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. e du/thirdc irc uit_1996/97UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_______________

No. 95-5092

_______________

UNITED STATES OF AMERICA

v.

JOHN VOIGT, Ap pellant

_______________

On Appeal from the United States District Court for the District of New Jersey (D.C. Criminal No. 93-cr-00300-1)

_______________

Argued January 25, 1996

Before: COWEN and SAROKIN, Circuit Judges , and POLLAK, District Judge

(Filed July 9, 1996)

_______________

Lawrence S. Lustberg (ARGUED) Crummy, Del Deo, Dolan, Griffinger & Vecchione
One Riverfront Plaza Newark, New Jersey 07102-5497

COUNSEL FOR APPELLANT

Kevin McNulty Allan Tananbaum (ARGUED) Faith Hochberg Office of United States Attorney 970 Broad Street, Room 502 Newark, New Jersey 07102

COUNSEL FOR APPELLEE

_______________

OPINION OF THE COURT

_______________COWEN, Circuit Judge.

John Voigt appeals from a judgment of conv iction and sentence entered by the District Court for the Dist rict of New Jersey. The conviction arises from Voigt's role as the mastermind of a pernicious "advance fee" scheme whereby Voigt, operating under the auspices of the Euro-American Money Fund Trust, would obtain substantial fees in advance from, respectively, uns uspecting loan applicants and potential investors for various loan s and
investments that never materialized. Over a three- year period the
Trust took in a total of 18.5 million dollars. Of Voigt's eight assignments of error, two significant constitutional questions are presented for our revi ew. The first is whether the government's use of acquitted codefe ndant Mercedes Travis, who Voigt alleges was counsel to the Trust and to him personally, as a confidential informant against him constitutes "outrageous government conduct" in violation of the Fifth
Amendment's Due Process Clause. The second is whet her the district court violated Voigt's Sixth Amendment right to cou nsel of choice when, citing potential conflicts, it disqualified a third attorney Voigt sought to add to his defense team without hol ding a formal evidentiary hearing. We also confront several ques tions of first impression in this Circuit pertaining to the money laundering statute, 18 U.S.C.  1956(a)(1), and its forfeiture counterpart.

Id.  982. We must decide whether those statutes requir e formal "tracing" where laundered funds have been commingle d in a bank
account with untainted funds. We also must determi ne what is the proper burden of persuasion for forfeiture proceedi ngs under 18

U.S.C.  982, a question we have addressed previously in tw o other contexts. See United States v. Pelullo, 14 F.3d 88 1 (3d Cir. 1994) (RICO; reasonable doubt); see also United States v. Sandini, 816 F.2d 869 (3d Cir. 1987) (CCE; preponderance). Fina lly, Voigt contests the legal sufficiency of his convictions f or tax evasion
under 26 U.S.C.  7201, and challenges the orders of the district court requiring him to make restitution in the amou nt of $7,040,000 and refusing to grant his motions for severance. For the reasons we set forth below, we wil l affirm Voigt's conspiracy, money laundering and tax evasio n convictions, along with the order of restitution, in all respect s. We will vacate the judgment insofar as it incorporates an e rroneous order of forfeiture and remand for further proceedings co nsistent with this opinion.

I.

THE FACTS John Voigt was the mastermind of a scheme to defraud loan applicants and potential investors by inducing them to pay
substantial "advance fees" for nonexistent loans an d investments. To implement this scheme, Voigt created two fraudul ent entities: Euro-American Money Fund Trust, and Meta Trading an d Financial International [hereinafter collectively referred to as "the Trust"]. Voigt fabricated a fictitious genealogy f or the Trust, claiming that it was a long-established European fi nancial
institution affiliated with the Catholic Church andthe Knights of
Malta and that it had access to billions of dollars . Voigt alsofalsely claimed that the Trust's headquarters was l ocated in Paris,

France, and that he was the U.S. Director. To faci litate the scheme Voigt used various aliases and required loan applicants to fill out bizarre confidentiality agreements that pu rported to bar customers from disclosing information about the Tru st in this life
and the afterlife. The scheme operated from early 1990 until mid-1993. Brokers for the Trust recounted the false genealogy Voigt had concocted to unsuspecting victims. At first, the T rust marketed only "loans." These multi-million dollar loans wer e supposedly self-liquidating, which meant that, in return for a fee that ranged into the hundreds of thousands of dollars, customer s would receive a loan that they did not have to repay. As soon as the fees were received they were distributed among the coconspira tors. Eventually, the Trust began to market "Master Colla teral Commitments" ("MCCs"), bogus financial instruments that were touted as special promissory notes issued by banks and ava ilable only through the Trust. They were marketed to unsuspect ing investors for 3.5-4.5 million dollars with the representation that they eventually would yield hundreds of millions of doll ars. All told, Voigt's three-year gain from marketing self-liquida ting loans and MCCs was approximately seven and one-half million d ollars. On December 13, 1993, Voigt and four alleg ed coconspirators--Skip Alevy, Mercedes Travis, Ralph Anderskow, and Donald Anchors--were charged in a twenty-eight-coun t superseding indictment. The indictment charged Voigt personall y with one count of conspiracy to commit wire fraud, fifteen counts of wire fraud, four counts of money laundering, two counts of tax evasion, and criminal forfeiture allegations arising out of the money laundering counts. After a three-month trial, a jury convicte d Voigt of all counts except one count of wire fraud. After a non jury proceeding
at which the district court ordered forfeiture of c ertain automobiles and pieces of jewelry, the court senten ced Voigt to a term of imprisonment of 188 months and ordered him to make $7,040,000 in restitution. This appeal followed. Voigt challenges the judgment against him on eight grounds. He argues that: (1) the government's use of his alleged attorney, Mercedes Travis, as an informant violatedhis Fifth Amendment due process rights and his Sixth Amendmen t right to effective assistance of counsel; (2) the district c ourt erred in disqualifying one of his attorneys due to a potenti al conflict of interest without first making sufficient findings o f fact, in violation of his Sixth Amendment right to counsel o f choice; (3) there was insufficient evidence to support his conv iction on moneylaundering counts twenty-five and twenty-six; (4) t he forfeiture
order should be vacated because the district court failed to require the government to prove beyond a reasonable doubt that the forfeited items were "traceable to" laundered money ; (5) his
convictions on the tax evasion counts should be vac ated because the government failed to prove an affirmative act of ev asion as required by statute; (6) the district court erred i n imposing an order of restitution without making findings of fac t regarding his ability to pay; (7) the district court should have granted his
motion for a severance because his co-defendants as serted defensesantagonistic to his own; and (8) the district court erred in

increasing his Guidelines offense level by two poin ts for obstruction of justice.

II.

JURISDICTION The district court had original jurisdicti on over this criminal action pursuant to 18 U.S.C.  3231. We exercise appellate jurisdiction to review a final judgment o f conviction
under 28 U.S.C.  1291.

III.

OUTRAGEOUS GOVERNMENT CONDUCT Voigt argues that the government infringedhis Fifth Amendment right to due process by recruiting his at torney as a government informant "in deliberate and flagrant di sregard for the attorney-client relationship." Voigt's Br. at 10. The premise of this claim is that codefendant Mercedes Travis, wit h whom the government had extensive investigative contacts, wa s his personal attorney during the time of the investigation. The precise nature of Travis' relationship with Voigt and with the gov ernment, however, is in dispute.

A.
The relevant facts are as follows. Merced es Travis began working for the Trust in August, 1990. Voigt conte nds that she was engaged as an attorney at that time, and points to an engagement letter that supports his claim. The government, ho wever, maintains that it justly and reasonably believed that Travis was not and had never been an attorney for the Trust. In any event , by Travis' own account, she became concerned about the legitimacy of the Trust and feared that she herself was being defrauded. As a result, she left her post in Europe and approached the FBI with her concerns. In June and July, 1991, she met with Special Agent Alv in Powell and voluntarily provided him with a package of relevant documents. Those documents indicated that the Trust was engage d in a fraud. Over the course of a three-day interview a t a New Jersey motel in mid-July of 1991, Travis detailed the frau d for Powell. Noting that Travis was an attorney, and having seen a letter on Trust letterhead purporting to appoint Travis as at torney for the Trust, Powell asked Travis whether she had acted in a legal capacity for the Trust. Travis indicated on severa l occasions that she had not acted as a legal representative for the Trust but, rather, that she had been primarily responsible for initiating and maintaining contacts with banks. Travis also insis ted that the letter purporting to appoint her as an attorney for the Trust was

false.
Travis indicated that she went to work for the Trust in 1990, first in the U.S. and later in Europe, believ ing it to be a bona fide financial institution. Over time, howeve r, she discovered that, notwithstanding Voigt's contention that the Trust possessed $75 billion in assets, the Trust was simp ly a shell corporation with few assets. Travis then related t hat the Trust was engaged in an advance-fee scheme for loans in w hich fees were paid but no loan was ever funded. Based on Travis' allegations, and on Powell's belief that she had not representedthe Trust or its members in a legal capacity, Powell enlisted th e assistance ofTravis. Powell devised a pretext whereby Travis wo uld reingratiate

herself with the Trust by falsely informing Voigt t hat she had negotiated an MCC. Powell hoped that this would le ad Voigt to divulge further information about the Trust's activ ities. Powell eventually had Travis officially designated as a "c ooperating
witness" on the FBI's records. Having enlisted Travis as an informant, Po well asked her to sign a document allowing the consensual recordin g of her conversations with Trust members, including Voigt. In that document, however, Powell carefully noted that the purpose of the recordings was to corroborate her statements, basedon the understanding that she had not acted, and would not act, as an attorney for the Trust or any of its members. In S eptember of 1991, Travis made three supervised calls from the F BI office in New Jersey, although apparently none involved Voigt or his coconspirators. In October of 1991, Travis informed Powell that she had been invited to Europe by someone associated with t he Trust. Powell asked her to maintain contact with him, and she called once during her trip to inform Powell that she had met w ith Voigt, but that they had discussed only personal matters. Whe n Travis returned from Europe, Powell met her in an Atlantic City hotel, where she provided him with several cassette record ings of conversations, documents obtained during the trip, and information acquired by talking with Voigt. Travis was still c onvinced that the Trust was engaged in a fraud. According to Pow ell's version of the meeting, Travis indicated that she had not perf ormed legal work for the Trust or Voigt during her trip to Europe. In February of 1992, Travis informed Powel l that she had prepared a tax opinion for Voigt. She claimed it w as a "one-shot deal," and that it concerned Voigt and not the Trus t, but she did not share the substance of the opinion with Powell. Powell had no prior knowledge that Travis would be providing lega l advice to Voigt. In March of 1992, Travis advised Powell tha t she had persuaded Voigt to let her become the Trust's attor ney, but that
her role would be to facilitate communications betw een the Trust
and other entities. Powell became concerned about this latest development because of potential attorney-client pr ivilege problems and because Travis herself might become an active p articipant in
what she had insisted was a fraud. He therefore in structed Travis to meet with Assistant United States Attorney ("AUS A") Paul Zoubek, who was supervising the investigation. Travis repl ied that she would inform Powell if her status changed from faci litating loans and investments to providing legal advice. Travis next called
Powell on March 10 to inform him that she indeed ha d been appointed as attorney for the Trust. Powell again warned her about acting in a legal capacity and warned her not to engage in an y illegal activity. He also gave her a firm date for their m eeting with AUSA Zoubek. In another telephone call two days later, Powell again instructed Travis not to act as an attorney, and sh e reassured Powell that the information she was providing raise d no issue of privilege. On March 25, 1992, Travis and Powell met w ith AUSA Zoubek at the U.S. Attorney's Office in Newark. After lis tening to Travisrecount her version of the events, AUSA Zoubek poin ted out the

stark inconsistency between her original allegation that the Trust was a fraud and her recent decision to rejoin the T rust as its attorney. Travis indicated that she wanted to dete rmine for herself whether in fact the Trust was legitimate an d would inform the government of her findings within two weeks. A USA Zoubek nevertheless told her that she would be on her own, and that any time spent in Europe working for the Trust would no t be as a government informant due to potential privilege pro blems. According to Zoubek, as verified by Powell's notes of the meeting, the only way that information otherwise privileged could be provided to the government would be if the crime-fr aud exception were deemed to be applicable. Travis indicated tha t she understood. At the same time, however, Powell inst ructed Travis to report to him as to whether the Trust had sufficien t funds to cover its existing loan commitments. From the time of their last meeting on Mar ch 25, 1992, until May 1, 1992, Powell did not hear from Travis, but received information indicating that she was participating i n the same type of fraudulent conduct that originally had motivatedher to come forward to the FBI. On May 1, 1992, Travis made tw o separate calls to Powell from Europe. Her first call, which Powel l maintained was unsolicited, was from a pay phone because, accordin g to Travis, she was afraid her calls were being monitored. Travis again told Powell that the Trust had no funds to lend, and tha t she would make her "official" call later that day. In her second call, Travis indicated that she was representing Voigt in connec tion with two grand jury subpoenas for records of the Trust that Powell had served on Voigt. At trial, however, Travis testifi ed that at that point she was representing only the Trust, and that attorney James Binns was representing the Trust and its directors for purposes of the criminal investigation. Powell advised Travis that she and Voigt should appear at the FBI office to discuss th e matter. It was not until sometime after this May 1 call from T ravis that Powell had Travis officially taken off the books as a confidential
informant. Travis did not contact the government agai n until September of 1992, when Travis called AUSA Robert E rnst (who had taken over the investigation) to discuss grand jury subpoenas that had been served on the Trust in August. Travis inf ormed Ernst that she was representing the Trust in connection with t he subpoenas. Before any further discussion occurred, Ernst infor med Travis that she was a target of the investigation and, given he r earlier contacts with the government, that she had a confli ct of interest
and should withdraw as counsel for the Trust. AUSA Ernst
documented this admonition in a letter sent to Trav is eight days

later. On November 6, 1992, Travis again made an unsolicited call to Powell, warning him that an unsuspecting po tential customer was about to transfer $21 million to the Trust and asking him to stop the transaction. In response to a question by Powell, Travis indicated that she was not represented by counsel. After reiterating that Travis was a target, Powell asked Travis whether she would appear voluntarily before a federal grandjury. Travisagreed to testify. After Travis had arrived in New ark, but prior

to her grand jury testimony, she met with Powell an d AUSA Ernst. Ernst repeated that Travis was a target, and inform ed her of her rights. Ernst warned Travis not to disclose any co nfidences between her and any person affiliated with the Trus t because of potential attorney-client privilege issues, and sta ted that he would not ask any questions that would risk eliciti ng potentially privileged information. In fact, when Travis indic ated that she had brought Trust documents with her to turn over t o the government, Ernst refused to examine them. Notwith standing Travis' insistence that the documents were not privileged b ecause the Trust did not actually exist, Ernst turned them over to a n AUSA who was not part of the investigation into the Trust to mak e an independent privilege determination. Before the grand jury, Travis again was in formed of her rights and that she was a target of the investigati on. She was again admonished not to disclose privileged informa tion, and when it appeared that she was about to do so, Ernst inst ructed her not to answer. On January 12, 1993, Ernst wrote to Tra vis informing her once more that she was a target of the grand ju ry's investigation and invited her to provide additional testimony or evidence in her own behalf, which she did on Januar y 15, 1993.

