d 1 0- 12 . B. S ec tio n 10 01 p ro hib its pe opl e fr om m ak ing f al se state m en ts c onc er

nin g

“ any m atte r w ith in the j ur isd ic tio n of the e xe cu tiv e . . . br an chof the [ fe de ra l] [g] overnm ent.” For the r easons discu ssed in th is Section, w e do not believe thatTh is a na ly sis is the so le g ro un d u po n whic h w e re ve rs e Gl ov e r’ s c onvic tio n o n c ounts 31 13-15, and is an a lternate g round upon which w e re verse his conviction on counts 5-7 and 10- 12. 48 the f al se state m en ts at i ssu e he re c onc er ne d m atte rs w ith in the j ur isd ic tio n of the fe d er al g o v ern m en t . C o n s eq u en t l y, we a re fo rc edt o o v er tu rn Gl o v er ’s co nvi ct ion s un de r co unt s 5- 7 and 1 0- 15. 31 T he S upr em e Co urt ha s e m pha siz ed that “ the te rm

‘j ur isd ic tio n’ sho uld

not be given a narrowor technical m eaning for purposes of § 10 01.” Br y son v. United St at es , 396 U . S. 64, 70, 90 S . Ct . 355 , 359 , 24 L . E d. 2d 2 64 ( 1969 ). N ev er the le ss, the sc ope of

the te rm doe s have li m its . I n U nit ed S ta te s v. Ro dge rs , 466 U . S. 475 , 479, 904 S . Ct . 194 2, 194 6, 80 L . E d. 2d 4 52 ( 1984 ), the Co urt e xpl ai ne d th at thi s phr as e “ co ve rs a ll m atte rs c onf ide d to the auth or ity

of [ a fe de ra l] a ge nc y

or departm ent. . . . Adepartm ent or agency has j urisdictio n, in this sense, w hen it has power to exer cise authority in a particular situation.” Inthe ins tant c as e, G lov er ( an d th e Bl an ke nshi ps) w er e co nvi ct ed of m ak ing fa lse state m en ts t o G ranit e, apr ivate c onstru ct ionc om pany und er c ontra ct to bui ld ro ad s f or the F D O T . T he F D O T , in tur n, w as und er

c ontra ct w iththe U SD O T to adhere to fe deral specifications and requirem ents. A s the uncon tradicted te sti m ony of the G ove rn m en t’ s w itn es se s de m onstrate d, the U SD O T de al t ex cl usi ve ly

w iththe F D O T and l ooke d so le ly to the F D O T to im

ple m en t i ts49

contractual obligatio ns. T he US DO T w as powerle ss to “ exercise a utho rity ” over ei the r G ranit e or

the de fe ndants . T he f

al se state m en ts m ad e by

the de fe ndants co nc ern edth ei r co m

pl ia nc e wit h t he ter m s o f th ei r co nt ract wit h Gra ni te , a co nt ract ov er wh ic h t he USDOT nei th er h adno r ex erci se d a ny sup erv is ory po wer. Co nse que ntl y , the f

al se state m en ts c onc er

ne d am atte r out sid e the j ur isd ic tio n of th e fed eral go ve rn m en t. The Governm ent argues that, bec ause the funds with which G ranite w as pa id h ad or igi na te d w iththe f

ed er al gov er

nm en t, any

m atte rs pe rt ai nin g to the co nstru ct ionpr oj ec t ne ce ssari ly f al l un de r fe de ra l j ur isd ic tio n. T his arg um en t i s una cc ep ta

ble f or se ve ra l r ea sons . F ir st, the S upr em e Co urt e xpl ic itl y state d in Ro dge rs that the ke y

iss ue in de te rm ini ng whe the r a state m en t i s w ith in the gove rn m en t’ s j ur isd ic tio n is the auth or ity of the a ge nc y

to ac t. G en er al ly spe ak ing , af

ed er al a ge nc y

onl y ha s th e au tho ri ty

to take a ct iona ga ins t the recipient of the fe deral funds—that is, the party with w hom

it has contracted. In th is cas e, th atwou ldbe th e FDOT. The f act that the FD OT m ay

have contracted w ith private firm s such as Gr anite, or that Granite in turn m ay have subcont racte d with the defendants, does not som eh owgiv e the U SD O T pow er ove r ag re em en ts b etw ee n G ranit e an d th e de fen da nt s. In de ed , th e Gov ern m en t’s wi tn es se s t es ti fie d a t t ria l t ha t t he FDOT,50

not th e U SD OT , w as responsibl e for over seeing Granite. I f the U SD OT wa s dis ple as ed

w ithan a gr ee m en t be tw ee n G ra nit e an d th e de fe ndants , it la ck ed the pow er to co m pe l e ith er party to re sc ind

or m odi fy the a gr ee m en t. T he onl y thi ng i t could do would be to pressure the FD OT , under the ter m s of the FD OT ’ s contract w iththe U SD O T , int o pr es sur ing G ranit e int o takin g so m e sort of a ct ion . T his emb arra s s i n g l y we akan di n d i re ct av en u e o f r ec o u rs e d emo n s t ra t es th e U SD OT’s la ckof a ut ho rit y , andhe nc e la ckof ju ris di ct io n, o ve r Gran it e an d t he de fen da nt s. T he S ixth C ir cu it ha s r ec ogni ze d th e im portanc e, e ve n inthe c ont ex t of federa lly funded program s, of deter m ining whether

or not the federal a gency actually has power over the specific transaction in which the fa lse statem ents wer e m ad e. I n U nit ed

S ta te s v. L utz , 154 F . 3d 5 81 ( 6thCi r. 199 8) , the de fe ndant r ana loan origin ation com

pany . She w ouldfill out application s on behalf of potenti al bor ro w er s and s ubm it the m

to pr ivate banks in o rd er to obt ai n H U D -b ac ke d lo an s fo r tho se bor

ro w er s. T he appl ic at ion s r equir ed the de fe ndant t o c er

tif y that sh e had obtain ed the inform ation necessary to fill them

out throu gh face- to-face m eetings with her clients. The def endant never actually

m et w ith m any

of her cl ie nt s, yet sh e fal se ly certi fie d t ha t s he ha d. T he S ixth C ir cu it ult im at el y a ff irm ed he r co nvi ct ion . I n th e co ur se of it s opi nio n, how ev er , the c ourt he ld tha t at the ti m e the de fe ndant s ubm itt ed the51

paperw ork to the bank s, the m atter w as not y et w ithin HU D’ s jur isdictio n, as there was no th in g HUD co ul d yet d o re ga rd in g t he ap pl ic at io n. Th e co ur t ex pl ai ne d, A t the ti m e [the de fe ndant] sub m itt ed the f orm s to the le ndi ng in st it ut io n c ert ifyin g t ha t s he ha d h el d fa ce-t o- face in te rv ie ws, HUD did not y et have j ur isd ic tio n be ca

use the f ina l l oan a

ppl ic at ion pa ck ag e ha d no t y et

be ensub m itt ed

to it. F urthe rm or e, H U D ha d no au tho ri ty ove r the le ndi ng i nst itu tio n a t this poi nt w ithr eg ar d to w he the r or

not the ins tit uti on w oul d a cc ep t the loan. T he re fo re , the m at te r was no t wi th in HUD’ s ju ris di ct io n . . . . 15 4 F .3dat 5 86 -8 7 (e m

ph as is ad de d) . W e al so n ote that i f § 10 01 w er e int er pr et ed to pr ohi bit

any f al se state m en t to any pr ivate e nti ty

w hose f unds , in w hol e or

in part , ha

ppe ne d to or igi na te w ith the f ed er al gov er

nm en t, the r es ult s w oul d be sho ck ing . T o st ar t w ithasim

ple ex am ple , any e m plo y ee of e ith er G ranit e or

it s su bc ontra ct or s w ho m ay

have padded his resum e to obtain a job on the proje ct w ouldbe guiltyof a f ederal offense. A fter a ll, under the G overnm ent’ s theory , the r oad constructio n was under the jurisdiction of the federa l governm ent, and byly ing on his resum e that w orke r re ce ive d ashare of “ fe de ra l f

unds ” to whic h he oth er

w ise w oul d no t have be ene nti tle d. P er

ha ps s hari ng tha t w orke r’ s f ed er al pr iso n c el l w oul d be the pe rs on who l ie d a

bout his a ddr es s to ge t a

loc al li br ar

y c ar d inatown inw hic h he does not reside that happened to receive som e funds und er C ongress’s librar y su bs id iz at io n p ro gr am .52

In de ed , und er

the G ove rn m en t’ s th eo ry , any te ac he rs in inn er -c ity

pub lic sc hool s th at

r ec ei ve f ed er al sub sid ie s w ho t ak e sic k day s w he n th ey ’ re r ea lly goi ng to the be ac h c anf

ind the m se lve s sp en din g so m e qua lity ti m e w ithabr igh t y oung A ssi stant Unit ed

