### I N THE UNI TED STATES COURT OF APPEALS FOR THE FI F TH CI RCUI T

No. 12-30101

UNITED STATES OF AMERICA, Plaintiff – Appellee
v. THOMAS A. NELSON, JR., Defendant – Appellant

Appeal from the United States District Court for the Middle District of Louisiana

Before JONES, DENNIS, and HIGGINSON, Circuit Judges. HIGGINSON, Circuit Judge: Th o mas A. Nelson, Jr., the former mayor of New Roads, L o ui s i a n a , a p p e al s his conviction f

or corruptio n -related offenses, along with the district court’s calculation of h is s e n t e n c i n g range. F or the reasons articulated below, we AFFIRM Nelson’s conviction, VACATE his sentence, and R EMAND for resentencing consistent with this opinion.

FACTS AND PROCEDURAL HISTORY A. Facts The government’s interest in Nelson arose from its undercover investigation of a n o t her Louisiana m ayor, George Grace. As p art of that investigation, Federal Bureau of Investigation (“FBI”) agents and paid U n i t e d S t a te s C o u rt o f A p p e al s

F i f t h C i rc u i t 

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c o operating witness William Myles posed as representatives of a w a s t e c o nt ai n e r cleaning system business k nown as the Cifer 5000 (“Cifer”). The FBI instructed Myles, a businessman with a real estate development b ackground, to be “very overt” ab o u t h i s willingness to participate i n corrupt activity t o obtain government contracts. Through his conver s a t ions with Grace, Myles discovered th at Grace considered Nelson, along with four other mayors, to be part of a close-knit group that Grace was “training.” Although Myles may have been the first to use the term “A-Team” to describe this group, Grace picked up on the moniker. Grace identified N elson as l ikely willing to accept cash, rather than stock o p t i o ns, in exchange f

or helping Cifer. Grace also singled out another member of this group of five as a “clean” politician who would want to do things “straight up,” which Myles understood to imply that the others would not. Myles, a t Grace’s s uggestion, invited Grace, Nelson, and Lewis, another member of Grace’s A-Team, to dinner at a steak house in B aton Rouge in August 2008. Myles paid for dinner a nd made it “absolutely” clear that he was trying to get contracts for C i f e r ’ s s e r v ices i n the mayors’ t o wns. On October 1, 2008, Myles and Grace met privately to discuss the A-Team mayors f urther; Grace told Myles that the other mayors would “listen and do what I tell them.” After Myles mentioned “ t a k [ ing] c are of” the mayors i n return for Cifer contracts in their towns, Grace sai d , “ W e l l , I know Nelson, from New Roads. H e ready to go.” Grace also instructed Myles that h e would act a s a middleman between Myles and the other m ayors. According to Grace, the mayors trusted Grace enough to believe that he would take the fall if the group got into trouble. Myles a n d FBI special agents, i n their undercover capacity as Cifer representatives, met with Grace, Nelson, a n d t w o other A-Team mayors at Myles’s N ew Orleans condo on October 6, 2008. Myles had asked Grace not to i n vite the mayor whom G race identified as “clean.” Cifer paid for the mayor s ’

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hotel rooms for the night a nd provided them with tickets to a Saints game. At the meeting, Myles explained to the mayors the legal bidding process for securing public contracts, but also told the group: “I might not even talk to you outside of t h i s room but this is the group that h elping us and s ince y’all guys willing to help u s, we w illing to help you guys.” After N e l s o n e x pressed particular enthusiasm for Cifer, one of the agents asked whether Nelson could

secure the contract himself or whether it would need to be put to a c ity council vote. N e lson responded: “[Y]ou’re talking about RFPs [ a s t e p in the formal bidding process] and all those thing[s], b ut y ou could—I c ould probably look at it almost a s a professional service.” He continued: “ S o if i t’s a professional service, then I make t h e c all

. . . . The C o uncil doesn’t make the c a ll on that.” Myles u nderstood Nelson t o m e a n that he was willing to circumvent the RFP bidding process. At some point during the evening, Grace and an F BI a gent, Johnson, went into another room and Johnson gave Grace $ 2,000 in cash. Later that night, Grace came to Nelson’s hotel r oom and gave Nelson $300 in c ash, telling him the
money was from Johnson. G race t o l d N e lson that he could “do whatever he wanted” with the money, but Nelson later characterized the $300 payment as a quid pro q u o : “If I’m going to accept, I m ean I couldn’t, you k now, I’m going to perform.” Nelson and one of the other mayors agreed that they would not speak about the payments again. N e l s o n m e t with Cifer “businessmen,” including Myles and Johnson , a g ai n

on October 30, 2008. At that meeting, N e l s o n a ccepted $400 in cash from Johnson and a t icket to a H o r n e t s game from Myles. The group discussed having Nelson write an official “letter of support” to give to investors. The next d a y , O c t ober 31, 2008, Nelson told Myles: “Y’all tell me when the time is right to make the move o n, we can do it. And the sooner we g e t this knocked out, then

we can get the o ther little deal I was telling you about.” Myles testified that the

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“other little deal” referred t o Ne l s o n seeking financial backing for his own business venture, a “video bingo” project. On N o vember 11, 2008, Nelson sent a le t ter to a “private investment group,” Quorum Venture Group, which had also b een set up by t h e F BI, in support of Cifer. In the letter, Nelson noted that New Roads was “committed to working towards a contract with” Cifer. Nelson also drafted a proposed city ordinance requiring the cleanliness of garbage cans in order to benefit Cifer. He published an article in support of the ordinance in the local paper. On January 2 7, 2 009, Nelson replied t o J ohnson’s offer of a silent partnership in Cifer by saying: “That sounds good

. . . . I’m with th a t

. ” A few days later, Nelson told Myles that J ohnson h ad “told me some stuff that made me—I’m even more r eady to roll than y’all.” Durin g this time, Nelson also sought Cifer representatives’ financial backing for several business ventures of his own. In February 2009, Nelson instructed a c ity employee t o send a request to the Louisiana Department of E n v i r onmental Quality, s e eking support for legislation favorable to Cifer. On M arch 4, 2 00 9 , J o h nson offered Nelson $20,000 in s tock in an electronic medical r ecord s b u siness in exchange for Nelson’s

s upport of Cifer; N elson agreed. Johnson told Nelson they could delay th e decision, but N elson s aid that he was “ready right now.” In April 2009, Nelson solicited football playoff t i c k e t s from FBI undercover agent Mike King while rejecti n g a similar offer from a representative of another company. told King that he trusted Cifer. King offered Nelson $ 20,0 0 0 i n c a s h, instead of s tock, on May 20, 2009. Nelson r efused, saying he preferred the s t o c k because it could “bring so much

more i n the f

u t ure.” But in July, Nelson changed his mind about preferring stock to cash after hearing of an undercover F B I operatio n i nvolving public officials in New Jersey. King reassured Nelson that he could decline the bribe