B. Contending that the government's reliance on Travis to build a case against him constitutes "outrageous go vernment
conduct" in violation of the Fifth Amendment's Due Process Clause, Voigt moved pretrial to dismiss the indictment. Th e district court declined to hold an independent evidentiary hearing because it determined that Voigt had failed to make a prima fa cie showing of outrageousness and the trial would address the issu es raised by his motion. The district court ultimately denied Voigt 's renewed posttrial motion to dismiss the indictment: [A]s far as outrageous conduct by the Government, I certainly can't find that he re. I have had the benefit of seeing Agent Pow ell testify, I have seen Mercedes Travis testi fy and the cross examination of both of them, and
I can't find that that was the case.

To the extent there is any conflict between the testimony of Powell and Travis , I credit the testimony of Powell . . . becau se Powell convinced me that the Government wa s acting reasonably based upon what Travis h ad told them when they went forward, even tho ugh she was an attorney, that she was not acti ng as an attorney. I can't find any outrageo us conduct whatsoever here and, of course, we know later, Travis was not a Government ag ent, [and] was really acting on her own at the time. I can't see any outrageous conduct
whatsoever and I have had the benefit of t he full trial hearing on this.App. at 1122-23.

Our standard of review is mixed. When the district court decides a constitutional claim based on a developedfactual record, we exercise plenary review of the district court's legal conclusion. United States v. Driscoll, 852 F.2d 84 , 85 (3d Cir. 1988). We defer to the factual findings supporting that conclusion unless they are clearly erroneous. United States v . Bonanno, 852 F.2d 434, 437 (9th Cir.), cert. denied, 488 U.S. 10 16, 109 S. Ct. 812 (1989).

1. In 1952 the Supreme Court recognized that outrageous misconduct by law enforcement officers in detecting and obtaining incriminating evidence could rise to the level of a due process violation. Rochin v. California, 342 U.S. 165, 72 S. Ct. 205 (1952) (vacating conviction and dismissing indictme nt where police had pumped stomach of suspected drug pusher to obta in incriminating evidence). Since Rochin was decided the Court has discussed the viability of an outrageous government conduct claim only in the context of government instigation of and overinvolv ement in the very criminal activity it seeks to punish. See Uni ted States v. Russell, 411 U.S. 423, 93 S. Ct. 1637 (1973); see a lso Hampton v. United States, 425 U.S. 484, 96 S. Ct. 1646 (1976) (five Justices reaffirm viability of due process claim for governm ent overinvolvement in crime). In United States v. Pay ner, 447 U.S. 727, 100 S. Ct. 2439 (1980), however, the Court dis cussed, in dictum, whether an illegal search of a third party' s briefcase might constitute outrageous government conduct. Id . at 737 n.9, 100 S. Ct. at 2447 n.9. Thus, we have no reason to doubt that the Court continues to recognize a due process claim pr emised upon outrageous law enforcement investigative techniques

. The showing required to establish a due pr ocess violation, though often recited, is by no means pel lucid. Writing for the Court in Rochin, Justice Frankfurter said t hat "the proceedings by which this conviction was obtained d o more than offend some fastidious squeamishness or sentimental ism about combatting crime too energetically. This is conduc t that shocks the conscience." Rochin, 342 U.S. at 172, 72 S. Ct . at 209. In Russell, the Court elaborated on the standard it ha d enunciated in
Rochin: While we may some day be presented wi th a
situation in which the conduct of law enforcement agents is so outrageous that d ue process principles would absolutely bar th e government from invoking judicial processe s to obtain a conviction, the instant case is distinctly not of that breed. . . . The la w enforcement conduct here stops far short o f violating that "fundamental fairness, shoc king to the universal sense of justice," mandat ed by the Due Process Clause of the Fifth

Amendment.

Russell, 411 U.S. at 431-32, 93 S. Ct. at 1643 (cit ation omitted).And in Hampton, the Court's most recent opportunity to visit the

outrageous government conduct issue, Justice Powell , concurring in the judgment, noted that "[p]olice overinvolvement in crime would have to reach a demonstrable level of outrageousnes s before it could bar conviction." Hampton, 425 U.S. at 495 n. 7, 96 S. Ct. 1653 n.7 (Powell, J., concurring in the judgment). We have also noted that the judiciary is e xtremely
hesitant to find law enforcement conduct so offensi ve that it
violates the Due Process Clause. In United States v. Janotti, 673 F.2d 578 (3d Cir.) (in banc), cert. denied, 457 U.S . 1106, 102 S. Ct. 2906 (1982), we observed that "the majority of the Court has manifestly reserved for the constitutional defense only the most intolerable government conduct." Id. at 608 (empha sis added). Relying on well-settled separation-of-powers princi ples, we
cautioned that [w]e must necessarily exercise scrupulous
restraint before we denounce law enforceme nt conduct as constitutionally unacceptable .

. . . Unless the behavior of the F.B.I. agents rose to the level of outrageousness which would bar conviction, the conduct of agent s of the executive branch who must protect the public from crime is more appropriately considered through the political process w here divergent views can be expressed in the ba llot

box.

Id. at 607, 609. Subsequent decisions have heeded Janotti's call for judicial restraint. As a result, the doctrine of o utrageous government misconduct, although often invoked by de fendants, is rarely applied by courts. See United States v. San tana, 6 F.3d 1, 4 (1st Cir. 1993) ("The banner of outrageous miscon duct is often raised but seldom saluted."). Although litigants c ontinue to assert the doctrine as a defense against conviction , "courts have rejected its application with almost monotonous reg ularity." Id.at 4 (collecting cases). Indeed, the doctrine has only once been applied by a federal appellate court since the Supr eme Court's Hampton decision in 1976: in this court's decision in United States v. Twigg, 588 F.2d 373 (3d Cir. 1978). Since Twigg , however, "this court and other appellate courts have . . . exercis ed extreme caution in finding due process violations in underc over settings." United States v. Gambino, 788 F.2d 938, 945 n.6 (3dCir.), cert.denied, 479 U.S. 825, 107 S. Ct. 98 (1986). See United Sta tes v. DeRewal, 10 F.3d 100, 105 n.3 (3d Cir. 1993), cert. denied, 114 S. Ct. 1544 (1994).
2. Bearing in mind the amount of restraint we must exercise in subjecting law enforcement conduct to judicial r eview, we must determine whether, as a matter of law, the conduct that Voigt alleges occurred in this case raises a cognizable c laim of outrageous government conduct. Despite the paucity of directly relevant authority, we are not writing on a clean s late. Our
review of the case law demonstrates that a claim of outrageousgovernment conduct premised upon deliberate intrusi on into the

attorney-client relationship will be cognizable whe re the defendant can point to actual and substantial prejudice. In United States v. Ofshe, 817 F.2d 1508 ( 11th Cir.), cert. denied, 484 U.S. 963, 108 S. Ct. 451 (1987), for example, the government used a defense attorney as an informant against the defendant in a matter unrelated to the subject of t he attorney's representation (a drug prosecution). With the atto rney's permission, the government placed a body bug on him to record conversations with the defendant. Despite strict i nstructions to the attorney not to elicit privileged information, secret defense strategy concerning Ofshe's drug prosecution was re corded by government agents. Nevertheless, the Eleventh Circ uit concluded that this government misconduct was not so outrageo us as to violate
the Fifth Amendment. Id. at 1516. This conclusion was based on two findings: (1) that the attorney's cooperation c oncerned a different crime from the one for which he was repre senting the defendant, thus the invasion of the attorney-client relationship did not produce any evidence against the defendant; and (2) that the defendant was not prejudiced in his defense bec ause the attorney's cocounsel continued to provide zealous r epresentation to the defendant throughout the trial. Id. The court noted, however, that "[h]ad there been demonstrable evidence of pre judice, we would be compelled to reverse." Id. Accord United State s ex rel. Shiflet v. Lane, 815 F.2d 457 (7th Cir. 1987) (dism issal not warranted where disclosure of privileged informatio n to police lead to discovery of crucial evidence against defendant because government played no role in the breach of the priv ilege), cert. denied, 485 U.S. 965, 108 S. Ct. 1234 (1988); cf. U nited States v. Levy, 577 F.2d 200 (3d Cir. 1976) (dismissal of ind ictment on Sixth Amendment grounds warranted where government employ s codefendant as
confidential informant in order to obtain and revea l confidential defense strategy). Only one decision has ordered that an indi ctment be dismissed due to preindictment intrusion into the a ttorney-client relationship so pervasive and prejudicial as to be considered "outrageous." United States v. Marshank, 777 F. Su pp. 1507 (N.D. Cal. 1991). In Marshank, Ronald Minkin, the attorn ey for two cooperating defendants, provided information to the government leading to the indictment of another one of his cli ents. Minkin then encouraged that client to cooperate with the g overnment in order to secure an indictment against Marshank, wit h whom Minkin also had an ongoing attorney-client relationship. The government never warned the attorney to avoid ethical impropri ety, and affirmatively hid from both the court and the defen dants the attorney's multiple, conflict-ridden representation while acting as a government informant. Granting Marshank's motion to dismiss the indictment based on a due process violation for out rageous preindictment conduct, the district court distingui shed between passive tolerance and active encouragement of impro priety: [T]he government actively collaborated wit h Ron Minkin to build a case against the defendant, showing a complete lack of resp ect for the constitutional rights of the defen dantand Minkin's other clients and an utter

disregard for the government's ethical obligations. . . . [T]he agents and the prosecutor here never warned Minkin not to engage in unethical behavior and in fact facilitated that behavior by hiding it fro m the defendant. Moreover, the government
colluded with Minkin to obtain an indictme nt against the defendant, to arrest the defendant, to ensure that Minkin would represent the defendant despite his obviou s conflict of interest, and to guarantee the defendant's cooperation with the governmen t.

Id. at 1524 (second emphasis added).

C.
1. Voigt claims that, at the very least, the factual disputes raised by his moving papers and the govern ment's response warranted an independent evidentiary hearing prior to trial, and
that the district court's determination that he hadfailed to make out a prima facie showing of "outrageous government conduct" was erroneous. The district court had before it: (1) A gent Powell's affidavit, to which contemporaneous notes of his co ntacts with Travis were attached as exhibits; (2) Voigt's affid avit, in which Voigt claimed that Travis had been the Trust's and his attorney from the summer of 1990 through June of 1993; (3) T ravis' affidavit; and (4) Travis' and Powell's grand jury testimony. Although we agree with Voigt that conducting a hear ing prior to trial would have been more prudent and the better p ractice, a remand is unnecessary under the facts of this case since we find that the record developed at trial, taken together with Voigt's moving papers and the government's response, provid ed the district court an adequate basis with which to resolve Voigt 's
constitutional claim.

a. Rule 12(b)(1) of the Federal Rules of Crim inal Procedure requires that all "defects in the institution of th e prosecution" be raised by pretrial motion. Fed. R. Crim. P. 12( b)(1). Although Rule 12 does not by its terms specify when such a m otion entitles a defendant to a pretrial evidentiary hearing, we h ave held that a defendant's moving papers must demonstrate a "color able claim" for relief. United States v. Brink, 39 F.3d 419, 424 ( 3d Cir. 1994) (remanding for hearing where Brink alleged facts th at, if true, "could violate a defendant's rights under the Sixth Amendment"). See United States v. Soberon, 929 F.2d 935, 941 (3dCir.) (if district court had "reasonable suspicion" of prosec utorial misconduct proper course was to hold evidentiary he aring), cert. denied, 502 U.S. 818, 112 S. Ct. 73 (1991). In ord er to be "colorable," a defendant's motion must consist of m ore than mere bald-faced allegations of misconduct. United State s v. Sophie, 900 F.2d 1064, 1071 (7th Cir.) ("A district court does not have to hold evidentiary hearing on a motion just because a part y asks for one."), cert. denied, 498 U.S. 843, 111 S. Ct. 124 (1990). Theremust be issues of fact material to the resolution o f the

defendant's constitutional claim. See United State s v. Panitz, 907 F.2d 1267, 1273-74 (1st Cir. 1990) (refusal to holdevidentiary hearing on outrageousness claim proper because mate rial facts were not in dispute); Sophie, 900 F.2d at 1071 (refusal to hold hearing proper where defendant's own submissions refuted hi s claim). As our survey of the relevant case law ind icates, see supra III.B.2, in order to raise a colorable claim of outrageousness pertaining to alleged governmental i ntrusion into the attorney-client relationship, the defendant's s ubmissions must
demonstrate an issue of fact as to each of the thre e following elements: (1) the government's objective awareness of an ongoing, personal attorney-client relationship between its i nformant and the defendant; (2) deliberate intrusion into that relat ionship; and (3) actual and substantial prejudice. See Ofshe, 8 17 F.2d at 1516; Lane, 815 F.2d at 466; United States v. Santopietro , 809 F. Supp. 1008, 1015 (D. Conn. 1992) (no due process violatio n where defendant fails to demonstrate that attorney/inform ant revealed client confidences); Marshank, 777 F. Supp. at 1524

. Although the issue is a close one, after c omparing Voigt's motion and Travis' affidavit with the gover nment's response, we think the district court should have c onducted an evidentiary hearing. Travis' relationship with bot h Powell and Voigt was highly disputed. Furthermore, Voigt's mo ving papers raised enough of a specter of ethical impropriety o n the government's part to warrant closer scrutiny. Even the district court, skeptical though it was as to the degree of purposeful intrusion, believed that whatever factual disputes existed on that
issue would be resolved at trial. This was an ackn owledgement by the court that there were some disputed factual iss ues raised by Voigt's motion that needed to be resolved. Since t he government itself notes that suppression of evidence is a more appropriate remedy than dismissal of the indictment, factual de terminations that can lead to suppression logically should be re solved at an evidentiary hearing conducted prior to trial. Conducting a pretrial evidentiary hearing certainly has its advantages. The district court is then in a po sition to place in the record its findings of facts and concl usions of law, see Fed. R. Crim. P. 12(e), which greatly facilitat es appellate review. Prieto-Villa, 910 F.2d at 610. This is es pecially true where the legal claim, outrageous government conduc t, is so highly
fact sensitive. While we are not unmindful of the district court's strong interest in avoiding duplicative proceedings , judicial economy is not fostered when substituting trial tes timony for a pretrial hearing generates postverdict and appellat e litigation and potentially frustrates appellate review.

b. Nevertheless, any "error" arising from the district court's failure to hold an independent evidentiary hearing in this case is unquestionably harmless. Most of the factu al issues depended for their resolution on assessing Powell's and Travis' credibility. In our view, their trial testimony, w hen taken together with Voigt's motion papers and the governm ent's response, provided the district court with a sufficient evide ntiary recordagainst which to measure Voigt's outrageousness cla im. At trial,

Voigt cross-examined Powell thoroughly about whethe r he in fact believed that Travis had acted in a legal capacity on behalf of the Trust or Voigt when she first approached the govern ment. Powell also was cross-examined extensively about the degre e to which he encouraged Travis to reestablish contact with the T rust and whether it was his understanding that she would do so in he r capacity as an attorney. Travis testified in her own behalf and w as crossexamined at length by the government as to her unde rstanding of her relationship with Powell and her role as a confiden tial informant. Finally, during the trial the district court ruled on numerous claims of attorney-client privilege, which certainl y provided it with insight into the nature and degree of any alle ged government intrusion into the attorney-client relationship. T hus, the district court's failure to conduct a hearing, alth ough illadvised, was at worst harmless error.
2. Voigt claims, however, that even assuming the record as it now stands is sufficiently developed, and we det ermine that it is, the district court should have dismissed the in dictment because the record unequivocally demonstrates outrageous go vernment conduct. Relying on the three-part test we set for th above, supraIII.C.1.a, we hold that Voigt's claim of outra geousness fails as a matter of law with respect to the period between Ju ly 13, 1991, and May 1, 1992, because Voigt failed to establish the first element-- the government's objective awareness of an attorney -client relationship between Travis and Voigt during that t ime. We further agree with the district court's implicit determinat ion that there
is insufficient evidence in the record on the secon d and third elements, purposeful intrusion and prejudice, as to the period

thereafter.

