## F I LED United States C ourt of Appeals Tenth Circuit 

### Ju ly3,2007 Elisab eth A. Shumaker C l erk of C ourt PU BL I SH UNI TED S TATES CO URT O F AP PEALS F O R T H E T E N T H C IR C U IT U N IT E D S T A T E S O F A M E R IC A , Pl ai nt i ff - A ppel l ee, v. G A RY W . FLA N D ER S, D e fe n d a n t - A p p e llan t. N o. 05- 6379

APP EAL FROM THE UN I TED S TATES DI S TRI CT CO URT F O R T H E WE S T E R N D I S T R I C T O F O K L A H O MA

( D. C. No. 0 3 - CR - 2 4 3 - F) Sean C onnel l y , R ei l l y , Pozner& C onnel l yL L P, D enver , C ol or ado, for D e fe n d a n t-A p p e llan t. V i cki Z emp B ehenna , A s s i s t antU ni t ed St at es A t t or ney( J ohn C . R i cht er , U ni t ed St at es A t t or neyw i t h heron br i ef) , O kl ahoma C i ty , O kl ahoma, forPl ai nt i ffA ppel l ee. B efor e LU CE RO , M c KAY , and M UR P HY C i rcui tJudg es. M c KAY , C i r cui tJ udge. A ju ryc o n v icte d D e fe n d a n t G a ryF lan d e rs, fo rm e r C E O a n d su p e rm ajo rity shareholderof M et roB ank , of tw o co un t s of w i l l ful m i sappli cat i on of b ank fun ds,D efe ndantdoes notappea l hi s convi ct i on under§ 1014. 1

- 2- in v io latio n o f

1 8 U .S .C . § 6 5 6 , tw o c o u n ts o f sc h e m in g to d e f

ra u d a b a n k , in vi ol at i on of 18 U . S. C . § 1344( 1) , one countof m aki ng a fa l s e entryi n a bank r ecor d, i n vi ol at i on of 18 U . S. C . § 1005, and one c ountof cons pi r i ng t o m ake a fa ls e s ta te m e n t to a b a n k , in v io la tio n o f 1 8 U .S .C . § 1 0 1 4 . De fe n d a n twa s s e n t e n c e d t o n i n e ty - s i x mo n th s ’ i mp r i s o n me n t

— s o me ei ght een mont hs above the Sent enci ng G ui del i ne r ecomm endat i on— and or der ed to p a y$ 8 0 ,0 0 0 re stitu tio n , am o n g o th e r p e n a lti e s. D e fe n d a n t ap p e a ls h is con vict i on al l eging i nsuffi ci encyof the evidence o n five of the si x co un t s, 1 vi ol at i on of hi s Si xt h A m endmentr i ghtt o chos en couns el , and comm i s s i on of nu m erous sent encing err ors. B AC KGROU ND In provi ding t he p ert i nen tfact s, w e view t he record i n the l i gh tm ost fa v o ra b le to th e g o v e rn m e n t. Uni t ed Stat es v. Wei dner , 437 F. 3d 1023, 1027 (1 0 th C ir . 2 0 0 6 ). D efe ndantacqui r ed M etr oB ank, a fe der al l ychart er ed, FD I C - i ns ur ed bank oper at i ng i n O kl ahoma C i t y , O kl ahoma, fr om t he FD I C i n 1989 bypur chas i ng a bank s t ock l oan on w hi ch the or i gi nal i nves t or s defa ul t ed. I n Sept ember1997, D efe ndantt ook outt w o l oans t ot al i ng $3, 838, 000 fr om B r i dgevi ew B ank G r oup (“B ri d g ev iew ”) p ri m aril yto sa ti sfythe b an k stoc k loan that h e u sed to ac q u ir eI n Au g u s t1 9 9 8 , De fe n d a n tb o u n c e d s e v e r a l l o a n p a yme n tc h e c k s d r a wn 2 on an ac countatR ockyM ount ai n B ank.

- 3- M e tro B a n k . A s c o llate ra l fo r th is lo a n , B rid g e v iew to o k D e fe n d a n t’s c e rtific a te for248, 000 s har es of M etr oB ank s t ock and pl ace d l i ens on D efe ndant ’ s C ol or ado Spr i ngs , C ol or ado home, a s epar at e 125- acr e tr acti n C ol or ado Spr i ngs , and m is c e lla n e o u s a s s e ts . D e fe n d a n t’ s fir s t p a ym e n t o b lig a tio n to B ri d g e v ie w w a s d u e J a n u a ry 1 9 9 8 . I tw entunpai d, and paym entnegot i at i ons betw een D efe ndantand B r i dgevi ew ens ued. T hes e negot i at i ons dr agged on form onths w i thoutD efe ndantever t ender i ng val i d paym ent . O n O ct ober16, 1998, notl ong aft erB r i dgevi ew 2 in fo rm e d D e fe n d a n t o f its in ten tio n to a c c e ler a te th e lo a n a n d u lti m a tely fo re c lo se , D e fe n d a n t filed fo r C h a p ter 1 1 b a n k ru p tcy. D e fe n d a n t’s a ttem p ts to r eor gani ze unde rC hapt er11 pr ot ect i on pr oved uns ucce s s ful . A s a r es ul t , t he bankrupt cycour tconvert ed D efe ndant ’ s C hapt er11 bankrupt cyt o C hapt er7 on D ece m ber17, 1999. I n acc or dance w i t h C hapt er7 pr ocedur e, t he bankrupt cycourtappoi nt ed a tru ste e to liq u id a te D e fe n d a n t’s a ss e ts, in c lu d in g h is M e tro B a n k sto c k . D u e to FD I C rul es t hatr equi r e bank offi cer s and di r ect or s t o ow n s t ock i n the banks t hey serv e, D efen d an t fac ed rem o v al. A t a sp ec ial sh are h o lders’ m ee ti n g o n Jan u ary 1 9 , 1 9 9 9 , D efen d an t r esig n ed h is po sit ion , an d the M etroB an k b o ard o f d ir ec tors ra tifie d h is re s ig n a tio n .- 4-

D efe ndant ’ s s i x- countconvi ct i on ar os e outof fourtr ans act i ons — an aut om obi l e l oan, t w o i ndepende ntr eal es t at e l oans , and the att empt ed s al e of the M etr oB ank bui l di ng— conduct ed dur i ng D efe ndant ’ s bankrupt cy . D efe ndant in iti a ted th e se tra n sa c tio n s in a n a p p a re n t atte m p t to g e n e ra te f u n d s w ith w h ich to sati sfyh is sub stan ti al ou tst an d ing d eb ts. A s the su p erm ajoritysh are h o lder, D efe ndantr ece i ved di vi dends fr om M etr oB ank pr ofi t s . D efe ndanttypi cal l yt ook u p w ard o f n inetyp erc en t of the p rofit s in d ivide n d s. T h ese d ivide n d s w ere D efe ndant ’ s s ol e s our ce of i ncome. A . T he F i s cher A ut om obi l e L oan 1 . A u to m o b ile O w n e r sh ip In J a n u a ry 1 9 9 8 , th e O ffic e o f th e C o m p tr o lle r o f

th e C u rr e n c y(“ O C C ” ), a di vi s i on of the U ni t ed St at es T r eas uryD epart m entt as ked w i th s upervi s i ng the oper at i ons of fe der al l ychart er ed banks , l earned thatD efe ndanthad bee n dr i vi ng a 1995 M i t s ubi s hi E cl i ps e ow ned byM etr oB ank. M etr oB ank ac qui r ed the M i t s u b i s h i fo l l o wi n g i t s r e p o s s e s s i o n d u e t o a n u n r e l a t e d , u n p a i d l o a n . Th e OCC cr i t i ci zed D efe ndant ’ s per s onal us e of the vehi cl e w i thoutr ei m bur s i ng M etr oB ank for exp enses associ at ed w i t h it s use. Itdem and ed thatD efen dan tei ther r ei m bu rs e th e b a n k o r p u rc h a s e th e v e h ic le o u tr ig h t. D efe ndants el ect ed the l at t eropt i on. I n l at e J anuary1998, he pur chas ed the vehi cl e fr om M etr oB ank on cr edi tbyexec ut i ng a $9, 000 not e i n favorof- 5-

M etr oB ank w i t h M etr oB ank t aki ng a l i en aga i ns tthe vehi cl e. D efe ndant there af ter t im elym ad e the m o n thlyloan install m en t pay m en ts. In e arlyJan u ary 1999, how ever , D efe ndantappr oache d N ancyB ai nbr i dge, M etr oB ank’ s chi ef fin a n c ial o ffice r, ab o u t re v e rsin g th e lo a n a n d re tu rn in g th e v e h icle to M etr oB ank’ s pos s es s i on. M s . B ai nbr i dge i nform ed D efe ndantthatthe l oan re v e rs a l w a s n o t p o s s ib le . A t th a t p o in t, D e fe n d a n t in fo rm e d M s. B a in b rid g e th a t h e h a d fa iled to tit le t he vehi cl e i n hi s name. T he exi s t i ng t i t l e ce r t i fi cat e l i s t ed M etr oB ank as the ow neron t he fr onts i de, butt he bac k s i de bor e a not ar i zed a cknow l edgmentof the t r ans ferof ow ner s hi p t o D efe ndant . D efe ndantr eques t ed thatM s . B ai nbr i dge obt ai n a dupl i cat e t i t l e, w hi ch w oul d notbearnot ar i zed e vi dence of the pr evi ous tra n sfe r. D e fe n d a n t cla im e d th a t w ith th e d u p lica te title h e c o u ld p ro p e rlytit le th e v e h icle w ith o u t h a v in g to p a ya p e n a ltyfo r n o t h a v in g tit led th e v e h icle w i t hin the ti m e al l ott ed b yt he O klahom a dep artm ent of m otorveh i cl es. M s. B a in b ri d g e re f

u s e d D e fe n d a n t’ s re q u e s t. N evert hel es s , a t i t l e w as i s s ued on J anuary12, 1999, l i s t i ng M etr oB ank as t he ow nerof the vehi cl e. D es pi t e the t i t l e conf us i on, an O C C exami nert es t i fi ed th a t th e c a r in fa c t b e lo n g e d to D e fe n d a n t.

2. A ut om obi l e L oan In M a rc h 1 9 9 9 , D e fe n d a n t so ld th e M itsu b ish i fo r $ 1 0 ,0 0 0 to M ich e lleT he or i gi nal i ndi ctm ent , fi l ed on N ovember19, 2003, al s o char ged co- 3 defe ndantD avi d Sol om on i n fourof the s i x bank fr aud cha r ges . O n A pr i l 23, 2 0 0 4 , h o w e v e r, M r. S o lo m o n w a s d e e m e d in c o m p e ten t to sta n d trial. T h is r es ul t ed i n a s uper s edi ng i ndi ctm entfi l ed s om e t en mont hs l at er , on February16, 2005. T hati ndi ctm entcont i nued t o l i s tM r . Sol om on as a co- defe ndant , butt he count s w er e amended t o char ge onl yD efe ndantw i th the under l y i ng offe ns es r a t h e rt h a n c o n s p i r a c y.

- 6- Fi s cher , an acqua i nt ance of co- defe ndant D avi d Sol om on. D efe ndantr equi r ed 3 t hatM s . Fi s cherm ake a $1, 000 dow n paym ent . M s . Fi s cherobt ai ned the r emai ni ng $9, 000 fr om a M etr oB ank l oan i s s ued on M ar ch 19, 1999. M etr oB ank t ook a l i en aga i ns tt he vehi cl e, w hi ch had a K el l eyB l ue B ook val ue of be tw een $ 9 , 0 0 0 an d $ 1 0 , 0 0 0 . M r. S o lom o n ac ted a s a g u ara n tor. A ccor di ng t o C odyM acha l a, a j uni orl oan off i ceratM etr oB ank, D efe ndant as ked hi m t o exami ne M s . Fi s cher ’ s l oan appl i cat i on. M r . M acha l a’ s exami nat i on rev ea led th at bo th M s. F isch er a n d M r. S o lom o n h ad p o o r cred it . A s a re su lt , M r. M ac h ala “ d id n o t fee l com fo rt ab le m ak ing this l o an . ” (A p p . at 67 1 . ) M r. M acha l a, how ever , di d notexpl ai n hi s conce rns t o D efe ndantbeca us e he fel t“a little in tim id a ted ” b yD e fe n d a n t an d b e c a u se h e b e liev e d D e fe n d a n t w a n ted h im t o ma k e t h e l o a n . ( Ap p . a t6 7 2 . ) I n s t e a d , M r . M a c h a l a s o u g h tt h e a d v i c e o f t wo m or e s eni orM etr oB ank l oan off i cer s . T hos e l oan off i cer s both s t at ed that b ec au se th e a m o u n t of the lo an w as w ith in D efen d an t’ s len d ing au tho ri ty , M r. M ac h ala sh o u ld m ak e the loan . A t l ea st on e o f th e loa n o fficers ca u ti o n ed M r. M acha l a, how ever , t o putD efe ndant ’ s i ni t i al s on the pape rw or k t o s i gni fyt hat- 7-

