1 District Judge of the Eastern District of Texas, sitting by

designation. UNITED STATES COURT OF APPEALS

For the Fifth Circuit

No. 96-50340

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

VERSUS

SHANNON KNOX; DAVID BRACE,

Defendants-Appellants.

Appeals from the United States District Court

for the Western District of Texas

May 1, 1997

Before POLITZ, Chief Judge, DeMOSS, Circuit Judge and JUSTICE, 1

District Judge.

DeMOSS, Circuit Judge:

A preacher and his financial advisor were caught in a

government sting designed to snare money launderers. Both raised

entrapment at trial, but the jury rejected the defense and they

were convicted of laundering drug proceeds. Because the government

failed to prove that the preacher was likely to engage in money2

launderin g absent the government’s conduct, we hold that he was

entrapped as a matter of law.

BACKGROUND

Defendant/Appellant Rever end David Brace was pastor of the

Faith Metro Church in Wichita, Kansas. Faith Metro had financial

d ifficulties and, by late 1993, was heavily in debt. The church

had to pay over $60,000 per month in debt service and needed to

raise $10 million to pay its bondholders and other creditors. In

an effort to raise money, Brace hired a Houston financial

consulting firm First Diversifi ed Financial Services, in early

1994. Brace met with Mike Clark, the president of First

Diversified, and Clark’s assistant, 24-year-old Defendant/Appellant

Shannon Knox. Brace paid First Diversified $75,000 to prepare a

prospectus for a $10.8 million limited private offering by Faith

Metro.

Under the terms of th e prospectus, Faith Metro offered 432

units of senior secured notes bearing 12.5% interest. The units

were $25,000 each, with a minimum subscription of two units

($50,000). If all units were sold, $10.8 million would be raised,

of which $9.375 million went to the church. Payment on the notes

would begin in September 1995 with quarterly payments of $337,500.

Thus, interest of $112,500 accrued monthly on the notes. The

church could begin repaying the principal any time after December2 Under the terms of the first prospectus, the interest rate

was 10%.

3 31, 1996, and the notes matured on December 31, 1999. Thus, under

the terms of the prospectus, Faith Metro would have use of $9.375

million for up to five years, accruing $112,500 per month in

interest (paid quarterly), with the principal of $10.8 million due

for repayment on December 31, 1999.

The first printing of the prospectus was on Septe mber 1,

1994. 2 Knox sent the prospectus to approximately 40 broker

dealers, and received responses from two. The second printing of

the prospectus was on December 1, 1994. Copies were sent to 32 or

33 broker dealers, and Knox received responses from three. None of

these responses proved fruitful and, ultimately, no money was

raised through the private offering.

In Octo ber or November 1994, Knox met Roy Clarkston, who

w orked for the Brazos Valley Small Business Development Center.

Clarkston had several clients in the Bryan-C ollege Station area

interested in private placements, so Clark, who was also at the

meeting, gave Clarkston a copy of the Faith Metro prospectus. In

mid to late February 1995, Clarkston told Knox that he had several

potential investors in San Antonio. Clarkston told Knox that he

knew them thr ough his business dealings in South and Central

America . Brace was not present at any of these meetings and did

not meet Clarkston until March 24, 1995.

At the same time Clark and Knox were seeking financing for4

Faith Metro, undercover federal agents were running an elaborate

sting operation in San Antonio designed to catch money launderers.

Beginning in October 1994, undercover agents from the United States

Drug Enforcement Agency, the Internal Revenue Service, and United

States Cu stoms were involved in the operation. As part of the

sting operation, undercover agents investigated Clarkston, who they

suspected was a money launderer. The undercover agents told

Clarkston that they were seeking to l aunder cocaine proceeds and

requested his a ssistance. Clarkston suggested several long-term

laundering schemes, including investing in a cattle business and a

sports bar, but the undercover agen ts rejected the ideas, saying

they were interested in short-term investments.

In early March 1995, Clarkston told the undercover agents that

he had a “major big time guy,” a chur ch group, anxious to do

business. At this time the undercover agents had no knowledge of

Brace or Knox. On March 17, 1995, Clarkston met with the

undercover agents in San Antonio and explained that he knew a

minister who was interested in laundering cocaine funds, and that

the preacher’s representative, his financial advisor, was in town

and anxious to meet with them. The undercover agents explained to

Clarkston that they did not want innocent people involved in the

business, and asked him if the minister knew they were cocaine

traffickers and that the money would be cocaine proceeds.

Clarkston replied that the preacher and the other person knew and3 Clarkston did not t estify at trial; instead, one of the

undercover agents testified as to Clarkston’s statements regarding

Brace and Knox. Knox objects that Clarkston’s statements are

hearsay and should not have been admitted. We address this issue

below.

