FI L ED U.S. COURT OF APPEAL S EL EVENTHCI RCUI T AUGUST 19, 2009 THOMAS K. KAH

N CL ERK [PUBLISH]
IN THE UN ITED STATES COURT OF APPEALS FOR THE ELE VENTH CIRCUIT

__ __ __ __ __ __ __ __ __ __ __ __ No. 0 7- 11 30 1

__ __ __ __ __ __ __ __ __ __ __ __ D. C. Dock etNo. 0 5- 20 57 1- CR-P AS UNITED STAT ES OF AMERIC A,
Pl ai nt iff -Ap pe ll ee, ve rs us DEW ITT JACKSON MAXWELL , a.k.a . JACK, Defen da nt -Ap pe ll an t.

__ __ __ __ __ __ __ __ __ __ __ __ App eal fro m

th e Uni te d S ta te s Di st ric t Co urt fo r th e So uthe rnDis tri ctof F lo rid a

__ __ __ __ __ __ __ __ __ __ __ __ _ (Au gu st19 , 20 09 ) Befo re BI RCH an d M ARCUS, Ci rcu itJu dg es , andFORRESTER, Dis tri ctJu dg e. *
MARC US, Cir cu itJu dg e:
Honora ble J . Owen F orre ster, United States District Judge f or the Nor

thern District of * Geor g ia, sitting by

designation.As a re su ltof h is pa rti ci pa ti on in a frau du le ntsch em e to ob ta in co ns tru ct io n

co nt ract s s etasi de forso ci al ly andeco no m ic al ly dis ad vant ag edco m pa ni es at Mi am i In te rn at io na l Ai rp ort (“ MIA”) , Dewit t J ack so n M ax well was c on vi ct edby a jury in t he Uni te d S ta te s Di st ric t Co urt fo r th e So uthe rnDis tri ctof F lo rid a o f
m ai l fr au d, wi re fraud , con sp ira cy to co m m itm ai l an d wi re fraud , m on ey laun de rin g, an d c on sp ira cy to co m m itm on ey

lau nd eri ng in vi ol at io n o f 18 U.S.C. §§ 2, 1 34 1, 1 34 3, 1 34 9, 1 95 6, an d 1 95 7. He was subs eque nt ly sen te nc edto a te rm of im pr is on m en t o f si xt y

m on th s fo ll owe d b y

twen ty-fou r m on th s o f supe rv is ed rel eas e. Max well ap pe al s b ot h h is co nv ic ti on s an d the res ul ti ng sen te nc e. He arg ue s br oa dl y th athi s co nv ic ti on s m

us t b e o ve rtu rn edon th ree g ro un ds : (1 ) hi s ri gh t t o cro ss -ex am in at io n was wron gf ul ly lim it edby the di st ric t co urt i n v io la ti onof t he Si xt h Am en dm en t; (2) th e co nv ic ti on s wer e n otsupp orte d b y su ffi ci en t ev id en ce; an d (3 ) th e reject io n o f hi s p ro ffer edjury in st ru ct io ns ona “ go odfai th ” d efen se am ou nt edto cle ar erro r. Max well als o s ay s t ha t h is sen te nc e m us t b e rev ers ed , be cau se th e d is tri ctco urt cl earl y erre d i n c al cu la ti ng th e am ou ntof l os s en ha nc em en t ap pl ic ab le to hi s s en te nc e u nd er § 2B 1.1 of t he Sen te nc in g Gui de li ne s. Aft er tho ro ug h re vi ew, we affi rm th e co nv ic ti on s an d t he sen te nc e.

2I.

Max well was i nd ic te d b y a gr an d ju ry

in th e So ut he rnDis tri ctof F lo rid a o n twen ty-fou r co un ts of m ai l an d wi re fraud , m on ey lau nd eri ng , andrel at ed
co ns pi raci es , ari si ng ou t o f hi s i nv ol ve m en t wi th si x e le ctric al subc on tra ct s at

1 MIA wh il e h e was Vice Pres id en t, an d the ex ecu ti ve in ch arg e, of Fis k El ect ric al Co rp or at io n’s So ut h F lo rid a o ffi ce (“ Fi sk ”). A. The Trial The ess en ti al fact s t ak enin a li gh t m os t fa vo rab le to th e jury’ s v erd ic t ar e th es e. Of th e si x M IA co nt ract s i nv ol ve d i n t hi s ca se , fiv e were f un de d b y Mi am iDad e Co un ty (the “ Co un ty”) andrequi redco m pl ianc e wit h the Co un ty’ s Co m m un it y Sm al l Bu si ne ss Ent erp ris e (“ CSBE” ) pr og ram . Thi s p ro gr am set s 2
as id e a ce rta in pe rcen ta ge of t he Co un ty’ s co ns tru ct io n wo rkto be pe rfo rm edby
Specifica lly , Count 1 charg ed conspira cy to commit mail and wire fr aud in violation of 1 18 U.S.C. § 1349; C ounts 2 and 3 cha rg ed wire fra

ud in violation of 18 U.S.C. §§ 1343 and 2; Counts 4-13 charg ed mail fra ud in violation of 18 U.S.C. §§ 1341 and 2; C ount 14 char g ed conspirac y

to commit promoti onal and c oncea lment money launder ing in violation of 18 U.S.C. § 1956(h); Count 15 char g ed conspira cy to commit money

launder ing in violation of 18 U.S.C. § 1956(h); Counts 16-20 cha rg ed money

launder ing in violation of 18 U.S.C. §§ 1956(a) (1)( A)(i) and 2; and Counts 21-24 cha rg ed money

launder ing in violation of 18 U.S.C. §§ 1957 and 2. The CSBE pr og ram is a County program set f

orth in County

Ordinanc e 97-52 c odified 2 at § 1033.02 of the Miami-D ade County Code and Administrative Order 3- 22. A CSBE is “a construction re lated ente rprise . . . which has a n actua l place of

business in Miami-Dade County” and has a n aver ag e gross reve nue below a specifie d amount. Under the CSBE program, a specifie d perc entag e of a

ny cover ed County

construction proje ct must be completed by a CSBE. This quota is satisfied only if the CSBE per forms a “ commerc ially useful func tion.” 3qu al ifyin g s m al l, l oc al bu si ne ss es . The s ix th MIA co nt ractwas fe de ral ly fun de d

an d re qu ire d c om

pl ia nc e wit h the Dis ad va nt ag edBu si ne ss Ent erp ris es (“ DBE”) pr og ram . To o bt ai n a ndm ai nt ai n aco nt ractun de r th es e p ro gr am s, a C SBE o r

3 DBE m us t p erfo rm

a co m m erci al ly use fu l fu nc ti on in th e co m pl et io n o f th e co nt ract . A com

m erci al ly use fu l fu nc ti on oc cu rs when th e CSB E or DBE ac tu al ly pe rfo rm s, m an ag es , andsupe rv is es th e work i nv ol ve d. Co un ty O rd in an ce 9 7- 52 ; 49 C.F.R. § 26 .55 (c)( 1) . “ A DBE do es no t p erfo rm a co m m erci al ly use fu l fu nc ti on if i ts rol e is li m it edto th atof an e xt ra p art ic ip an t i n atra ns act io n, co nt ract , or p ro

ject t hr ou gh whi ch fun ds are p as se d i n o rd er t o o bt ai n t he ap pe aran ce o f DBE pa rti ci pa ti on .” 49 C.F.R. § 26 .55 (c)( 2)
. Bec au se Fis k i s a l arg e Tex as -b as edele ctric al co nt ract in g c or po rat io n wi th of fic es na ti on wid e, itis no t el ig ib le for CSBE o r DBE co nt ract s. Ho wev er, the
supe rs ed in g i nd ic tm en t al le ge d t ha t Fi sk , th ro ug h t he co nduc t o f Max well an d h is
co -co ns pi rat or s, o bt ai ne d fu nd s s etasi de forCSBE an d DBE el ect ric al co nt ract or s by repre se nt in g t o t he Co un ty andth e Uni te d S ta te s t ha t a C SBE o r DBE was
co m pl et in g t he workan d re cei vi ng th e p aym en ts on th e CSB E or DBE co ntract The DB E program is a f

eder al program c odified in 49 C.F.R. § 26. A DB E is a for- 3 profit small business that is at least fifty -one pe rce nt owned by one or more socially

and economica lly

disadvantag ed individuals, and whose ma nag ement and da ily

business operations are controlled by

at least one of those individuals. I d. at § 26.5. A DB E must be cer tified by the state in which it opera

tes and must perf

orm a c ommercia lly

useful func tion. 4whe n, i n fa ct , Fis k was do in g t he workan d t he CSBE o r DBE was p as si ng th e

pa ym en ts on to Fis k. Of th e si x M IA co nt ract s, t hr ee i nv ol ve d t he Nort h Term in al (Co nt ract s 73 7A, 7 37 G, and73 9F ), two in vo lv edth e So ut h Term in al (Co nt ract s B 31 3A an d B3 15 A), an d o ne in vo lv edth e im pr ov em en t o f ai rp ort-wi de sec ur it y (Co ntract F0 34 F). The fiv e co nt ract s i nv ol vi ng th e North an d S ou th Term in al s wer e fu nd ed by the Co un ty andrequi redco m pl ianc e wit h the CSBE p ro gr am . The s ix th
co nt ractwas fe de ral ly fina nc ed , th us requi rin g c om pl ia nc e with t he DBE pro gr am . To b e el ig ib le forth e n on -CSB E or n on -DBE po rti on of s ev eral of t he se ele ctric al
co nt ract s, Fi skha d t o s ub m it , as p artof i ts bi d p ack ag e, a “ Lett er o f In te nt ” an d

“ Sch edul e o f Part ic ip at io n” id en ti fy in g t he CSBE o r DBE subc on tra ct oran d sp eci fy in g t he pe rcen ta ge of t he job th atsubc on tra ct orwou ldpe rfo rm . Once t he bi d i s awa rd ed , com

pl ia nc e wit h t he CSBE p ro gr am is m on it or edth ro ug h t he
subm is si on of M on th ly Uti li zat io n R ep orts (“ MURs ”) th atcert ify the type an d 4 qu an ti ty of work b ei ng pe rfo rm edby the CSBE. The Co un ty also pe rfo rm s ran do m au di ts of t he CSBEs to en su re the y are p erfo rm in g aco m

m erci al ly use fu l

A MUR is “a report completed by the succ essful bidder on a contra ct that is set-aside” 4 as a CSBE c ontrac t. It is “submitt ed monthly , listi ngall work pe rfor med in the past month by the CSBE identified on the Sche dule of Participation and all expenditures paid to date to the identified CSBE.” A dminist rative O rder 3-22, as amended. 5fu nc ti on . Sim il arl y , th e Mi am i-Da de Avi at io n Dep art m en t’s Offi ce o f Mi no rit y

Affai rs m on it or s al l fe de ral ly-fun de d c on tra ct s t o e ns ur e co m pl ianc e wit h t he DBE pr og ram . At t ria l, the Gov ern m en t p res en te d e vi de nc e th at , th ro ug h M ax well ’s effo rts , Fis k was ab le to ob ta in co nt ract s atMIA an d t he fun ds ge ne rat edby the m , ba se d o n aser ie s o f fal se cla im s t ha t a qua li fie d C SBE o r DBE was p erfo rm in g a co m m erci al ly use fu l fu nc ti on , when , in tru th an d i n fa ct , th e CSB E or DBE wo ul d do li tt le or n o wo rkonth e co nt ract s. In st ead , Fis k wo ul d c om pl et e th e CSB E or DBE po rti on of the co nt ract , andth e CSB E or DBE wo ul d turn o ve r it s p aym en ts fro m th e Co un ty or th e Uni te d S ta te s t o F is k. Max well ’s co- co ns pi rat or s i n thi s s ch em e were No rm an“ Pat ” Cl yne an d Hect orPau lt re. Cl yne was t he op erat io ns m an ag er atFis k, h av in g h adpre vi ou sl y worke d fo r Max well at ano th er el ect ric al co nt ract orin Mi am i. He b ecame em pl oyed atFis k wh enMax well op en edth e fi rm ’s off ic e inJan ua ry

19 98 an d Max well was h is di rectsupe rv is or . Clyne d es cri be d M ax well as a“ m ic ro
m an ag er” wh o wan te d t o kno w eve ryth in g t ha t h ap pe ne d i n the off ic e, rece iv ed
co pi es of a ll co rres po nd en ce, reg ul arl y vi si te d jo b s it es , andha d wee kl y m eet in gs wit h p ro ject m an ag ers . Pau lt re was a fo rm er Fi skpu rch as in g a ge ntan d m at eri al ex pe di te r who was 6in tro du cedto Clyne b y Max well in 19 98 as t he own er o f FLP Ent erp ris es (“ FLP”). Max well to ldClyne t ha t ce rti fie d C SBE an d DBE el ect ric al co nt ract orFLP “ was go in g t o b e o ursm al l b us in es s an d d is advant ag edpa rtn er as [Fi sk ] st art edto bi d fo r fu tu re wo rk .” All li cen se d e le ctric al co nt ract or s ar e requi redto de si gn at e a

“ qu al ifi er” wh o h ol ds th e li cen se , si gn s t he pe rm it s, an d i s re sp on si bl e fo r th e work andth e fi na nc ia l s ta tu s o f th e co m pany. Bec au se Pau ltre was no t a l ic en se d el ect ric ia n, FLP’s qua li fie r was alwa y s a F is k e m pl oyee. Even tu al ly, Max well tapp edMi ch ael Mal on e, hi s re la ti on by m arri ag e, to be FLP’s qu al ifi er an d Pau ltre’s b us in es s p art ne r. Max well an d h is co -co ns pi rat or s fr au du le nt ly induc edth e awardof t he si x MIA co ntract s t o F is k a ndFLP by fals el y rep res en ti ng in th ei r bi ds th atFLP
wou ldpe rfo rm

a co m m erci al ly use fu l fu nc ti on on th os e co ntract s as th e requi red CSBE o r DBE. Whe n C lyne p rep aredFis k’s b id s fo r th es e co nt ract s, h e in cl ud ed a p erce nt ag e o f th e work t ha t wo ul d b e p erfo rm edby FLP, buthe ne ve r co nf erre d wit h F LP ab ou t t he sco pe or c os t o f th e job . Clyne was ab le to do th is be cau se Pau ltre, o n b eh al f of