D e fe n d a n t w a s in fa c t th e lo a n o ffic e r o f re c o rd . D efe ndanti nform ed M r . M acha l a t o di s tr i but e the l oan pr ocee ds t o tw o of D efe ndant ’ s out s t andi ng l oans w i th M etr oB ank. M r . M acha l a appl i ed $6, 476. 85 t o D efe ndant ’ s carl oan, compl et el ypay i ng off thatdebt . H e appl i ed the rem ainin g p roc ee d s p lus the $ 1 , 0 0 0 d o w n p ay m en t t o an o ther o f D efen d an t’ s l oan s. T his dis t ri bu t i on w as r ecorded on several offi ci al ban k fo rm s as w el l as a nons t andar d m emora ndum cr eat ed byM r . M acha l a forthe expr es s purpos e of det ai l i ng t he l oan pr ocee d di s t r i but i on “due t o w her e the pr ocee ds w er e goi ng. ” (A p p . a t 6 7 6 .) M s . Fi s chert i m el yt ender ed the fi r s tthr ee mont hl yl oan i ns t al l m ent pay m ents befo re default i ng . M r. S olom on then paid app roxi m at el yfou r m on ths’ w or t h of del i nquentpaym ent s befor e al s o defa ul t i ng. U l t i m at el y , M etr oB ank r epos s es s ed the M i t s ubi s hi and s ol d i tatauct i on for$7, 130. B . T he N el co R eal E s t at e L oan 1. T he T rans act i on I n ear l y1999, D efe ndantappr oache d M s . B ai nbr i dge s eeki ng advi ce r egar di ng t he pos s i bl e pur chas e byM etr oB ank of a 160- acr e tr acti n N ew cas t l e, O kl ahoma. D efe ndantexpl ai ned t o M s . B ai nbr i dge thatt he pr opertyr epr es ent ed a l ucr at i ve deve l opm entoppor tuni tygi ven the St at e’ s i nt ended i ns t al l at i on of a nearbytur npi ke. M s . B ai nbr i dge i nform ed D efe ndantt hatbanks w er e pr ohi bi t ed- 8-

fr om buy i ng and hol di ng l and forpurpos es of s pecul at i on. A r ound t hi s t i m e, M r . Sol om on i ntr oduced D efe ndantt o uni ndi ct ed cocons pi r at orN el s B ent s on, an entr epr eneurw ho ow ned a c hai n of s m al l - l oan and chec k- cas hi ng s ervi ce s t or es forw hi ch M r . Sol om on occa s i onal l yper form ed w o rk. D efen d an t, M r. S o lom o n , an d M r. B en tson ag ree d to p u rch ase the 1 6 0 -ac re p arc el an d turn itinto a h o u sing d ev elop m en t kn o w n as E d en E stat es. M r. B ent s on w as i n char ge of de vel opi ng E den Est at es , M r . Sol om on of m arket i ng and s e llin g th e d e v e lo p e d lo ts , a n d D e fe n d a n t o f fin a n c in g th e p roje c t. A t D e fe n d a n t’ s s u g g e s tio n , M r. B e n ts o n fo rm e d N e lc o , In c . (“ N e lc o ” ). N el co w oul d obt ai n a $500, 000 l oan fr om M etr oB ank i n or dert o pur chas e and dev el op t he p roperty . O f t he loan p roceeds, $3 52 , 00 0 w as ear m arked t o p urchase t he l and w i t h t he r emai ni ng funds avai l abl e t o dr aw upon as N el co i ncurr ed d e v e lo p m e n t co sts . A t so m e p o in t, M r. S o lo m o n w a s injec ted a s a n in ter m e d iate buy er . T he tr ans act i on t hen w as arr anged a s a doubl e- es cr ow cl os i ng s uch that M r. S o lo m o n w o u ld p u rc h a se th e lan d fo r $ 3 5 2 ,0 0 0 a n d im m e d iate lytra n sfe r it to N el co ata cos tof $1. 2 m i l l i on, a fi gur e appa r ent l yr epr es ent i ng a por t i on of the pr oper t y ’ s pos t - devel opm entval ue. I n r etur n, N el co w oul d i s s ue a $910, 000 p rom issoryn o te t o M r. S o lom o n , w h o in turn w o u ld se ll itto M etroB an k fo r a m er e $10, 000. T he pr opos ed l oan tr ans act i on w as pr es ent ed t o the M etr oB ank boar d ofD e fe n d a n t p re v io u slyp re se n ted a d iffe re n tlystru c tu re d lo a n tra n sa c tio n to 4 t he M etr oB ank l oan comm i t t ee on M ar ch 4, 1999. T he t erm s of thatt r ans act i on cal l ed fora $514, 000 l oan, w i t h $170, 000 goi ng t o pur chas e the l and, $200, 000 r etur ni ng t o M etr oB ank as a fi nder ’ s fee , and the r emai ni ng funds fi nanci ng the devel opm ent . T he l oan comm i t t ee e xpr es s ed doubt s overt he l and val uat i on and voi ced c oncerns overt he l egal i t yof col l ect i ng a fi nder ’ s fee . T hatm eet i ng adj our ned w i t houtvot i ng on t he tr ans act i on.

- 9- di r ect or s for appr oval on A pr i l 6, 1999. D es pi t e conc erns overt he val uat i on 4 at t ache d t o t he l and as w el l as t o the pr om i s s orynot e, t he boar d appr oved the l oan s ubj ectt o r emovi ng M r . Sol om on fr om t he tr ans act i on. T hi s condi t i onal appr oval w as pr om pt ed due t o M r . Sol om on’ s poorcr edi tand the pr es ence of t ax l i ens agai ns tM r . Sol om on t hatcoul d effectt he cha i n of t i t l e. A ccor di ng t o not es t aken b yM s. B a in b rid g e a t th a t m e e tin g , the b o a rd re f u se d to “ d e a l w ith D a v id Sol om on due t o hi s cr edi tr eport ” and r equi r ed “[ g] ood and cl eart i t l e. ” ( A pp. at 8 2 0 -2 1 .) Fol l ow i ng t hi s m eet i ng, on A pr i l 15, 1999, M r . Sol om on i ncorpor at ed T r ans T ech Pr opert i es , I nc. ( “Tra ns T ech” ) atD efe ndant ’ s s ugges t i on. T r ans T ech w as t hen s ubs t i tut ed as t he i nt erm edi arypur chas er . A l though a M etr oB ank empl oy ee pr epar ed a c r edi tm emora ndum det ai l i ng M r . Sol om on’ s ow ner s hi p of T ran sT ec h , itis no t cl ea r th at th is m em o ran d u m w as m ad e a v ail ab le t o the b o ard unt i l A pr i l 22, 1999, t he dayaft ert he N el co tr ans act i on cl os ed. I ti s cl eart hat boar d m ember s expr es s ed di s s at i s fac t i on overM r . Sol om on’ s cont i nued inv o lvem en t i n the tran sac ti o n w h en the issu e c am e u p at th e M ay1 3 , 1 9 9 9 b o ard- 10-

m eet i ng. 2. The Bank R e c or ds Y et , one mont h l at er , ata J une 23, 1999 boar d m eet i ng, t he boar d appr oved a ver s i on of the A pr i l 6, 1999 m eet i ng m i nut es t hatom i t t ed anym ent i on of the condi t i ons i m pos ed. C hr i s R auchs , an out s i de contr act or , had pr oduced w r i t t en dr aftm i nut es of the A pr i l 6 m eet i ng bas ed on a t ape r ecor di ng m ade of t hat m eet i ng. M s . R auch’ s i ni t i al dr aftl i s t ed the condi t i ons i m pos ed on the N el co l oan appr oval . D efe ndantt hen ca l l ed M s . R auchs t o r eques tt hats he del et e that p o rt io n o f

th e m in u te s a n d s h e c o m p lie d w ith th a t r e q u e s t. M etr oB ank l oan off

i cerV i r gi ni a Evans a l er t ed the O C C of the di s cr epanc y i n t he var i ous dr aftm i nut es dur i ng a s t andar d O C C r evi ew conduct ed on or ar ound J une 14, 1999. She di d notr eportt he di s cr epanc yt o the boar d of di r ect or s pr i ort o ordur i ng t he J une 23, 1999 boar d m eet i ng atw hi ch the al t er ed m i nut es w er e appr oved. C . T he R ei s i g R eal E s t at e L oan N el co’ s E den Est at e deve l opm entw as l ocat ed i n cl os e pr oxi m i tyt o other hous i ng devel opm ent s , i ncl udi ng M eadow vi ew E s t at es and O ak For es t , w hi ch w er e both devel oped byM . C . L and, a pr opertydevel opm entcompanyco- ow ned b yM ik e C a m p b e ll an d R o ss M o rris. M r. C a m p b e ll w a s a c q u a in ted w ith D efen d an t bec au se M etroB an k h ad p rov ided the finan cing fo r M ea d o w v iew ’s- 11-

devel opm ent . M r . C ampbel l al s o w as acqua i nt ed w i th M r . Sol om on, w hom he d e s c ri b e d a s D e fe n d a n t’ s “ e n v o y .” (A p p . a t 1 2 7 0 .) I n F a l l 1 9 9 9 , M r . S o l o mo n a p p r o a c h e d M r . Ca mp b e l l r e g a r d i n g M . C. L and ’s desi re t o sel l seven, unde veloped , on e-acr e l ots i n the O ak F orest devel opm ent . M r . Sol om on s t at ed thathe had l ocat ed a pot ent i al buy erw ho w as i nt er es t ed i n s t art i ng a pr oper t ydevel opm entbus i nes s . M r . C ampbel l i ndi cat ed t hathe w oul d s el l al l s even l ot s for$10, 000 perl ot , or$70, 000. A r ound t he s ame t i m e, M r . Sol om on appr oache d an ac quai nt ance , J on R e isig , ab o u t p u rc h a sin g th e se lo ts. M r. S o lo m o n in tro d u c e d M r. R e isig to D e fe n d a n t, w h o to ld M r. R e isig a b o u t th e p o ten tiallylu c ra tiv e o p p o rtu n ity pr es ent ed byt he O ak For es tl ot s . D efe ndantal s o t ol d M r . R ei s i g thatM etr oB ank w oul d pr ovi de anynece s s aryfi nanci ng. W i thouts eeki ng an appr ai s al or c o n d u c tin g a su rv e yo r e v e n se e in g e a c h lo t, M r. R e isig a g re e d to p u rc h a se a ll s even l ot s for$11, 500 perl ot , or$80, 500. M r . C ampbel l and M r . R ei s i g nevernegot i at ed w i th one another , s o nei ther w as aw ar e of the pr i ce di s par i t y . I ndeed, M r . R ei s i g w as underthe i m pr es s i on that $ 1 1 , 5 0 0 p er lot am o u n ted to $ 9 0 , 0 0 0 , the final sale p ri ce as se t byM r. Sol om on and D efe ndant . T he ent i r e tr ans act i on w as bas ed on or al pr om i s es ; the p a rties n e v e r e n ter e d in to a w ritten c o n tra c t. D e fe n d a n t as k e d Jo h n D e F re e s, M e tro B a n k ’s s e n io r le n d in g o ffice r, to pr epar e and pr es entt he l oan t o t he l oan comm i t t ee forappr oval . D efe ndantw as- 12-

unabl e t o do s o hi m s el f bec aus e the O C C had s us pended D efe ndant ’ s l endi ng author i t yfol l ow i ng hi s i s s uance of a numberof ques t i onabl e l oans . M r . D eFr ees pas s ed the l oan off

t o B ob O s bor ne, a l endi ng offi cerw i th m or e r eal es t at e l oan e x p e rie n c e . U n d e r th e ter m s o f lo a n , M e tro B a n k w o u ld lo a n $ 2 4 8 ,0 0 0 to R e isig E nt erpr i s es , a corpor at i on w hol l yow ned byJ on R ei s i g. T he t ot al l oan amount w as based o n $ 90 , 00 0 fo r the p urchase of the seven l ots , $8 2, 00 0 fo r the p urchase o f a m o d u lar sh o w h o m e , an d $ 7 6 ,0 0 0 fo r a re v o lv in g lin e o f c re d it fo r c o sts a ss o c iate d w ith b u ild in g h o m e s o n a n yso ld lo ts. T h e lo a n c o m m itt e e in iti a lly r ej ect ed the l oan. D efe ndant , M r . D eFr ees , and M r . O s borne then r ew or ked the pr opos al t o addr es s t he comm i t t ee’ s conce rns . O n D ece m ber9, 1999, the l oan w as agai n pr es ent ed t o t he l oan comm i t t ee, and appr oval w as gr ant ed. J us tbefor e the cl os i ng, D efe ndanti nform ed M r . D eFr ees that$40, 000 of th e $ 9 0 ,0 0 0 p u rc h a s e p ri c e w a s to b e d is tr ib u te d to T ra n s T e c h a s a fin d e r’ s fe e . M r. D e F re e s in fo rm e d M r. O sb o rn e , w h o h a d th e c lo sin g d o c u m e n ts c h a n g e d to r efl ectt hi s di s bur s ement . I n or dert o effectuat e thi s di s bur s ement , D efe ndanthad T ransTe ch insert ed as an i nterm ediarybu y er/ sel l er of the lot s. D espi t e t hese c h a n g e s , th e lo a n w a s n o t p re s e n te d to th e lo a n c o m m itte e fo r r e a p p ro v a l. M r. C am p b ell also w as n o ti fied o f a lastm inu te ch an g e. T h e d ayb efo re t he cl os i ng, M r . C ampbel l r ece i ved a t el ephone c al l fr om D efe ndanti nform i ng hi m t hatM r . R ei s i g’ s w i fe ha d “thr ow n a fi t ” overthe s al e pr i ce. ( A pp. at1275, 1276. ) A ccor di ng t o D efe ndant , M r . R ei s i g w as now w i l l i ng t o payonl y$7, 000T hes e l oans had a t ot al pr i nci pal val ue of a r ound $25, 000. M r . D eFr ees 5 tes tifie d th a t ch a rg e d -o ff lo a n s typ ica llyse ll fo r a ro u n d ten p e rc e n t o f th e ir p rin c ip a l v a lu e . M r. S o lo m o n p a id m o re th a n se v e n ty -fiv e p e rc e n t.