S ta te s A tto rn ey . T he D ep ar tm en t of Jus tic e can a lso pay

avis it to the U PS dr ive r w ho d el ibe rate ly put s of f de liv er ing apa ck ag e that the G ove rn m en t m ai le d se co nd- day a ir unt il the thi rd

day . P er ha ps the m ost

sho ck ing im plication o f the G overnm ent’ s interpretation of § 100 1 is that any one who lies on an a dm iss ion s a

ppl ic at ionto any

of the tho usands of

e duc at ion al ins tit

uti ons in thi s natio n th at

r ec ei ve f ed er al f unds or part ic ipate in a fe de ra l f

inanc ia l a id pr ogr am —i nc lud ing pub lic and p ri va te c oll eg es , lawsc hool s, m ed ic al sc hool s, an d th e lik e—

m ay be c onsi de re d af

ed er al f el on. A ll of

thi s, w ith out

any not ic e to th e in di vi du al th athe r st at em en ts are a v io la ti on of f ed eral law. Whil e Co ngr es s m ay

be c onst itu tio na lly

e m pow er ed to cr im ina liz e thi s br oa d r an ge of

c ondu ct , w e sim

ply do n ot b el ie ve that i t c hose to do s o, e spe ci al ly not thr oughastatut e suc h a s § 1 001. T he S upr em e Co urt’ s e xpl an at ionof juri sd ic ti on in Ro dg ers req ui res a reas on ab le , bal an cedin te rp ret at io n o f th is law. Be ca use af ed er al a ge nc y

c ane xe rc ise pow er

dir ec tly ove r the r ec ipi en t of

it s funds, the feder al governm ent clear ly has j urisdictio n over such actors and m ay pr ose cu te the m

und er § 10 01. B ec au se af

ed er al a ge nc y ’ s a gr ee m en t w ithaF or the purp os e of

c omp ari so n, 18 U. S.C. § 1 00 1( a )( 2) , ( 3) pr ov ide s: 32 [W ]hoever, in any matter within the jurisdiction of the executive, leg islative, or judicial bra nch of the Gover

nment of the United S t at e s , kn o w i n g l y an d

w i l l f u l l y—

. . . (2) make s any

materia lly

false, f ictitious, or fraudulent statement or r epre sentation; or (3) make s or uses any

false writing or

document knowing 53 re ci pie nt o f fe de ra l f

unds doe s no t ne ce ssari ly e m pow er that a ge nc y

to ex er ci se au tho ri ty ove r thi rd

part ie s w ithw hom

that r ec ipi en t i nte ra ct s, the a ge nc y la ck s j ur isd ic tio n ov er

tho se thi rd

part ie s and i nte ra ct ion s. U nde r Ro dge rs , j ur isd ic tio n do es no t s im

pl y fol lo w fed eral m on ey

wher ev er i t m ay

lea d. N otw ith standi ng r el at ive ly r ec en t c as es that su gge st the c ontrary , our c ir cu it pr ec ed en t i s c onsi ste nt w iththi s c onc lus ion . O ur e ar lie st r el ev an t c as e, L ow e v. Uni te d S ta te s, 1 41 F.2d10 05 (5t h C ir. 1 94 4) (Hol m es , J.), ad dr es se d 1 8 U.S.C. § 80, the f or er unne r to § 100 1. T his lawstate d: [W ] hoe ve r sha ll know ing ly and w ill fu lly

. . . m ak e or

c au se to be m ad e any f al se or f ra udul en t st at em en ts o r re pr es en ta tio ns, or m ak e or u s e o r c au s e t o b e ma d e o r

u s e dan y f

a l s e [ w r i t i n g ], kn o w i n g th e s a me to contain anyfra

udul ent or fictitious statem ent or entry in any m atter within the jurisdiction of any departm ent or agency

of the U nited St at es . . . [s ha ll be pu ni sh ed ]. 75th C ong. , 3d S es s. , Ch . 69, Apr . 4, 193 8, 52 S ta t. 197 . T his statut e is i n a ll m aterial r espects identical to its current incarnation in 18 U. S. C. §§ 10 01(a)(2), (3 ). S inc e L ow e re pr es en ts o ur e ar lie st o pin ionon the m eanin g of thi s pr ovi sio n, 32the same to c ontain any materia lly

false, f ictitious, or fr a ud ule nt s tate me nt o r e ntr

y ; shall be [punished] .

54 w e ar e boun d to f

oll owit e ve n if it is co ntr ar

y to our late r opi nio ns o r int er pr et at ion s. S ee Cl ar

k v. H ousi ng Auth . of

A lm a, 971 F . 2d 7 23, 726 n. 4 ( 11th Ci r. 199 2) ( “ Whe re c ir cu it au tho ri ty is in c onf

lic t, the e ar lie st p an el opi nio n re sol vin g th e iss ue in que sti on b ind s th is c ir cu it unt il the c ourt r es olv es the iss ue en ba nc .”). InL ow e, the de fe ndant w orke d f or the A la bam a D ry D oc k & S hip bui ldi ng Co m pany . H e w as pa id b y

the hour, and s ubm itt ed

f al se ti m e she et s th at m isr ep re se nte d th e num

be r of hours he w orke d. H e w as pr ose cu te d un de r § 10 01 because, at the tim e, “ the com pany wa s engaged in bu ildin g ship s under a contract w iththe U nit ed

S ta te s M ar iti m e Co m

m iss ion , an a ge nc y

of the U nit ed

S ta te s, pr ovi din g th at

the c om pany sho uld m ak e its payro ll paym en ts and s houl d be dir ec tly r ei m bur se d th er ef

or by the T re as ur

y of the U nit ed

S ta te s. ” L ow e, 141 F. 2d at 10 06. T his c ourt r ev er se d th e de fe ndant’ s c onvi ct ion , hol din g: [T ] he validityof the indictm ent depends upon whether the alleged fa ct that the U nit ed

S ta te s r ei m

bur se d th e co m

pany f or it s payro ll paym en ts w as suf

fi ci en t t o m ak e the a lle ge d m isr ep re se ntatio n w ith respect to the pay

roll entry a m atter w ithin the j urisdictio n of a de pa rtment o r ag en cy

of t he Uni te d S ta te s. We th in k n ot .55

Id . W e fu rth er ex pl ai ne d, [D ef en dant’ s] e m

plo ym en t w as de ri ve d f

ro m his pr ivate c ontra ct

w ith a pr ivate c or

por at ion . H is h our s of

w ork and r at e of

pay , and the control and supervision over the duties he perform ed, w ere m atters w ith in the e xc lus ive dom ini on o f his pr ivate e m plo y er . T he m isr ep re se ntatio n a s to the hours w orke d w as m ad e to an e m plo y ee of the private corporation und er an arrangem ent wher eby the wa ges we re to be paid by

the corporation. I nsofar as the em ploy ee w as co nc er ne d, e ve ry

a spe ct of his e m plo ym en t w as e xa ct ly

the sam e as it would have been had there been no contract w ith any governm ental ag en cy of any kin d. . . . . T he c ontra ct

f or r ei m bur se m en t of

payro ll paym en ts . . . did

not de sig na te the payro ll de partm en t of the com pany as an agency

of the U nited States, nor did it place that de pa rtment u nd er t he co nt ro l o r su pe rv is io n o f an y su ch ag en cy . Id. W e concluded, “ [T ] he m ere allegation of the existence of the contract pr ovi din g f

or r ei m bur se m en t of

payro ll paym en ts w as not suf fi ci en t t o m ak e [the de fe ndant’ s] a lle ge d f

ra udul en t m isr ep re se ntatio n to his e m plo y er an of fe nse ag ai ns t t he Uni te d S ta te s.” Id . Thus, L owe w as about the “ j urisdictio n” elem ent of § 1001 (or, m ore spe ci fi ca lly , 18 U . S. C. § 80 , the pr ed ec es sor to § 10 01) . T he c le ar , ind isp uta ble hol din g of

L ow e is tha t a

m isr ep re se ntatio n m ad e to a pr ivate c om

pany c onc er nin g a proj ect that is the subject of a contrac t betwee n that com pany and the federa l gove rn m en t do es not

c onst itu te am isr ep re se ntatio n a bout am atte r w ith in the juri sd ic ti on of t he fed eral go ve rn m en t.56

L at er c as es have tw ist ed

thi s ho ldi ng, ins te ad

c onstru ing L ow e as am en s rea case. For e xam

ple, in U nited States v. Be asley , 550 F. 2d 26 1, 273-74 (5th Cir. 1977 ), w e he ld tha t L ow e supp orte d th e pr opos iti on tha t “ fa lse c la im s su bm itt ed to the state w he n th e cl ai m an ts k ne wthat the state w oul d r el y on those c la im s f

or re im bur se m en t f

ro m the f ed er al gov er

nm en t purs uant t o aj oin t f ed er al -s ta te pr ogr am f al l w ith in the f

ed er al f al se c la im s st at

ute . ” P utt ing a sid e the iss ue of the ty pe of m en s r ea ne ce ssary

to supp ort a

§ 10 01 c onvi ct ion , thi s is agr av e m isc hara ct er iz at ionof

L ow e. L ow e ne ve r spok e to the de fe ndant’ s st at e of m ind , an dd i dn o tas kwh et h erth e d ef en d an twa s aw ar e o f t h e f ed er al g o v ern m en t ’s invo lvem ent. I ndeed, beca use the ship y ard w as constructing ships for the f ederal gove rn m en t, a cc or din g to f ed er al spe ci fi catio ns, it

is qui te li ke ly

that the de fe ndant kn ew of th e fed eral go ve rn m en t’s i nv ol ve m en t. A s di sc uss ed

above , L ow e fo cu se d square ly and e xc lus ive ly

on whe the r the fal se st at em en t co nc ern eda m at te r wit hi n t he fed eral go ve rn m en t’s jur is di ct io n. The de fen da nt ’s m is st at em en ts ab ou t h is ho ur s o f work c on cern edhi s p ay , a m atte r be tw ee n hi m

and h is e m

plo y er that w e he ld w as not

w ith in the j ur isd ic tio n of the feder al governm ent. N either the fa ct that the shipy ard m ay have been pay ing him

w ithf unds it r ec ei ve d un de r its c ontra ct w iththe f

ed er al gov er

nm en t, nor the fact that m isrepresentations concerned a feder al proj ect, nor the fact that57

the defendant’ s lies m ay

have form ed the basis of progress reports or work utilization summ aries sent to the governm ent, w ere sufficient to bring th e m atter wit hi n t he fed eral go ve rn m en t’s jur is di ct io n. O ne of our la st c as es to ci te L ow e w as U nit ed S ta te s v. Bake r, 626 F . 2d 5 12 (5 th C ir . 198 0) . B ak er

a cc ur at el y

c hara ct er iz ed

L ow e’ s a ct

ua l ho ldi ng, re co gni zi ng tha t L ow e lim ite d th e range of m atte rs w hic h c oul d pr ope rl y be co ns id eredwit hi n t he fed eral go ve rn m en t’s jur is di ct io n fo r pu rp os es of § 10 01 . Se e id. a t 51 5 n. 6. N ev er the le ss, the Bake r co urt up he ld the de fe ndant’ s § 1 001 co nvi ct ion s f

or m ak ing f al se state m en ts t o th e D al la s H ousi ng Auth or ity ( the

“ DH A” ) because the “ DH A w as required to m ake quarterly reports to HU D [ a federa l agency ] , and HU D r etained ‘ the ultim ate authority to see that the feder al funds (w er e) pr ope rl y

