1

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 206

ELECTRONIC CITATION: 2003 FED App. 0455P (6th Cir.)

File Name: 03a0455p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

_________________

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

JOAN MARIE ANDERSON

(02-1662); FRANCIS ALBERT

SAGORSKI (02-1673); RODGER

BRUCE YATES (02-1700);

ARTHUR HENRY

MODDERMAN (02-1703);

SUSAN ELAINE SLOBODA

(02-1736); ROBERT LEE

GOODWIN, JR. (02-1769);

RUTH ELAINE SHRIVER

(02-1771),

Defendants-Appellants.

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Nos. 02-1662/

1673/1700/1703/

1736/1769/1771

Appeal from the United States District Court

for the Western District of Michigan at Grand Rapids.

No. 01-00175—Robert Holmes Bell, Chief District Judge.

Argued and Submitted: December 2, 2003

Decided and Filed: December 23, 2003 

2 United States v.

Anderson, et al.

Nos. 02-1662/1673/1700/1703/

1736/1769/1771

*

The Honorable Danny C. Reeves, United States District Judge for

the Eastern District of Kentucky, sitting by designation.

Before: GUY and GILMAN, Circuit Judges; REEVES,

District Judge.*

_________________

COUNSEL

ARGUED: Lawrence J. Phelan, HAEHNEL & PHELAN,

Grand Rapids, Michigan, Kevin M. Schad, SCHAD &

COOK, Indian Springs, Ohio, Richard E. Zambon,

MITCHELL & ZAMBON, Grand Rapids, Michigan, Daniel

R. Fagan, DANIEL R. FAGAN & ASSOCIATES, Grand

Rapids, Michigan, John M. Karafa, Grand Haven, Michigan,

for Appellants. Donald A. Davis, ASSISTANT UNITED

STATES ATTORNEY, Grand Rapids, Michigan, for

Appellee. ON BRIEF: Lawrence J. Phelan, HAEHNEL &

PHELAN, Grand Rapids, Michigan, Kevin M. Schad,

SCHAD & COOK, Indian Springs, Ohio, Richard E.

Zambon, MITCHELL & ZAMBON, Grand Rapids,

Michigan, Daniel R. Fagan, DANIEL R. FAGAN &

ASSOCIATES, Grand Rapids, Michigan, John M. Karafa,

Grand Haven, Michigan, Anthony J. Valentine, TWOHEY

MAGGINI, PLC, Grand Rapids, Michigan, Keith W. Turpel,

Kalamazoo, Michigan, for Appellants. Donald A. Davis,

ASSISTANT UNITED STATES ATTORNEY, Grand

Rapids, Michigan, for Appellee.

_________________

OPINION

_________________

PER CURIAM. These seven consolidated appeals by

defendants Joan Marie Anderson, Arthur Henry Modderman,
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United States v.

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3

1

A bank representative, Paul Wegener, contrasted a check with a

sight draft. A check is payable on demand when presented to a bank,

while the maker or drawer of a sight draft instructs the drawee to pay a

third party. A sight draft is not deposited in an account like a check, but

must be processed through the collection department.

Rodger Bruce Yates, Francis Albert Sagorski, Ruth Elaine

Shriver, Susan Elaine Sloboda, and Robert Lee Goodwin, Jr.,

raise various challenges to their respective convictions and/or

sentences. The 73-count Superceding Indictment in this case

charged 14 defendants with conspiracy both to defraud and to

commit offenses against the United States in violation of

18 U.S.C. § 371 (count 1); substantive offenses relating to the

making and offering of fictitious “sight drafts” purporting to

be actual financial instruments issued under the authority of

the United States in violation of 18 U.S.C. § 514(a)(2) (counts

2-24); and substantive offenses involving the making and

subscribing, or aiding, assisting or counseling the making and

subscribing of false reports of cash transactions to the IRS on

Form 8300 in violation of 26 U.S.C. § 7206(1) and

(2) (counts 25-73). Two defendants pleaded guilty and the

remaining twelve defendants were convicted by a jury on all

charges following a joint trial. After review of the record and

the defendants’ respective challenges to their convictions

and/or sentences, we affirm in all respects.

I.

The indictment alleged that beginning in late 1998 and

continuing through July 2001, the defendants joined in a

single conspiracy withmultipleobjectives: namely, to defraud

the United States by impeding, impairing, obstructing, and

defeating the lawful government functions of the IRS and

other federal agencies; and to commit offenses against the

United States with respect to both the fictitious sight drafts

and the false reports of cash transactions to the IRS.1 The

indictment described the “means and methods” of the

4 United States v.

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conspiracy to include the creation and offering of 193

fictitious sight drafts purporting to be drawn on the United

States Treasury with an aggregate face value of more than

$550 million and the use of IRS Form 8300 to falsely report

that 113 transactions occurred with third parties with an

aggregate value of more than $490 million. In addition,

defendants refused to appear before or cooperate with the

grand jury, its subpoenas, or the federal district court.

Defendants also filed frivolous “notices” (including criminal

complaints) against prosecutors, law enforcement and judicial

officers involved in the investigation and prosecution of this

case.

In 1998, defendant Rodger Yates was serving a sentence in

federal prison for activities involving the “Montana Freemen”

at the same time that defendant Jerry Allen Chase was serving

a sentence for violating income tax laws. Chase testified that

Yates told him that he and Roger Elvick were perfecting a

scheme using false financial instruments that appeared to be

drawn on the United States. Yates enlisted the aid of

individuals outside prison; namely, Joan Anderson, her

common law husband Arthur Modderman, and Phillip Leroy

(a.k.a. PJ) Hammond (who has not appealed). Yates, who

was in prison for having used earlier forms of fictitious

instruments, told Chase that the new “sight draft” theory was

“more sound” than earlier schemes.

