### IN THE UNI TED STAT ES COURT OFAPPEALS FOR THE FIF TH CIRCU IT

No. 09-20871

UNITED STATES OF AMERICA, Plaintiff- Appellee
v. JAMES BROOKS, WESLEY C. WALTON, JAMES PATRICK PHILLIPS, Defendants - Appellants

Appeals from the United States District Court for the Southern District of Texas

Before KING, BENAVIDES, and DENNIS, Circuit Judges BENAVIDES, Circuit Judge: Defendants-Appellants James Patrick Phil l i p s , Wesley C. Walton, and James Brooks (collectively, the “D e f e n d a nt s - Ap p e ll ant s”) appeal their conviction of and sentencing for false reporting of natural gas trades in violation of the Commodities Exchange Act and the federal wire fraud statute. We AFFIRM.

FA C T U A L A N D P R O C E D U R A L BA C K G R O U N D Th e Defendants-Appellants are former employees of El Paso Merchant Energy Corporation (“EPME”), a subsidiary of the El Paso Corporation (“El Pa s o ” )

. The government alleges that the Defendants-Appellants violated the Commodities Exchange Act (“CEA”) and the wire fraud statute by sending false information about natural gas prices to trade magazines that report natural gas U n i te d S ta te s C o u rt o f A p p ea l s

F i ft h C i rc u i t 

### F I L E D May18 , 20 12 Lyle W . Cayce Clerk Case: 09-20871 Document: 00511861304 Page: 1 Date Filed: 05/18/2012No. 09-20871

prices in indexes, in an effort to affect and manipulate those indexes, which, in turn, would affect the market for natural gas futures and benefit the company’s financial positions. Some background on the natu r a l g as industry is necessary for understanding this case. Natural gas is transported throughout North America via a network of pipelines. The gas transportation network is centered around

“hub s , ” which are geographical locations where major pipeline system s i nt e rlink

. These hubs act as separate markets, at which supply and demand dictate prices that may differ between the hubs. Gas trades are divided into different types. Most basically, physic al gas is traded, whereby one company agrees to purchase a quantity of gas to be physically delivered to a particular location. In addition to the sale of physical
gas, finan c ial trades are made based on gas prices. One particular financial trade, a gas contract for future delivery, is traded on the New York Mercantile Exchange (“NYMEX”). NYMEX contracts are based on the price of gas trading

a t Henry Hub, Louisiana. Other financial trades, termed “swaps,” are transactions where two traders agree to buy a volume of gas from each other at the same time, b u t at different prices. In one common format, called a “basis” trade, one party agrees to pay a f i r s t

- o f

- the-month index price and the counterparty a gr e e s to pay based on the last day NYMEX settle. Another

common financial transaction is an exchange for physical futures (“EFP”), which is a swap with one end priced off the NYME X futures market and the other prices off an index plus or minus a differential. Financial trades generally do 1 not result in the transfer of physical gas, but are resolved financially.

In thes e variou s fut ures tra nsa cti ons , the par tie s dis cus s fina ncial tra der s hold ing 1 “s hort” or “lo ng” pos itio ns. In a “s hort” pos itio n, a tra der benef its f r o m a l o w e r i ndex pr ice, and in a “ long” pos itio n, the tra derbe nef its f rom a higherin dex pr ice.
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The market index prices for physical gas are most prominently published in two privately owned newsletters: Inside F E R C G a s Market Report (“Inside FERC ”) and Natural Gas Intelligence (“N GI ”)

. B o th o f th e s e p ublications publish the natural gas p r i ce marketing indicators at the major pipeline hubs and market centers in the United States, and it is undisputed that both publications

are highly influential to market price for physical gas. The indexes also are used to determin e r oyalties and public gas contracts, among other things. The publications gather pricing information about the various markets and pipeline h ub s by requesting data about physical gas transactions from natural gas traders. After receiving data from the gas traders, and taking a variety of other factors into account, the publications release indexes that purport to represent the price of natural gas at different delivery points. In requesting data, Inside FERC and NGI requ e s t e d t hat traders report fixed-price, baseload deals negotiated during bidweek, and it also instructed that basis or EFP trades not be reported. 2 The Defendants-Appellants were all employees at EPME. EPME traded in both physical and financial transactions of the sort previously mentioned. In 2000, Defendant-Appellant Brooks was EPME’s Senior Vice President for Risk Management, and he was responsible for overseeing physical traders. In 2001, Brooks became the Managing Director for Natu r a l G a s , and he oversaw both physical and basis traders. At the time, EPME was divided into various trading “desks,” which were then split between physical gas trading and finance trading. The desks were based on pipeline network regions. During the time in question, Defendant-Appellant Phillips was a senior physical trader and was manager of the Texas Desk at EPME. Defendant-Appellant Walton was a basis tr a der on the financial side for b o t h t h e Texas Desk and the Gulf Coast Region of the

As wi ll be expla ined , t h e par tie s dis put e the exten t to wh ich thes e ter ms have 2
acc ept ed me anings int he natur al gas indu st ry. 3 Case: 09-20871 Document: 00511861304 Page: 3 Date Filed: 05/18/2012No. 09-20871

Northeast Desk. As a market participant, Inside FERC and NGI would request physical trade information from EPME. EPME would report the information to the trade publications via spreadsheets sent by the physical traders responsible for each of EPME’s desks. From summer 2002 to fall 2002, El Paso received inquires from various fede r al agencies and a United States Attorney’s Office grand jury subpoena seeking information on the reports EPME sent t o t h e trade publications. 3 Around that time, El Paso hired Haynes & Boone, a law fir m , t o c o n duct an internal investigation into allegations that El Paso employees had submitted false trades to trade publications. Defendants-Appellants Brooks, Walton, and Phillips were interviewed as part of that investigation, and each employee was subsequently terminated. N o n e t h e l e s s, at least at the beginning of this investigation, El Paso paid the legal fees for both Walton and Brooks. Starting in March 2003, an Assistant U

. S. Attorney began a course of correspondence with El Paso’s legal counsel about El Paso’s payment of l e g al f ees for former employees. El Paso informed the Assistant U.S. Attorney about the
company by-laws, a c c o r ding to which EPME was required to indemnify any employee for legal fees if the employee was found not to have engaged in wrongdoing, but EPME was left with discretion about whether to advance payment of legal fees prior to such deter m i n a t i o n
. El Paso stated that, based in part on 4

Prior to the Unit ed Sta tes Atto rney’ s inves tiga t ion, in 2000, the Calif orni a Public 3 Ut ilit ies Com mi ss ion st art ed an inves tigat ion of El Paso , dur ing wh ich Sout hern Calif orni a Edis on als o reque st ed do cum ents relat ed to EPME’s repo rti ng. M ore over, at about thetime of the Unit ed Sta tes Atto rney sub poe na, E l P a s o r e ceive d sim ilar requ es ts for info rm atio n fr om the Com mo di t ies Futur es Trad ing Com mi ss ion and the Fede ral Energy Regulat ory Com mi ss ion.
El Paso and EPME had sli ghtly dif fer ent pol icie s
. E l P a s o ’ s by-law s requ ired it to 4 bothin dem nify and to advanc e l egal fee s for any of its em plo yees
. El Pas o w ouldt hen have the ri ght to se eka refundof paym ents if t he em plo yee wa s fou nd to have engagedinwro ngdoi ng. EPME wa s only requ ired to inde mni fy its em plo yees , how ever, and the def enda nts here
we re all EPME em plo yees
. 4 Case: 09-20871 Document: 00511861304 Page: 4 Date Filed: 05/18/2012No. 09-20871

“the limited results o f t h e H aynes & Boone interviews,” it had decided not to advance legal fees for Brooks, but that it was inclined to advance Walton’s legal fees. El Pa so stressed, however, that it would consider the employee’s cooperation with the federal investigation in deciding wheth er to continue advancing legal fees. After additional correspondence regarding Delaware law and its application to El Paso’s indemnification policy, the government, in
response to El Paso’s request for the identities of any individual who w as not cooperating, identified Walton, as well as four other employees, who are not defendants here, as non-cooperating employees. Sometime thereafter, El Paso terminated Walton’s legal fees, but it did not inform the government. Defendant-Appellant Phillips, who had not been disc u s s e d in the correspondence, subsequently requested indemnification. On August 12, 2004, El Paso declined Phillips’s request, noting that indemnification was made only after an ultimate determination of the legal proceedings, and that it would not advance his legal fees. El Paso also noted that it was not obliged to advance fees, and that EPME was coope r a t i n g with the government and so it would not advance legal fees to “potential subjects or targets of their investigations.” 5 On Septembe r 25, 2006, the government filed a second superseding indictment, charging the Defendants-Appellants with forty-nine counts: specifically, t w e n t y - f

our counts of false reporting in violation of the CEA, 7 U.S.C. § 13(a)(2), twenty-four counts of w i re fraud in violation of 18 U.S.C. § 1343, and one count of conspiracy to commit false reporting and wire fraud in violation of 18 U.S.C. § 371. The government alleged that the DefendantsAppellants were involved in a conspiracy, lasting from about April 2000 through

P h i l l i p s s u b se quent ly fil ed a civil sui t to for ce EPME to advanc e his legal fee s, in 5 wh ich he so ught dis cover y. See Phil li ps v. El Paso Corp

. , no. 2005- 00645 (Texas Di st

. Ct. Jan. 5, 2005)

. The governm ent fil ed a suc ces sf ul mo tio n to st ay that civil sui t, pend ing the cri mi nal inves tigat ion. 5 Case: 09-20871 Document: 00511861304 Page: 5 Date Filed: 05/18/2012No. 09-20871

M a y 2002, whereby the Defendants-Appellants reported false informatio n related to natural gas prices to Inside FERC and NGI to manipulate the index prices reported in those magazines. Specifically, the government alleged that Defendant-Appellant Brooks would direct the physical gas traders at EPME to report false data to the publications, such as trad e s that did not occur, false prices, or false gas volumes, in a manner that would benefit EPME ’ s f i n a n c ial positio n s
. D e fendant-Appellant Walton, a basis trader on the Texas and Northeast Desks, would allegedly tell the physical traders his financial positions for the upcoming month, such a s w h e t her he wanted the index price of gas to increase or decrease in certain areas, so the physical traders could report data manipulating the published i n d e x e s in his favor. The second superseding indictment also allege d th at D e f e n d a nt

- Ap p e ll a nt Phillip s and the other physical
gas traders sent fictitious information and reports to Inside FERC and NGI

. The
g o vernment alleged that twenty-four misleading reports were transmitted to these publications, either personally by the Defendants-Appellants or based on their instructions. 6 The trial lasted from December 4, 2007 to February 7, 2008. During the trial, the government submitted ove r 1,000 exhibits, including the bidweek

s u rv e ys sent to Inside FERC and NGI , internal worksheet versions of those
surveys, internal EPME emails, EPME trade ti c k e t s recording physical and basis deals, summaries of basis positions, and hundreds of taped telephone calls. During trial, the jury heard testimony from fourteen government witness e s, including Matthew O’Loughlin, an expert, and five defense witnesses, including Defendant-Appellant Brooks. The government’s t w o primary witnesses were physical traders Dallas Dean and Sharon O’Toole. Dean was a physical trader on the Northeast Desk

A num ber of othe r me m bers of the allege d cons pir acy have alre ady ple d guilty to 6 char ges of fal se r epo rti ng, wi re fr aud, orc ons pir acy. 6 Case: 09-20871 Document: 00511861304 Page: 6 Date Filed: 05/18/2012No. 09-20871

and O’Toole was a physical trader on the Texas Desk. Both testified about the conspiracy a n d s tated that Defendant-Appellant Brooks instructed them to submit false data to Inside FERC base d o n i n formation given to them by Defendant-Appellant Walton. O’Toole also testified about Defendant-Appellant Phillips’s involvement in the conspiracy. The government also admitted a large number of incriminating emails between the various traders—often b e tween Phillips and other physical traders—about the content of the r e ports sent to Inside FERC and NGI or requesting information from basis traders about their f inancial positions. Similarly, the government played recordings of tel e p h o n e calls, many recorded on Walton’s line. In some of these conversations, Walton discussed price targets for ce rt ai n tr ading regions, the submission of reports that would or had affected published indexes, a n d w h e ther certain reported trades

were too low to be credible. He also thanked the phys i c a l traders when the published index prices were favorable to his financial positions. In one particul a r l y important email chain, various EPME employees, i n cluding Brooks, Phillips, and Walton, discussed the reports sent to the publications. Starting this chain, Bro o k s emailed the physical and financial traders on October 23, 2000, writing: There has [sic] b een several discussions on how IF [Inside FERC ] price should be reported in the month of November. Most of you are aware that we reported only verifiable fixed price transactions to IF for October. It is the opinion of some, that the re a s o n f o r d o ing so made no difference, and only eliminated us as an active price setting participant. In an effort to get everyone’s opinion on this, reply as to the following : 1

. R e p o rt according to our book bias (as in the past). 2. Report verifiable fixed price trades only. In response, various traders, including Walton and Phillips, chose the first option. Several other traders discussed the options, emailing with Brooks and discussing how Inside FERC had a standardized format for reporting data, but that the “integrity of the d a t a
. . . is not verified.” Another trader replied that