spe nt. ’ ” I d. ( quot ing U nit ed S ta te s v. S tanf

or d, 589 F . 2d 28 5, 2 97 (7t h C ir. 1 97 8) (al te rat io n i n o rig in al )). N otw ith standi ng B ak er ’ s a tte m pt t o di sti ngui sh L ow e, w e be lie ve the opin ions are in conflict. I t strains credulity to believe that a shipb uilder under co ntr ac t w iththe f

ed er al gov er

nm en t t o bu ild

shi ps w oul d no t be r equir ed to subm it pr ogr es s r ep orts, or that the f ed er al gov er

nm en t l ac ke d “ the ult im at e au tho ri ty ” to e nsur e that i t w as a ct ua lly ge tti ng wha t i t w as pay ing f or . I nde ed , the shi pbui lde r’ s c la im

to the f ed er al gov er

nm en t f or r ei m bur se m en t ha d to be ba se d,We f ind it p art ic ula

rl y dis tur bin gthat on e of

our m os t f

re qu e ntl y c ite d c a se s o n th is 33 subject, United States v. He rring , 916 F.2d 1543 ( 11th Cir. 1990), does not even me ntion L owe. In Her ring , we uphe ld the conviction of a defe ndant who submitted to the Georg ia Depa rtment of L abor a n application for

unemploy

ment assistance that contained f alse stateme nts about his work his tor y . We state d, “ [A] st ate a g e nc y ’s us e of fe de ra l f un ds is g e ne ra lly

su ff ic ie nt t o e sta

bli sh jurisdiction under sec tion 1001.” I d. at 1547. Sever al other c ircuits have a dopted this approac h. Se e , e .g ., Un ite d St ate s v . Sh a fe r, 19 9 F .3 d 8 26 , 8 29 (6 th C ir . 1 99 9) (“ B e c a us e the fa lse statements in this case we re ma de to a state ag ency that rec eived f

eder al support and wa s subject to f e de ra l r e gulatio n, the fa lse state me nts ma de by [the De fe nd ant] i nv olv e a matte r t hat f a lls square ly within the jurisdiction of an ag ency or depa rtment of the United States.” ); United States v. Davis, 8 F .3d 923, 929 (2nd Cir. 1993) (“ In situations in which a fede ral a g ency is oversee ing a state a g e nc y , it

is the me re e xiste nc e of

the fe de ra l a g e nc y ’s su

pe rv iso ry a uth or ity that is important to determiningjurisdiction.”). 58 at le as t i n part , on i nf

orm at ionc onc er

nin g th e shi pbui lde r’ s w orke rs ’ hours . P ut an oth er w ay , it se em s th at

the ve ry f ac tor s B ak er

c ite d to dis tin gui sh i tse lf f ro m Low e w ere actually

present in Low e. T hus, under our prior panel rule, we adhere to Lowe instead of Baker. 33 While som e later

Suprem e Court case s have required that the term

“ j urisdictio n” be construed “ broadly ,” see, e. g., Bry son v. United States, 396 U.S . 64, 70, 90 S. Ct. 355, 359, 24 L. Ed. 2d 264 (1969), such general statem ents are insufficient to allow us to devi ate fr om the holdi ng in Lowe. “ W e ar e not at liberty to disregarding b indin g case lawthat is so closelyon poi nt and that has o n l y b e e n [ a l l e g e d l y] w e a k e n e d , r a t h e r th a n d i r e c t l y o v e rr

u l e d , b y t h e S up r e me Court.” Fla. Le ague of Prof . L obby ists, Inc. v. Me ggs, 87 F.3d 457, 462 (11th Cir. 1996 ). “ Whil e an

int er ve nin g de ci sio n of

the S upr em e Co urt c anove rr ule the de ci sio n of

apr ior pane l of our c ourt, the S upr em e Co urt de ci sio n m ust be c le ar ly59

on p oin t. ” G ar

re tt v. U niv . of

A la . a t B irm ing ham

Bd . of T rs . , 344 F . 3d 1 288, 1292 (11th Cir. 2003). Beca use neither Low e nor its central holding has never be enove rr

ule d by the S upr em e Co urt or

thi s c ourt si tti ng e n banc , it r em ai ns g ood law . T he f

ac t tha t i t i s su

ppor te d by sol id p oli cy

and f ed er al ism c onsi de ratio ns i s m erel y an ad di ti on al be ne fit . Co nse que ntl y , the S upr em e Co urt’ s op ini on i n R odge rs , our ow n op ini on i n L ow e, and d ee ply

tr oubl ing c onc er

ns o ve r the oth er

w ise unb ri dle d r ea chof

§ 10 01 co m pe l us to co nc lud e that the f al se state m en ts m ad e by

G lov er to G ranit e did

not fa ll w ith in the U SD O T ’ s j ur isd ic tio n. T hus, w e m ust r ev er se G lov er ’ s c onvi ct ion s unde r Co unt s 5- 7 and 1 0- 15. VI . W e re j ec t the de fe ndants ’ c ont en tio ns tha t the dis tr ic t j udge e rr ed in co n du ct i n g a jo i n ttri al . We s i m i l ar l y re je ct Gl o v er ’s cl ai m

th at th e G o v ern m en t ’s ind ir ec t r ef

er en ce to his f

ai lur e to t es tif

y pr ej udi ce d hi m

and r es ult ed

in a de nia l of hi s Fi fth Am en dm en t ri gh t ag ai ns t s el f-i nc riminat io n o r gu aran te e o f du e p ro ces s. W e re verse the Blankenships’ and Tarand’s m oney laundering conv ictions u nder co unt s 26 -3 4 be ca

use the ir a ct ion s di d no t be tr ay

an in te nt t o “ co nc ea l” the pr oc ee ds o f the ir

il le ga l a ct ivi tie s. A s ar es ult , the ir c onvi ct ion s un de r co unt

3, f or co nspi ri ng t o e nga ge in m one y launde ri ng, is al so r ev er se d. F or avari ety of60

re as ons, w e al so r ev er se G lov er ’ s c onvi ct ion s un de r co unt s 5- 7 and 1 0- 15. T he rem ai ni ng co nv ic ti on s ar e aff irmed. T he j udgm en t of

the dis tr ic t c ourt i s A FF IRME D in part and RE V E RS E D in pa rt, a ndth is m at te r is REMANDED for r es en te nc in g. SO ORDERED.61

BL A CK , Ci rc uit

Jud ge , c onc ur

ri ng i n part

and d iss en tin g inpart : I ag re e w iththe m aj or ity

that the dis tr ic t c ourt di d no t a buse it s di sc re tio n w he n it de nie d Appe llants ’ se ve ranc e m oti ons; the re fo re , I c onc ur in that r es ult . W it h re sp ectto th e m on ey lau nd eri ng an d fa ls e st at em en t co nv ic ti on s, I re spe ct fu lly

dis se nt. I. MONEY LAUN DERING CONVICTIONS T o pr ove m one y

launde ri ng unde r § 19 56( a) (1 )( B) (i ), c om m onl y r ef er re d to as th e co nc eal m en t p ro ng of t he m on ey lau nd eri ng st atut e, se e, e . g. , United States v. M ajo rs , 196 F . 3d 1 206, 121 1 & n. 11 ( 11th C ir . 199 9) , w e have he ld the G ove rn m en t m

ust sho w : (1) the defe ndant cond ucted or attem pted to cond uct a financial tr an sa ct ion ; ( 2) the tr an sa ct ioninv olv ed the pr oc ee ds o f a statut or ily specified unlawful ac tivity ; (3) the defe ndant kn ewthe proceeds w ere fro m so m e fo rm

of i ll eg al act iv it y ; an d (4 ) th e d efen da nt kn ew a purpos e of the transaction was to conceal or disguise the nature, loc at ion , sourc e, ow ne rs hip , or c ontro l of

the pr oc ee ds. United States v. M

iles , 290 F . 3d 1 341, 135 5 ( 11th C ir . 200 2) . Appe llants que sti on the suf fi ci en cy of the e vid en ce onl y

a s to the f

ourth e le m en t— int en t t o c onc ea l. T he re is no d isp ute that w e re vie wsuf fi ci en cy of the e vid en ce c la im s de novo , vie w ing the e vid en ce in the li ght m ost f av or ab le to the G ove rn m en t, w itha llIndeed, A ppellants’ conte ntion that the DBAacc ount was set up per the bank’ s 1 instruction, strictly

speaking , is not inconsist ent with the jury verdic t. “Concea ling the sour ce of funds does not nee d to be the only g oal of the pe rtinent transa ction.” Un ite d S tates v . A bb e ll , 271 F.3d 1286, 1298 n.10 ( 11th Cir. 2001). 62 reas on ab le in fere nc es an d c red ib il it y ch oi ces m ad e in th e Gov ern m en t’s fa vo r. United States v. M

cCarrick , 294 F . 3d 1 286, 128 9–90 ( 11th C ir . 200 2) . W e w ill not reverse a c onvi ction on the basis of insu fficient evidence unless no rational tr ie r of f ac t c oul d have f

ound the e sse nti al e le m en ts o f the c ri m e be y ond a reas on ab le do ub t. U

nit ed Sta tes v . Ch ris to , 12 9 F .3d57 8, 5 79 (11 th Cir . 19 97 ). T he G ove rn m ent ne ed

not dis pr ove e ve ry

r ea sona ble hy pothe sis of

inn oc en ce and the j ury is “ ‘ free to choose am ong reasonable const ructions of the evidence.’ ” M ajo rs , 196 F . 3d at 12 10 ( quot ing United States v. J ones , 913 F . 2d 1 552, 155 7 (11th Cir. 1990)). A lth oughthe m aj or ity

c or re ct ly state s th e standard

of r ev ie w , it

f ai ls t o apply it properly . Appellants presented a cr edible explanation for the f inancial tr an sa ct ion s sh ow n by

the G ove rn m en t, but

the j ur y w as not r equir ed to ac ce pt Appellants’ chara cterization o f the evidence. T he evidence adm itted at trial w as 1 that R an dy