4 This conversation, unlike later ones, was not taped. Knox

testified that the undercover agents did not tell him they were

drug dealers. The veracity of the conversation, however, was a

credibility issue for the jury.

5 did not care. 3

Later that day, Knox met with Clarkston and the u ndercover

agents. Knox said that he was representing Brace and that he was

there to negotiate a deal. Early in the conversation, the

undercover agents told Knox that the money was from drug proceeds;

Knox said that this was not a problem. 4 Knox showed the prospectus

to the undercover agents, who indicated that they might be able to

lend Brace $3 million.

On March 24, the undercover agents met Brace for the first

time at a meeting also attended by Knox and Clarkston. The

undercover agents told Brace that t hey would be able to loan him

the ent ire $10 million, not just the $3 million previously

discussed. To make sure that Brace and Knox could handle such a

large sum, the undercover agents told them that they would have a

practice transfer of $100,000, a condition to which Brace readily

agreed. The undercover agents then informed Brace that the money

came from the sale of cocaine, and that he was being asked to5 One of the undercover agents actually said, “he is asking you

to launder money.” The government informed Brace that the money

was from drugs only six pages into the transcript of the meeting.

6 Brace stated that:

[E]ven the last two days, my office called and let me

know th at someone in Kansas had, won the lottery and

they gave our church 5,000 dollars. Uh... I have

monies th at I know that come to the church. I don’t

have a questionnaire... where these monies come from.

***

I know I get monies... That are from sources that, uh,

would be questionable.

***

Uh, I ask, and it’s important I think for you to know

I, I prayed to God... I said God, because I wanted to

know if I was supposed to do this...

***

God said that.. . He helped put this, this together.

So I feel comfortable because of that.

6 launder it. 5 Brace stated that he was not troubled by the money’s

source. 6 At the end of the meeting, Brace said he was ready to

start the test mone y, but the undercover agents told him to have

patience.

B race and Clarkston met with the undercover agents on April

26. Before the meeting, Knox told the undercover agents that he

and Brace had already “contrived a system” to quickly deposit and

transfer the first $100,000. At the meeting, the undercover agents

gave Brace an account number for an undercover account in a London7 Knox never brought up the subject again, but the undercover

agent questioned him about it often. Knox argues that it was plain

error for the district court to admit the extrinsic evidence of

Knox’s solicitation of murder. We address this issue below.

7 bank where Brace was to wire the $100,000 in the first test. Brace

was given $100,000 in cash, which he wired to the English bank the

next week.

On May 5, the undercover agents again met with Brace in San

Antonio. The undercover agents suggested another $100,000 test,

this time to a domestic accou nt controlled by the undercover

agents. Brace agreed to this, stating that to conceal the source

o f the money, he would carry it on his books as a loan. The

undercover agents again gave Brace $100,000 in cash. As he counted

it, he commented, “I have a feeling that neither one of you, have

ever come across a pastor like me.” Brace took the money and wired

it the account.

Knox called one of the undercover agents on May 10. During

the conversation, Knox mentioned that he “kn[e]w a couple of people

that deserve a bullet,” and inquired, “can we work on that.” Knox

then stated that “I got a couple of problems, that I’ m trying to

alleviate but if, uh they don’t alleviate I, uh I might need some

services of some kind,” referring to having someone killed. 7

On May 12, the undercover agents met with Brace, Clarkston and

Knox, and delivered the cash for another test, this time $150,000.

Four days later Brace and Knox wired the money to the English bank.

The undercover agents told Brace and Knox that they would soon be8 Clarkston was also charged in the ind ictment, but pleaded

guilty.

8 ready to transfer the entire $10 million.

On June 21, the final meeting took place. The undercover

agents met Brace and Knox in a San Antonio parking lot and gave

them three c anvas bags purportedly containing $10 million. The

bags actually contained an amount of newspaper clippings

approximating the weight of $10 million in cash. Brace and Knox

were arrested as they left the parking lot.

Brace and Knox were charged with money laundering in a four

count indictment. 8 In Count One, Brace and Knox were charged with

conspiring to launder money in violation of 18 U.S.C. § 1956(h).

In Count Two, Brace was charged with laundering $100 ,000, and

aiding and abetting Clarkston, in violation of 18 U.S.C. §§ 2 and

1956(a)(2)(B)(i). In Count Three, Brace was charged with

laundering $100,000 in violation of 18 U.S.C. § 1956(a)(3)(B). In

Count Four, Brace and Knox were charged with laundering $150,000,

and aiding and abetting each other, in violation of 18 U.S.C. §§ 2

and 1956(a)(2)(B)(i). After a jury trial, Brace and Knox were

convicted on all counts and sentenced to 175 and 97 month

imprisonment, respectively.9 In his brief, Knox does not argue that he was entrapped as a

matter of law. Accordingly he waived the issue and we do not

address it.