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altogether, saying: “If you’re comfortable [helping Cifer] for the right reasons, let’s do it for the right r easons.” Nelson continued t o request the cash. On September 16, 2009, Nelson t old King he wanted to be paid in a week. Nelson accepted $5,000 o n September 24, 2009, and another $5,000 on O ctober 8, 2009. King told Nelson he would g et the remaining $ 10,000 when Cifer was set up in New Roads. In Octo b e r 2 0 0 9, Nelson used New Roads’s “robo call” system to disseminate a pre-recorded message to the town’s residents, from him as mayor. The m essage d escribed the Cifer system and stated that “we are not advocating that the Cifer 5000 alone w i l l c u re the H1N1 outbreak, what w e are saying is that your risk of contracting this v i r u s o r a ny other w ill be significantly mini m i z e d

. ” The message ended by asking the recipient to press a button on their keypad if h e or she is “interested i n the Cifer 5 000 performing this service in our community for a short period of time free of charge.” In April 2010, Nelson w as interviewed by an FBI agent about a report by the City o f New Roads that city offices might have been bugged by a disgruntled employee; when asked if he had been bribed, N e lson failed t o m ention his involvement with Cifer. Nelson contacted Myles on April 26, 2010, t o s ay that he was running for re-election and he needed C ifer trucks “on the ground” in New Roads, as well as money for campaign f

unds. Nelson told Myles that Johnson should “empty his pockets” and give N elson the remaining $10,000. Nelson later told Myles that if he did not receive the money within a week, he would impose interest “so high

w here y’all can’t make it u p.” Myles promised to give Nelson the money, but only if Nelson w ould a ward Myles a city contract for C ifer’s services in the fall. Nelson agreed and also agreed to provide an official letter to the Environmental Protection Agency (“EPA”) in support of Cifer’s grant request.

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Nelson s ent a letter o n C ifer’s b e half to the E PA Ad ministrator, signed and printed on mayoral letterhead, on May 3, 2010. Th e letter w as written mainly by undercover agents but edited by Nelson; it read in part: Recently, I met with other mayors from Pointe Coupee Parish, L o u i s i a n a , a n d there was an overwhelming interest from the m ayo r s in a technology like the Cifer 5 000. A municipal joint venture was discussed w h e r e i n a ny federal financial assistance from the EPA would be shared p arish-wide in o rder to afford many citi e s th e opportuni t y to implement a regimented s anitation c ontainer cleaning s ystem in compliance with the EPA r ules a nd regulations. At t rial, the government introduced evidence that the meeting between Nelson and the other mayors never took place. The letter concluded by requesting the EPA to “tak [ e ] a l eadership role i n promoting the development and implementation of standards for the sanitation of waste containers—perhaps

u n d e r the auspices of federal grants allowing municipalities to invest i n technologies such as the Cifer 5000.” In r e t u r n for the letter and a verbal guarantee of a city contract with Cifer i n t h e fall, Myles paid N elson the remaining $10,000 in two installments. Nelson asked Myles to hire him to promote C i f er to other p ublic officials in exchange for ten percent of profits from contracts secured. Nelson said that his “money goal” for the scheme was to “stack a f ew m i l l [ i o n ]

. ” Nelson anticipated that C ifer might b e bought o ut and told Myles that he did not want its o wners to “walk away with $300 million and leave [Nelson] with some chump change.” Nelson also r eassured Myles that his wife would not be s u spicious about any influx of m oney because s he “had to know what she was getting into before she got into it

. . . . S h e knew my f amily was political f

rom the gitty-up.” During the course of the investigati on, N elson told M yles that he had cultivated relationships w i th o ther companies in a ddition to Cifer. For e xample, he told Myles that “he threw in the e xtra lagniappe”—referring to $444,000—to PEC, an engineering firm that had been awarded a contract worth several

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million, as part of a quid pro quo. Myles understo o d N e l s o n t o mean, “I d o something for them, they do something for me.” When M yles asked what Nelson

w o uld d o i f another firm offered to do the same w o rk f or 30% le s s t h a n P E C , Nelson responded that the other firm could talk “to the next mayor coming in.” Nelson a lso told an F BI agent that at the same time he was dealing w ith Cifer, he w as “taking care of” a New Roads company called Wildgame Innovations: “I

. . . gave them $100,000 to set up . . . they’ll tell you . . . the mayor took care of

us . . . But everything they needed to set up, from the Capitol, I’ve been working with them on legislation.” The undercover investigation o f N elson ended on May 20, 2010, w hen FBI agents identified themselves to Nelson a s he was leaving a meeting with Myles, and Nelson admitted to soliciting and receiving bribes. B. Procedural History Nelson originally agreed to plead guilty to a bill of information c harging him w i t h b r ib ery involving an entity receiving federal funds in violation of 18 U.S.C. § 666(a)(1)(B). The plea agreement was signed by Nelson, his attorneys, and the prosecution. Included in the a greement was a stipulated factual basis stating in part that “[f]rom on or about October 6, 2008”— the date of the first condo meeting—“through on or about May 2 0, 2 010, Nelson used his position as Mayor to promote the Cifer 5 000 in the City and elsewhere in exchange for cash and other things of value t otaling $22,053.” The agreement contained a waiver clause providing that if Nelson failed to plead gu ilty, “any i nformation p rovided by the defendant,” including “but not limited t o[] the factual stipulation contained in this Plea Agreement,” “may be used against [Nelson] in this or any other prosecution.” After signing the p lea agreement, Nelson swit c h e d att o r n e y s a n d informed the United States that h e n o longer wished to plead guilt y . The government sought to admit statements made by Nelson i n the p lea agreement, including in

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the stipulated factual basis. Over the d efense’s objection, the district court ruled t h a t the stipulated factual basis w as admissible but that the plea a greemen t itself was not. At trial, the government called M ary Olive P i e rson, Nelson’s attorney during the plea-barg ai ni n g s t a g e , t o t e s tif y ab o u t the circumstances surrounding Nelson’s signing of the s t ipulated factual basis. The district court allowed the testi m o ny over the defense’s objection, and the government introduced the factual stipulation into evidence through Pierson’s testimony. The d efense also objected to the government’ s motion to a dmit video excerpts of a recorded conversation b etween Myles and G race. The district court admitte d th e evi d e nce under the co-conspirator hearsay exclusion. The district court deni e d t h e defense’s request for a j ury instruction on

e n t r a p m ent, f

inding that Nelson had not established a prima f acie case o f entrapment. The district court found that Nelson a ccepted the $300 in cash, the hotel room, and the Saints ticket as bribes in October 2008 and that those transactions were s ufficient to indicate predisp osition. The district court instructed t h e j ury that “entrapment is not an issue and s hould not be considered by you.” The jury found Nelson guilty on all c ounts. At sentencing, th e district court d etermined the a pplicable guidelines r a nge to b e between 235 a nd 293 months. However, n o ting N el s o n ’ s young family and lack of criminal history, and describing his gain from the scheme as “minimal,” at least compared to the intended loss amount, the distric t c o u r t varied downward under 18 U.S.C. § 3553(a) and imposed c oncurrent sentences of 132 m onths and 6 0 months, as well as two years of supervised release. DISCUSSION Nelson argues that the district court erred at t rial by refusing to instruct the jury on the affirmative d efense of e ntrapment; by admitting statements