- 13- p er lot, o r $4 9 , 0 0 0 . M r. C am p b ell reluc tantlyag ree d to the n ew p ri ce . M r. R ei s i g and hi s w i fe t es t i fi ed thatD efe ndant ’ s r epr es ent at i ons w er e fa l s e. On De c e mb e r2 2 , 1 9 9 9 , t h e p a r t i e s me ta tM e tr o Ba n k fo rth e c l o s i n g . At t hatt i m e M r . C ampbel l beca m e aw ar e of Tr ans T ech’ s i nvol vement . H avi ng re c e iv e d h is p a ym e n t, h o w e v e r, h e s ig n e d th e a p p ro p ri a te d o c u m e n ts a n d le f t. M r. R e isig a p p a re n tlyre m a in e d u n a w a re o f T ra n sT e c h ’s in v o lv e m e n t an d its r ece i ptof $40, 000. M r . R ei s i g neverr ead the cl os i ng document s orr et ai ned c o u n se l to a ss ist in re v iew in g th e d e a l. Im m e d iate lya f

ter th e c lo sin g , M r. S o lo m o n g a v e ro u g h ly$ 1 9 ,0 0 0 to M e t r o Ba n k t o p u r c h a s e s i x , n o n p e r fo r mi n g , u n c o l l e c t i b l e l o a n s , o th e rwi s e k n o wn as char ged- off l oans . I n addi t i on, appr oxi m at el y$1, 600 w entt o m ake de l i nquent 5 p a ym e n ts o n th e F isc h e r c a r lo a n . M r. S o lo m o n a lso a ttem p ted to g iv e $ 1 0 ,0 0 0 to M r. R eisi g as re p ay m en t fo r a fail ed inv estm en t M r. R eisi g h ad m ad e a t M r. Sol om on’ s ur gi ng. D . T h e A tte m p te d B u ild in g S a le A s n o ted a b o v e , D e fe n d a n t’s C h a p ter 1 1 b a n k ru p tcy w a s c o n v e rte d to C h ap ter 7 o n D ec em b er 1 7 , 1 9 9 9 . P u rsua n t t o the b an k rup tcyco d e, th e C h ap ter 7 t rust ee att hat poi nt becam e t he st atutoryow ner of all D efen dan t ’s asset s,- 14-

i ncl udi ng hi s M etr oB ank s t ock. T he trus t ee i nform ed D efe ndanton J anuary4, 2000, t hata s peci al boar d m eet i ng w oul d be hel d on J anuary19. T hatm eet i ng w as s chedul ed i n or dert o di s cus s D efe ndant ’ s i nabi l i tyt o cont i nue t o s erve on the M etr oB ank boar d due t o hi s l ack of s t ock ow ner s hi p. O n J anuary11, 2000, D efe ndantcont act ed r eal es t at e att orneyK i r an Phans al kart o as s i s ti n t he s al e of M etr oB ank bui l di ng. D efe ndantr epr es ent ed t hathe had a ut hor i t yt o s el l t he bank bui l di ng and thatthe s al e w as ai m ed at a c h iev in g tax b re a k s. A lth o u g h th e b o a rd h a d g ra n ted D e fe n d a n t au th o rityto expl or e the s al e of ba nk as s et s near l yone mont h ear l i er , thatauthor i tyw as condi t i oned on obt ai ni ng r egul at oryappr oval fr om the O C C pr i ort o effectuat i ng anys al e. A ta meet i ng atM r . Phans al kar ’ s offi ce on J anuary17, 2000, D efe ndant i nform ed M r . Phans al kart hatO kl ahoma C entr al R ai l r oad ( “O C R R ”) , a company w hol l yow ned byD efe ndant ’ s w i fe, w oul d be the pur chas er . M r . Phans al kar expr es s ed conc erns aboutt he i ns i de natur e of the tr ans act i on, butw as r eas s ur ed byD efe ndantabouthi s author i t yt o conductthe s al e. M r . Phans al karl at er l earned thatO C R R ’ s corpor at e s t atus had bee n s us pended, m eani ng i tw as not l egall yable t o co nd uct busi ness ope rat i on s. A ccor di ng t o t he t erm s of the tr ans act i on, O C R R w oul d buythe bui l di ng on c r e d i tfo r$ 2 mi l l i o n , b u two u l d o n l yma k e a $ 1 0 , 0 0 0 d o wn p a yme n t . OCRR w oul d t hen l eas e the bui l di ng back t o M etr oB ank ata mont hl yr entof $20, 000 for a per i od of tw enty - fi ve y ear s . A ccor di ng t o D efe ndant ’ s w i fe, O C R R di d not- 15-

have the funds t o effectuat e the s al e. D efe ndantatt empt ed t o arr ange the fi nanci ng t hr ough O l d St andar d L i fe I ns ur ance ( “O l d St andar d”) . D efe ndanthad hi s w i fe s i gn a che ck t o O l d St andar d for$10, 000 i n excha nge fora comm i t m ent l et t er r egardi ng a $2 m i l l i on l oan . T hat com m i t m ent never cam e. N evertheles s, D efe ndantand hi s w i fe s i gned al l the nec es s arys al e document s on J anuary18, 2000, t he ni ghtbefor e the s peci al s har ehol der ’ s m eet i ng. A tD efe ndant ’ s ur gi ng, M r . Phans al karpl ace d t he document s i n es cr ow s ubj ectt o cl os i ng. U nbeknow ns tt o M r . Phans al kar , the nextdaythe M etr oB ank boar d of di r ect or s r emoved D efe ndantfr om the boar d and r el i eved hi m of hi s r ol e atthe bank. A tno poi nti n t hatm eet i ng di d D efe ndantadvi s e the boar d of the i m pendi ng s al e. T w o day s l at er , the i ncomi ng M etr oB ank pr es i dentl earned of the at t empt ed s al e. H e i m m edi at el ycont act ed M r . Phans al karand s t opped the t r ans act i on. A N A LY S IS I . Suffi ci ency of t he E vi dence W e revi ew suffici encyof the evidence ch al l eng es de novo t o det erm i ne w hether , vi ew i ng t he evi dence i n the l i ghtm os tfavor abl e t o the governm ent , any ra tio n a l trier o f

fa c t co u ld h a v e fo u n d th e d e fe n d a n t g u iltyb e y o n d a re a so n a b le d o u b t. Uni t ed Stat es v. Yehl i ng , 4 5 6 F . 3 d 1 2 3 6 , 1 2 4 0 ( 1 0 th C i r . 2 0 0 6 ) . We c o n sid e r b o th d ire c t an d c irc u m sta n tial e v id e n c e , tog e th e r w ith th e re a so n a b le- 16-

in fe re n c e s to b e d ra w n th e re f ro m . Id. W e do not , how ever , w ei gh confl i ct i ng e v id e n c e o r c o n s id e r w itn e s s c re d ib ility. Id. We a l s o g e n e r a l l yr e v i e w de novo a di s tr i ctcour t ’ s deni al of a mot i on for ju d g m e n t o f

a c q u itta l. Uni t ed Stat es v. Appers on , 4 4 1 F . 3 d 1 1 6 2 , 1 2 0 9 (10 th C ir . 2 0 0 6 ). T h is ci rcu it , h o w ev er, fo ll o w s the w aive r rule. U n d er tha t ru le, “‘a d efen d an t w h o m o v ed fo r a jud g m en t of ac q u ittal at th e c lose o f th e g o v ern m en t’ s c a se m u st m o v e a g a in fo r a ju d g m e n t o f a c q u itt a l at th e c lo se o f th e e n tire c a se if he ther eaf

t eri nt r oduces evi dence i n hi s defe ns e. ’ ” Un itedS ta tes v . B o w ie , 892 F. 2d 1494, 1496 ( 10t h C i r . 1990) ( quot i ng Uni t ed Stat es v. Lopez , 576 F. 2d 840, 842 ( 10t h C i r . 1978) . B eca us e D efe ndantfai l ed t o r eaffi r m hi s m ot i on for ju d g m e n t o f

a c q u itt a l af

ter tes tify in g in h is o w n d e fe n se , w e re v iew fo r p lain e rr o r u n d e r F e d . R . C ri m . P . 5 2 (b ). Id. T he ana l y s i s , how ever , i s “es s ent i al l yt he s a m e ” a s u n d e r s u ffic ie n c yo f th e e v id e n c e . Id. A . § 656 A c o n v ic tio n fo r w illf u l m is a p p lic a tio n o f

b a n k f u n d s u n d e r 1 8 U .S .C . § 656 r equi r es t he governm entt o pr ove that( 1) t he defendantw as a bank offi ceror di r ect or( 2) of a na t i onal orfede r al l yi ns ur ed bank ( 3) fr om w hi ch the defendant w i l l ful l ym i s appl i ed funds and ( 4) t hatt he defendantact ed w i th i nt entt o i nj ur e or d e f ra u d th e b a n k . Uni t ed Stat es v. R ackley , 9 8 6 F . 2 d 1 3 5 7 , 1 3 6 1 (10 th C ir . 1993) . A l t hough “i nt entt o i nj ur e ordefr aud” i s notan expl i ci ts t atut oryel ement- 17-

of § 656, t he C our t s of A ppeal s al l agr ee that“i nt entt o i nj ur e ordefr aud” mustbe e s ta b lis h e d . See Bat es v. Uni t ed Stat es , 5 2 2 U .S . 2 3 , 3 0 n .4 (c o lle c tin g c a s e s ). T h is c o u rt h a s s tate d th a t ev id e n c e o f a n “ in ten t to d e c e iv e ” m a yb e su fficie n t, i n cert ai n ci r cumst ance s , t o s uppl ythe nec es s arypr oof of c r i m i nal i nt entr equi r ed u n d e r § 6 5 6 . United S tates v. Harenb erg , 7 3 2 F . 2 d 1 5 0 7 , 1 5 1 1 -12 (10 th C ir . 1984) ( r el y i ng upon i m pl i ci thol di ng of United S tates v. Tw i f ord , 600 F. 2d 1339, 1 3 4 1 (10 th C ir . 1 9 7 9 )). D e fe n d a n t as se rts th a t h is c o n v ictio n “ e x ten d s th e m isa p p lica tio n sta tu te in an unpr ece dent ed fa s hi on” ( A ppel l ant ’ s B r . at22) beca us e ther e w as i ns uffi ci ent evi dence of hi s i nt entt o conce al the us e of the funds ati s s ue.

1. T he F i s cher A ut om obi l e L oan A ccor di ng t o D efe ndant , t he fa ctt hathe truthful l yand openl ydi s cl os ed the Fi s cherl oan pr ocee ds i n t he l oan document s r ender s m i s appl i cat i on i m pos s i bl e as a ma t t e ro f

l a w. T h e u s e o f

t h e F i s c h e rl o a n p r o c e e d s t o p a yo ff De fe n d a n t ’ s o wn carl oan as w el l as ot herM etr oB ank debt s w as s t at ed on the fa ce of t he l oan d o cu m en ts. In a d d it ion , M r. M ac h ala c rea ted a sep ara te, n o n stan d ard m emora ndum det ai l i ng t he di s bur s ement s . T hi s m ade D efe ndant ’ s per s onal b e n e fit r e a d ily a p p a re n t to a n y o n e re v ie w in g th e lo a n file . T he governm entpoi nt s outt hat“t o be convi ct ed under§ 656, a defendant need nothave made a fal s e s t at ementorr epr es ent at i on. ” Uni t ed Stat es v.- 18-

Haddock , 9 6 1 F . 2 d 9 3 3 , 9 3 5 (10 th C ir . 1 9 9 2 ). R athe r, u n d er the g o v ern m en t’ s t heory , D efe ndanti nt ended t o defr aud M etr oB ank s i m pl ybygr ant i ng a l oan t o an u n cre d itw o rth yb o rrow er. T h e ind ict m en t cha rge d D efen d an t w ith “c au s[in g ] a carl oan t o be made t o a borr ow er , w ho coul d nototherw i s e qual i fyforthe l oan, and then us [i ng] t he pr ocee ds forhi s ow n per s onal benef i t . ” ( A pp. at61, C ount 1, ¶ 3. ) T he pr os ecut or ’ s s ynops i s of m i s appl i cat i on i n hercl os i ng ar gum ent b e a rs s tr ik in g s im ila ri ty: “ M is a p p lic a tio n o c c u rs . . . w h e n . . . a lo a n o ffic e r . . . pr ovi des a l oan t o an i ndi vi dual w ho i s notcr edi tw or thyforhi s ow n per s onal b en efit . ” (A p p . at 19 6 1 . ) T h u s, the q u esti o n b efo re the co u rtis w h ethe r a defe ndantw ho gr ant s a l oan t o an uncr edi tw or thyborr ow erpos s es s es the n e c e ss a ryc rim in a l in ten t to b e g u iltyo f w ill f u l m isa p p lica tio n w h e re th e b a n k is fu ll yaw are o f th e b o rrow er’s p o o r cred ith ist o ryan d w h ere the d efen d an t’ s per s onal benef

i ti s ful l ydi s cl os ed. T he t erm “w i l l ful m i s appl i cat i on” has “no s et t l ed t echni cal m eani ng, ” but

“ w a s in ten d e d to in c lu d e a c ts n o t co v e re d b yth e w o rd s ‘e m b e z z le’ o r ‘a b stra c t’ as s uch ar e us ed i n t he s t atut e. ” Uni t ed Stat es v. K i ng , 4 8 4 F .2 d 9 2 4 , 9 2 6 (1 0 th C i r . 1973) . H ow ever , “‘ m i s appl i cat i on has been di s t i ngui s hed fr om