9 DISCUSSION

Entrapment as a Matter of Law

Brace ar gues that, as a matter of law, he was entrapped. 9

“Where the Government has induced an individual to break the law,

and the defense of entrapment is at issue, . . . the prosecution

must prove beyond reasonable doubt that the defendant was disposed

to commit the criminal act prior to first being approached by

Government agents.” J acobson v. United States

, 503 U.S. 551, 548-

49 (1992). The government concedes that Brace was induced;

therefore, the evidence must prove bey ond reasonable doubt that

Brace was predisposed to launder money. Because this is a

sufficiency review, we will reverse only if no rational juror could

have found pre disposition beyond a reasonable doubt. S ee United

States v. Byrd , 31 F.3d 1329, 1335 (5th Cir. 1994), cert. denied

,

115 S. Ct. 1432 (1995).

The Supreme Court most re c ently addressed entrapment and

predisposition in Jacobson v. United States , 503 U.S. 551 (1992).

In Jacobson

, government agents engaged in a

campaign of phony mail ings to induce a Nebraska

farmer to violate the ban on child pornogra p hy

contained in the 1984 Child Protection Act. After

seven or eight mailings spanning 26 months,

Jacobson succumbed and ordered an illegal magazine.

The Supreme Court held as a matter of law that

Jacobson h ad been entrapped. . . . Given the

government’s persistent encouragements, the Supreme10 Court found that Jacobson’s “ready response to

these solicitations cannot be enough to establish

beyond a reasonable doubt that he was predisposed,

prior to the Gove rnment acts intended to create

predisposition, to commit the crime.”

United States v. Sandoval

, 20 F.3d 134, 137 (5th Cir. 1994)

(quoting Jacobson

, 503 U.S. at 553). The Court summarized

entrapment law, stating that “[w]hen the Government ’s quest for

convictions leads to the apprehension of an otherwise law-abiding

citizen who, if left to his own devices, likely would have never

run afoul of the law, the courts should intervene.” J acobson

, 503

U.S. at 553-54.

The en banc Seventh Circuit recently wrestled with the meaning

of Jacobson in United States v. Hollingsworth

, 27 F.3d 1196 (7th

Cir. 1994) (en banc). Writing for the majority, Chief Judge Posner

stated that in examining predisposition, we must ask ourselves what

the defen dant would have done, had the government not been

involved. See id

. at 1199-1200. To properly answer that question,

we must look to more than the defendant’s me ntal state; we must

also consider the defendant’s skills, background and contacts. As

Chie f Judge Posner explained, predisposition “has positional as

well as dispositional force. The defendant must be so situated by

reason of previ ous training or experience or occupation or

acquaintances that it is likely that if the government had not

induced him to commit the crime some criminal would have done so.

. . .” I d

. at 1200. A defendant may have the desire to commit the1 0 We echo the Seventh Circuit’s statement that “lack of present

means to commit a crime is alone [not] enough to establish

entrapment if the government supplies the means.” Hollingsworth

, 27 F.3d at 1202 (emphas is in original). Instead, we are only

speaking of individuals who, but for the government’s inducement,

likely would not commit the offense. Id . at 1202-03.

11 crime, but may be without any ability to do so. The defendant is

a ble to commit the crime only when the government steps in and

provides the means to do so. 10 In those cases, we cannot say that,

absent government involveme nt, the defendant would likely have

committed the crime.

The facts of Hollingsworth illustrate the Seventh C ircuit’s

point. The H

ollingsworth defendants were an orthodontist and a

farmer, both from Arkansas. The pair, who had attempted and failed

at many business ventures, decided to become international

financiers, “a v ocation for which neither had any training,

contacts, aptitude, or experience.” I d

. at 1200. They secured two

foreign banking licenses, one from Grenada, and attempted to make

money. Unfortunately, they had no customers and were rapidly going

broke. The orthodontist, deciding to raise capital by selling the

Grenadan banking license, placed an ad in USA Today offering the

license for $29,950.

A Customs agent saw the ad and, “[k]nowing that foreign banks

are sometimes used for money laundering,

. . . assumed that someone

who wanted to sell one would possibly be interested in money

laundering.” I d

. (internal quotation omitted). The agent, acting12

undercover, contacted the orthodontist and, ultimately, persuaded

him to launder money. The orthodontist and farmer were convicted

of money laundering.

The en banc Seventh Circuit reversed, stating that, “[h]ad the

government left [him] ‘to his own devices’

. . . in all likelihood

[the orthodontist], a middle-aged man who so far as anyone knows

had never before committed any crime, would never have committed a

money-laundering or related offense.” I d

. at 1201-02 (quoting

Jacobson

, 503 U.S at 553). The government “turned two harmless,

though weak, foolish, . . . and greedy, men into felons.” Id . at

1202. Chief Judge Posner made clear that “[w]hatever it takes to

be come an international money launderer, they did not have it.”