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made b y Grace about Nelson’s propensity towards corruption; by admitting the stipulated factual basis for the plea a greement into evidence; a nd by allowing Nelson’s former a ttorney to t estif y ab o u t th e c irc u m s t a n c e s s urr o u n di n g N e l s o n ’ s signing o f the factual basis. Nelson also a sserts that the district court erred at sentencing in its calculation of the intended l o s s a mount resulting from the fraudulent grants and contracts Nelson attempted t o help secure. We address these claims in order. A. Entrapment Instruction We review the di s t r i c t court’s decision not to grant an entrapment instruction de n ovo , looking a t the evidence in the light m ost f av o r able to the defendant. United States v. Theagene, 565 F.3d 911, 918 (5th Cir. 2 009); United States v. Bradfield , 113 F.3d 515, 521 (5th Cir. 1997). Entrapment is an affirmative defense that “operates through a burden s hif ti n g regime.” Theagene , 565 F.3d at 918. Generally, entrapment is a question f o r t h e j u r y, not for the court. Mathews v. United S tates , 485 U.S. 58, 63 (1988). But in order for an entrapment instruction to be put to t h e j u r y , a d efendant m ust make a prima facie s h o w i n g of t w o elements: (1) lack o f p redisposition to c o mmit the offense and (2) “some governmental involvement and i n duc e m e nt m o r e substantial than simply providing an opportunity or facilities t o commit the offense.” Theagene , 565 F .3d at 918. Both e lements pose the same ul t i m a t e question: “whether criminal intent origina t e d w i th the defendant or with government agents.” Bradfield , 113 F.3d at 521. The “principal element in the d e fense o f entrapment” is p r e d i sposition. Mathews , 485 U .S. at 6 3 (i n t e r nal quotation marks omitted). To determine whether the defendant lacked predisposition, we consider w hether he “intended,

was p redisposed, or w as willing to commit the offense befo r e f irst being
app r oached by government agents .” Theagene , 565 F.3d at 919 (internal quotation marks omitted). A defendant l a c k s predisposition where h e had no
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p ri o r interest o r experience r elated to the crime, displayed “signif i c a nt h e s it ati o n

or unwillingness, o r attempt[ed] to r e turn discussion to lawful conduct.” Id. at 920; see, e .g
. , B r adfield , 113 F.3d at 521 (holding n o predisposition when government informant propositioned defendant approximately eighteen times before the defendant agreed to participate in a drug deal). By contrast, if the evidence suggests that the defendant w as an “‘unwary criminal’ who readily availed hi mself o f the opportunity to perpetrate the crime,” then predisposition is present. Theagene , 565 F.3d at 919 (quoting Mathews , 485 U.S. at 63). Evidence to show predisposition m ay include “active, enthusiastic participation” or “demonstrated expertise in the criminal endeavor.” Id. If a defendant displays such expertise or enthusiasm yet f ails to show “an y hint of hesitation or unwillingness,” we will find predisposition. See id. a t 919–20. Nelson argues that he made a prima facie showing of lack of predisposition. Specifically, he c ontends that his acceptance of the first $5,000 cash payment i n 2009 followed an “intense campaign of s olicitation” that had be g u n o n O c t ober 6, 2008, when the mayors attended their first meeting at Myles’s c ondo. The district court found that the hotel room, S aints t icket, and $300 in cash that Nelson accepted on October 6, 2 008 were not part of a “wining and dining” campaign or m e s h to e ntrap but were themselves bribes, taken by Nelson “with the a greement to perform official acts.” Nelson a rgues that, viewed in the light most favorable to the defendant, the events of O ctober 6, 2008, were “no more indicative of criminality than innocence.” N e lson cites Theagene , a case i n which this c ourt remanded for an entrapment i nstruction wh e n th e evi d e n c e c o u l d s u p port a lack of predisposition. 565 F .3d a t 920–21. In that case, the defendant sent $500 to an I n t e rnal Revenue Service (“IRS”) agent with a note describing the cash as “ a token.” I d. at 9 21 (internal quotation marks omitted). The defendant t estified t h a t he meant the cash to count t owards the repayment o f his o verdue taxes as a signal

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of good faith i n case his check bounced and that he i ncluded the “token” note to

s i g n i fy th at he recognized the $500 was only a nominal step towards repayin g his debts. I

d

. at 9 2 0

– 2 1

. W e e xplained a lso that it was “highly relevant to predisposition” that even the IRS agent testified that at some p oint h e doubted whether the defendant intended bribery. Id. at 921. Thus, we determined that the defendant presented a “plausible enough” story such “that the jury deserved

a chance to evaluate” whether bribery was on the defendant ’ s m i n d before the IRS agent suggested it. Id. a t 922. Nelson, by contrast, has not p r e s e nt e d a p l a u s ible i nnocent explanation for accepting the money and other g ifts offered to him on O ctober 6, 2008. Before taking the cash, N elson suggested to Myles that he c ould circumvent the formal
process for a warding city contracts; so m e t i m e after the meeting, he himself described the hotel room, Saints ticket, and cash as offers that he felt h e needed to repay with political favors. Nelson s aid he “felt like it was . . . if you gonna d o this, if I’m going to accept .

. . I’m going to p erform

. . . I’m not just gonna sit in t h e r e and say . . . this is really nice, now I mean, who just does that?” I n addition, the signed factual basis for the plea agreement, w hich we c onclude was properly admitted at trial, see infra , stated that the bribes b egan on O ctober 8, 2008.

“[I]ndependently m o t ivated behavior that occurs after government solicitation begins” may constitute e vidence of predisposition. United S tates v. Brace , 1 45 F.3d 247, 262 (5th Cir. 1998) ( quoting United States v. B yrd , 31 F.3d 1329, 1336 (5th Cir. 1994)) (internal quotation marks omitted). The government presented ev i d e n c e that Nelson discussed with u ndercover agents his corrupt dealings with other companies unrelated to Cifer. For example, Nelson said that he was “taking care of” a c ompany called Wildgame Innovations, had given them $100,000 of public funds, a nd was “working with them on legislation.” Further, “a defendant’s ready and willing participation in government-solicited c riminal

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activity, standing alone, is sufficient to prove predisposition.” United S tates v. Reyes , 239 F.3d 722, 7 39 (5th Cir. 2001). B y accepting bribes, and d oing so without reluctance, N elson was an “ a ctive, e nthusiastic participa[nt] in the crim[e].” Theagene , 565 F.3d a t 919 (internal quotation marks omitted). In fact, Nelson’s request for $10,000 f rom Cifer came after undercover agents suggested that they forget t h e b r ib e a n d m ove forward with the contract “for the right reasons.” See United States v . Ca v azos , 1 62 F .3d 1160 (5th C ir. 1998) (“Many factors indicate a defendant’s predisposition, including a showing of defendant’s desire for profit, his eagernes s to participate in the transaction, his ready
response to the government’s inducement offer, or his demonstrated knowledge

or experience in the criminal activity under investigation.”) (internal quotation marks omitted). 1 Because we conclude that Nelson made no plausible s howing o f lack of predisposition, we affirm the district court’s decision not to give an entrapment instruction. B. Evidentiary Rulings 1. Co-conspirator Hearsay Statements N e l son challenges the district court’s admission of Grace’s recor d e d statements, made o n October 1 , 2008, about Nelson’s i nclination s t o w a rds corrupt activity. The district court admitted the statements under the coconspirator hearsay exclusion. Under F e deral Rule o f Evidence 801(d)(2)(E), an opposing party’s statement i s not considered hearsay if it was “made by the party’s coconspirator during and in furth e r a n c e o f the conspiracy.” We will “review the admission of hearsay evidence under the non-hearsay definition of