Bl an ke nshi p r ec ei ve d th irte enc he ck s m ad e out to “ H . J. T ru ck ing ” fr om G ranit e Co nstru ct ion . R an dy Bl an ke nshi p c re at ed

an a cc ount

und er the nam e of “ Randy Bl an ke nshi p d/

b/a H . J. T ru ck ing ” (the D BAa cc ount ). T he se63

ch ec ks, tot al ing $26 8, 978. 74, w er e de posi te d in to the D BAa cc ount . I m m ed ia te ly upon deposit, Randy

Blankenship wr ote out a new chec k drawn on the D BA ac co unt and d ep osi te d th at

c he ck int o T ar an d’ s a cc ount . A ll the pr oc ee ds, save $1 00 , were t ran sf

erre d i n t hi s m an ne r to th e Taran d a cco un t. T his e vid en ce w as suf

fi ci en t f or aj ur y to co nc lud e be y ond a re as ona ble doub t tha t the se tr an sa ct ion s w er e de sig ne d to c onc ea l f ro m G ranit e that T ar an d w as the tr ue be ne fi ci ar

y of the f unds G ranit e tho ught

it w as pay ing to H . J. T ru ck ing —i . e. , to co nc ea l the ow ne rs hip and c ontro l of the pr oc ee ds. T ha t this schem e ultim ately

failed is not determ inative. See U nited Sta tes v. Starke , 62 F . 3d 1374 , 138 4 ( 11th C ir . 199 5) ( co nc lud ing “ that a m one y launde ri ng transa ct ion ne ed not c onc ea l the ide nti ty

of the part ic ipants in the tr an sa ct ion , ” so l ong as “ the transactions were designed to conceal the funds or the source of the funds”). T he m aj or ity ’ s c onc er

n th at a ff irm ing the m one y

launde ri ng c onvi ct ion s w oul d e xte nd the m one y

launde ri ng s ta tut e to v irtua lly a ll fi nanc ia l transa ct ion s inv olv ing the pr oc ee ds o f unl aw fu l a ct ivi tie s is not w ar rante d. T he c ri tic al f

ac tor h e r e i s th a tth e B l a n k e n s h i p s d e p o s i t e dth e f u n d s , w h i c h w e r e n o tp a yab l e t o th e m, int o an a cc ount

w ithaf al se nam e, and the n im

m ed ia te ly tur ne d aro und an d redeposited the funds into th eir ow n account. T his is n ot m erely a ca se of “ m oneyIalso note that at lea st two factor s listed by the Court in Ma

jor s a s p ro bativ e of

int e nt t o 2 conce al ar e ar guably

prese nt in this case : namely , the depositingof illeg al profits in the bank acc ount of a leg itimate business, and the use of a putative third pa

rty (H.J. Trucking ) to conc eal the re al owner

of the proc eeds. Se eMa

jor s , 196 F.3d at 1213 n.18. United States v. Mc Gahee , 2 57 F .3 d 5 20 (6 th C ir . 2 00 1) , u po n whic h th e ma

jor ity 3 place s g reat relianc e, is distinguishable. I n that case , funds wer e deposited f rom a g overnme nt ag ency into an acc ount desig nated “ Doug las J . McGuire d/b/a W.G. W illiams Enterprises.” Id. at 524–25. McGuire did not, however , g o on to transfe r the funds to a nother a ccount ( unlike the Bla nkenships, who immediately transfe rre d the funds to the Ta rand a ccount) . Rather, he either conver ted the funds in the DB A ac count direc tly into cash or use d them to pay off his per sonal mortg ag e. Id. at 52 5. Ac c or din g ly , th e Sixth C ir c uit fo un d th e re wa s n o e vid e nc e of a de sign to conce al the proc eeds of

illega l activity . Id. at 528.

64 sp en di ng .” Se e M

ajo rs , 196 F . 3d at 12 13. 2 N or doe s th e ru le of

le nity appl y in thi s c as e. T he re is no i ssu e of howthe st atut e sh ou ldbe read . See M oskal v. U

nited Sta tes , 498 U . S. 103 , 108 , 111 S . Ct . 461, 465 ( 1990 ) (o bse rv ing that l en ity is “ re se rv ed

. . . f or tho se sit ua tio ns i n w hic h ar ea sona

ble doubt p er sis ts a

bout astatut e’ s in te nde d sc ope e ve n after re sort t o th e langua ge and s tr uc tur e, le gis la tiv e his tor

y , and m oti va tin g po lic ie s of the statut e” ( int er

na l qu otatio n m ar

ks o m itt ed )) . R athe r, w e ar e pr es en te d w iththe cl ear cu t qu es tio n of

w he the r the G ove rn m en t ha s pr ovi de d su ff ic ie nt e vid en ce to es t ab l i s h co n ce al m en tu n d er th e s t at u t e— i .e ., aqu es t i o n p er t ai n i n g t o th e ju ry’s factual f indin gs, not to the law. It is this jury finding—s uppo rted by

subst antial e v i d e n c e —t h e ma

j o r i t y u n n e c e s s a r i l y ab r o g a t e s . A c c o r d i n g l y, I w o u l da f f i rm. 3The indictment cha rg ed Glover

with “mak[ing] and us[ing] a false writing a nd 4 document, knowingthe same to c ontain materia lly false, f ictitious and fraudule nt statements and entries, in a matter within the jurisdiction of the United States De partment of T ranspor tation” and seeking“to cr eate the fa lse appe ara nce that H.J . Truckingwas pe rfor ming a nd manag ing the work re quired unde r the subcontr act be tween Granite a nd H.J . Trucking .” Glover w as convic ted on Counts 5–7 and 10–12, which involved equipment lea ses betwe en H.J. Truckingand other tr u c k i n gf i r m s , an d C o un t s 1 3

– 1 5 , w h i c hi n v o l v e d w a g e an d

h o ur r e c o r d s s u

b m i t t e d b y H . J. T ru ck i n g. 65

II. FALSE STATEMENT CONVICTIONS Only Glover c hallenges his conviction s under 18 U.S .C. § 1001 (a), which 4 pr ohi bit s m ak ing af

al se state m en t i n any

m atte r w ith in the j ur isd ic tio n of the U nit ed S ta te s go ve rn m en t. T o ob ta in a c onvi ct ion , the G ove rn m en t ha d to pr ove the f oll ow ing f

ive e le m en ts: ( 1) the e xis te nc e of astate m en t; (2 ) fa lsi ty ; ( 3) juri sd ic ti on ; (4 ) m at eri al it y ; an d (5 ) sp eci fic in te nt to de frau d. United States v. H errin g , 916 F . 2d 1 543, 154 6 ( 11th C ir . 199 0) . H er e, G lov er arg ue s onl

ythat the G ove rn m en t f

ai le d to e sta

bli sh the thi rd

e le m en t—

j ur isd ic tio n. T he m aj or ity ac ce pts thi s arg um en t, but it a lso c onc lud es that, w ithr es pe ct to the c onvi ct ion s inv olv ing e qui pm en t l ea se s, the G ove rn m en t f ai le d to e sta

bli sh the se co nd el emen t

— fa l s i t y—a s we l l . Ac co rd i n g l y, th e majo ri t y re v er s es al l o f G l o v er ’s § 100 1 convictio ns on jurisdiction al grounds and som e of them , in the alter native,All of Glover’ s § 1001 convictions are reve rsed on jurisdictional grounds, and the 5 c onvic tio ns on

Counts 5– 7 a

nd 10 –1 2 a re a lso re ve rs e d o n f

a lsi ty g ro un ds . After Gra nite had subcontra cted with H.J. Trucking , inspectors notice d that both Tara nd 6 and J.D. Mil ler truc ks were showingup at the job site bea ringH.J . Truckinginsignia. The i n s p e c t o r s r e f

u s e d t o l e tth e s e tr

u c k s b e u s e d

un l e s s i t c o u l d b e s h o w nth e y

w e r e l e a s e d

t o H . J. Trucking . Acc ording ly , Tammy Bla nkenship cre ated lea ses to satisfy the inspectors, on the off chanc e they

might ag ain che ck truc k owner ship. Si g nificantly , these same lease s were also used to c onvin c e Gr anit e that H .J. T ru c kin gwa s in c omp lia nc e wi th t he 51 pe rc e nt r e qu ir e me nt. To sh owthat it

wa s f oll ow ingfe de ra l w a g e ta

ble s, H. J. Tr

uc kin gsu bmi tte d w e e kly 7 “ce rtified pay

rolls” to Gra

nite listi ngthe H.J. Truckingemploy ees who had wor ked on the projec t that week, the hours they worke d, and the wa g es they wer e paid. Gr anite in turn fo rw ard e d th e se c e rt if

ie d p ay ro lls to t he F lor ida

De pa rtme nt o f T ra

ns po rt atio n. Ea c h o f t

he se pay rolls identified truck dr ivers as “ owner -oper ators” when, in ac tuality , the driver s neither worke d for H.J. Truckingnor we re owner ope rators; rather, they worke d for e ither Tar and or one of Mil le r’ s c omp anie s. 66 on f al sity gr ound s to o. B ec au se I dis ag re e w ithboth th is r es ult and i ts r at ion al es , 5 I di ss en t. I wo ul d a ffi rm

all of Gl ov er’s § 10 01 co nv ic ti on s. A. Ju ris dic tio n G lov er , asub co ntr ac tor , sub m itt ed the f al se state m en ts at i ssu e in this c as e to Granite, the genera l contractor. T hese false statem ents invo lved either (1 ) le as es be tw ee n H . J. T ru ck ing and o the r tr uc kin g c om

panie s sh ow ing H . J. T ru ck ing c ontro lle d a sse ts i t di d no t, or ( 2) c er tif ie d payro lls sub m itt ed

by H . J. 6 Tr ucking , c laim ing various drivers it em ploy ed we re ow ner-operators when they w er e not . G ranit e re lie d up on the se state m en ts whe n it c er tif ie d to the state and 7 fed eral ag en ci es in vo lv edth atitwas i n c om pl ia nc e wit h t he DBE requi rem en t.In e ff e c t, G lov e r i s c ha lle ng ingthe su ff ic ie nc y of the e vid e nc e wi th r e sp e c t to 8 jurisdiction—the third element. See A likhani v. United States , 200 F.3d 732, 735 ( 11th Cir. 2000). In revie winga convic tion for suffic iency of the e vidence , this Court “ex amine[s] the evidenc e de novo in the light most favorable to the g overnme nt, to determine whe ther a rea sonable jury