During that same time frame, defendants Ruth Shriver

(Shriver) and her husband Jack Shriver (who has not

appealed) were in financial trouble with the IRS. The

Shrivers communicated with Elvick and his partner, Roger

Knutt, both of whom had recently been released from prison

and claimed to have recovered their farm using false sight

drafts. In late summer 1998, PJ Hammond ordered thousands

of blank sight drafts from a commercial printing company.

The drafts were paid for by someone named “Ruth.” On

September 9, 1998, the Shrivers sent the IRS a sight draft

appearing to be drawn on the United States Treasury in the
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United States v.

Anderson, et al.

5

amount of $1.75 million. Although the IRS initially credited

the Shrivers in that amount, the credit was reversed. Within

a week of the first sight draft, six other codefendants each

wrote similar sight drafts to the IRS (including appellants

Sagorski, Hammond, Anderson, and Modderman).

Sight drafts made payable to the IRS were written by all but

two defendants, Sloboda and Goodwin, and formed the basis

for the substantive charges in counts 2 through 24. As

referenced earlier, numerous other sight drafts were presented

to state and local governments, credit card companies, banks

and credit unions, brokerages, and were also used for personal

expenses. Part of the scheme was the hope that some

financial institutions had such sloppy computer systems that

at least some sight drafts would be accepted and the credits

could be spent or used to eliminate other debts.

Another aspect of the conspiracy involved the filing of false

returns with the IRS that reported cash transactions of over

$10,000, when no transaction had in fact occurred, in order to

intimidate and harass the individual identified as having

participated in the nonexistent transaction. Underfederal law,

a return, Form 8300, must be filed with the IRS when a

person engaged in a trade or business receives over $10,000

in a cash transaction. 26 U.S.C. § 6050I. Form 8300 includes

a jurat, stating that: “Under penalties of perjury, I declare that

to the best of my knowledge the information I have furnished

above is true, correct, and complete.”

Targets of the false 8300s included individuals who

rejected sight drafts and both public officials and private

individuals against whom a defendant bore a grievance. For

example, four members of the Westveld family were targeted

because one of them had purchased property that had once

6 United States v.

Anderson, et al.

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2

An employee of a credit union was targeted by Hammond, and a

disabled worker in the mailroom of a credit card company was targeted

after opening an application from defendant Carney.

belonged to Modderman.

2

 Most of the false 8300s reported

nonexistent transactions involving a number of judges,

prosecutors, attorneys, public officials, and law enforcement

and corrections officers. The forms were filled out to indicate

that the target had refused to give his or her social security

number, which automatically caused the IRS to send a stern

form letter to the target demanding compliance with the law.

A total of eight defendants were charged with making false

declarations under penalty of perjury by signing a false IRS

Form 8300, in violation of § 7206(1); including appellants

Modderman (counts37-45), Sagorski (counts 46-47), Sloboda

(counts 48-49), and Goodwin (counts 28-30). The remaining

charges for aiding, assisting, counseling, or advising others to

make false declarations on the 8300s in violation of § 7206(2)

were brought against Yates (counts 50-53) and Anderson

(counts 50-73).

The evidence showed that Anderson and Modderman

explained the “redemption theory” and instructed others how

to write the sight drafts and fill out the false 8300s. One

witness, Diana Arndt-Mammen (Arndt), testified that

Anderson and Modderman offered the sight-draft scheme as

a way for her to resolve her severe financial problems,

showed her how to fill out the sight drafts and false 8300s,

and asked if she had filed false 8300s against those who

rejected the sight drafts. Another coconspirator, Herbert

Lawrence, testified that Anderson and Modderman instructed

him on how to use the false 8300s to “bring the IRS down” on

officials and other individuals to harass them. Anderson and

Modderman also told Lawrence to avoid lawyers, that he did
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Anderson, et al.

7

3

The mantra consisted of the following three questions and demand:

“What is your name? Do you have a claim against me? Do you know of

any others that have a claim against me? I request the order of the Court

be released to me immediately.”

4

Ruth Shriver also rose and stepped toward someone near the

podium, but was intercepted by security and removed from the courtroom.

not have to obey the corrupt court system, and that he would

be protected if he recited their “shield” or “mantra.”3

Use of the mantra was taught as part of the scheme and was

recited by various defendants through all stages of the

proceedings. It was part of the refusal to cooperate with the

grand jury and in contempt proceedings, which resulted in

obstruction of justice enhancements at sentencing.

Handwriting exemplars were ultimately provided to the grand

jury, but not until after defendants were held in contempt of

court. At trial, each of the defendants—except for Sagorski,

Dewey Metcalf, Sr., and Dewey Metcalf, Jr.—disrupted the

trial by standing and reciting the mantra.

This disruption involved several defendants rising together,

repeatedly reciting the mantra and being removed from the

courtroom. The first time, seven defendants were removed.

The next day, a total of nine defendants were removed.4 With

that, the district court decided, after consulting with counsel,

that the nine defendants would be allowed to return only if

they gave assurances that they would not disrupt the

proceedings any further. Unwilling to give any assurances,

none of the nine were present in the courtroom for the rest of

the trial. Although the defendants do not challenge the

district court’s handling of the situation, it was the basis for

upward departures at sentencing as well as Sagorski’s motion

for severance or mistrial.

Defendants were convicted on all counts and, after

sentencing, timely notices of appeal were filed on behalf of

8 United States v.

Anderson, et al.

Nos. 02-1662/1673/1700/1703/

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Anderson, Modderman, Yates, Sagorski, Sloboda, Goodwin

and Shriver.

II.

With the exception of Sloboda and Shriver, defendants

appeal from the denial of judgment of acquittal with respect

to some or all of their convictions. On appeal, “the relevant

question is whether, after viewing the evidence in the light

most favorable to the prosecution, any rational trier of fact

could have found the essential elements of the crime beyond

a reasonable doubt.” Jackson v. Virginia, 443 U.S. 307, 319

(1979). This standard applies to both direct and

circumstantial evidence, and all reasonable inferencesmust be

drawn in favor of the government. United States v. Searan,

259 F.3d 434, 441 (6th Cir. 2001).

A. Form 8300

Challenging their convictions for violations of 26 U.S.C.