Id

. “Even if they had wanted to go into money laundering before

they met [the agent,]

. . . the likelihood that they could have

done so was remote. They were objectively harmless.” I d

. It was

“highly unlikely that if [t he agent] had not providentially

appeared someone else would have guided them into money laundering.

No real criminal would do business with such [novice s].” Id . at

1203.

We recognize that the Seventh Circuit’s reading o f Jacobson

has not been universally embraced. The Ninth Circuit has rejected

the Seventh Circuit’s positional predisposition requirement and the

First Circuit has adopted a different test. See United States v.

Thickstun

, 1997 WL 152744, *4 (9th Cir. April 3, 1997); United1 1 In this case, the result woul d not differ under the First

Circuit’s Gendron test. The government failed to prove that real

drug dealers would provide the same, or even similar, terms to a

launderer as the undercover agents offered Brace. Thus, the

government failed to offer any evidence that Brace would accept an

“ordinary opportunity” to launder money.

Under the deal worked out between Brace and the undercover

agents, Brace would have the use of $10 million for four years. He

would pay back $50,000 a month for the first two years, and then

$100,000 for the last two. At the end of four years, a balloon

payment of $6.4 million would be due. The money would be paid back

13 St ates v. Gendron , 18 F.3d 955, 962-63 (1st Cir. 1994); s ee also

Hollingsworth

, 27 F.3d at 1211 (East erbrook, J., dissenting)

(criticizing positional predisposition requirement). In Gendron

,

then Chief Judge (now Justice) Breyer held that Jacobson stands for

the proposition that in trying to induce the target of a sting to

commit a crime, the government may not confront him with

circumstances that are different from the ordinary circumstances a

real criminal would use in inducing one to engage in wrongdoing.

See Gendron , 18 F.3d at 962 (proper inquiry for predisposition is

“how the defendant likely would have reacted to an ordinary

opportunity to commit the crime”); Thickstun

, 1997 WL 152744, at *4

(following Gendron ). Thus, the government must show that a

defendant would have committed the crime when “ faced with an

ordinary `opportunity’ to commit the crime rather than a special

`inducement.’” Id . at 963.

Nonetheless, we are persuaded that the Seventh Circui t ’s

Hollingsworth decision is correct. 11 S ee Paul Marcus, Presentingwithout interest. With the undercover agents’ approval, Brace

would use the money to pay the church’s debts. This arrangement

was similar to Brace’s proposal in the prospectus, except the

payments were lower and there was no interest.

This structuring was necessary to Brace’s participation. Brace

had pressing financial needs and needed to restructure his debts.

H e needed the use of $10 million for several years. Had the

laundering of the $10 million been structured the same as the test

amounts, the scheme would have offered no benefit to Brace. Under

the tests, Brace had to immediately wire the money, and thus could

not use it. Without use of the money for several years, Brace had

no incentive to launder money. Therefore, without the deal being

structured as it was, Brace would not have laundered money.

The gov ernment presented no evidence as to what is involved in

an ordinary opportunity to launder money. Perhaps real drug

dealers regularly give launderers the interest free use of millions

of dollars for several years, with low monthly payments and a large

balloon payment. If that is the case, then we can infer that Brace

would accept an ordinary opportunity to launder drug proceeds.

But, it seems just as likely that real drug dealers would not want

their money tied up for years, with only token payments coming back

at first. It also seems just as likely that real drug dealers

would not allow a launderer to use $10 million in to-be-laundered

cash to pay off current debts, hoping that an income stream was

available to pay them back. Instead, real drug dealers might only

give the cash as needed, and ask that it be laundered immediately,

so that the launderer receives no benefit from the use of the

money, as in the tests. If the latter scenario is how real drug

dealers operate, then Brace would like ly not have accepted an

ordinary opportunity to launder money.

The fact is that we do not know what constitutes an ordinary

opport unity to launder money. This is a subject on which the

record is sil ent. Because the record does not show what is an

ordinary opportunity to launder money, it follows that it provides

no support for the proposition that Brace would accept an ordinary

opportunity to launder money. Because predisposition is an issue

on wh ich the government bears the burden of proof, we would hold

that, under the First Circuit’s test, the evidence is insufficient

to conclude that Brace was predisposed to launder money.

14 Back From the [Almost] Dead, the Entrapment Defense

, 47 F LA

. L. R EV

.

205, 233-34 (1995) (arguing H ollingsworth is proper approach to1 2 In fact, in its brief, the gover nment fails to even cite

Hollingsworth, let alone deal with it substantively.

15 entrapment law). The Supreme Court instructs that in determining

predisposition we are to ask what the defendant would have done

absent government involvement. To give effect to that command, we

must look not only to the defendant’s mental state (his

“disposition”), but also to whether the defendant was able and

likely, based on experience, training, and contacts, to actually

commit the crime (his “position”).