could have conclude d beyond a re asonable doubt that the defe ndant was guilty of the cr imes char g ed.” United States v. Toler , 144 F.3d 1423, 1428 ( 11th Cir. 1998). 67 On appeal, Glover argues there is an insufficient nexus between the fe deral gove rn m en t’ s j ur isd ic tio n and the se f al se state m en ts. 8 The m aj ority

concludes § 10 01’s j urisdictio nal requirem ent is not s atisfied fo r thr ee r ea sons : ( 1) thi s C ourt’ s de ci sio n in H errin g is ina ppl ic ab le ; ( 2) thi s Co urt’ s de ci sio n in Lowe v. United States , 141 F . 2d 1 005 (5 th C ir . 194 4) , c ontro ls; an d ( 3) the G ove rn m en t f ai le d to e sta

bli sh the f

ed er al gov er

nm en t su pe rv ise d th e fe de ra l f unds a t i ssu e. I dis ag re e w ithe ac h of the se c onc lus ion s. 1. H er ri ng Re quires Affirmance T he m aj or ity

r ea ch es the r es ult

it doe s be ca

use it c onc lud es H

errin g and oth er c as es f ro m thi s C ir cu it ar e ina

ppl ic ab le . I n H

errin g , t h i s Co u rt h el d§ 1 0 0 1 ’s j ur isd ic tio na l r equir em en t w as sa tis fi ed w he re the de fe ndant m ad e a fa lse state m en t t o astate a ge nc y that r ec ei ve d f

ed er al f unds . 916 F . 2d at 1546– 47. In re ac hin g th is d ec isi on, thi s C ourt no te d th at , und er § 10 01, the f

al se state m en t doe s no t ne ed

to be pr es en te d di re ct ly

to a fe de ra l a ge nc y ; r athe r, it is suf fi ci en t that the f al se state m en t i s pr es en te d to astate a ge nc y , w hic h intur n pr es en ts i t t o aIn Herring the c ha in o f r e lia

nc e up on the fa lse state me nt c on sis te d o f t hr e e links , 9 including the source of the fa lse statement: (1) the defe ndant; (2) the state ag ency ; and (3) the fe de ra l a g e nc y . 9 16 F .2 d at 15 46 –4 7. He re , th e c ha in c onta ins fo ur links : ( 1) Gl ov e r, wh o w a s a subcontrac tor; (2) Gr anite, the g ener al contra ctor; (3) the state a g ency ; and (4) the fede ral a g ency . 68 fed eral ag en cy . Id. at

154 7. T his Co urt a lso not ed f ed er al f unds do n ot a ct

ua lly ha ve to be us edto pa y

th e p ers on m ak in g t he fal se st at em en t. Id . I nde ed , thi s Court observed the “sta te age nc y’ s us e of f ed eral f unds is ge ne ral lysuf

fic ie nt to es tab lis h ju ris dic tio n un de r se ct ion 100 1 .” Id. (em phasis add ed). G lov er arg ue s H errin g is inappli cable, given that th is case contains an extra link in the chain—i.e. , G ranite—betwe en him and the federa l agency . I see , 9 how ev er , no t an gib le dif

fe re nc e. G lov er

kne whe ha d to c om

ply w iththe 51 pe rcen t DBE re qu ire m en t, wh ic h s te m m edfro m a fed eral ly-fun de d p ro gr am . In de ed , it w as his state d in te nti on t o c om ply that br ough t hi s c om

pany the tr uc kin g co ntr ac t i n th e fi rs t pl ac e. Jus t a s th e de fe ndant i n H errin g shoul d have expected the state agency

in that case to rely

upon his false statem ent that he was un em pl oyed wh en , in fact , he was work in g, id. a t 15 45, so t oo s houl d G lov er have expe ct ed both G ranit e an d th e state of F lor ida to re ly upo n th e fa lse state m en ts h e m ad e co nc ern in g t he DBE pro gr am , se e id. a t 15 46–4 8; see also United States v. Sugg s , 755 F . 2d 1 538, 154 2 ( 11th C ir . 198 5) ( “ It is undi sput ed

that . . . the f

al se statem ent need not be presented directly to an agency

of the U nited States or thatIn Bo nn e r v . Ci ty of Pric ha rd, 6 61 F .2 d 1 20 6, 12 09 (1 1th Cir . 1 98 1) (e n b anc ), thi s 10 Court a do pte d a s b ind ingpr e c e de nt a ll d e c isi on s o f t he fo rm e r F if

th C ir c uit ha nd e d d own p ri or

to close of busine ss on September 30, 1981. 69 fe de ra l f unds a ct ua lly be use d to pay

the c la im an t. ”) ; United States v. B aker , 626 F. 2d 5 12, 514 –15 & nn. 5–6 ( 5thCi r. 198 0) ( hol din g th at j ur isd ic tio n e xis ts i f the federa l agency

retains authority

to ensure feder al funds are properly spent); 10 United States v. B easley , 550 F. 2d 26 1, 273–74 (5th Cir. 1977 ) (holding th at juri sd ic ti on ex is ts wher e th e d efen da nt kn ows of t he fed eral in vo lv em en t). A cc or din gly , I w oul d a ff ir m , ba se d on H

errin g et a l. 2. Lowe Th e maj o r i t y d o e s n o tap p l y H errin g be ca use it c onc lud es Lowe controls. In m y vie w , the re are a t l ea st thr ee sig nif ic an t pr obl em s w iththi s c onc lus ion . F ir st, the f ac ts i n Lowe are qui te dis tin ct f ro m the f ac ts i n th is c as e, pr ec lud ing the co nc lus ion Lowe c ontro ls. S ec ond, oth er c as es f ro m thi s C ir cu it have dis tin gui she d Lowe . Third, the m aj ority cites clear and rele vant Suprem e Court au th or it y , whi ch , when fol lo wed , lea ds to th e o pp os it e res ul t.

a. Lowe ’s F

acts Are D istinct Lowe invol ved a defendant that worked f or a shipbui lding com

pany on an hourlybasis, w ho was char ged with m aking a false statem ent regarding a “ m atter70

w ith in the j ur isd ic tio n of ade partm en t or

a ge nc y of the U nit ed

S ta te s. ” 141 F . 2d at 100 6 . T he ind ic tm en t a lle ge d on ly the f oll ow ing f

ac ts: ( 1) the shi pbui ldi ng co m pany ha d ac ontra ct

w iththe U . S. Mari tim e Co m m iss ionto bui ld s hip s; (2 ) thi s c ontra ct

sti pul at ed

that the c om

pany sho uld m ak e its ow n payro ll pa ym en ts , bu t t ha t t ho se pa yro ll pa ym en ts wou ldbe rei m bu rs edby the U.S. T re as ur y ; and ( 3) L ow e fa lse ly

r ep re se nte d to the shi pbui ldi ng c om pany ’ s payro ll de pa rtment t ha t h e h adwork edeig ht ho ur s wh en he ha d n ot . Id. Fo llo w ing his ple a of

nol o c ont en de re , the de fe ndant a ppe al ed , que sti oni ng

“ w he the r the a lle ge d f

ac t tha t the U nit ed

S ta te s r ei m

bur se d th e co m

pany f or it s payro ll paym en ts w as suf fi ci en t t o m ak e the a lle ge d m isr ep re se ntatio n w ith re spe ct to the payro ll en tr

y am atte r w ith in the j ur isd ic tio n of ade partm en t or agency of the U nited States.” Id. In a short, six-para graph opin ion, this Court co nc lu de d ju ris di ct io n d idno t ex is t u nd er t he fact s al le ge d i n t he in di ct m en t. Id. Inr ea ch ing thi s c onc lus ion , thi s C ourt e m pha siz ed the re w as no i ndi catio n th e co m pany ’ s payro ll de partm en t ha d be enpla ce d “ unde r the c ontro l or sup er vis ion of [a f ederal a gency ] .” Id

. I nde ed , Jud ge W al le r ev enw en t so f ar a s to not e in a spe ci al c onc ur

re nc e that the c onvi ct ionw oul d have be en affirmed if the ind ic tm en t h adal l eg edth e U .S . Tr ea s u ry’s re i m b u rs emen twa s co n d i t i o n ed“ up o n [i t s ] re ce ipt and ch ec ki ng of

the payro lls upo n w hic h paym en ts h ad be enm ad e to the71

workm en.” Id

. at 1006– 07 (W aller, J., concurring) (em phasis add ed). In su m m ary, Lowe at

m ost stands fo r the pr opos iti on tha t, to im pli cate j urisdictio n, an indictm ent m ust do m ore than m erely

allege re ceipt of feder al fu nd s. Se e id. ( W al le r, J. , c onc ur ri ng) ( obse rv ing that j ur isd ic tio n w oul d e xis t i f the federa l agency

supervised th e re cipient of the funds). In this case, addition al fa ct s are c le ar ly

pr es en t. P ar

t I I. A . 2 e xpl ai ns tha t the e vid en ce de m onstrate s th e federa l governm ent supervised th e fe deral funds at issue in thi s case. T herefor e, the onlyquestion that rem ains (and which is answer ed in Part I I. A. 2) is whether th is supe rv is io n was su ffi ci en t t o s at is fy § 1 00 1’s ju ris di ct io na l re qu ire m en t. Lowe , how ev er , is of

no h el p inthi s e nde av or , a s th e ind ic tm en t the re c ont ai ne d no al le ga ti on s wh at so ev er co nc ern in g s up erv is io n. Se e id.