FLP, ha d p re-s ig ne d b lankLett ers of I nt en t fo r Fi sk
em pl oyees t o fi ll ou t as ne ed edto co m pl et e th e b id s. Max well , Clyne, an d P au lt re ag reedth atFis k wo ul d p ay FLP a fee equa l t o ei th er thr ee o r fi ve pe rcen t o f th e v al ue of the CSBE o r DBE po rti on of t he
7co nt ract ; the res t o f th e p aym en ts m ad e u nd er the CSBE o r DBE po rti on of the

co nt ractwou ldbe pa ss edon to Fis k. Lat er, wh enMax well learn edth atPau lt re ha d c om pl ai ne d t ha t FLP was no t m ak in g a ny m on ey on th e MIA co nt ract s, h e to ldhi s p ro

ject m an ag er “ to tel l t ha t s on of abi tc h t ha t h e was ge tt in g h is fiv e pe rcen t an d ju stdo whathe was t ol d.” Once th es e co nt ract s wer e award ed , Max well an d h is co -co ns pi rat or s cr eat edth e il lu si on th atFLP was pe rfo rm in g a co m m erci al ly use fu l fu nc ti on when , in fact , Fis k p erfo rm edvi rtu al ly all o f th e work o n t he co nt ract s. Th ey als o t oo k m eas ur es to co nc eal th is frau d fr om Co un ty
au di to rs . Co nt ract73 7A, i n p art ic ul ar, cal le d fo r th e rel oc at io n o f un de rg ro un d ut il it ie s i n t he Nort h Term in al . The p rimary co nt ract orwas C en tra l Fl or id a Equ ip m en t Re nt al of Da de Co un ty (“ Cen tra l Fl or id a”), wh ic h, i n turn, h ire d
subc on tra ct or s t o c om

pl y wit h the CSBE p ro gr am . Whe n t he in it ia l CS BE el ect ric al subc on tra ct orlef t t he job , FLP was a ward edth e job aft er s ub m it ti ng to th e Co un ty a Lette r of

Int en t ce rti fy in g t ha t i t wo ul d p erfo rm th e CSB E-de si gn at ed
work o n t he co nt ract . Howev er, atMax well ’s di rect io n, Fi skpe rfo rm edth e CSB E
work o n C on tra ct73 7A. Sp eci fic al ly, Max well di rect edClyne t o o pe n ajob
nu m be r wit hi n F is k’s ac co un ti ng syste m forth e co nt ractan d t o o bt ai n t he pe rm it
. Fi skpu rch as edall of t he m at eri al s an d s up pl ie d a ll of t he lab or , whi ch was 8supe rv is edby a Fis k fo rep ers on . Neit he r Pau lt re n orMal on e were i nv ol ve d i n

supe rv is in g o r m an ag in g t he pro ject. When th e job was c om pl et ed , Cen tra l Fl or id a p ai d F LP wit h a$9 0,0 00 ch eck ; Paul tre , in tu rn , end or se d t he en ti re ch eck to Fis k a nditwas d ep os it edin a Fi skba nkacco un t. Aft er Co un ty aud it or s as ke d Pau ltre t o e xp la in why FLP h adtu rn edov er the en ti re $ 90 ,00 0 t o F is k, Cl yne , Pau ltre, an d M al on e, wit h M ax well ’s app ro va l, p rep aredan d s ub m it te d t o t he Co un ty fals ifi edba ck -d at edlet te rs be twee n F LP an d F is k t o g iv e th e ap pe aran ce th atFLP was rep ay in g alo anm ad e b y Fis k. Co nt ract73 7G was a th ree- y ear p ro ject t o i ns ta ll th e m ai n i nf ras tru ctur e fo r te le ph on e an d s wit chge ar ro om s an d re qu ire d fi fte enpe rcen t o f th e el ect ric al
work t o b e p erfo rm edby a CSBE. Con tra ct73 9F was e arm ark edforth e in st al la ti onof i nt eri orele ctric al workan d re qu ire d t ha t n in et een pe rcen t o f th e work b e d on e b y

a CSB E. Fis k s ub m it te d b id s o n b oth c on tra ct s, re pr es en ti ng th at th e requi si te pe rcen ta ge s o f CSB E workwou ldbe subc on tra ct edto FLP. Pau lt re an d M al on e were n otco ns ul te d abo utFLP’s pa rti ci pa ti on inth es e b id s. Fi skwas award edbo th co nt ract s an d i t was ag reedth atFis k wo ul d re cei ve all th e p ro ceed s fro m th e CSB E po rti on of the co nt ractex cep t fo r a thr ee p erce ntfee t ha t was to be pa idto FLP. To cre at e th e il lu si on th atFLP actua ll y was wo rk in g o n the se job si te s, Fi skfor em entrans ferr edFis k e m pl oyees t o F LP’s payrol l; th e fax sen t b y 9th e Fi skpro

ject m an ag er t o M ax well co nf irming th e tr an sf

er n ot edth at“ we ne ed to sh ow an FLP pr es en ce o n o ur pro jects .” Neit he r Pau lt re n orMal on e were co ns ul te d o r in vo lv edin th e em pl oyee tra ns fer. Aft er thi s t ran sf er, the em pl oyees co nt in ue d t o e arn th e sa m e p ay , com pl et e th e sa m e ta sk s, were supe rv is edby Fisk fo rem en , andus edFis k e qu ip m en t. Mo reo ve r, Fis k, wi th Max well ’s kn owl ed ge , rei m bu rs edFLP fo r al l o f it s labo r co st s fo r th e tr an sf

erre d wo rk ers . Max well als o d ire ct edth atth e Fi sktra il er on th e job si te be rep la cedby an FLP trai le r, fo r whi ch Fis k p ai d. No tabl y , nei th er Pau ltre n orMal on e supe rv is edany work ers , att en de d wee kl y pl an ni ng m eet in gs , pu rch as edm at eri al s, o r ot he rwis e p art ic ip at edin th e co m pl et io n o f th es e two
co nt ract s. In de ed , all Mal on e di d was “ m a[k ]e sur e th ey di dn ’t hav e an y

Fis k st ic ke rs on th ei r ha rd -h at s an d m a[k ]e sur e th ey real iz edth ey

were wo rk in g fo r FLP Ent erp ris es an d n otFis k El ect ric .” Gen eral ly, Fi skpe rs on ne l d el iv eredpa y ch eck s t o the FLP em pl oyees. Fi sk
wro te two -p art y

ch eck s, wh ic h l is te d b ot h F is k a ndFLP as pa y or s, t o v en do rs to gi ve th e ap pe aran ce t ha t FLP was pu rch as in g m at eri al s; ho wev er Cl yne an d o th er Fi skem pl oyees n eg ot ia te d, o rd ered , andpa idforall th e m at eri al s. Fi na ll y , and wit h M ax well ’s kn owl ed ge , Fis k s ub m it te d M URs to th e Co un ty fals el y cla im in g th atFLP co m

pl et edth e requi si te CSBE p erce nt ag e o n t he two co nt ract s. In de ed , a 10Fi skem

pl oyee to ldMax well an d C lyne tha t h e “ was co nc ern edwit h t he factth at [h e] was fi ll in g o ut[MURs ] fo r ou r m in or it y pa rti ci pa ti on , bu t we d idno t h av e
m in or it y pa rti ci pa ti on onth e p ro

ject a t t ha t t im e.” Ma xwe ll to ldth e em pl oyee: “ it
wou ldbe tak encare of a ndno t t o wo rry ab ou t i t.” Co nt ractF0 34 F, st il l an ot he r of th e rel ev an t co nt ract s, was forth e co ns tru ct io n o f se cu rit y

roo m s an d t he in st al la ti on of afib er-o pt ic in fras tru ctur e th ro ug ho utth e ai rp ort. Bec au se th e co nt ractwas afed eral ly-fun de d p ro ject, si xt een pe rcen t o f th e work h adto be co m pl et edby a DBE. Fis k was award edth e el ect ric al po rti onof t he co nt ractaft er rep res en ti ng init s b idth atFLP wou ld pe rfo rm th e requi redDBE po rti on of t he ele ctric al work . Agai n, t he bi d o r sc op e of th e p ro ject was ne ve r di sc us se d wi thPau lt re o r Mal on e; th e o nl y di sc us si on was whe th er t o g iv e FLP a t wo p erce ntor ath ree p erce ntcu t o f th e DBE co nt ract . Max well an d C lyne i ns tru ct eda Fi skem pl oyee to “br eakou t a s ect io n o f th e ov eral l co nt ractto gi ve to FLP,” p refe rab ly one th atin vo lv edon ly the pu rch as e o f
m at eri al s an d n otth e p erfo rm an ce o f labo r. Thatem pl oyee ex pr es se d c on cern th at Fi skha d n o s ub co nt ractwith F LP, bu t, ag ai n, was to ldno t t o wo rry ab ou t i t. Fi skth enpu rch as edm at eri al s i n F LP’s name; Cl yne di d a ll of t he
ne go ti at io ns an d F LP’s on ly inv ol ve m en t was th e ap pe aran ce o f it s n am e o n t he two -p art y ch eckus edto pa y

th e supp li er. Fi skals o t ran sf erre d s om e o f it s wo rk ers 11to FLP’s pa yro ll an d a dv an cedm on ey to FLP to pay

th os e worke rs ; the y

co nt in ue d to do th e sa m e work t he y ha d p erfo rm edpre vi ou sl y as F is k e m

pl oyees, an d t he y co nt in ue d t o b e supe rv is edby Fiskpe rs on ne l. Ma xwe ll in st ru ct edClyne t o m ak e su re tha t Paul tre att en de d wee kl y pro ject m eet in gs in ord er t o g iv e th e ap pe aran ce of FLP in vo lv em en t. Ma lo ne att en de d o nl y on e o r two of t he th irt y

m eet in gs an d vi si te d t he job si te on ly a coupl e o f ti m es . Fis k a ls o s ub m it te d M URs fal se ly rep res en ti ng th atFLP ha d p erfo rm edth e DBE requi redpo rti on of t he co nt ract . Co nt ract s B 31 3A an d B 31 5A al so requi redCSBE p art ic ip at io n, h owe ve r, th e p rimary

co nt ract orst ru ctur edth e co nt ract s s o t ha t Fi skan d F LP each ha d
se pa rat e subc on tra ct s d ire ct ly w it h t he pri m ary co nt ract or , as o pp os edto m ak in g Fi ska subc on tra ct orof t he pri m ary co nt ract or , andm ak in g F LP a subc on tra ct orof Fi sk . Alth ou gh FLP ha d i ts own co nt ract s, wh ic h re qu ire d t he pe rfo rm an ce o f
work d iff eren t fr om

th e work s pe ci fie d i n F is k’s co nt ract s, Fi skactua ll y pe rfo rm ed th e work o n a ll fou r co nt ract s. Ma xwe ll an d C lyne i ns tru ct edth ei r m an ag ers to sp li t t he workon th e p ro

jects be twee n F is k a ndFLP ev enth ou gh Fis k wo ul d l os e
m on ey do in g t hi s. When Fis k’s l ab orsupe rin te nd en t as ke d M ax well “ wha t k in d of m on ey Fis k El ect ric st an ds to lo se ,” Max well rep li ed , “ th is is whatwe ha ve to do to st ay in bu si ne ss .” As FLP’s Pro ject M an ag er, Ma lo ne ex pl ai ne d tha t h e

“ba si cal ly did n’t d o anyth in g,” be cau se Fis k ra n b ot h F is k’s an d F LP’s con tra ct s. 12Mal on e an d P au lt re ra rel y att en de d c on st ru ct io n m eet in gs an d d idno t
supe rv is e th e worke rs . Fis k wo rk ers an d fo rep eo pl e were t ran sf erre d t o t he FLP pa yro ll du rin g t he co m

pl et io n o f th es e co nt ract s an d F is k p rep aredall of t he
ne ces sa ry co rres po nd en ce b etween FLP an d t he pri m ary co ntract or . Fis k a ls o pr ep aredth e d ai ly pro gr es s re po rts do cu m en ti ng th e work p erfo rm edby bot h F is k
an d F LP em

pl oyees a ndpre pa redFLP’s pa y ap pl ic at io ns . In fa ct , Fis k p ro ject
m an ag er Gary Sarge nttes ti fie d, t hi s was th e fi rs t t im e in hi s t wen ty-ni ne y ear care er tha t h e h adbe enask edto pre pare d ai ly repo rts , corres po nd en ce, an d p ay ap pl ic at io ns on be ha lf o f an ot he r subc on tra ct or . Pau lt re al so pu rch as edth e Fi sk
va n t ha t Fi skan d F LP ha d b een us in g t o t rav el to th e job si te , andpl acedFLP st ic ke rs on th e v anag ai n i n o rd er t o g iv e th e ap pe aran ce o f FLP’s p res en ce. As fo r eac h o f th es e two co nt ract s, FLP re cei ve d p ro gr es s p aym en ts di rect ly fro m th e p rimary

co nt ract or . Max well be li ev edth atan y pa y m en ts FLP rece iv ed be lo ng edto Fis k, an d t ha t FLP was en ti tl edon ly to i ts us ua l t hr ee o r fi ve pe rcen t
cu t. On ce FLP a ccu m

ul at edap pr ox im at el y

$1 m il li on in pro gr es s p aym en ts , Max well be ga n a sk in g C lyne d ai ly how t he y were g oi ng to reco ve r th e m on ey , vo ic in g c on cern th atPau lt re m ig htfle e wit h i t t o Hai ti . Max well di rect edClyne t o in fo rm th e p rimary

co nt ract orno t t o m ak e fu rth er p aym en ts to FLP un ti l M ax well
co ul d “ fig ur e o utho w to ge t t he ex tracas h” FLP ha d b een rece iv in g fo r Fi sk ’s
13work. Ma xwe ll an d C lyne m on it or edFLP’s cas h fl ow an d M ax well de m an de d