‘ m al admi ni s t r at i on. ’ ” Id. ; s ee als o Uni t ed Stat es v. B las i ni - Ll uber as , 169 F. 3d 57, 63 ( 1s tC i r . 1999) ( not i ng t hatuncert ai n defi ni t i on of w i l l ful m i s appl i cat i on has “pos ed a c hal l enge t o court s att empt i ng t o di s t i ngui s h bad j udgm entfr om bad conductt hati s i l l egal ”) . I n Un itedS ta tes v . D a v is , th i s c o u r ti l l u s tr a t e d two- 19-

e x a m p les o f

m isa p p lica tio n in re latio n to 1 8 U .S .C . § 6 5 7 , a p a ra llel sta tu te go verni ng m i sappli cat i on atfede ral savi ng s and loan inst i tuti on s: M i s appl i cat i on m ayoccurw hen an offi cer , di r ect or , empl oy ee or ot herper s on s ubj ectt o t he s t atut e know i ngl yl ends m oneyt o a s ham b o r r o we ro rc a u s e s a l l o rp a r to f th e l o a n t o b e ma d e fo rh i s o wn benef i tw hi l e conc eal i ng hi s i nt er es tfr om the bank. M i s appl i cat i on of funds “occ ur s w hen funds ar e di s tr i but ed undera r ecor d w hi ch m i s r epr es ent s t he true s t at e of the r ecor d w i th the i nt entthatbank offi ci al s, ban k ex am i ners, or the [F D IC ] w i l l be d ecei ved . ” T hu s, w h e n a p e rso n w ith in th e a m b it o f § 6 5 7 re c e iv e s m a ter ial b e n e fits of l oans w i t houtdi s cl os i ng thi s fac t , m i s appl i cat i on has occurr ed. 953 F. 2d 1482, 1493 ( 10t h C i r . 1992) ( quot at i ons and ci t at i ons om i t t ed) . U nder bot h exampl es , conce al m entof a pe r s onal s t ake i s cruci al . Si m i l ar l y , i n R ackley , 986 F. 2d at1361, w e hel d t hata bank c oul d be def r auded unde r§ 656 even w hen som e ban k em ploy ees kne w abo ut the n ature of the transact i on s if the defendant fai l ed t o “di s cl os [e hi s ] i nt er es ton the l oan document s , ther ebyfl out i ng banki ng rul es and r egul at i ons des i gned t o pr ot ectthe fi nanci al i nt egr i tyof the bank. ” D efe ndantar gues t hatw hi l e § 656 does notr equi r e a fal s e s t at ementor re p re se n tatio n , itd o e s re q u ire a t lea st s o m e a ttem p t at c o n c e a lm e n t. A b se n t th a t, D efe ndantar gues t hathi s ful l ydi s cl os ed i nvol vementi n a l oan t o an u n c re d itw o rt h yin d iv id u a l c a n n o t s a tis f yth e in te n t to inju re o r d e f ra u d e le m e n t. In d e e d , the ju ryw a s in stru c ted th a t “in ten t to d e f ra u d ” re q u ire s “ th e sp e c ific i nt entt o dece i ve orchea t ” ( A pp. at120) , and the governm entdoes notar gue that t his i nst ruct i on w as erroneou s. E ven the case o n w hich the g ov ernm ent r el i es, Uni t ed Stat es v. Unr uh , 8 5 5 F . 2 d 1 3 6 3 , 1 3 7 5 (9th C ir . 1 9 8 7 ), ind icates tha t m o reW e n o te th a t m a n yo p in io n s c o n fla te th e re c ita tio n o f th e la w . See , e. g. , 6 G olden v. Uni t ed Stat es , 3 1 8 F . 2 d 3 5 7 , 3 6 0 -61 (1st C ir . 1 9 6 3 ) (up h o lding jury i ns t ruct i on and not i ng t hati ns t ruct i on s t at ed pr opert es tfori nt entt o i nj ur e or d e f ra u d a s “ w h e th e r o r n o t th e b a n k w a s d e f ra u d e d o f

so m e th in g , d e f

ra u d e d o f

its r i g h tt o h a v e c u s t o d yo f [ i t s ] f u n d s , t h e r i g h to f

t h e b a n k t o ma k e i t s o wn deci s i ons as t o how t hes e funds w er e t o be us ed, and t o actunderother r egul at i ons pr om ul gat ed i n pr ot ect i on of banki ng”) . N everthel es s , t he maj or i t yof opi ni ons conductt he fa ctual appl i cat i on of i nt entt o i nj ur e and i nt entt o defr aud s e p a ra te ly. See , e. g. , Uni t ed Stat es v. E vans , 4 2 F .3 d 5 8 6 , 5 9 0 (1 0 th C ir . 1 9 9 4 ).

- 20- i s r equi r ed than j us ts how i ng t hatthe defendantm ade a l oan t o an uncr edi tw or t hy i ndi vi dual : “The cr edi t w or t hi nes s of the borr ow er s i s r el evantbeca us e a ba nk o ffic e r w h o , w i th int ent to d ef raudor i njure , m a k e s lo a n s to ‘fin a n c ially i ncapa bl e’ i ndi vi dual s i s gui l t yof m i s appl i cat i on of bank f unds . ” Id. (e m p h a sis a d d e d ); se e a lso id . at1371 ( not i ng thatdi ffe r ence betw een uphe l d and over tur ned § 656 convi ct i ons w as l ack of bank r ecor d fal s i fi cat i on i n overtur ned co n v ict ion ). W e a g re e w ith o u r sis ter c irc u its th a t th e in ten t to inju re a n d th e in ten t to defraud are dis t i nct op t i on s un der § 65 6 viol at i on s. See Uni t ed Stat es v. Lung 6 Fong C hen , 393 F. 3d 139, 145- 46 ( 2d C i r . 2004) ( “Sect i on 656’ s i nt ent req u ir em en t i s p rop erlyrea d in the d isj u n cti v e a n d thu s p roo f o f in tent to injure or d e f ra u d is s u fficie n t to su p p o rt a c o n v ictio n .”); Va la n si v . A sh c ro ft , 278 F. 3d 2 0 3 , 2 1 0 (3 d C ir. 2 0 0 2 ) (s tatin g th a t in ten t “m a yb e sh o w n e ith e r b yin ten t to inju re o r in ten t to d e f ra u d ” ); United S tates v. C astro , 8 8 7 F . 2 d 9 8 8 , 9 9 5 (9th C ir . 1989) ( “I nt entt o i nj ur e nee d notbe s how n i f ther e i s i nt entt o dece i ve or- 21-

d e f ra u d .”); Uni t ed Stat es v. A ngel os , 7 6 3 F .2 d 8 5 9 , 8 6 1 (7 th C ir. 1 9 8 5 ) (“ [ I]t is im p o rta n t to d istin g u ish b e tw e e n in ten t to inju re a n d in ten t to d e f ra u d ; eith e r w ill d o , an d th e ya re n o t th e sa m e .”). P ro v in g th a t a d e fe n d a n t ac ted w ith th e in ten t to defr aud r equi r es evi dence of an i nt entt o dece i ve, s uch as “mi s r epr es ent [i ng] the purpos e of the l oan, ” B l as i ni - Ll uber as , 169 F. 3d at64, or“conc eal i ng vi t al i nform at i on, ” Un itedS ta tes v . Wa tts , 1 2 2 F e d . A p p ’x 2 3 3 , 2 3 9 (6 th C ir . 2 0 0 5 ). See , e. g. , Uni t ed Stat es v. G i r aldi , 86 F. 3d 1368, 1377 ( 5th C i r . 1996) ( appr ovi ng ju ryin stru c tio n sta tin g th a t “in ten t to d e f ra u d m e a n s to a c t w ith a n in ten t to dece i ve orchea ts om eone, or di nar i l yforthe purpos e of c aus i ng s om e fi nance [s i c] l os s t o anotherorbr i ngi ng abouts om e fi nanci al gai n t o ones el f” ( al t er at i on i n or i gi nal ) ) . T o pr ove an i nt entt o i nj ur e, the pr os ecut orm us ts how thatthe defe ndantknow i ngl ycomm i t t ed a vol unt aryact , the “na tur al t endenc yof w hi ch w oul d be t o i nj ur e the bank, ” r egar dl es s of w hetherthe defendanthad a

“ s u bje c tiv e in te n t” to h a rm th e b a n k . Uni t ed Stat es v. B r uun , 809 F. 2d 397, 408 (7 th C ir. 1 9 8 7 ) (c o llec tin g c a se s); cf . E vans , 42 F. 3d at590 ( us i ng phr as es “natur al t endenc y. . . coul d nothave be en t o i nj ur e” a nd “t ended t o i nj ur e” w ith o u t c le a rl yd is tin g u is h in g in te n t to inju re f ro m in te n t to d e f

ra u d ). T he governm enthas fai l ed t o es t abl i s h thatD efe ndantact ed w i th an i nt ent t o defr aud M etr oB ank. T he l oan fi l e cont ai ned al l the appr opr i at e document at i on, a s w e ll a s a d d itio n a l in fo rm a tio n s p e c ific a lly d e ta ilin g D e fe n d a n t’ s b e n e fit. D efe ndantm ade no a t t empt t o conce al the l oan, the borr ow er ’ s poorcr edi t , ort he- 22-

di s bur s ementof l oan pr ocee ds . A l though D efe ndantexer ci s ed contr ol overthe bank empl oy ees and enc our aged them t o i s s ue a que s t i onabl e l oan, the governm entpr es ent ed no evi dence thatD efe ndantt amper ed i n anyw ayw i th the lo a n o r m is le d th e b a n k o r i ts e m p lo y e e s . C f . Haddock , 961 F. 2d at935 ( fi ndi ng m i s appl i cat i on w her e bank pr es i dentdefe ndant ’ s “s ubs t ant i al contr ol ” overbank e m p lo y e e s a n d “ o v e r m u c h o f w h a t o c c u rre d a t th e b a n k ” p re v e n ted h is m a ss iv e ly over dr aw n chec k fr om bounci ng fornear l ytw o w eeks ) . R ather , D efe ndant handed the l oan t o M r . M acha l a forr evi ew des pi t e hi m s el f pos s es s i ng the author i t yt o i s s ue the l oan w i t houtl oan comm i t t ee orboar d appr oval , thus m aki ng th e tr a n s a c tio n th a t m u c h m o re tr a n s p a re n t. T he governm entci t es t o D efe ndant ’ s i nappr opr i at e per s onal us e of the vehi cl e, hi s r eques tt o r ever s e hi s ow n carl oan, hi s appl i cat i on fordupl i cat e t i t l e, and his earl yl i en rel ease as evi den ce of m i sappli cat i on . S om e or al l of these a c tio n s m a yc o n stitu te m isa p p lica tio n in a n d o f th e m se lv e s, b u t th e se a c tio n s d id notform t he bas i s of the mi s appl i cat i on char ge forw hi ch D efe ndantw as convi ct ed. A nd w hi l e thes e fa ct s cert ai nl yi ndi cat e D efe ndant ’ s des i r e t o be fr ee fr om hi s l oan obl i gat i on, t heydo nots how thathe had a nyi nt entt o defr aud M e tr o B a n k b yis s u in g th e F is c h e r l o a n . See Uni t ed Stat es v. Val adez - G al l egos , 162 F. 3d 1256, 1262 ( 10t h C i r . 1998) ( “[W ] e maynotuphol d a convi ct i on o b ta in e d b yp ilin g in fe re n c e u p o n in fe re n c e .” ). N o r d id th e g o v e rn m e n t p ro d u c e a n ye v id e n c e o f D e fe n d a n t’s in ten t to- 23-

i nj ur e M etr oB ank. W hat everD efe ndant ’ s m ot i vat i on, w e ca nnots aythatthe F is c h e r l o a n p o s e d a n “ in d e fe n s ib le ri s k ” to M e tr o B a n k . K i ng , 484 F. 2d at927 ( quot at i on om i t t ed) . M s . Fi s cherw as cogni zantof herl oan obl i gat i on, and the t es t i m onyes t abl i s hes t hatt he l oan w as adequa t el ycol l at er al i zed. W e r ecogni ze th a t ce rta in c a se s w ith in th is c irc u it h a v e h in ted th a t a b o rro w e r’s a d v e rse c re d it h is to ry m a yin flu e n c e a m is a p p lic a tio n d e te rm in a tio n . See , e. g. , E vans , 42 F. 3d at 590. H ow ever , t he part i es have notal er t ed us t o anycas e hol di ng thatthe bor r ow er ’ s i nadequa t e cr edi ti s s uffi ci enti n and of i t s el f t o s us t ai n a convi ct i on, norhave w e l ocat ed anys uch ca s e. A ccor di ngl y , w e w i l l notext end the r eac h of § 656 byr eadi ng i ts o br oadl yt hatw e cr i m i nal i ze the maki ng of a l oan t o an uncr edi t w or t hyi ndi vi dual even w her e a pe r s onal benef i ti s der i ved abs entfur ther ci rcum st ances.

2. T he R ei s i g R eal E s t at e L oan W h e th e r D e fe n d a n t p o ss e ss e d th e in ten t to inju re o r d e f ra u d M e tro B a n k is a l s o c e n t r a l t o De fe n d a n t ’ s c o n v i c t i o n fo rmi s a p p l i c a t i o n o n t h e Re i s i g l o a n . As b e fo re , the n a tu re o f

th e lo a n m a k e s a n a ly sis o f th e m isa p p lica tio n sta tu te diffi cult . T he g ov ernm ent ar gu es that D efen dan t“used h i s posi t i on t o p ush t hr ough a l oan” ( A ppel l ee’ s B r . at19) and thatt he ent i r e tr ans act i on w as “r i fe w i t h dece pt i on” ( i d. a t 2 3 ). W e a g re e th a t d e c e p tio n p layed a m ajo r ro le in th is t r ans act i on. T he evi dence att r i al , how ever , pr edomi nat el yfocus ed on- 24-

D efe ndant ’ s al l eged f r aud aga i ns tM r . C ampbel l and M r . R ei s i g i n r el at i on t o t he sal e and pu rchase pri ce dis pari t y . T he g ov ernm ent’ s at t em pt t o est abli sh m i s appl i cat i on byboot s t r appi ng fr om thatfr aud l eave s a l i m i t ed r ecor d of pr oof s uppor t i ng D efe ndant ’ s i nt entt o i nj ur e ordefr aud M etr oB ank. Y e t, th a t re c o rd is s u fficie n t to u p h o ld D e fe n d a n t’s c o n v ictio n o n th is count . Fr om t he i ncept i on of thi s deal , D efe ndantcaus ed M etr oB ank t o i s s ue a l oan i n exce s s of the s al e val ue byi nfl at i ng the s al e pr i ce. T hatdi s par i tyw as h e ig h te n e d b yD e fe n d a n t’ s s u rr e p titio u s , la s t- m in u te rejig g e ri n g o f th e s a le p ri c e . M r . C ampbel l , M r . R ei s i g, and, m os ti m por t ant l y , M etr oB ank, w er e unw i t t i ng d u p e s . T rue, t he $40, 000 benef i tt o T r ans T ech w as ful l ydi s cl os ed i n the l oan d o cu m en ts. H o w ev er, th e testi m o n yestab li sh ed that the M etroB an k b o ard p re v io u s ly h a d re f

u s e d to d e a l w ith M r. S o lo m o n a n d , b yim p lic a tio n , T ra n s T e c h . A s a r es ul t , D efe ndant ’ s l as t - m i nut e i ns er t i on of Tra ns T ech c oul d have l ed the j ur yt o i nfert hatD efe ndantw as gener at i ng i ncome forhi m s el f and M r . Sol om on att he bank’ s expens e i n a mannerdes i gned t o keep the l oan comm i t t ee a nd the boar d i n t he dark. In d e e d , D e fe n d a n t in se rte d T ra n sT e c h a s a n in ter m e d iar yb u y e r/se ller in or dert o have a vehi cl e thr ough w hi ch t o w i thdr aw thos e funds . D efe ndant s ki m m ed the moneyoff the l oan tr ans act i on i n or dert o funnel i tt o M r . Sol om on and hi m s el f. D efe ndanthad M r . Sol om on us e $21, 000 t o pur chas e cha r ged- off- 25-

lo a n s a n d p a yo ff

o v e rd u e lo a n b a lan c e s in a n e ffo rt to m a k e it ap p e a r a s if M et roB ank had gen erat ed incom e from w hich D efen dan tcou l d take di vidends. T he r emai nderof the moneyfl ow ed di r ect l youtof the bank: $10, 000 w entback to M r. R e isig to c o v e r a d e b t M r. S o lo m o n in c u rre d , ro u g h ly$ 1 ,0 0 0 w e n t to u n ind ict ed co -co n sp ir ator B en tson , an d so m e $ 6 , 0 0 0 w en t i n to M r. S o lom o n ’s p o c k e t. D efe ndant ’ s act i ons i n pus hi ng thr ough a fr audul entl oan pos ed an