b. E le ve nth Ci rc uit

Ca ses H av e D ist inguis he d Lowe A s Lowe sim

ply stoodfor the propositio n that receipt of f ederal f unds wa s not by it se lf suf fi ci en t t o tr igg er

j ur isd ic tio n, it

r em ai ne d f

or sub se que nt p an el s of thi s C ourt t o de te rm ine w ha t a ddi tio na l f ac t or f ac ts h ad to be pr es en t f

or juri sd ic ti on to ex is t. Ac le ar body of lawgr ad ua lly e m er ge d. I n 19 76, thi s C ourt he ld ju ri s d i ct i o n ex i s t s wh er e t h e d ef en d an tkn o ws o f t h e f

ed er al g o v ern m en t ’s72

co nn ect io n t o t he fun di ng at i ss ue . U nit ed Sta tes v . L ange , 528 F . 2d 1 280, 128 7 n. 11 ( 5thCi r. 197 6) ( dis tin gui shi ng Lowe ). T his Co urt a ppl ie d th e sam e re as oni ng in a se co ndcas e in 19 77 . See B easley , 550 F . 2d at 27 3–74 ( hol din g th at j ur isd ic tio n e xis ts whe re the de fe ndant s ubm its f al se c la im s to the state , kno w ing th e st at e wil l re ly on t he m to see k re im

bu rs em en t fr om

th e fed eral go ve rn m en t). Then, in 198 0, w e clar ified that, e ven if the defendant has no kno wledge of f ederal invo lvem ent, j urisdictio n still exis ts if it is clear the federa l governm ent retained au th or it y to en su re fe de ral fun ds are p ro pe rly sp en t. See B aker , 626 F . 2d at 51 5 n. 6: [S ] om e co urts h av e expr es se d ar el uc tanc e to s ust ai n ac onvi ct ion unde r § 10 01 whe n th e fa lse state m en ts w er e subm itt ed to a pr ivate em plo y er und er gov er nm en t c ontra ct , and whe n th e de fe ndant h ad no kn owl ed ge of f

ed eral in vo lv em en t. See Lowe v. United States , 141 F. 2d 1 005 (5 th C ir . 194 4) . T he se c as es are c le ar ly dis tin gui sha

ble fr o m th e c as e w e c o n s i d ert o d ay s i n ce i n [c as es l i k e] Lowe it w as not apparent w hether the m atters involvi ng private contractors we re “ w ith in the j ur isd ic tio n of af ed er al de partm en t or

a ge nc y , ” w hil e in the case at hand agency

j urisdictio n is clear. [T he local agency ] wa s re qui re d to m ak e quart er ly r ep orts t o [ the f

ed er al a ge nc y ] , and [ the la tte r] r et ai ne d th e ult im at e au tho ri ty to se e that the f

ed er al f unds were p ro pe rly sp en t. (s om e ci ta ti on s an d i nt ern al qu ot at io ns m ark s o m it te d) . N ot o nly w as the lawr el at ing to w he the r j ur isd ic tio n e xis te d c le ar in thi s Ci rc uit pr ior to the m aj or ity ’ s c ontri but ion , but it a lso w as in ac co rd

w iththat ofGi ve n th at Lowe inv olv e d th e su ff ic ie nc y of fa c ts a lle g e d in

an in dic tme nt, Ibe lie ve it 11 is improper for

the majority

to speculate about what f acts we re “ quite likely ,” (O pinion at 56), “may have” exis ted, ( id. at 57), or the lack of which “stra ins credulity ,” ( id. ). 73 ev er y oth er Ci rc uit that ha d c ite d Lowe—al l o f whi ch di st in gu is he d t ha t ca se . See U nit ed Sta tes v . Sta nfo rd , 589 F . 2d 2 85, 297 ( 7thCi r. 197 8) ( ad opt ing , in ef fe ct , thi s C ourt’ s c onc lus ion s in Lange an d Be asley ); U nit ed Sta tes v . Ca nde lla , 487 F. 2d 1 223, 122 6–27 ( 2d C ir . 197 3) ( sam e) ; Eberling v. United States , 248 F . 2d 429, 435 ( 8thCi r. 195 7) ( sam e) ; U nit ed Sta tes v . G ibs on , 881 F . 2d 3 18, 322 –23 (6 th C ir . 198 9) ( ad opt ing , in ef fe ct , thi s C ourt’ s c onc lus ion s in Bake r ); United States v. M

onto ya , 716 F . 2d 1 340, 134 3–45 ( 10th C ir . 198 3) ( sam e) ; Nye &Nissen v. United States , 16 8 F .2d84 6, 8 50 –5 1 (9 th Cir . 19 48 ) (s am e). T he m aj or ity ’ s op ini on a lte rs thi s bo dy of w el l- se ttl ed

lawby a ddi ng f ac ts t o the ind ic tm en t i n Lowe that this Co urt i tse lf a cknow le dge d w er e not

pr es en t. T he

11 m aj or ity obs er ve s: It str ai ns c re dul ity

to be lie ve that a

shi pbui lde r unde r co ntr ac t w ith the f ed er al gov er

nm en t t o bu ild

shi ps w oul d no t be r equir ed to subm it pr ogr es s r ep orts, or

that the f ed er al gov er

nm en t l ac ke d th e “ ult im at e authority ” to ensure that it wa s actually getting what it pay ing for. (O pinio n at 57.) I n effe ct, the m aj ority is say ing th at—because (1) federa lNote that this result is contrar y to this C ourt’s holdingin Bake r that fede ral super

vision 12 satisfies § 1001’s jurisdictional re quirement. 626 F .2d at 514–15 nn.5–6. 74 supe rv isi on m

ust have be enpr es en t i n Lowe , and ( 2) thi s Co urt ne ve rthe le ss h el d the re w as no j ur isd ic tio n—the e xis te nc e of f ed er al sup er

vis ionhe re is ins uf

fi ci en t to tri gge r j ur isd ic tio n f

or pur pose s of § 10 01. 12 A s th is C ourt a cknow le dge d in Lowe , how ever, the only issue there w as w he the r al le gin g r ec ei pt o f fe de ra l f unds w as suf

fi ci en t t o tr igg er

j ur isd ic tio n. 141 F. 2d at 10 06: [T ] he validityof the indictm ent depends upon whether the alleged fa ct that the U nit ed

S ta te s r ei m

bur se d th e co m

pany f or it s payro ll paym en ts w as suf

fi ci en t t o m ak e the a lle ge d m isr ep re se ntatio n w ith respect to the pay

roll entry a m atter w ithin the j urisdictio n of a de partm en t or

a ge nc y of the U nit ed

S ta te s. Se e als o id

. (explaining th ere wa s no ind ication the ship build ing com pany wa s supe rv ise d by

af ed er al a ge nc y ); id. at

100 6–07 ( W al le r, J. , c onc ur ri ng) ( not ing that jurisdiction would have existed if som e degree of feder al supervision had be enpr es en t) . T hus, the m aj or ity ’ s a ssum pti on tha t so m e de gr ee of sup er vis ion w as pr es en t i s e nti re ly

w ith out f ound at ion . I t i s a lso c ontrary to howthi s and ev er y oth er Ci rc uit ha s a ppr oa ch ed Lowe up unti l this ins tant.Loweoc c up ie s li ttl e mor e tha n a sin g le pa g e in t

he fe de ra l r e po rt e r a

nd is utte rl y de vo id 13 of citation to authority . See 141 F.2d at 1006–07. Indeed, the only citation is to the statute at issue, 18 U.S.C. § 80, which prec eded § 1001. 75

c. R el ev ant

Sup re m e Co urt

A uth ori ty Lowe ac kn o wl ed g es n o au t h o ri t y fo r t h e i n t er p re t at i o n o f § 1 0 0 1 ’s j urisdictio nal requirem ent. Since Lowe , the S uprem e Court has provided 13 authorityholdi ng that § 1 001’s j urisdictio nal requirem ent is to be interpreted br oa dl y . Se e U

nit ed Sta tes v . R odge rs , 466 U . S. 475 , 479 , 904 S . Ct . 194 2, 194 6 (1984):

“ Jur isd ic tio n” is not

de fi ne d inthe statut e. W e the re fo re start w iththe assum ption that the legislative pu rpose is expressed by the ordinary m eanin g of

the w or ds u se d. T he m ost na tur al , non te ch nic al r ea din g of the statut or

y langua ge is that i t c ove rs a ll m atte rs c onf ide d to the authorityof an agency

or departm ent. T hus, W ebster’ s Third N ew In te rn at ion al D ic tio nary

122 7 ( 1976 ) br oa dly

de fi ne s “ j ur isd ic tio n” as , a m ong oth er

thi ngs, “ the li m its or

te rr ito ry w ith in whic h any particular powe r m ay

be exerc ised: sph ere of authority .” A de part m en t or age nc y has jur isdic tio n, in thi

s se nse, wh en it

has the pow er to ex er ci se aut hori tyin a pa rti cu lar

situat ion . U

nde rstood in this way, the phrase “within th e jurisdi ction” merelydifferentia tes the off ic ial , aut hori ze d fu nc tio ns o

f an age nc

y or d ep art m en t f rom matters periphera l to the bus iness of th at bod y. (em phasis add ed; m ost citation s and internal quo tation m arks om itted); Bry son v. United States , 396 U. S. 64, 70–71 , 90 S. Ct. 355, 359 (196 9): Be ca use the re is a va lid

le gis la tiv e int er es t i n pr ote ct ing the int eg ri ty of of fi ci al inquir ie s, w e thi nk the te rm “ j ur isd ic tio n” sho uld

not beIn my view, ther e ar e only

two possibili ties here . Either the major ity is wrongabout 14 Lowe , which I

think it i s, or the majority is corre ct, and the Supre me Court has over ruled Lowe su b s ile nti o. Withre sp e c t to the se c on d p os sib ili ty , a n a rgume nt c ou ld b e ma de that, at th e tim e Lowe was de cided, the Supre me Court had not y et established a framework f

or ana ly zing the jurisdictional require ment, althoug h it has done so since. The ref ore, the argument would g o, Lowewas ove rruled sub silentio bec ause it did not follow that framework. G iven, howeve r, that the majority ’s conc lusions are c ontrary to those of the other