1 N els on notes that he d eclined certain of f ers f rom the governm ent, includ ing M yles ’s of f e r to tak e him on a hunting trip , but the record d oes not s up p ort that he d id s o out of concern f

or their p otential illegality nor that he d is p layed “s ig n i f i c a n t hes itation or unw illingnes s ” in entering into a crim inal schem e. 12 Case: 12-30101 Document: 00512405621 Page: 12 Date Filed: 10/14/2013No. 12-30101

Rule 801(d)(2)(E) for abuse of discretion.” United States v. Robinson , 367 F.3d 278, 291 (5th Cir. 2004) (internal quotation marks omitted). To establish a foundation for admission of evidence under this exclusion, the government show “(1) the existence of a conspiracy, (2) [that] the statement

was made by a co-conspirator of a party, (3) the statement was made during the

course of the c onspiracy, and (4) the statement was made in f urtherance of the conspiracy.” Id. (internal quotation marks omitted). The statement itself must be considered but cannot b y i tself establis h “the e xistence of the conspiracy or participation in it.” Federal Rule of E vidence 801(d)(2). There must be “independent evidence” establishi n g the conspiracy. United States v. El-Mezain , 664 F.3d 467, 502 (5th Cir. 2011). Nelson argues that the government failed to s h o w t h e existence of a

cons p i r a c y between Nelson and Grace. A conspiracy for the purpose of the hearsay exclusion need not be unlawful; the statement may be m ade in furtherance of a “ l a w f u l joint undertaking.” Id. A c onspiracy may be shown “merely by engaging in a joint plan[] . . . that was non-criminal in nature.” I d. Thus, “a statement is not hearsay if it was made du r i n g the course and in furtherance of a common plan or endeavor with a party.” Id (internal quotation marks omitted)

. For example, this court has admitted a ship’s logbook under the co-conspirator e xclusion because the ship’s crew were engaged in the voyage of the ship, which was “a joint venture i n and of itself apart from the illegality of its pu r p o s e, and the logbook was created in furtherance of the voyage.” I d. (quoting United States v. Postal , 589 F.2d 862, 886 n.41 (5th Cir. 1 979)) (internal quotation marks omitted). Nelson argued that the r e w a s no evidence that he and G race shared a

common purpose—for e x a m p le, to share profits from a corrupt venture w ith each other. But Nelson cites cases relating to th e requi r e m e n ts f or c onspiracy as a crime, not as a hearsay exclusion. Before Grace m ade the challenged statements

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on O ctober 1, Nelson, Grace, and another mayor attended a dinner with Myles, d u r i n g w hich Myles discussed the potential benefits of C ifer for the mayors ’ communities. Nelson told FBI agents that h e u nderstood Grace was the one who

was “putting the whole Cifer deal together.” The district court did not abuse its discretion in finding that Grace and Nelson were , a t the least, engaged in a

common scheme to recruit Cifer’s business to their towns. 2 At the dinner it was “clear that [Myles was] trying to get a contract i n the towns of the different mayors that were there.” 2. Admission of Factual Basis Federal Rule of Evidence 410 prohibits the use o f “a guilty plea that was later withdrawn” or a “statement made during a proceeding on” th at plea under Rule 1 1. Nelson argues that the admission of his signed f a c t ual basis violates this Rule. The government responds that the ple a a greement contained an enforceable waiver provision stating that even i f Nelson d ecided not to plead guilty, the factual basis could be used against him in a future prosecution. A district court’s admission of e vidence, if objected to, is r eviewed for abuse of discretion. United States v. Sylvester , 583 F.3d 285, 288 n.4 (5th Cir. 2009).

“[D]e n ovo review of attendant legal issues “is a component part of that abuse of discretion review.” Id. The Supreme Court has held t h a t “ ab s ent some affirmative indication that the agreement w a s entered into unknowingly or involuntarily, an a greement to waive the e xclusionary p rovisions of the pleastatement Rules i s valid a nd enforceable.” United States v. Mezzanatto , 513 U.S. 196, 210 (1995). This court in Sylvester allowed th e government to use the defendan t ’s statements, made during plea n egotiations, in its case-in-chief,

2 N els on a l s o as s erts that G race’s s tatem ents violated the Conf rontation Claus e. N els on d oes not p oint to a C onf rontation Claus e objection p res erved at trial and he has f ailed to fully brief the i s s ue on ap p eal. M oreover, N els on d es cribes G race’s s tatem ents as “nontes tim onial, ” but the Conf rontation Claus e extend s only to tes tim onial statem ents

. See Brow n v . Ep p s , 686 F. 3d 281, 286 ( 5th Cir. 2012)

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provided that “the d efendant, as a condition to engaging in negotiations with the government, knowingly a nd v oluntarily waived a ll ri ghts t o object to such use.” 583 F.3d at 2 88; see a lso United S tates v. Mitchell , 633 F.3d 997, 1006 (10th Cir. 2011) (collecting cases). But cf. United States v. Newbert , 504 F.3d 180, 186–87 (1st Cir. 2007) (declining to find a breach of the agreement sufficient to enforce a waiver of rights where the waiver provision di d not define breach and where the defendant possessed newly-discovered evidence “that he c ould not

. . . have discovered” before pleading guilty and that “establish[ed] a plausible basis for concluding that the defendant was not guilty”). Nelson argues that this case is distinguishable from Sylvester because the government in Sylvester detrimentally relied on the plea agreement by offering the defendant life imprisonment rather than the d eath penalty and b y u sing the factual s tatements in debriefing sessions. Although “ [a] plea agreement is interpreted in accordance with general p rinciples of contract law,” United States

v. Harper , 643 F .3d 1 35, 139 (5th Cir. 2011), the Sylvester court did not base its

co n c l u s i o n on the government’s r eliance on the agreement. Instead, the court adhered to the Supreme Court’s rationale in Mezzanatto that admitting factual bases will a i d the truth-finding process. See Sylvester , 583 F.3d at 290 (citing Mezzanatto , 513 U.S. at 204). While Nelson argued at trial, and references on appeal, that the factual stipulation was c omposed with “no real input [from] the defendant whatsoever,” a s w e noted in S ylvester, “[w]hile in theory an innocent defendant migh t execute such a waiver

. . . the b enefit of evaluating a s much relevant evidence as possible outweighs the mere possibility of such danger, and will, on balance, enhance the r eliability of a fact-finder’s c onclusions.” Id. at 294. The statements made in S ylvester were arguably less reliable than those at issue here: there was n o t h r e a t o f the death penalty to potentially induce Nelson to incriminate himself; unlike the oral statements at i s sue in Sylvester , the stipulation here was reduced to writing and signed by Nels o n, a nd the plea