“ in d e fe n s ib le ri s k ” o f d e fa u lt to M e tr o B a n k . K i ng , 484 F. 2d at927 ( quot at i on o m itt e d ). C o llate ra liza tio n a n d c re d itw o rth in e ss a sid e , b yly in g a b o u t th e sa le pr i ce t o al l par t i es i nvol ved i n or dert o carve outfunds forhi s per s onal us e, D efe ndantcaus ed M etr oB ank t o payout$40, 000 that , upon di s coveryof the rus e, wo u l d l i k e l yn e v e rb e p a i d b a c k . W e a r e c o n v i n c e d , th e r e fo r e , th a tth e s c h e me w as notonl ydone w i t h t he i nt entt o defr aud M etr oB ank, butal s o thati tw as l i kel yt o caus e i nj ur yt o t he bank. B . § 1344( 1) U nder18 U . S. C . § 1344( 1) , t he governm entm us tpr ove that : ( 1) t he d e fe n d a n t k n o w in g lye x e c u ted o r a ttem p ted to e x e c u te a sc h e m e o r a rtific e to defr aud a f

i nanci al i ns t i tut i on; ( 2) t he defendanthad the i nt entt o defr aud a fin a n c ia l in s titu tio n ; a n d (3 ) t h e b a n k in v o lv e d w a s fe d e ra lly in s u re d . Uni t ed Stat es v. Waldr oop , 431 F. 3d 736, 741 ( 10th C i r . 2005) . C ons i s t entw i th the- 26-

comm on l aw defi ni t i on of “f r aud, ” § 1344( 1) r equi r es “a mi s r epr es ent at i on or conce al m entof m a ter ia l fac t . ” Nederv. Uni t ed Stat es , 5 2 7 U . S . 1 , 2 2 (19 9 9 ).

“ S e c tio n 1 3 4 4 w a s in ten d e d to re a c h a w id e ra n g e o f f ra u d u len t ac tiv ity t hatunderm i nes t he i nt egr i t yof the fe der al banki ng s y s t em. ” R ackley , 986 F. 2d at1361. A ccor di ngl y , “court s have l i ber al l ycons trued the s t atut e. ” Uni t ed Stat es v. B er nar ds , 166 F. 3d 348 ( 10t h C i r . 1998) ( t abl e) ( “‘ T he br oad r ange of s chemes cover ed byt he s t atut e i s l i m i t ed onl ybya cr i m i nal ’ s cr eat i vi ty . ’ ” ( quot i ng Uni t ed Stat es v. Nor t on , 1 0 8 F .3 d 1 3 3 , 1 3 5 (7 th C ir . 1 9 9 7 )) ).

1. T he N el co R eal E s t at e L oan D efe ndantar gues t hatt he N el co l oan w as “an e conomi cal l ys ound l oan that benef i t t ed the bank a nd br oughtD efe ndantno per s onal gai n. ” ( A ppel l ant ’ s B r . at 34. ) C ons i s t entw i t h t he court s ’ br oad r eadi ng of the s t atut e, as out l i ned above , as w el l as t he s t atut e’ s expr es s purpos e of puni s hi ng the s cheme t o defr aud and n o t th e c o m p le te d f

ra u d , th e g o v e rn m e n t n e e d n o t p ro v e d a m a g e s . Neder , 527 U . S. at25. D e fe n d a n t f

u rth e r a rg u e s th a t th e fin a l term s o f th e N e lco lo a n w e re f u lly d is c lo s e d a n d th a t th e M e tr o B a n k b o a rd “ in d is p u ta b ly ap p ro v e d ” th e lo a n . ( A ppel l ant ’ s B r . at34. ) D efe ndantal s o ar gues t hatt he boar d’ s onl yr eas on for re m o v in g M r. S o lo m o n w a s d u e to th e p re se n c e o f tax lien s a g a in st h im th a t co u ld h av e c lou d ed the c h ain o f ti tl e. A cc o rdin g to D efen d an t, b yrep lacing M r.- 27-

S o lo m o n w ith T ra n s T e c h h e a d e q u a te ly ad d re s s e d th a t c o n c e rn . T h e re is s u b sta n tial e v id e n c e , h o w e v e r, th a t th e b o a rd c o n d iti o n e d its app roval of the N el co loan n ot onl yon the recei pt of go od and cl ear t i t l e, bu tal so on t he r emoval of M r . Sol om on fr om the tr ans act i on. T he l at t erconce rn w as spurr ed b yM r. S olom on ’s po or cr edithis t oryand patt ern of b ad b usi ness pr act i ces . T he j ur yhear d t es t i m onyr egar di ng thi s conce rn fr om s ever al M etr oB ank boar d m ember s and empl oy ees . I tal s o s aw document aryevi dence e x p re s s ly sta tin g th is c o n d itio n . A s t he evi dence s uffi ci ent l yes t abl i s hes , D efe ndants chemed t o defr aud M etr oB ank byconce al i ng M r . Sol om on’ s cont i nued i nvol vementi n the tr a n s a c tio n . S e e Un itedS ta tes v . Hill , 197 F. 3d 436, 444 ( 10th C i r . 1999) ( “[T] he phr as e ‘ s cheme orart i fi ce t o defr aud’ s i m pl yr equi r es a des i gn, pl an, ori ngeni ous contr i vance ordevi ce t o defr aud. ”) . Fol l ow i ng the A pr i l 6, 1999 boar d m eet i ng at w h ich th ese co n d it ion s w ere im p o sed , D efen d an t cau sed an att o rne yto p rep are p ap ers inc o rpo rati n g T ran sT ec h w ith M r. S o lom o n as it s so le sh are h o lder. M r. Sol om on s i gned the i ncorpor at i on paper s on A pr i l 15, 1999. D efe ndantthen had a M etroB an k em p loy ee p rep are a c red itm em o ran d u m clea rl yli sti n g T ran sT ec h ’s in v o lv e m e n t in th e N e lco lo a n a n d id e n tify in g M r. S o lo m o n a s T ra n sT e c h ’s s o le ow ner . T hatcr edi tm emora ndum w as s i gned byD efe ndanton A pr i l 19, 1999, and pl ace d i nt o t he cr edi tfi l e. T he N el co l oan cl os ed on A pr i l 21, 1999. T her e w as evi dence t hatD efe ndantdi d notpr es entthe r evi s ed tr ans act i on t o the boar d and- 28-

t hatno M etr oB ank boar d m emberbeca m e aw ar e of M r . Sol om on’ s cont i nued in v o lv e m e n t u n til a f

te r t h e lo a n c lo s e d . S e e Un itedS ta tes v . C ro n ic , 900 F. 2d 1511, 1513- 14 ( 10t h C i r . 1990) ( not i ng thata defendantneed notm ake a n aff i r m at i ve mi s r epr es ent at i on t o vi ol at e § 1344( 1) ) . T he j ur yhear d t es t i m ony fr om boar d m ember s t hatM r . Sol om on’ s r epl ace m entw i th T r ans T ech vi ol at ed the b o a rd -i m p o s e d c o n d itio n s . C f . United S tates v. Ventura , 17 F. Supp. 2d 1204, 1208 ( D . K an. 1998) ( “B anks ar e i n the bus i nes s of as s um i ng r i s ks . Sect i on 1344( 1) of the bank f

r aud s t atut e, how ever , pr ohi bi t s i ndi vi dual s fr om expos i ng a b a n k to a ri s k o f

lo s s th a t th e b a n k d id n o t k n o w in g ly as s u m e .” ). I n addi t i on, t he governm entpr es ent ed t es t i m onythat , fol l ow i ng the l oan cl os i ng, D efe ndants oughtt o book t he $910, 000 not e thatthe bank ha d pur chas ed foronl y$10, 000 as $900, 000 i n i ncome. T he j uryhear d t es t i m onythat D efe ndant ’ s s ol e s our ce of i ncome w as der i ved fr om bank s t ock di vi dends and t hatM etr oB ank had t o tur n a pr ofi ti n or dert o gener at e di vi dends . I tw as r eas onabl e fort he j ur yt o i nfer , t her efor e, thatD efe ndantconcoc t ed the N el co lo a n in o rd e r t o g e n e ra te fic titio u s in c o m e fo r M e tr o B a n k . See i d. (“A fal se re p re se n tatio n b ya n in d iv id u a l as to th e p u rp o se o f a lo a n m a yb e su fficie n t to s uppor ta convi ct i on of bank f r aud unders ect i on 1344( 1) . ” ( ci t i ng col l ect ed appel l at e ca s es ) ) . I tw as fur t herr eas onabl e forthe j uryt o concl ude that D efen d an t i n co rpo rated T ran sT ec h in o rde r t o m isl ea d M etroB an k ab o u t M r. S o lom o n ’s co n ti n u ed inv o lvem en t bec au se D efen d an t r eq u ir ed M r. S o lom o n ’s- 29-

cont i nued part i ci pat i on i n and ac qui es cenc e t o the s cheme i n or dert o obt ai n the $910, 000 not e w i t h t he i nt ent i on of overbooki ng i t s val ue.

2 . T h e A tte m p te d B u ild in g S a le T he governm entpr es ent ed t es t i m onyt hata J une 1999 O C C exami nat i on of M et roB ank reveal ed thatM et roB ank had i ssued a n um ber of q uest i on able l oan s, had strai ned i t s operat i ng capit al , and had viol at ed a n um ber of lendi ng l aw s, i ncl udi ng s t atut es cappi ng t he bank’ s l endi ng l i m i tand r es tr i ct i ng i ns i der t r ans act i ons . A s a r es ul t , M etr oB ank and the O C C ent er ed i nt o a mem or andum of under s t andi ng ( “M O U ”) on O ct ober13, 1999. T hatM O U w as “des i gned s peci fi cal l yt o contr ol orl i m i t ” D efe ndant ’ s act i ons , i ncl udi ng hi s l endi ng authori t yand his abil i t yt o w i t hd raw divi den ds. (A pp . at14 86 . ) Th e M O U al so pr event ed D efe ndantfr om affect i ng “[t ] he ac qui s i t i on ors al e of a nyfi xed as s et o w n e d b yth e b a n k in v o lv in g m o re th a n $ 2 ,5 0 0 .” (A p p . at 2 3 3 1 ; see also A pp. at 1 4 8 8 .) T h e M e tro B a n k b u ild in g w a s a fix e d a ss e t. A s not ed above , t he bankrupt cycourtconvert ed D efe ndant ’ s C hapt er11 p roc ee d ing s to C h ap ter 7 li q u idation o n D ec em b er 1 7 , 1 9 9 9 . F o u r da y s lat er, M e tro B a n k h e ld a b o a rd m e e tin g a t w h ich D e fe n d a n t re q u e ste d p e rm iss io n to se ll uns peci fi ed bank a s s et s . T he boar d gr ant ed D efe ndantt he author i tyt o s el l bank a ss e ts “ su bjec t to re g u lato rya u th o rity .” (A p p . at 2 3 3 8 ; see also A p p . at 16 3 6 . ) T he t es t i m onyr efl ect ed thatt hi s condi t i on r efe rr ed t o O C C appr oval . A tno poi nt- 30-

d id D efen d an t i n fo rm the b o ard that h is assets, inclu d ing h is ba n k stoc k , w ere now i n t he pos s es s i on of the C hapt er7 t rus t ee. T he j ur yhear d t es t i m onyt hatD efe ndantcont act ed M r . Phans al karand, as det ai l ed above , s eti n m ot i on t he pr opos ed s al e of the bank bui l di ng. A ccor di ng to the test im o n yo f b o ard m em b ers p rese n t atthe J an u ary1 9 , 2 0 0 0 sp ec ial b o ard m eet i ng, D efe ndantm ade no ment i on of the i m pendi ng s al e. Y etM r . Phans al kar t es t i fi ed thatD efe ndantcal l ed hi m aft erthatm eet i ng and t ol d hi m that “eve r yt hi ng w ents m oot hl y ” and thatthe boar d had “a ppr oved the tr ans act i on. ” (A p p . at 15 2 2 . ) D efe ndantappea r s t o ar gue thatthe boar d- m andat ed r egul at oryappr oval w as notnece s s arybeca us e the bui l di ng s al e w as coupl ed w i th a l eas ebac k s uch th a t M e tro B a n k w o u ld n o t h a v e to c e a se o p e ra tin g a t it s p re se n t lo c a tio n . T h is a rg u m e n t d e fies lo g ic. T h e e x a c t stru c tu re o f th a t sa le is irre lev a n t. T h e re is abundantevi dence t hatD efe ndantatt empt ed t o effecta s al e of the bui l di ng and s chemed t o defr aud M etr oB ank byci r cumvent i ng both the O C C and the M etr oB ank boar d r es t r i ct i ons . D efe ndant ’ s cont ent i on thathe comm i t t ed no c rim e b e c a u se th e sa le n e v e r c lo se d is e q u a llyp e rp lex in g . T h e law c lea rly puni s hes t he s cheme r athert han the compl et ed fr aud, and forthatr eas on r equi r es n o p ro o f th a t th e b a n k a c tu a lly su ffe re d d a m a g e s . Neder , 527 U . S. at25. D efe ndantal s o as s ert s t hata l et t erhe s ubm i t t ed af t erhi s r emoval ur gi ng th e M e tro B a n k b o a rd to a p p ro v e th e sa le e sta b lish e s th a t h e n e v e r a ttem p ted to- 31-