Circuits that have c ited Lowe , I believe the first possibili ty to be the ca se. 76 gi ve n ana rro w or t ech ni cal m ean in g fo r pu rp os es of § 10 01 . A statutory basis for an agency ’ s request for inform ation provi des j ur isd ic tio n e noug h to pun ishf ra udul en t st at em en ts unde r § 10 01. (footnotes and citatio ns om itted). Inm y vie w , thi s C ourt’ s de ci sio ns i n H errin g et a l. are in ac co rd

w iththe Su pr em e Co urt’ s de ci sio ns i n R odge rs and B ry son , w hil e the m aj or ity ’ s op ini on i n t h i s ca s e i s n o t . Th e S up re m e C o u rt ’s i n s t ru ct i o n s we re t o re ad§ 1 0 0 1 ’s ju r i s d i c t i o n a l r e qu i r e men tb r o a d l y, ye tth e maj o r i t y re a d s i tn a rr o w l y. 14 3. Th e F

ed eral G ov ernm en t Su

pe rv ise d th e F

ed eral F unds O nc e one c onc lud es H

errin g and Bake r

c onst itu te bin din g auth or ity , and, by ex te nsi on, that j ur isd ic tio n e xis ts i f the re is fe de ra l su pe rv isi on o f the f

ed er al f unds atis su e, th e que st io n b eco m es whet he r th ere was fed eral supe rv is io n i n t hi s ca se . Unl ik e th e m ajor it y , (Opi ni on at 4 9– 50 ), I be li ev e th ere was supe rv is io n h ere. In suppo rt of its conclusion that there w as no sup ervision, the m aj ority relies on U nit ed Sta tes v . L utz , 154 F . 3d 5 81 ( 6thCi r. 199 8) . L utz r analoan or igi na tio n77

co m pany , w he re she f

ill ed out appl ic at ion s onbe ha lf

of pot en tia l bo rr ow er s and subm itt ed the m to pr ivate banks in o rd er to obt ai n H U D -b ac ke d lo an s f or tho se bo rro wers . Id

. a t 58 5. I n th es e ap pli catio ns, L utz c er tif ie d sh e ha d m et

f ac e- toface wit h h er cl ie nt s wh en sh e h adno t ac tu al ly don e so . Id . S he w as c onvi ct ed of vi ol at in g § 10 01 . Id. at

586 . O n a

ppe al , L utz m ad e tw o r el ev an t arg um en ts: (1 ) the statut e of

li m itatio ns h ad

r un; and ( 2) § 10 01’ s j ur isd ic tio na l r equir em en t was no t m et . Id

. at 5 86 . Wi t h r e s p e c tt o h e r

f i r s tar g u me n t , L u t z c o n t e n d e dth a t , s i n c e ( 1 ) th e c r i me was co m pl et e whe n s he “ su bm it te d t he in it ia l ap pl ic at io n fo rm s t o t he [ba nk ], ” (2) the statute of lim itations wa s five y ears, (3) the date on the form s was m ore than f ive y ears a go, and ( 4) no e vid en ce w as pr es en te d a t tri al ind ic at ing w he n th e fo rm s wer e act ua ll y

su bm it te d, t he st atut e o f li m it at io ns ha d ru n. Id . W ith respect to her second argum ent, L utz contended th ere wa s no eviden ce the form s had ever been subm itted to HUD ; therefore , § 1001’ s jur isdictio nal req ui rem en t was no t m et . Id . a t 58 7. T he S ixth C ir cu it re

j ec te d bo th arg um en ts. S om ewha t c onf usi ngl y , it concluded th at w hile there w as no jurisdiction for statute of lim itations purposes un ti l HUD actua ll y

rece iv edth e fo rm s, § 10 01’ s ju ris dic tio nal

re qui re m en t w asThe majority even quote s from the Six th Circuit’s discussion of the statute of 15 lim itatio ns : “At the time [the defe ndant] submi tted the forms . . . HU D did not have jur isd ic tio n b e c a

us e the fi na l lo an a

pp lic atio n p a c ka g e ha d n ot b e e n s ub mitte d to it. Further

more, HU D had no a

uthority over the lendinginstitution at this poi nt with reg ard to whe ther or not the institution would acce pt the loan. Ther efor e, the matter wa s not within HUD’s jurisdiction.” (O p i n i o nat5 1 (qu o t i n g Lut z , 154 F.3d at 586–87)).

78 sa tisf ie d e ven th ou gh th e fo rms ne ver rea ch ed HUD. Id

. a t 58 6–87 . A lth oughit

doe s no t so spe ci fy , the m aj or ity f oc use s e nti re ly

on the S ixth Ci rc uit ’ s tr eatm en t of

L utz ’ s f ir st arg um en t— i. e. , he r ar gum en t c onc er nin g th e statute of lim itations . In m y view, the m aj ority ’ s discuss ion of Lu tz is m isl ea din g 15 because it com

pletely fails to note that Lutz’ s second argum ent concerned § 10 01’ s j ur isd ic tio na l r equir em en t, and the S ixth C ir cu it he ld, a ft er a ddr es sin g that arg um en t at l en gth , that the r equir em en t w as sa tis fi ed : Th er e is n o im

pli ci t re qui re m en t that

the[fa lse ] sta te m en ts b e m ade di re ct ly to , or

even be rec ei ved

by, th e fe de ra l dep ar tmen t o r a ge nc y. Fa lse state m en ts m ad e in any m atte r w ith in the a ge nc y ’ s j ur isd ic tio n ar e w ith in the sc ope of

§ 10 01, and c ourts h av e uphe ld § 100 1 co nvi ct ion s f

or f al se state m en ts m ad e to p ri va te e nti tie s r ec ei vin g fe de ra l f unds or sub j ec t t o f ed er al r eg ulatio n or

sup er vis ion . H U D had sup ervi sor y authori tyov er

thele ndi ng i nst itu tio n with regard

to the loan s at issu e. H U D ha d vari ous re qui re m en ts and rules that the lending institu tions and loan origin ators we re e xpected to c om ply w ithin ac ce pti ng l oans f or the pr ogr am , inc lud ing the req ui rem en t t ha t fa ce-t o- face in te rv ie ws o ccu r. W hen Lutz sub mitted the fi nal loa n pa ck

ages to H U

D, wh ic h w er e appr ov ed

bythele ndi ngThe Six th Circuit’s analy sis in Lut z is consistent with how all of the 16 Circuits—including this one—have handled Loweup until the majority ’s opinion in this case . See supra Part I I .A.1.b (e x plaining that § 1001’s jurisdictional require ment is satisfied wher e either ( 1) the fe dera l gove rnment super vised the fe dera l funds at issue, or (2) the def endant ha d kn ow le dg e of

fe de ra l invo lve me nt) . Si g nif ic antl y , th e ma

jor ity fa ils to n ote thi s. 79 ins tituti on i n pa rt o n th e basi s of thefal se c er tif ic ati on, thi

s w as suf fic ie nt to c onst itu te a f

als e sta te m en t i n v iolati on o f § 1001 . 154 F.3d at 587 (em

phasis add ed; citations andquotatio n m arks om itted). 16 Si gn ifi can tl y , th e Si xt h C irc ui t wen t o n t o a ffi rm th e § 10 01 co nv ic ti on . Id . at 591. A cc or din gly , I dis ag re e w iththe m aj or ity that Lu tz sup ports the r es ult

it re ac he s. In ste ad of appl y ing the S ixth C ir cu it’ s de ci sio n in Lu tz , I w oul d a ppl y thi s Co urt’ s de ci sio n in Bake r . I n Bake r , this Court held “ supervisio n” exists where (1) the nonfederal e ntityto which the false state m ents wer e initially m ade w as required to subm it reports to the federal a gency , and (2) the feder al agency ret ai ne d aut ho rit y

to en su re fe de ral fun ds were p ro pe rly sp en t. See B aker , 626 F. 2d at 51 5 n. 6; se e als o H errin g , 916 F. 2d at 154 6–47 (finding jurisdiction where the non fe de ra l e nti ty

ha d to c om

ply w ithaf ed er al statut e be fo re it

c oul d r ec ei ve any f unds ); cf . W eb ste r’ s T hir d N ewI nte rn at ion al D ic tio nary 229 6 ( 1976 ) (d ef ini ng “ supe rv isi on” a s “ dir ec tio n, ins pe ct ion , and c ri tic al e va luatio n: ov ers ig ht ”).For an explanation of why

these lea ses wer e cr eate d, see supra note 6. 17 80 During the trial in this case, witnesses testified as follows: (1) the Federa l Highway Adm inistration and the Florida De partm ent of T ransportation agreed that Fl or ida w oul d r ec ei ve f

ed er al f unds , pr ovi de d a ll fe de ra l gu ide lin es w er e m et ; (2) Florida w as required, prior to rece iving funds, to certify all such guid elines w oul d be m et ; ( 3) if

F lor ida did not c om ply w iththe f

ed er al gui de lin es , it

w oul d los e fe de ra l f

unds ; and ( 4) one of

the f ed er al gui de lin es that F lor ida ha d to c om

ply with w as the DB E r equirem ent. B ased on this evidence, I w ouldhold th e fe deral ag en cy in th is cas e su pe rv is edth e fed eral fun ds at i ss ue . A cc or din gly , be ca

use I be lie ve sup er

vis ionw as pr es en t he re , I w oul d a f f i rm. B. F als ity T he m aj or ity

a lso r ev er se s G lov er ’ s c onvi ct ion s onCo unt s 5– 7 and 1 0–12 be cau se itco nc lu de s t he un de rlyin g e qu ip m en t l eas es can no t, as a m at te r of law, 17 co nst itu te f

al se state m en ts f

or pur pose s of § 10 01. I n it s ana ly sis , the m aj or ity co rr ec tly not es that m any

of our sis te r Ci rc uit s have uph el d c onvi ct ion s purs uant to § 100 1 w he re the de fe ndants “ m ad e pr om ise s or guarante es c onc er

nin g th ei r fu tur e ac tio ns tha t, a t the ti m e the y m ad e tho se pr om ise s, the y ha d no int en tio n of81

carr y ing out . ” ( O pin iona t 40 . ) I t f urthe r not es m any

of the se c as es inv olv ed

f al se guarantees m ade on applications for governm ent benefits—i.e. , instances where the de fe ndants qua lif

ie d f or af ed er al be ne fi t on ly

be ca use the y pr om ise d inthe ir ap pli catio ns t o pe rf

orm som e ac tio n inthe f

uture the y

ha d no int en tio n of

a ct ua lly pe rfo rm in g. (

Id. a t4 0 - 4 1 . ) To th i s p o i n t , I a g r e e wi t h th e maj o r i t y. T he m aj or ity

goe s onto co nc lud e, how ev er , that, be ca use c ontra ct s are not ap pli catio ns f

or be ne fi ts, the f

orm er c annot , a s am atte r of

law , c onst itu te f

al se state m en ts f

or pur pose s of the statut e. I n su

ppor t of thi s c onc lus ion , the opi nio n expla ins that ( 1) c ontra ct s on ly se rv e to e sta

bli sh a le ga l r el at ion shi p am ong the parties involv ed, ( 2) breac h is not illegal, and (3) “ effic ient” breach is often even s o ci al l y d es i rab l e. (O p i n i o n at4 1