§ 7206(1) and (2), as well as the portion of the conspiracy

charge relating to these offenses, Anderson, Yates,

Modderman, Sagorski, and Goodwin argue first that these

convictions must be reversed because there is no duty to file

Form 8300 for nonexistent transactions. Defendants reason

that if there is no duty to file a return, there can be no

prosecution for filing a form containing false information

either because it cannot be a “willful” violation or because the

falsity cannot be “material.” While there are apparently no

cases addressing this argument, we are satisfied that it is the

novelty of the defendants’ conduct that accounts for this fact

and not the inapplicability of § 7206 to this situation.

Defendants emphasize that most cases involving the

currency transaction report required by 26 U.S.C. § 6050I are

prosecutions for willful failure to file the return under 26

U.S.C. § 7203. That may be, and, in those cases, proof of a

duty to file a return may be required for conviction since
Nos. 02-1662/1673/1700/1703/

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United States v.

Anderson, et al.

9

5

Although Anderson claims error in the failure to give a requested

instruction on willfulness, the record shows that the jury was instructed

concerning “willfulness.” The district court denied a request that

“willfully” be added to the verdict form.

§ 7203 refers to any person “required to make a return.” We

have no difficulty concluding, however, that proof of a duty

to file a return is not required to establish a violation of

§ 7206(1) or (2) for filing reports of nonexistent transactions.

See United States v. Tarwater, 308 F.3d 494, 504 (6th Cir.

2002) (describing § 7206 as a perjury statute criminalizing

lying on any document filed with the IRS).

“Willfulness” for purposes of the tax laws connotes “‘a

voluntary, intentional violation of a known legal duty.’”

Cheek v. United States, 498 U.S. 192, 200 (1991) (citation

omitted). The relevant duty for purposes of willfulness is the

duty imposed by the provision of the statute or regulation the

defendant is accused of violating. Id. at 201-02. Under

§ 7206(1), the government must show the defendant willfully

made and subscribed “any return, statement, or other

document, which contains or is verified by a written

declaration that it is made under the penalties of perjury, and

which he does not believe to be true and correct as to every

material matter.” The companion section, § 7206(2), makes

it a felony for any person to willfully aid, assist, procure,

counsel, or advise the preparation or presentation under the

internal revenue laws a return, affidavit, claim or other

document which is fraudulent or false as to any material

matter. The clear import of these provisions is that when one

makes and subscribes a return, or aids and counsels the

preparation and presentation of a return, an obligation arises

that the return not be false as to any material matter. This

duty arises with the making of the return, without regard to

whether there was an obligation to file one in the first place.5

10 United States v.

Anderson, et al.

Nos. 02-1662/1673/1700/1703/

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6

Anderson does not appeal her convictions for violation of

§ 514(a)(2) (counts 2-3), or her conviction on the conspiracy charge

(count 1).

Taking a slightly different tack, Modderman argues that the

falsity of the information on the 8300s was not “material”

because in the absence of any reportable transaction there was

no duty to file the 8300s and no tax to be computed by the

IRS. Of course, the failure to report income or other items

necessary to the computation of tax is material. Tarwater,

308 F.3d at 505. In general, however, “a false statement is

material if it has ‘a natural tendency to influence, or [is]

capable of influencing, the decision of the decisionmaking

body to which it was addressed.’” Neder v. United States,

527 U.S. 1, 16 (1999) (alteration in original) (citation

omitted). We reject defendants’ contention that it is

immaterial as a matter of law to falsely report a transaction on

Form 8300 when no transaction has in fact occurred.

B. Sight Drafts

The convictions for violation of 18 U.S.C. § 514(a)(2), as

well as the portion of the conspiracy charge relating to those

offenses, are challenged on appeal by Modderman (counts 1,

15-17), Yates (counts 1 and 24), Sagorski (counts 1, 18-22),

and Goodwin (count 1).6 Defendants make three main claims:

that the sight drafts are not “fictitious” obligations; that they

do not appear to be “actual” financial instruments; and that

there was no evidence of an intent to defraud because they did

not attempt to get a refund from the IRS. None of these

claims have merit.

Added in 1996, § 514(a)(2) makes it a felony to pass,

present, offer, issue, attempt or cause the same, or possess,

with intent to defraud,
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11

any false or fictitious instrument, document, or other

item appearing, representing, purporting, or contriving

through scheme or artifice, to be an actual security or

other financial instrument issued under the authority of

the United States, a foreign government, a State or other

political subdivision of the United States, or an

organization[.]

The legislative history of this provision indicates that it was

intended to cover “fictitious” instruments, as opposed to

“counterfeit” instruments, in order to close a loophole in the

criminal statutes. United States v. Howick, 263 F.3d 1056,

1066-67 (9th Cir. 2001), cert. denied, 535 U.S. 946 (2002).

The court in Howick articulated the distinction between

counterfeit and fictitious documents as follows, id. at 1067:

A “counterfeit” obligation is a bogus document contrived

to appear similar to an existing financial instrument; a

“fictitious” obligation is a bogus document contrived to

appear to be a financial instrument, where there is in fact

no such genuine instrument, and where the fact of the

genuine instrument’s nonexistence is presumably

unknown by, and not revealed to, the intended recipient

of the document.

In this case, there was testimony that although there is a

legitimate financial instrument known as a sight draft, the

United States Treasury has not used sight drafts in modern

history. Moreover, the United States Treasury maintains no

depository accounts against which an individual could draw

a check, draft, or any other financial instrument. The sight

drafts at issue here were properly charged as fictitious

instruments under § 514(a)(2).

Yates asserts, without elaboration or citation to authority,

that it was obvious from the face of the sight draft that it was

not an “actual” financial instrument within the meaning of

§ 514(a)(2). While the sight drafts were not in fact accepted

12 United States v.

Anderson, et al.