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agreement explicitly provided that the government c ould admit the factual basis if Nelson failed to plead guilty to the B ill of Information. Cf. Sylvester , 583 F.3d at 289. Importantly, in both cases, counsel was involved in the waiver of Rule 410. We c o n clude that N elson, with counsel, validly waived the exclusionary provisions of the plea-statement rules and that the district court did not abuse its discretion in allowing the stipulated factual basis into evidence. 3. Former Defense Attorney Testimony Nelson a rgues that in testifying about the circumstances surrounding his signing the factual b asis , his f ormer attorney violated the attorney-client privilege and Nelson’s S i xth Amendment right to c ounsel. 3 “The application of the attorney-client privilege is a question o f fact, to be deter m i n e d in the light of the p urpose of the privilege and guided by judicial p rec e d e n t s . T h e clearly

erroneous standard of review applies to the district court’s factual findings. We review the application of the controlling law de n ovo. ” United States v . Neal , 27 F.3d 1035, 1 0 48 (5th Cir. 1994) (citation omitted) (internal quotation marks omitted). To assert the privilege, a party must show: (1) a confidential communication; (2) to a lawyer or su b o r d i n a te; (3) for the primary purpose of securing a legal opinion, l egal services, or assistance in t h e legal p roceeding. United States v. Robinson , 121 F.3d 971, 974 (5th Cir. 1 997). The privilege does not protect “ev e rything that arises out of the existence of an attorney-client relationship,” United States v . Pipkins , 528 F .2d 559, 5 63 (5th Cir. 1976). An attorney-client communication is also protected under the Sixth Am endment “if it is intended to r emain confidential a n d was m ade under s uch circumstances that it w a s r e a s onably expected and understood t o be confidential.” United States v. Melvin , 650 F.2d 641, 645 (5th Cir. Unit B July 1981).

3 N els on d oes not reiterate on ap p eal his s ep arate objection at trial to this tes tim ony und er Fed eral Rule of E vid ence 403. Cf

. O l d Chi ef v . U

ni ted Sta tes , 519 U

. S. 172 ( 1997)

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The government called Nelson’s former attorney, Mary P ierson, to testify regarding the circumstances surrounding Nelson’s signing his plea agreement. The prosecutor told the district court that the purpose of the t estimony was “to establish that the statement w as voluntary[]

. . . so that the jury doesn’t get the wrong idea. . .

. This i s the only way that w e can establish the voluntariness of the statement.” N o t i n g that it was the government’s burden to show voluntariness, the court allowed “limited inquiry of” Pierson. Th e gov e rn m e nt a d m itt e d the factual basis into e vide n c e thr o u gh Pi e r s o n ’ s testimony, and she r ead it aloud to the jury. P ierson confirmed the a uthenticity of the document and of Nelson’s signature. S he stated that Nelson’s signature

on the document indicated that she and Ne l s o n had “read [the document] together, and he had read it, and h e u n d e r s t o o d i t and agreed with it.” She testified that before Nelson signed the document, they had a “ l e n g t hy discussion.” Sh e d i d not discuss the details of the conversation. Pierson confirmed that Nelso n c a me to her office of his own free will to sign the document and there were no government officials present. She stated that she

was not a ware of any coercion or threats made against Nelson and, when asked if Nelson signed the document “knowingly and voluntarily,” Pierson responded, “I believe so.” The government attempted to ask about specific f acts referenced in the document, but the court sustained an objection by Nelson that “the document speaks for itself.” 4 The government argues that Pierson’s testimony regarding the contents of the factual basis itself was not confi d e n t i a l and

4 We tak e th i s o p p o r t u n i ty to obs erve that the op inion tes tim ony of a w itnes s w ith p ers onal or exp ert k now led ge, help f ul and p ertaining to a d ocum ent, is not objectionable on the ground that the d ocum ent “s peak s f or its elf.” See Fed

. R. Evid

. 701, 702. Prop erly m ad e, s uch an objection m ay perta i n to the character and scop e of tes tim ony und er Rules 403 and 611. The original w ritings rule, Rule 1002, how ever, s hould not be m is und ers tood as a “bes t evid ence” d evice to exclu d e o th e rwi se a d mi ssib l e o p i ni o n tes tim ony interp reting a w riting af ter it ha s b e e n i ntrod uced into evid ence. See Chris top her B. M ueller & Laird C. Kirk p atrick , Ev idence § 10. 6, at 1158 ( 4th ed

. 2009)

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therefore n ot privileged. See Robinson , 121 F.3d a t 976. N e lson, h owever, primarily challenges P i e rson’s testimony regarding the circumstances of his signing the agreement. We h ave noted that “[t]he mere a p p e a r a n ce of an attorney testifying against a former client[]

. . . is distasteful and should only b e u s e d in rare insta n c es.” U

nited States v. Cochran , 546 F.2d 27, 29 n.5 (5th Cir. 1977). We have, nonetheless, a llowed attorneys, in narrow circumstances, to testify about their former clients’ mental competence. See Clanton v . United S tates , 488 F.2d 1069, 1071 (5th Cir. 1974). We concluded that an attorney’s evaluatio n o f h is client’s mental competency during plea b argaining did not constitute p r i v a t e, confidential communications because the attorney was a s “qualified as a layman to express a view as to his client’s mental c o mpetency.” Id. “Excluded from the
pr i v i l e ge[]

. . . are the physical characteristics o f the client, s u ch as his

. . . demeanor, his bearing, his s obriety

. . . . S uch things are observable by anyone who talked with the client.” Id. ( quoting United States v. Kend r i c k , 3 3 1 F.2d 110 , 1 13–14 (4th Cir. 1964)) (internal quotation marks o mitted); see also Malinauskas v. United States , 505 F.2d 649, 655 (5th Cir. 1 974) (attorney-client privil e g e w a s not violated when a defendant’s former attorney t e stified that, “from his observations and disc u s s i o n s w i th [the defendant] he could find no indication that he was incompetent or under the influence of drugs”). Pierson’s testimony, however, was not confined to observations about Nelson’s demeanor that c ould have easily been made by a layperson; nor was it offered outside the presence of a trial j ury on a narrow issue l ike competency or voluntariness. 5 Instead, it was trial t estimony that described a meeting held “for

5 See Fed

. R

. Evid

. 104( a) ( “The court m us t d e cid e any p relim inary ques tion about
w hether a w itnes s is qualif ied , a p rivilege exis ts , or evid ence is ad m is s ible. ”) ; see a lso Fed

. R

. Evid

. 104( c) ( “The court m us t cond uct any hearing on a p relim inary ques tion s o that the jury cannot hear it if: ( 1) the hearing involves the ad m is s ibility of a conf es s ion[]

. . . . ”)

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the primary purpo s e o f securing