– 4 3 .) In m y v i ew , t h i s p o rt i o n o f t h e majo ri t y’ s an al y sis is be sid e the poi nt. S ign if ic an tly , it is not j ust the e qui pm en t l ea se s, st an di ng alo ne , th atare at is su e h ere. T he G ove rn m en t di d no t pr ose cu te G lov er m er el y be ca use his c om

pany m ad e a co ntr ac tua l pr om ise it did not int en d to ke ep . R athe r, the G ove rn m en t prosecuted him

because he took the addi tio nal ste p o f p re s en t i n g h i s co m

p an y’ s contractual prom ises in writing to Granite—to dem onstrate his pu rported co m pl ia nc e wit h t he Fed eral Depa rtment o f Tran sp or ta ti on ’s DBE requi rem en t. Significantly , at the tim e these presentations wer e m ade, Glover knewthe leasesTh e ma jor ity c la ims the re is a

ne e d to avo id j ud ic ia lly

c re atin ga

natio na l “ fa lse 18 contra ct” law , under which mere ly enter ing into a c ontrac t absent an intention of pe rfor ming might expose a pe rson to fede ral prose cution. ( See Opinion at 46.) I must admit t his conce rn pe rp le xes m e , a s a

pe rs on c ann ot b e c onvic te d und e r § 10 01 un le ss t he Go ve rnme nt p ro ve s a ll five e lements of the c rime—including , signific antly , specific intent. See H erring , 916 F.2d at 1547. To reiter ate, it is not enteringinto a contra ct abse nt an intent to perfor m that trigg ers § 1001’s applica

bility . Rather, what trigg ers § 1001’ s applicability is taking the additional step of re prese nting to the g overnme nt that such a c ontrac t refle cts rea lity , knowingfull well it does not. See U

nited States v. Swearingen , 858 F.2d 1555, 1557–58 ( 11th Cir. 1988) (conc luding that prese nting sham transac tions as valid constitutes making a false statement). In the first instance , there is no specific intent to mislead the g overnme nt. In the sec ond, there is. Thus, it seems the majority has committed the log ical er ror of importing a

conce rn addr essed by

one element—spe cific intent—into its analy sis of another—whether there was a

false statement. See Bake r , 6 26 F .2 d at 51 6 ( no tin gthat th e sp e c if ic int e nt r e qu ir e me nt “ se rv e s to ins ur e a g a ins t punishing one who has c ommitt ed no culpa ble ac t”). In my

view, if ther e is any

conce rn reg arding“innoce nt” per sons potentially beingswept up into the statute’s scope , that conce rn should be addre ssed by

analy zing whethe r there was spec ific intent to mislead—not whether there was a

false statement. 82 did not r ef le ct the r ea lity

of the sit ua tio n, and h e kne wG ranit e w oul d r el y on t h e m. Mo re o v er , i f G ra n i t e h adn o tb ee n m i s l edi n t o b el i ev i n g Gl o v er ’s

18 co m pany w as in co m

pli an ce , the latte r w oul d no t have be enpart ic ipatin g inthe pr oj ec t. A s f

ar I a m c onc er ne d, the ana ly sis he re ne ed go n o f urthe r. I se e no tangi ble dif

fe re nc e be tw ee n th e equip m en t l ea se s inthi s c as e an d f al se state m en ts inc or por at ed int o a ppl ic at ion s f

or gov er nm en t be ne fi ts. I n m

y vie w , both f

al l w ith in § 100 1’ s sc ope be ca use both in vol ve de fe ndants ly ing to obt ai n gove rn m en t be ne fi ts t o w hic h th ey are not e nti tle d. O ne a ddi tio na l a spe ct

of the m aj or ity ’ s op ini on tro ubl es m e: th e fa lsi ty iss ue is be ing r ai se d su a spon te . A s th e iss ue appe ar s to be aque sti on o f fi rs tThe majority focuse s exclusively

on § 1001(a) (3), whic h is conce rned w ith whether 19 the re wa s a

fa lse wr iti ng . H a d th is i ssu e ha d b e e n r a ise d b y the pa rt ie s, Iwo uld

have wa nte d to a sk the m whe the r t

he y tho ught § 10 01 (a )( 2) might a lso a pp ly , a s th at pr ov isi on

re qu ir e s me re ly that there have be en a “ false . . . statement or re prese ntation” and make s no mention of a “ wr iti ng .” Af

te r r e vie wi ngthe ind ic tme nt a nd the re c or d, Iam no t, at th is s ta g e , c omf or ta ble concludingthe latter subse ction is inapplicable. 83 im pression in this Circuit, I am som ew hat reluctant to address it, given that it has not been briefed and argued in the adversarial context. I am also concerned 19 b e c au s e — ap a rtf

r o m i t s c o n c l u s i o n th a tc o n t r a c t s an dap p l i c a t i o n s s i mp l y m ust be tr eate d di ff

er en tly f or pur pose s of § 10 01

—the m aj or ity ’ s ana ly sis hin ge s e nti re ly on i ts a ppl ic at ionof

the S upr em e Co urt’ s de ci sio n in W illiams v. U

nited Sta tes , 458 U . S. 279 , 102 S . Ct . 308 8 ( 1982 ), w hic h is que sti ona bly r el ev an t i n th at

thi s Co urt pr ev iou sly

opt ed to ap ply it narr ow ly in United States v. Swe aring en , 858 F.2 d 1 55 5 (1 1t h C ir. 1 98 8) (pe r cu ria m ). T he de fe ndant i n W

il li ams wa s convicted un der 18 U. S. C. § 101 4, which prohibi ts m aking a “ false statem ent” to a fe derally insured bank. 458 U.S . at 28 0– 82 , 10 2 S . Ct. at30 89 –9 0. Th e d efen da nt ha d b een de po si ti ng ch eck s d rawn on o ne a cc ount

int o ase co nd a cc ount , kno w ing the re w er e ins uf fi ci en t f unds in the fir stacco un t t o c ov er t ho se ch eck s. Id . T he S upr em e Co urt ov er tur ne d th e convictio n, concluding a check could no t be a “ false statem ent,” since,84

“ te ch nic al ly

spe ak ing , ac he ck

is not af ac tua l a sse rt ion. . . and the re fo re c annot be charac terized a s ‘ true’ or ‘ false. ’ ” Id . a t 28 4, 102 S . Ct . a t 30 91. In Swearing en , this Court considered whether W ill iam s applied in a factual co nte xt n ot i nvol vin g th e pr es en ta tio n of an ov er dr awn c he ck

and c onc lud ed

it did no t. Swearing en inv olv ed tw o auto m obi le de al er s w ho t ook tur ns p re se nti ng the ir ba nkwit h d raft s d rawn on th e o th er’s d eal ers hi p. Id . at 1556. E ach such draft re pr es en te d th at

one de al er

ha d purc ha se d ac ar

f ro m the oth er , and tha t he w oul d pa y foritby hon or in g t he dra ft. Id. In actuality , no car s had been sold , but, since the bank w as c onvi nc ed

oth er w ise , the de al er s w er e ab le to m ai nta in art if ic ia lly in fla te d b al an ces an d re cei ve in te res t-f ree c red it . Id

. O ne of the dealer s was co nvi ct ed of vio la tin g 18 U . S. C. § 13 44( a) (2 ), w hic h r equir ed the G ove rn m en t t o pr ov e—i nt er al ia

—t ha t h e h adm ad e fal se rep res en ta ti on s. Id . at 1 55 5– 56 . On ap pe al , the de al er

c ite d W il li ams and argued that, beca use the Suprem e Court had he ld c he ck s c oul d no t be f al se state m en ts, the dr af

ts at i ssu e in h is c as e co uld not be co ns id eredfal se st at em en ts eit he r. Id . a t 15 57. T his Co urt so undl y r ej ec te d th e de al er s’ arg um en t:T h e m a j o r i ty d e c l i n e s t o a

p p l y Swearingen on the g round that the dra fts at issue in that 20 c a se inv olv e d f

a lse state me nts of

pa st f a c t, whe re the le a se s at is su e in t his c a se inv olv e on ly contra ctual promises. (O pinion at 46 n.30.) Iam not persua ded bec ause, a s alrea dy noted, the lease s in this case we re pr esente d to Granite a s indicative of r eality —specific ally , that Glover controlled the a ssets he cla imed to—when they wer e not. See supra note 6 and a ccompa nying text . 85 [T ] he [ de al er s] kne wthat the Bank b el ie ve d th at the . . . dr af

ts represe nted actual, legitim ate sales of vehicles, and that [they ] used that pe rc ep tio n to de ce ive the Bank i n or de r to o bta in an im m ed ia te cr ed it on n on- ex ist en t sa le s. A cc or din gly , thr oughthe [ sig ht] dr af ts inv olv ed in thi s c as e the [ de al er s] m ad e fa lse f ac tua l a sse rt ion s w ith th e sp eci fic in te nt to de frau d t he Ban k. Id. Inm

y vie w , the e qui pm en t l ea se s inthi s c as e pe rf orm ed the sam e func tio n as the dr af

ts i n Sw ea rin ge n. Se e id. at 1558 (characte rizing the “ sales” described in the dr af

ts a s “ sim ply ‘ pa pe r’ tr an sa ct ion s w ithno p ur pose oth er

than to obt ai n int er es t- fr ee f

inanc ing f

ro m the Bank” ). T he y

sho uld thu s be de em ed

f al se state m en ts t oo. 20 III. CONCLUSION Fo r the r ea sons state d, I w oul d a ff irm the m one y

launde ri ng and f

al se state m en t c onvi ct ion s.