Nos. 02-1662/1673/1700/1703/

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7

In contrast with counterfeit statutes, § 514(a)(2) cannot be

interpreted to include a “similitude” requirement; that is, that the

document bear such likeness to genuine currency as is calculated to

deceive an honest unsuspecting person of ordinary observation.

by any of the recipients, we agree with the court in Howick

that because the “very purpose of the statute is to supplement

the preexisting counterfeit laws by criminalizing bogus

obligations that are not copies of any actual obligation” the

term “actual” in § 514(a)(2) cannot be given its most natural

meaning. 263 F.3d at 1067 (emphasis in original). Instead,

it should be interpreted to encompass the idea of

“verisimilitude”—the quality of appearing to be true or real.

Id.7

Recognizing the infinite range of financial instruments,

both genuine and fictitious, the court in Howick interpreted

the phrase “‘actual security or other financial instrument’” to

mean “one that appears to be ‘actual’ in the sense that it bears

a family resemblance to genuine financial instruments” or, in

other words, “include[s] enough of the various hallmarks and

indicia of financial obligations so as to appear to be within

that class.” 263 F.3d at 1068. In this case, the government

presented testimony from William Kerr of the Office of the

Comptroller describing the sight drafts as having good

physical quality (including microencoding, microprinting, a

colored background, and an artificial watermark), and noting

that their invalidity would not necessarily be apparent just

from looking at them.

Finally, defendants assert that there was insufficient

evidence of an intent to defraud because they made no

attempt to obtain a refund from the IRS. As the government

points out, however, it was not necessary to prove defendants

requested a refund in order to establish that the sight drafts

were presented with intent to defraud. Intent may be proven

through circumstantial evidence, and there was evidence from
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United States v.

Anderson, et al.

13

which the jury could infer that defendants knowingly sent

worthless sight drafts drawn on the United States Treasury

with the intention that they be accepted for value.

C. Sufficiency

Defendants Goodwin and Sagorski argue that the evidence

was insufficient to support their convictions under 26 U.S.C.

§ 7206(1) (counts 28-30 and 46-47). Sagorski specifically

relies on the fact that the document examiner was unable to

identify him as having signed the 8300s that bore his name.

The witness did testify, however, that Sagorski authored all

other entries on the form and that no conclusion could be

made about the signatures because Sagorski’s handwriting

exemplar was “very quickly executed and partially illegible.”

Goodwin, on the other hand, relies on the fact that the

document examiner could only identify him as the “probable

preparer” of the 8300s bearing his name.

In addition to the expert witness testimony, the jury was

entitled to consider both circumstantial evidence as well as

the rebuttable presumption afforded by 26 U.S.C. § 6064,

which provides that the fact that an individual’s name is

signed to the return is prima facie evidence that the return was

signed by him. We have no difficulty finding that when the

evidence and inferences are viewed in the light most

favorable to the prosecution, there was sufficient evidence

from which a rational trier of fact could conclude that

Sagorski and Goodwin signed the false 8300s that bore their

names.

Next, defendants Sagorski and Goodwin challenge the

sufficiency of the evidence tying them to the charged

conspiracy. Both defendants argue first that they never joined

the conspiracy to defraud the United States by obstructing the

IRS. Not only does this ignore that the conspiracy had

multiple objectives, but also disregards the evidence

concerning their participation. Goodwin’s name was signed

14 United States v.

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8

Sagorski, a customer in Lawrence’s muffler shop, heard Lawrence’s

anger at police and the court system and arranged for him to meet with

Anderson and Modderman at their home. Sagorski also gave Lawrence

some audio tapes that included anti-government rhetoric. Under

Anderson’s direction, Lawrence signed false 8300s that were filed with

the IRS reporting transactions with individuals against whom Lawrence

bore grievances. Arndt, who worked for Sagorski, had severe financial

problems arising from her son’s use of her credit cards. Sagorski referred

her to Anderson and Modderman and provided her with sight drafts on

one occasion. Arndt sent more than 50 sight drafts and filed false 8300s.

She introduced her son and sister to the scheme and they, in turn, also

wrote worthless sight drafts.

on 11 false 8300s directed at judicial officers, police, and

attorneys that collectively reported over $140 million in

financial transactions which never occurred. Goodwin also

refused to cooperate with the grand jury, sent notices to court

officers, and joined with those who acted to disrupt the trial.

Sagorski signed 34 false sight drafts totaling $49 million

and filed 16 false 8300s reporting nonexistent transactions

with employees of financial institutions, as well as judges,

lawyers, and court officers. Special Agent Robert Walker

testified that Sagorski admitted to having prepared the 8300s

and sight drafts bearing his name and insisted that the IRS

was a fictitious entity with no right to collect taxes. In

addition, Sagorski was responsible for bringing Lawrence and

Arndt into the conspiracy.

8

Finally, Goodwin argues that it was error to have admitted

another piece of evidence, the only sight draft purportedly

written by him, because it preceded the conspiracy. To the

contrary, the sight draft was dated May 21, 1999, and was

endorsed on the reverse side to Jerry M. Beurkens on July 13,

1999; well within the period of the conspiracy. Beurkens, a

city attorney, testified that he had prosecuted Goodwin on a

traffic ticket several years earlier; received several documents
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Anderson, et al.

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9

Goodwin also argues that this sight draft was neither the subject of

a substantive charge nor listed as an overt act in furtherance of the

conspiracy. The government may offer proof of overt acts not listed in

the indictment. United States v. Henson, 848 F.2d 1374 (6th Cir. 1988).

The government also notes that this exhibit was admitted twice without

objection from Goodwin.

10At trial, counsel for Sagorski agreed with the district court’s

characterization that the motion was in essence one for mistrial.

from Goodwin, including the sight draft; and was the target of

a false Form 8300 filed with the IRS.9

III.

Sagorski claims error in the denial of his motion for

severance or mistrial on the grounds that he was prejudiced

by the disruptive behavior of his codefendants. Whether

properly articulated as a question of prejudicial joinder

requiring severance, or a motion for mistrial resulting from

prejudicial joinder, the record reflects that the district court

addressed the appropriate considerations for determining

whether the defendant could demonstrate he was prejudiced.