a. Voigt's claim of outrageousness based on t he government's contacts with Travis during the period from July 13 , 1991 (when Travis first approached the government), to May 1, 1992 (when Travis first announced that she was representing Vo igt in response to the grand jury subpoenas), fails as a matter of law for two reasons. First, the record is wholly devoid of any evidence that the government was or should have been aware of a p ersonal attorney-client relationship between Travis and Voi gt during that time. Voigt argues that the tax opinion Travis pre pared for him should have alerted Powell that by February or Marc h of 1992 Travis had an ongoing personal attorney-client relationshi p with Voigt. According to Powell, however, Travis claimed that i t was a "oneshot deal" and did not share the opinion with him. The district court credited Powell's version of the events, and we find nothing
in the record to indicate that the district court's finding in this respect was clearly erroneous. In any event, the r ecord clearly
indicates that at about the same time Travis inform ed Powell of the tax opinion AUSA Zoubek discontinued Travis as a co nfidential
informant. Voigt also argues inferentially that the g overnment's entire case at trial was based on the premise that the Trust was essentially his "alter ego." Since the Trust was a fictitiousentity, Voigt reasons, any legal work Travis perfor med for the

Trust in reality must have been performed for him p ersonally. In this way Voigt attempts to bootstrap himself into a n attorneyclient relationship that is essential to the mainte nance of his outrageousness claim, at least with respect to the period preceding May 1, 1992. Voigt cannot have it both ways. Havi ng abused the corporate structure such that the Trust, in effect, became his "alter ego," we think that Voigt may not now rely o n that abuse as a shield by claiming a personal attorney-client rel ationship with the attorney for the fraudulent corporate entity. Moreover, far from creating additional protections for officers o f fraudulent corporations, the "alter ego" doctrine exists to pi erce the corporate veil, thereby stripping those officers of the protections normally associated with the corporate form. See g enerally Charles Clark, Corporate Law  2.4, at 71 (1986). In any event, even if Travis' status as an attorney for
the Trust were relevant to our resolution of the ou trageousness issue, the record fully supports the district court 's implicit finding that Powell reasonably believed that Travis was not acting as counsel for the Trust during the period between July 13, 1991, and May 1, 1992. Accordingly, any claim of outrage ousness must be premised upon the government's contacts with Travis after May 1, 1992, for that is the day Travis informed the gover nment that she was representing the Trust and Voigt in connection with the very investigation in which she had acted as an informan t.
b. As for Travis' contacts with the governmen t from May 1, 1992, until her indictment, the record falls woeful ly short of establishing the sort of purposeful intrusion into her attorneyclient relationship with Voigt that would rise to t he level of outrageousness. For example, Travis made two phone calls to Powell on May 1 1992. Contending that these calls were "s taged" to maintain Travis' cover, Voigt asserts that they con stitute proof of "purposeful intrusion." We are not persuaded. Fir st, by the time Travis placed these calls to Powell, AUSA Zoubek ha d affirmatively cut off contact with Travis given her decision to r ejoin the Trust as counsel. This demonstrates the government's awa reness of and sensitivity to Travis' ethical obligations and beli es Voigt's sinister characterization. Second, Powell assertedthat he did nothing to solicit the calls, and the record suppor ts his contention. Thus, to the extent that Travis disclo sed privileged information, and there is no proof that she did, it was not at the behest of government agents. All of Travis' post-May 1, 1992, contacts with the government were unsolicited except for her appearan ces before the grand jury. The government's actions during this p eriod demonstrated sensitivity to potential ethical probl ems and contradicts Voigt's claim of "purposeful intrusion. " Illustrative of the government's sensitivity was Travis' call to AUSA Ernst in September of 1992. Ernst did not attempt to extrac t information from Travis. Instead, he informed her that she was a target of the investigation and admonished her to withdraw as cou nsel given her
obvious conflict of interest. Travis' next contact with the government was her unsolicited call to Powell in No vember of 1992to warn him about an impending fraud. To the exten t that such

information was privileged, it was volunteered and cannot have constituted "deliberate intrusion" on the part of t he government. Similarly, we find no impropriety in Powell's askin g Travis to appear before the grand jury. By this time Travis knew she was a target of the investigation and had been warned to withdraw as counsel for Voigt. Therefore, to the extent Travis continued to provide legal advice to Voigt in connection with th e criminal investigation, she was violating her ethical obliga tion to avoid a conflict of interest. Finally, AUSA Ernst's effort s to steer clear of privileged information during Travis' grand jury testimony demonstrate that the government was attentive to et hical constraints. We fail to see any purposeful intrusi on on the government's part. Voigt's alternative claim of purposeful in trusion, which arguably has some merit, might be that the governme nt had an affirmative duty to inform him that Travis had acte d as an informant when it discovered that she was represent ing him in connection with the very criminal investigation in which she had acted as an informant. At least one court of appea ls has speculated as to whether the government, during the investigative phase of a prosecution, may have some affirmative d uty to inform a defendant of a potential conflict of interest cause d by its prior association with the defendant's lawyer. See, e.g. , United States v. Lopez, 71 F.3d 954, 963-64 (1st Cir. 1995) (atto rney for defendant had begun grand jury investigation into h is client as AUSA before switching sides). We need not reach th at issue, however, because as our discussion in the next subs ection indicates, Voigt has made no showing of prejudice.

c. We find no evidence in the record of signi ficant prejudice--the third element of our outrageous gove rnment conduct test. As the party bearing both the burden of prod uction and persuasion on his outrageousness claim, Voigt has f ailed to demonstrate that he suffered any ill effects flowin g from the government's allegedly improper investigative activ ity. For instance, Voigt does not cite even a single occasio n on which Travis gave him legal advice that was calculated to damage him to the benefit of the government. Nor does he claim t hat Travis intentionally declined to assert the attorney-clien t privilege in response to the government's grand jury subpoenas o r that Travis advised him to pursue a course of conduct she knew to be illegal simply to help the government build its case. More significantly, however, Voigt failed to demonstrate that any of th e information Travis provided the government after May 1, 1992, w as in fact privileged. We think this alone is fatal to his cl aim of outrageousness. Voigt contends on appeal that he d oes not assail the district court's attorney-client privilege ruli ngs because of the lenient standard of review we would apply. But we think if Voigt's assertion that "the evidence introduced bot h prior to and at the trial included hundreds, if not thousands, o f privileged attorney-client communications" (Voigt's Br. at 12) had any merit whatsoever, he would have pointed to at least one d ocument Travis provided the government that was privileged. By fa iling to meethis burden to establish the privilege he claims, Vo igt has

precluded us from finding that an attorney-client r elationship between Travis and him ever existed, let alone that it was
violated. Finally, Voigt invokes our decision in Lev y, 577 F.2d at 200, along with other similar decisions, in an atte mpt to have us find that the government's intrusion into his attor ney-client relationship, standing alone, is per se prejudicial . Levy, however, is distinguishable on two fronts. First, Levy was decided under the Sixth Amendment. Second, and more import antly, Levy, like most of the cases that Voigt has cited, concer ned the government's deliberate intrusion into a defendant' s attorneyclient relationship in order to gain access to conf idential defense strategy. See, e.g., United States v. Valencia, 54 1 F.2d 618 (6th Cir. 1976) (dismissal appropriate where government obtains defense strategy). The record in this case demonstrates th at the government was scrupulous in its effort to avoid pr ocuring confidential defense strategy. See generally Ofshe , 817 F.2d at 1516 (no dismissal warranted where inadvertently in tercepted defense strategy not used against the defendant). If any privileged information was disclosed to the governm ent in this case, it concerned the workings of the Trust, not V oigt's legal strategy in responding to the criminal investigatio n into his activities. Voigt's claim of severe prejudice amou nts to little more than an argument that "where there's smoke, th ere must be
fire." We find neither.

IV.

RIGHT TO COUNSEL OF CHOICE Voigt claims that the district court's dis qualification of James Binns, a third attorney he sought to add t o his defense team, violated his right to counsel of choice under the Sixth Amendment. Voigt seeks per se reversal of his conv iction on the theory that the manner in which the district court disqualified Binns was arbitrary.

A.
1.
The nature and extent of James Binns' rela tionship with the Trust, like that of Travis, is somewhat ambiguo us and eludes precise definition. An attorney who also was Voigt 's long-time friend, Binns first came into contact with the Trus t in April of 1992 when he was contacted by Travis and Voigt in c onnection with the government's investigation into the Trust. Sho rtly thereafter, he accompanied Voigt to the Linwood, New Jersey off ices of the FBI and "attempted" to meet with Powell. Binns then met with Anderskow regarding th e grand jury subpoenas that had been served on him. By Binns' o wn account, he told Anderskow that he would be acting as counsel f or Voigt only, but would "facilitate the production of documents t o the Government" in connection with Anderskow's subpoena . In a June interview with the FBI, however, in response to the FBI's request to review certain documents, Anderskow apparently s tated that Binns had been retained by the Trust and was representing Voigt, Anderskow, and any other Trust members who came und er investigation regarding the activities of the Trust. Binns was n ot present atAnderskow's interviews, nor did he have any contact with the FBI

around that time. In June of 1992, Travis and Binns spent fi ve days together in a New Jersey hotel assembling documents responsive to grand jury subpoenas that had been served on Voigt and Anderskow that spring. Travis asserted that "Binns was opera ting in the role of attorney for the Trust and its various members" at that time; Binns maintained that Travis was the attorney for V oigt, Anderskow, and the Trust, and that she withheld many documents from Binns on grounds of attorney-client privilege with respect t o those parties. Binns and Travis also worked together that weekend and periodically until November of 1992, to devise Voig t's defense strategy. According to Binns, he advised Travis nu merous times that as a potential target of the grand jury's inve stigation she should seek a criminal defense attorney to represen t her. Travis replied that she did not want an attorney and that she would represent herself. On November 12, 1992, Binns sent a letter to AUSA Ernst
that stated as follows: Please be advised that for the limited pur pose of responding to outstanding subpoenas I a m representing . . . [the Trust], Ralph Anderskow, John Voigt and Jack Dunn.

App. at 56. When Binns filed a notice of appearanc e in July of 1993 indicating that he was joining Voigt's defense team, which already consisted of two privately retained attorne ys, the government submitted a letter to the district court suggesting a potential conflict arising out of Binns' prior repr esentation of the Trust and Anderskow during the investigative ph ase of the case and requesting a hearing. The government also indi cated that there was a possibility that Binns would be called to tes tify at trial since a potential victim of the Trust had been inst ructed to deposit his advance fee into Binns' escrow account. Shortly thereafter, codefendant Mercedes T ravis filed a formal motion to disqualify Binns. She submitted a n affidavit describing her professional interaction with Binns and his actions in representing the Trust and its members in respon se to government subpoenas. She argued that when Binns formerly rep resented the Trust he "was loosely representing all members of t he Trust," and
that she had consulted with him numerous times when he was acting in that capacity, such that she was in effect a for mer client of
his. Travis also alleged that Binns might be in possession of certain documents or recordings material to her def ense. According to her affidavit, four boxes of her Trust documents and personal material had been shipped to Binns, but only two of those boxes were produced to the government. The remaining box es and their contents have not been seen since they were shippedfrom Geneva. Travis maintained that they are in Binns' possessio n and control. The only missing item that Travis mentioned specifi cally is a tape of a two-and-one-half-hour telephone conversation b etween Voigt, and Dunn and herself that she had surreptitiously r ecorded in March of 1992. Travis stated that she phoned and faxed B inns repeatedlyin an effort to recover her papers and this tape in particular, but

Binns did not respond. Travis asserted this as a s eparate ground for Binns' disqualification, arguing that it is possible in the defense of this matt er that I may need to have access to this tap e or documents or to account for their absence. Mr. Binns may well have duties to his curr ent client not to provide access to this tape or these documents. Mr. Binns could conceiva bly be the only witness available to me shouldit be necessary for me to account for the abs ence of the tape or the documents.

Id. at 71.

In response to the government's letter andTravis' disqualification motion, Binns submitted a letter t o the district court attempting to dispel any notion that his repr esentation of Voigt at trial would raise a conflict problem. Fir st, Binns asserted that he never had an attorney-client relat ionship with Travis. Binns claimed, therefore, that he could no t have acquired any confidential information in the course of his a ssociation with Travis that would prejudice her defense. Binns als o disavowed any knowledge of the potential use of his escrow accoun t in connection with a victim of the Trust. Binns asserted that "[ t]here is no possibility that anyone acting in good faith would call me as a fact witness at the trial of this case." App. at 8 7. Finally, Binns asserted that his alleged "representation" of codefendant Anderskow had been limited to facilitating the Trus t's response to the government's subpoenas. Binns also claimed tha t after Anderskow's meeting with the FBI, in which Andersko w had indicated that Binns was representing the Trust and its membe rs, he made clear to Anderskow that he was representing only Vo igt. With respect to the documents, Binns offer ed the following account of the way in which they came int o his possession and the manner in which he disposed of them: In October, 1992 I received four (4)

boxes of documents from Jack Dunn. He sen t them from Geneva, Switzerland. Messrs. Vo igt and Dunn told me that they couldn't get
Mercedes Travis to either come to the Unit ed States or send documents responsive to Age nt Powell's 2nd Grand Jury subpoena. They to ld me that she refused their repeated request s to send the documents unless she was paid a considerable sum of money.

When I received the boxes I did not o pen them or look at the contents. I asked Mr. Voigt to come to my office to pick up the boxes. He said he wanted to produce everything. . . . Mr. Voigt produced all of the documents to the Grand Jury. Accordin g to him, Ms. Travis withheld a number of docum entswhich she had in her possession.

Id. at 86.
2. Before hearing oral argument on Travis' mo tion, the
district court stated: I must say that the record before me raise s great concern in my mind. We have here additional counsel. My concern is if we a llow this additional counsel to participate, we may wind [] up polluting an otherwise hopefull y error-free trial and creating issues of conflict of interest, as well as the possibility that this person who seeks to act as an attorney is, in fact, a potential
witness.

Id. at 190-91. Binns then addressed the district c ourt, essentially reiterating his reasons as to why the m otion to disqualify should be denied, and offered to take th e stand to repeat them under oath. Attorneys for codefendants Anderskow and Anchors indicated their clients' willingness to wai ve any issue of conflict arising out of Binns' representation of Vo igt. Both the government and Travis reiterated why Binns should b e disqualified.
The district court did not hold an evident iary hearing. Instead, relying on the affidavits and Binns' oral representations, the court decided to grant the disqualification mot ion: We have here a number of very serious issues. As a matter of fact, I would characterize it really as a foaming caldro n of representation issues here. Such that I a m convinced that it would be foolhardy for m e to go forward and inject potential error and possible violation of the rights of codefendants in what purports to be a leng thy and complicated criminal case right at its inception before we have even heard any
motions.