We are called upon to determine whether the government proved

beyond a reasonable doubt that Brace w as predisposed to launder

money. Following H ollingsworth

, we look to Brace’s position , as

well as his mental disposition. The evidence of Brace’s mental

disposition t o launder money is close. Nonetheless, we must

reverse because the government failed to prove that Brace, absent

government involvem ent, was in a position to launder money.

Therefore, the evidence is insufficient to prove tha t Brace was

predisposed to launder money.

The government argues that the evidence shows that Brace was

predisposed to la under money. The government, however, fails to

address the positional and disposit ional aspects of predisposition. 12 All of the evidence the government adduced at trial

went solely to Brace’s mental disposition. The government offered

no evidence that Brace was in a position to launder money. The16

government offered no evidence that real drug dealers would use a

novice such as Brace to l aunder money. Brace had never been

convicted of a crim e, and, as far as the record shows, had never

committed a crime worse than speeding before he met the undercover

agents. The evidence shows that Brace certainly had never

laundered money before, and knew li ttle, if anything, about the

subject. In fact, he had to send an associate to the library to

figure out the mechanics of laundering money. It is possible that

real drug dealers often use such ignorant and naive individuals to

launder millions of dollars. If that is the case, the government

offered no proof of it.

The government failed to prove that real drug dealers would

use a church to launder money. The only evidence that a church

might be useful in money laundering came when Brace’s counsel was

cross-examining one of the undercover agents. When asked whether

a real drug dealer would use someone who “didn’t know what the hell

he was doing,” and “was totally inefficient,” the undercover agent

responded that:

[P]erhaps, perhaps not, depending on what he -- in

the whole gist of the thing, the fact that he had a

church, that was golden to me. That would have

been golden because nobody looks at a church.

This statement is too vague and non-committal to be evidence of

anything. The undercover agent says “perhaps, perhaps not,” and

then says that a church would be “golden” to him

, not whether a

real drug dealer would find it so.17

The government never adduced evidence that a church would be

valuable in money laundering, or that a church has ever been used

in money laundering. The only evidence the government offered on

the subject established that no church has ever knowingly been used

to launder drug money. On cross-examination of Knox, the Assistant

United States Attorney (“AUSA”) asked whether Knox could “identify

even a single church company in the United States that’s ever

knowingly taken purported drug proceeds.” Knox responded that he

had no information regarding that, and the AUSA asked, “Never heard

of that before?” To which Knox responded, “No, sir. Not thus

far.” It is possible that drug dealers regularly use churches to

launder money, and that a willing, though inexperienced, pastor

would be an invaluable asset. That, however, is not in the record,

and this is an issue upon which the government bore the burden of

proof. On the record before us, the government failed to prove

that any church has ever been used to launder money, or that a

church would even be useful in laundering money.

Aft er examining the record, we must conclude that the

government failed to prove that Brace was in a position to launder

money. When we ask the question of what Brace would have done if

he had never met the undercover agents, we cannot answer “launder

money for real drug dealers.” In all likelihood, Brace never would

have laundered money, but inste ad would have missed his bond

payments and been forced into bankruptcy, as ultimately happened.

Because the government failed to establish that Brace would have1 3 Brace raises several other issues in his brief. Because we

reverse his convictions based upon the sufficiency of the evidence,

we do not address those other issues.

1 4 Bra ce does not raise this issue. Accordingly, we only

consider the issue as it relates to Knox.

18 laundered money abs ent government involvement, the evidence is

insufficient to prove predisposition. Accordingly, we hold that

Brace was entrapped as a matter of law, and his convictions must be

reversed. 13

Entrapment Jury Instruction

Knox argues that the district court erred in using the pattern

jury instruction on entrapment after Jacobson

. Fifth Circuit

Pattern Instruction No. 1.28. We recently held that the entrapment

pattern jury instruction is correct post- Jacobson

. United States

v. Hernandez , 92 F.3d 309, 311 (5th Cir. 1996), c ert. denied , 65

U.S.C.W. 3692 (April 14, 1997) (No. 96-7257). Accordingly, his

claim must fail.

Hearsay as to Clarkston’s Statement

Knox argues that the district court erred in admitting

Cla rkston’s hearsay statement. 1 4 The undercover agent testified

that on March 17, Clarkston told him that Brace and Knox knew, but

did not care, that the undercover agents were cocaine traffickers

and that the funds were cocaine proceeds. The statement was19

a dmitted under Federal Rule of Evidence 801(d)(2)(E) as “a

statement by a co-conspirator of a party during the course and in

furtherance of the conspiracy.” To support admission of an out of

court statement under this provision, the proponent must show by a

preponderance of the evidence that (1) a conspiracy existed; (2)

the statement was made during the course and in furtherance of the

conspiracy; and (3) the declarant and the defendant were members of

the conspiracy. U nited States v. El-Zoubi

, 993 F.2d 442 (5th Cir.