co pi es of a ll of t he ch eck s i ss ue d b y th e p rimary

co nt ract orto FLP. Ind eed , Max well wrot e a n ot e to Clyne as ki ng hi m “ whe re ar e we o n t he ha lf m il li on do ll ars ,” refe rri ng to th e p ro gr es s p aym en ts th atFLP ha d a ccu m ul at ed . Becau se th e Co un ty hadbe gu n aud it in g F LP, Fis k d ev is eda sc he m e to reco up th e p ro gr es s pa ym en ts by hav in g F LP pa y Fis k’s i nv oi ces on ot he r MIA co nt ract s. To do th is , Cl yne , with M ax well ’s app ro va l, cr eat edan d s en t fa ls e in vo ic es to FLP fo r pa ym en t. Thu s, fo r ex am pl e, Cl yne ask eda supp li er t o v oi d t he in vo ic es itha d is su edto Fis k a ndrei ss ue ne w in vo ic es di rect in g tho se ch arg es to FLP. Clyne al so al te redso m e in vo ic es hi m se lf u si ng whi te -o utto crea te th e il lu si on th atth e d eb ts be lo ng edto FLP an d n otto Fis k. An In te rn al Rev en ue Serv ic es Sp eci al Agen t au di te d t he fin an ci al an d
co nt ractua l re co rd s ad m it te d i nt o e vi de nc e an d c al cu la te d t ha t FLP was pa ida to ta l o f $7 ,97 4,6 47 by the Co un ty andth e Uni te d S ta te s fo r it s co m pl et io n o f th e CSBE an d DBE wo rkon th e si x M IA co nt ract s. Incro ss -ex am in in g g ov ern m en t wi tn es s an d c o- co ns pi rat orClyne, Ma xwe ll at te m pt edto qu es ti onhi m

ab ou t wo rkdo ne by FLP onco nt ract s o th er tha n t he si x MIA co ntract s. Th e ad di ti on al co nt ract s wer e n otdi sc us se d dur in g C lyne’s d ire ct
ex am in at io n. Th e d is tri ctco urt i nf orm edMax well th athe co ul d n otcro ss 14ex am in e Cl yne on th os e o th er co nt ract s, i ns tru ct in g h im th at“ [y ]ou n eedto cal l Mr. Cl yne in y ou r cas e” i f he want edto di sc us s the m si nc e th ey

fel l o ut si de th e sc op e o f di rectex am in at io n. (Oc t. 2 6, 2 00 6 Tra ns cri ptat 4 8) . The d is tri ctco urt
ex pl ai ne d i ts rul in g t hi s way: W e h av e si x c on tra ct s h ere. We hav e a co m pl ex syste m . Let’s k eep it fo cu se d on th e ch arg es wit h th e co nt ract s th at are in is su e. I’m no t he re to he ar an yth in g ab ou t wha t he m ay ha ve do ne on an y oth e r p l a ce. Tha t’s n otrel ev an t.

. . . . You can cal l Mr. Cl yne in y ou r cas e if y ouwantto ge t i nt o o th er ar eas as pa rt o f y ou r de fen se . (Id . at 4 9) (em

ph as is ad de d)
. At o th er t im es du rin g t he tri al , th e d efen dantatt em pt edto refe ren ce ag reem en ts ot he r th anth e si x M IA co nt ract s; th e d is tri ctco urt ag ai n e xp la in edth at Max well co ul d e xp lo re the lar ge r rel at io ns hi p b etween FLP an d F is k wh il e pr es en ti ng hi s o wn ca se , bu t wo ul d n otbe pe rm it te d t o a dd res s t he m at te r du rin g th e cro ss -ex am in at io n o f th e Gov ern m en t wi tn es se s. (Oct . 23 , 20 06 Tran sc rip t at 12 5)
. Max well ’s def

en se in cl ud edtes ti m on y

ab ou t l oc al in du st ry

st an da rd s. In pa rti cu la r, hi s wi tn es se s s ai d t ha t i t was co m m on in th e el ectric al in du st ry for el ect ric ia ns to be sh ift edbe twee n e m pl oyers o n t he job si te , andfor lar ge r co m pa ni es to m en to r an d h el p s m al le r co m pa ni es by adv an ci ng fun ds forth ei r 15labo r an d s up pl ie s. A labo r at to rn ey forth e Mi am i ch ap te r of th e In te rn at io na l Bro th erh oo d o f Elec tri cal W orke rs tes ti fie d t ha t, p ur su an t t o a n u nwr it te n

“ in te rp ret at io n” of t he co ll ect iv e b arg ai ni ng ag reem en t, wo rk ers co ul d b e reas si gn edfro m

a pr im e co nt ract orto a CSB E or DBE s ub co ntract oron th e sa m e job witho utrequi rin g t ha t wo rk er t o g o t hr ou gh th e u ni on ha ll forreas si gn m en t. A gen eral co nt ract oran d p ers on al fri en d o f Max well als o t es ti fie d t ha t i t
was “ ve ry

co m m on ” in th e co ns tru ct io n i ndus try for b ig co nt ract or s t o m en to r, tra in , andhe lp sm al le r bu si ne ss es , so m et im es by adv an ci ng fun ds to pay forlab or an d m at eri al an d u si ng two -p art y ch eck s. He ex pl ai ne d t ha t i n t he pe rfo rm an ce o f
work a t M IA, wher e se cu rit y cle aran ce i s a r eal co nc ern , itwas n otun co m m on for a la rg er co nt ract orto sh are e m pl oyees wi th a CSB E on th e sa m e job . The wi tn es s, ho wev er, ad m it te d t ha t t he CSBE p ro gr am ’s go al of trai ni ng an d m en to rin g wo ul d
no t b e ad va nc edby the m en to r co m pa ny m erel y

ad di ng th e CSB E’ s n am e to two pa rty chec ks or h av in g t he CSBE ac t as a labo r po ol . He als o t es ti fie d t ha t CS BEs
an d DBEs are s up po se d t o b idonth ei r own job s, m an ag e an d s up erv is e th e job s th ey pe rfo rm , ord er the ir o wn m at eri al s, s ub m itth ei r ownpa y ap pl ic at io ns , and pa y th ei r own em

pl oyees. He co nc lu de d t ha t i t wo ul d n otbe a “ no rm al pra ct ic e,”
an d i t wo ul d n otbe pe rm is si bl e fo r a g en eral co nt ract orto pa y a fee f orth e u se of a CSB E’ s ce rti fic at io n. 16The Gov ern m en t co nc lu de d i ts cas e b y pre se nt in g t wo re bu tt al wit ne ss es who own edcert ifi edCSBE el ect ric al co m pa ni es . They te st ifi edth atth ey pre pa red th ei r own bi ds forCo un ty pro jects ; g en eral co nt ract or s h adne ve r tr an sf erre d
worke rs to th ei r pa y

ro ll s; th ey

ne go ti at edan d m ad e th e p ur ch as es of the ir o wn
m at eri al s; th ei r own for ep eo pl e an d p ro ject m an ag ers att en de d c on stru ct io n
m eet in gs an d s up erv is edth ei r worke rs ; an d the CSBEs pre pa redth ei r own pa y ap pl ic at io ns . Pri orto tri al , th e d is tri ctco urt i ns tru ct edMax well th athe co ul d n otm en ti on a Pre -Tri al Div ers io n Ag reem en t re ach edbe twee n F is k a ndth e Gov ern m en t. (Oct . 17 , 20 06 Tran sc rip t at38 ; Oct . 18 , 20 06 Tran sc rip t at10 1- 10 5) . Und er the te rm s o f th e ag reem en t, Fi skwas re qu ire d t o fi re Ma xwe ll , di sc on ti nu e p ay in g fo r hi s d efen se , andaidth e Gov ern m en t’s p ro se cu ti on of t he de fen da ntby pro vi di ng in fo rm at io n t hr ou gh wit ne ss es , evi de nc e, an d t es ti m on y . In e xc ha ng e fo r th is
co op erat io n, Fi skwou ldav oi d b ei ng pro se cu te d a ndco ul d c on ti nu e p art ic ip at in g in Co un ty andUni te d S ta te s fu nd edco nt ract s. Inpro hi bi ti ng th e d is cu ss io n o f th is ag reem en t, the di st ric t co urt ex pl ai ne d th atth e Pre -Tri al Div ers io n Ag reem en t wo ul d b e rel ev an t fo r im pe ach m en t pu rp os es on ly if th e wit ne ss was t he att orne y who dra fte d t he ag reem en t, the Fis k si gn at ory to th e ag reem en t, o r th e co rp or at io n i ts el f. (Oct. 1 8, 2 00 6 Tra ns cri ptat 1710 1) . It co nt in ue d t ha t t he Pre-Tri al Div ers io n Ag reem en t wo ul d n otbe rel ev an t

fo r im pe ach m en t p ur

po se s o f a wit ne ss who is m erel y a Fi skem

pl oyee, bec au se be in g a n e m

pl oyee do es no t m ean th atth e wit ne ss ha d any pers on al , firs t-h an d kn owl ed ge of t he cir cu m st an ces su rro un di ng th e ag reem en t. (Id .). The d is tri ct
co urt al so ex pl ai ne d tha t the Pre-Tri al Div ers io n Ag reem en t wo ul d m is le adth e jury becau se Fis k was no t a d efen da ntin th e cas e. (Id . at 1 14 ). At t he co nc lu si on of t he fou r weektri al , th e jury con vi ct edMax well on twen ty-th ree c ou nt s. There aft er, the di st ric t co urt d en ie d b ot h M ax well ’s Mo ti on 5 fo r Ju dg m en t o f Acqui tt al an d h is Mo ti on fora New Tria l, fi nd in g t ha t h is
co nv ic ti on was s up po rte d b y su ffi ci en t ev id en ce; th atth e co urt h adno t ab us edit s di sc ret io n i n p ro hi bi ti ng Max well fro m cro ss -ex am in in g t he Gov ern m en t’s wit ne ss es ab ou t CS BE an d DBE wo rkdo ne by FLP ou ts id e o f th e si x M IA
co nt ract s; th atth ere was no ab us e o f di sc ret io n i n p ro hi bi ti ng Max well fro m in tro du ci ng ev id en ce o f th e Pre -Tri al Div ers io n Ag reem en t; th atitdi d n otab us e it s d is cret io n i n e xc lu di ng ev id en ce o f paym en ts fro m th e Co un ty to Fi skan d n ew co nt ract s atMIA awar de d t o F is k; th atth ere was no t an im pr op er v ari an ce be twee n the supe rs ed in g i nd ic tm en t an d t he pro of at t ria l; th atitdi d n otab us e it s di sc ret io n i n re

jecti ng Max well ’s pro po se d ju ry in stru ct io n; an d, fi na ll y , th atit
The Gove rnment had dismissed Count 5 on October 6, 2006. 5 18co ul d d is cern no pro se cu to ria l m is co nduc t.

B. The Sen te nc e InMax well ’s Pres en te nc e In ve st ig at io n R ep ort (“ PSI” ), he was a ss ig ne d a ba se off en se lev el of s ev enun de r § 2 S1 .1(a )(1 ) of th e Sen te nc in g Gu id el in es . The PSI t he n app li edth e Gov ern m en t Be ne fit s Pr ov is io n o f th e App li cat io n No te s o f § 2B 1.1 of t he Sen te nc in g Gu id el in es in ord er t o fi ndth e ap pr op ria te am ou ntof l os s in th e cas e, whi ch itfou ndwas the en ti re s um of t he CSBE an d DBE p aym en ts
rece iv edby FLP from

th e si x M IA co nt ract s. Be cau se th atlo ss am ou ntwas i n ex ces s o f $7 m il li on , Max well ’s off en se lev el was i nc reas edby twent y lev el s. Add it io na ll y , th e PSI r eco m m en de d i nc reas in g h is off en se lev el by two l ev el s pu rs ua ntto § 2 B1 .1(b )(9 )(C) , bec au se th e d efen da ntut il iz edso ph is ti cat edm ean s to effe ctth e fraud , andtwo ad di ti on al lev el s p ur su an t t o § 2S 1.1 (b )(2 )(B) , bec au se Max well was c on vi ct edof v io la ti ng 18 U.S.C. § 1 95 6. Fi na ll y , Max well ’s off en se le ve l was en ha nc edby fou r le ve ls -- b rin gi ng hi s fi na l o ffen se lev el to th irt y -fi ve - - pu rs ua ntto § 3 B1 .1(a ) be cau se of h is lea de rs hi p ro le
. Max well ob

jecte d t o t he PSI, arg ui ng th athe sh ou ldno t b e h el d a cco un tabl e fo r a l os s amoun t g reat er tha n $ 7 m il li on be cau se he was n otpe rs on al ly awarde d th e co nt ract s, h e d idno t b en efi t fr om th e co nt ract s, an d F is k m ad e o nl y a sm al l pr of iton th e co nt ract s. Alt ern at iv el y , he arg ue d t ha t n o l os s was actua ll y in cu rred
19be cau se th e co nt ract s wer e fu lfi ll edin acco rd an ce wi th lo cal pra ct ic e; no lo ss

ex is te d fo r res ti tu ti on pu rp os es be cau se th e Co un ty andUni te d S ta te s re cei ve d t he el ect ric al workcal le d fo r un de r th e co nt ract s; th e CSB E andDBE pro gr am s wer e no t Go ve rn m en t Be ne fit s p ro gr am s u nd er the Sen te nc in g Gu id el in es ; an d h e d id
no t p la y a le ad ers hi p ro le or u se so ph is ti cat edm ean s. Inpro no un ci ng sen te nc e, th e d is tri ctco urt n ot edth atth e tr ia l t es ti m on y sh owe d t ha t FLP h adrece iv eda to ta l o f $7 ,97 4,6 74 in CSBE an d DBE fu nd s o n th e si x M IA co nt ract s, an d e xp la in edth atitso ug htto pu ni sh frau d b y foc us in g o n th e p ro fitob ta in edby the pro po ne nt s o f th e fraud . Thu s, t he tri al co urt d et erm in ed th atth e am ou ntof l os s fo r pu rp os es of c al cu la ti ng Max well ’s off en se lev el un de r § 2 B1 .1 was so m e $ 47 4,0 00 . It rea ch edth is fig ur e b y tak in g s ix pe rcen t o f th e to ta l am ou ntof $ 7,9 74 ,67 4 p ai d t o F LP fo r th e si x M IA co nt ract s, wh ic h t he di st ric t co urt fo un d t o b e th e p ro fitm arg in earn edby Fiskan d F LP. Thi s l os s am ou nty ie ld edanoff

en se lev el in crea se of f

ou rte en , rathe r th ananin crea se by twen ty lev el s. Mo reo ve r, th e d is tri ctco urt i nc reas edMax well ’s off en se lev el by th ree f orhi s ro le in th e o ffen se , y ie ld in g ato ta l ad jus te d o ffen se lev el of t wen tysi x o r a ran ge of s ix ty-th ree t o s ev en ty-eig htm on th s. Afte r co ns id eri ng Max well ’s m it ig at io n a rg um en ts , th e 1 8 U.S.C. § 35 53 fact or s, an d t he advi so ry