. . . .

. . . Mr. Binns has had substantial involvement in pre-indictment events concerning the case. I don't need to pass on his credibility versus Ms. Travis's credibility or to the extent that Mr.
Anderskow did or did not authorize his representation. We have a letter that he represented him for a limited purpose. We have Mr. Anderskow, according to counsel's submission, saying that he thought Mr. Bin ns was going to represent him and later sayin g that he didn't. While Mr. Anderskow certa inly can waive any conflict, the waiver would h aveto be knowing and voluntary, and we'll get

into that a bit later.

And certainly Ms. Travis doesn't waiv e any issue here. . . .

And I am convinced, based upon the precedent, that it would be very foolish f or me to proceed and to allow [Binns to repre sent Voigt]. . . . [T]o allow him to come into court and cross-examine other persons base d upon his personal knowledge, possibly to examine persons as to whom he has represen ted beforehand, whether directly or otherwise, is exactly the concern that the cases have
raised.

Id. at 216-18. The district court went on to note that it did not
think that Anderskow's or Anchor's waiver could be considered knowing and voluntary at the beginning of a large m ulti-defendant, multi-count trial. Binns ultimately was never call ed to testify at trial, although there were sporadic references to h im during testimony.

B. The Sixth Amendment provides that "[i]n al l criminal prosecutions, the accused shall enjoy the right . . . to have the
Assistance of Counsel for his defence." U.S. Cons t. amend VI. One element of this basic guarantee is the right to cou nsel of choice. Powell v. Alabama, 287 U.S. 45, 53, 53 S. Ct. 55, 5 8 (1932). The right to counsel of choice, however, is not absolut e. Wheat v. United States, 486 U.S. 153, 108 S. Ct. 1692 (1988) . Thus, where "considerations of judicial administration" superve ne, the presumption in favor of counsel of choice is rebutt ed and the right must give way. Fuller v. Diesslin, 868 F.2d 604, 6 07 & n.3 (3d Cir.), cert. denied, 493 U.S. 873, 110 S. Ct. 203 ( 1989).
Our decision in Fuller reveals that counse l of choice cases can further be divided into two categories. The first and most common type of case involves "arbitrary" denia ls of the right to counsel. Fuller, 868 F.2d at 604; United States v. Flanagan, 679 F.2d 1072, 1075 (3d Cir. 1982) (Sixth Amendment "goes no further than preventing arbitrary dismissal of the chosen attorney."), vacated on other grounds, 465 U.S. 259 , 104 S. Ct. 1051 (1984). A disqualification of counsel of choi ce is arbitrary not because it is substantively "erroneous," but be cause it was the product of a failure to balance proper consideratio ns of judicial administration against the right to counsel. See F uller, 868 F.2d at 604 (flat refusal to admit out-of-state attorney s pro hac vice); United States v. Romano, 849 F.2d 812 (3d Cir. 1988 ) (summarily denying request for chosen counsel); United States v. Rankin, 779 F.2d 956 (3d Cir. 1986) (summarily denying request for continuance that would permit defendant to retain chosen counse l); United States v. Laura, 607 F.2d 52 (3d Cir. 1979) (failur e to make findings essential to balancing required by Sixth Amendment). Under current circuit precedent, arbitrary denials of the right tocounsel of choice mandate per se reversal. Fuller, 868 F.2d at

607-08 (citing Romano, 849 F.2d at 818, 820). The second type of right to counsel of cho ice case concerns "a nonarbitrary, but erroneous denial." I d. at 609 n.4. In these cases, as Fuller's dictum describes, "a tr ial court could
make a reasoned determination on the basis of a ful ly prepared record (hence a nonarbitrary determination), but st ill err in concluding that counsel of choice should be denied. " Id. Thus, although a trial court's disqualification decision may be substantively erroneous, it is nonarbitrary because the trial court engaged in the balancing required by the Sixth Amen dment and developed the record necessary to do so. Id. This is an important distinction for two reasons. First, and most impor tantly, Fullersuggested, albeit in dictum, that nonarbitrar y-yet-erroneous denials of the right to counsel of choice might be subject to harmless error analysis, and noted that no Third Ci rcuit case has decided that issue definitively. Id. Second, the standard of review may be different, for the question whether a disqualification is "arbitrary" is quite different from the question whether the disqualification was substanti vely unjustified under Wheat and its progeny.

C. Voigt claims that the district court faile d to conduct the sort of inquiry required by our cases and, thus , that it arbitrarily violated his right to counsel of choice . In the alternative, Voigt contends that even if nonarbitra ry, the district court's disqualification decision constituted an ab use of
discretion.

1. Although two potential grounds for disqual ification were raised in the district court (Binns' prior represen tation and his status as a potential witness), it appears that the court relied on only the former.

a. The district court's oral disqualification decision, which spanned four pages of transcript, indicates t hat the principal, if not the sole, basis for its decision was Binns' prior status as an attorney for the Trust, Anchors, Ander skow and, perhaps, Travis during the grand jury investigation . See, e.g., App. at 218 ("[T]o allow him . . . possibly to exam ine persons as to whom he represented beforehand . . . is exactly the concern that the cases have raised."). The court viewed this as raising the potential for serious conflicts. Clearly, the pote ntial for serious conflicts is a consideration of judicial ad ministration that can outweigh a defendant's right to counsel of choice. Wheat, 486 U.S. at 163, 108 S. Ct. at 1699; United States v. Moscony, 927 F.2d 742, 750 (3d Cir.), cert. denied, 510 U.S. 121 1, 111 S. Ct. 2812 (1991); Davis v. Stamler, 650 F.2d 477, 480 (3 d Cir. 1981). There is no question that the trial court performedthe balancing required by our cases and considered a factor legit imately weighing against the right to counsel of choice. Voigt contends that the district court's r efusal to hold a separate evidentiary hearing renders the district court's disqualification of Binns per se arbitrary. He rel ies on twoauthorities in support of his claim: Fuller, 868 F. 2d at 604, and,

to a lesser extent, United States v. Romano, 849 F. 2d 812 (3d Cir. 1988). In Fuller, a defendant who was represented b y in-state
counsel filed a motion for admission of two out-of- state lawyers pro hac vice to represent him. The state trial cou rt denied the motion without holding a hearing or making particul arized findings of fact, on the grounds that the local counsel was competent to try
the case and that the admission of the two out-of-s tate attorneys would likely result in delays and administrative ha ssles. 868 F.2d at 605. On appeal from the grant of Fuller's petit ion for a writ of habeas corpus, this court held that "the trial c ourt's wooden approach and its failure to make record-supported f indings balancing the right to counsel with the demands of the administration of justice resulted in an arbitrary denial of Fuller's motion for counsel pro hac vice." Id. at 611. Contrary to Voigt's assertion, our decisio n in Fullerdoes not stand for the proposition that a trial court's deni al of

a defendant's chosen counsel must be based on a hea ring and supported by factual findings in order to pass cons titutional
muster. While we held in Fuller that a trial court may not deny a defendant's right to counsel of choice on the basis of generalizations alone, we took pains to clarify tha t "we d[id] not hold that a court is prohibited from using its 'ins tinct and judgment based on experience' when it weighs the co mpeting rights of the litigant to counsel of his choice and wise j udicial administration." Id. (citation omitted). As long as the court
makes a "reasoned determination on the basis of a f ully prepared record," its decision will not be deemed arbitrary. 868 F.2d at
609 n.4. Voigt also cites United States v. Romano, 849 F.2d at 812, in support of his argument that the district c ourt's failure to hold a hearing and make factual findings was rev ersible error. In Romano, a pro se defendant sought to reserve the right to select
counsel of her choice in the event that the court f ound it necessary to have stand-by counsel take over. The district court summarily denied her request, instead appointing st and-by counsel to back up defendant and potentially take over her defense. This court ruled, as it did in Fuller, that the failure to conduct a hearing and make findings of fact as to the suitabi lity of
defendant's chosen counsel violated the defendant's Sixth Amendment rights and constituted reversible error. Taken together, Fuller and Romano do no mo re than illustrate the well-established principle that a t rial court may not arbitrarily deny a defendant's right to counsel of choice.
While in both of those cases the court's failure to hold a hearing or make factual findings was fatal, neither case es tablishes formal procedures that a court must follow in weighing a d efendant's Sixth Amendment right to counsel of choice against the in terests of the proper and fair administration of justice. Rather, we found hearings and/or factual findings necessary in those cases because
the district courts' determinations had no basis in fact or reason;
the trial court in Fuller denied the defendant's r equest for admission of counsel pro hac vice on the basis of g eneralizations and speculation, while the district court in Romano denied thedefendant's request for no apparent reason at all. Without some

sort of fact finding or hearing, these determinatio ns could only be considered arbitrary. In determining whether to disqualify couns el on conflict of interest grounds, the district court need not fi nd an actual, existing conflict of interest. As the Supreme Cour t stated in Wheat, the court must recognize a presumption in favor of petitioner's counsel of choice, but that presumption may be overcome not only by a demonstration of actual conflict but by a showing of serious potential for conflict.
The evaluation of the facts and circumstan ces of each case under this standard must be l eft primarily to the informed judgment of the
trial court.

486 U.S at 164, 108 S. Ct. at 1700. Determining wh ether such a potential conflict exists is no simple task. "The likelihood and
dimensions of nascent conflicts of interest are not oriously hard to predict, even for those thoroughly familiar with cr iminal trials." Id. at 162-63, 108 S. Ct. at 1699. In this case, the district court heard ora l argument, but did not hold an evidentiary hearing. At the time o f the argument, however, the court had before it the submissions of the various parties, including sworn affidavits and documentary evidence attached as exhibits. This record was fairly subst antial-- certainly far more so than anything that was before the courts in Fuller and Romano. The government's eleven-page le tter of August 6, 1993, attached exhibits including: (1) correspon dence between Binns and the U.S. Attorney's Office regarding whom he represents; (2) a memorandum and notes by Mercedes Travis regar ding litigation strategies and mentioning Binns; and (3) communicat ions with investors in the Trust directing them to contact Bi nns or deposit
funds into his escrow account. Travis' motion incl uded a sworn affidavit setting forth her relationship with Binns . Binns'
letter to the court laid out his version of events in great detail and attached ninety-six pages of documentary suppor t, including but not limited to affidavits, grand jury transcripts, correspondence to and from Binns, and FBI reports. Indeed, Binns' letter and supporting documentation were so thorough that he t old the court at the hearing, "in substance, you have the story. Th e story is contained in my letter . . . ." App. at 204. Unde r these circumstances, we conclude that the record was more than sufficient
to enable the district court to make a reasoned andwell-informed decision. Formal findings of fact are not required

. b. We agree with Voigt, however, that Binns' status as a potential witness, standing alone, cannot render th e district court's disqualification order nonarbitrary. Altho ugh Binns' status as a potential witness is certainly a proper consideration of judicial administration, Stamler, 650 F.2d 480-8 1, the record indicates that the decision to disqualify Binns was based primarily on his alleged prior representation of the Trust an d its members.To be sure, the district court made passing referen ce to the

possibility of Binns' becoming a witness at trial. See App. at 190-91. Yet none of the reasons referred to by the district court
in its final oral decision indicated that Binns' st atus as a potential witness was one of the "considerations of judicial administration" that weighed into its balancing. M oreover, the record is devoid of any "findings" as to Binns' sta tus as a potential witness that would have allowed the distr ict court properly to weigh that consideration against Voigt' s presumed right to counsel of choice (and allowed us to exercise ap pellate review). The government's retort that "Voigt conspi cuously fails to argue that the district court could not have mad e the necessary findings . . . .," Government's Br. at 34, is unsat isfactory in several respects. First, it all but concedes that the district court failed to make any findings with respect to B inns' status as a potential witness. Second, the government appear s to make this argument in suggesting that the district court's di squalification was nonarbitrary. But to be nonarbitrary, as we ha ve noted, the district court actually must make findings based on evidence in the record and weigh those findings against the right t o counsel. Permitting the government to argue that there was e vidence in the record upon which the district court could have bas ed findings that it concededly failed to make would simply inject a harmless error inquiry into the one area that our right to counsel of choice jurisprudence indicates is singularly inappropriate . Therefore, since the district court failed to address adequate ly the likelihood that Binns would be called as a witness, record evidence concerning that potential is irrelevant to the "arb itrariness" question. In any event, we have determined that the court had sufficient other evidence before it to suggest that disqualification was appropriate. It specifically referred to that evidence in announcing its decision to disqualify B inns. That is all our decisions prohibiting arbitrary denials of the right to counsel of choice require. See, e.g., Fuller, 868 F.2d at 604; Romano, 849 F.2d at 812. We therefore reject Voigt 's claim that the district court arbitrarily denied his Sixth Ame ndment right to
counsel of choice.

2. In the alternative, Voigt contends that th e disqualification decision amounted to an abuse of d iscretion because it was unwarranted given the information be fore the district court. We disagree. In Wheat, 486 U.S. a t 153, 108 S. Ct. at 1692, the Supreme Court considered the circu mstances under which a trial court, consistent with the Sixth Amen dment, could disqualify a defendant's chosen attorney. Wheat in volved an attorney's potential representation of several code fendants in the same trial. Referring to the balancing required of trial courts in determining whether a potential conflict warranted disqualification, the Court wrote: [A] district court must pass on the issue
whether or not to allow a waiver of a conf lict of interest by a criminal defendant not wi th the wisdom of hindsight after the trial ha staken place, but in the murkier pre-trial

context when relationships between parties are seen through a glass, darkly. The likelih ood
and dimensions of nascent conflicts of interest are notoriously hard to predict, even for those thoroughly familiar with crimina l
trials. . . . For these reasons we think t he
district court must be allowed substantial latitude in refusing waivers of conflicts of
interest . . . in the more common cases wh ere a potential for conflict exists which may or may not burgeon into an actual conflict as the trial progresses. . . .

. . . .

. . . The District Court must recognize a presumption in favor of [a defendant's] counsel of choice, but that presumption ma y be overcome not only by a demonstration of ac tual conflict but by a showing of a serious potential for conflict.