1993). Knox argues that there is no evidence that he or Brace were

Clarkston’s co-conspirator at the time the statemen t was made;

thus, it was not made during the course of the conspiracy.

The evidence was sufficient for the district court to find by

a preponderance of the evidence that the conspiracy existed at the

time of Clarkston’s statement. In determining whether a conspiracy

exists, the district court is free to look at all evidence,

including the putative hearsay statement. S ee Bourjaily v. United

States

, 483 U. S. 171, 175-180 (1987) (applying F E D

. R. E VID

.

104(a)); United States v. Triplett , 922 F.2d 1174, 1181 (5th Cir.

1991). The evidence clearly established that Clarkston and Knox

had previously met and were in contact with each other. On the

morning of March 17, Clarkston told the agents that he had a

preacher interested in laundering money and t hat his financial

advisor was in town. Just a few hours later, Clarkston produced

Knox and Knox agreed to launder money for the undercover agents.20

Knox’s quick arrival and ready agreement to launder could be read

as evidence that he and Clarkston were already part of a conspiracy

to launder money wh en Clarkston made the statement that morning.

Considering this evidence, as well as Clarkston’s statement that

Knox knew the money was drug proceeds, yet did not care, the

district court could have reasonably concluded that Clarkston and

Knox were already part of a conspiracy to launder money. Thus, the

statement was an admission of a co-conspirator and not hearsay.

Admission of Evidence of Solicitation of Murder

Knox argues that the district cou rt erred in admitting

evidence regarding his solicitation of murder. Knox admits that he

failed to object at trial; our review, therefore, is for plain

error. We will correct plain error only if (1) there is error, (2)

which is clear or obvious, (3) which affected substantial rights,

and (4) which will seriously affect the fairness, integrity or

public reputation of judicial proceedings if allowed to stand. S ee

United States v. Clements

, 73 F.3d 1330, 1337 (5th Cir. 1996);

United States v. Calverley

, 37 F.3d 160, 162-64 (5th Cir. 1994) (en

banc). Therefore, our first task is to determine if there is

error. Calverley , 37 F.3d at 162 (“There first must be error.”).

If we determine that th e district court did not err in admitting

the solicitation of murder evidence, then our inquiry need go no

further.1 5 The government argues that the evidence of solicitation of

murder is not extrinsic

, but rather is intrinsic evidence, which is

not governed by Rule 404(b). S ee United States v. Coleman

, 78 F.3d

154, 156 (5th Cir.), cert. denied

, 117 S. Ct. 230 (1996). Because

there is no plain error either way, we assume, without deciding,

that the evidence of solicitation of murder is extrinsic.

16 Rule 404(b) provides that:

Evidence of other crimes, wrongs, or a cts is not

admissible to prove the character of a person in order

to show action in conformity ther ewith. It may,

ho wever, be admissible for other purposes, such as

proof of motive, opportunity, intent preparation,

plan, knowledge, identity, or absence of m istake or

21 The district court allowed evidenc e that Knox asked the

undercover agents to kill someone. Specifically, Knox told the

undercover agents that he knew “a couple of people that deserve a

bullet,” and asked “can we work on that.” The next day, the

undercover agents asked whether he still needed the hit, and Knox

responded that his situation had not become a problem yet, but if

it did, his “wrath is just going to be biblical.” The undercover

agents raised the issue with Knox twice more. Both times Knox said

that he longer needed anyone killed. The last time the issue was

raised, Knox stated that his problem had abated, and “I don’t have

to get violent with anybody so I’m happy about that. . . . [T]he

other day I really didn’t wanna have to go to extremes but I wanted

to know I kinda had the ability to if I needed to.”

Knox argues that this testimony is extrinsic evidence 15 (that

is, evidence of other crimes) and should be inadmissible under

Federal Rule of Evidence 404(b). 16 “Extrinsic offense evidence isaccident. . . .

17 Federal Rule of Evidence 403 provides that:

Although relevant, evidence may be excluded if its

probative value is substantially outweighed by the

danger of unfair prejudic e

, confusion of the issues,

or misleading the jury, or by consideration of undue

delay, waste of time, or needless presentation of

cumulative evidence.”

22 properly admitted under Rule 404(b) only if (1) it is relevant to

an issue other than the defendant’s character, an d (2) its

probative v alue is not substantially outweighed by its undue

prejudice” under Federal Rule of Evidence 403. 17 U nited States v.

Buchanan

, 70 F.3d 818, 831 (5th Cir. 1995), cert. denied , 116 S.