See United States v. Moore, 917 F.2d 215, 220 (6th Cir.

1990). Our review of a district court’s decision on a motion

for severance or for mistrial is for abuse of discretion. United

States v. Lloyd, 10 F.3d 1197, 1215 (6th Cir. 1993)

(prejudicial joinder); United States v. Chambers, 944 F.2d

1253, 1263 (6th Cir. 1991) (mistrial).10

Relief from prejudicial joinder is required “only if there is

a serious risk that a joint trial would compromise a specific

trial right of one of the defendants, or prevent the jury from

making a reliable judgment about guilt or innocence.” Zafiro

v. United States, 506 U.S. 534, 539 (1993). A trial court’s

limiting instructions may “cure” such prejudice. Id. The

defendant bears the burden of making a “strong showing of

factually specific and compelling prejudice resulting from a

16 United States v.

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joint trial.” Moore, 917 F.2d at 221. We adhere to the view

that the jury must be presumed capable of sorting out the

evidence against each defendant separately. Id. at 220.

In denying Sagorski’s motion, the district court observed at

the outset that there had been a noticeable difference in the

appearance, demeanor, and attentiveness of the three

defendants who did not disrupt the proceedings (who were

also on bond) as compared to the nine defendants who

engaged in the disruptive behavior. The three nondisruptive

defendants were also physically separated from the others,

due to the configuration of the tables in the small courtroom.

In addition, the court noted that much of the evidence related

to the sight drafts or 8300s allegedly prepared by the various

individuals.

Finally, in considering the impact of the disruptive

behavior, the court indicated that the outbursts were short and

the defendants were quickly escorted out of the courtroom.

In fact, the court suggested that Sagorski’s good behavior

may have served to impress the jury and differentiate him

from the disruptive defendants. No further disruptions

occurred, as the nine defendants were unwilling to give the

necessary assurances. Moreover, the jury was properly

instructed to separately consider the evidence as to each

defendant. United States v. Stull, 743 F.2d 439, 447 (6th Cir.

1984). We find no abuse of discretion in the denial of

Sagorski’s motion for severance or mistrial.

IV.

Several evidentiary claims are raised by defendants

Anderson, Modderman, Sagorski, and Goodwin. We review

the district court’s decisions concerning the admission of

evidence for abuse of discretion. United States v. Middleton,

246 F.3d 825, 836 (6th Cir. 2001). Even if an abuse of

discretion has occurred, “[a]ny error, defect, irregularity, or
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United States v.

Anderson, et al.

17

variance that does not affect substantial rights must be

disregarded.” FED. R. CRIM. P. 52(a).

Anderson, joined by Modderman, claims error occurred

when Agent Jon Street was allowed to testify concerning a

box of documents which consisted of correspondence

received from the defendants and addressed to individuals

including judges, prosecutors, and IRS investigators (the

“Gateway” box). The essence of Anderson’s claim on appeal

is twofold: that it was an abuse of discretion to allow

testimony concerning the entire collection of documents

without admitting all of the documents; and that it was

unfairly prejudicial because it allowed the jury to speculate

about the voluminous “collective misdeeds” of the

defendants. We reject these contentions as meritless.

The record reflectsthat Street testified generally concerning

the contents of the box to explain how the documents were

accumulated and organized, but did not include specifics

about documents that were not admitted into evidence. In

addition, the box was present so that it would be available for

defense counsel to use in cross-examination. From the box,

Street selected documents sent by various defendants that

contained the same or very similar captions or verbiage.

Those selected documents were offered as exhibits to show

the existence of and participation in the conspiracy. To the

extent that the voluminous number of documents reflected

badly on defendants, it was not unfairly prejudicial. There

was no claim that the box did not contain the kind of

documents that the exhibits represented. At least one

defendant was able to clarify on cross-examination that none

of the selected documents were sent by him.

Anderson and Modderman contend that it was an improper

plea for sympathy to mention that defendants directed notices

and other harassing correspondence to the prosecutor

personally. In overruling objections to such evidence, the

district court observed that to exclude the evidence would

18 United States v.

Anderson, et al.

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11In a related argument, Goodwin asserts that documents received by

the government during trial, including a letter prepared by Goodwin from

the holding cell and handed to a Deputy United States Marshal, were

irrelevant, outside the scope of the conspiracy, and unduly prejudicial.

The documents, and especially Goodwin’s letter, were relevant to the

alleged conspiracy as they supported the contention that there was

concerted action by the defendants.

allow a defendant to thwart prosecution by sending damaging

material to the prosecutor. This is an unusual case in that the

letters and notices were relevant to the conspiracy charge and

were not themselves of an inflammatory nature. Moreover,

defendants have not identified any questioning or argument

by the prosecutor relating to the correspondence that would

tend to inflame the jury.

11

Sagorski claims that the district court erred in allowing

Agent Steven Baker to testify concerning items seized from

the Anderson-Modderman residence. Specifically, defendant

points to testimony about a letter from a bank in response to

correspondence from Sagorski; a copy of the alert from the

Comptroller’s Office to financial institutions about the

fictitious sight drafts; excerpts from a book called “Accepted

for Value”; portions of pamphlets outlining the use of the

mantra; and literature referencing the “Kingdom of Heaven”

group and other teachings. Defendant argues that the

evidence was hearsay, and claims it was irrelevant and highly

prejudicial because it branded the defendants as “antigovernment” and because some of the references might have

called to mind similarly named cults. There is no indication,

however, that an objection was made on either basis. As

such, our review is for plain error. United States v. Thomas,

11 F.3d 620, 629-30 (6th Cir. 1993).

This evidence was relevant to the question of the

defendants’ knowledge and intent and would not have been

offered for the truth of the matter asserted. Moreover, this

was hardly the only evidence of “anti-government” sentiment
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United States v.

Anderson, et al.