Id. at 162-64, 108 S. Ct. at 1699-1700. The court also noted that, even apart from the requirements of the Sixth Amend ment, the district court's independent duty "to investigate p otential conflicts arises in part from the legitimate wish o f district courts that their judgments remain intact on appeal ." Id. at 161, 108 S. Ct. at 1698. Finally, the Court noted with approval that in
the case before it "the District Court relied on in stinct and judgment based on experience in making its decision ." Id. at 163,
108 S. Ct. at 1699. We begin by observing that the unique fact ual scenario presented by Binns' proposed representation of Voig t is quite different from the one presented in Wheat. This is not a case where the district court's sole or even primary int erest was in protecting Voigt's right to the effective assistanc e of counsel by disqualifying an attorney whose potential conflicts of interest might impede his ability to defend his client. See , e.g., United States v. Lussier, 71 F.3d 456 (2d Cir. 1995) (revi ewing propriety of trial court's decision to accept defendant's wai ver of conflictfree representation), cert. denied, 116 S. Ct. 1321 (1996); United States v. Ross, 33 F.3d 1507 (11th Cir. 1994) (revi ewing propriety of disqualification ordered to safeguard defendant' s right to conflict-free representation), cert. denied, 115 S. Ct. 2558 (1995). On the contrary, as the record makes clear , what concerned the district court was the possibility th at Binns' prior representation of the Trust and its members during the grand jury investigation might affect Anderskow's, Anchor's an d Travis' ability to receive a fair trial. Nevertheless, bec ause the effect of a disqualification is to deny a criminal defenda nt his or her presumptive right to chosen counsel, the question u nder Wheat is the same, even where the trial court's disqualifica tion of chosencounsel is aimed at protecting the rights of person s other than the

defendant. Thus, we must determine whether the dis trict court's conclusion that there was an actual or serious pote ntial for
conflict of interest constituted an abuse of discre tion. Cf.Moscony, 927 F.2d at 750-51 (reviewing disqualification of defendant's attorney aimed, in part, at protecting rights of several government witnesses attorney represented a t grand jury); United States ex rel. Stewart v. Kelly, 870 F.2d 85 4 (2d Cir. 1989) (reviewing disqualification of attorney aimed, in p art, at protecting rights of witness attorney had represent ed in the past).
We find no abuse of discretion in the dist rict court's disqualification of Binns. It was undisputed that Binns represented the Trust and Anderskow for purposes of responding to the grand jury subpoenas. There was also a very re al possibility that Anderskow might testify at trial, thereby subj ecting himself to cross-examination by Binns. We noted in Moscony that "[c]onflicts of interest arise whenever an attorney 's loyalties are divided, and an attorney who cross-examines former clients inherently encounters divided loyalties." 927 F.2dat 750 (citation omitted). Since there was a strong possi bility that Anderskow might face cross-examination by a former attorney, there was a serious potential for a conflict of interest which, notwithstanding Voigt's attempt to downplay it on a ppeal, warranted disqualification. Wheat, 486 U.S. at 153, 108 S. C t. at 1692 (disqualification due to conflict proper despite de fendant's attempts on appeal to minimize its extent). Voigt makes much of the district court's r efusal to accept Anchors' and Anderskow's proffered waiver of the attorneyclient privilege in the event that Binns would have to crossexamine them at trial. Nevertheless, we find no ab use of
discretion in the district court's decision. As th e Wheat Court noted, at the beginning of a criminal trial, "[t]he likelihood and
dimensions of nascent conflicts of interest are not oriously hard to predict . . . ." Id. at 162-63, 108 S. Ct. at 1699 . Here, the district court obviously feared that if during tria l the nature of Binns' relationship with Anderskow and Anchors turn ed out to be more significant than first thought, Anchors' and A nderskow's rights to a fair trial could be jeopardized, thereb y generating potential appellate issues. We have recognized tha t the district court has "an institutional interest in protecting the truthseeking function of the proceedings over which it i s presiding . . . [and] an independent interest in protecting a fai rly rendered verdict from trial tactics that may be designed to generate issues on appeal." Moscony, 927 F.2d at 749. Accord Stew art, 870 F.2d at 856-57 ("Wheat emphasized the trial judge's duty to preserve the integrity of the justice system by assuring [all] d efendants a fair trial."). We find nothing improper in the district court's refusal to accept Anchors' and Anderskow's proffered waiver

. Moreover, at least one codefendant vehemen tly refused to waive the attorney-client privilege. Travis was a member of the Trust during the grand jury investigation and had s ubstantial interaction with Binns during that period. Apart f rom the fact that this only added to the district court's growin g concern aboutthe ability of Voigt's codefendants to receive a fa ir trial, Binns'

prior interaction with Travis may have been suffici ent, in and of itself, to warrant disqualification since Binns may have acquired
confidential information about her. In Stamler, for example, we held that a tr ial court had properly disqualified counsel for a corporation fro m serving as the criminal defense attorney to the corporation's form er president despite the counsel's insistence that he had receiv ed no information about the president's criminal activiti es while acting as counsel to the corporation. "[I]t was not unrea sonable for the [trial court] to find that [the lawyer] might have obtained information related to the criminal proceeding." 6 50 F.2d at 480. In United States v. Rogers, 9 F.3d 1025 (2d Cir. 19 93), cert. denied, 115 S. Ct. 95 (1994), the Court of Appeals for the Second Circuit upheld the disqualification of a corporate attorney who sought to represent a corporate officer after havin g previously attended a deposition with one of the corporation's employees. The deposition concerned the same matter giving rise to the prosecution, and the employee was to testify agains t the officer during the criminal trial. The Second Circuit reje cted the defendant's claim that the disqualification was imp roper because the attorney-client relationship allegedly giving r ise to the conflict was between the corporation and the attorn ey: "in this case, [the witness], as an employee at [the corpora tion] when he was deposed, should be considered a privy of the co mpany. As such his joinder in the motion to disqualify [the attorn ey] was
sufficient to assert the adverse nature of his inte rest and the confidences he may have disclosed . . . ." Id. at 1031. Here, Travis was adamant that she had impa rted confidential information to Binns, and she indicate d that she would take the stand in her own defense at trial, thereby subjecting herself to potential cross-examination by Binns. T he district court once again had an independent duty to safegua rd Travis' right to a fair trial and to protect a potential judgment against her from attack on appeal. See Moscony, 927 F.2d at 75 1; Stamler, 650 F.2d at 480; see also Rogers, 9 F.3d at 1025. In sum, we conclude that the district cour t acted prudently given the unenviable situation with which it was presented. James Binns had substantial involvement in the grand jury investigation and he had sent a letter to the government tacitly acknowledging his multiple representation o f Voigt, Anderskow and the Trust. In light of the district court's obvious interest in safeguarding the codefendants' rights t o a fair trial by avoiding the possibility that they would be cros s-examined by Binns, we hold that the presumption in favor of Voi gt's constitutional right to counsel of choice had been adequately rebutted. Accordingly, we reject Voigt's claim tha t the disqualification of Binns violated his Sixth Amendment righ t to counsel of
choice.

V.

THE MONEY LAUNDERING CONVICTIONS Voigt alleges that his convictions on two counts of money laundering in violation of 18 U.S.C.  1956(a)(1)(A)(i) are legally insufficient because the government failed to prove beyonda reasonable doubt that the financial transactions forming the

basis of the laundering convictions "in fact involv e[d] the proceeds of specified unlawful activity." Id. We review sufficiency of the evidence claims under a deferent ial standard. "It is not for us to weigh the evidence or to deter mine the credibility of the witnesses. The verdict of a jur y must be sustained if there is substantial evidence, taking the view most favorable to the Government, to support it." Unite d States v. Schoolcraft, 879 F.2d 64, 69 (3d Cir.) (internal ci tations and quotation marks omitted), cert. denied, 493 U.S. 99 5, 110 S. Ct. 546 (1989). If "any rational trier of fact could h ave found the essential elements of the crime beyond a reasonable doubt," Jackson v. Virginia, 443 U.S. 307, 319, 99 S. Ct. 2781, 278 9 (1979), then the verdict of the jury must be sustained.

A. In this case, Voigt was convicted of depos iting the proceeds of a certain transaction known as the "Nev ille Price transaction" into an account in the First Fidelity Bank in
violation of 18 U.S.C.  1956(a)(1)(A)(i). The evidence adduced at trial demonstrated that on October 1, 1991, a $500, 000 advance fee from the "Neville Price" transaction was deposited into codefendant Ralph Anderskow's escrow account, which at the time contained over $600,000 from other sources. On October 4, 1991, t wo wire
transfers were made from Anderskow's account to Voi gt's First Fidelity account, one for $90,000 and the other for $32,000. These deposits formed the basis of the two money-launderi ng convictions that Voigt now challenges. Voigt contends that bec ause only $500,000 out of the $1.1 million in Anderskow's acc ount was "tainted," the government failed to prove beyond a reasonable doubt that the two wire transfers, which totaled $122,000 , "involve[d] the proceeds of specified unlawful activity." Id.

B. Voigt concedes that not all of the money i nvolved in a financial transaction that is the subject of a mone y laundering charge must derive from the proceeds of money laund ering activity. Rather, he contends that because Congress required that the financial transaction "in fact involve[]" the "proc eeds of specified unlawful activity," id. (emphasis added), the government must prove that at least one dollar (or, even, one penny) is traceable to the proceeds of unlawful activity--a m athematical impossibility in cases such as this where (1) the w ire transfers
came from an account in which tainted funds had bee n commingled with untainted funds, and (2) the amount of the tra nsfer was less
than the amount of untainted funds in the account. Both the government and Voigt characterize the issue as one involving "which side should bear the uncertainty when tracing becom es an impossibility." Government's Br. at 46.
While the trend in our sister circuits has been to reject the sort of legal sufficiency challenge raised by V oigt as a matter of statutory construction, see United States v. Can celliere, 69 F.3d 1116, 1120 (11th Cir. 1995), we need not decid e this issue, because we conclude that Voigt's claim fails on the facts. While the flow-chart that the government relied on to est ablish the source of the $122,000 deposit does not reveal the source of theother funds in Anderskow's account, Anderskow himse lf conceded on

cross-examination that all but $26,000 of the funds deposited into
his Continental Bank account between 1990 and 1993 were advance fees paid by borrowers of and investors in the Trus t. As there was
uncontroverted evidence at trial that no borrower o r investor ever received any funds from the Trust, and as the jury found that the Trust was the engine of a scheme to defraud, we con clude that a rational trier of fact could easily have concluded that virtually
all of the funds in Anderskow's account at the time of the $122,000 transfer represented the fruits of specified illega l activity.

VI.

THE FORFEITURE ORDER In connection with the four money launderi ng counts charged in the superseding indictment, the governme nt brought separate criminal forfeiture allegations under 18 U .S.C.  982 seeking forfeiture of certain vehicles and pieces o f jewelry either as "involved in" or "traceable to" Voigt's money la undering activity, id.  982(a)(1), or as substitute assets under 21 U.S.C.

 853(p)(5), the CCE criminal forfeiture provision, which is incorporated in 18 U.S.C.  982(b)(1). At a nonjury proceeding conducted prior to sentencing, the district court d etermined that Voigt's money laundering convictions rendered him l iable to the government for $1,661,960 in criminal forfeiture. In satisfaction of that amount, the court ordered forfeiture of, in ter alia, two pieces of jewelry, finding "by a preponderance of t he evidence" that they were "items personal property . . . trace able to the money involved in the [money-laundering] violations . App. at 1246. The jewelry had been purchased with funds from an a ccount in which money laundering proceeds had been commingled with other funds -- numerous deposits and withdrawals having intervenedbetween the deposit of the laundered funds and the purchase of the jewelry. Voigt raises two assignments of error. Fi rst, he contends that the district court applied the wrong burden of persuasion. He maintains that our decision in Unit ed States v. Pelullo, 14 F.3d 881 (3d Cir. 1994), requires the g overnment to prove its forfeiture allegations beyond a reasonabl e doubt. Second, Voigt asserts that the government failed to prove that the jewelry it sought was "traceable to" the proceeds o f his money laundering activity, since it had been purchased wi th commingled funds from an account subject to numerous interveni ng deposits and withdrawals after the original deposit of the laund ered funds.
Both of these contentions raise issues of first impression in this circuit. With respect to the bu rden-of-proof issue, we conclude, as did the district court, that the preponderance standard applies. We agree with Voig t, however, that the numerous intervening deposits and withdrawals i nto his account subsequent to the deposit of the tainted funds make it impossible to say that the two items of jewelry are "traceable to" property "involved in" the money laundering offense. Accord ingly, we will vacate the forfeiture order that was incorporated i nto the judgment and remand for further proceedings.

A. The forfeiture provision upon which the co urt's order was based, 18 U.S.C.  982, provides that a district court sentencinga person convicted of, inter alia, money laundering in violation of

18 U.S.C.  1956, "shall order that the person forfeit to the United States any property, real or personal, invol ved in such offense, or any property traceable to such property ." 18 U.S.C.  982(a)(1). Voigt first contends that the governmen t's burden of persuasion for criminal forfeiture under 18 U.S.C.  982(a)(1) is proof beyond a reasonable doubt. We have not yet h ad occasion to address the burden-of-proof issue with respect to  982(a)(1), and to date only one other court of appeals has conside red it, concluding that preponderance-of-the-evidence stand ard applies. United States v. Myers, 21 F.2d 826, 829 (8th Cir. 1994), cert. denied, 115 S. Ct. 742 (1995). We have, however, a ddressed this issue twice previously in the context of other crim inal forfeiture provisions. Pelullo, 14 F.3d at 881 (RICO; reasona ble doubt); United States v. Sandini, 816 F.2d 869 (3d Cir. 198 7) (CCE; preponderance). A description of the Sandini, Pelu llo and Myersdecisions
is in order.

1. In Sandini, 816 F.2d at 869, we addressed the appropriate burden of persuasion under 21 U.S.C.  853, the CCE criminal forfeiture provision. The defendant there argued t hat  853(d)'s inclusion of a rebuttable presumption of forfeitabi lity if the government could demonstrate two factors by a prepo nderance of the
evidence was unconstitutional to the extent it fail ed to require proof beyond a reasonable doubt. After discussing the history of
and distinction between civil in rem and criminal i n personamforfeiture,
we concluded that criminal forfeiture under CCE constitutes punishment for a crime, and not a separ ate element of the offense, notwithstanding Fed. R. Crim. P. 7(c)( 2) (requiring the indictment to specify the extent or interest of the property subject to forfeiture) and Fed R. Crim. P. 31(e) (r equiring the jury to return a special verdict on same). Sandini, 816 F.2d at 875 & n.7 ("assumption" in Rule 31(e) that forfeiture is element of the offense to be tried and proved is akin to nonbindin g legislative history). Because other federal statutes providing for enhanced penalties have established the government's burden of proof as a preponderance of the evidence, we concluded that  853(d) withstands constitutional scrutiny as long as the f orfeiture proceeding follows a conviction by proof beyond a r easonable doubt. Seven years later we confronted the same q uestion in the
context of 18 U.S.C.  1963, the RICO statute's criminal forfeiture provision. Pelullo, 14 F.3d at 881. We held that the beyond-areasonable-doubt standard governs such forfeitures. Our conclusion was premised mainly on Congress' simultaneous amend ments to the RICO and CCE forfeiture statutes in 1984, and its d ecision not to add a rebuttable presumption provision to  1963(a) when it added such a provision to the CCE statute. See 21 U.S.C.  853(d) (discussed in Sandini, 816 F.2d at 874-75). We con cluded that the omission was deliberate and, hence, dispositive: "T his indicates that Congress intended the higher beyond a reasonab le doubt
standard to control in a  1963(a) proceeding. If Congress wanted a preponderance standard for  1963(a), it would have so stated as it specifically did for CCE." Pelullo, 14 F.3d at 905. See id. at903 ("Most important, the CCE rebuttable presumptio n . . . does notexist

in the RICO forfeiture provisions.") (citations omi tted). We distinguished our decision in Sandini on the basis that it pertained only to CCE and could not bind a future p anel of this court considering a different forfeiture provision. See id.("Sandini does
not decide the issue in this case because the statute at issue there was CCE, not RICO."). In Myers, 21 F.3d at 826, the Court of App eals for the Eighth Circuit concluded that the government's burd en of proof

under  982(a)(1) was the preponderance standard. Noting that it
had decided in a different case handed down the sam e day that the preponderance standard governed forfeitures under C CE, the court

reasoned that [t]he language of the money laundering forfeiture statute is very similar to the language of section 853(a). By stating th at "the court, in imposing sentence on a pers on convicted" of a money laundering offense, shall forfeit property involved in the offense, Congress indicates that forfeitur e under the money laundering provision is al so a sentencing sanction, not an offense or ele ment
of an offense.