Sen te nc in g Gu id el in es ran ge , th e d is tri ctco urt v ari ed

20th ree m on th s b el ow t he ran ge reco m m en de d b y

th e Sen te nc in g Gu id el in es , im po si ng a se nt en ce o f si xt y m on th s o f im

pr is on m en t, twen ty-fou r m on th s o f
supe rv is edrel eas e, an d a$1 2,5 00 fin e. Thi s t im el y

ap pe al fol lo wed
. II. Max well rai se s t hr ee ch al le ng es to hi s co nv ic ti on an d o ne to th e se nt en ce. Sp eci fic al ly, he cla im s (1 ) th atth e d is tri ctco urt ab us edit s d is cret io n i n pr oh ib it in g h im

fro m cro ss -ex am in in g C lyne an d o th er p ro se cu ti on witne ss es ab ou t the Pre-Tri al Div ers io n Ag reem en t, ab ou t Cl y ne ’s reque stfora se nt en ce reduc ti on in li gh t o f hi s co op erat io n, an d abo utth e CSB E or DBE co nt ract s h el d by FLP othe r th anth e si x M IA co nt ract s; (2) th atth e ev id en ce was in su ffi ci en t t o es tabl is h asch em e to de frau d o r th e requi si te in te nt ; (3 ) th atth e d is tri ctco urt ab us edit s d is cret io n i n re jecti ng hi s p ro po se d “ go odfai th ” d efen se jury in st ru ct io ns ; an d, fi na ll y , (4) th atth e d is tri ctco urt cl earl y erre d i n c al cu la ti ng th e am ou ntof l os s u nd er the Sen te nc in g Gu id el in es . A. Lim it at io n o f Cro ss -Exa m in at io n W e rev ie w Max well ’s cla im th atth e d is tri ctco urt i m

pr op erl y li m it edth e sc op e o f hi s cr os s- ex am in at io n fo r a cl ear abu se of d is cret io n. Un it edSta te s v . Mat th ews , 16 8 F .3d12 34 , 12 44 , am en de d o n o th er g ro un ds , Uni te d S ta te s v . 21Mo or e, 18 1 F .3d12 05 (11 thCir . 19 99 ); Un it edSta te s v . Guzm an , 16 7 F .3d13 50 ,

13 52 (11 th Cir . 19 99 ) (“ A di st ric t co urt h as wid e d is cret io n t o c on tro l t he cro ss ex am in at io n o f wit ne ss es .”). Whi le th e d is tri ctco urt h as “ di sc ret io nary au th or it y to rul e o n t he adm is si bi li ty of ev id en ce, i nc lu di ng th e p owe r to li m itcro ss ex am in at io n,” th is di sc ret io n i s l im it edby the gu aran te e o f th e Si xt h Am en dm en t’s Co nf ro nt at io n C laus e th ata cri m in al de fen da ntha s t he rig htto cro ss -ex am in e pr os ecu to ria l wi tn es se s. Un it edSta te s v . Garci a, 13 F.3d14 64 , 14 68 (11 th Cir
. 19 94 ). In p art ic ul ar, “ [c]ros s- ex am in at io n o f a g ov ern m en t ‘st ar’ witn es s i s im po rta nt , anda pr es um

pt io n fa vo rs free c ro ss -ex am in at io n o n p os si bl e b ia s,
m ot iv e, ab il it y

to pe rcei ve an d re m em

be r, an d g en eral ch arac te r fo r trut hf ul ne ss .” Uni te d S ta te s v . Phe lp s, 7 33 F.2d14 64 , 14 72 (11 th Cir . 19 84 ) (ci ta ti on om it te d)
. Howev er, “ th e m ere f

actth at[a d efen da nt ] so ug htto ex pl or e b ia s o n t he pa rt o f a p ro se cu ti on wit ne ss do es no t au to m at ic al ly voi d t he co urt’s ab il it y to li m itcro ss -ex am in at io n.” Uni te d S ta te s v . Diaz, 2 6 F .3d15 33 , 15 40 (11 th Cir
. 19 94 ). Thi s i s s o b ecau se th e d efen da nt“ is en ti tl edon ly to an op po rtu ni ty for effe ct iv e cro ss -ex am in at io n, n otcro ss -ex am in at io n tha t i s ef fect iv e in what ev er way , andto what ev er ex te nt , th e d efen da ntm ig htwis h.” Uni te d S ta te s v . Bap ti st a-Ro dr ig ue z, 17 F.3d13 54 , 13 66 (11 th Cir . 19 94 ) (quo ti ng Kentuc ky v. St in cer, 4 82 U.S. 73 0, 7 39 (19 86 )) (quo ta ti on m ark s o m it te d) . Thu s, a d efen da nt 22can on ly cros s- ex am in e a p ro se cu ti on wit ne ss if “ th e in fo rm at io n s ou gh t t o b e

el ic it ed[is ] rel ev an t.” Di az, 2 6 F .3dat 1 54 0 (q uo ti ng Habe r v. Wain wrig ht , 75 6 F.2 d 1 52 0, 1 52 2 (1 1t h C ir. 1 98 5) ); s ee al so Ph el ps , 73 3 F .3dat 1 47 2 (n ot in g t ha t
cro ss -ex am in at io n re ga rd in g p ot en ti al bi as “ m us t b e rel ev an t” ). Add it io na ll y ,

“ [o ]nce the re i s s uf

fic ie ntcro ss -ex am in at io n t o s at is fy th e Si xt h Am en dm en t’s Co nf ro nt at io n C laus e, fu rth er que st io ni ng is wit hi n t he di st ric t co urt’s d is cret io n,” Garci a, 13 F.3dat 1 46 8. An d t he di st ric t co urt en joy s “ wid e la ti tu de ” to im po se

“ reas on ab le li m it s” oncro ss -ex am in at io n b as edon , am on g o th er thi ng s,

“ co nf us io n o f th e is su es ” an d “ in te rro ga ti on th atis rep et it iv e o r on ly m arg in al ly rel ev an t.” Del aware v. Van Arsd al l, 4 75 U.S. 67 3, 6 79 (19 86 ). Add it io na ll y , “ th e Si xt h Am en dm en t d oe s n otrequi re u nl im it edin qu iry int o th e p ot en ti al bi as of awit ne ss .” Uni te d S ta te s v . De Pari as , 80 5 F .2d14 47 , 14 52 (1 1t h C ir. 1 98 6) , ov erru le d o n o th er g ro un ds by Uni te d S ta te s v . Kapl an , 17 1 F .3d 13 51 (11 th Cir . 19 99 ). Thu s, “ [t]he tes t fo r th e Co nf ro nt at io n C laus e is whet he r a reas on ab le jury wou ldha ve rece iv eda si gn ifi can tl y di ffer en t i m

pr es si onof t he wit ne ss ’ cred ib il it y

ha d c ou ns el pu rs ue d t he pro po se d l in e o f cro ss -ex am in at io n.” Garci a, 13 F.3dat 1 46 9; Bap ti st a-Ro dr ig ue z, 17 F.3dat 1 37 1 (“ A def en da nt ’s
co nf ro nt at io n ri gh ts are s at is fie d wh enth e cro ss -ex am in at io n p erm it te d e xp os es th e jury to fa ct s s uf

fic ie ntto ev al ua te th e cre di bi li ty of th e wit ne ss an d e nabl es

23de fen se co un se l t o e st ab li sh a reco rdfro m whi chhe pro pe rly can arg ue why th e wit ne ss is les s t ha n re li ab le .”). Pu t an ot he r way : [A] defen dant ’s si xt h a m en dm en t rig ht s are not in fri ng ed whe re cros sex am in at io n of a pr os ecu ti on wit ne ss is li m it ed by th e tri al jud ge , as lo ng as two co nd it io ns are m et . Fi rs t, th e jury, th r o u g h th e cro ss ex am in at io n th at is pe rm it te d, m us t be ex po se d to fact s su ffi ci en t fo r it to dr aw in fere nc es rel at in g to th e rel iabi li ty of th at wit ne ss . And se co nd , th e cro ss -ex am in at io n co nduc te d by de fen se co un se l m us t en ab le hi m to m ak e a rec or d fr om whi ch he co ul d arg ue why the witne ss m ig ht ha ve be enbi as ed
. Uni te d S ta te s v . Van Do rn , 92 5 F .2d13 31 , 13 35 (11 th Cir . 19 91 ) (i nt ern al ci ta ti on s o m it te d) . W

he n m eas ur edag ai ns t t he se bro adst an da rd s, we ar e sa ti sf ie d th atth e d is tri ctco urt ac te d wi th in it s co ns id erab le di sc ret io n. Fi rs t, we n eedno t d eci de whet he r Fi sk ’s Pre-Tri al Div ers io n Ag reem en t
was inth e b ro ad es t s en se rel ev an t, b ecau se , eve n i f itwas, t he di st ric t co urt d id
no t ab us e it s d is cret io n i n p ro hi bi ti ng it s d is cu ss io n. Ma xwe ll ’s cro ss -ex am in at io n of th e cu rren t Fi skem

pl oyees, p art ic ul arl y

Clyne, ex po se d fa ct s t ha t wer e m or e th ansu ffi ci en t t o a ll ow t he jury to dra w in fere nc es ab ou t the ir r el iabi li ty andto al lo w Max well to ful ly argu e th atth ey were i nd eedbi as ed
. Thu s, fo r ex am

pl e, du rin g t he di rectan d c ro ss -ex am in at io n o f Cl yne , at le as t t he fol lo win g p ert in en t i nf orm at io n b eari ng onbi as was am pl y pre se nt edby ab le tri al co un se l: (1) Clyne i s cu rren tl y a Fi skem

pl oyee who is rece iv in g asal ary

24an d h op edto rece iv e a b on us ; (2 ) Fi skco nt inue s t o wo rkon ele ctric al co ntract s

th ro ug ho utth e Co un ty andels ewh ere; (3) Clyne b eg anco op erat in g wi th th e Gov ern m en t b efo re h e was off ereda pl ea ag reem en t; (4) he reac he d apl ea ag reem en t wi th th e Gov ern m en t p ur su an t t o wh ic h h e p le adgu il ty to m ai l fr au d, wire frau d, an d m on ey

lau nd eri ng ; (5 ) in ex ch an ge forhi s p le a ag reem en t, h e ag reedto co nt in ue co op erat in g wi th th e Gov ern m en t; (6) Clyne m etwith t he Gov ern m en t o n t ento fif

te enoc cas io ns in ord er t o d is cu ss hi s t es ti m on y ; (7 ) as a res ul t o f hi s g ui lt y

pl ea, Cl yne ha s b een ad

jud ic at eda co nv ic te d fe lo n; (8) si nc e hi s co nv ic ti on , Clyne h as be enpro m ot edby Fiskto tak e o ve r Max well ’s job ; (9 ) Cl yne was p erm it te d t o p os tp on e th e su rren de r da te forhi s s en te nc e o f fi ve y ears of im pr is on m en t; (10 ) Cl yne be li ev edth ere was a po ss ib il it y th athi s s en te nc e wou ldbe reduc edaft er Ma xwe ll ’s tri al an d h e h op editwou ldbe ; (1 1) Clyne was pe rm it te d t o g o o n afis hi ng tri p t o C an ad a aft er h is co nv ic ti on an d s en te nc e were en te red ; an d (1 2) Clyne ad m it te d t o p rev io us ly ly in g u nd er o ath dur in g the
ex ecu ti on of t he frau du le ntsch em e atth e cen te r of th is cas e. (Oct . 25 , 20 06 Tran sc rip t at15 -2 0, 1 83 -8 4, 1 89 , 19 1- 95 ; Oct . 26 , 20 06 Tran sc rip t at9-1 7)
. In de ed , th e d is tri ctco urt o ffer edth e fo ll owi ng in st ru ct io n t o t he jury as Cl yne be ga n h is tes ti m on y : In th is cas e th e go ve rn m en t ha s cal le d Mr. Cl yne as a w i t n e s s, he is
25na m ed as a de fen da nt in a rel at ed cas e, an d th e go ve rn m en t ha s en te red

in to a Pl ea Agr eem en t wit h Mr. Cl yne th atpro vi de s fo r th e po ss ib il it y o f a l e s se r se nt en ce th an he wou ld ot he rwis e be ex po se d to . . . . S o , whi le a wit ne ss of th is ki nd m ay be en ti rel y tru th fu l whe n te st ifyin g, y ou sh ou ld co ns id er su ch te st im on y wit h m or e cau ti on th an th e te st im on y of ot he r witne ss es . (Oct . 25 , 20 06 Tran sc rip t at21 ). Thi s re co rdm or e th anall owe d M ax well to vi go ro us ly argu e (as he di d) th atClyne was bi as ed . In ad di ti on , a reduc ti on of a jail sen te nc e in factoff

ers a m or e p owe rfu l m ot iv e to pro vi de tes ti m on y fav or ab le to th e Gov ern m en t t ha n a ny po te nt ia l fi na nc ia l b en efi t t o o ne ’s em pl oyer wou ld
. Si m il arl y , du rin g t he ex am in at io n o f Fi sklab orsupe rv is orRo be rt B ro wn, Fi sk ge ne ral for em anMari o M ares ca, an d F is k p ro ject m an ag er Pa t Nu ge nt , th e jury le arn edth atth ey

are al l cu rren t Fi skem

pl oyees, an d tha t Br own an d Nu ge nt
rece iv edimm

un it y let te rs fro m

th e Gov ern m en t. (No v. 2 , 20 06 Tran sc rip t at43
- 46 , 83 ; No v. 6 , 20 06 Tran sc rip t at18 6- 88 ; No v. 7 , 20 06 Tran sc rip t at25 ). Mo reo ve r, th e Pre -Tri al Div ers io n Ag reem en t b etweenth e Gov ern m en t an d th e co rp or at e en ti ty Fiskdi d n otdi rect ly ben efi t an y Fis k e m pl oyee who serve d a s a wit ne ss forth e Gov ern m en t. At m os t, the be ne fitto th e te st ifyin g F is k
em pl oyees was th atth ei r em pl oyer wou ldbe ab le to co nt in ue to bi d o n c on tra ct s wit h t he Co un ty andth e Uni te d S ta te s, an d M ax well off eredno su gg es ti on th atif Fi skwere d ep riv edof t he op po rtu ni ty to wo rkon go ve rn m en t co nt ract s t ha t wo ul d