19

12USSG § 2F1.1 was repealed and amended provisions were

consolidated in USSG § 2B1.1, effective November 1, 2001. See USSG

§ App. C, amendment 617. Although defendants were sentenced after the

effective date, the old provision was used in order to avoid ex post facto

problems.

on the part of the defendants. Finally, it would be pure

speculation to conclude that references to the “Kingdom of

Heaven” group might have led the jurors to associate

defendants, specifically Anderson and Modderman, with a

cult known by a similar name. We find no reversible error.

V.

Five defendants—Anderson, Shriver, Sloboda, Goodwin,

and Sagorski—appeal from certain aspects of the district

court’s calculation of their adjusted offense level under

United States Sentencing Guidelines Manual (USSG) § 2F1.1

(2000). This guideline applies to both the group of offenses

relating to the sight drafts and those relating to the false

8300s, and provides for a base offense level of 6. USSG

§ 2F1.1(a). The guideline applicable to the conspiracy

charge, USSG § 2X1.1(a), incorporates this base offense level

and any specific offense characteristics for intended conduct

that can be established with reasonable certainty. Because a

broad range of offenses are covered by USSG § 2F1.1, the

guidelinesinclude a number of specific offense characteristics

– the most significant of which is the incremental increase of

up to 18 levels based on the value of the loss or intended loss.

USSG § 2F1.1(b)(1).12

Although the probation department recommended that the

offense level be increased based on the face value of all the

sight drafts and 8300s attributable to each defendant, the

district court rejected that approach as inconsistent with this

court’s precedent concerning the calculation of intended

losses. United States v. Watkins, 994 F.2d 1194 (6th Cir.

1993); United States v. Khan, 969 F.2d 218 (6th Cir. 1992).

20 United States v.

Anderson, et al.

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This determination is not challenged on appeal. To be

included as an intended loss, the district court must find the

defendant intended the loss; it was possible for the defendant

to cause the loss; and the defendant completed or was about

to complete, but for interruption, all of the acts necessary to

bring about the loss. Watkins, 994 F.2d at 1196.

Consequently, the district court categorically excluded the

value of all the 8300s, leaving a base offense level of 6 for the

§ 7206 offenses. The court then discriminated between sight

drafts that would be counted as intended losses, excluding

those for more than $100,000 and including those that related

to an existing debt or an attempt to obtain credit. In this way,

the district court determined that Anderson and Sagorski

would each receive a 12-level increase in the offense level

relating to their convictions under § 514(a)(2) for intended

losses of more than $1.5 million and less than $2.5 million

under § 2F1.1(b)(1)(M). Anderson and Sagorski claim that

this was error.

A. Intended Loss and § 514(a)(2) Offenses

At the outset, Anderson argues that no sight drafts should

have been included as intended losses because they were so

obviously bogus that it was impossible for the scheme to

succeed in causing a loss. In Khan, we explained that the

incremental increases for intended losses “assume a

fraudulent scheme that would have created some actual loss

but for the interruption of the scheme by detection or failure

to carry out all the steps necessary to succeed.” 969 F.2d at

221. This limitation applies when the impossibility of

pecuniary loss is “entirely unrelated to the fraud or its

discovery.” Id. at 220. See United States v. Ly, No. 98-3783,

1999 WL 196573 (6th Cir. Mar. 29, 1999) (unpublished
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United States v.

Anderson, et al.

21

13The amendments abandon this circuit’s interpretation of intended

loss and clarify that intended loss “includes intended pecuniary harm that

would have been impossible or unlikely to occur.” USSG § 2B1.1,

comment. (n.2) (eff. Nov. 1, 2001).

14The addition of these amounts to the defendant’s intended losses

“bumps” the increase in the base offense level from 11 levels (for losses

of more than $800,000) to 12 levels (for losses of more than $1.5 million).

decision). While no sight drafts were accepted for value in

this case, it is because the fraud was detected.13

Anderson and Sagorski both claim the district court erred

by holding them accountable for sight drafts written by

others. To be considered “relevant conduct,” the conduct

must have been (1) reasonably foreseeable to the defendant

and (2) undertaken in furtherance of the jointly undertaken

criminal activity. USSG § 1B1.3(a)(1)(B) and comment.

(n.2) (2000); United States v. Orlando, 281 F.3d 586, 600

(6th Cir.), cert. denied, 537 U.S. 947 (2002). The district

court must make individualized findings regarding these

requirements in order to differentiate between coconspirators.

281 F.3d at 600.

Sagorski does not contest the amount of losses representing

sight drafts he wrote himself, to the tune of about $820,000,

but only disputes the inclusion of sight drafts written by

Arndt and her son, Chad Boerma, on the grounds that the

court failed to make particularized findings concerning the

foreseeability of their conduct and the scope of the joint

activity. The record shows, however, that the district court

made the requisite findings.

14

The district court found that Sagorski recommended the

scheme to Arndt, and arranged for Anderson and Modderman

to teach her. Arndt explained the theory to her son, who, with

prompting from Sagorski, wrote a series of sight drafts. The

district court concluded that Sagorski should be found

22 United States v.

Anderson, et al.

Nos. 02-1662/1673/1700/1703/

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culpable for the conduct of Arndt and Boerma because “one

can say without a shadow of a question that he knew what

[Arndt] and her son Boerma were doing, and the amounts that

they defrauded and intended to defraud are culpable to him as

a co-conspirator because it was clearly foreseeable within that

portion of the conspiracy.” Because Sagorski has not

demonstrated that the district court’s findings were either

inadequately individualized or clearly erroneous, we find no

error in the 12-level adjustment in the offense level under

§ 2F1.1.

Anderson was held accountable for intended losses of

$2,205,749, of which only $31,000 was attributable to sight

drafts she wrote herself. This resulted in a 12-level increase

in the offense level for the § 514(a)(2) convictions. Anderson

argues, as she did at sentencing, that it was not reasonably

foreseeable that her “students” would write these sight drafts.