Id. at 829 (alteration omitted).
2. While Sandini and Pelullo are useful guide s, we begin by observing that prior decisions of this court interp reting different criminal forfeiture provisions do not constitute bi nding precedent on the issue before us. Similarly, the reasoning u nderlying those decisions is not binding, although to the extent th at the statutes are analogous it may be persuasive. We must begin the task afresh and determine which burden of proof Congress intend ed to apply to
 982(a)(1). Perhaps the most striking feature of the f orfeiture provision is that it requires the district court to order forfeiture "in imposing sentence on a person [alrea dy] convicted of
an offense in violation of . . . section 1957 . . . of this title

. . . . " 18 U.S.C.  982(a)(1) (emphasis added). As the Myerscourt observed, the plain language of the statute reveals that
forfeiture is a form of sentence enhancement that f ollows a previous finding of personal guilt. Myers, 21 F.3dat 829. As a result, we conclude that the preponderance, not the reasonable doubt, standard governs forfeiture under  982(a)(1). Voigt's most forceful argument to the cont rary is that when Congress enacted the money laundering forfeitu re statute, it specifically incorporated in  982(b)(1), the statute's procedural component, virtually all of the subsections of 21 U .S.C.  853, the procedural provisions of the CCE forfeiture statute , yet it omitted

 853(d), the rebuttable presumption provision we fo und dispositive in Sandini. Relying on Pelullo, where we attached much significance to Congress' failure to add a provisio n like  853(d) to RICO's forfeiture provision, Voigt argues that C ongress'
decision not to include  853(d) as one of the subsectionsincorporated via  982(b)(1) evinces an intent to require

application of the reasonable doubt standard. We t hink Voigt's argument proves too much. At most, Congress may ha ve decided it did not want the rebuttable presumption to apply in money laundering cases. But that by no means compels us to conclude that the reasonable doubt standard should apply in such cases. Furthermore, acknowledging that the burden of proof is simply a means of expressing our tolerance for erro neous outcomes, there are good reasons for employing the reasonable doubt standard in the RICO context but not in the money laundering context. The RICO forfeiture provision is by far the most far re aching, requiring the district court to order forfeiture of "any interest the person has acquired or maintained in violation of section 1962," 18 U.S.C.  1963(a)(1), as well as any "interest in," "security of," "claim against," or "property or con tractual right of any kind affording a source of influence over[] any enterprise which the person has established, operated, control led, conducted, or participated in the conduct of in violation of s ection 1962."

Id.  1963(a)(2). The statute further requires forfeitu re of "any property constituting, or derived from, any proceed s which the person obtained, directly or indirectly, from racke teering activity
. . . in violation of section 1962." Id.  1963(a)(3). Section 1963(a)'s coverage, to say the least, is extremely broad and sweeping. See Rusello v. United States, 464 U.S. 1 6, 26, 104 S. Ct. 296, 302 (1983) ("The legislative history clear ly demonstrates that the RICO statute was intended to provide new w eapons of unprecedented scope for an assault upon organized c rime and its economic roots."); Craig W. Palm, RICO Forfeiture a nd the Eighth Amendment: When is Everything Too Much?, 53 U. Pitt . L. Rev. 1, 27 (1991) ("The most striking aspect of RICO's forfeit ure provisions is their unprecedented nature and breadth. The lan guage of the forfeiture provisions is extremely broad and compre hensive . . . ."). Indeed,  1963(a) sweeps far more broadly than the elements
of the substantive RICO offense itself. See 18 U.S .C.  1962. Accordingly, since the identity and extent of prope rty subject to
forfeiture will not have been addressed in the cour se of proving the substantive RICO charge, a reasonable doubt bur den of persuasion ensures greater accuracy in determining the scope of property subject to forfeiture. In the money laundering context, by contra st, the forfeiture provision makes clear that the governmen t is entitled only to property "involved in" or "traceable to" mo ney laundering activity. See generally United States v. $448,342. 85, 969 F.2d 474, 476 (7th Cir. 1992) (government entitled only to "funds" used in offense, not whole account into which such funds had been deposited). Furthermore, "property involved in a f inancial transaction" is part of an element of the money lau ndering offense,
see 18 U.S.C.  1956(a)(1), and the term "transaction" is defined
in the statute. See id.  1956(c)(3). Unlike the RICO context, we

have no reason to doubt that the amount of the tran saction that forms the basis of a substantive money laundering o ffense will be identified in the indictment and, thus, that its co nnection to money laundering activity will have been proved bey ond a reasonable doubt at trial. As the government has observed, in many cases theonly factual issues left for resolution after trial will be whether

particular items bought with tainted funds are "tra ceable to" money laundering activity. Applying a beyond-a-reasonabl e-doubt standard to that issue appears unnecessary. Accordingly, we agree with the Eighth Circuit's decision in Myers that the governm ent's burden for
forfeiture under  982(a)(1) is the preponderance standard.

B. Voigt next argues that the government fail ed to prove that the money used to purchase the jewelry in ques tion was "traceable to" money laundering proceeds, as requir ed by 18 U.S.C.
 982(a)(1). His argument is based on the fact that the jewelry was purchased with funds drawn from an account in w hich money laundering proceeds had been commingled with other funds, and that those funds were further "diluted" by numerous inte rvening deposits and withdrawals. Voigt asserts that if the jewelry was subject to forfeiture, it was under 21 U.S.C.  853(p)(5), the CCE substitute asset provision incorporated into the money launder ing forfeiture
scheme via 18 U.S.C.  982(b)(1). The government counters by observing that criminal forfeiture is an in persona m punishment, which obviates the need for strict tracing, especia lly where tainted and untainted funds are commingled in a ban k account, making tracing a virtual impossibility.

1. The government's observation concerning th e in personamnature of criminal forfeiture is helpful to a certain extent: the amount of forfeiture to which the government is ent itled under 18

U.S.C.  982 is not dictated by whether the government can prove that certain of the defendant's property is in fact property "traceable to" money laundering activity. When a d efendant has been convicted of committing $1.6 million in money laundering offenses (as Voigt was here), the government has pr oved beyond a reasonable doubt that it is entitled to $1.6 millio n in criminal forfeiture; that amount represents property "involv ed in" money laundering activity for purposes of  982(a)(1). What is at issue here is the question of how the government may go a bout seizing property in satisfaction of that $1.6 million amoun t. The government's principal contention is t hat money is fungible, making it impossible to differentiate bet ween "tainted" and "untainted" dollars in a bank account. The gov ernment also advances what is clearly a policy argument, contend ing that interpreting the term "traceable to" to require eve n some tracing "would perversely permit money launderers to escape with all of their proceeds intact simply by commingling such ta inted proceeds with untainted sums--a result Congress could not ha ve intended."
Government's Br. at 53. To support its arguments, the Government h as cited a number of cases dealing with the tracing issue in t he context of 18

U.S.C.  1963(a), the RICO statute's criminal forfeiture pr ovision. See generally United States v. Robilotto, 828 F.2d 940, 949 (2d Cir. 1987), cert. denied, 484 U.S. 1011, 108 S. Ct. 711 (1988); United States v. Ginsburg, 773 F.2d 798, 802-03 (7t h Cir. 1985) (en banc), cert. denied, 475 U.S. 1011, 106 S. Ct. 1186 (1986); United States v. Conner, 752 F.2d 566, 576 (11th Cir.), ce rt. denied 474 U.S. 821, 106 S. Ct. 72 (1985). These cases hold t hat where crimeproceeds have been commingled in a bank account wit h untainted

funds, tracing is not required. The reasoning supp orting those holdings is (1) the in personam nature of criminal forfeiture, and (2) the courts' conclusion that when Congress used the term "traceable to," it could not have intended to requi re the government to demonstrate some nexus between the cr iminal activity and the property sought--at least not where cash ha s been deposited
into a bank account. Regardless of whether these cases were cor rect on their merits, however, they were decided before the Presi dent signed into law the Anti-Drug Abuse Act of 1988. Pub. L. No. 1 00-690, 102 Stat. 4374-75 (1988). With that act Congress addedsubsection (b)

to  982, which incorporates the CCE forfeiture statute 's "substitute asset" provision: [i]f any of the property described in subsection (a) of this section, as a resul t of any act or omission of the defendant . . . has been commingled with other property which cannot be divided without difficulty; the court shall order the forfeiture of any ot her property of the defendant up to the value of any property described in paragraph[] . .

. (5).

21 U.S.C.  853(p)(5). The inclusion of the substitute asset provision in the money laundering forfeiture scheme represents Congress' express recognition that property subject to criminal forfeiture can be commingled with "untainted" prope rty. It may also be an acknowledgement by Congress that its ear lier-enacted criminal forfeiture provisions, such as RICO and CC E, were unartfully drafted to the extent that they failed t o address the problem posed by commingled property. In our view the specific inclusion in  982 of a substitute asset provision precludes us from interp reting the term "traceable to," as did the courts in the RICO conte xt, to avoid a perceived bad policy result. See United States v. Ripinsky, 20 F.3d 359, 365 n.8 (9th Cir. 1994) ("  982 . . . defines forfeitable assets to be only those associated with the underly ing offense or traceable to the offense and distinguishes between 'forfeitable' and 'substitute' assets."). Because Congress has m ade the determination not to "perversely permit money laund erers to escape with all of their proceeds intact simply by comming ling such tainted proceeds with untainted sums . . . .," Gov ernment's Br. at 53, we should not be in the business of overlooking the plain terms of a statute in order to implement what we, as fede ral judges, believe might be better policy. Accordingly, the g overnment's policy arguments, along with the cases supporting t hem, are inapposite. Seeking to avoid our conclusion that cases decided prior to the enactment of the money laundering forfeiture statute are not controlling, the government observes that in 1986 C ongress added a substitute asset provision to RICO's forfeiture sch eme. Relying on In re Billman, 915 F.2d 916, 920 (4th Cir. 1990), c ert. denied, 500 U.S. 952, 111 S. Ct. 2258 (1991), the government co ntends that theaddition of a substitute asset provision to the RIC O statute could

not affirmatively undo the settled judicial determi nation that the
words "traceable to" in the RICO forfeiture statute do not require tracing of commingled funds. The government theref ore suggests that in the money laundering forfeiture context it can seek forfeiture of items purchased with commingled funds either as "traceable to" or as substitute assets. We disagre e. As the Ninth Circuit's decision in Ripinsk y makes clear, the government's position is internally inconsisten t. The substitute asset provision comes into play only whe n forfeitable property cannot be identified as directly "involvedin" or "traceable to" money laundering activity. Clearly, if funds commingled in a bank account are sufficiently ident ifiable as to be considered "traceable to" money laundering activity , then the substitute asset provision should have no applicabi lity whatsoever. Accordingly, the government's contention that the " traceable to" and substitute asset theories merely create alterna tive paths to forfeiture, which the government may choose at its option, is illogical. We also do not understand why an amendment to a statute cannot affirmatively reverse, or at least cast subs tantial doubt on, prior court decisions interpreting earlier vers ions of that statute. This is especially true where, in underta king to discern the plain meaning, those decisions essentially held(for policy reasons) that Congress simply could not have meant what it said. Indeed, if the legitimacy of the courts' interpreta tion of the RICO statute had been beyond doubt, then the addition of a substitute asset provision to the RICO, CCE and money launderi ng criminal forfeiture schemes would seem superfluous. Furthermore, we think the government's int erpretation of Billman proves too much. In Billman the Fourth Cir cuit cited to the prior case law holding that the in personam nat ure of criminal forfeiture makes tracing under the RICO statute's f orfeiture provision unnecessary. It then made the unremarkab le observation, which the government apparently finds significant, that "[t]hese principles are embodied in an amendment to the act, which makes provision for the forfeiture of substitute assets." 915 F.2d at 920. Contrary to the government's interpretation, however, that observation may signal the Fourth Circuit's view (w hich we expressed above) that Congress recognized its unart fulness in using
the term "traceable to" in its forfeiture statutes. Moreover, the Fourth Circuit may have recognized that in amending forfeiture statutes to include a substitute asset provision, C ongress may have appreciated that courts had been stretching to avoi d the result of applying the plain meaning of the term "traceable t o" to commingled property. Even if Billman can be read to suggest tha t the addition of a substitute asset provision to RICO's criminal forfeiture scheme cannot undo prior judicial interpretations o f the words "traceable to" in the RICO context, we simply canno t ignore the plain fact that the money laundering criminal forfe iture provision contains a substitute asset provision that appears to be addressed directly to the situation confronting us in this ca se. We are unaware of any decision that has imported the restr ictivedefinition of "traceable to" prevalent in the RICO context into the

money laundering forfeiture scheme. In sum, to accept the government's argumen t that "traceable to" does not mean what it says for purpo ses of commingled property, in effect would render the sub stitute asset provision a nullity, in contravention of a well-set tled canon of statutory construction that "courts should disfavor interpretations of statutes that render language superfluous." Conn ecticut Nat'l Bank v. Germain, 503 U.S. 249, 253, 112 S. Ct. 1146 , 1149 (1992).
2.

We hold that the term "traceable to" means exactly what it says. In light of our holding on the burden of proof, this means that the government must prove by a preponder ance of the evidence that the property it seeks under  982(a)(1) in
satisfaction of the amount of criminal forfeiture t o which it is entitled has some nexus to the property "involved i n" the money laundering offense. For example, if the defendant receives $500,000 cash in a money laundering transaction andhides the cash in his house, the government may seize that money a s property "involved in" the money laundering offense. If the defendant purchased a $250,000 item with that money, the gove rnment may seek the remaining cash as "involved in" the offense, wh ereas the item purchased is subject to forfeiture as property "tra ceable to" property involved in the money laundering offense. Where the property involved in a money lau ndering transaction is commingled in an account with untain ted property, however, the government's burden of showing that mo ney in the account or an item purchased with cash withdrawn th erefrom is "traceable to" money laundering activity will be di fficult, if not impossible, to satisfy. While we can envision a si tuation where $500,000 is added to an account containing only $50 0, such that one might argue that the probability of seizing "tainte d" funds is far greater than the government's preponderance burden (50.1%), such an approach is ultimately unworkable. As the Seventh Circuit, speaking through Judge Easterbrook, has observed, a bank account is simply a number on a piece of paper: Bank accounts do not commit crimes; people do.
It makes no sense to confiscate whatever balance happens to be in an account bearin g a particular number, just because proceeds o f crime once passed through that account. .

. . An "account" is a name, a routing device l ike the address of a building; the money is th e "property" [for purposes of the forfeiture statute]. Once we distinguish the money f rom its container, it also follows that the presence of one illegal dollar in an accou nt
does not taint the rest--as if the dollar obtained from [money laundering activity] were like a drop of ink falling into a glass of

water.