26affe ctth e co m pany’ s emplo y ees . Fin al ly, th e co urt l earn eddu rin g apro fferou t o f th e jury’ s p res en ce t ha t Cl yne actua ll y ha d n o p ers on al kn owl ed ge of t he Pre-Tri al Div ers io n Ag reem en t o r it s co nt en ts , and , in de ed , hadpl edgu il ty som e si x m on th s be fo re the Pre-Tri al Div ers io n Ag reem en t was stru ck
. On t hi s re co rd , we are s at is fie d t ha t t he Pre-Tri al Div ers io n Ag reem en t was of no pa lp ab le im

pe ach m en t v al ue to Max well , andth atth e d is tri ctco urt ju dg e was well withi n h er d is cret io n i n p ro hi bi ti ng Max well fro m cro ss -ex am in in g t he pr os ecu ti on wit ne ss es , in ge ne ral , andClyne, i n p art ic ul ar, ab ou t i t. The sec on d e vi de nt ia ry

m is take cit edby the de fen dantis th athe sh ou ld ha ve be enpe rm it te d t o c ro ss -ex am in e Cl y ne ab ou t t he ob se rv at io ns in Clyne’s
se nt en ci ng bri ef tha t h e was th e Gov ern m en t’s “ st ar wi tn es s,” a ndth athi s

“ co op erat io n wi th hi s o wn co m pa ny . . . as wel l as hi s co op erat io n wi thth e go ve rn m en t, s ho ul d b e ta ke n i nt o a cco un t b y th is Co urt i n d et erm in in g a n ap pr op ria te sen te nc e reduc ti on .” The p ro bl em wit h t hi s ar gu m en t i s tha t, atth e ti m e h e te st ifi ed , Clyne h adno t yet reque st eda se nt en ce re du ct io n. Infact , Cl yne ’s m ot io n fo r a s en te nc e reduc ti on was n otfil edwit h t he di st ric t co urt u nt il aft er Ma xwe ll ha d fi le d h is Not ic e o f App eal in th is cas e. Thu s, t he co nt en ts of th e se nt en ci ng bri ef co ul d n otha ve be enth e subjec t o f cro ss -ex am in at io n a t t ria l. W e ad d, ag ai n, t ha t M ax well di d v ig or ou sl y cro ss -ex am in e Cl yne ab ou t h is pl ea 27ag reem en t, h is ho pe s fo r a reduc edsen te nc e, an d the len ie nc y wit h wh ic h the Gov ern m en t h adalr ead y

tre at edhi m . On th is reco rd , th ere c anbe no qu es ti on th at th e jury hear d a m

pl e ev id en ce ab ou t Cl yne ’s po ss ib le bi as an d m ot iv es for te st ifyin g a ga in stth e d efen da nt . Thi rd , andfin al ly, Max well arg ue s t ha t t he di st ric t co urt ab us edit s di sc ret io n b y

pro hi bi ti ng hi m

fro m cro ss -ex am in in g C lyne ab ou t CS BE an d DBE
co nt ract s tha t FP L work edon ot he r th anth e si x M IA co nt ract s atis su e. Any CSBE co nt ract s awa rd edto FLP ou ts id e o f th e si x M IA co nt ract s wer e b ey on d t he
sc op e o f Cl yne ’s di rectex am in at io n, an d t he refo re Ma xwe ll was n oten ti tl edto cl ai m as o f ri gh t the op po rtu ni ty to ra is e th e is su e o n c ro ss -ex am in at io n, as op po se d t o p res en ti ng itin hi s o wn ca se . Fed . R. Evi d. 6 11 (b ) (“ Cro ss ex am in at io n s ho ul d b e li m it edto th e subjec t m at te r of th e d ire ctex am in at io n a nd
m at te rs affe ct in g the cred ib il ity of t he wit ne ss .”). Max well arg ue s n ev erthe le ss th atth e d is tri ctco urt s ho ul d h av e al lo wedhi m to cro ss -ex am in e Cl yne ab ou t FLP’s p art ic ip at io n i n o th er CS BE co ntract s wi th Fi sk , bec au se th e Gov ern m en t h adatt em pt edto pa in t FLP a s a s ha m co m pany, not cap ab le of p ro vi di ng a co m m erci al ly use fu l fu nc ti on . But , as t he di st ric t co urt
ex pl ai ne d, t he foc al po in t o f th e Gov ern m en t’s ca se -in -ch ie f was on th e si x M IA
co nt ract s an d any ass oc ia te d m is rep res en ta ti on s. Th e Gov ern m en t n ev er ar gu ed
28th atFLP was a “ fro nt ” o r “ sh am ” co m pa ny, north atitco ul d n ev er p erfo rm a co m m erci al ly use fu l fu nc ti on . Agai n, p erh ap s m os t i m po rtant ly, th e d is tri ctco urt al lo wedMax well to pre se ntth is ev id en ce i n h is own cas e. In de ed , du rin g C lyne’s
cro ss -ex am in at io n, the di stric t co urt t ol d M ax well th atif h e wan te d t o d is cu ss co nt ract s o th er than t he si x M IA co nt ract s, t he n h e “ ne ed [ed ] to cal l M r. Cl yne in [h is ] cas e.” (Oct . 26 , 20 06 Tran sc rip t at48 ). Max well de cl in edto do so , ob vi ou sl y m ak in g t he tac ti cal de ci si on no t t o c al l Cl yne as h is own wit ne ss . Fi na ll y , we addth atev enif t he di stric t co urt h aderre d i n l im it in g Max well ’s cro ss -ex am in at io n o n a ny of th es e g ro un ds , any erro r wou ldbe ha rm le ss be y on d areas on ab le do ub t. Tod d, 1 08 F.3dat 1 33 4 (e xp la in in g t ha t i f th e d is tri ctco urt d oe s err in li m it in g c ro ss -ex am in at io n, t he n “ we m us t n ex t de te rm in e whe th er the erro r was ha rm le ss be y on d areas on ab le do ub t” ) (i nt ern al qu ot at io n m ark s o m it te d) . W e h av e ex pl ai ne d t ha t [i]n m ak in g th is de te rm in at io n, a ho st of fa c to rs are to be co ns id ered , in cl ud in g th e im

po rta nc e of th e wit ne ss ’ te st im on y in th e pr os ecu ti on ’s cas e, whe th er th e te st im on y was cu m ul at iv e, th e pr es en ce or ab se nc e of ev id en ce co rro bo rat in g or co nt rad ic ti ng th e te st im on y of th e wit ne ss on m at eri al po in ts , th e ex te nt of cro ss -ex am in at io n ot he rwis e pe rm it te d, an d, o f co ur se , th e o ve ral l s tre ng th of t he pro se cu ti on ’s cas e. Uni te d S ta te s v . Lank fo rd , 95 5 F .2d15 45 , 15 52 (11 th Cir . 19 92 ) (i nt ern al qu ot at io n m ark s o m it te d) . Whe re “ th e ex cl ud edtes ti m on y [is ] rel at edto th e

29de te rm in at iv e is su e o f in te nt , we can no t s ay th atth e err orwas h arm le ss .” Uni te d St at es v. Gas ke ll , 98 5 F .2d10 56 , 10 63 (11 th Cir . 19 93 ). Here, the ex cl ud ed
ev id en ce d idno t g o d ire ct ly to M ax well ’s cri m in al in te nt ; i n fa ct , th e p ro ffer ed
ev id en ce was , at b es t, o f li m it edrel ev an ce t o t he cas e, was cu m ul at iv e, or ot he rwis e co ul d h av e b een pre se nt edat alat er s ta ge in th e tr ia l. Insh ort, we ca n d is cern no ab us e o f di sc ret io n i n t he tri al co urt’s
ev id en ti ary de ci si on s. B. Su ffi ci en cy

of the Evi de nc e Whe th er the re i s s uf

fic ie ntev id en ce i n t he reco rdto supp ort a ju ry ’s ver di ct in a cri m in al tri al is rev ie wedde no vo , tak in g t he ev id en ce i n the li gh t m os t fav or ab le to th e Gov ern m en t. Un it edSta te s v . Fut rel l, 2 09 F.3d12 86 , 12 88 (11 th Ci r. 20 00 ). Acco rd in gl y , we are o bl ig edto res ol ve an y co nf li ct s i n fa vo r of

th e Gov ern m en t, draw al l re as on ab le in fere nc es th atten d t o s up po rt t he pro se cu ti on ’s
cas e, an d a ss um e th atth e jury m ad e al l cr ed ib il it y ch oi ces in supp ort o f th e ve rd ic t. Un it edSta te s v . Tho m ps on , 47 3 F .3d11 37 , 11 42 (11 th Cir . 20 06 ); Un it ed St at es v. Ward, 1 97 F.3d10 76 , 10 79 (11 th Cir . 19 99 ). Evi de nc e is su ffi ci en t t o supp ort a c on vi ct io n i f “ a rea so nabl e tr ie r of factco ul d fi ndth atth e ev id en ce es tabl is he d g ui ltbe y on d areas on ab le do ub t.” Un it edSta te s v . Cal ho on , 97 F.3d 51 8, 5 23 (11 th Cir . 19 96 ). In r eb ut ti ng th e Gov ern m en t’s ev id en ce, “ [i]t i s n ot 30en ou gh fora de fen dantto pu t fo rth a reas on ab le hypo th es is of i nn oc en ce, b ecau se

th e is su e is no t wh ethe r a jury reas on ab ly cou ldha ve acqui tt edbu t wh ethe r it
reas on ab ly cou ldno t h av e fo un d g ui ltbe y on d areas on ab le do ub t.” Th om ps on , 47 3 F .3dat 1 14 2. Me as ur edag ai ns t t hi s s ta nd ard , we ho ldth atth ere was su ffi ci en t ev id en ce t o s ho w th atMax well act iv el y pa rti ci pa te d i n t he sch em e to de frau d a ndha d t he requi si te cri m in al in te nt . Max well was c on vi ct edof t wen ty-th ree c ou nt s o f subs tant iv e an d
co ns pi rat or ia l cr im in al co nduc t p rimaril y ba se d o n m ai l an d wi re fraud . The el em en ts of m ai l an d wi re fraudare: (1) in te nt io na l p art ic ip at io n i n asch em e to de frau d, an d, (2 ) th e u se of t he in te rs ta te m ai ls or wi res in furth eran ce o f th at
sc he m e. See Un it edSta te s v . Hass on , 33 3 F .3d12 64 , 12 70 an d n .7 (1 1t h C ir. 20 03 ); Un it edSta te s v . Elli ng to n, 3 48 F.3d98 4, 9 90 (11 thCir . 20 03 ). To s us ta in th e rel at edco ns pi racy con vi ct io ns th e Gov ern m en t was requi redto pro ve th at Max well kn ew of

an d wi ll fu ll y

joi ne d i n t he un la wfu l s ch em e to de frau d; ci rcu m st an ti al ev id en ce ca n s up pl y pro of of kno wled ge of t he sch em e. Ell in gt on , 34 8 F .3dat 9 89 -9 0. A sch em e to de frau d re qu ire s p ro of of am at eri al m is rep res en ta ti on , or t he
om is si on or c on ceal m en t o f a m at eri al fact , cal cu la te d t o d ecei ve an ot he r ou t o f
m on ey or p ro pe rty. Uni te d S ta te s v . Sve te , 55 6 F .3d11 57 , 11 61 , 11 69 (11 th Cir
. 3120 09 ) (en ba nc ). A m is rep res en ta ti on is m at eri al if i t h as “ a n atur al ten de nc y to in flu en ce, o r [i s] cap ab le of i nf lu en ci ng , th e d eci si on m ak er t o wh om itis ad dr es se d.” Hass on , 33 3 F .3dat 1 27 1. The ev id en ce, t ak enin a li gh t m os t fa vo rab le to th e Gov ern m en t, re ve al s th atFis k e m

pl oyees, wi th Max well ’s kn owl ed ge an d app ro va l, s ub m it te d b id s an d MURs to th e Co un ty andto th e Uni te d S ta te s t ha t m at eri al ly andrep eat ed ly
m is rep res en te d t ha t FLP p erfo rm eda co m m erci al ly use fu l fu nc ti on on each of t he si x M IA co nt ract s wh enin tru th itdi d n ot . Max well m ad e th e fo ll owi ng m at eri al m is rep res en ta ti on s an d u nd ert oo k t he fo ll owi ng co nduc t i n s up po rt o f th e m is rep res en ta ti on s. He d ire ct edth atFis k pr ep are, n eg ot ia te , andrev ie w bi ds co nt ai ni ng ex pl ic itrep res en ta ti on s t ha t FLP
was go in g t o p erfo rm

th e requi redCSBE an d DBE p erce nt ag e o f th e work, d es pi te kn owi ng th os e rep res en ta ti on s wer e fal se . Ind eed , Fis k p rep aredbi ds on be ha lf o f FLP wit ho utco ns ul ti ng or d is cu ss in g t he bi d wi th FLP, an d wi th ou t re ga rdfor whe th er FLP was ab le or wi ll in g t o u nd ert ak e th e work. Ma xwe ll an d F LP en te red in to anag reem en t wh ereb y Fis k wo ul d p ay