Ct. 1340 (1996); see also United States v. Route , 104 F.3d 59, 63

(5th Cir. 1997); United States v. Beechum

, 582 F.2d 898, 911 (5th

Cir. 1978). Knox argues that the solicitation of murder is only

relevant as to his character. It is not relevant to whether he

laundered money, but only serves to show that he is a bad man who

deserves to be punished. We disagree. Knox’s defense at trial was

entrapment. The government, therefore, was required to prove

beyond a reasonable doubt that Knox was predisposed to launder

money. The government did so by having Knox himself testify, via

the undercover tapes, that he was experienced in drug trafficking

and knowledgeable of criminal activity. Through this evidence, and

through Knox’s solicitation of murde r, the government sought to

prove that Knox was predisposed to launder money.23

At trial, the jury essentially saw two Shannon Knoxes. The

jury saw the Knox of the undercover tapes, the young man who told

the undercover agents that his father was friends with a mafia

hitman, and that as a young boy he had seen a man killed. The Knox

of the undercover tapes told the undercover agents that he had

experience in the drug business, and that two years earlier he “had

a guy that was making a run to Cincinnati

. . . and he had a

Cincinnati connection to buy ‘em three [kilograms of cocai ne].”

The Knox of the undercover tapes spok e knowledgeably about

processing and dealing cocaine, and said that he knew the biggest

drug dealer in Pasadena. The Knox of the undercover tapes told the

undercover agents that he was not worried about federal undercover

agents because he “figure[d] if you’re going to get problems with

the feds, they’re easily purchased,” and stated that he had “always

had friends in the judi cial system downtown that have always

cleaned [him] up.”

The Knox who testified at trial was a quite different figure.

He claime d that all the things he had told the undercover agents

were lies, that he was just “puffing” and “fun nin’,” so as to

create a “lev el of comfort” with the putative Colombian drug

dealers. He stated that he had no cocaine trafficking experience,

other than buying small amounts for personal use, and that he had

no Cincinnati connection. The Knox at trial stated that he did not

know the biggest drug dealer in Pasadena, and that he had no

friends in the judicial system who could help him out. He stated1 8 At trial, Knox explained away his comments by stating that

he solicited murder for “no particular reason.”

24 that most of his knowledge of drug trafficking and the underworld

came from “things seen in movies and read in books and magazines.”

It was in this context that the government put on evidence

that Knox solicited murder from the undercover agents. The

government was attempting to show the jury that Knox was the man on

the tapes, experi enced in drug trafficking and the underworld, a

man who would order a hit on an associate giving him trouble. The

Knox of the undercover tapes was a man predisposed to launder

money, while the Knox testifying at trial was an inexperienced

innocent, whom the jury might thi nk had no predisposition to

launder. The jury was entitled to decide which picture of Knox was

more credible, the one on the undercover tapes, or the one

testifying at trial. By presenting evidence of Knox telling the

undercover agents that he had some pe ople “that deserve[d] a

bullet,” and that he might need some “services of some kind,” the

government could show the jury that the Knox of the undercover

tapes was the real Knox. The jury could conclude that a person

just “fun nin’” would not solicit murder and, therefore, the real

Knox was on the undercover tapes, not in the courtroom. 18 If the

jury believed the government’ s portrayal of Knox, it could infer

that he was predisposed to launder money. The evidence, therefore,

was relevant to the main issue at trial: predisposition.

Having determined that the solicitation of murder evidence is25

relevant to an issue other than Knox’s character, we must next

determine whether its probative value is substantially outweighed

by the danger of unfair prejudice. Evidence of solicitation of

murder is prejudicial to a defendant. S ee

, e.g.

, United States v.

Limones

, 8 F.3d 1004, 1008 (5th Cir. 1993) (evidence of murder

prejudicial); United States v. Fortenberry

, 860 F.2d 628, 632 (5th

C ir. 1988) (evidence of violent crimes highly prejudicial).

Nonetheless, Knox has not shown that the danger of unfair prejudice

resulting from this evidence substantially outweighs its highly

probative value. Testimony regarding solicitation of murder did

not dominate the trial. In a seven day trial comprising over 1400

pages of trial transcript and hundreds of pages of undercover tape

transcripts, references to Brace’s solicitati on of murder spans

only a few pages. C f

. Fortenberry

, 860 F.2d at 632 (evidenc e of

extrinsic offenses “ occupied more of the jury’s time than the

evidence of the charged offenses”). After reviewing the record, we

are not convinced that this evidence was likely to lead the jury to

base its verdict on an improper basis. See Fed. R. Evid. 403

advisory committee’s note; Fortenberry , 860 F.2d at 632 (evidence

likely to insp ire emotional basis for verdict); U nited States v.