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they should “avoid discussing this is on e-mail” due to ongoing i n v e s tigations, and O’Toole replied, “GOOD point!” Also testifying for the government was Ronald Clay Sanders, an employee at EPME, who worked as the manager of the risk operations group during the time of the alleged conspiracy. Sanders testified whether the trades reported to Inside FERC or NGI by t h e physical traders were real and whether they matched any trades in the EPME electronic database. Overall, Sanders testified that only 3.6% of the 6,213 trades reported to Inside FERC and NGI during the

course of the conspiracy matched actual trades, and that if the trades reported by the West Desk are excluded—which alle g e d ly stopped participating in the conspiracy i n f

a l l 2002—only 1.9% of the 5,687 trades match actual trades. Finally, the government presented O’Loughlin, an expert who testif i ed about the effect of EPME’s false reports on the published indexes at Inside FERC and NGI. The primary defense witness was Defendant

- Ap p e llant Brooks. In part, Brooks testified about the incriminating October 2000 email chain wh e r e the traders discuss reporting based on “book bias.” Brooks testified that “book bias” did not mean that the physical traders would submit numbers favoring the basis traders’ positions; rather, Brooks stated that the term meant that EPME would report d a t a to the publications based on their perception of where gas was actually trading. A potential defense witness, Don Guilbault, invoked his Fifth Amendment
p r i vi l e g e against self-incrimination on the day he was scheduled to testify. Guilbault was a physical trader at EPME and h e h a d admitted to submitting false reports to Inside FERC and NGI

. According to the Defendants-Appellants, however, Guilbault would have testified that Walton did not provide him with basis positions to shape his reports. Although Guilbault pled guilty prior to the Defendant-Appellants’ trial, he was still awaiting sentencing at the time of the

curr e nt tri al t o e n s ur e c o o p eration. The Defendants-Appellants moved to compel

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testimony; after a hearing, the distr i c t court denied the motion, finding no government misconduct and a valid purpose for the invocation of privilege. After closing arguments, the jury deliberated for three days. The jury sent several notes during deliberations, o n e of which asked a question about the phrase “ignorance of the l a w i s n o excuse.” Ultimately, the jury found: all Defendants-Appellants guilty of the c o n s p i racy count; Phillips guilty of false reporting and wire fraud on counts 5, 9–10, 14, 19–21, 23– 25, 29, 33–34, 38, 43–45, 47–49, and not guilty on all other charged counts; Walton guilty of false reporting and wire fraud on counts 3–5, 9–10, 19–24, 27–29, 33–34, 43–48, and not guilty on all other charg e d c o u n t s ; and Brooks guilty on counts 2–5, 8–29, 32–49, and not guilty on all other charged counts. On December 17, 2009, the d i s t r i ct court sentenced the DefendantsAppellants. The district court c a l c u l a t ed, for Phillips and Walton, that the
proper offense level was thirty-three (with criminal history category 1), with a recommended sentencing range of 135 to 168 months. For Brooks, the district court calculated that the offense level was thirty-five (with a criminal h i s t o r y

c a tegory 1), with a recommended sentencing range of 168 to 210 months. The district court sentenced Phillips and Walton to 135 months of imprisonment and sentenced Brooks to 168 months of imprisonment. The Defendants-Appellants filed a timely notice of appeal, and they now assert ten separate grounds for error. They argue that the indictment must be dismissed, and that their convictions and sentences must also be reversed. AN A L Y S I S A. Government Interference with Payment of Legal Fees The Defend a n t s-Appellants first argue that the government pressured EPME to cut off its payment of legal fees for their attorneys, violating their Fifth and Sixth Amendment righ ts, and consequently, requiring dismissal of the indictment against them, relying on 2003 correspondence between the Assistant

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U.S. Attorney and El Paso’s legal cou n sel. The district court found no such
pressure by the government, and the Defendants-Appellants do not show clear error in that determination. We review a district court’s denial of a motion to dismiss an indictment de

novo. United States v. McNealy , 625 F.3d 858, 868 (5th Cir. 201 0). We review the d i s t r i ct court’s underlying factual findings for clear error. Id. “Under the clear error standard, we defer to the findings of the district court unless we are left with a definite and firm conviction that a mistake has been committed.” United States v. Avants , 367 F.3d 433, 441 (5th Cir. 2004) (citation and internal quotation omitted). The record creates no “firm c o n vi c t i o n” that the district court erred in finding the government did not coerce El Paso into deciding not to advance the Defend a nts-Appellants’ legal fees. While the correspondence shows El Paso possessed an intense desire to be seen as coopera t i v e b y the government, the government never demanded or suggested to El Pa s o t h a t it cease paying the legal fees of the Defendants-Appellants. Indeed, rather than create a “firm conviction” that El Paso was coerced into not paying the Defendants-Appellants’ attorney fees, the correspondence shows El Paso, through EPME, exercised its

o wn discretion whether to pay the Defendants-Appellants’ legal fees. Th e correspondence shows that EPME had the discretion, under its by-laws, not to advance legal fees to its employees. Further, as to Brooks, the correspondence shows El Paso h a d exercised that discretion prior to the government’s correspondence due to the company’s conclusion that he was involved in wrongdoing. Nor do Defenda n t s - Appellants fair better in relying on the 2003 Justice Department Memorandum, “Princi ples of Federal Prosecution of Business

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Organizations,” also known a s the “Thompson Memorandum.” That 7 memorandum provided guidance on how the government should decide whether

a corporate entity is cooperating with an investigation, and it suggested that investigators consider whether a corpo r a t i on was advancing legal fees to culpable agents. Admittedly, that memorandum has been subject to criticism, and the Department of Justice has subsequently revise d its policies. Nevertheless, the mere existence of the memorandum could not have compelled El Paso. T h is case is distinguishable from the facts that the Second Cir c u i t

c o n fronted in United States v. Stein , 541 F.3d 130 (2d Cir. 2008). T h e r e , t h e district c o u r t f

ound that the government had “forced” KPMG to cease paying legal fees on behalf of the defendants, the payment of which had been KPMG’s long-standing policy, b ased on threats from the government and the government’s involvement in c rafting internal KPMG memos dissuading employees fr o m o b taining counsel. Id. at 147–50. The district court’s factual findings bound the Second Circuit, and on such findings, the Second Circuit held KPMG’s actions were state actions that violated the defendants’ right to counsel of their choice. Id. Here, as noted above, no such factual findings were made, and reasonably

so. Whereas in Stein , where the government specifically threatened to take into account KPMG’s payment of legal f e e s , r e f e rri n g t o th e Th o m p s o n Memorandum, the correspondence here does not refer to that memorandum and it includes no threat to indict El Paso if it continued to pay fees. Moreover, the government did not meddle i n E l P aso’s internal discussion with employees in an attempt to dissuade the retention of counsel. Lastly, whereas KPMG’s long-standing policy

Mem

. fr om Lar ry D

. Thom ps on, D eput y Att ’y Gen ., U.S . D ep’ t of Jus tic e, Pri nci pl es 7 of Feder al Pros ecu tion of Bus i nes s Or ganiza tions (Jan

. 20, 2003) , av ai la ble at htt p: //ww w. just ice. gov/d ag/c ft f/cor por ate_ guide lines .ht m. 11 Case: 09-20871 Document: 00511861304 Page: 11 Date Filed: 05/18/2012No. 09-20871

of paying legal fees demonstrated that the fees would have been paid but for the government’s actions, EPME’s policy was discretionary, and had been independently exercised to not advance legal fees to Brooks. Accordingly, the Defendants-Appellants fail to show clear error in the district court’s factual findings, and under those facts, we find that denial of the motion to dismiss the indictment was proper. B. Applicability and Constitutionality of CEA The Defendants-Appellants raise a number of challenges to the applicability and constitutionality of the CEA. First, they argue that 7 U.S.C. § 13(a)(2)’s reference to “false . . . reports” does not cover the false reports they sent to industry newsletters. Second, they argue that trades of physical natural
ga s are exempted from the CEA and/or do not meet the Act’s definition of “commodity.” Third, the Defendants-Appellants argue that various terms in § 13(a)(2) are vague, and thus the CEA is unconstitutionally vague as applied to them. Fourth, they argue that the CEA is overbroad. While the DefendantAppellants’ arguments are sweeping, they are, ultimately, unavailing. 1. “Report” The Defendants-Appellants first argue that their communications with Inside FERC and NGI do not qualify as “ r e p o r ts” under §13(a)(2). They state that other portions of the CEA, as well as the CFTC’s regulations promulgated thereunder, distinguish between “statements” and “reports,” and generally use “report” to refer to “a formal record or document the Commission r e q uires regulated futures professionals or traders to file , m a i ntain or provide to the Commission or costumers.” The CEA states that it shall be unlawful for: [a]ny person
. . . knowingl y t o d e l i v er or cause to be delivered for transmission through the mails or interstate c ommerce by telegraph, telephone, wireless, or other means o f c o mmunication false or misleading or knowingly inaccurate reports concerning

. . .
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market information or conditions that affect o r t e n d to affect the price of any commodity of interstate commerce . . . .

7 U.S.C. § 13( a)(2). The term “reports” is not defined in the CEA or CFTC regulations. See 7 U.S.C. § 1a; 17 C.F.R. § 1.3. Neither the Supreme Court nor any circuit court has considered the definition. Consequently, the applicability 8 of the term “reports” appears to be an issue of first impression. “In construing the United States Code our task must begin with the words provided by Congress and the plain meaning of those words.” United States v. Valencia , 394 F.3d 352, 355 (5t h Cir. 2004). Thus, we begin with the plain meaning of “report[],” which the dictionary defines as any statement of fact, or at least a detailed statement of fact. See Merriam-Webster, report, available at http : / /www . m e rri a m - w eb s t e r
. c o m/ dic ti o n ary/r e p o rt ( d e f i ni n g r e p o rt a s “ a u s u ally detailed account or statement); Oxford English Dictionary, report, available at http : / /www . o e d

. c o m/s e arch ? s e archTyp e = dic ti o n ary &q=re p o rt ( d e f i ni n g r e p o rt a s “[i]nformation pro vi d ed or conveyed, and related senses,” “[a]n account of a situation, event, etc., brought by one person to another

. . . , a n o tification of something observed,” “[a] descriptive account or statement”); see also CBC, Inc.

v. Bd. of Governors of Federal Reserve Sys. , 855 F.2d 688, 690–91 (10 t h Cir. 1988) (applying diction a ry definition of “report” to interpret word in Bank Holding Act). The Defendants-Appellants’ statements to Inside FERC and NGI

9 would satisfy such a definition. They were not expressions of opinion, or casual

com m u n i c ations, but were lengthy documents outlining detailed information

A dis tri ct cour t has cons ide red the def init ion of “re por t” and fou nd it cover s elec tro nic 8
com mun icat ions suc h as the De fen dant s- App ellant s’

. See CFTC v. Atha , 420 F. Sup p. 2d 1373, 1380–81 (N .D

. Ga

. 2006) (f indi ng § 13(a)( 2) fal se rep ort ing pr ovis ion app lies to fal se t r a de rep ort s se nt elec tro nical ly t o Insid e FERC ).
The De fen dant s- App ellant s pr ovide the cour t wi th no reas on to belie ve “re por t, ” fir st 9 inclu d e d i n t h e G r a i n Futur es Act of 1922, had a me aning othe r than that use d tod ay. See Gr ain Futur es Ac t, 42 Sta te 998, 100 3 ( 1922)

. 13 Case: 09-20871 Document: 00511861304 Page: 13 Date Filed: 05/18/2012No. 09-20871

about natural gas trades, sent to established industry publications with the intent to inform those publications about the state of the natural gas markets. The Defendants-Appellants argue that “reports,” when used in the CEA, refers only to formal reports requi r ed under the statute to be submitted by traders to the CFTC or to customers, and tha t o t h e r portions of the CEA differentiate between “reports” and mere “statements.” While it i s t r u e that various parts of the CEA specify reports that are to be kept and submitted, such fact cuts against the Defendants-Appellants. Where the CEA discusses reports to be sent to the CFTC or to customers, the CEA specifies the kind of report. See 7 U.S.C. § 6g (providing “[e]v ery person registered hereunder

. . . shall make such reports as are required by the Commission

. . .” (emphasis added)); 7 U.S.C. § 6i(2) (providing certain trades unlawful “unless such person files

. . . with

. . . the Commission such reports regarding any transaction

. . . as the Commission
may by rule

. . . require” (emphasis added)); 17 C.F.R. § 16.00 (providing “[e]ach reporting market shall submit to the co m m i s s ion

. . . a report

. . . showing” specified information); 17 C.F.R. § 17.00 (providing “[e]ach futures commission merchant

. . . shall submit a report to the Commission . . .”; requiring report to provide specified information). Such specifics would be unnecessary if every use of “report” implied the same type of report. The fact that the CEA specifies the kind of report when discussing reports to be made to the CFTC or to customers implies that when the CEA uses “report,” with o ut such limits, it does so in a more general fashion. I n d eed, reading § 13(a)(2) in the manner suggested by DefendantsAppellants would render other sections of the CEA superfluous. The next two subsections of the CEA make it unlawful for “[a]ny pe r son knowingly to make

. . . any st a t e ment in any application, report, or document required to be filed under this chapter

. . . which statement was false or misleading with respect to

a ma t e r i a l f

a c t , ” and for “[a]ny person willfully to falsify

. . . a material fact,

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make any false

. . . statements o r r e p r e sentations

. . . to a registered entity, board of trade, of futures associations

. . . .” 7 U.S.C. §§ 13(a)(3), (4) (emphasis added). Similarly, 7 U.S.C. § 6b(a)(2) renders it unlawful for “any person, in or in connection with any order to make

. . . any contract of sale of any commodity for future delivery

. . . , (B) willfully to make or c a u s e t o b e m a d e to the other
person any false report or statement or willfully to enter or cause to be entered for the other person any false record.” If § 13(a)(2) was intended to cover only false reports sent to the CFTC or to customers, these other sectio n s w ould be superfluous. M o reover, if § 13(a)(2) concerned only false reports submitted to the C FT C ,
or false reports submitted from traders to customers, there would be no need to limit the provision to communications “in interstate commerce,” and that “affect

or tend to affect t h e p r i c e o f any commodity.” See 7 U.S.C. § 13(a)(2). These jurisdictional “hooks” would not be needed for Con gr e ss to regulate false communications to a government agency, or false communications by federally registered traders. See M’Culloch v. Maryland, 17 U.S. (4 Wheat.) 316, 417 (1819)

. The fact is apparent when one looks at the CEA’s provisions that s p e c ifically deal with false reports to t h e CEA or customers. Those sections are not limited to

c o mmunications in interstate commerce or to those that affect commodity price s
. Instead, they render all false statements to the CFTC or customers by registered traders unlawful. See7 U.S.C. §§ 6b(a)(2)(B), 13(a)(3)–(4). Furth e r , the language in § 13(a)(2) indicates that covered “reports” include

more than formal communications to the CFTC or customers. As the Northern District of Georgia pointed out, § 13(a)(2) covers reports communicated “through th e m ails or interstate commere by telegraph, telephone, wire l e s s o r o th e r m e a n s of communication.” See CFTC v. Atha , 420 F. Supp. 2d 1373, 1380–81 (N.D. Ga. 2006). As the section clearly contemplates reports sent by t e l e p h one, it is unlikely it is intended to cover only the official reports.