FLP on ly thre e p erce ntor f iv e p erce nt of th e v al ue of t he CSBE o r DBE po rti on of t he co nt ractan d wo ul d re ta in th e res t of th e p aym en ts as c om

pe ns at io n fo r actua ll y

co m pl et in g t he workrequi redby the
co nt ract . W

he n P au lt re co m

pl ai ne d t ha t FLP was no t m ak in g a ny m on ey on th es e 32co nt ract s, i t was Max well who ord eredhi s p ro ject m an ag er “ to tel l t ha t s on of a bi tc h t ha t h e was ge tt in g h is [fi ve ] pe rcen t an d ju stdo whathe was t ol d.” The ev id en ce es tabl is he d t ha t FLP d idno t p erfo rm a “ co m m erci al ly use fu l fu nc ti on ” o n a ny of th e si x M IA co nt ract s. No tabl y , Fis k, n otFLP, pe rfo rm edan d
supe rv is edall of t he CSBE an d DBE wo rk . But , to gi ve th e ap pe aran ce o f FLP in vo lv em en t, Ma xwe ll di rect edPau lt re o ccas io na ll y to att en d wee kl y

pro gr es s
m eet in gs ; M ax well tra ns ferr edFis k e m pl oyees t o F LP’s payrol l ev enth ou gh th os e em pl oyees c on ti nu edto be supe rv is edby Fisk ’s supe rv is or s, ea rn edth e sa m e p ay , an d p erfo rm edth e sa m e ta sk s wh il e u si ng Fis k e qu ip m en t; Max well rei m bu rs ed FLP fo r al l o f th e labo r co st s i nc urredby Fiskem pl oyees wh o wer e p utonFLP’s pa yro ll ; M ax well cau se d a n F LP tra il er t o b e p la cedon cert ai n jo b s it es ; an d Max well us edtwo -p art y

ch eck s wi th FLP’s na m e to pu rch as e m at eri al s fo r whi ch Fi skne go ti at ed , ord eredan d p ai d. Nei th er Ma lo ne no r Pau lt re, the two he ad s o f FLP, supe rv is edan y

work ers or o rd eredor p ai d fo r an y m at eri al s o n t he si x M IA
co nt ract s. Max well ’s con du ctonCo nt ract73 7A i s p art ic ul arl y st rik in g. Whil e FLP
rece iv edth e CSB E ele ctric al subc on tra cton th atpro ject, Fi skwas n otaward ed
an y pa rt o f th e co nt ract . But , Fis k p erfo rm edall of t he CSBE re qu ire d wo rkfor FLP an yway . It o bt ai ne d the pe rm it s, p ur ch as edth e m at eri al s, s up pl ie d t he lab or , 33an d p ro vi de d the supe rv is io n. Ma xwe ll di rect edClyne t o o pe n aFis k jo b n um be r fo r th e co nt ractan d P au lt re s ig ne d o ve r to Fis k t he en ti re $ 90 ,00 0 p aym en t t ha t FLP h adrece iv edun de r th e CSB E subc on tra ct . And , when Co un ty aud it or s subs eque nt ly ask edPau lt re t o e xp la in why FLP tu rn edov er the en ti re p aym en t t o Fi sk , Max well ’s co- co ns pi rat or s, wi th hi s kno wled ge an d app ro va l, p rep aredan d
subm it te d fa ls ifi edba ck -d at edlet te rs be twee n F is k a ndFLP in ord er t o g iv e th e ap pe aran ce t ha t FLP was si m pl y rep ay in g alo anto Fis k. As fo r Co nt ract s B 31 3A an d B 31 5A, Fi skan d F LP were awa rd edsep arat e bi ds , requi rin g t he m

to co m pl et e se parat e ta sk s. Ho wev er, Fi skpe rfo rm edth e work fo r bo th co m

pa ni es , des pi te Max well ’s kn owl ed ge th atth is wou ldcau se Fis k to lo se m on ey . A Fiskpro ject m an ag er p rep aredall of t he co rres po nd en ce be twee n F LP an d t he pri m ary co nt ract or , as wel l as FLP’s da il y pro gr es s re po rts , an d F LP’s pay app li cat io ns . Ind eed , he t es ti fie d t ha t t hi s was th e fi rs t an d o nl y ti m e in hi s t wen ty-ni ne y ear c aree r th athe ha d b een ask edto do th is . Becau se FLP
was pa idsep arat el y

by the pri m ary co nt ract or inin st al lm en ts forth es e two
co nt ract s, M ax well ask edClyne o n ada il y ba si s h ow t he y

were g oi ng to reco ve r th e m on ey

fro m FLP, an d, aton e p oi nt , di rect edClyne t o a skth e p rimary
co nt ract or

no t t o m ak e an y

ad di ti on al pa ym en ts to FLP un ti l M ax well co ul d b eg in
reco ve rin g t he m on ey . In o rd er t o d ecei ve Co un ty aud it or s, Fi skalt eredit s 34in vo ic es to gi ve th e ap pe aran ce t ha t t he y were b il le d t o F LP an d t he n h adFLP us e th e p ro ceed s o f Co ntract s B 31 3A an d B 31 5A t o p ay Fis k’s b il ls
. Max well als o d ire ct edth atth e MURs be fil le d o utfal se ly, rep res en ti ng th at FLP was pe rfo rm in g aco m m erci al ly use fu l fu nc ti on on all si x M IA co nt ract s whe n, i n fa ct , Fis k, an d n otFLP, was m an ag in g, s up erv is in g, an d p erfo rm in g t he
ne ces sa ry work . As fo r Co nt ract s 7 37 G and73 0F , a Fis k p ro ject m an ag er al ert ed Max well th athe “ was co nc ern edwit h t he factth at[he ] was fil li ng ou t [M URs ] fo r ou r m in or it y

pa rti ci pa ti on , bu t we d idno t h av e m in or it y pa rti ci pa ti on onth e pr ojec t atth e ti m e.” Ma xwe ll si m pl y to ldhi m th at“ itwou ldbe tak encare of a nd
no t t o wo rry

ab ou t i t.” Bas edon th is bo dy of ev id en ce, we thi nka reas on ab le jury co ul d fi nd be y on d areas on ab le do ub t t ha t FLP d idno t p erfo rm a “ co m m erci al ly use fu l fu nc ti on ” o n t he si x M IA co nt ract s, an d t ha t M ax well kn ew FLP wou ldno t pe rfo rm a co m m erci al ly use fu l fu nc ti on . Thes e m is rep res en ta ti on s wer e m at eri al
. W it ho utth em

FLP wou ldno t h av e b een award edth e si x M IA co nt ract s an d wo ul d
no t h av e b eenall owe d t o c on ti nu e to pa rti ci pa te in th em . Max well co un te rs th atth e Gov ern m en t d idno t p res en t s uf fic ie ntev id en ce of a sc he m e to de frau d, b ecau se he pre se nt edth ree wi tn es se s wh o t es ti fie d tha t
m an y of the act io ns un de rta ke n b y Fis k a ndFLP were co ns is te ntwit h l oc al
35in du st ry

st an da rd s. Th es e wit ne ss es cla im ed , am on g o th er thi ng s, t ha t t he sh ift in g of em pl oyees b etween a CSB E or DBE ce rti fie d s ub co nt ract oran d i ts pri m ary co nt ract or , supp lying of s up erv is or s b y th e p rimary

co nt ract orfor

th e CSB E or DBE subc on tra ct or , purch as in g o f m at eri al s fo r th e CSB E or DBE co nt ract orby th e p rimary

co nt ract or , fun di ng of t he CSBE o r DBE payro ll by the pri m ary co nt ract or , andus e o f two -p art y ch eck s t o p ur ch as e m at eri al s fo r CSB E andDBE
subc on tra ct or s wer e co ns is te ntwit h l oc al in du st ry pra ct ic es . The p ro bl em

with t he arg um en t i s t ha t t he jury was free to di sr eg ardth e te st im on y (as itob vi ou sl y

di d)
an d, i ns te ad , to cred itth e co nt rary evi de nc e p res en te d b y th e Gov ern m en t’s wit ne ss es , in cl ud in g the two itcal le d o n re bu tt al . Elli ng to n, 3 48 F.3dat 9 90 -9 1; Uni te d S ta te s v . Cal de ro n, 1 27 F.3d13 14 , 13 25 (11 th Cir . 19 97 ) (s ta ti ng th at cred ib il it y

de te rm in at io ns are t he so le pro vi nc e o f th e jury). The Gov ern m en t al so pre se nt edsu ffi ci en t ev id en ce t o e st ab li sh th at Max well po ss es se d t he requi si te in te ntto de frau d. Anin te ntto de frau d m ay be fo un d wh enth e d efen da ntbe li ev edth athe co ul d d ecei ve th e p ers onto who m he
m ad e th e m at eri al m is rep res en ta ti on ou t “ of m on ey or p ro pe rty of s om e v al ue .” Uni te d S ta te s v . Coo pe r, 13 2 F .3d14 00 , 14 05 (11 th Cir . 19 98 ); Un it edSta te s v . Pen de rg raft , 29 7 F .3d11 98 , 12 09 (11 th Cir . 20 02 ) (ex pl ai ni ng th atanin te ntto de frau d i s n otpre se ntif t he de fen dantkn ew th athe co ul d n otde cei ve th e rec ip ie nt 36of

hi s s ta te m en ts ). A jury

m ay in fer a n i nt en t t o d efraudfro m th e d efen da nt ’s
co nduc t. Se e Uni te d S ta te s v . Hawki ns , 90 5 F .2d14 89 , 14 96 (11 thCir . 19 90 ) (ex pl ai ni ng th atth e Gov ern m en t n eedno t p ro du ce d ire ctpro of of s ci en te r in a frau d c as e, bu t, i ns te ad , canrel y on cir cu m st an ti al ev id en ce o f cri m in al in te nt ); Ell in gt on , 34 8 F .3dat 9 90 (ex pl ai ni ng th atsp eci fic in te ntto co m m itm ai l fr au d
can be in ferr edby a j ury

fro m th e d efen da nt ’s con du ct ). As we h av e d et ai le d a lre ady , th e Gov ern m en t p res en te d a m pl e ev id en ce t ha t Max well kn owi ng ly m ad e m at eri al m is rep res en ta ti on s. Ma xwe ll says, ho wev er, th atth e ev id en ce i s i ns uf fic ie nt , bec au se hi s wi tn es se s cl ai m edth atso m e o f hi s co nduc t was co ns is te ntwit h l oc al in du st ry pra ct ic es . Agai n, wh il e Ma xwe ll was free to arg ue th atth es e lo cal pra ct ic es were co ns is te ntwit h alac k o f frau du le nt in te nt , th e jury was equa ll y free to rejectth is tes ti m on y . Max well als o arg ue s t ha t h e d idno t h av e anin te ntto de frau d, b ecau se he
was co nf us edab ou t the m ean in g o f th e CSB E andDBE reg ul at io ns . This arg um en t i s u nc on vi nc in g a s wel l. Fi rs t, an d m os t i m po rta nt ly, th e sp eci fic in te nt requi redun de r th e m ai l an d wi re fraudst atut es is th e in te ntto de frau d, n otth e in te ntto vi ol at e a p art ic ul ar s ta tu te or r eg ul at io n. Un it edSta te s v . Parad ie s, 9 8 F.3 d 1 26 6, 1 28 5 (1 1t h C ir. 1 99 6) . Wha t i s m os t re le va ntis th atMax well kn ew th atth e b id s an d M URs were s ub m it te d t o t he go ve rn m en t fa ls el y cla im in g t ha t 37FLP wou ldactua ll y pe rfo rm an d was pe rfo rm in g acert ai n p erce nt ag e o f th e co nt ract edwork
. Whi le Max well is co rrec t t ha t wh en“ th e trut h o r fal si ty of a s ta te m en t
cen te rs on anin te rp ret iv e que st io n o f la w, th e g ov ern m en t b ears th e b ur de n o f pr ov in g b ey on d areas on ab le do ub t t ha t t he de fen da nt ’s st at em en t i s n ottru e u nd er a rea so nabl e in te rp ret at io n o f th e la w,” Uni te d S ta te s v . Whi te si de , 28 5 F .3d13 45 , 13 51 (11 th Cir . 20 02 ), th atm ax im is of l it tl e h el p h ere. In th is cas e, th e jury cou ld read il y fin d b ey on d areas on ab le do ub t t ha t t he st at em en ts th atFLP wou ldan d d id pe rfo rm th e CSB E or DBE p orti on of t he si x M IA co nt ract s wer e fal se ev enun de r th e p la in lan gu ag e o f th e p ert in en t re gu la ti on s. Bo thth e Co un ty andfed eral reg ul at io ns ex pl ic it ly say th ata CSB E or DBE i s re qu ire d t o p erfo rm a co m m erci al ly use fu l fu nc ti on . Bot h re gu la to ry sch em es de fin e a co m

m erci al ly
us efu l fu nc ti on as b ei ng res po ns ib le forth e ex ecu ti onof t he co nt ractan d a ctua ll y pe rfo rm in g, m an ag in g, an d s up erv is in g t he workin vo lv ed . Andth e DBE reg ul at io ns m ak e cl ear t ha t a DBE d oe s n otpe rfo rm a co m m erci al ly use fu l fu nc ti on if i ts rol e is li m it edto th atof an e xt ra p art ic ip an t i n atra ns act io n, co nt ract , or p ro