defyt he s al es r es t r i ct i on. T he j ury , how ever , hear d the t es t i m onyof the i ncomi ng bank pr es i dentt hat , i n ear l yJ anuary2000, D efe ndantatt empt ed t o have the phr as e “s ubj ectt o r egul at or yappr oval ” s tr i cken f r om the D ece m ber21, 1999 m e e tin g m in u tes . T h u s, th e ju ryc o u ld h a v e re a so n a b lyin fe rre d th a t h is e ffo rts to a lter th e m e e tin g m in u tes w a s d o n e in o rd e r to c lo se th e sa le in se c re t. C . § 1005 T o pr ove a § 1005 vi ol at i on, t he governm entm us tes t abl i s h that : “‘ ( 1) an e n trym a d e in b a n k re c o rd s is fa lse ; (2 ) th e d e fe n d a n t m a d e th e e n tryo r c a u se d it to b e m a d e ; (3 ) th e d e fe n d a n t k n e w th e e n tryw a s fa lse a t th e tim e h e . . . m a d e it; a n d (4 ) th e d e fe n d a n t in ten d e d th a t th e e n tryinju re o r d e f ra u d th e b a n k o r p u b lic offi cer s . ’ ” Uni t ed Stat es v. Wei dner , 437 F. 3d 1023, 1037 ( 10th C i r . 2006) ( al t er at i on i n or i gi nal ) ( quot i ng Uni t ed Stat es v. C haney , 9 6 4 F .2 d 4 3 7 , 4 4 8 (5 th C i r . 1992) ) . T he purpos e of the s t atut e i s t o ens ur e that“upon an i ns pect i on of a b an k , p u b li c o fficers an d o thers w o u ld d isco v er in it s b o o k s o f a cc o u n t a picture of i t s true condi t i on. ” Uni t ed Stat es v. D ar by , 2 8 9 U . S . 2 2 4 , 2 2 6 (19 3 3 ). D efe ndantar gues t hathe coul d notcomm i ta § 1005 vi ol at i on unt i l t he M etr oB ank boar d m eet i ng m i nut es i n ques t i on beca m e “offi ci al ” mi nut es . T he m i nut es ati s s ue di d notbecome “off i ci al ” unt i l appr oved byt he boar d att he J une 2 3 , 1 9 9 9 m e e tin g . T h e m in u te s w e re n o t a p p ro v e d u n til a f te r V ir g in ia E v a n s , a M etr oB ank empl oy ee, al ert ed the O C C exami ner s t hatt he pr opos ed mi nut es- 32-

om i t t ed the boar d’ s s t at ementt hati t s appr oval of the N el co l oan w as condi t i oned on r emovi ng M r . Sol om on fr om the tr ans act i on. R egar dl es s of w hen the mi nut es b e c a me o ffi c i a l , t h e r e wa s a mp l e e v i d e n c e f r o m b a n k e mp l o y e e s a n d OCC exami ner s t hatnei t hers etof m i nut es w oul d have pr ovi ded i ns pect or s w i th a compl et e ac countof the l oan. D efe ndantcount er s thatthe M ay13, 1999 m eet i ng m i nut es ful l ydi s cl os ed M r . Sol om on’ s cont i nued i nvol vementand “the i nt ernal d ispu te reg ard ing w h ethe r [h is co n ti n u ed p arti cipa ti o n ] co m p li ed w ith the b o ard ’s condi t i ons . ” ( A ppel l ant ’ s R epl yB r . at13. ) H ow ever , the fa l s i fi cat i on of the o rig in a l m in u tes “ is re n d e re d n o les s fa lse sim p lyb e c a u se , thr o u g h c o n sid e ra b le e ffo rt a n d a p iec in g to g e th e r o f m in u te d e tails, th e b a n k m ig h t h a v e b e e n a b le to di s covert he trut h. ” Wei dner , 437 F. 3d at1037 ( quot i ng Uni t ed Stat es v. Luke , 7 0 1 F . 2 d 1 1 0 4 , 1 1 0 8 n . 7 (4th C ir . 1 9 8 3 )). In a d d iti o n , the tes tim o n ym a d e c lea r th a t D e fe n d a n t in stru c ted C h ris R au ch s, a c o n tr ac t typ ist , to d elete the refere n ce restri cti n g M r. S o lom o n ’s part i ci pati on i n the l oan . T he tes t i m on yreveal s that D efen dan tordered M s. R a u c h s to re m o v e m e n tio n o f th a t co n d iti o n a n d th a t M s. R a u c h s c o m p lied w ith t hat or der. “U nd er § 100 5, ‘an om i ssi on of m at eri al i nfo rm at i on qu al i fi es as a fal s e entr y . ’ ” Wei dner , 437 F. 3d at1037 ( quot i ng Un itedS ta tes v . C o rd e ll , 912 F. 2d 769, 773 ( 5t h C i r . 1990) ) . I ti s bey ond cavi l thatD efe ndantom i t t ed mat er i al in fo rm a tio n b yd e letin g th e c o n d iti o n o f lo a n a p p ro v a l. M o re o v e r, itis in c o n se q u e n tial th a t D e fe n d a n t d id n o t p e rso n a llym a k e th e fa lse e n try : “‘ it- 33-

s uffi ces t hathe s eti n m ot i on m anage m entact i ons thatnece s s ar i l ycaus ed [ba nk per s onnel ] t o m ake fal s e entr i es . ’ ” Id. ( al t er at i on i n or i gi nal ) ( quot i ng Uni t ed S ta tes v . Wo lf

, 8 2 0 F . 2 d 1 4 9 9 , 1 5 0 4 (9th C ir . 1 9 8 7 ). I I . Si x t h A m endm ent R i ght t o C hose n C ounsel D ue t o D efe ndant ’ s bankrupt cy , he r ece i ved appoi nt ed couns el on D ec em b er 9 , 2 0 0 3 . B ec au se tri al w as se t t o b eg in Ja n u ary1 2 , 2 0 0 4 , D efen d an t’ s couns el m oved fora pr o f or m a cont i nuance i n or dert o al l ow addi t i onal t i m e for p re p a ra tio n . T h is c o n tin u a n c e w a s g ra n ted , an d trial w a s re sc h e d u led fo r A p ril 1 2 , 2 0 0 4 . O n A p ril 2 , 2 0 0 4 , D e fe n d a n t m e t i n ca m era w ith th e d istric t co u rt. A t th is m eet i ng, D efe ndantexpl ai ned thathe w i s hed t o t erm i nat e hi s court - appoi nt ed at t or neybeca us e he be l i eved c ouns el ’ s s tr ai ned s chedul e pr event ed couns el fr om adequa t el ypr epar i ng fort r i al . D efe ndantal s o i nform ed the di s tr i ctcourtt hathe w as at t empt i ng t o r et ai n pr i vat e couns el , butt hathi s bankrupt cypr ocee di ngs and di vor ce pr ocee di ngs compl i cat ed hi s abi l i tyt o do s o. H e s t at ed thathe had pet i t i oned the C ol or ado di vor ce c our tt o r el eas e mar i t al es t at e funds fort hat purpos e and thathe had a n att or neyl i ned up t o begi n w or ki ng on the defens e as so o n as th o se f

u n d s w ere ap p rov ed . T h e d istri ct co u rtinterpre ted D efen d an t’ s re q u e s t a s a s e c o n d m o tio n fo r a c o n tin u a n c e a n d d e n ie d th a t m o tio n . A t an A p ri l 9, 20 0 4 h ea ri n g , h o w ev er, th e d istri ct co u rtd isqu ali fied M r.- 34-

Sol om on’ s couns el . T hatr equi r ed r es chedul i ng tr i al forJ une 14, 2004. T hen, on A p ril 2 3 , 2 0 0 4 , M r. S o lo m o n w a s d e e m e d in c o m p e ten t to sta n d trial. T h is le d to a len g th ytrial d e lay, w h ich th e d istric t co u rt a d m o n ish e d b o th p a rties ’ c o u n se l to us e i n pr epar i ng fort r i al . T he pr os ecut i on di d notfi l e a s uper s edi ng i ndi ctm ent el i m i nat i ng t he cons pi r acychar ges unt i l February16, 2005; appar ent l ythe pr os ecut i on w as w ai t i ng t o s ee i f the for ced a dm i ni s tr at i on of ps y chotr opi c drugs w oul d r etur n M r . Sol om on t o compet ency . D efe ndant ’ s tr i al w as s etforA pr i l 11, 2005. O n M ar ch 15, 2005, t he C ol or ado di vor ce c our tfi nal l yappr oved D e fe n d a n t’s re q u e st fo r m a rital e sta te f u n d s, b u t d id n o t re lea se th o se f u n d s u n til M arc h 2 9 , 2 0 0 5 . E arli er o n M arc h 2 9 , 2 0 0 5 , D efen d an t fi led w h at th e c o u rt i nt erpr et ed t o be D efe ndant ’ s t hi r d m ot i on fora cont i nuance . T hi s r eques tw as pr edi cat ed on the nee d forfur t herdi s covery , as the pr os ecut i on pr evi ous l yhad fai l ed t o tur n overcert ai n di s coverym at er i al s . O n M ar ch 31, 2005, D efe ndant a d v is e d th e c o u rt o f

th e c h a n g e in h is fin a n c ia l s ta tu s . T he di s t r i ctcour tconduct ed a he ar i ng on A pr i l 4, 2005, t o exami ne the cont i nuance i s s ue. I tt hen deni ed the cont i nuance , ci t i ng the age of the ca s e and t he “s ubs t ant i al l i kel i hood” thatD efe ndantw oul d m ake a n “el eventh- hourpl ea” fo r an o ther c o n ti n u an ce . (A p p . at 24 1 . ) T h e d istri ct co u rto rde red D efen d an t’ s co u rt -ap p o inted co u n sel t o rem ain a s d efen se c o u n sel alon g side D efen d an t’ s n ew lyh ir ed co u n sel. D efen d an t sou g h t r ec o n side rati o n o f th e d istri ct co u rt ’s- 35-

rul i ng on A pr i l 5, 2005, and thi s m ot i on w as pr om pt l ydeni ed. D efen d an t argu es th at th e d istri ct co u rt ’s refu sal t o g ran t th e third cont i nuance cons t i tut ed an a bus e of di s cr et i on thatvi ol at ed hi s Si xth A m endment ri g h t to b e re p re s e n te d b yc o u n s e l o f h is c h o ic e . Fol l ow i ng t he Supr eme C our t ’ s deci s i on i n United S tates v. G on zal ezLopez , --- U .S . ----, 1 2 6 S . C t. 25 5 7 (2 0 0 6 ), th e o n lyq u e stio n fa c in g th is c o u rt is w hethert he di s t r i ctcour t“w r ongl ydeni ed” the cont i nuance thatw oul d have p e rm itte d s o le re p re s e n ta tio n b yD e fe n d a n t’ s h ir e d c o u n s e l. Id. a t 2 5 6 3 ; acco rd Un itedS ta tes v . Za n g w ill , 197 Fed. A pp’ x 888, 891 n. 1 ( 11th C i r . 2006) ( unpubl i s hed) ( “I n or derfort he aut om at i c rul e of G on zal ez-L op ez to a p p ly , in o t h e rw o r d s , i tm u s tfi r s tb e s h o w n th a tth e tr i a l c o u r t“ w r o n g l y” o r“ e rr o n e o u s l y” d e n ied th e d e fe n d a n t h is c h o ice o f c o u n se l.”); Uni t ed Stat es v. Hi ckey , N o. 9 7 -0 2 1 8 , 2 0 0 6 W L 1 8 6 7 7 0 8 , at * 1 4 (N .D . C a l. Ju ly6 , 2 0 0 6 ) (“ [ A ]s a th re sh o ld m at t erfort he G onz al ez - Lopezrul e t o appl y , a courtm us thave ‘ w r ongl y ’ deni ed defe ndant ’ s choi ce of couns el . ”) . W e r evi ew the di s tr i ctcourt ’ s deci s i on for a b u s e o f d is c re tio n , Un itedS ta tes v . D o w lin , 4 0 8 F . 3 d 6 4 7 , 6 6 3 (10 th C ir . 2 0 0 5 ), bal anci ng t he defendant ’ s “‘ cons t i tut i onal r i ghtt o r et ai n couns el of . . . choi ce a g a i n s tt h e n e e d t o m a i n t a i n t h e h i g h e s ts t a n d a r d s o f p r o fe s s i o n a l r e s p o n s i b i l i t y, th e p u b lic’s c o n fid e n c e in th e in teg rityo f th e ju d icia l p ro c e ss a n d th e o rd e rly admi ni s t r at i on of j us t i ce, ’ ” Uni t ed Stat es v. Mendoz a- Salgado , 964 F. 2d 993, 1015 ( 10t h C i r . 1992) ( al t er at i on i n or i gi nal ) ( quot i ng Uni t ed Stat es v. C ol l i ns ,- 36-