McRae , 593 F.2d 700, 707 (5th Cir. 1979) (noting that Rule 403's

major function is only to exclude matters of slight probative

force, "dragged in by the heels for the sake of prejudicial

effect").26

Because the extrinsic evidence of solicitation of murder was

relevant to Knox’s predisposition, and not just his character, and

because the evidence’s pr obative value is not substantially

o utweighed by the danger of unfair prejudice, the district co urt

did not err in admitting the evidence regarding solicitation.

Because there is no error, it follows that there is no plain error.

Sentencing

Knox argues that the district court erred in calculating his

base offense level. The Guideline under which he was sentenced

requires a three level decrease:

[U]nless the defendant or a coconspirator completed

all the acts the conspirators believed necessary on

their part for the successful completion of the

substantive offense or the circumstances

demonstrate that the conspirators were about to

complete all such acts but for a p prehension or

interruption by some similar event beyond their

control.

U.S.S.G. § 2X1.1(b)(2) . The commentary to the guideline states

that:

In most prosecutions for conspiracies or

attempts, the object offense was substantially

completed or was interrupted or prevented on the

verge of completi o n by the intercession of law

enforc ement authorities or the victim. In such

cases, no reduction of the offense level is

warranted. Sometimes, however, the arrest occurs

well before the defendant or any co-conspirator has

completed the necessary acts of the object offense.

Under such circumstances, a reduction of 3 le vels

is provided under § 2X1.1(b)(1) or (2).

U.S.S.G. §2X1.1, comment. (backg’d.).27

T he district court denied the reduction, stating that “the

three level decrease to the offense level is not warranted []

because the Defendants completed all the acts believed necessary on

their part for a successful completion of the offense.” Knox

contends that the district court erred in denying the r eduction

because he had not taken all the acts necessary to launder the $10

million when he was caught. In fact, he argues, he was nowhere

near ready to launder that amount of cash.

The district court’s statement that K nox had completed all

acts believed necessary for completion of the offense is a

factfinding, which we review for clear error. United States v.

Sotelo

, 97 F.3d 782, 799 (5th Cir. 1996), cert. denied

, 117 S. Ct.

1002 (1 997). “In making findings pursuant to the Sentencing

Guidelines, a district court need only be convinced by a

preponderance of the evidence.” I d

. “Factual findings are not

clearly erroneous if they are plausible in light of the record read

as a whole.” U

nited States v. Ayala

, 47 F.3d 688, 690 (5t h Cir.

1995). We will only hold a finding clearly erroneous if,

considering the evi dence as a whole, we are left with a definite

and firm conviction that a mistake has been made. S ee United

States v. Acosta , 972 F.2d 86, 90 (5th Cir. 1992).

Knox a nd Brace had previously laundered $350,000 in three

tests. They had no difficulty laundering this amount, and always

completed their task within the time limit set by the undercover1 9 The cashiers checks had to be for less than $3000 in order

to avoid triggering bank reporting requirements.

28 agents. On the undercover tapes, Knox and Brace detailed their

plans to launder the money over four years, which included mixing

the cash in with offerings at Br ace’s church. Knox argues that

while he and Brace had plans to launder the money, none had been

implement ed. For example, he had taken no steps to create the

Cayman Islands corporation he had discussed. The only method he

had for laundering the funds was using cashiers checks, as had been

d one for the tests. Knox argues that this plan was unworkable,

because 33,000 cashier’s checks would have been required to launder

the $10 million. 19

In similar circumstances, other circuits have approved

factfindings that defendants completed all steps believed

necessary. For example, in U nited States v. Barton

, 32 F.3d 61, 64

(4th Cir. 1994), the Fourth Circuit held that the factfinding of

completion of "all steps believ ed necessary" was not clearly

e rroneous when a defendant merely accepted a suitcase of alle ged

drug money for delivery to his associate. See also United States

v. Brown

, 74 F.3d 891, 893 (8th Cir.) (def endant need not have

reached the “last step” before completion of the su bstantive

offense), cert. denied , 117 S. Ct. 74 (1996).29

Reviewing the evidence as a whole, we do not have a definite

and firm conviction that the district court made a mistake in

finding that Knox had completed all steps he believed necessary to

launder the $10 million. Accordingly, the district court did not

err in denying the three point reduct ion under U.S.S.G. §

2X1.1(b)(2).

CONCLUSION

The government failed to prove beyond a reasonable doubt that

Brace would likely have laundered money absent the government’s

involvement. Accordingly, we hold that Brace was entrapped as

matter of law, and his convictions and sentence on all counts are

REVERSED

. The district court did not err in admitting Clarkston’s

statement, or in admitting evidence regarding Knox’s solicitation

of murder. The district court did not err in refusing the three

level decrease because Knox had not completed all steps necessary

to launder the entire $10 million. Therefore, Knox’s convictions

and sentences are, in all respects, AFFIRMED

.