. . . a legal opinion” on whether to s ign the agreement. See Robinson , 1 21 F.3d at 974. Called by the government, defense counsel Pierson testified th at her former client in this c ase, Nelson, r e ad the plea agreement a dmitting to f ederal criminal offense c onduct with h er, that he “understood” a nd “agreed with” it, and that he s igned it only after a “lengthy discussion” with his experienced attorney. Such information reveals more than the plain fact of the voluntariness o f N elson’ s s i g n a t u re on a guilty plea attestation and document i nclusive of the offense’s fa c t u a l basis, and we conclude that it i s protected by the attorney-client privilege. See Fed. R. Evid. 501; see also Fed. R. Evid. 104(a), (c). Although Pierson’s testimony falls under the a ttorney-client privilege, we

n o n e t heless conclude that its admission in this c ase was harmless error. Se e Robinso n , 121 F .3d at 9 77; United States v. Jiminez-Lopez , 873 F.2d 769, 771 (5th Cir. 1989);. “Where objected to testimony is cumulative of o ther t estimony that h as not been objected to, the error that occurred is harmless.” United States

v. Griffin , 324 F.3d 330, 348 (5th Cir. 2003). The p r o s e cutor had Pierson read the s tipulation a loud, but the district c o urt already had ruled that the stipulation w as admissible due to Nelson’s Rule 4 10 waiver. In fact, Nelson objected to the testimony i n p art because it was “cumulative and unnecessary,” considering the content o f the stipu l a t i o n w o u ld go before the j ury e ither way. Pierson testified that Nelson signed the document k nowingly and v oluntarily, but N e l s o n explicitly abandoned his arguments on those issues at trial. The overriding content of Pierson’s testimony indicated that Nelson considered the contents of the fact u a l basis and did n ot sign i t unknowingly o r involuntarily. Notably, Pierson herself, and then also the district c ourt in rulings limiting government i nquiry, restricted testimony to avoid conversation going to matters other than the knowing and voluntary signing of the f actual basis. Viewing the

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record “in its entirety,” w e conclude that any erro r i n a dmitting Pierson’s testimony was harmless. See Griffin , 324 F.3d at 348. C. Sentencing Loss Calculation Nelson argues that the district court arrived a t t h e wrong guidelines sentencing range b y miscalculating the v alue o f his bribery activity. Although

we review the district court’s loss calculations for clear error, United States v. Scher , 601 F.3d 4 08, 412 (5th Cir. 2010), w e review the di strict court’s method of determining the amount o f loss, as well a s its interpretations of the m eaning of a sentencing guideline, de novo . United States v. H arris , 597 F.3d 2 42, 251 (5th Cir. 2010); U

nited States v. Roussel , 705 F.3d 184, 197 (5th Cir. 2013). Th e s e nt e n c i n g gu i d e li n es provide that the offense level for bribery-related offenses is to be increased as follows: If the value of the payment, the benefit received or to be r eceived in return for the payment, the value of anything obtain e d o r to be obtained by a p ublic official or others acting with a public official, or the loss to the government from the offense, whichever is greatest, exceeded $5,000, increase by the number of levels from the table in § 2B1.1 . . . corresponding to that amount.
U.S.S.G. § 2 C1.1(b)(2). The application notes to § 2B1.1 state that for t h e purpose of this calculation, “loss is the greater of actual l oss or intended loss.” U.S.S.G. § 2B1.1 cmt. n.3(A). Intended loss “means the pecuniary harm that was intended to r esult from the o ffense” and “includes intended pecuniary harm that would have been impossible or unlikely to occur (e.g., a s in a government sting operation, or an insurance fraud in w hich the c l aim e x ceeded the insured value).” Id. cmt. n.3(A)(ii). Intended loss need not be limited to the a mount the defendant is “capable of inflicting.” United States v. Edwards , 303 F .3d 606, 645 n.27 (5th Cir. 2002). Nonetheless, the calculation of intended loss cannot be “purely sp e c u l a tive.” Roussel , 705 F.3d at 201. There must be a “ reasonable estimate o f the ‘ intended

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loss that the d e f

e n d a n t w as attempting to inflict.’” I d. We use a “fact-specific, case-by-case inquiry into the defendant’s intent in d etermining ‘intended loss.’” United States v. Isiwele , 635 F.3d 196, 203 (5th Cir. 2011). “Although it may be theoretically possible t o intend a loss that i s g r e a t e r than the potential actual loss, our case l aw requires the government [to] prove by a preponderance of the evide n c e t h a t the d efendant had the subjective intent to cause the loss that is used t o calculate his offense level.” Id. (quoting United St a t e s v . Sanders , 343 F.3d 511, 527 (5th Cir. 2003)) (internal quotation marks omitted). The district court increased Nelson’s offense level b y 18 corresponding to its valuation of the bribery amount at $6,382,000. See U.S.S.G. § 2 B1. 1 (b)(1). N e l son suggests a 10–level increase corresponding to his suggested loss calculation of $152,000. 6 N e l s o n challenges the district c ourt’s calculations relating to three aspects of the bribery activity: fir s t , t h e letter to the EPA; second, the letter to private investors; and third, the kickback scheme for public contracts. T h e d i s t r i c t c ourt valued the EPA letter at $4 million; the private investor letter at $2 million; and the kickback scheme at $250,000. 1. EPA Letter Although not cited b y th e p arties or the district court, the application notes to the sentencing guidelines establish a special framework, “notwithstanding” the general provisions of § 2B1.1 c mt. 3(A), for “cases involving go v e r nment benefits,” including “grants.” U.S.S.G. § 2B1.1 cmt. 3 (F)(ii); see U nited States v. Mi ller , 607 F.3d 144, 148 n.2 (5th Cir. 2010) (“Commentary contained in U.S.S.G. application notes is ‘authoritative unless it violates the Constitution or

a federal statute, or is inconsistent with, or a plainly e rroneous reading of, that

6 N els on d oes not challenge the $132, 000 los s am ount rem aining, af ter s ubtracting the EPA and inves tor letter and k ickback s chem e valuations

. Pres um ably, the $152, 000 am ount res ults f rom ad d ing the $20, 000 in cas h bribes N els on received , w hich Nels on argues s hould be cons id ered as a n a l t e r n a t ive to the d is trict court’s as s es s m ent of p otential gain f or Cif er f rom the EPA and inves tor letters

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guideline.’”) (quoting Stinson v. United States , 508 U.S. 36, 38 (1993)) (internal quotation marks omitted). For cases involving government benefits, “l o s s s h all be considered to be not less than the value of the b enefits obtained by u nintended recipients or diverted to unintended u ses, as the case may be.” I d. The application note provides an example: “[I]f the defendant was the intended recipient of food s t a m p s having

a value of $100 but fraudu l e ntly received f ood s tamps having a value of $150, loss is $50.” Id. The intended loss analysis applies to such cases: “The i ntention to divert funds from the Government for unintended uses qualifies the

. . . amounts as ‘intended losses.’” United States v . Dowl , 619 F.3d 494, 502 (5th Cir. 2010). The government b enefits rule was instituted to clarify that even if benefits “flowed through an unauthorized intermediary, as long as th ey went to intended recipients or intended uses, the amount of those benefits should not be included in loss.” United States v . Harms , 442 F