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Finally, the CFTC has consistently interpreted § 13(a)(2) to apply to trade reports sent to Insider F E R C and/or NGI

, like those sent by the DefendantsAppellants. Although not promulgated in notice-and-comment rulemaking, the CFTC has sued various defendants for behavior identical or simi l ar to that at issue here. See CFTC v. Dizona , 594 F.3d 408, 411–13 (5th Cir. 2010) (alleging defendants sent false reports to Inside FERC and NGI ; affirming district court’s refusal to overturn jury verdict on false reporting because no e vidence that reports were false); CFTC v. Reed , 481 F. Supp. 2d 1190, 1193 (D. Colo. 2007) (alleging defendants sent false trade reports to “industry reporting firm”); Atha , 420 F. Supp. 2d at 1377–78 (alleging defendants sent false reports to Insider FERC, NGI

, and Gas Daily). The CFTC’s consistent interpretation is afforded at l e a s t some deference. See generally Skidmore v. Swift & Co. , 323 U.S. 134 (1944). Accordingly, we find th at th e D e f e n d a nt

- Appellants’ communications with Inside FERC

and NGI

qualified as “reports” under 7 U.S.C. § 13(a)(2). 2. Covered Commodities The Defendants-Appellants next argue that the CEA does not apply to their conduct, making two arguments. First, they argue that natural gas is an exempt commodity under the CEA, and thus, the types of contracts t h ey allegedly falsely reported—natural gas contracts—are ex e mpt. Second, they
argue that because the CEA only regulates natural gas futures contracts, which

are traded on NYMEX, any false reporting related to index prices at hubs other than Henry Hub are not covered by the C E A

. T h e s e arguments will be considered in turn.

a. Exemptions In 1993, the CFTC issued a final rule which “exempt[ed] from all provisions of the [CEA], [except certain provisions to t h e e x tent they prohibit manipulation]

. . . [c]ontracts for the purchase and sale of

. . . natural gas, [and]

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natural gas liquids.” See 58 Fed. Reg. 21,286, 21,294 (1993). Thereafter, 7 U.S.C. § 2(g)–(h) was amended in 2 0 0 0 , as part of the Commodity Futures Modernization Act, to exclude all trades between individual qu a l i f i ed participants that are not “executed or traded on” or “entered into on” a “trading facility,” which, defendants argue, covers the physical natural gas trades. The D e f e n d a nt s - Ap p e ll a nt s c o nt e nd that because natural gas is exempte d u n d e r b o th the 1993 CFTC rule and the 2000 amendment to the CEA, their false reporting practices are also exempted from the CEA’s coverage. T h e Defendants-Appellants’ argument, however, has been uniforml y rejected by the courts that have considered it—this Court included. In United States v. Futch , an unpublished decision, t h i s C o u r t found that the various exemptions only cover actual co n t r acts for natural gas, and do not cover false reports about non-existent contracts. See 278 F. App’x 387, 392 (5th Cir. 2008). In reaching this holding, this Court stated that “§ 13(a)(2)’s false reporting offense

. . . extends to ‘any commodity in interstate commerce’ and is not limited to futures contracts regulated by the CFTC

. . . [;] ‘ f a l s e r e p orting of market information concerning natural gas and attempted manipulation of natural gas price indices does not implicate an agreement, contract or transaction’ and thus does not come under the exceptions in 7 U.S.C. § 2(g)–(h).” See id. (citations and quotations omitted). As in Futch , the charges a g a i nst the DefendantsAppellants do not arise from their execution of contracts for purchase of natural gas, or contracts entered into outside of a trading facility, but rather, for filing false reports about contracts that they claimed to have executed. This reading has been uniformly adopted by courts, and the DefendantsAppellants do not cite any contrary case law to support t h e i r argument. See, e.g
. , R e e d , 481 F. Supp.2d at 1197–98 (holding that false reporting not exempted); A t h a , 420 F. Supp.2d at 1379–80 (same); CFTC v. Bradley , 408 F. Supp. 2d 1214, 1218–19 (N.D. Okla. 2005) (same); United States v. Valencia , No.

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Civ. A. H-03-024, 2003 WL 23174749, at *10 (S.D. Tex. Aug. 2 5, 2003) (same), rev’d on other grounds , 394 F.3d 352 (5th Cir. 2004); see also CFTC v. Johnson , 408 F. Supp. 2d 259, 266–67 (S.D. Tex. 2005) (not expressly addressing issue but finding that CEA covers nearly identical false reporting practices). Moreover, 1 0 other decisions by this Co u r t have implicitly found that the CEA covers false reports about natural gas markets, even if it would not cover the falsely reported contracts (if they e x i s t e d). See Dizona , 594 F.3d at 418 (dismissing false reporting count for lack of e v i d e nce, but assuming CEA covered similar false reporting of natural gas); Valenci a , 3 9 4 F.3d at 353–57 (assuming but not expressly deciding that the CEA covers false reporting of natural gas); see also 58 Fed. Reg. a t 2 1 , 2 9 1 (approving exemption of natural gas; noting conduct “otherwise subject to the Act would not be exempt for such activity , e v e n i f it

were connected to their exempted

. . . (Energy Contract) activity”). In sum, given that we agree with the previously cited decisions that squarely rejected th e Defendants-Appellants’ argument, we hold that the exemptions in the CEA and the CFTC do not cover their reporting activities.

b. “Commodity” The De f e n dants-Appellants next contend that the false reports they submitted did not concern a “commodity” subject to the CEA. They argue that only natural gas traded at Henry Hub is a commodi t y u n d er the CEA because only natural gas traded at H e n r y H ub underlies the natural gas futures cont r acts traded on NYMEX. Consequently, because the government proved only that their false reports affected or could have affected the price of natural

Cf. Uni ted States v. Radl ey , 632 F.3d 177, 182–83 (5t h Cir. 2011) (ho ldi ng § 2(g) ’s 1 0 “co ntr act , agree me nt, or trans act ion” not lim ite d to legally enf orc eableagr eem ents , but als o cover s “co nduc ting bus ines s, ” thus inclu ding, and exem pt ing fr om CEA, def enda nts ’ allege dly
man ipul ative act ions ; dis tinguis hing Futch , st ating fal se ly rep ort ing tra des is not “co nduc ting bus ines s” ). 18 Case: 09-20871 Document: 00511861304 Page: 18 Date Filed: 05/18/2012No. 09-20871

g a s g enerally, and not at Henry Hub, the Defendants-Appellants argue th e i r convictions must be vacated. We do not agree. The CEA defines “commodity” as “wheat, cotton, rice, corn, o a t s , barley,
rye
. . . , and all other goods and arti c l e s , except onions

. . . , and all services, rights, and interests

. . . in which contracts for future delivery are presently or in the future dealt with.” See 7 U.S.C. § 1a(4). Natural gas is plainly a “good”

or “article.” The questions thus turns on whether it is a good “in which contracts for future delivery are presently or in the future dealt with.” As mentioned above, fu t u r e s c o n tracts for natural gas are traded on NYMEX, and those futures are derivative of natural gas traded at Henry Hub. Nonetheless, the record shows that natural gas may be moved from any location to Henry Hub through the national pipeline system. Thus, it would be peculiar that natural gas at another h u b is not a commodity, but suddenly becomes a commodity solely on the basis that it passes through Henry Hub, and ceases to be a commodity once it moves onto so m e o t h e r l o cale. While the price of that commodity may fluctuate with its location, and the forces of supply and demand at that location, the actual nature of the “good” does not change. 1 1 Although, as discussed above, the Defendants-Appellants conduct did not fall within the regulatory exemption, the existence of t h at exemption bolsters

our reading of the definition of “commodity.” T h e CFTC exempted from the CEA’s coverage “[c]ontracts for the purchase or sale of

. . . natural gas.” See 58

Indeed , it is at leas t ope n t o q ues tionw heth er the CEA re quire s a com mo dit y to be 1 1 the s ubjectof a curre ntly exis ting fut ures mark et, or mer ely thatit be suc h a good fo r wh ich a futur es mark et co uld co me into being. The CEA def ines , as a comm odi ty, all “good s .
. . in wh ich cont rac ts for fut ure del ivery are pr es entl y or in the futur e dea lt wi th. ” See § 1 a ( 4 ). Ass umi ng only natur al gas at He nry Hu b wa s a cover ed c o m m o dit y, the De fen dant sApp ellant s pr es ent no reas on wh y gas atot her hubs couldnever se rve as the bas is forot her fut ures mar ke ts

. See Uni ted States v. Rel ia nt Energy Serv s. , Inc. , 420 F. Sup p. 2d 1043, 1062 (N .D

. Cal. 2006) (ho ldi ng “cr im inal man ipul a t i on pr ovis ion of § [13( a)( 2)] is not lim ite d to fut ures cont rac ts ”; “[ r] athe r, acc ord ing to the plai n me aning of the text , the cri mi nal
man ipul atio n p rovis ion als o a pp lies t o ‘ any c om mo dit y in inte rs tat e c om me rce ’”)

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Fed. Reg. at 21,294. Such an exemption would be unnec e s sary if natural gas was not a commodity under the act. 1 2 Case law supports such a r e ading. Although no court has squarely confronted the question presented by the Defendants-Appellants, neither has any court suggested that natural gas at hubs other than Henry Hub is outside the purview of the CEA. See Futch , 278 F. App’x at 390 (stating “natural gas is

a commodity under the Commodity Exchange Act”); Valencia , 394 F.3d at353 (considering allegations defendant manipulated natural gas market , b y reporting false trades, in violation of § 13(a)(2)); United States v. Radley , 659 F. Supp. 2d 803, 806 (S.D. Tex. 2009) (stating “natural gas” was “the commodity at issue in the case”); Reed , 481 F. Supp.2d at 1196 (finding allegations “Defendant attempted to manipulate the price of natural gas, a commodity that travels in interstate commerce” covered by CEA); Atha , 420 F. Supp.2d at 1377–78 (stating “[n]atural gas is a commodity”); Brad le y , 4 0 8 F. Supp.2d at 1220 (“It is

u n d i s p uted that natural gas constitutes a ‘commodity’ under the CEA.”); Johnson , 4 08 F. Supp.2d at 264–65 (finding allegations defendants falsely reported natural gas trades stated a claim under § 13(a)(2)). Hershey v. Energy Tranfers Partners, L.P. , 610 F.3d 239 (5th Cir. 2010), does not contradict this reading. In that case, t h e C o u r t considered whether private plaintiffs had a cause of action based on allegations that the defendants

were manipulating the price of natural gas at hubs other than Henry Hub. Id. at 243–49. The private plaintiffs’ standing to sue was premised on their holding NYMEX futures contracts. Id. at 240. The CEA, howev e r , p rovides a right of action for holders of a futures contract for manipulation of that contract or “the price of the commodity underlying such contract.” See 7 U.S. C

. § 25(a)(1)(D). Consequently, as the plaintiffs had not alleged manipulation of the Henry Hub

The CFTC gave no indi cat ion that it belie ved the exem pt ion cover ed only natur al gas 1 2 at He nry Hu b. 20 Case: 09-20871 Document: 00511861304 Page: 20 Date Filed: 05/18/2012No. 09-20871

natural gas price, which price underl a y their security, they had no cause of action against manipulation of the price o f natural gas which had no affect on their security. See Hershey , 610 F.3d at 241, 247 (stating “[t]he modifier ‘underlying’ has an important effect on ‘ c o m m o dity’

—th e ‘ u n d e rlying commodity’ of a futures contract is a specific good, governed by the terms of the futures contract”; holding “the underlying commodity of a NYMEX natural gas futures contract is not natural gas wherever bought and sold, but the specific nat u r a l
gas delivered at Henry Hub”). Hershey , however, never que s t i oned whether natural gas was a commodity subject to § 13(a)(2). Accordingly, we find that natural gas, whether at Henry Hub or at some other location, is a “commodity” within the meaning of the CEA. 3. Vagueness The Defendants-Appellants next argue § 13(a)(2) is u n c onstitutionally
vague because it fails to give fair notice that the CEA, an act whose prima r y purpose is to regulate futures and options, covers false report ing of physical trades. In particular, they argue that terms “report,” “false or misleading,” “market information,” “conditions that tend to affect the price of any commodity in interstate commerce,” and “price” are all vague. “It is a basic principal of due process that an enactm e n t i s void for
vagueness if its prohibitions are not clearly defined.” Gra y ned v. City of Rockford , 408 U.S. 104, 108 (1972). “[T]he void-for-vagueness doctrine requires that a penal statute define the criminal offense with sufficient definiteness that ordinary people can understand what conduct is prohibit ed and in a manner that does not encourage arbitrary and discriminatory enforcement.” Kolender v. Lawson , 461 U.S. 352, 357 (1983). Nonetheless, it is also “well established that
vagueness challenges to statutes wh i c h d o not involve First Amendment freedoms must be examined in light of the facts of the c a s e a t h a n d

. ” United States v. Mazurie , 419 U.S. 544, 550 (1975 ).