$448,342.85, 969 F.2d 474, 476 (7th Cir. 1992). The solution, we think, is to give effect to thesubstitute asset provision. See 18 U.S.C.  982(b)(1)

(incorporating 21 U.S.C.  853(p)(5)). Thus, once a defendant has commingled laundered funds with untainted funds--wh ether in a bank account or in a tattered suitcase--such that they " cannot be divided without difficulty," 21 U.S.C.  853(p)(5), the government must satisfy its forfeiture judgment through the su bstitute asset provision. Once property subject to forfeiture und er  982(a)(1) is no longer identifiable due to some act of the de fendant, the government may seek any property, cash or merchandi se, in
satisfaction of the amount of criminal forfeiture t o which it is
entitled.
3. In light of our analysis, the district cou rt's forfeiture order, which is incorporated into Voigt's judgment of conviction and sentence, cannot stand. Even under the prepond erance standard, the items of jewelry cannot be considered "traceabl e to" the proceeds of money laundering activity; the jewelry was purchased with funds from an account into which money launder ing proceeds had been commingled with other funds, and after numerou s intervening deposits and withdrawals. We therefore cannot say that, more probably than not, the jewelry is "traceable to" mo ney laundering activity. Notwithstanding our conclusion, the govern ment continues to be entitled to $1.6 million in criminal forfeitu re. But to the extent that the forfeiture order incorporated in th e judgment required Voigt to hand jewelry over to the governme nt under an erroneous legal determination, the government is improperly in possession of that jewelry. We do not envision tha t the district court will have to conduct a de novo forfeiture pro ceeding on remand. Since all that is at issue is the process by which the government may seize property in satisfaction of th e $1.6 million to which it is lawfully entitled, on remand the gov ernment should be permitted to move to amend the judgment to refle ct that the jewelry is forfeitable as a substitute asset. Cf. United States v. Hurley, 63 F.3d 1, 23 (1st Cir. 1995) (no error whe re, after notice of appeal from conviction was filed, government mov ed for and received from district court permission to seize ce rtain property as "substitute assets"); Todd Barnet & Ivan Fox, Tr ampling on the Sixth Amendment: The Continued Threat of Attorney F ee Forfeiture, 22 Ohio N.U. L. Rev. 1, 55 (1995) ("The substitute assets provisions constitute a procedural alternative for collecting a forfeiture judgment and are not a form of punishmen t in their own right . . . .").

VII.

THE TAX EVASION CONVICTIONS Voigt contends that his convictions on two counts of tax
evasion under 26 U.S.C.  7201 (relating to the 1990 and 1991 tax years) are legally insufficient because the governm ent failed to
adduce evidence of an "affirmative act" of tax evas ion, which is an
essential element of the offense.

A. Prior to trial, Voigt moved for and receiv ed a bill of particulars relating to the tax evasion counts beca use the indictment failed to specify the affirmative acts o n which thegovernment intended to rely at trial. The bill of particulars

indicated four separate acts of evasion: (1) Voigt' s submission of a partially false and partially incomplete Internal Revenue Service ("IRS") Form 433-A understating the amount in his F irst Fidelity Bank account, his failure to fulfill his promise to provide the missing information to an IRS agent, and his failur e to tell the agent of his advance-fee income earned in 1989 and 1990; (2) Voigt's decision not to purchase a piece of jewelry with cash when informed that a Currency Transaction Report would h ave to be filed with the IRS; (3) Voigt's role in requiring potenti al victims of the Trust to fill out bizarre confidentiality agree ments that forbade them from disclosing details of their trans action; and (4) Voigt's maintenance of overseas bank accounts and h is direction to
Anderskow to wire funds into those accounts. At tr ial the government introduced evidence on all four affirmat ive acts.

B.
Essential to a conviction under 26 U.S.C.  7201 is "1) the existence of a tax deficiency, 2) an affirmativ e act constituting an attempt to evade or defeat payment of the tax, and 3) willfulness." United States v. McGill, 964 F.2d222, 229 (3d Cir.), cert. denied, 506 U.S. 1023, 113 S. Ct. 664 (1992). Voigt claims that the government's proof at trial failed to establish the

second element as a matter of law because none of t he alleged affirmative acts shows that his purpose was to evad e the payment of taxes. Bearing in mind that "[o]ur review of the s ufficiency of the evidence is 'governed by strict principles of d eference to a jury's findings,'" id. (quoting United States v. As hfield, 735 F.2d 101, 106 (3d Cir.), cert. denied, 469 U.S. 858, 105 S. Ct. 189 (1984)), we reject Voigt's legal sufficiency challe nge. 1. With respect to the first affirmative act charged by the government, the submission in September of 1990 of a materially misleading Form 433-A, Voigt claims that "[t]hese f alse statements
could not . . . have been used to evade taxes for 1 990 and 1991, taxes which were not even due until April 15, 1991 and April 15, 1992, respectively." Voigt's Br. at 36. The IRS u ses Form 433-A to identify potential assets with which a taxpayer who owes back taxes can pay them and to establish a method of col lection. Since the form at issue dealt with payment of taxes owed in (or prior to) 1990, and since it was submitted before the deficie ncies that are the focus of the tax evasion charges arose, Voigt c ontends that it cannot have been calculated "to mislead the governm ent or conceal funds to avoid payment of an admitted and accurate deficiency" as a matter of law. McGill, 964 F.2d at 230 (emphasis added). In McGill we addressed the question whethe r an affirmative act can predate the existence of a tax deficiency and cited to conflicting authority on that issue. We d eclined to answer that question definitively, however, because the crime charged in the indictment pointed to the date the d eficiency arose as the date of the offense: "The indictment by its terms required the jury to look forward in time for evidence of af firmative acts." Id. at 231. Once again, we decline the parties' in vitation to rule as a general matter on whether predeficiency conduc t can satisfy the statute's "affirmative act" element. For here, as in McGill,the superseding indictment charged Voigt with viola ting 26 U.S.C.

 7201 "[o]n or about April 15, 1991" and "[o]n or a bout April 15, 1992." App. at 432, 433. Accordingly, even if con duct predating the existence of a deficiency can constitute proof of an affirmative act of tax evasion, the government's fa ilure to include the predeficiency period in the indictment's specif ication of the offense charged precludes it from relying on conduc t predating the existence of the deficiency as substantive evidence of affirmative acts of evasion. McGill, 964 F.2d at 231 ("The Gov ernment must prove attempted evasion for each count beginning at the dates [charged in the indictment]."). This same reasoning applies to the governm ent's contentions that Voigt's failure to fulfill his pro mise to provide the IRS agent with income information missing from his Form 433-A and his failure to disclose to the IRS agent advanc e-fee income
earned in 1989 and 1990 constitute affirmative evas ive acts. These actions, like the submission of the false Form 433- A in the first place, were taken in the context of a collection ac tion for delinquent taxes from prior years, and preceded the tax liabilities on which the evasion charges are based. As with th e submission of the false Form 433-A, we believe that the circumsta nces do not warrant a finding that these prior acts were affirm ative evasive acts that laid the groundwork for later tax evasion

. 2. Nevertheless, the three additional affirma tive acts proved by the government at trial, when taken toget her, are sufficient to sustain the jury's verdict. The Supr eme Court has said of the affirmative act element that "[i]f the tax evasion motive plays any part in such conduct[,] the offens e may be made out even though the conduct may also serve other pu rposes such as concealment of other crime." Spies v. United State s, 317 U.S. 492, 499, 63 S. Ct. 364, 368 (1943). Elaborating on the "affirmative act" requirement, we stated in McGill that an "affi rmative act is anything done to mislead the government or conceal funds to avoid payment of an admitted and accurate deficiency." M cGill, 964 F.2d at 230. We also noted that "[o]ne act will suffice ." Id. at 229 (citing United States v. Conley, 826 F.2d 551, 556- 57 (7th Cir. 1987)). Whereas simple nonpayment of taxes owed ca nnot sustain a conviction under the statute, acts intended to conc eal or mislead
are sufficient. Voigt argues that the government's proofs as to the second, third and fourth affirmative acts were lega lly insufficient because they were equally consistent with innocent activity and, more specifically, because there was no evidence li nking them to a "motive" or "intent" to evade. According to Voigt, therefore,
there must be direct evidence of intent before a ra tional trier of fact can conclude beyond a reasonable doubt that an affirmative act was undertaken, in part, to evade the payment of in come tax. Voigt's legal proposition is without precedential s upport. In the majority of criminal cases, the ele ment of intent is inferred from circumstantial evidence. See gene rally United States v. Iafelice, 978 F.2d 92, 98 (3d Cir. 1992) ("It is not unusual that the government will not have direct ev idence. [Mens rea] is often proven by circumstances."). The rule is no differentin tax evasion prosecutions. The Supreme Court in Spies stated

that "any conduct, the likely effect of which wouldbe to mislead or conceal," is sufficient to satisfy the "affirmat ive act" element. Spies, 317 U.S. at 499, 63 S. Ct. at 368 (emphasis added). Accord United States v. Mal, 942 F.2d 682, 687 (9th Cir. 1991) (evasion of payment "involves conduct designe d to place assets beyond the government's reach after a tax li ability has been assessed") (emphasis added); Conley, 826 F.2d at 55 6 (rational jury can infer intent to evade upon learning of manner i n which defendant conducted his financial affairs); United States v. Shorter, 809 F.2d 54, 57-58 (D.C. Cir.) (jury couldinfer intent to evade where defendant carried on "cash lifestyle"), cert. denied, 484 U.S. 817, 108 S. Ct. 71 (1987); United States v . Voorhies, 658 F.2d 710, 714-15 (9th Cir. 1981) ("Voorhies' conduc t in 1974 [of liquidating assets and transporting proceeds to Swi tzerland] had the 'likely effect' of misleading or concealing."). These cases simply require that there be some evidence from whi ch a jury could infer an intent to mislead or conceal beyond mere f ailure to pay assessed taxes; it is for the jury to determine, as a matter of fact, whether the affirmative act was undertaken, i n part, to conceal funds from or mislead the government. We have no difficulty concluding, therefor e, that Voigt's refusal to pay for a piece of jewelry in cash; his use of bizarre confidentiality agreements; and his maintenance of overseas bank accounts, taken together, provided the jury with su fficient evidence from which it could infer that they were " designed" to evade the payment of admitted tax deficiencies, eve n if such actions otherwise might constitute wholly innocent conduct. SeeUnited States v. Jungles, 903 F.2d 468, 473-74 (7th Cir. 1 990) (activity that is lawful itself can constitute affi rmative act to evade); see also United States v. Pollen, 978 F.2d 78, 86 (3d Cir. 1992) (transporting funds to foreign countries, the reby making it more difficult to trace, provides inference of inte nt to evade), cert. denied, 508 U.S. 906, 113 S. Ct. 2332 (1993). The evidence at trial indicating a possibl e motive unrelated to tax obligations for some or all of the affirmative acts, upon which Voigt heavily relies on appeal, wa s before the jury. It chose to reject Voigt's proffered interpr etation and accept the government's. Given our deferential sta ndard of review, United States v. Casper, 956 F.2d 416, 421 (3d Cir. 1992), along
with the settled rule that we draw all reasonable i nferences in favor of the jury's verdict, Jackson v. Virginia, 4 43 U.S. 307, 319, 99 S. Ct 2781, 2789 (1979), we may not substit ute our (or Voigt's) judgment for that of the jury; Voigt's leg al sufficiency challenge is essentially a futile attempt to rehash his closing argument. Finally, even were we to agree that, stand ing alone, the three remaining affirmative acts were insufficient to establish Voigt's intent to evade payment, our decision in Mc Gill instructs that the jury was entitled to consider Voigt's subm ission of a materially misleading Form 433-A in 1990 as relevan t evidence on the question whether his later actions were intende d to be evasive. See supra n.25. This provided the jury with ample basis on which to convict, since in 1990 Voigt had materially misl ed the IRS inorder to hamper its attempts to collect back taxes. The jury

readily could have concluded that Voigt's later act ions were not innocent as Voigt claimed but, rather, were part of a conscious and continued attempt to thwart the IRS's collection ef forts. Accordingly, we reject Voigt's legal sufficiency ch allenge to his
tax evasion convictions.

VIII.

THE RESTITUTION ORDER At sentencing, the district court ordered Voigt to make $7,040,000 in restitution. Finding that Voigt had secreted substantial sums of money derived from the Trust's advance-fee scheme, the district court noted in its amended jud gment that
as was demonstrated at trial and at variou s motion hearings, [] defendant has himself deposited or forwarded to others for depos it in various accounts in various European ba nks,
millions of dollars in cash and other property. To cite but two examples, the Government has already obtained a release and assignment of funds and property currently
frozen at United Overseas Bank in Switzerl and
in the account of defendant's former girlfriend; and the Government has receive d a similar release and assignment from defend ant pertaining to funds frozen in his accounts at
the same bank.

App. at 1394. Voigt now challenges the district co urt's restitution order and, more specifically, the lack of "specific findings" as to his ability to pay. Claiming that "there is no evidence of any funds elsewhere," Voigt's Br. at 48 , Voigt asks us
to vacate the restitution order and remand for reca lculation. We
review the restitution award for abuse of discretio n. United States v. Graham, 72 F.3d 352, 355 (3d Cir. 1995), cert. denied, 116 S. Ct. 1286 (1996).

A. In United States v. Logar, 975 F.2d 958 (3 d Cir. 1992), we held that when a district court imposes an order of restitution under the Victim and Witness Protection Act ("VWPA" ), codified at18 U.S.C.

 3663-64, it is required "'to make specific finding s as to the factual issues that are relevant to the appl ication of the restitution provisions . . . .'" Id. at 961 (quoti ng United States v. Palma, 760 F.2d 475, 480 (3d Cir. 1985)). One o f the relevant provisions to which the requirement of specific fac tual findings applies is "the defendant's ability to pay and the financial need of defendant and the defendant's dependents." Unit ed States v. Copple, 24 F.3d 535, 549 (3d Cir.) ("Copple I") (ci ting Logar, 975 F.2d at 961), cert. denied, 115 S. Ct. 488 (1994)). The
restitution amount must reflect the defendant's abi lity to pay within five years after the date of sentencing. 18 U.S.C.  3663(e)(2)(C). In Copple I, the district court ordered re stitution of approximately four million dollars after simply ado pting as its factual findings the amount of loss to the victims calculated inthe presentence report, but without specific findin gs on either the

amount of loss or Copple's ability to pay. After t he case had been remanded to the district court and a resentencing h earing had been held, the court reinstated its restitution order of four million dollars. Although it had made specific findings co ncerning the amount of the loss, which Copple did not challenge, the district court found that despite the defendant's current fi nancial hardship, he had the potential to earn money in the future given his past success as a businessman. On appeal a different panel of this court again vacated the restitution award and remanded for resentencing . United States v. Copple, 74 F.3d 479 (3d Cir. 1996) ("Copple II") . We found that a defendant's past success as a businessman, alone, could not justify the four-million-dollar restitution award, since it was
unrealistic that the defendant would be able to ear n that amount of money over five years. The court made no "findings about Copple's financial needs, and observed only that 'the family is in dire financial straights at this time,' an assertion har dly supportive of the exceptionally large restitution amount it ul timately
ordered." Id. at 483. As to the government's contention that the restitution award should be sustained because it implicitly ref lected amounts attributable to assets Copple acquired with misappr opriated funds, we agreed that [t]he proceeds from a defendant's illegal
conduct that the defendant still retains o r can recoup are certainly encompassed withi n the "financial resources of the defendant"
that the district court should consider in fashioning a restitution order. Of course
, the continued existence of such proceeds i s a factual issue that should be accompanied b y "specific findings."

Id. at 484 (citation omitted). We went on to note that, in determining a restitution award based on "the court 's reasonable belief that there are secreted assets," id., the di strict court may calculate the total proceeds of defendant's crime m inus amounts already accounted for, and then place the burden of accounting for the remainder on the defendant. The defendant may point to specific disbursements indicating that he is no lon ger in possession of funds obtained as a result of his cri mes or assets purchased therewith. "Unless [the defendant] can d isprove possession of any remaining amount in this manner, the court may consider the resulting figure as constituting 'fina ncial resources

of the defendant.'" Id.