ject t hr ou gh whi ch fun ds are p as se d i n o rd er t o o bt ai n t he ap pe aran ce o f DBE pa rti ci pa ti on . 49 C.F.R. § 26 .55 (c)( 2) . There is no ob vi ou s am bi gu it y ab ou t wh ethe r a CSB E or DBE s ub co nt ract orpe rfo rm s a c omm erci al ly
38us efu l fu nc ti on when th e job is m an ag edby the pri m ary co nt ract or , th e work i s

pe rfo rm edby the em

pl oyees o f th e p rimary

co nt ract or , th e p rimary

co nt ract ordo es al l o f th e n eg ot ia ti on s, ev al ua ti on s, an d p aym en ts forth e n eces sa ry m at eri al s, an d th e subc on tra ct ordo es no th in g m or e th anpro vi de a m in im al am ou ntof l ab oran d
se rv e as a si gn at ory

on two -p art y

ch eck s. In sh ort, n o m at te r ho w th es e reg ul at io ns are re ad , th e jury cou ldco nc lu de th atwhatFLP di d was no t t he pe rfo rm an ce o f a “ co m

m erci al ly use fu l fu nc ti on .” Mo reo ve r, Max well ’s con du cton Co nt ract73 7A u nd erm in es hi s co nf us io n arg um en t. Tha t b idwas a ward edon ly to FLP. Fi skwas n otgi ve n a ny workun de r th atco nt ract . Howev er, Fi skco m pl et edall of t he workass ig ne d t o F LP, andFLP, in tu rn , si gn edov er t o F is k i ts en ti re p aym en t fo r th e job . Max well can no t cl ai m co nf us io n o r un cert ai nt y

ab ou t the reg ul at io ns when he in vo lv edhi s co m pa ny in th e p erfo rm an ce o f a co nt ractth atwas a ward edon ly to FLP. Fi na ll y , Max well cla im s t ha t h e d idno t d ep riv e th e Co un ty or th e Uni te d St at es of m on ey

or p ro pe rty, becaus e, in th e en d, t he Co un ty andth e Uni te d S ta te s rece iv edth e el ect ric al workth ey so ug ht . Howev er, fi na nc ia l l os s i s n otat t he co re of th es e m ai l an d wi re fraud s. In st ead , th e p en al st atut es als o s eekto pu ni sh th e in te ntto ob ta in m on ey

or p ro pe rty from

a vi ct im by m ean s o f frau d a ndde cei t. Reg ard le ss of t he qu al it y or c os t o f th e work c om

pl et edby FLP andFis k, t he
39m on ey

us edto pa y

FLP un de r th os e co nt ract s was setasi de by the Co un ty andth e na ti on al so ve rei gn to pa y on ly CSBE andDBE ele ctric al subc on tra ct or s t ha t wer e actua ll y pe rfo rm in g c omm erci al ly use fu l fu nc ti on s. Fi skis no t a C SBE o r DBE cert ifi edco m

pa ny andFLP di d n otpe rfo rm a co m m erci al ly use fu l fu nc ti on . But , th ro ug h M ax well ’s sch em e, FLP o bt ai ne d c on st ru ct io n c on tra ct s an d s ub st an ti al pa ym en ts fro m

th e Co un ty andth e Uni te d S ta te s fo r whi ch itwas n oteli gi bl e. By
or ch es tra ti ng anelabo rat e sc he m e p as si ng on th e CSB E andDBE paym en ts to Fi sk , Max well de frau de d b ot h s ov erei gn s. Th e Co un ty andth e Uni te d S ta te s wer e free to pre sc rib e th e ru le s o f th is co nt ract in g p ro ces s, an d the de fen da ntwas n ot free to di sh on es tl y

cir cu m ve ntth e worth y

pu rp os e o f th e se t-a si de pro gr am s. C. Pro po se d J ury

Ins tru ct io n W e rev ie w th e d is tri ctco urt’s re fu sa l t o g iv e a p ro po se d jury in st ru ct io n fo r ab us e o f di sc ret io n. Un it edSta te s v . Ndi ay e, 43 4 F .3d12 70 , 12 80 (11 th Cir
. 20 06 ). In g en eral , a refu sa l to gi ve a reque st ed in stru ct io n is an ab us e of di sc ret io n if: (1 ) th e in st ru ct io n is co rrec t; (2 ) th e co urt di d no t addres s th e subs ta nc e of th e in st ru ct io n in it s c ha rg e; an d (3 ) th e fai lu re to gi ve th e in st ru ct io n se rio us ly im

pa ire d th e de fen da nt ’s ab il it y to pr e s en t an effe ct iv e de fen se . Uni te d S ta te s v . Sira ng , 70 F.3d58 8, 5 93 (11 th Cir . 19 95 ). The d is tri ctco urt d id
no t ab us e it s d is cret io n i n d en y in g M ax well ’s pro po se d ju ry in st ru ct io ns on hi s 40“ go odfai th ” d efen se .

The di stric t co urt re

jecte d t hr ee v ers io ns of M ax well ’s pro po se d in st ru ct io ns , exp la in in g t ha t “ th e is su e h ere i s n otth e in te rp ret at io n o f th e reg ul at io ns ,” bu t i s, i ns te ad , whe th er or no t th e go ve rn m en t ha s pr ov en th at th e de fen da nt kn owi ng ly an d in te nt io na ll y kn ew th e way th at th e CSBE op e r a t e d an d th e DBE pr og ram op erat ed , a n d no twi th st an di ng th at kn owl ed ge de ci de d to ci rcu m ve nt th at pr og ram by subm it ti ng wha t ap pe ar e d t o b e a pa rti ci pa ti on on si x co nt ract s by a m in or it y bu si ne ss in whi ch th e m in or it y bu si ne ss wou ld no t be do in g th e work, bu t Fi sk wou ld be do in g th e work, an d th us at te m pt in g to ob ta in th e co ntr a c t w i th ou t fu lfi ll in g th e ob li g a t i o n o f th e sm al l bu si ne ss do in g wha t it was supp os ed to be do in g u nd er the pro gr am . (Nov . 9, 2 00 6 Tra ns cri ptat 9 6)
. Max well ’s firs t p ro po se d i ns tru ct io n s ai d: Und er th e la w, a co ur se of co nduc t is no t “fraudul en t” if reas on ab le pe rs on s can di sa gr ee on r e g u l a t ory requi rem en ts whi ch go ve rn th e c o nduc t ch arg ed in th e In di ctm en t. You sh ou ld co ns id er th e co m pl ex it ie s of th e co un ty o rd in an ces an d fed eral reg ul at io ns an d a ny am bi gu it ie s co nt ai ne d th erei n to de te rmi n e whe th er th e Gov ern m en t es tabl is he d, be y on d a reas on ab le do ub t, th e ch arg es in th e In di ct m en t. A Defen dant do es no t “ kn owi ng ly” en ga ge in a sc he m e to de frau d whe n th ei r co nduc t is co ns is te nt wit h a re as onab le in te rp ret at io n of am bi gu ou s reg ul at ory

gu id an ce. His sec on d p ro po se d i ns tru ct io n s ta te d: Whe re, as in th is cas e, th e tru th or fal si ty of a st at em en t, cen te rs up on an in te rp ret iv e qu es ti on of la w reg ard in g co un ty or di na nc es , fed eral reg ul at io ns , ad m in is tra ti ve ru li ng s or st atut es , th e go ve rn m en t be ars th e 41bu rd en of p ro vi ng be y on d a reas on ab le do ub t th at th e de fen da nt ’s

st at em en t is no t tru e un de r a reas on ab le in te rp ret at io n of th e fed e r al reg ul at io ns , adm in is tra ti ve ru li ng s or st atut es . If co m pe ti ng in te rp ret at io ns are re as on ab le , th e Defen da ntcan no t b e co nv ic te d. His th irdpro po se d i ns tru ct io n re adth is way : To de m on st rat e th at th e Defen da nt ’s cl ai m s, st at em en ts or pa tt ern of co nduc t is “ kn own to be fal se ,” th e Gov ern m en t m us t de m on st rat e th at th ere were “ li es ” an d no t m erel y reg ul at ory or te ch ni cal di sp ut es . Pro of of on e’s m is ta ke s or in ab il it ie s is no t e v i d e n c e t ha t on e en ga ge d in a sc he m e to de frau d. A Defen da n t d o e s no t “ kn owi ng ly en ga ge in a sc he me t o d e frau d” or en ga ge in a pa tt ern of co nduc t “ kn own to be fal se ” whe n hi s or he r co nduc t is co ns is te n t w i t h a reas on ab le in te rp ret at io n o f am

bi gu ou s re gu la to ry

gu id an ce. In st eadof r ead in g o ne of t he se th ree p ro ffer edin st ru ct io ns to th e jury, the di st ric t co urt g av e two ot he r in st ru ct io ns ab ou t M ax well ’s go odfai th de fen se . Fi rs t, the di st ric t co urt t ol d t he jury th atMax well ha d a ss ert eda go odfai th de fen se ; t ha t g oo d fa ith i s a c om pl et e d efen se to th e ch arg es be cau se go odfai th is

“ in co ns is te ntwit h i nt en t t o d efraudor wi ll fu ln es s” ; t ha t o ne who expr es se s an ho ne st ly hel d o pi ni on or a n h on es tl y form edbe li ef i s n otch arg eab le with frau du le ntin te nt , eve n i f th e o pi ni on is erro ne ou s o r th e b el ie f is m is ta ke n; an d th atev id en ce es tabl is hi ng th ata pe rs on m ad e a “ m is ta ke in jud gm en t o r an erro r in
m an ag em en t, o r was care le ss , do es no t es tabl is h fr au du le ntin te nt .” Seco nd , th e d is tri ctco urt p la cedMax well ’s go odfai th de fen se in th e co nt ex t o f th e CSB E andDBE reg ul at io ns an d o rd in an ces by ins tru ct in g t he jury
42th at [i]t is th e de fen da nt ’s t h e o ry of de fen se th at th e de fen dant reas on ab ly

be li ev e d t ha t it s act io ns were take n in go od fai th ba se d up on hi s expe ri en ce an d un de rs ta nd in g of th es e reg ul at io ns , th e or di na nc e an d the ad m in is tra ti ve or de r an d co m m on in du stry pr act ic e, an d th at he ha d no in te ntto de frau d. You m ay co ns id er th e reg ul at io n s , or di na nc e, ad m in is tra ti ve or de r, al on g wit h al l ot he r ev id en ce, in de te rm in in g whe th er t h e go ve rn m en t ha s pr ov ed b e yon d a reas on ab le do ub t th at th e de fen da nt act ed with sp eci fic in te ntto de frau d a s ch arg ed
. (No v. 1 3, 2 00 6 Trans cri ptat 3 2) . As fo r sp eci fic in te nt , th e d is tri ctco urt in st ru ct edth e jury tha t “ [t]o a ctwit h ‘in te ntto de frau d’ m ean s t o a ctkn owi ng ly
an d wi th th e sp eci fic in te ntto de cei ve or c he atso m eo ne ord in ari ly for the pu rp os e of cau si ng so m e fi na nc ia l l os s t o a no th er o r br in gi ng ab ou t s om e fi nanc ia l g ai n t o on es el f.” (Id . at 1 5, 1 8)
. The fai lu re t o g iv e an y

of t he alt ern at iv e v ers io ns di d n otser io us ly im pa ir Max well ’s abi li ty to d efen d h im se lf. Th e d is tri ctco urt p ro pe rly ins tru ct edth e jury th atMax well was n otch arg edwit h v io la ti ng th e CSB E or DBE re gu la ti on s, co rrec tl y ex pl ai ne d t he ele m en ts of c on sp ira cy , m ai l fr au d, wi re fraud , andm on ey laun de rin g, ex pl ai ne d t ha t M ax well m us t h av e sp eci fic al ly int en de d t o d ecei ve th e so ve rei gn s o utof m on ey

or p ro pe rty, andpu t t he bu rd enon th e Gov ern m en t t o pr ov e eac h e le m en t b ey on d areas on ab le do ub t. The in st ru ct io ns were s uf fic ie ntto

43en ab le Max well to arg ue in clo si ng th athe lac ke d t he requi si te cri m in al in te nt .