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Here, the Defendants-Appellan t s d o not argue that their speech is protected by the First Amen d m e n t

. Indeed, this Circuit has held that “intentional or reckle s s falsehood, even political falsehood, enjoys no First Amendment protection[.]” Colson v. Grohman , 174 F.3d 498, 507 (5th Cir. 1999) (finding first amendment did not protect defam a t i o n and libel made with knowledge of or reckless disregard to falsity). 1 3 Consequently, the Defendants-Appellants’ vag u eness challenge must be evaluated in light of the proven conduct. As discussed below, the evidence shows the Defendants-Appellants reported knowingly false trades to Inside FERC and NGI , that they did so with the intent that it affect those publications’ reported indexes, and with the intent that it would affect EPME’s financial positions, to their personal benefit. Simply put, it is incredulous to believe that a person of
average i ntelligence could not understand the CEA as potentially applying to that type of conduct. See Futch , 278 F. App’x at 393–95 (holding CEA was not vague in application to false trade reports submitted to Inside FERC ). In particular, “report,” as discussed above, clearly covers the DefendantsAppellants’ emails and faxes to the publi c a t ions. Similarly, “false and misleading” has a clear and w e l l d efined meaning. “[M]arket information” clearly covers reports of quantity and price of trades. See id. at 393 (holding the term “‘market information’ is not vague because [defendant’s] false statements about time, place, price, and volume of

. . . natural gas trades clearly qualified

as ‘market information’ under almost any definition of the term”). Similarly, the term “price” is also clear. See Merriam-Webster, price, available at

Mo reo ver, as di s c u s se d below , the jury fou nd each violat ion of the CEA wa s 1 3
acc om p a n i e d b y a n a c t of wi re fr aud, and fr aud has long been rec ognized to be outs ide the pr ote cti on of the Firs t Ame ndm ent. See Uni ted States v. Steve ns , 130 S. Ct. 1577, 1584 (201 0) (f indi ng “[ f] rom 1791 to the pr es ent

. . . , the Firs t Ame ndm ent has per mi tte d res tri cti ons upon the cont ent of sp eec h,” inclu ding “f raud” (quo tat ion and cit atio ns om itt ed) ). He re, as dis cus se d below , suf

fic ient evide nce wa s intr o d u c e d that the De fen dant s- App ellant s pos se ss ed a fr audul ent inte nt. 22 Case: 09-20871 Document: 00511861304 Page: 22 Date Filed: 05/18/2012No. 09-20871

http://www.merr i am-webster.com/dictionary/price (defining “price” as “the amount of money given or set as consideration for the sale of a specified thing”). Even if the Defendants-Appellants are correct that there are a number of prices in natural gas trading, each one of the referenced prices is a “price, ” a nd thus manipulation of it would create a violation of § 13(a)(2). Finally, the term “affect

or tend to affect” clearly covers a situation, such as the Defendants-Appellants’, where the false reports served as the basis for the industry publication’s price reports. See Futch , F. App’x at 394 ( noting “even if the phr ase ‘tends to affect’

were found to be vague in some factual contexts, it is sufficiently clear to have put [defendant] on notice that providin g false sales data to Inside FERC ’s monthly reporting index survey violated the law”). Accordingly, the CEA is not unco n stitutionally vague as applied to the Defendants-Appellants’ conduct. 4. Overbreadth The Defendants-Appel lants also challenge the CEA as being unconstitutionally overbroad. The Defendants-Appellants argue that the CEA, while directed at constitutionally unprotected speech, nevertheless covers constitutionally protected speech because it requires no mens re a p r o o f with regard to the element that the speech “affect or tend to affect” commodity prices. A statute is overbroad if in “banning unprotected speech,” a “substantial amount of protected speech is prohibited or chilled in the process.” Ashcroft v. Free Speech Coalition , 535 U.S. 234, 237 (2002). Nevertheless, by its express language, the CEA only covers “knowingly

. . . false or misleading or knowingly inaccurate” speech. Su c h speech is not constitutionally protected. See Colson

v. Grohman , 174 F.3d 498, 507 (5th Cir. 1999). Accordingly, the CEA covers no constitutionally protected speech.

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C. Jury Instructions The Defendants-Appellants next argue that the dis t r i ct court’s jury instructions were erroneous on several grounds. We review “preserved error in jury instructions under an abuse of d i s c r etion standard and ask whether the court’s charge, as a whole, is a correct statement o f t h e l a w and whether it

c l early instructs jurors as to the principles of the law applicable to the factual issues confronting them.” United States v. Kay , 513 F.3d 432, 446 (5th Cir. 2007) (quotation and footnote omitted). Under this standard, district courts “enjoy substantial latitude in formulating a jury charge.” United States v. Davis , 609 F.3d 663, 689 (5th Cir. 2010); see also United States v. Williams , 610 F.3d 271, 285 (5th Cir. 2010). Similarly, the district court is afforded “great discretion in responding to jury questions.” United States v. Wilcox , 631 F.3d 7 4 0 , 752 ( 5th Cir. 2011) (quotation marks omitted). However, when a jury instruction “hinges

on a question of statutory construction, [our] review is de novo.” United States v. Wright , 634 F.3d 770, 774 (5th Cir. 201 1). 1. Conspiracy Instructions First, the Defendants-Appellants argue that the district court incorrectly instructed the jury on the mens rea of conspiracy and conspiracy to commit wire fraud in a response to a jury note. In its j u r y i n structions, based on the Fifth Circuit Pattern Criminal Instructions, the district court instructed that to convict for conspiracy under 18 U.S.C. § 371, the jury must find: 1 4 First : That two or more persons made an agreement to commit the crime of false reporting or wire fraud as charged in the indictment;

18 U. S. C. § 3 71 p rovid es : 1 4

If tw o or mo re per so ns cons pir e eit her to com mi t any off ens e agains t the Unit ed Sta tes , or to def

raud the Unit ed Sta tes , or any agency ther eof in any man ner or for any pur pos e, and one or mo re of suc h per so ns do any act to eff ect the objec t of the cons pir acy , e a c h sha ll be fine d unde r this tit le or im pr iso ned not mo re than five years , or both

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Second : That the defendant knew t he unlawful purpose of the agre e m e n t and joined in it willfully, that is, with the intent to further the unlawful purpose; and Third : That one of the conspirators during the existence of the conspiracy k n o w i n gly committed at least one of the overt acts described in the indictment, in o rder to accomplish some object or purpose of the conspiracy. The district court also explained that under the first element the jurors need to “agree that the government proved beyond a r e a s o n ab le doubt that the defendants conspired to commit false reporting; or, all of you must agree that the government proved beyond a reasonable doubt that the defendants conspired to commit wire fraud.” The district court instructed that to convict someone of wire fraud under 18 U.S.C. § 1343, the jury must find: 1 5 First : That the defendant knowingly created a scheme or artifice to defraud or to obtain money, property or other thin g s o f v a l ue by
means of material false or fraudulent pretenses, representations or promises as set out in the indictment; Second : That the defendant acted with a specific intent to defraud; Third : That the defen d a nt used interstate wire communications facilities or caused another person to use interstate wire communications facilities for t he purpose of carrying out the scheme; and Fourth : That the scheme to defraud employed false material representations. The district court explained that “‘specific intent to defraud’ means an intent to specifically deceive or cheat someone.” During its deliberations, the jury sent the district court a note asking:

18 U. S. C. § 1 343 pr ovide s: 1 5

Whoeve r, having devis ed or inte ndin g to devi s e a n y sc hem e or art ifi ce to def raud , or for obta ining mo ney or pr ope rty by me ans of fal s e o r f r a u dule nt pr ete nse s, rep res enta tio ns, or pr om ise s, tra nsm its or caus es to be tra nsm itt ed by me ans of wi re, rad io, or tel evis i o n c o m mun icat ion in inte rs tat e or for eign
com me rce , any wr itin gs, signs , signa ls, pic tur es , or so unds fo r t h e pur pos e of execut ing suc h sc hem e or artifi ce, sha ll be fine d unde r this tit le or impr iso ned not mo re than 20 ye ars , or both

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In the second part of Count 1 i t s t a tes, “that the Defendant knew the unlawful purpose.” Doesn’t this contradict th e i d e a that “ignorance of the law is no excuse.”
After a conference with the parties, the district court replied to the note, writing: There is no contradiction. The government is not required to prove that a defendant knew the purpose of the agreement w a s i n fact unlawful, that is, in violation of a statute, but the government must prove the defendant knew the purpose of the agreement, and the government must prove that the purpose was in fact unlawful. The Defendants-Appellants argue that this answer misstates the mens rea required to prove conspiracy and conspiracy to commit wire fraud. A conviction for conspiracy under Section 371 requ i r e s that the government prove: “(1) an agreement between two or more persons to pursue an unlawful objective; (2) the defendant’s knowledge of the unlawful objective and voluntary agreement to join the conspiracy; and (3) an overt act by one or more of the members of the conspiracy in furtherance of the objective of the conspiracy.” United States v. Coleman , 609 F.3d 6 9 9, 704 (5th Cir. 2010); see also United States v. Curtis , 635 F.3d 704, 719 n.53 (5th Cir. 2011). Conspiracy

a c tually has two intent elements—intent to further the unlawful purpo s e a n d the level of intent required for proving the underlying substantive offense. See 2 Wayne R. LaFave & Austin W. Scott, Jr., Substantive Cr i m i n a l Law § 12.2(c)(1) (2003); United States v. Alvarez , 610 F.2d 1250, 1255 (5th Cir. 1980) (“Conspiracy is, ho w e v e r , more complex because it involves two elements of intent that shade into each other: each party must have intended to enter into the agreement and the schemers must have had a common intent to commit an unlawful act.”). 1 6

Altho ugh the tw o inte nts are se par ate, they oft en func tio nally coll aps e into a sin gle 1 6 inte nt. Uni ted States v. Chagra , 807 F.2d 398, 401 (5t h Cir. 1986)

. Thus, oft enti me s, it is only
nece ss ary for the governm ent to pr ove the level of inte nt requ ired for pr oving the unde rlying sub st antiveoff

ens e. Uni ted States v. Feola , 420 U. S. 671, 686 (197 5); Uni ted States v. Da di , 235 F.3d945 , 950 (5t h Cir

. 2000)

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The Defendants-App e l l ants first seem to argue that proving conspiracy always requires proof the defendant knew his conduct was unlawful, regardless of the mens rea of the underlying substantive offense. This a r gument is inconsistent, however, with the Supre m e C o u r t’s opinion in Ingram v. United States , 360 U.S. 672 (1959). In that decision, the Supreme Court stated that to convict for conspiracy, “[t]here need not, of course, be proof that the conspirators

were aware of the criminality of their objective,” but rather, there must only be proof of knowledge of the u n l a w f u l c onduct. Id. at 678. This holding was reaffirmed in United States v. Feola

. 420 U.S. 671 (1975). In Feola , t h e Supreme Court again stated that the government need not prove anything more than the degree of criminal intent necessary for the substantive offense in order to convict a defendant of conspiracy. Id. at 686–87. Thus, to the extent that the Defendants-Appellants argue that c o nspiracy always requires proof that the defendant knew his conduct was unlawful, we reject their argument. See United States v. Blair , 54 F.3d 639, 642–43 (10th Cir. 1995) (rejecting same argument and stating that since “‘one can violate a criminal statute simply by engaging in the forbidden conduct, a conspiracy to commit that offense is nothing more than

an agreement to engage in the prohibited conduct’” (quoting Feola , 420 U.S. at 687)). 1 7 More specific to the wire fraud offense, the Defendants-Appellants argue that the answer to the jury’s que s t i o n was erroneous because it improperly lowered the intent required to prove conspiracy to commit wire fraud. They
argue that the response improperly led the jury to believe that the DefendantsSee also Uni ted States v. Ram is ca l , 99 F.3d 1148 ( 9 t h Cir. Oc t. 18, 1996) 1 7 (unp ublis hed) (r eject ing argum ent that pr oof of cons pir acy alw ays requ ires pr oof of kn ow led ge of illegal ity of cond uct); Uni ted States v. Jo , 99 F.3d 1147 (9t h Cir. Oc t. 18, 1996) (unp ublis hed) (s ame ); Uni ted States v. Sclam o , 578 F.2d 888, 891 (1s t Cir. 1978) (r eject ing sim ilar argum ent and st ating, “[ t] he unde rlying sub st antive st atut e doe s not requ ire a sho wi ng of sp ecif ic Me ns rea; the cons pir acy count requ ires no great er degr ee of sc ient er than the sub st antive count”)