She claims she merely explained the redemption theory and

the use of the sight drafts and could not control what her

“students” did with that “knowledge.” The issue, however, is

not control but foreseeability.

We find no error in the finding that it was reasonably

foreseeable to Anderson that her coconspirators would write

the sight drafts in question. She explained how the sight

drafts could be used to escape debts and secure credit, showed

them how to fill out the sight drafts, and encouraged the filing

of false 8300s against those who rejected the sight drafts. The

only coconspirator Anderson did not personally instruct was

Boerma. Not only did Anderson fail to object to those sight

drafts, but any error in the inclusion of the $156,000 in sight

drafts written by Boerma would be harmless because even
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United States v.

Anderson, et al.

23

15Anderson also questions the accuracy of some of the figures

included by the district court and complains that the adding machine tape

referenced by the district court is not part of the record. Inviting this court

to remand to expand the record, Anderson asserts that there are

discrepancies in the totals of the sight drafts written by Arndt and Boerma.

Anderson did not object to or ask for clarification concerning the amounts

that were being included in the loss calculation, and we find no plain

error.

without it the intended losses would still greatly exceed $1.5

million.15

B. Enhancements under USSG § 3B1.1 and § 3A1.2

Shriver received a two-level enhancement under USSG

§ 3B1.1(c) for her role in the offense as “an organizer, leader,

manager, or supervisor” of the criminal activity. To qualify

for this adjustment, the defendant must have exerted control

over at least one other participant in a supervisory,

managerial, leadership, or organizational capacity. United

States v. Caseslorente, 220 F.3d 727, 734-35 (6th Cir. 2000).

Although the district court did not identify an individual over

whom Shriver exerted control, we can infer the necessary

finding from the district court’s explanation that she had a

leadership role in that she secured the sight drafts, met with

and connected people, and had a leadership role both pretrial

and at trial. United States v. Dupree, 323 F.3d 480, 494 (6th

Cir. 2003); see also Caseslorente, 220 F.3d at 736 (although

preferable, it is not required that the district court state the

specific facts relied on in applying § 3B1.1 enhancement).

The record indicates that Shriver was an organizer in the

conspiracy and an instigator among the defendants at trial.

The government notes that there can be little doubt that she

exerted control with respect to the participation of her

husband. It was not clearly erroneous for the district court to

find the enhancement applied to Ruth Shriver.

24 United States v.

Anderson, et al.

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16In a novel claim, Anderson argues that although proper notice was

sent regarding possible departure under § 5K2.7, the district court had an

obligation to amend that notice to advise her regarding the possibility of

departure under § 5K2.0. We find no error, however, because the

government’s prehearing motion for departure adequately disclosed that

departure under § 5K2.0 was at issue. Burns v. United States, 501 U.S.

129, 138 (1991) (notice is required before the district court may depart

upward “on a ground not identified as a ground for departure in the

presentence report or in a prehearing submission by the Government”).

Anderson appeals from the 3-level enhancement imposed

under USSG § 3A1.2(a), which applies if “the victim was a

government officer or employee . . . and the offense of

conviction was motivated by such status.” This enhancement

was added to the offense level for the § 7206(2) offenses

relating to the false 8300s. Although Anderson challenges the

enhancement on the grounds that the target was really the

government, rather than government officials, the district

court did not clearly err in finding that the targets of the false

8300s covered individual government officials who were

targeted because of their positions. For example, individuals

targeted included an officer who issued a ticket to a defendant

and a judge who presided over a court matter involving a

defendant. Conceding that about half of the 8300s that were

the subject of her convictions under § 7206(2) targeted federal

or state employees, Anderson argues that it was error to apply

the enhancement to all of those counts. However, the § 7206

convictions were grouped together without objection.

C. Upward Departures under USSG § 5K2.0 and

§ 5K2.716

We have reviewed a district court’s decision to depart

upward or downward from the sentencing guideline range

under an abuse of discretion standard. United States v.

Chance, 306 F.3d 356, 393 (6th Cir. 2002). Recent

amendments to 18 U.S.C. § 3742(e) require de novo review

of whether a departure was based on proper factors, but
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United States v.

Anderson, et al.

25

review of the extent of such a departure continues to be for

abuse of discretion. See PROTECT Act of 2003, § 401(d),

Publ. L. No. 108-21, 117 Stat. 650 (2003). Because we

would affirm the upward departures under either standard, we

need not decide whether this modification applies to appeals

pending as of the effective date of the PROTECT Act.

The applicable guidelines allow for upward departures

when “there exists an aggravating . . . circumstance of a kind,

or to a degree, not adequately taken into consideration by the

Sentencing Commission in formulating the guidelines.”

18 U.S.C. § 3553(b); see USSG § 5K2.0 (2000). When a

factor being considered is an encouraged factor, the court may

depart if the applicable guideline does not already take the

factor into consideration, or, if already taken into account, it

is present to a degree that makes the case different from the

ordinary case in which it is present. Koon v. United States,

518 U.S. 81, 95-96 (1996).

Once the district court excluded all of the false 8300s and

many of the sight drafts from the loss calculations, the offense

level could not be increased under USSG § 2F1.1(b)(1) for

any of the convictions under § 7206, or for Ruth Shriver’s

conviction under § 514(a)(2). Granting the government’s

motion for upward departures under USSG § 5K2.0, the

district court found that without additional increases the

offense level would not reflect the seriousness of the

defendants’ conduct. As the commentary to USSG § 2F1.1

explains: “In cases in which the loss determined under

subsection (b)(1) does not fully capture the harmfulness and

seriousness of the conduct, an upward departure may be

warranted.” USSG § 2F1.1, comment. (n.11). Shriver,

Anderson, Sloboda, and Goodwin challenge these departures.

In addition, the district court provided defendants with

notice of its intention to consider upward departure under

USSG § 5K2.7, which provides, in part, that “[i]f the

defendant’s conduct resulted in a significant disruption of

26 United States v.

Anderson, et al.