920 F. 2d 619, 626 ( 10t h. C i r . 1990) ) . I n s tr i ki ng thatbal ance , w e cons i der w hether : 1) t he cont i nuance w oul d i nconveni ence w i tnes s es , the court , couns el , or t he part i es ; 2) ot hercont i nuance s have be en gr ant ed; 3) l egi t i m at e r eas ons w arr anta del ay ; 4) t he defendant ’ s act i ons contr i but ed t o the del ay ; 5) other c o m p e ten t co u n se l is p re p a re d to tryth e c a se ; 6 ) rejec tin g th e re q u e st w o u ld m a ter iallyp reju d ice o r su b sta n tiallyh a rm th e d e fe n d a n t’s c a se ; 7 ) th e c a se is com plex; and 8) anyothercase- speci fi c factor s necessi t at e or w ei gh against f u rt h e r d e la y . Id . at1015. T h e re is n o e v id e n c e th a t th e d istric t co u rt’s d e n ial w a s d u e to u n re a so n a b le o r a rb itrar yc o n c e rn s. A lth o u g h w e q u e stio n w h e th e r th e d istric t co u rt c o u ld ent i r el yfaul tD efe ndantfort he numer ous del ay s i n br i ngi ng thi s cas e t o tr i al , t hat w a s n o t th e o n ly re a s o n p ro v id e d . T h e a g e o f th e c a s e w a s a s e ri o u s c o n c e rn . W h ile n o t a p a rt ic u la rl yc o m p le x c a s e , it in v o lv e d m u ltip le in s ta n c e s o f f ra u d . T hus , i tr equi r ed t es t i m onyof num er ous w i tnes s es . D ue t o the s chedul i ng bur dens of the di s t r i ctcourt s , “as s embl i ng the w i tnes s es , l aw y er s , and j ur or s at t he s ame pl ace att he s ame t i m e” ne ces s i t at es that“br oad di s cr et i on . . . be g ran ted tri al co u rt s o n m att ers o f c o n ti n u an ce s; on lyan u n rea so n ing an d arb itrary i ns i s t ence upon expedi t i ous nes s i n the fa ce of a j us t i fi abl e r eques tfordel ay vi ol at es t he r i ghtt o t he as s i s t ance of couns el . ” Mor r is v. Slappy , 461 U . S. 1, 1 1 -1 2 (1 9 8 3 ) (q u o tatio n o m itt e d ); s ee als o G onz al ez - Lopez , 126 S. C t . at2565- 66 ( r ecogni zi ng “a tr i al court ’ s w i de l at i tude i n bal anci ng the r i ghtt o couns el of- 37-

choi ce a gai ns tt he nee ds of fa i r nes s and aga i ns tthe demands of i t s cal endar ”) (cit ati o n o m itted). W h il e the S u p rem e C o u rth as stated that tho se w ith o u t th e m ea n s to h ir e couns el have no c ogni zabl e compl ai nti n the fa ce of adequa t e court - appoi nt ed re p re s e n ta tio n , C apl i n & D r ys dal e, C har t er ed v. Uni t ed Stat es , 491 U . S. 617, 624 (1 9 8 9 ), th e rig h t to h ire p re fe rre d c o u n se l “d e riv e s f ro m a d e fe n d a n t’s rig h t to det erm i ne the type of de fens e he w i s hes t o pr es ent . ” Mendoz a- Salgado , 964 F. 2d at1014. D efe ndant , how ever , fai l s t o ar gue on appe al how the deni al of the c o n tin u a n c e a ffe c ted trial p re p a ra tio n o r d e fe n se stra teg y , o r h o w th e “ h yb rid re p re se n tatio n ” fo iste d u p o n h im b yth e d istric t co u rt n e g a tiv e lyim p a c ted h is defe ns e. E ven i f D efe ndanthad made s uch an a r gum ent , the r ecor d w oul d not s uppor ti t . D efe ndantr ece i ved not i ce thatfunds w oul d be r el eas ed more than one w eek be for e tr i al . D efe ndanthad cont act ed hi s hi r ed att or neynear l yone y ear befo re, and i tw as und ers t oo d thatthe att orneyw ou l d b egin w orki ng on the case as so o n as itb ec am e c lear tha t fu n d s w o u ld b e a v ail ab le. M o reo v er, th e re co rd cont ai ns no evi dence t hathi r ed and appoi nt ed couns el di ffe r ed i n thei rappr oach t o t he ca s e. T he di s t r i ctcour tnot ed i t s r es pectforappoi nt ed couns el ’ s abi l i tyon s ever al occa s i ons , and appoi nt ed couns el i n tur n obs erved thathi r ed couns el w as a hi ghl yexper i ence d cr i m i nal defe ns e att or ney . A l though D efe ndantexpr es s ed di s s at i s fac t i on w i t h w hathe per cei ved t o be a l ack of pr epar ednes s on the partof appoi nt ed couns el att he A pr i l 2, 2004 i n ca m era m eet i ng, ther e i s no evi denceT hes e pr ovi s i ons corr es pond t o the 1998 edi t i on of the Sent enci ng 7 G ui del i nes , w hi ch the di s t r i ctcourtcorr ect l yr efe r ence d.

- 38- t hatD efe ndant ’ s opi ni on per s i s t ed, es peci al l yaft erthe l engthycont i nuance c a u se d b yM r. S o lo m o n ’s in c o m p e ten c ya n d th e p ro se c u tio n ’s s u b se q u e n t d e lay i n fili n g a su p e rse d in g in d ictm e n t.

Fort he for egoi ng r eas ons , w e ar e unabl e t o s aythatthe di s tr i ct cour t ’ s deni al of D efe ndant ’ s t hi r d m ot i on fora cont i nuance on the eve of tr i al cons t i tut ed an a bus e of di s cr et i on. I I I . Se nt e nc i ng D efe ndant ’ s ni nety - s i x m ont h t erm of i m pr i s onm entr es ul t ed fr om a 12- l evel enhanc ementunderU . S. S. G . § 2F1. 1( b) ( 1) fori nt endi ng t o caus e a $2 m i l l i on l os s ; fours epar at e 2- l evel enhanc ement s forvi ol at i on of a mem or andum of under s t andi ng underU . S. S. G . § 2F1. 1( b) ( 4) ( B ) , m or e than mi ni m al pl anni ng underU . S. S. G . § 2F1. 1( b) ( 2) , obs truct i on of j us t i ce unde rU . S. S. G . § 3C 1. 1, and abus e of a pos i t i on of pr i vat e trus tunderU . S. S. G . § 3B 1. 3; and an e i ght een- 7 m ont h i ncr eas e above t he Sent enci ng G ui del i nes r ange pur s uantt o § 3553. D efe ndantal s o w as or der ed t o pay$80, 000 r es t i tut i on. D efe ndantappea l s eac h of t hese sentenci ng determ i nati on s. I n r evi ew i ng s ent enci ng deci s i ons , w e r evi ew a di s tr i ctcourt ’ s fac tual fin d in g s fo r c le a r e rr o r b u t its le g a l d e te rm in a tio n s d e n o v o . Uni t ed Stat es v.- 39-

Kris tl , 437 F. 3d 1050, 1054 ( 10t h C i r . 2006) . Si m i l ar l y , w e r evi ew the l egal i tyof r es t i tut i on or der s de novo, t he under l y i ng fac tual fi ndi ngs forcl earerr or , and the a m o u n t fo r a b u s e o f

d is c re tio n . Uni t ed Stat es v. O s bour ne , 332 F. 3d 1307, 1314 ( 10t h C i r . 2003) . W e al s o r evi ew the di s tr i ctcour t ’ s i nt erpr et at i on of the M a n d a to ry V ic tim ’s R e s titu tio n A c t ( “ M V R A ” ) d e n o v o . Uni t ed Stat es v. B ar t on , 3 6 6 F . 3 d 1 1 6 0 , 1 1 6 4 -65 (10 th C ir . 2 0 0 4 ). B eca us e w e have r ever s ed D efe ndant ’ s convi ct i on forw i l l ful m isa p p lica tio n in a ss o c iatio n w ith th e F isc h e r a u to m o b ile lo a n , res e n ten c in g w ill be nec es s ary . N evert hel es s , w e addr es s D efe ndant ’ s s ent enci ng ar gum ent s s i nce t he s ame i s s ues ar e ce r t ai n t o ar i s e atr es ent enci ng. A . Intend ed L oss U nder§ 2F1. 1( b) ( 1) ( M ) of the 1998 Sent enci ng G ui del i nes , a s ent ence s h o u ld in c re a s e 1 2 le v e ls fo r a lo s s o f m o re th a n $ 1 .5 m illio n b u t le s s th a n $ 2 .5 m i l l i on. W her e the i nt ended l os s i s gr eat ert han the ac tual l os s , t he amountof in te n d e d lo s s s h o u ld b e u s e d fo r s e n te n c e c a lc u la tio n p u rp o s e s . See U .S .S .G . § 2F1. 1( b) ( 1) cmt . 8 ( 1998) . T he di s tr i ctcourtgr ant ed the enha ncementbas ed on D efe ndant ’ s at t empt ed s al e of the M etr oB ank bui l di ng for$2 m i l l i on; no actual l os s occurr ed. T he di s t r i ctcour tdi d, how ever , r ej ectt he governm ent ’ s s ugges t i on t hatt he i nt ended l os s t ot al ed $6 mi l l i on beca us e i ns uffi ci entevi dence s uppor t ed t he governm ent ’ s as s ert ed val uat i on. R ather , t he di s tr i ctcourtdet erm i ned that- 40-

D efe ndanti nt ended t o defr aud M etr oB ank of $2 mi l l i on bys el l i ng the M etr oB ank bui l di ng t o a fi nanci al l yi ncapa bl e ent i tyow ned byD efe ndant ’ s then- w i fe fort hat a m o u n t. D efe ndantar gues t hatt he i nt ended l os s w as zer o beca us e he c oul d nothave s ol d t he bui l di ng w i t houtM etr oB ank boar d and/ orO C C r egul at oryappr oval and w o u ld n o t h a v e b e e n u n a b le to d iv id e n d o u t th a t m o n e y . C e rta in ly , w e h a v e h e ld t hat“the l os s defe ndants ubj ect i vel yi nt ended t o caus e i s notcontr ol l i ng i f he w as i ncapa bl e of i nfl i ct i ng t hatl os s . ” Un itedS ta tes v . G a lb ra ith , 20 F. 3d 1054, 1059 ( 10t h C i r . 1994) ( fi ndi ng i nt ended l os s i nappl i cabl e w her e defendant ’ s conduct o c c u rr e d in c o n te x t o f u n d e rc o v e r s tin g o p e ra tio n th a t p re v e n te d lo s s to “ v ic tim ,” a n o n -e x iste n t p e n sio n f u n d ); accord Uni t ed Stat es v. E ns m i nger , 174 F. 3d 1143, 1146 ( 10t h C i r . 1999) ( r ever s i ng s ent enci ng enhanc ementaft erconcl udi ng that s cheme t o us e fa l s i fi ed s ei zur e or dert o have U . S. M ar s hal l ’ s O ffi ce s ei ze r eal p ro p e rtya n d /o r sa le p ro c e e d s h a d n o c h a n c e o f su c c e e d in g ); Uni t ed Stat es v. Sant i ago , 9 7 7 F .2 d 5 1 7 , 5 2 4 (1 0 th C ir. 1 9 9 2 ) (re d u c in g v a lu e o f in ten d e d lo ss to comportw i t h “ec onom i c r eal i t y ” of w hati ns ur ance companyw oul d have pa i d for stolen v eh icl e, no t am o u n t defen d an t cl aim ed v eh icl e w as w o rth ). H o w ev er, contr aryt o D efe ndant ’ s s ugges t i on, the di s tr i ctcour tdi d notfi nd thatthe s al e and di vi dend paym entneverw oul d have oc curr ed, butthatD efe ndantw oul d nothave b ee n “e n ti tl ed ” to tak e e ith er a cti o n . (A p p . at 22 0 8 . ) T he di s t r i ctcour tobs erved thatD efe ndanthad bec om e “a des per at e man”- 41-

( A pp. at2208) i nt enton m aki ng $2 m i l l i on. T he di s tr i ctcourtfur therobs erved th a t th e e v id e n c e p re se n ted a t trial e sta b lish e d D e fe n d a n t’s d e sire to o b tain th is m oneyand thathe “di d noti nt end t o j eopar di ze hi s pl an t o s el l the bui l di ng by e x p o sin g h im se lf

to th e risk th a t th e b o a rd w o u ld rejec t th e tra n sa c tio n o r d e lay i t o r im p o se c o n d iti o n s th a t w o u ld h a v e m a d e th e tra n sa c tio n im p o ss ib le to cons um m at e. ” ( A pp. at2192. ) T he i ncomi ng boar d pr es i dentt es t i fi ed that D efe ndantatt empt ed t o del et e fr om the boar d m i nut es the r es tr i ct i on on D efe ndant ’ s abi l i t yt o s el l M etr oB ank as s et s . D efe ndantal s o m ade no ment i on of t he i m pendi ng s al e t o t he boar d buti nform ed the r eal es t at e att orneythatthe b o a rd h a d a p p ro v e d th e tra n sa c tio n . In d e e d , o n lyth e in a d v e rte n t, l a st-m in u te di s coveryof the l oom i ng s al e bythe i ncomi ng bank pr es i dentpr event ed the t r ans act i on fr om cl os i ng. D efe ndant ’ s “s ur r ept i t i ous and furt i ve” a ct i ons ( A pp. at 2 1 9 2 ) a n d n e a r su c c e ss re n d e r h is s itu a tio n in su fficie n tlyc o m p a ra b le to th o se in w h ic h th is c o u rt fo u n d “ n o p o s s ib ility fo r [ th e d e fe n d a n ts ] t o h a v e s u c c e e d e d .” E ns m i nger , 174 F. 3d at1146 ( not i ng that“[n] o r ecor d fac t s s ugges tthatther e w as ev en a re m o te pro b ab il ity ” o f c o m p let ing the s ch em e). D e fe n d a n t als o c o n tes ts th e fin d in g o f a n in ten d e d lo ss o f

$ 4 0 ,0 0 0 in conj unct i on w i t h t he R ei s i g r eal es t at e l oan. B eca us e thi s amount does not in c re a s e th e in te n d e d lo s s in to th e n e x t lo s s ra n g e a s s e t b yU .S .S .G . § 2 F 1 .1 (b )(1 )(M ), w e n e e d n o t co n sid e r D e fe n d a n t’s a rg u m e n t.- 42-