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Appellants could be convicted even if they lacked specific intent to defraud. This is closer, b ut again, we do not find the Defendants-Appellants’ argument persuasive. To prove wire fraud, the government must prove: (1) a scheme or artifice to defraud; (2) material falsehoods; and (3) the use of interstate wires in furtherance of the scheme. See Curt i s , 6 3 5 F.3d at 718 n.49; United States v. M cM i llan , 600 F.3d 434, 447 n.24 (5th Cir. 2010). Violation of the wire-fr a u d statute requires the specific intent to defraud, i.e., a “conscious knowing intent to defraud.” United States v. Reyes , 2 3 9 F

. 3 d 7 2 2 , 736 (5th Cir. 2001). Thus,
p r o ving conspiracy to commit wire fraud requires proof that the DefendantsAppellants joined the conspiracy with the specific intent to defraud. See Curtis , 635 F.3d at 719 n.53. The district court’s response to the jury’s note accurately describes this intent requirement. The jury note states that as to the conspiracy statute itself, ignorance of the law is no excuse, because “[t]he government is not required to prove that a def e n d a nt knew the purpose of the agreement was in fact unlawful, that is, in violation of a statute, b u t the government must prove the defendant knew the
purpose of the agr e e m e n t

. ” See Ingram , 360 U.S. at 678. The note also accurately states that the government must prove that the purpose was in fact unlawful, which requires proof that the Defendants-Appellants acted with the requisite mens rea to commit wire f r a u d

. Coleman , 609 F.3d at 704–06 ( a n alyzing whether elements of target offense also met when determining if conspiracy to commit that offense proven); United States v. Bedford , 536 F.3d 1148, 1155 (10th Cir. 2008) (stating government must prove degree of criminal intent necessary to prove underlying crime). Although the d i s t r i c t court’s
response possibly c o ul d h ave s p e ll e d o ut th e r e l ati o nship between conspiracy and the underlying substantive offenses more clearly, it is n o t an incorrect statement of the law, particularly in light of the rest of the jury charge. See United States

28 Case: 09-20871 Document: 00511861304 Page: 28 Date Filed: 05/18/2012No. 09-20871

v. Chavis , 772 F.2d 100, 108 (5th Cir. 1 9 85) (“The jury charge must

. . . be considered as a whole, in the full context of the trial.”). 1 8 Therefore, we conclude that the district court’s instructions and the note to the jury were an accurate statement of the mens rea required to convict for conspiracy to commit wire fraud. 2. Deliberate Ignorance Instruction Next, the Defendants-Appellants argue that th e d i s trict court’s jury instruction on deliberate ignorance impermissibly lowered the mens rea of both offenses. The district used the Pattern Fifth Circuit instruction, and instructed: You may find that a d e f endant had knowledge of a fact if you find that the defendant delibera t e ly closed his eyes to what would otherwise have been obvious to him. While k n o w l edge on the part of the defendant cannot be established merely by demonstrating that the defendant was negli ge nt , c ar e l e s s , o r foolish, knowledge can be inferred if the defendant deliberately blinded hi m s e l f to the existence of a fact. Fifth Circuit Pattern Criminal Jury Instruction s , § 1

. 37. The DefendantsAppellants argue that these instructions were incorrect on two grounds: first,

The De fen dant s- App ellant s als o argue that t h e note gave the jury the im pr es sio n 1 8 that the maxim “ignor ance of the law is no excus e” wa s off icia lly a jury ins tru cti on. Whet her
or not it wa s pr ope r for the dis tri ct cour t to imp lici tly ado pt this st atem ent, the note acc urat ely st ated that this cas e did not f a l l wi thin the narr ow excep tio n to the tra dit ional rule that “ignor ance of the law is no excus e,” as laid out by the Sup rem e Court

. T h e S u p r e m e Court st ated that “th e tra dit ional rule that ignora nce of the law is no excus e” doe s not app ly only in
cas es involving highly tec hnica l st atut es that cri mi nalize othe rw ise “inno cent cond uct .” Brya n v. Uni ted States , 524 U. S. 184, 194–96 (199 8); see also Ratz la f v. Uni ted States , 510 U. S. 135, 149 ( 1994) ; Che ek v. U nitedState s , 498 U. S. 192 , 199–200 ( 1991)

. Alt hough wi re fr aud is a sp ecif

ic inte nt cri me , it wo uld not fal l into this narr ow excep tio n to the genera l rule

. See Kay , 513 F.3d at 447–51 (d es cribing narr ow excep tio n to tra dit ional rule that ignora nce of the law is no excus e). Furt her, to the exten t that the D e f e n d ants -Ap pel lants argue that this ins tru cti on gave the jury the im pr es sio n that it coul d not a c q u i t , e v e n if it fou nd that the De fen d a n t s - App ellant s belie ved they we re giving acc urat e ans we rs to the publ icat ions , the ins tru cti on on sp ecif

ic inte nt to def

raud mad e clea r to the jury that it coul d not convic t unles s it fou nd a “co nsc ious kn o w i n g inte nt to def raud .” See Uni ted States v. Cav in , 39 F.3d 1299, 1310 (5t h Cir. 1994) (a find ing of inte nt to d e f r a u d a n d good fai th are mut ually exclus ive). Tak en in cont ext wi th the res t of the ins tru cti ons , and the rem a i n der of the note , we do not thinkt hat the st atem ent regar ding “ignor ance of t he law” wa s in err or. 29 Case: 09-20871 Document: 00511861304 Page: 29 Date Filed: 05/18/2012No. 09-20871

that the evidence did not support the instruction; a nd second, that the instruction was legally incorrect. On the first argument, a deliberate i g n o r a n ce instruction is warranted “when a defendant claims a lack of guilty knowledge and the p r o of at trial supports an inference of deliberate indifference.” United States v. Moreno , 185 F.3d 46 5 , 4 7 6 ( 5 t h Cir. 1999) ( quotation omitted). “The evidence at trial must raise two i nferences: (1) the defendant was subjectively aware of a high probability of the existence of the illegal conduct; and (2) the defendant
p urposely contrived to avoid learning of the illegal conduct.” United States v. Lara–Velasquez , 919 F.2d 946, 951 (5th Cir. 1990). I n assessing whether evidence sufficiently supports the i n s t r u c tion, we “view the evidence and all reasonable i n f

e r e n c es that may be drawn from the evidence in the light most favorable to the [g]ove rnment.” United States v. Mendoza-Medina , 346 F.3d 121, 132 (5th Cir. 2003) (quotation omitted); United States v. Gray , 105 F.3d 956, 967 (5th Cir. 1997). The first requirement for using the ins truction—the defendant claims a lack of guilt y k n o w ledge—is not disputed by the parties. The second requirement—the defendant purposely contrived to avoid learning of the illegal conduct—is satisfied i f t h e evidence at trial raises an inference that: (1) the defendant was subject iv e ly aware of a high probability of the existence of the illegal conduct; and (2) the defendant purposely contrived to avoid lear ning of t h e i l l e g a l conduct. Lara-Velasquez , 919 F.2d at 951. Here, taking all reasonable inference in the government’s favor, the r e is more than sufficient evidence to f

i n d t hat the Defendants-Appellants were subjectively aware of a high probably of the existence of illegal conduct and that they purposely contrived to avoid learning of the illegal conduct. On this first prong, a review of t he record shows that there was a great deal of evidence admitted at trial showing that the Defendants-App e l lants

30 Case: 09-20871 Document: 00511861304 Page: 30 Date Filed: 05/18/2012No. 09-20871

believed that their conduct was illegal, or were aware of a high probability that it was illegal. For example, testimony a t t r i a l revealed that Brooks told coworkers that they would “be toast” if the go v ernment looked into their index reporting practices, and later, Brooks ordered traders to delete all copies of the reports that had been sent to the trade publication s
. S i m ilarly, all of the Defendants-Appellants were involved in the email communication wh e r e the traders decided to continue reporting based on “b ook bias.” In that email exchange, the traders discussed how they should not discuss t h i s topic over email—an obvious inference f ro m th e s e c o m m e nt s i s that the traders were aware their “book bias” method of reporting was likely illegal. Finally, taking a step back, it is simply unbelievable to think that sophisticated gas traders, such as the Defendants-Appellants, did not realize that falsely repor t i n g d a ta to steal

mon e y from basis trading partners was, in all likelihood, criminalized under some statute. On the second prong, the Defendants- Ap p e l l a nts argue that there is no evidence that they “purposefully contrived to avoid learning of illegal conduct.” Specifically, the Defendants-Appellants claim that they did not know the actual instructions sent by the publications, and that they thought they were sending the correct information. There is evidence in the record, however, showing that t h e Defendants-Appellants purposely avoided learning of the illegal nature of the conduct. For e x a m p l e, both Brooks and Phillips repeatedly ignored the reporting instructions, and they b o th also had conversations with Kelley Doolan,

an editor at Inside FERC, about the reporti n g r e q u irements. Similarly, other evidence indic a t e d that Walton had been forwarded a spreadsheet with fake trades, and that he was included in the “book bias” email, in which the traders made statements indicating that their reporting practices were not in line with Inside FERC

’s instructions. Based on this evidence, we hold that it was not an

31 Case: 09-20871 Document: 00511861304 Page: 31 Date Filed: 05/18/2012No. 09-20871

abuse of discretion f

o r t he district court to instruct the jury on deliberate ignorance. Second, the Def

e ndants-Appellants argue that the instruction on deliberate i g n o r a n c e was an improper statement of the law in light of the Supreme Court’s recent d e c i s i o n i n G lo b a l

- T ech Appliances, Inc. v. SEB S.A. , 131 S. Ct. 2060 (2011). In Global-Tech , the Supreme Court considered willful blindness in the civil context, stating that willful blindness requires proof that: “(1) the defendant [ ] subjectively believe[d] that there [was] a high probability that a fact exists and (2) the defendant [took] deliberate actions to avoid learning

o f that fact.” Id. at 2070. The Court continued, stating that willful blindn e s s “surpasses recklessness and negligence,” and that “a willfully blind defendant i s o n e who takes deliberate actions to avoid confirming a high probability o f wrongd o i n g a n d who can almost be said to have actually known the critical facts.” Id. at 2070–71. The Fifth Circuit Pattern Instruction meets the standard set forth by the Supreme Court in Global-Tech

. The instructions do not have the same failings 1 9

as the Federal Circuit sta n d a r d r eversed in Global Tech , which allowed for a finding of willful blindne ss where there is only a “known risk,” and where the defendant did not make an active effort to avoid knowledge. Global-Tech , 131 S. Ct. at 2071. As to Global Tech ’s first prong—the defendant “must subjectively believe that there is a high probability that a fact exists”—the jury instruction provided that the defen d a n t n e eded to have “deliberately closed his eyes” to a fact that “would otherwise have been obvious to him.” As to t he second prong—the defend a n t “ m u s t take deliberate actions to avoid learning of that

Altho u gh Globa l- Tec h wa s a civil cas e, the st andar d se em s to app ly equall y to 1 9
c r i m i n a l d e l ibera te ignora nce cas es
. See Uni ted States v. Fergus on , -- - F.3d

-- -- , 2011 WL 6351862 , at *10 n.16 ( 2 d C i r
. De c. 19, 2011) (ap plying st andar d in cri mi nal cas e and noti ng sli ght dif

fer ence s in ter mi nology) ; Uni ted States v. Butler , 646 F.3d 1038, 1041 (8t h Cir. 2011) (s ame ). 32 Case: 09-20871 Document: 00511861304 Page: 32 Date Filed: 05/18/2012No. 09-20871

fact”—the instruction provided that the defendant needed to have “deliberately closed his eyes,” and “deliberately blinded himself to the existence of a fact.” The instruction also stated that merely finding the defendants were “n e gl i g e n t, careless, or foolish” was insufficient. Thus, although this instruction obviously does not use the same language as Global-Tech , the same meaning is conveyed. Accordingly, not only was the deliberate ignorance instruction ju s t i f ied, the instruction itself was legally correct. 3. False Reporting Instruction The Defendants-Appellants also argue that the jury instructions were in

error because the district court incorrectly stated the elements of false reporting under the CEA, 7 U.S.C. § 13(a)(2). In relevant part, the CEA provides that “[i]t shall be a felony

. . . for

. . . [a]ny person . . . knowingly to deliver or cause to be delivered for transmission through the mails or interstate commerce by telegraph, telephone, wireless, or other me a n s of communication false or misleading or knowingly inaccurate reports concerning crop or market information or conditions that affect or tend to affect the price of any commodity in interstate commerce
. . . . ” 7 U.S.C. § 13(a)(2). The district court instructed the jury that to convict it must find that the Defendants-Appellants: (1) “knowingly delivered, or caused to be delivered, for transmission through interstate commerce by telephone o r o ther means of communication a material false or misleadi n g or inaccurate report”; (2) “knew t h e report was false or misleading or inaccurate; and (3) “[t]hat the repo r t concerned market information or conditions that affected or tended to affected the price of a commodity in interstate commerce.” The Defendants-Appellants
argue that the mens rea of false reporting—knowingly—require s t h a t a defendant must “know” his reports would “affect or tend to affect the price of any commodity in interstate commerce.”