. 3 d 367, 380 (5th Cir. 2006) (quoting U.S.S.G. app. C vol. II, at 180 (2010)) (internal q u o t a tion m arks omitted). We have clarified that a d e fendant should not be held accountable for the total amount o f benefits obtained, when some portion of that b enefit would have been obtained absent the fraudulent conduct. Id. Instead, the correct loss calculation is “the difference between the amount the defendant actually received and the amount h e would have received absent the f raud”—in other words, “the amount of loss based on the amount of excess benefits received as a result of fraud.” I d. (emphasis added). Generally, i t i s the government’s burden to s how by a preponderance of the evidence the amount of loss a ttributable to fraudulen t c o n d u c t. United States

v. Hebron , 684 F .3d 554, 563 (5th Cir. 2012). The government’s only evidence of Nelson ’ s intended l oss i n this case—Nelson’s understanding that the letter would “ assist Cifer folks with obtaining a three to four million dollar grant from

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the EPA”—is insufficient to h old N elson a ccountable f or an i nt e n d e d l o s s a m o u nt of $4 m illion. 7 N e l s o n ’ s expectation that Cifer might be eligible for a multimillion dollar grant does not constitute a reasonable estimation of the amount of government funds Nelson intended to divert using his l etter of support. See H e b r o n , 684 F.3d at 563. The letter itself did not identify a requested g r a n t amount, nor did it constitute a gr a n t a p p l i cation. Instead, the letter merely suggested that the EPA “consider taking a leader ship r ole in promoting the development and implementation of standards for the sanitation of waste

c o nt ai n e r s

—

p erhaps u nder the auspi c e s o f f e d e r al gr a nt s all o wi n g m u ni c i p aliti e s to invest i n technologies such as the Cifer 5000.” (emphasis a dded). Nelson acknowledged he believed the letter would “ assist Cifer folks

. . . ,” not that the letter w ould s ecure $4 million in grant money. The wording of Nelson’s acknowl e d g m e nt makes s ense, because Cifer necessarily would have to c omplete various further steps on its own initiative and merit before receiving millions in f e d eral funds. The r ecord establishes that Nelson believed Cifer w a s a legitimate company with the ability to achieve its stated goals and put trucks on the ground in New Roads in a matter of months. The r e i s insufficient evidence to adequately differentiate between legitimate fundi n g C if

e r could have r eceived from the EPA, and any benefits that Nelson i n tended t o stem from this false statement in his letter that he h ad met with other mayors regarding Cifer a n d s imilar p rojects. A defendant’s false statement i n seeking government benefits is insufficient to render him accountable f

or all benefits r eceived or intended to be received. See, e.g. , United States v . Parsons , 1 0 9 F .3d 1002, 1005 (4th Cir. 1997) (“Just as in [a previous

7 Af ter N els on s igned the letter, M yles told him it w as w orth “$4 m illion f or your tow n. ” M yles tes tif

ied : “I had let him k now that becaus e of his letter that w e c o u l d get f ed eral as s is tance

. . . if a m unicip ality [s aid] that they w ere behind us , it is eas y to rais e the cap ital. ”

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case] where the F DA's approval was n o t automatically revoked on the basis of

a false statement, here a n entire travel reimbursement claim was not automatically forfeited because it was partially fraudulent.”). Where a defendant has “defraud[ed] th e gov e r n m e nt t o s u c h an extent that

an accurate loss calculation is not possible,” we have h eld that “the burden shifts to the defendant” t o identify w hich benefits are legitimate. Hebron , 684 F.3d at 563 (noting that if the defendant f ails to make such a showing, the district court may treat the enti r e c l a i m a s i ntended loss). Here, we cannot find such “extensive and pervasive” fraud, at least w ith regard to the EPA grant. See id. Nelson’s activity was limite d to providing a l e tter of s upport, that, as noted above, was introductory in nature and did n ot specify a requested grant amount. We therefore c onclude that this case, a lthough close, is one i n which the amount o f loss cannot reasonably be determined, and it m ay therefore be more appropriate to use “the gain that r esulted f rom the o ffense a s a n alter n a t ive

measure of loss.” § 2B1.1, comment. (n.3(B)). The district co u r t noted at sentencing, i n response to Nels o n ’ s a r g ument that he w as “not sure [whether Cifer or New Roads would be] the intended b eneficiary” of the grant money, that the EPA was part of an overall “scheme . . . with the expectation that [Nelson] himself would receive a substantial su m of money a s a result of it.” We have held, h owever, that the e x p ectation of receiving a “substantial” amount of money is i n sufficiently specific t o base a calculation of intended loss. Roussel , 705 F.3d at 2 01 (“‘Su b s t a n t ial sums’

. . . c annot c o nstitute an estimate o f an intended benefit for the purpose of the s entencing guidelines enhancement.”). The record in this case indicates that government agents requested the E PA letter in return for a $10,000 cash brib e. The FBI viewed the letter as Nelson’s repayment—along with the promised C ifer contract w ith New Road s

—f or the $10,000 amount. As Myles testified, the letter was designed to add “realism” to the operation: “I don’t look like a bank

. . . I’m trying to advance my project. So

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I w ill give you that money if you do this for me. That would be n ormal in any normal businessman transaction.” Thus, the most appropriate valuation of the EPA letter may be the amount Nelson received for writing it, i.e., $10,000. 2. Private Investor Letter Second, Nelson challenges the valuation of the letter he wrote to private investors as $2 million i n intended benefit f or C ifer. The district c ourt found “by

a preponderance of the evidence [that] the d efendant believed the investor letter would b e u s e d to generate at least two million dollars

. . . if not three million dollars . . . and maybe [just] as a starting point.” The guideline commentary defines the value of “the benefit received or to be received” as “the net value of such benefit.” U.S.S.G. § 2C1.1(b)(2)(A), cmt. n.2. The commentary provides two examples: (1) A government employee, in return for a $500 bribe, reduces th e p r i ce of a p iece of surplus property offered for sale by t h e government from $10,000 to $2,000; the value of the benefit received is $8,000. (2) A $150,000 contract on which $ 20,000 p rofit was made was awarded i n return for a bribe; the value of the benefit received is $ 20,000. Do not deduct the value of the bribe i t self in computing the value of the benefit received or to be r e ceived. In the above examples, therefore, the value of the benefit received would be the same regardless of the value of the bribe.
U.S.S.G. § 2C1.1, c mt. n.2; see United States v. G riffin , 3 2 4 F.3d 330, 366 (5th Cir. 2003). Nelson g ave C ifer a letter expressing his official support for the Cif e r project to Quorum Venture Group, which had been set u p b y the FBI. The original letter, drafted by undercover agents, suggested the New R oads City Council supported the contract, but N elson e dited it to state th at w hile New Roads was “committed to working towards a contract” t o u se Cifer, it was contingent on the approval o f the City C ouncil and p ublic input. I d. The letter concluded: “Be assured that the appropriate steps will be taken to ensure that