B. In light of our decision in Copple II, whi ch was filed after briefing and argument in this case had been c ompleted, we see no basis for setting aside the district court's res titution award as an abuse of discretion. In fact, the district c ourt's analysis was prescient in that it essentially employed the f ramework contemplated by Copple II for ordering restitution where there is reason to believe that a defendant has secreted pro ceeds fromillegal activity. Relying on Copple II, we divide our analysis

into two parts. We first determine whether the dis trict court's finding that Voigt had secreted the proceeds of his crime, thereby shifting to him the burden to explain their whereab outs, was an
abuse of discretion. We then determine whether the district
court's ultimate restitution order constituted an a buse of discretion given that the burden of persuasion as t o the location of the proceeds, as well as on financial resources and ability to pay, had shifted to defendant. Copple II, 74 F.3d at 484; 18

U.S.C.  3664(d).

1. That the district court was entitled to pr oceed with the sort of analysis contemplated in Copple II cannot s eriously be disputed. The district court's restitution order, along with the evidence at trial, provided ample basis for the cou rt's conclusion that Voigt had attempted to secrete the proceeds of his criminal activity in foreign bank accounts and in his former girlfriend's name. Since there is evidence in the record to sup port the district court's "reasonable apprehension that [Voi gt] has secreted certain assets," Copple II, 74 F.3d at 484, the der ivation of a "starting point" and the concomitant shifting of th e burden to the
defendant cannot constitute an abuse of discretion. To the extent that Voigt complains that th e district court's starting point ($7,040,000) did not represe nt the amount of his actual holdings at sentencing, he misses the po int. Copple IImakes clear that once the district court has reasonably c oncluded that the defendant is concealing the proceeds of hi s crime, the district court may use as a starting point the enti re amount of the loss caused minus any amount already accounted for (in this case, the amount sought by the government in forfeiture). Again, we see
no abuse of discretion in the district court's deci sion to require Voigt to account for the entire $7,040,000.

2. The essence of Voigt's complaint is that t he district
court's ultimate restitution award was the same amo unt as the starting point it had derived. Voigt assails the d istrict court's failure to make specific findings on his ability to pay or on his financial resources. But under Copple II and 18 U. S.C.  3664(d), it was Voigt who bore the burden of persuasion (and , logically, the burden of production) on whether he possessed the $ 7,040,000 in crime proceeds and on the issue of his financial re sources and needs. Voigt failed to adduce sufficient evidence on either subject. For instance, Voigt never submitted to th e Probation Department a completed Personal Financial Statement form. Instead, he claimed that he was "living off savings and othe r assets," yet
never accounted for the source of those funds. Thi s was simply insufficient to demonstrate by a preponderance of t he evidence his
financial resources and needs. United States v. Ca nnistraro, 871 F.2d 1210, 1214 (3d Cir. 1989) (no abuse of discret ion where restitution amount not reduced to reflect ability t o pay when defendant fails to adduce evidence on that subject)

. Given Voigt's complete failure to meet his statutory burden of demonstrating his financial resources andneeds, it is not surprising that the district court was unable t o announce"specific findings" on that subject. Quite simply, because Voigt

had failed to account for the $7,040,000 in crime p roceeds, and
because he failed to adduce sufficient evidence on his ability to pay and financial needs, the district court had no choice but to impose what had been its "starting point" as the fi nal amount of restitution. Such a result is entirely "consistent with . . . our policy-based conviction that defendants ought not b e permitted to profit, quite literally, from uncertainty for which their illegal conduct is ultimately responsible." Copple II, 74 F.2d at 484. Put another way, if the government bore the burden of provi ng that such defendants still possess illegal ly obtained assets, the government would be unable to locate hidden assets, those asse ts would not be taken into account in framing restitution orders, and the defendants wou ld continue to profit at the expense of the
innocent victims. This would be
unconscionable.

The solution is to place the burden o f proof on the defendant to show what has happened to all of the illegally obtained
assets. All assets for which the defendan t cannot account may be included in the amou nt
of restitution ordered. To the extent tha t records are unavailable, the risk of inaccuracy should be borne by the defendan t
rather than the victims.

Id. at 486 (Alito, J., concurring) (citation omitte d).

Finally, we do not view the district court 's decision to accept Voigt's representations of indigency for pur poses of appointing appellate counsel as mandating a contrar y result. The district court explained that it did so simply to e xpedite Voigt's appeal. In United States v. Hallman, 23 F.3d 821, 827 (3d Cir.), cert. denied, 115 S. Ct. 216 (1994), we held that a finding of indigence at the time of sentencing is not a bar to imposing restitution as long as the award is based "on reali stic prospects that the defendant will be able to pay it, and not on fantastic or overly speculative possibilities." Copple II, 74 F .3d at 485. Given the district court's record-supported finding s that Voigt concealed substantial sums of crime proceeds, and g iven Voigt's failure to rebut those findings with competent evid ence, the
district court's restitution order was based on "re alistic prospects that the defendant will be able to pay it . . ." Id.

IX.

THE MOTIONS FOR SEVERANCE Finally, Voigt argues that the district co urt erred in denying his motions to sever his trial from those o f his codefendants on the ground of mutually antagonistic defenses, and
that his convictions must therefore be reversed. T he district court's denial of Voigt's motion is reviewable only for abuse ofdiscretion. United States v. Thornton, 1 F.3d 149, 152 (3d Cir.),

cert. denied, 114 S. Ct. 483 (1993).

A. In appealing his conviction on this ground , Voigt faces an uphill battle. As the Supreme Court has recentl y noted, "[t]here is a preference in the federal system for joint trials of defendants who are indicted together." Zafiro v. U nited States, 506 U.S. 534, 113 S. Ct. 933, 937 (1993). See Fed. R. Crim. P. 8(b) ("Two or more defendants may be charged in the same indictment or information if they are alleged to have participate d in the same
act or transaction or in the same series of acts or transactions constituting an offense or offenses."). Such joint trials promote efficiency in the courts and serve the interests of justice by preventing "the scandal and inequity of inconsisten t verdicts." Zafiro, 506 U.S. at 537, 113 S. Ct. at 937 (quoting Richardson v. Marsh, 481 U.S. 200, 209, 107 S. Ct. 1701, 1708 (19 87)). In addition, joint trials of defendants charged under a single conspiracy aid the finder of fact in determining th e "full extent of the conspiracy," United States v. Provenzano, 68 8 F.2d 194, 199 (3d Cir.), cert. denied, 459 U.S. 1071, 103 S. Ct. 492 (1982), and prevent "the tactical disadvantage to the governmen t from disclosure of its case." United States v. Jackson, 649 F.2d 967, 973 (3d Cir.), cert. denied, 454 U.S. 1034, 102 S. Ct. 574 (1981). As a result, when defendants have been pro perly joined pursuant to Rule 8(b) of the Federal Rules of Crimi nal Procedure, "a district court should grant a severance under Ru le 14 only if there is a serious risk that a joint trial would co mpromise a specific trial right of one of the defendants, or p revent the jury from making a reliable judgment about guilt or inno cence." Zafiro, 506 U.S. at 539, 113 S. Ct. at 938. See Fed. R. Cr im. P. 14 ("If it appears that a defendant or the government is preju diced by a joinder of . . . defendants . . . for trial togethe r, the court may order an election or separate trials of counts, gra nt a severance of defendants or provide whatever other relief just ice requires."). Many courts have recognized that such a ri sk arises when codefendants assert "mutually antagonistic" defense s. See Zafiro, 506 U.S. at 538, 113 S. Ct. at 937 (collecting case s). Even where
a defendant establishes that his defense and those of his codefendants are mutually antagonistic, however, se verance is not mandatory. Id., 113 S. Ct. at 938. Mutually antag onistic defenses are not prejudicial per se; and even if they were, Rule 14 "leaves the tailoring of the relief to be granted, if any, to the district court's sound discretion." Id. at 539, 113 S. Ct. at 938. Therefore, to obtain a reversal of conviction for f ailure to sever where codefendants assert mutually antagonistic def enses, a defendant "must demonstrate clear and substantial p rejudice resulting in a manifestly unfair trial." United St ates v. Reicherter, 647 F.2d 397, 400 (3d Cir. 1981). Although precise articulations may differ, courts agree that "[m]utually exclusive defenses . . . exist whe n acquittal of one codefendant would necessarily call for the conv iction of the other." United States v. Tootick, 952 F.2d 1078, 1 081 (9th Cir. 1991). This type of situation arises "when one per son's claim of innocence is predicated solely on the guilt of a co -defendant."United States v. Harris, 9 F.3d 493, 501 (6th Cir. 1993). In

determining whether mutually antagonistic defenses exist such that severance may be required, the court must ascertain whether "the jury could reasonably construct a sequence of event s that accommodates the essence of all appellants' defense s." United States v. Perez-Garcia, 904 F.2d 1534, 1548 (11th C ir. 1990). While mutually antagonistic defenses have been much discussed in theory, only rarely have courts found that they exist in practice. See Zafiro, 506 U.S. at 538, 113 S. C t. at 937; see also Tootick, 952 F.2d at 1078 (finding mutually an tagonistic defenses warranting reversal where two defendants c harged with assault both defended themselves by arguing that th e other committed the assault alone). Far more frequently, courts have concluded that the asserted defenses, while in conf lict with one another, are not so irreconcilable that "[t]he jury could not have been able to assess the guilt or innocence of the d efendants on an individual and independent basis." Tootick, 952 F. 2d at 1083. See, e.g., United States v. Flanagan, 34 F.3d 949, 952 (10th Cir. 1994) (affirming denial of motion to sever because a jury "could logically" accept one defendant's defense without c oncluding that the codefendant was guilty, and vice versa); Harris , 9 F.3d at 501 (affirming denial of motion to sever trials of coco nspirators, one
of whom claimed innocence and the other of whom cla imed entrapment, on the ground that these defenses are not inconsist ent because the jury could logically have accepted both); Perez-Gar cia, 904 F.2d at 1548 (affirming denial of motion to sever because " the jury could reasonably construct a sequence of events that acco mmodates the essence of all appellants' defenses"). Moreover, courts have consistently held th at fingerpointing and blame-shifting among coconspirators do not support a finding of mutually antagonistic defenses. See Pro venzano, 688 F.2d at 198 (affirming denial of motion to sever wh ere all defendants blamed one coconspirator on the ground t hat these defenses were not antagonistic, because if jury hadbelieved that only one defendant was to blame there would have be en a failure of proof on the conspiracy charges); see also United S tates v. Smith, 44 F.3d 1259, 1266-67 (4th Cir.) (affirming denial of motion to
sever where defendant's codefendants claimed that h e ran the whole scheme and they were just victims of his criminal i nfluence), cert. denied, 115 S. Ct. 1970 (1995); United States v. Li nn, 31 F.3d 987, 992 (10th Cir. 1994) (affirming denial of motion to sever where each coconspirator defended himself by blaming the others on the ground that the jury could have believed all defend ants' theories and acquitted them all); United States v. Rivera, 6 F.3d 431, 438 (7th Cir. 1993) (affirming denial of motion to seve r where codefendants in a drug conspiracy all claimed ignor ance and blamed each other on ground that "plain and simple blame-s hifting" does not necessarily prevent jury from making reliable j udgment about guilt or innocence), cert. denied, 114 S. Ct. 1098 (1994); United States v. Barber, 442 F.2d 517, 530 (3d Cir.) (hold ing that "the mere presence of hostility among defendants or the desire of one to exculpate himself by inculpating another" are insuf ficient grounds to require severance), cert. denied, 404 U.S. 958, 92 S. Ct. 327 1971). These cases illustrate the well-settled pri nciple that"defendants are not entitled to severance merely be cause they may

have a better chance of acquittal in separate trial s." Zafiro, 504 U.S. at 540, 113 S. Ct. at 938.

B. Voigt's argument is essentially indistingu ishable from those that were rejected in the conspiracy cases ci ted above. The
basis of his claim is that his codefendants "direct ed blame at [him] as the architect of the scheme . . . ." Smit h, 44 F.3d at 1267. Travis argued throughout the trial that Voigt had deceived her, and that "[s]he was one of the victims of John Voigt." App. at 985 (Travis' counsel's closing argument). Simil arly, Anderskow and Anchors argued that they were pawns in a scheme created and perpetrated by John Voigt. Voigt contends that "the defenses presente d [by his codefendants] would, in order to have succeeded, ha ve required defendant Voigt's conviction, and certainly enhance d that possibility." Voigt's Br. at 30. In light of the case law and on logical grounds, we disagree. The basic theory beh ind the defenses of Travis, Anderskow, and Anchors was that they lac ked criminal intent. Although it is fairly clear that these def enses, by pointing the finger of blame at Voigt, increased th e likelihood that Voigt would be convicted, the Supreme Court ha s stated that this type of injury alone does not mandate severanc e. Zafiro, 506 U.S. at 540, 113 S. Ct. at 938. As the government correctly argued in its brief, "it was not logically impossible for the jury to have either (i) disbelieved all of the defenses, given t he government's affirmative proof or (ii) believed all of them, on the basis that the government had not adduced sufficient evidence of intent." Government's Br. at 39. Under these circumstances, we cannot
conclude that the defenses in this case were mutual ly antagonistic. The limiting instructions that the distric t court gave to the jury reinforce our conclusion. See Smith, 44 F .3d at 1267; Rivera, 6 F.3d at 438. The court instructed the ju ry (1) to
"consider each count of the indictment and each def endant's involvement in that count separately," (2) that "th e burden is always on the prosecution to prove guilt beyond a r easonable doubt," (3) that its "verdict as to any defendant o n any count should not control [its] verdict as to any other de fendant or any other count," and (4) that opening statements and c losing arguments are not evidence. Anderskow's App. at 4251, 4257 & 4278. We are
convinced that these instructions "were sufficient to cure any potential prejudice from antagonistic defenses." R ivera, 6 F.3d at 438 (relying on similar instructions). We therefor e conclude that
the district court did not abuse its discretion in denying Voigt's
motions for a severance.

X.

CONCLUSION We will affirm Voigt's conspiracy, money l aundering and tax evasion convictions, as well as the district co urt's order of restitution. We will vacate the forfeiture order, which is incorporated into the judgment of conviction and se ntence, and remand for further proceedings consistent with this opinion.TO THE CLERK:

Please file the foregoing opinion.

United States Circu it Judge

M E M O R A N D U M

TO: P. Douglas Sisk, Clerk

FROM: Judge Cowen

DATE: July 8, 1996

RE: U.S.A. v. Voigt, No. 95-5092, argued 1/25/ 96

Dear Doug:

Please file the enclosed opinion which has cleared in accordance with our procedure. A signed original w ill be mailed today. Also, please note that Voigt's appeal was c onsolidated for argument with the appeals of U.S.A. v. Anderskow, N o. 95-5093, and U.S.A. v. Anchors, No. 95-5094. The opinion dispos ing of Anderskow's/Anchors' appeals is being filed simulta neously
herewith.

Sincerely,

Robert E. Cowen

REC/ds

enclosure cc: Judge Sarokin (memo only) Judge Pollak (memo only) Pat McCafferty (memo only)