33 Case: 09-20871 Document: 00511861304 Page: 33 Date Filed: 05/18/2012No. 09-20871

In Valencia , the Court found that “knowingly” in this section of the CEA applies both to the transmission and falsity of the report (elements one and two), bu t t h a t decision did not reach whether it applied to the final element of the offense. 394 F.3d at 354–56. It is not clear whether “knowingly” applies to all 2 0 of the elements of the offense. As a matter of natural reading and grammar, there is not an interpretation of the language that clearly makes the most sense. See generally Flores-Figueroa v
. U n i ted States , 556 U.S. 646 (2009) (applying “ordinary English grammar” to construe statute’s knowledge requirement); see also United S t a t e s v
. Betancourt , 586 F.3d 303, 308–09 (5th Cir. 2009) ( d e t e rmining whether mens rea applies to elements of an offense after Flore s Figuero a)

. The Defendants-Appellants argue that the mens rea should be applied to the final element of the offense based on the Supreme Court’s decision i n United States v. X-Citement Video, Inc. , 513 U.S. 64 (1994). In X-Cit e m e n t Video , the Supreme Court read the term “knowingly” as applying to each element of a child pornography offense, even though the “mos t natural
gramm a t i cal reading” of the statute did not suggest this result. See id. at 68. In reaching this conclusion, the Supreme Court set forth a general rule that a “scienter requirement should appl y t o each of the statutory elements that criminalize otherwise innocent conduct.” See id. at 72 (citing Staples v. United States , 511 U.S. 600, 619 (1994)); see also Carter v. United States , 530 U.S. 255, 269 (2000) (reaffirming X-Citement Video rule); V a le ncia , 394 F.3d at 354–56 (applying the X- Ci t e m e nt Video rule to the CEA). Here though, the first two elements of the offense already require that a defendant knowingly transmit a knowingly false statemen t , l a r g ely taking the criminalized conduct out of the

Altho ugh obvious ly not dis pos itive , our dec isi on in Va le nci a has been inte rp ret ed by 2 0 othe r cour ts as only requ iring kn ow led ge as to the fir st tw o elem ents of the off ens e. See, e. g. , Atha , 420 F. Sup p. 2d at 1380; CFTC v. Johns on , 408 F. Sup p. 2d at 267. T h i s C ourt als o ado pt ed that inte rp ret atio n in Futch , 278 F. App ’x at 391, altho ugh that is an unpub lis hed and
non- pr ece dent ial dec isi on. 34 Case: 09-20871 Document: 00511861304 Page: 34 Date Filed: 05/18/2012No. 09-20871

realm of innocent activity. See United States v. B u t ler , 637 F.3d 519, 524 (5th Cir. 2011) (stating that Staples and X-Citeme n t V i deo presumption does not apply where statute “does not entail the risk of subjecting ordinary citizens to criminal prosecution for otherwise innocent conduct”). 2 1 Overall, it is not clear whether knowledge applies to the requirement that the false report affect or tend to affect the price of a commodity. However, even assuming that the Defendants-Appellants are correct in their interpretation of the statute, we need not reverse their convictions. Where a trial court misstates

or omits an element of an offense, the conviction is reviewed for harmless error. Se e Neder v. United States , 527 U.S. 1, 9–10 (1999); Pope v. Illinois , 48 1 U

. S

. 497, 501–04 (1987); United States v. Bohuchot , 625 F.3d 892, 903 (5th Cir. 2010); United States v. Delgado , 256 F.3d 264, 280–81 (5th Cir. 2001). Under this plain

error standard, the conviction sh o u l d be affirmed if it is “clear beyond a reasonable doubt that a rat i o n a l j ury would have found the defendant guilty absent the error.” Neder , 527 U.S. at 18; acco r d United States v. Skilling , 638 F.3d 480, 481–82 (5th Cir. 2011 ). Here, there was a great deal of evidence admitted at trial showing that the Defendants-Appellants knew their price reports would or had affected natural
gas indexes. For example, according to Dean, Brooks told him that they “gamed the system” and that Dean needed to report trades that would favorably affect the index prices. Additionally, in the October 2000 “book b i as” email, Brooks

wr o t e t o the other traders that “we reported only verifiable fixed price

See also Uni ted Sta tes v. V el te , 331 F.3d673 , 680 (9t h Cir. 2003) (hold ing me ns rea 2 1 did not app ly to “w itho ut autho rit y” language in st atut e beca use se tt i n g a f i re in a natio nal par k not genera lly c ons ide redan innoc ent act); Uni ted Sta tes v. Q uar rel l , 310 F.3d664, 672 (10t h Cir. 2002) (s tat ute prohibi ting excavat ing forartif act s on fe der al lands did not requ ire kn ow led ge that one wa s on fed eralla nd beca use “[ o]n e wo uld antic ipat e that excavat ing for
arc haeol ogical res ourc es on anot her per so n’s land , wh ethe r pr ivate or p ublic , wo uld not be view ed as an innoc ent act”) ; Uni ted States v. Sablan , 92 F.3d 865, 868 (9t h Cir. 1996) (f ede ral st atut e barr ing unauth orize d com put er acc es s did not requ ire kn ow led ge acc es s wo uld caus e dam age b ecau seuna utho rizedac ces s not an i nnoce nt act). 35 Case: 09-20871 Document: 00511861304 Page: 35 Date Filed: 05/18/2012No. 09-20871

transactions to IF for October” and “[it] only eliminated us as a n a c t i v e price setting participant.” O’Toole and Dean bot h a l s o testified that they were instructed by Phillips or Brooks to coordinate their reports with Walton, and that Walton would give them target prices for the indexes. Additionally, there

were numerous recorded c o nversations and emails entered into evidence, during which Walton and Phillips discussed the manner certain reports would or had affected index prices. Moreover, the jury convicted the Defendants-Appellants for wire fraud on every count that it convicted them for false reporting. In doing
so, the jury found that the Defendants-Appellants had specific intent to defraud when submitting these false reports, which indicates that the jury also believed that the Defendants-Appellants had knowledge that their reporting would affect index prices. Given this evidence, it is “clear beyond a reasonable doubt that a rational jury” would have found that t h e Defendants-Appellants had knowledge that their reports affected or tended to affect the price of natural gas. Accordingly,

we decline to decide whether the mens rea appl i e s t o the final element of false

re p o r t i n g , because even assuming that it does, the error would be harmless. 4. Cumulative Error Finally, the Defendants-Appellants argue that the cumulative error of the jury instructions errors requires reversal. “[T]he cumulative error doctrine

. . . provides that an aggregation of non-reversible errors (i.e., plain errors failing to necessitate reversal and harmless errors) can yield a denial of the constitutional right to a fair trial, which calls for reversal.” United States v. Munoz , 150 F.3d 401, 418 (5t h C i r
. 1 9 9 8). Beyond the issue of whether the mens rea applied to the final element of the false reporting offense—whic h w e are confident was

36 Case: 09-20871 Document: 00511861304 Page: 36 Date Filed: 05/18/2012No. 09-20871

harmless if it w a s e r r o n eous—we found no errors in the jury instructions. Therefore, we hold that the cumulative error do ctri n e do e s n ot require reversal. 2 2 D. Fundamental and Arguable Ambiguity The Defendants-Appellants also argue that the qu estions on the Inside FERC and NGI surveys were fundamentally ambiguous—requiring a judgment of acquittal—or that the district cour t s h o u l d have given the jury an arguable ambiguity instruction. First, the Defendants-Appellants argue that the district cou r t e r r e d by denying their motion for acquittal because they were convicted for a n swering fundamentally ambiguous questions. Specifically, they argue that there are not universally accepted definitions for the terms “trading location,” “bidweek,” “baseload,” or “f

i x e d price.” This court reviews the district court’s denial of a motion for acquittal d e novo. United States v. Bennett , 664 F.3d 9 9 7 , 1 0 1 1 –12 (5th Cir. 2011).

The De fen dant s- App ellant s als o brie fly chall enge the dis tri ct cour t’s deni al of a good 2 2 fai th ins tru cti on and an ins tru cti on that fai lure to fol low Insid e FERC ’s ins tru cti ons , st andi ng alone , is not a cri me
. As to the good fai th ins tru cti on, the d i s t r i c t c o urt did not abus e its dis cre tio n in denyi ng it. “The di s t r ict cour t wi ll not abus e its dis cre tio n wh en it deni es a pr off ere d ins tru cti on unles s this ins tru cti on (1) wa s a cor rec t st atem ent of the law , (2) wa s not sub st antia lly cover ed in the char ge as a wh ole, and (3) conc erne d an im por tant p o i n t i n the tri al suc h that the fai lure to ins tru ct the jury on the iss ue se riou sly im pair ed the def enda nt’ s abilit y to pr es ent a given def ens e.” Uni ted States v. Jobe , 101 F.3d 1046, 1059 (5t h Cir. 1996) (c itat ion and quot atio n mar ks om itt ed)

. A dis tri ct cour t may “re fus e to sub mi t an ins tru cti on regar ding a good fai th def ens e if the def

ens e is sub st antia lly cover ed by the char ge given and the def enda nt has had the opp ort unity to argue good fai th to the jury.” Uni ted States v. Up ton , 91 F.3d677, 683 (5t h Cir. 1996) (quo tat ion om itt ed)

. He re, the D efe ndant s- App ellant s w ere per mi tte d to argue that they act ed in g o o d f a i t h and had no inte nt to def raud , and the jury ins tru cti ons acc urat e l y conveye d the sp ecif ic inte nt requ ired to both com mi t fr aud and
cons pir acy. See Uni ted States v. Storm , 36 F.3d 1289, 1294–95 (5t h Cir. 1994) (r efu sin g to find
err or wh ere “d efe nse of good fai th wa s sub st antia lly cover ed by char ge to t h e j u r y” o n the ter ms “ ‘k now ingly’ and ‘w illf ully’” ). Sec ond, the De fen dant s- App ellant s pr opo se d ins tru cti on that a fai lure to fol low Insid e FERC ’s ins tru cti ons , by its elf, is not evide nce of a cri me , is conf usi ng and the ins tru cti on lik ely
wo uld have mi sle d the jury. Furt her, the ins tru cti on se em s to be ina ccu rat e, given that a fai lure to fol low Insid e FERC ’s ins tru cti on s alone , wi th the pr ope r inte nt, coul d cons tit ute fal se rep ort ing or wi re fr aud. Thus, denyi ng this ins tru cti on w a s a l s o not an abus e of dis cre tio n. See Jobe , 101 F.3dat105 9. 37 Case: 09-20871 Document: 00511861304 Page: 37 Date Filed: 05/18/2012No. 09-20871

To be fundamentally ambiguous, a “question must lack ‘a meaning about which men of ordinary intellect could agree, nor one which c o u l d b e u s ed with mutual understanding by a questioner and answerer unless it were defined at the time it were sought and offered as testimony.’” United States v. Strohm , 671 F.3d 1 1 7 3 , 1 1 7 9 (10th Cir. 2011) (quoting United States v. Farmer , 137 F.3d 1265, 1269 (10th Cir. 1998)); accord United States v. Culliton , 328 F.3d 1074, 1078 (9th Cir. 2003). The question must be so vague that it is impossible to have intended to answer it untruthfully. Un i t e d S t ates v. Richardson , 421 F.3d 17, 33 (1st Cir. 2005). Wh ere a question is found to be fundamentally ambiguous,

a defendant’s answer to it is insufficient a s a m a t ter of law to sustain a conviction. Richardson , 421 F.3d at 33. A question is fundamentally amb i gu o u s, however, in only very “narrow circumstances.” Strohm , 671 F.3d at 1179; United States v. Damrah , 412 F.3d 618, 627 ( 6 th Cir. 2005) (stating that doctrine applies only in “exceptional” ca s e s )

. If a witness “knowingly made a false statement, based on his or her understanding of the question,” the doctrine does not apply, Strohm , 671 F.3d at 1180, and a witness cannot “twist the meaning of a question in his own mind into some totally unrecognizable shape and then hide behind it by alleging its fundamental ambiguity,” Richardson , 421 F.3d at 35 (quotation omitted). Given the context in which the fundamental ambiguity defense has been applied previo u s l y , we hold that it does not apply under the facts of this case. It is completely i m p l a u sible to think that the Defendants-Appellants reported fabricated trades based on a misinterpretation of the ins t r u ctions. The fundamental ambiguity defense does not apply where a defendant “twist[s] the meaning of a question in his own mind into some totally unrecognizable shape and then hide[s] behind it by alleging its fundamental ambiguity.” Richardson , 421 F.3d at 35 (quotation omitted); see also Farmer , 137 F.3 d a t 1 2 6 9 ( stating that a question cannot be isolated from context to engineer ambiguity); United

38 Case: 09-20871 Document: 00511861304 Page: 38 Date Filed: 05/18/2012No. 09-20871

States v. Carey , 152 F. Supp. 2d 415, 427 (S.D.N.Y. 2001) (defense does not apply where an “answer to an ambiguous q u e s t ion is false under any reasonable interpretation”). There is no reasonable interpretation of the instructions that would allow reporting invented and fabricated trades. Indeed, the DefendantsAppellants are unable to cite any actual trade that was mistakenly reported due to specific ambiguities in the survey instructions. 2 3 Additionally, as to the only Defendant-App e llant who testified, Brooks stated at trial that he either (1) did not ever read Inside FERC ’s instructions, or (2) consciously disregarded the i n s t r u ctions and submitted invented data as a

means of reporting “fair market value” (or “book bias”) to make the indexes more accurate, even though he knew the publications only wanted actual trades. In either case, Brooks admits that the instructions did not cause the type of false reporting that occurred. See United States v. Mubayyid , 658 F.3d 35, 63 (1st Cir. 2011) (holding that, if t he defendant gave a false response based on how he understood the question, his conviction would not be invalidated due to ambiguity in question); Culliton , 328 F.2d at 1079 (“[The defendant] points to no case, and indeed we have found none, that j u s t i f ies an applicant’s unilateral reinterpretation of questions

. . . to comport with his own parti c u l ar goals.”); U nited States v. Bollin , 264 F.3d 391, 411 (4th Cir. 2001) (holding defense not available where defendant testified in a manner that he knew was false, even if question open to multiple interpretations). Accordingly, we h o l d that the district court did not err in denying the motion for acquittal based on the ambiguity of the terminology in the reporting instructions.