B M e m or andum of U nde r s t andi ng T h e d is tr ic t c o u rt im p o s e d a tw o -l e v e l e n h a n c e m e n t u n d e r U .S .S .G . § 2F1. 1( b) ( 4) ( B ) forvi ol at i ng an admi ni s tr at i ve or der . O n O ct ober13, 1999, t he M etr oB ank boar d and the O C C agr eed thatD efe ndantw oul d oper at e M etr oB ank cons i s t entw i t h t he pr ovi s i ons of a mem or andum of under s t andi ng ( “M O U ”) . T he O C C i ni t i al l yat t empt ed t o i m pos e a “ cea s e and de s i s tor der ” ora “c ons entor der . ” A ccor di ng t o t he t es t i m onyof an O C C exami ner , t hos e t erm s ar e us ed i n t e r c h a n g e a b l yt o d e fi n e a p u b l i c l ya v a i l a b l e p u n i t i v e o r d e r . Af t e rs o me negot i at i on w i t h M etr oB ank, t he O C C l ow er ed i t s puni s hm entt o the M O U , w hi ch i s a confi den t i al agreem ent betw een the O C C and t he b ank t hat act s as a reh ab il it o rym ea su re “ d esig n ed to . . . return [th e b an k ] t o a sa ti sfa ctory c o n d i t i o n . ” ( Ap p . a t1 4 8 5 . ) T h e d i s tr i c tc o u r tc o rr e c t l yc o n c l u d e d t h a tt h e M OU q u a lifie s u n d e r U .S .S .G . § 2 F 1 .1 (b )( 4 )( B ) a s a n a d m in is tr a tiv e o rd e r. See Uni t ed Stat es v. Spence r , 1 2 9 F . 3 d 2 4 6 , 2 5 2 (2d C ir . 1 9 9 7 ) (find ing fo rm al ad v ersa ry pr ocee di ng unnece s s aryw her e negot i at i on betw een pa r t i es r es ul t s i n bi ndi ng a g re e m e n t) . T he ext entt o w hi ch the M O U r es tr i ct ed D efe ndant ’ s conducti s another m a tter. A rticle X X I o f th e M O U sta ted in p e rtin e n t p a rt: “T h e a c q u isitio n o r sa le o f a n yfix ed asse ts ow n ed b ythe b an k inv o lving m o re tha n $ 2 , 5 0 0 sh o u ld req u ir e pr i orB oar d appr oval . ” ( A pp. at2331. ) T he di s tr i ctcourtdet erm i ned that D efe ndant ’ s at t empt ed s al e of the bank bui l di ng, a fi xed as s etw i thi n the meani ng- 43-

of the pr ovi s i on, vi ol at ed A r t i cl e X X I . D efe ndantar gues thatbeca us e the pr ovi s i on’ s l anguage i s pr eca t or y , notm andat or y , hi s act i ons di d notvi ol at e the M OU. W e agr ee. I n Un itedS ta tes v . Tisda le , 2 4 8 F . 3 d 9 6 4 , 9 7 7 (10 th C ir . 2 0 0 1 ), t hi s cour tanal y zed the di ffe r ence betw een “ s houl d” and “ s hal l . ” A ft erexami ni ng the w o rds’ res p ec ti v e d ict ion aryd efinit ion s, n o ti n g the S u p rem e C o u rt ’s “di r ect i ve thatcourt s ar e t o gi ve w or ds thei ror di narym eani ng, ” and c om m ent i ng favor abl yupon t he Second Ci r cui t ’ s i nt erpr et at i on of thi s i s s ue i n Uni t ed Stat es v. Ma ria , 18 6 F . 3d 65 , 70 (2d C i r. 19 99 ), w e determ i ned that “s ho uld” i s a p e rm is s iv e c o n s tru c tio n . S e e Qwe s tCo r p . v . FCC , 2 5 8 F .3 d 1 1 9 1 , 1 2 0 0 (1 0 th C i r . 2001) ( “The t erm ‘ s houl d’ i ndi cat es a r ecomm ended c our s e of a ct i on, but does noti t s el f i m pl yt he obl i gat i on as s oci at ed w i th ‘ s hal l . ’ ” ( ci t i ng Ma ria , 186 F .3 d a t 7 0 )) . T h e M O U o n ly re c o m m e n d e d b o a rd a p p ro v a l; it d id n o t m a n d a te it. A cc o rdin g ly , the d istri ct co u rterred in im p o sing the tw o -l ev el en h an ce m en t un d er U . S . S . G . § 2 F 1 . 1 (b)(4 )(B ). C . M iscell a n eo u s E n h a n ce m en ts T he di s t r i ctcour ti m pos ed thr ee othert w o- l evel enhanc ement s . D efe ndant ar gues onl yt hatt hes e enha ncement s “s houl d be s etas i de and r emanded for reconsi derat i on i f t his C ou rtvacates anyof the un derl y i ng con vict i on s” becau se th e d is tr ic t c o u rt ’s fin d in g s w o u ld n e c e s s a ri ly re ly o n o v e rt u rn e d c o n v ic tio n s .- 44-

(A p p ell an t’ s B r. at 55 . ) A s i l l us t r at ed bel ow , how ever , the di s tr i ctcourt ’ s fi ndi ngs w er e bas ed l ar gel yon D efe ndant ’ s act i ons w i th r es pectt o tr ans act i ons otherthan the Fi s cher au tom o b il e loa n . C o n seq u en tl y , w e se e n o rea so n w h ythe d istri ct co u rt ’s m et i culousl yexp l ai ned fi nd i ng s ar e rendered err on eou s.

1. M or e Than M i ni m al Pl anni ng T he di s t r i ctcour tcorr ect l yappl i ed a 2- l evel enhanc ementform or e than m i ni m al pl anni ng pur s uantt o U . S. S. G . § 2F1. 1( b) ( 2) ( A ) aft erfi ndi ng “w i th a very , veryhi gh degr ee of cert ai nty ” thatD efe ndant ’ s cr i m es i nvol ved s ubs t ant i al pl anni ng. ( A pp. at2138. ) T he di s tr i ctcourtr el i ed pr i m ar i l yon the att empt ed sa le o f th e b a n k b u ild in g , w h ich th e c o u rt c o n sid e re d “ fa r a n d a w a yth e e a sie st” exam ple because t he sal e “i nv olved a co urse of con du ctt hat began several w eeks” pr i ort o t he pl anned c l os i ng. ( A pp. at2138. ) I ndeed, t he di s tr i ctcourts aw “no need t o addr es s anyt hi ng ot hert han the R ei s i g l oan and the N el co l oan and the p ro p o s e d s a le o f

th e b a n k p ro p e rt y .” (A p p . a t 2 1 3 8 .) 2. O bst ruct i on of Just i ce T he di s t r i ctcour tal s o pr oper l yi m pos ed a 2- l evel enhanc ementunder U . S. S. G . § 3C 1. 1 forobs t ruct i on of j us t i ce a ft erfi ndi ng thatD efe ndantoffe r ed m at er i al l yfal s e t es t i m ony . W e nee d notdeci de w hetherD efe ndantobs truct ed ju stic e in c o n n e c tio n w ith th e F isc h e r a u to m o b ile lo a n in o rd e r to u p h o ld th is- 45-

enhanc ement . T he di s t r i ctcourthi ghl i ght ed s i x i ns t ance s i n w hi ch D efe ndant p ro v id e d m a ter iallyfa lse tes tim o n yre g a rd in g th e R e isig a n d N e lco re a l es tate l oans and the att empt ed bui l di ng s al e.

3. A b u se of a P osi ti on of P ri va te T ru st L a s t l y , t h e d i s t r i c tc o u r ta p p r o p r i a t e l ye n h a n c e d De fe n d a n t ’ s s e n t e n c e t wo l evel s under§ 3B 1. 3 forabus i ng hi s pos i t i on as M etr oB ank C E O . T he di s tr i ct cour ts t at ed thatD efe ndant ’ s pos i t i on r ender ed appl i cat i on of the enha ncement “a lm o st self-pro v ing ” a n d that the e v iden ce clea rl yil lustrat ed D efen d an t’ s coer ci ve mannerand dec ept i ve ac t i ons . ( A pp. at2139. ) M or eover , t he di s tr i ct c o u rt c o rre c tlyn o ted th a t ev e rysin g le c o u n t in v o lv e d a n a b u se o f p riv a te tru st. D . U n reason ab l en ess D efen d an t argu es th at his sen tenc e w as “ p aten tl yu n rea so n ab le” in p art b e c a u se o f

“ rh e to ric a llyc h a rg e d ” sta tem e n ts m a d e b yth e d istric t co u rt. ( A ppel l ant ’ s B r . at59. ) H e ar gues t hatt hes e s t at ement s i gnor e the fa ctt hat M etr oB ank w as notharm ed fi nanci al l yand, t her efor e, t hathi s s ent ence w as w r ongl ycal cul at ed. I n m aki ng thi s ar gum ent , D efe ndantr ei t er at es hi s ar gum ent above r el at ed t o t he 12- l evel enhanc ement . A s det ai l ed above , w e ar e not per s uaded byt hatar gum ent . I n addi t i on, i ti s cl earfr om t he s ent enci ng tr ans cr i pt t hat the d i stri ctcou rtart i culat ed w el l -gr ou nd ed reasons un der i t s § 35 53 analy si s. D efe ndantal s o cont ends t hatt he di s tr i ctcourti m perm i s s i bl ydepart ed- 46-

upw ar d byei ght een mont hs w i t houtpr ovi di ng pr es ent ence not i ce of i t s i nt ent i on t o d o so. F ederal R ule of C ri m i nal Procedu re 32(h) s t at es: B efor e the courtm aydepartfr om the appl i cabl e s ent enci ng r ange on a gr ound noti dent i fi ed fordepartur e ei theri n the pr es ent ence r epor tori n a part y ’ s pr ehea r i ng s ubm i s s i on, the courtm us tgi ve the p a rt ie s re a s o n a b le n o tic e th a t it is c o n te m p la tin g s u c h a d e p a rt u re . T h e n o tice m u st s p e c if ya n yg ro u n d o n w h ich th e c o u rt is cont empl at i ng a depa r tur e. W hen, as her e, a di s t r i ctcourtenhanc es the r ecomm ended G ui del i nes r ange unde r t he § 3553( a) fac t or s , “the i ncr eas e . . . i s cal l ed a ‘ var i ance . ’ ” Uni t ed Stat es v. A ten c io , 4 7 6 F . 3 d 1 0 9 9 , 1 1 0 1 n . 1 (10 th C ir . 2 0 0 7 ). A fter Uni t ed Stat es v. A ten c io , R ul e 32( h) appl i es t o both var i ance s and depa r tur es . T her efor e, di s tr i ct cour t s m us t“gi ve adva nce not i ce of thei ri nt entt o s ent ence above orbel ow the i dent i fi ed advi s or yG ui del i nes r ange. ” Id. a t 1 1 0 4 . O n t he fi r s tdayof D efe ndant ’ s s ent enci ng, the di s tr i ctcour tacknow l edged t hat , beca us e i thad notgi ven not i ce of i t s i nt entt o depart , thatw as “noteven a n opt i on. ” ( A pp. at2165. ) I tt hen s t at ed s i m pl ythati tw oul d i s s ue a G ui del i nes s ent ence oran out s i de- t he- G ui del i nes s ent ence . T hi s i s pl ai nl yi ns uffi ci entunder R u le 3 2 (h ). S e e A ten c io , 476 F. 3d at1104 ( “R ul e 32( h) . . . l eave [s ] no doubtt hat t he defendanthas a r i ghtt o know i n advanc e the verygr ound upon w hi ch the d istric t co u rt m ig h t u p w a rd lyd e p a rt o r v a ry .”); s ee als o Uni t ed Stat es v. C alz ada- Mar avi l l as , 443 F. 3d 1301, 1304 ( 10th C i r . 2006) ( “The not i ce r equi r ementi s notbur dens om e— i t s keycomponenti s thatthe part i es have not i ce- 47-

in ad v an ce o f th e se n tenc ing h ea ri n g . ”). B efo re rese n tenc ing , the d istri ct co u rt m us tpr ovi de the r equi s i t e det ai l ed not i ce i f i ti nt ends t o varyfr om the r ecomm ended G ui del i nes s ent ence . E ven though D efe ndantw as s ent ence d pr i ort o A ten c io , the not i ce req u ir em en t st il l app li es. W h at do es n o t app ly , p er A ten c io , i s the r equi r ement t hatD efe ndantobj ectt o t he l ack of not i ce dur i ng s ent enci ng i n or dert o pr es erve th e is s u e fo r a p p e a l. A ten c io , 476 F. 3d at1105 n. 6 ( overrul i ng Uni t ed Stat es v. B a r ts ma , 198 F. 3d 1191 ( 10t h C i r . 1999) , butappl y i ng obj ect i on r equi r ement

“ p ro s p e c tiv e ly”) . E . R es t i t ut i on T he di s t r i ctcour tor der ed D efe ndantt o pay$80, 000: $40, 000 eac h t o M i ke C ampbel l and J on R ei s i g fordefr audi ng them i n connec t i on w i th the R ei s i g r eal es t at e l oan. D efe ndantas s ert s t hatt he aw ar d s houl d be cuti n hal f orel i m i nat ed ent i r el ybeca us e both buy erand s el l err ece i ved exa ct l yw hatt heyexpec t ed. T he d istric t co u rt, h o w e v e r, sta ted th a t D e fe n d a n t m a n ip u late d th e p a rties in a “ c las sic di s hones tbr okers i tuat i on” i n or dert o carve out$40, 000 forhi m s el f and c odefe ndantSol om on. ( A pp. at2214. ) D efe ndants tr i pped M r . C ampbel l of w hat he coul d have gott en abs entt he dec ei t , w hi l e D efe ndantl ed M r . R ei s i g t o overpay by$40, 000 fr om t he mom entt he s al e w as pr opos ed. G i ven thatD efe ndant v ict im ized b o th p arti es to the s ale, w e find the d istri ct co u rt ’s resti tuti o n aw ard- 48-

ent i r el yappr opr i at e. C ONC L US I ON H av ing d eterm ined that insu ffici en t evid en ce su p p o rt ed D efen d an t’ s c o n v ictio n fo r w ill f

u l m isa p p lica tio n in c o n n e c tio n w ith th e F isc h e r a u to m o b ile l oan, t hatt he di s t r i ctcour ti ncorr ect l yappl i ed a 2- l evel s ent enci ng enhanc ement fo r v io latin g a n a d m in istra tiv e o rd e r, an d th a t th e d istric t co u rt fa iled to adequa t el ynot i fyD efe ndantof i t s i nt ent i on t o varyupw ar d, w e R EV ER SE D efe ndant ’ s convi ct i on on C ountO ne and RE M AND forr es ent enci ng cons i s t ent w i t h t he rul i ngs m ade a nd gui dance gi ven i n thi s opi ni on.