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the c ity makes a good faith effort to reach a final agreement with [ Cifer] that is both fair and reasonable.” Id. Nelson told the FBI after the investigation had ended that the letter “was to be u s e d to obtain two to three million dollars in private investment money for the Cifer 5000.” As with the EPA letter, while Nelson may have e xpected the letter to

c ontribute to Cifer’s ability to obtain private investments, the letter itself wa s not a funding application, nor did it e x plicitly request any funds. The record indicates that Nelson e xpected Cifer to use its i nvestment funds to launch a legitimate waste receptacle cleaning business. See United States v. Sublett , 124 F.3d 6 9 3 , 695 (5th Cir. 1997) (where a defendant “uses fraud to procure a contract but intends to provide the con t r a c t ed for s ervices,” the defendant “should not be characterized as causing as much loss a s one w ho intends to totally cheat the victim, giving nothing in return.”). In overruling Nelson’s objection to the $2 million valuation, the dist r ict court f ound that Nelson “not only knew that there would be large profits generated as a result i n part from this letter, but also that

. . . the letter was yet

o n e s t e p p e r haps in a series of steps of activities, the ultimate goal of which

w o u l d r e sult in a large sum of money to [ Nelson] p e rsonally.” In m aking th a t f inding, the district court referenced Nelson’s stated concern that Cife r w o u l d walk away with m illions and leave Nelson with “some chump change.”That statement, howev e r , w as made in connection with the kickback scheme, see infra , and not in conne c t i o n with the private i nvestor letter. As noted above, furthermore, we have held that the expectation of receiving a large or “substantial” amount of money is insufficiently specific t o base a calculation of intended loss. Roussel , 705 F.3d at 2 01 (“‘Substantial sums’

. . . cannot constitute an estimate of a n i ntended benefit for the purpose of the sentencing guidelines enhancement.”).

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Because we h ave concluded that a loss recalculation for the EPA letter is appropriate on remand, and because the district court’s reasoning with regard to the private investor letter re l i e d in part on Nelson’s general expectation to generate “a large sum of money,” we deem that c l oser scr u t i n y i s a dvisable regarding the valuation of the private investor letter. 8 3. Kickback Scheme Final l y, Nelson challenges the district court’s $250,000 v aluation of his expected benefit from the kickback scheme. This valu a t i o n was based on Nelson’s proposal to help o b t a in other government contracts f or Cifer, in exchange for 1 0% of Cifer’s profits from the resulting contracts. Myles and Nelson agreed that if Nelson h elped Cifer obtain a $10-million contract resulting

8 Becaus e w e rem and on thes e is s ues , w e need not ad d res s N els on’s argum ent that the d i s t r ict court erred in calculating the f ull rather than net benef it f rom the EPA and p rivate inves tor letters

. We nonetheles s note that this argum ent is incons is tent w ith our preced ent. N els on as s erts that the benef i t f i gures s hould be red uced by the cos ts Cif er w ould incur by
m oving into N ew Road s , s u c h a s p u r c h as ing equip m ent and hiring em p loyees

. The ap p lication note to § 2C1. 1 p rovid es that“[ t] he value of ‘the benef it received or to be received ’
m ean s t h e n e t va l u e of such benef it. ” U

. S. S. G

. § 2C1. 1 cm t. n. 3. We have held that the guid elines ’ us e of the p hras e “net value” d oes not m ean “net p rof its

. ” U ni ted S ta tes v . La nders , 68 F. 3d 882, 885 ( 5th Cir. 1995)

. Ins tead , w e have dis tinguis hed betw een direct cos ts

—w hich are prop erly d ed ucted f rom the benef

its calculation— and ind irect or f ixed cos ts , w hich are not. Id. at 885–86. As f urther guid ance on rem and , w e obs erve that Nels on als o argues the $2 m illion and $4 m illion values w ere “s et by the governm ent op eratives , arguably as a w ay of enhancing M r. N els on’s sentence or encouraging a p lea. ” N els on d id not rais e this objection below , and d oes not exp and on it on ap p eal. We have not “exp res s ly d eterm ined w hether w e have accep ted the concep t of ‘s entencing f actor m anip ulation. ’” U ni ted Sta tes v . Term el l i ng , 43 F. 3d 148, 151 ( 5th Cir. 1995)

. We note, nonetheles s , that this court cons id ered a s im ilar argum ent i n U ni ted Sta tes v. Ri cha rdson , 925 F. 2d 112, 117–18 ( 5t h C i r . 1 9 91)

. In that cas e, the d ef end ant claim ed that the governm ent brought m ore mone y t o t he table in a m oney- laund ering s ting op eration in ord er to rais e t h e eventual s entence. I d. This court af

f irm ed the s entence becaus e the d ef

end ant had “k now led ge and accep tance of the am ount of f und s involved , ” since he “d em ons trated an af f irm ative d es ire to laund er t h e m oney p res ented to him ” and “urged agents to inves t greater s um s of m oney, s ugges ted ad ditional laund ering s cenarios to enlarge the op eration, and initiated calls to exp ed ite the receip t of f und s . ” Id. at 118. H ere, on p lain er r o r r e view there is s uf f icient evid ence that N els on d em ons trated an af f irm ative d es ire to earn m illions f

rom w or king with C if er; that G race, not the governm ent, firs t s ugges ted the id ea of obtaining f

ed eral grant m on e y ; and that N els on s ugges ted the k ick back s chem e him s elf

. 27 Case: 12-30101 Document: 00512405621 Page: 27 Date Filed: 10/14/2013No. 12-30101

in $2.5 million in profit for C ifer, Nelson would r etain $250,000. N elson argues t h a t basing the calculation on a hypothetical c ontract is overly speculativ e because “Myles could have picked any amount” for the hypothetical contract. We conclude, h owever, that the record supports the district court’s determination that Nelson expected to receive a t l e a s t $250,000 for his role in the kickback s cheme. Nelson stated that his “money goal” for the project was to “stack a few mill.” He told Myles, in discussing the s cheme, that h e did not want Cifer to b e bought o u t , “walk away with $300 million a nd leave [Nelson] with

some chump change.” Although the $250,000 figure was mentione d a s part of

a hypothetical scenario, a s the application notes t o the sentencing guidelines caution, a sentencing court “need only m ake a reasonable estimate of the loss.” U.S.S.G. § 2B1.1 cmt. n. 3 ( C )

. With regard to the kickback scheme, the government p resented sufficient evidence that Nelson intended to secure benefits for himself of at l east that amo u n t , if not significantly more, and $250,000 is thus a r easonable—indeed, generous—estimate of the intended loss amount. 9 CONCLUSION For the ab ove reasons, we AFFIRM Nelson’s conviction, VACATE his sentence, and REMAND for resentencing consistent with the above opinion.

9 In this cas e, the d is trict court’s d ow nw ard d ep arture f rom the s entencing range d oes not “d oes not rend er harm les s the court’s s tarti n g f rom an incorrect s entencing guid elines range. ” Roussel , 705 F. 3d at 202. We “cannot as s um e, ” abs ent evid ence in the record , that the d is trict court “w ould not have granted a variance f rom the correct range” for reas ons s im ilar to thos e originally contem p lated , includ ing N els on’s young f am ily and lack of crim inal his tory. Id. ; see also Wi l li a m s v . U ni ted Sta tes , 503 U

. S. 193, 203 ( 1992) )

.

28 Case: 12-30101 Document: 00512405621 Page: 28 Date Filed: 10/14/2013