At oral argum ent and in thei r brie fing, the De fen dant s- App ellant s st ate that Insid e 2 3 FERC survey ques tio n, given the amb iguous ter ms , func tio nally wa s: “Wha t unde fine d type of trade s that may or may not call fordeliver y of gas foran unspe cif iedtime did you cond uct d u r ing so me tim e fr ame and that occ urr ed in an area wi thou t geograp hic bound arie s. ” Ho we ver, even bas ed on the De fen dant s- App ellant s’ char act eriza tio n of the ins tru cti ons , they gave fal se res pons es beca use the ques tio n only requ es ts tra des that we re ac tual ly cond uct ed. 39 Case: 09-20871 Document: 00511861304 Page: 39 Date Filed: 05/18/2012No. 09-20871

Second, th e Defendants-Appellants argue that even if Inside FERC ’s inst r u c t i o n s were not fundamentally ambiguous, the district court abused its discretion by denying a jury instruction on ar gu able ambiguity. As we noted earlier, “[d]istrict courts enjoy substantial latitude in formulating a jury charge, and hence we review all challenges to, and refusals to give, jury instructions for abuse of discretion.” United States v. Carrillo , 660 F.3d 9 1 4 , 9 2 5

– 26 (5th Cir. 2011) (quotation omitted). “We consider whether the instruct ion, taken as a whole, ‘is a correct statement of the law and whether it clearly instructs jurors

as to the principles of law applicable to the factual issues confronting them.’” U n i t e d States v. Freeman , 434 F.3d 369, 377 (5th Cir. 2005) (quoting United States v. Daniels , 281 F.3d 168, 183 (5th Cir. 200 2)). I t i s “ r e v e r s ib l e e r r o r t o refuse a charge on a defense theory for which there is an evidentiary foundation and which, if believed by the jury, would be legally sufficient to support a verdict of not guilty.” United States v. Barnett , 197 F.3d 1 3 8 , 142 (5th Cir. 1999) (quotation omitted). An instruction on a defense theory, however, only need be given where “there exists evidence sufficient for a reasonable jury to find in [the defendant’s] favor.” United States v. Mata , 491 F.3d 237, 241 (5th Cir. 200 7). During the jury charge conference, the Defendants-Appellants requested that the following jury instruction be given, which was adapted from the Fifth Circuit Pattern Jury Instruction Section 2.69, on perjury: If you should find that a particular quest i o n w a s ambiguous and that the defendant t r u t h f u l l y a n s w e r e d o ne reasonable interpretation of the question under the circu m stances presented, then such answer would not be false. Similarly, if you should find that the question was clear, but the answer was ambiguous, and one reasonabl e i nterpretation of such answer would be truthful, then such answer would not be false.
Fifth Ci r c uit Pattern Criminal Jury Instructions § 2.69. The district court denied this instruction. The Defendants-Appellant s argue that their defense

40 Case: 09-20871 Document: 00511861304 Page: 40 Date Filed: 05/18/2012No. 09-20871

revolved around showing that the instructions from Inside FERC were ambiguous and that not allowing the instruction pr e vented them from presenting their theory to the jury. A determination of whether a question or statement is arguably ambiguous is generally left to the jury. See, e.g. , U n i t e d States v. Posada Carille s , 541 F.3d 344, 362–63 (5th Cir. 2008) (stating that jury resolves ambiguities where they are not fundamental); United States v. Be l l , 623 F.2d 1132, 1136 (5th Cir. 1980) (same). It is not clear whether an arguable ambiguity instruction is appropriate in cases charging false reporting and wire fraud. In 2 4 support of their argument, the Defendants-Appellants rely upon a Tenth Circuit

c ase, United States v. Migliaccio , 34 F.3d 1517 (10th Cir. 1994), in whic h t h e d o c t r i n e was applied to a charge of fraud under facts somewhat similar to the current suit. In that case, the Tenth Circuit held that not allowing an arguable ambiguity instruction was reversible error where the defendants were charged with fraudulent billing of medical procedures. Id. at 1520–25. The defendants argued that the terminology was ambiguous and that their answers were truthful under their interpretation of the terms. Id. Here, i n making their argument, the Defendants-Appellants ignore the fact that such an ambiguity instruction is only appropriate in ca s e s w here the defendant’s claimed interpretation of the ambiguous terms is reasonable and is supported by the record. Migliaccio , 3 4 F

. 3 d a t 1525. In United States v. Lawrence , the Tenth Circuit discussed Migliaccio and affirmed a district court’s denial of an ambiguity instruction in a wire fraud case. 405 F.3d 888, 896–900 (10th Cir. 2005). In doing so, the court stated that an ambiguity instruction “is

o nly n e c e s s ary wh e r e there is evidence supporting the defendant’s i nt e rp r e t ati o n

as reasonable.” Id. at 8 9 8

. Indeed, it is accepted law that a defendant is only

See Uni ted States v. Muno z , 2 3 3 F

. 3 d 1117, 1130–32 (9t h Cir. 2000) (s tat ing that 2 4 amb iguity ins tru cti on not app rop riat e i n f raudc ase d ue to broa d natur e o f st atut e).
41 Case: 09-20871 Document: 00511861304 Page: 41 Date Filed: 05/18/2012No. 09-20871

entitled to an instruction on a defense theory where there is sufficient evidence such that a reasonable jury could find in his favor on that theory. See United States v. Branch , 91 F.3d 699, 712–13 (5th Cir. 1 996). As explained previously, there is no reasonable in t e r p r etation of the instructions that allows the reporting of completely fabricated data. This interpretation is divorced from the language of the instructions, and it has no relationshi p to the allegedly ambiguous terminology. The district court, therefore, appropriately denied the ambiguity instruction. See Lawrence , 405 2 5 F.3d at 898; Migliaccio , 34 F.3d at 1525. 2 6 E. Evidentiary Rulings The Defendants-Appellants a l so appeal several of the district court’s evidentiary rulings. Specifically, the Defendants-Appellants challenge: (1) the district cou r t ’s exclusion of their industry practice evidence; (2) the district court’s admission of the testimony of Matthew O’Loughlin, the government’s

Becaus e the arguabl e amb iguity ins tru cti o n i s n o t sup por ted by the rec ord , we 2 5 dec line to dec ide wh ethe r suc h an ins tru cti on is ever app rop riat e i n c ase s char ging f raudor fal se r epo rti ng.

Add itio nally, it is not an abus e o f dis cre tio n f or a d ist ric t cour t to deny a p rop os ed 2 6 jury i nst ruc tio n w here the def ens e theor y was adequat ely pre se ntedto t he jury. See Uni ted States v. G ra

y , 751 F.2d733 , 736–37 (5t h Cir . 1985) . For examp le, in the cas e of a pr opo se d good fai th def

ens e, we have held that deni al of a sp ecif ic ins tru cti on is not an abus e of dis cre tio n wh ere the cont ent of the def e n s e is rais ed dur ing argum ent and the jury is
acc urat ely ins tru cte d on sp ecif ic inte nt to defr aud. See Uni ted States v. Bilotto , 245 F. App ’x 410, 413–14 (5t h Cir

. 2007) ( perc uriam ); Uni ted Sta tes v. M anges , 110 F.3d116 2, 1177 ( 5th Cir. 1997) ; Da nie l , 957 F.2d at 170; Uni ted States v. St. Ge la is , 952 F.2d 90, 94 (5t h Cir. 1992) ; Gr ay , 751 F.2d at 736–37. He re, even thou gh the dis tri ct cour t deni ed the sp ecif ic ins tru cti on on amb iguity, the De fen dant s- App ellant s we re per mi tte d to pr es ent this argum ent to the jury, and in fac t, Phillip s’ s law yer dis cus se d how the amb iguous ter ms negate d the inte nt elem ents of the char ged off

ens es dur i n g c l o s i ng argum ents at length

. Furt her, the dis tri ct cour t acc urat ely ins tru cte d the jury o n h o w b o t h off ens es requ ire kn ow led ge of the fal sit y of the st atem ent, wh ich pr event ed the jury fr om convic ting if it fou nd that the De fen dant sApp ellant s act ually belie ved that they we re com plying wi th the ins tru cti ons
. Thus, the dis tri ct cour t’s char ge “enabled the jury to rec ognize and u nder st and the def ens e theo ry, [t o] tes t it
a g a i n s t t h e evide nce pr es ente d at tri al, and then [t o] mak e a def init ive dec isi on wh ethe r, bas ed on that evide nce a n d i n l i ght of the def ens e theo ry, the def

enda nt wa s guilty or not guilty. ” Gr ay , 751 F.2dat736–37 (quo tat ion om itt ed)

. 42 Case: 09-20871 Document: 00511861304 Page: 42 Date Filed: 05/18/2012No. 09-20871

expert witness; and (3) the district court’s decision not to immunize Don Guilbault, a potential defense witness. We will consider these rulings in turn. First, the D e f

e n d a n ts-Appellants argue that the district court erred by excluding evid ence related to industry practice. Specifically, the DefendantsAppellants argue that they were prevented from proving their good faith defense because they were barred from presenting evidence showing that other energy companies were also submitting similarly false data to Inside FERC and NGI

. We review evidentiary rulings for abuse of discretion, subject to harmless

error analysis. United States v
. I s iwele , 635 F.3d 196, 199 (5th Cir. 2011); United St a t e s v
. Cantu , 167 F.3d 198, 203 (5th Cir. 1999). This Court has previously held that it was not an abuse of discretion to exclude evidence offered

on a very similar theory. See United States v. Arledge , 553 F.3d 8 8 1 , 894 (5th Cir. 2008) ( excluding evidence in fraud case showing that similarly situated third parties committed si m i l a r a cts because it had little or no bearing on

w h e t her defendant acted with fraudulent intent). The industry pract i c e evid e n c e o f

fered here has little or no bearing on whether the DefendantsAppella n t s a cted with fraudulent intent. See United States v. Kahn , 711 F. Supp. 2d 9, 12 (D.D.C. 2010) (testimony about beliefs of third parties on validity of tax code irrelevant to determination of whether defendant acted in good faith). Indeed, this unrelated information posed a threat of confusing the jury and detracting from relevant information about the c o n d uct of the actual parties. Se e F ed. R. Evid. 403 (stating “relevant evidence” may be excluded “if its probative value is substantially outweighed by a danger of

. . . unfair prejudice, confusing the issues, [or] misleading the jury

. . .”). Thus, we hold that it was not an abuse of discretion to exclude this testimony. S e c o n d , th e D e f

e n d a nt s-Appellants ch all e n ge th e di s trict c o urt ’ s a d m i s s i o n of the government’s expert, Matthew O’Loughlin. The admission of expert evidence is also reviewed “for abuse of discretion; however, evidentiary rulings

43 Case: 09-20871 Document: 00511861304 Page: 43 Date Filed: 05/18/2012No. 09-20871

are subjected to heightened scrutiny in criminal cases.” United States v. John , 597 F.3d 263, 274 (5th Cir. 2010). “Federal Rule of Evidence 702 provides that testimony by a qualified expert is admissible if (1) it will assist the trier of fact; ( 2) it is based upon sufficient facts or data; (3) the testimony is a p r o d u c t o f reliable methods; and (4) the witness has applied those principles reliably to the facts.” Id. The Fifth Circuit has already upheld the admission of O’Loughlin’s expert testimony in nearly identical circumstances. See Valencia , 600 F.3d at 401, 420

– 29. The Defendants-Appellants’ attempts to distinguish Valencia are unavailing. The Defendants-Appellants argue that here, unlike in Valencia , O’Loughlin expressly “rejected” the publishers’ testimony about their editor ial
process. Valencia , however, upheld O’Loughlin’s testimony because it was not simply an attack on the credibility of the publishers; his testimony also provided

a conclusion grounded in analysis. See 600 F.3d at 427. T h e D e f e n d a ntsAppellants do not argue O’Loughlin’s testimony was not so grounded here, and his disagreement with the publishers did not render his t e s ti m o ny inadmissable. Cf. United States v. Whitted , 11 F.3d 782, 786–87 (8th Cir. 1993) (holding experts could not testify about credibil i ty of fact witnesses). Accordingly, the Defendants-Appellants fail to show the district court abused its discretion when it admitted the testimony of O’Loughlin. 2 7 Third, Defendant-Appellant Walton argues that the district court erred by fai l i n g to order the government to immunize Don Guilbault, a physical gas trader on the same desk as Dean. In particular, Walton argues, first, that the

The De fen dant s- App ellant s’ half-he art ed att ack on O’ Loughlin’ s qualif icat ion is als o 2 7

u n availing. The De fen dant s- App ellant s, along wi th fai ling to rais e this objec tio n to the district cour t, cit e no autho rit y to sho w that wo rk in the rele vant fie ld is a nece ss ary qualif icat ion for expe rt tes tim ony. Pres umably, thei r fai lure st em s fr om the fac t that any suc h autho rit y wo uld cont rad ictthe ter ms of Rule 702, w hich allo ws an expertto be qualif iedby “k now led ge, s ki ll expe rien ce, t raini ng ored ucat ion. ” SeeFed

. R. Evid. 702 ( em phas is add ed)