See Un it edSta te s v . Sil ve rm an , 74 5 F .2d13 86 , 13 95 -9 6 (1 1t h C ir. 1 98 4) (“ A di st ric t ju dg e is ve st edwit h b ro addi sc ret io n i n fo rm ul at in g h is ch arg e to th e jury
so lo ng as i t ac cu rat el y

refl ect s t he law an d t he fact s. Th e ch arg e m us t d efi ne th e of fen se ch arg edan d i ts ele m en ts to en ab le th e jury to app ly the law t o t he fact s.”) (ci ta ti on s o m it te d)
. Fu rth erm or e, Max well ’s pro po se d ju ry in stru ct io ns co nt ai n p art is anan d arg um en ta ti ve st at em en ts of l aw an d fa ct , andth e d is tri ctco urt was no t o bl ig edto pr es en t t he m

to th e jury in t ha t fo rm . See P arad ie s, 9 8 F .3dat 1 28 7 (e xp la in in g th atth e d is tri ctco urt d oe s n otha ve to gi ve a reque st edjury in st ru ct io n t ha t i s

“pa rti sa n a ndth at. . . as pi redto pl ace t he
. . . de fen dant s’ des ire d fa ctua l fi nd in gs in to th e m ou th of t he co urt” ) (quo ta ti on m ark s o m it te d) ; Un it edSta te s v . Barh am , 59 5 F .2d23 1, 2 45 (5t h C ir. 1 97 9) (affi rm in g the di st ric t co urt’s fa il ur e to gi ve a

“ th eo ry of t he de fen se ” jury ins tru ct io n wh en“ th e reque st edin st ru ct io n was m or e in th e n atur e o f a jury argu m en t t ha n ach arg e”). 6 D. Am ou ntof Lo ss Cal cu la ti on W e rev ie w a di st ric t co urt’s i nt erp ret at io n o f th e Sen te nc in g Gu id el in es
The Eleve nth Circuit has adopted a s prec edent a ll decisions of the for mer F ifth Circuit 6 rende red prior to October 1, 1981, and all F ifth Circuit Unit B dec isions rendere d afte r Oc tober 1, 1981. Bonne r v. City

of Prichar d, 661 F.2d 1206, 1207 ( 11th Cir. 1981). 44de no vo , andth e d et erm in at io n o f th e am ou ntof l os s i nv ol ve d i n t he off en se for cl ear e rro r. Uni te d S ta te s v . W oo da rd , 45 9 F .3d10 78 , 10 87 (11 thCir . 20 06 ). Cl ear e rro r wil l b e fo un d o nl y if t he co urt i s “ le ft wi tha de fin it e an d fi rm co nv ic ti on th ata m is ta ke ha s b een co m m it te d.” Uni te d S ta te s v . Crawfo rd , 40 7 F.3 d 1 17 4, 1 17 7 (1 1t h C ir. 2 00 5) (ci ta ti on om it te d)
. Max well ch al le ng es th e d is tri ctco urt’s ca lc ul at io n o f th e lo ss am ou ntus ed to de te rm in e h is to ta l o ffen se lev el un de r § 2 B1 .1 o f th e Sen te nc in g Gu id el in es . The Gov ern m en t re qu es te d alo ss am ou ntof $ 7,9 74 ,67 4, re pr es en ti ng th e to ta l
am ou ntof C SBE an d DBE fu nd s awa rd edto FLP un de r th e si x M IA co nt ract s. The di st ric t co urt, h owe ve r, de te rm in edth atth e ap pr op ria te lo ss am ou ntwas o nl y $4 74 ,00 0, a c al cu la ti on th atrep res en te d o nl y si x p erce ntof the $7 ,97 4,6 74 actua ll y pa idonth os e co nt ract s. Th e d is tri ctco urt re as on edth atva lu e was th e ap pr op ria te am ou ntof l os s af te r he ari ng tes ti m on y

th atsi x p erce ntfel l wi th in th e av erag e p ro fitm arg in m ad e b y ele ctric al subc on tra ct or s o n s uc h g ov ern m en t
co nt ract s. Sp eci fic al ly, th e d is tri ctco urt ex pl ai ne d tha t t he si x p erce ntpro fit
m arg in was app ro pr ia te be cau se : it al so se em s to be a reas on ab le es t i mat e , be cau se if I lo ok at , ev en ta ki ng th e lo w en d of the gr os s pro fit th at th e te st im on y nu m be rs cam e up , whi ch was [th ree] pe rcen t, th ere was al so th e [th ree] to [fi ve ] pe rcen t t h a t w a s p a id to Mr. Pau lt re. I am su re th at was no t pa rt of th e st a t e d lo ss . It was bu il t so m ewh ere in to th e co nt ract . And so if y o u t ak e th e 45[th ree] pe rcen t for th e st at ed lo ss , pl us an ot he r [th ree] pe rcen t th at was

h i d d e n i n th ere, th at wou ld co m e up to [s ix ] pe rcen t. So ba se d on t h e te st im on y an d just si m

pl e lo gi c, th is was no t do ne to si m pl y op erat e as a pa ss -th ro ug h. So ta k i ng [s ix ] pe rcen t lo ss of th e 7.9 [m il li on ] jus t is rig ht ov er [fo urte e n] – I m ean it is 40 0- so m ethi ng ; $4 74 ,00 0 in lo ss , ap pr ox im at el y . (Ma r. 12 , 20 07 Tran sc rip t at67 -6 8) . Thu s, t he di st ric t co urt co nc lu de d t ha t t he lo ss in th e cas e m eri te d afou rte enlev el en ha nc em en t u nd er § 2B 1.1 (b )(1 )(H) o f th e Sen te nc in g Gu id el in es . Sect io n 2 B1 .1 p ro vi de s t he ba se off en se lev el forde fen da nt s co nv ic te d o f cri m es in vo lv in g fr au d a ndde cei t, an d v ari ou s i nc reas es in th e o ffen se lev el de pe nd in g o n t he am ou ntof m on ey at i ss ue . In d et erm in in g t he lo ss att rib ut ab le

7 to rel ev an t co nduc t, the Gov ern m en t b ears th e b ur de n o f pr ov in g l os s wi th rel iabl e an d s pe ci fic ev id en ce. See Uni te d S ta te s v . Dabb s, 1 34 F.3d10 71 , 10 81 (11 th Cir
. 19 98 ) (i nt erp ret in g § 2F 1.1 , whi ch was c on so li da te d wi th § 2 B1 .1 o n No ve m be r 1, 20 01 ). The Se nt en ci ng Gui de li ne s d efi ne actua l l os s as “ th e rea so nabl y

8 fo res eeab le pe cu ni ary ha rm th atres ul te d fr om

th e o ffen se .” U.S.S.G. § 2 B1 .1 cmt.
Specifica lly , § 2S1.1(a) incor porate s § 2B1.1 to dete rmine a de fenda nt’s offe nse leve l 7 acc ordingto the attributable loss amount. Much of the c ase la

w on this issue was cr eate d using pr e-2001 Sente ncingGuidelines. 8 Howeve r, the c onsolidation of § 2B1.1 a nd § 2F1.1 did not mater ially alter the provisions pertinent to this analy sis. See United States v. Gupta, 463 F .3d 1182, 1199 (11th Cir. 2006) (notingthat § 2F1.1 wa s deleted by its consolidation with § 2B1.1 in 2001 and “ther e is no identifiable diff

ere nce in our

analy sis based upon the c onsolidation”).

46n.3 (A)(i ). Pecu ni ary harm “ m ean s h arm

th atis m on et ary orth atothe rwis e is 9 read il y m eas ur ab le in m on ey .” Id . at cmt. n .3(A) (ii i). If a lo ss can no t b e reas on ab ly det erm in ed , th e Gui de li ne s i ns tru ctth e co urts to “us e th e g ai n tha t
res ul te d fr om

th e o ffen se as a n a lt ern at iv e m eas ur e o f lo ss .” Id . cm t. n .3(B ) (em ph as is ad de d)
. Howev er, § 2B 1.1 als o c on ta in s a s pe ci fic pro vi si on th atad dr es se s h ow l os s is to be cal cu la te d wh enth e fraudor d ecei t i nv ol ve s a Go ve rn m en t Be ne fit s pr og ram . It rea ds th is way : In a cas e in vo lv in g go ve rn m en t be ne fit s (e.g ., gr an ts , lo an s, en ti tl em en t pr og ram pay

m en ts ), lo ss sh al l be co ns id ered to be no t le ss th an th e va lu e of th e be ne fit s ob ta in ed by un in te nd ed reci p i en ts or di ve rte d to un in te nd edus es , as t he cas e m ay be
. U.S.S.G. § 2 B1 .1 cmt. n .3(F )(i i). At l eas t t wo o f ou r si st er ci rcu it s h av e h el d t ha t t he DBE pro gr am or a si m il arl y st ru ctur edm

un ic ip al pro gr am

are Go ve rn m en t Be ne fit s p ro gr am s fo r pu rp os es of § 2B 1.1 . See Un it edSta te s v . Leah y , 46 4 F .3d77 3, 7 90 (7t h C ir. 20 06 ) (h ol di ng a ci ty min or it y co nt ract in g p ro gr am

was aGov ern m en t Be ne fit s pr og ram un de r § 2 F1 .1 b efo re i t was co ns ol id at edwith § 2B 1.1 ); Un it edSta te s v .
The c ommentary

and application notes of the SentencingGuidelines ar e author itative, 9 unless they

are plainly

err oneous, inconsistent with the regulation they interpre t, or contra

ry to the Constitut ion or fede ral law . Stins on v. United States, 508 U.S. 36, 45 (1993); United States v. Torre alba, 339 F .3d 1238, 1242 (11th Cir. 2003). 47Bro s. Co ns tr. C o. o f Ohi o, 2 19 F.3d30 0, 3 17 -1 8 (4 th Cir . 20 00 ) (h ol di ng th e

frau du le ntrece ip t o f DBE fu nd s i nv ol ve d t he di ve rs io n o f Gov ern m en t Be ne fit s un de r th e Sen te nc in g Gu id el in es ); s ee al so Uni te d S ta te s v . Tul io , 26 3 F ed . App x. 25 8, 2 63 (3dCir . 20 08 ) (h ol di ng Gov ern m en t Be ne fit s p ro vi si onof § 2B 1.1 ap pl ie s t o DBE fu nd edco nt ract s) . This is so , bec au se DBE andsi m il ar p ro gr am s are “ affi rm at iv e act io n p ro gr am [s ] ai m edat g iv in g e xc lu si ve op po rtu ni ti es to cert ai n wo m enan d m in or it y bu si ne ss es ,” th us m ak in g the m en ti tl em en t p ro gr am pa ym en ts . Leahy, 464 F.3dat 7 90 ; Br os . Con st r. Co . of Oh io , 21 9 F .3dat 3 17 -1 8;
se e al so Adar an d C on st ru ct or s, In c. v. Sl at er, 5 28 U.S. 21 6, 2 17 (20 00 ) (“ Co ng res s h as ad op te d apo li cy th atfav or s co nt ract in g wi th sm al l b us in es se s own edan d c on tro ll edby the so ci al ly andeco no m ic al ly dis ad va nt ag ed .”). In f act , evi de nc e was pre se nt edat M ax well ’s tri al th atth e p rimary pu rp os e of th e CSB E andDBE pro gr am s i s t o h el p s m al l m in or it y -o wne d b us in es se s de ve lo p a ndgro w, creat in g n ew job s an d h el pi ng to ov erco m e th e eff ect s o f pa st di sc riminat io n i n t he co ns tru ct io n i ndus try. Unl ik e st an da rdco ns tru ct io n co nt ract s, the se co ntract s fo cu s m ai nl y on who is do in g t he work . W e are pe rs ua de d b y

th e wel l-r eas on edop in io ns of o ursi st er ci rcu it s an d c on cl ud e th at bo th th e CSB E andDBE pro gr am s ar e Gov ern m en t Be ne fit s Pr og ram s u nd er § 2B 1.1 of t he Sen te nc in g Gu id el in es . Thu s, the ap pr op ria te am ou ntof l os s h ere 48sh ou ldha ve be enth e en ti re v al ue of t he CSBE an d DBE co nt ract s t ha t wer e

di ve rte d t o t he un in te nd edreci pi en t. The en ti re CS BE an d DBE p orti on s o f th e si x M IA co nt ract s wer e d iv ert ed to un in te nd edreci pi en ts , FLP an d F is k. Itis of n o m om en t t ha t FLP was a cert ifi edCSBE an d DBE co nt ract or ; wh atm atte rs is th atFLP di d n otpro vi de a co m m erci al ly use fu l fu nc ti on on an y of t he m . The p ro ceed s o f th e si x M IA
co nt ract s s ho ul d h av e, bu t d idno t, g o t o acert ifi edCSBE o r DBE co nt ract orth at
co m pl et eda co m

m erci al ly use fu l fu nc ti on . Howev er, b ecau se th e Gov ern m en t h as no t cr os s- ap pe al edon th is is su e, a rem an d t o i nc reas e th e am ou ntof l os s ap pl ic ab le to Max well ’s Sen te nc in g Gui de li ne s ca lc ul at io n i s u nwarran te d. Ra th er, o n t hi s p ro cedur al po stur e, we are cal le d upo n o nl y

to de te rm in e whe th er the di stric t co urt cl earl y erre d i n de te rm in in g t ha t M ax well ’s lo ss am ou ntwas n otzero . But , bec au se we be li ev e th e Gov ern m en t Be ne fit s p ro vi si on of § 2B 1.1 ap pl ie s h ere, t he pro pe r cal cu la ti on of lo ss sh ou ldha ve be en$7 ,97 4,6 74 . It fo ll ows th enth atwe can no t fi ndcle ar erro r inth e d et erm in at io n t ha t M ax well ’s lo ss am ou ntwas o nl y $4 74 ,00 0. W e ad d tha t the di st ric t co urt’s ca lc ul at io n was no t cl earl y erro ne ou s u nd er th e la w of t hi s C irc ui t atth e ti m e itwas m ad e. W e h av e n ev er b efo re ad dr es se d whe th er the CSBE an d DBE p ro gr am s ar e Gov ern m en t Be ne fit s Pr og ram s u nd er § 492B 1.1 . In Gupt a, we st at ed , inm ak in g an a m ou ntof l os s ca lc ul at io n i n afrau d

cas e th atdi d n otin vo lv e a Go ve rn m en t Be ne fit s Pr og ram un de r § 2 F1 .1, tha t

“ [f]rau d i s co nju redin nu m ero us va ria ti on s an d t ha t s ho ul d b e co ns id eredwhen ch oo si ng a cal cu la ti on m etho do lo gy for t he ha rm in te nd edor c au se d.” 46 3 F .3dat 11 99 . To th aten d, we ex pl ai ne d t ha t t hi s C ou rt h as us eddi ffer in g m etho ds to cal cu la te th e am ou ntof l os s d ep en di ng on th e n atur e o f th e fraud . Id. at12 00 . In pa rti cu la r, we no te d tha t two “ m or e co m m on ly use d fo rm s o f cal cu la ti on ” fo r th e lo ss am ou ntare “ (1 ) th e lo ss to th e lo si ng vi ct im s m etho d; an d (2 ) th e d efen da nt ’s ga in or n etga in m etho d.” Id. (quo ta ti on m ark s o m it te d)
. The di stric t co urt u se d t he “ de fen da nt ’s netga in m etho d” inm ak in g alo ss cal cu la ti on . There is no cle ar erro r in fin di ng th atth e n etpro fitwas $ 47 4,0 00
. The reco rdam

pl y supp orts th e co nc lu si on th at$7 ,97 4,6 47 was i m pr op erl y award edto FLP on th e si x M IA co nt ract s an d t ha t a p ro fitm arg in of s ix pe rcen t
was li ke ly earne d o n tho se co nt ract s. Insh ort, we AFFI RM b oth t he co nv ic ti on s an d s en te nc e o f Max well in all
res pe ct s. AFFIRMED
.

50