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17The court later rejected the government’s request for further

enhancement for more than minimal planning under USSG § 2F1.1(c)

because Shriver’s overall participation in the conspiracy was factored into

the USSG § 5K2.0 departure.

governmental function, the court may increase the sentence

above the authorized guideline range to reflect the nature and

extent of the disruption and the importance of the

governmental function affected.” The district court found that

the disruptions during trial represented significant disruption

of a governmental function for which upward departures

would be warranted in calculating the offense levels for both

the § 514(a)(2) and § 7206 offenses. Anderson, Sloboda, and

Shriver appeal from these departures.

1. Shriver

Convicted of one count each of conspiracy and violating

§ 514(a)(2), Shriver had an adjusted offense level of 10 prior

to any departure. The district court found this offense level

did not accurately reflect the seriousness of her conduct and

granted an 8-level upward departure under USSG § 5K2.0. In

explaining the reasons for this departure, the court noted that

the one sight draft at issue for $1.75 million was sent to the

IRS at a time when Ruth and Jack Shriver had a tax obligation

of $114,000. Given the amount of the sight draft, however,

the district court did not increase the base offense level to

account for intended losses. Nonetheless, the court found that

the sight draft sent to the IRS was obviously designed to

commit fraud and the tax liability related to her own antigovernment animus. The district court also found that, in

addition to the enhancement under USSG § 3B1.1(c), the

extent of her participation in the larger conspiracy had not

been taken into account. In deciding to upwardly depart 8

levels, the district court observed that a loss of $114,000

would alone result in a 6-level increase in the offense level

under USSG § 2F1.1(b)(1).17
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United States v.

Anderson, et al.

27

18With a total offense level of 24 and a criminal history score of 0,

the guideline range was 51 to 60 months. Shriver was sentenced to 60

months’ imprisonment on each count, to run concurrently.

19Anderson was sentenced to 60 months on the conspiracy count,

120 months on the § 514(a)(2) convictions, and 36 months on the § 7206

convictions, to run concurrently.

Turning then to the question of departure under USSG

§ 5K2.7, the district court explained that additional upward

departure was “absolutely necessary” because Shriver was

one of the leaders of the disruptive behavior and because she

repeatedly engaged in the disruptive behavior, all of which

demonstrated contempt for the process and everyone from

judge to jury. As a result, the district court found Shriver’s

conduct warranted an additional 6-level increase in the

offense level. She contends that this departure was an abuse

of discretion because her behavior during trial was adequately

taken into account by the 2-level enhancement for obstruction

of justice. The district court found otherwise, emphasizing

that the significant disruption of the trial was separate from

the obstruction of the grand jury and contempt proceedings.

We agree.18

2. Anderson

The district court granted a 6-level upward departure under

USSG § 5K2.0 with respect to Anderson’s § 7206 offenses

only, after finding that the base offense level of 6 did not

account for the seriousness of her conduct. In addition, she

received a 4-level upward departure in the offense level for

both the § 514(a)(2) offenses (counts 2-3) and the § 7206(2)

offenses (counts 50-73) under USSG § 5K2.7.19

Taking issue with the USSG § 5K2.0 departure, Anderson

mistakenly asserts that such a departure must relate to a

financial loss. This assertion is refuted by the earlier quoted

commentary to USSG § 2F1.1 authorizing departure when the

28 United States v.

Anderson, et al.

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20Sloboda was sentenced to concurrent terms of 37 months’

imprisonment on the conspiracy count and 36 months on each of the two

§ 7206 convictions. Goodwin received concurrent terms of 46 months’

imprisonment on the conspiracy count and 36 months each on his two

§ 7206 convictions.

loss calculation does not reflect the harmfulness and

seriousness of the conduct. Anderson also argues that this

departure resulted in double counting when combined with

the official-victim enhancement under USSG § 3A1.2. In

particular, she emphasizes that more than half of the targets

of the false 8300s were government officials. However, the

district court explained the departure as warranted because the

base offense level of 6 did not take into account the large

number of false 8300s that Anderson had aided, assisted, or

counseled others to file. This is distinct from the

enhancement based on the status of the targets themselves.

The USSG § 5K2.0 departure did not result in double

counting of the same factor. Sloboda and Goodwin, who join

in this argument, also received a 6-level departure under

USSG § 5K2.0 based on the number of false 8300s they each

filed in an attempt to subvert the IRS and harass the targets

(in each case a dozen).20

Appealing the 4-level upward departures under USSG

§ 5K2.7, Anderson argues, as she did at sentencing, that they

constituted double counting of the same conduct addressed by

the 2-level enhancement for obstruction of justice. As with

Shriver, however, it is clear that these departures addressed

separate conduct from the obstruction of justice enhancement.

Alternatively, Anderson suggests the USSG § 5K2.7

departures were error because the trial court could have

exercised its contempt powers during trial.

The district court considered this possibility, but found it

inappropriate because to bring criminal contempt charges at

trial could have “anointed these people with martyrdom.”
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United States v.

Anderson, et al.

29

21Sloboda, who adopts Anderson’s arguments on this issue, also

received a 4-level upward departure under USSG § 5K2.7 for the same

reasons.

The district court also explained that “this is not all about

contempt. This whole trial, this whole issue, redemption

theory, . . . was illustrative of contempt for all authority. Not

just judicial authority, but all authority. This contempt for

judicial authority was just one aspect of the contempt for

governmental authority within a democracy.” We find no

error in the determination that upward departures were

appropriate under USSG § 5K2.7.

In a related “piling on” argument, Anderson suggests the

departures were not necessary because removing her and the

others from the trial was punishment enough. That was a

question of courtroom management, with defendants being

invited to return to the courtroom twice every day, and was

not adequately reflected in the sentencing calculations absent

the departure. Finally, Anderson challenges the extent of the

departures as unreasonable. We cannot say that the 4-level

departures under USSG § 5K2.7 represent an abuse of

discretion. In particular, the district court emphasized that the

conduct involved multiple incidents of disruptive conduct that

significantly disrupted an important judicial function.21

AFFIRMED.