. 44 Case: 09-20871 Document: 00511861304 Page: 44 Date Filed: 05/18/2012No. 09-20871

district court should have denied Guilbault’s invocation of his Fifth Amendment right because he had already plead guilty to the relevant crimes and the statute

o f limitations had expired on any others, and, second, that the district court should have either granted Guilbault immunity or compelled the government to do so. As Walton shows error on neither ground, his argument fails. Guilbault worked on El Paso during the relevant times, and, on October 5, 2004, he plead guilty to violating the CEA by submittin g f a l s e r e ports to Inside FERC and NGI. At t h e t i m e of the Defendants-Appellants’ trial, Guilbault had not been sentenced because the government had sought to delay sentencing to ensure Guilbault’s continued corporation in its prosecutions. On June 2, 2005, Guilbault was interviewed by government agents. According to a summary of the interview, Guilbault stated that, while Brooks told Guilbault to “get w i t h” W a lton, Walton told Guilbault that he did not need to show Walton his trades, and that Walton did not otherwise tell Guilbault what to report. Walton s u bpoenaed Guilbault to appear at trial, and informed the government of the subpoena the day before Guilbault was to appear. That night,

one of the members of the prosecution called Guibault’s attorney to ask if Guilbault would indeed testify. The next morning at trial, Guilbault’s attorney informed the court that Guilbault would invoke his Fifth Amend m e n t r i ght against self-incrimination. Guilbault’s attorney told the court that the decision has been Guilbault’s alone to make. Guilbault’s attorney further explained that, while Guilbault had been on a list of possible government witnesses, no decision had been made previously about whether he would be called. Prosecutors then informed the court that they did not intend to call Guilbault because they had

concerns about Guilbault’s truthfulness, and pointed to inconsistences between Guilbault’s 2005 interview and previous statements, as well as other instances that cast doubt on his credibility. Walton thereafter moved to compel Guilbault

45 Case: 09-20871 Document: 00511861304 Page: 45 Date Filed: 05/18/2012No. 09-20871

to testify, to compel the government to grant Guilbault immunity, or to admit a summary of the 2005 interview. The district court denied each request. “A district court’s decision to exclude a witnesses’s testimony based on an invocation of the witnesses’s Fifth Amendment privilege is reviewed fo r a n ab u s e of d i s c retion.” United States v. Mares , 402 F.3d 511, 514 (5th Cir. 2005). “Although the trial court’s discretion is not un l i m i t ed, it must enjoy wide discretion in resolving a self-incrimination claim.” United States v. Van Deveer , 577 F.2d 1016, 1017 (5t h C ir. 1978) (per curiam). “Generally, an abuse of discretion only occurs where no reasonable personcould take the view adopted by the trial court.” Whitehead v. Food Max of Miss., Inc. , 332 F.3d 796, 803 (5th Cir. 2003) (quotation omitted & emphasis in original). Here, although Guilbault had plead guilty to violating the C EA, he had not yet been sentenced, and Walton’s questions sought information related to those

c ri m e s
. Th e Fif

th Amendment right against self-incriminati o n o nly e xti n gui s h e s

once “the sentence has been fixed and the judgment of conviction has b e c ome final.” Mitchell v. United States , 526 U.S. 314, 326 (1999) (“Where the sentence h a s n ot yet been imposed a defendant may have a legitimate fear of a dv e r s e consequences from further testimony.”). Accordingly, the district court did not

err in finding Guilbault had a legitimate fear of self-incrimination, and could be excused from testifying. With regard to immunity, this Court has held that “[d]istrict [c]ourts have

no inherent p o w e r to grant immunity.” United States v. Follin , 979 F.2d 369, 374 ( 5th Cir. 1992). “A district court may not gra n t i m m u n i t y simply because

a witness has e s sential exculpatory evidence unavailable from other sources.” Id. (citing United States v. Thevis , 665 F.2d 616, 638–41 ( 5th Cir. 1982)). At most, this Court h a s l eft open the possibility that immunity may be necessary

46 Case: 09-20871 Document: 00511861304 Page: 46 Date Filed: 05/18/2012No. 09-20871

to stem government abuse. See Thevis , 6 6 5 F.2d at 641. Here, however, the 2 8 district court found no abuse, and Walton ha s failed to show error in that determination. Walton’s sole evidence showing an abuse by the governme n t is the government’s continuances of Guilbault’s sente ncing, a single call by a prosecutor to Guilbault after Walton subpoenaed him to testify, and the purported inconsistency in the government’s m aint ai ni n g G uilb ault a s a possible witness and its statements on January 24, 2008 that it ha d c oncerns about Guilbault’s truthfulness. Guilbault’s attorney, however, informed the court that Guilbault’s decision to invoke the Fifth Amendment was his own. Further, the prosecutor’s call the night before was explained as an inquiry to determine whether the government would need to prepare to cross-e x a m ine Guilbault, a task that would be need to be completed that night as Walton only informed the government about the subpoena that day. And the go v e r nment’s proffer demonstrated a reasonable basis for it to doubt Guilbault’s veracity. In light of such facts, Wal t on fails to show the district court erred in accepting the prosecution’s, and Guilbault’s attorney’s, view of the facts. 2 9

Walt on’s cit atio n to out- of- cir cuit pr ece dent to argue that governm ent mi sc ondu ct is 2 8 not a nece ss ary pre requ isi te is unavailing in light of Thev is

. See Thev is , 665 F.2dat 639–41 ( d e clini ng to fol low Go v’ t of Vi rgin Isla nds v. Smi th , 615 F.2d 964, 974 (3d Cir. 198 0 ) )

. Mo reo ver, even if this Court coul d cons ide r suc h autho rit y, Walt on fai ls to sho w im mun ity wa s just ifi ed unde r it. Walt on fai ls to sho w that Gu ilbaul t’s exclus ion sk ew ed the evide nce in the governm ent’ s favor

. Altho ugh Gu ilbaul t coul d have tes tif ied that Walt on never ask ed him to se nd fal se tra des , suc h tes tim ony hard ly cont rad ict s O’ To o l e ’ s a n d De an’s tes tim ony that Walt on pr ovide d them wi th his pos itio ns. See Uni ted States v. Straub , 538 F.3d 1147, 1156–57 (9t h Cir. 2008) (f

indi ng exculp a t o r y evide nce mus t “d irec tly cont rad ict [] ” adm itt ed evide nce to wa rra nt im mun ity)

. Furt her, in cro ss -exam inati on of O’ Toole , Walt on intr oduc ed his theo ry that he did not alw ays pr ovide the tra der s wi th his pos itio ns, and that he did not ask to revie w thei r sub mi ss ions to the publ icat ions

. See Uni ted States v. Ebbers , 458 F.3d 110, 119 (2d Cir. 2006) (f indi ng exculp ator y evide nce must not be “cu mul ative” ). Gu ilbaul t’s tes tim ony wo uld not have been mat eria lly m ore exc ulpa tor y. Wa lto ns’ar gume nt, made only in pass ing and cit ing no supp ort , thatthe interview 2 9
me mo rand um sho uld have been intr oduc ed as evide nce is als o unavaili ng. The me mo rand um 47 Case: 09-20871 Document: 00511861304 Page: 47 Date Filed: 05/18/2012No. 09-20871

F. Sentencing Lastl y , the Defendants-Appellants raise a number of challenges to the calculation of their Sentencing Guidelines’ sentences. In particular, the Defendants-Appellants challenge the burden of proof born by t he government and the calculation of their Guidelines range. We review the distri c t c o u rt’s legal interpretation of the Sentencing Guidelines de novo and factual findings for clear error. See United Stat es v. Murray , 648 F.3d 251, 254 (5th Cir. 2011). A factual finding is clearly erroneous only if, based on the entirety of the evidence, the reviewing court is left with the definite and firm conviction that a mistake has been made. United States v. Va l dez , 453 F.3d 252, 262 (5th Cir. 2006). A factual finding is not clearly

erroneous if it is plausible in light of the entire record. Id. Because the Court finds Defendants-Appellants’ arguments unavailing, we affirm the sentence. 1. Burden of Proof The Defendants-Appellants first argue that the government should have been required to prove the loss caused by their fraud with clear and convincing evidence. The Presentence Report (“P S R”) p rovided for increases of eighteen and twenty

- l evels for the Defendants-Appellants due to the calculated loss, which

was th e l ar ge s t c o ntrib uti n g f ac t o r t o th e D e f

e n d ants-Appellants’ offense levels. 3 0

is hear say. See Uni ted Sta tes v. Mo ore , 651 F.3d 30, 83 (D .C. Cir. 2011) (f indi ng wi tnes s’ s pr ior conf

es sio ns hear say unde r Fede ral Rule of Evidenc e 8 04(b )( 3))

. Gu ilbaul t’s invoca tio n of the Fift h Ame ndm ent rend ere d him unavailab le. See id. Ho we ver, none of the except ions to hear say app ly. The por tio n of the st atem ent Walt on so ught to intr oduc e wa s not agains t Gu ilbaul t’s inte res t beca use it wa s exculp ator y. See Fed. R. Evid. 804(b)( 3). And the fac t that it wa s cont rad ict ed by an earl ier st atem ent by Gu ilbaul t tend s to s h o w it doe s not “ha[ve] equivale nt cir cum st antia l guarant ees of tru st wo rth ines s. ” See Fed. R. Evid. 807; Mo ore , 651 F.3d at 83 (f

indi ng wi tnes s’ s pr ior co ntr a dictio n s re n de re d h ears ay st ate me nts u ntr ust wo rth y). Acco rd ingly, Wal ton s how ed no err or in the dis tri ct cour t’s d ecis ion to exclud e the inte rview
sum mar y.

The calc ulate d l o s s r e s u lte d in a tw enty- level incr eas e for Brook s, incr eas ing his 3 0 off ens e level from fif

tee n to thirty- five, and result ed in an eighte en- level increas e for Walt on and Phillip s, in cre asi ng t heirof fen se le vels f

rom f ift een to thir ty-t hree

. 48 Case: 09-20871 Document: 00511861304 Page: 48 Date Filed: 05/18/2012No. 09-20871

They argue that, because of the significant effect of the loss, due process requires that the government prove the loss by more than a mere preponderance. “[A]s a general matter, th e b u r d e n of proof at sentencing is by a preponderance of the evidence.” United States v. Mergerson , 4 F.3d 337, 343 (5th Cir. 1993). The Fifth Circuit has stated in dicta, h o w e v e r , that “there may be certain cases where a sentencing fa c t i s a ‘ t a il that wags the dog of the substantive offense,’ and might arguably require a finding beyond a reasonable d oubt.” Id. at 344 (quoting McMillan v. Pennsylvania , 477 U.S. 79, 8 8 ( 1 9 8 6 ) (rejecting petitioner’s argument that visible possession of firearm enhancement

was element of crime r e q u i red to be proved beyond a reasonable doubt)). Nevertheless the Fifth Circuit has never r e quired such a heightened burden. See id. at 344–45 (finding a preponderance standard was sufficient where life sentence was within range both prior to and after enhancement); United States

v. Coleman , 290 F. Ap p ’ x 684, 685 (5th Cir. 2008) (per curiam) (finding sentencing judge did not commit plain error where judge applied preponderance standard to sentencing). I n deed, nearly all of our fellow circuits have rejected the need to apply a heightened standard in light of the advisory n a t ure of the Guidelines. 3 1

See Uni ted States v. Vi llar ea l-Am ar il la s , 562 F.3d 892, 894–98 & n.3 (8t h Cir. 2009) 3 1 (ho ldi ng se nten cing fac tor s may be p r o v en by pr epo nder ance ; find ing dic ta in Uni ted States
v. Ar chul eta , 412 F.3d 1003, 1007 (8t h Cir. 2005) , expr e s s ing othe rw ise wa s err oneo us) ; Uni ted States v. Fis her , 502 F.3d 293, 308 (3d Cir. 2007) (ho ldi ng pr epo nder ance so le st andar d of pr oof in se nten cing; st ating “bec aus e the Gu ide lines are now advis or y a nd dis tri ct judges
are em pow ere d to dis char ge thei r dut ies full y in the fir st ins tanc e, it is a logic al im pos sib ilit y for the ‘ta il to wa g the dog, ’ as coul d occ ur wh en t h e G uide lines we re man dat ory” ); Uni ted States v. Bri ka , 487 F.3d 450, 460–62 (6t h Cir. 2007) (ho ldi ng pr epo nder ance st andar d app lies , even wh ere judge se nten ced de f enda nt for cond uct unde rlying char ge on wh ich jury hung); Uni ted States v. Reuter , 463 F.3d 792, 793 (7t h Cir. 2006) (f indi ng tail -w agging-d og conc ern rend ere d “ac ade mi c” aft er Booke r); but see Uni ted States v. Staten , 466 F.3d 708, 717–20 (9t h Cir. 2008) (f

indi ng due pr oce ss requ ired pr oof by clea r and convin cing evid e n c e w h e r e enhanc em ent incr eas ed off ens e level fif

tee n levels and eff

ect ively doub led def

enda nt’ s se nten c e ; hold ing Uni ted States v. Booke r , 543 U. S. 220 (200 5), wh ich rend ere d Sent enci ng Gu ide lines adviso ry, didno t requ ire dep art ure fr om ea rlie r pr ece dent). 49 Case: 09-20871 Document: 00511861304 Page: 49 Date Filed: 05/18/2012No. 09-20871

We need not decide at this ti m e that a heightened burden is never required. While the Defendants-Appellants’ enhancements are si gnificant,

a c c o u n t i n g for more than fifty percent of their offense levels, and increasing their recommended sentence range from 18-to-24 months to 135-to-168 or 168- to-210 months, this Court has held a similar enhancement did not require a heightened burden of proof. See United States v. Carreon , 11 F.3 d 1 2 2 5 , 1240 (5th Cir. 1994) (holding enhancement in recommended sentence from six years to twenty years did not require p roof beyond a preponderance). Accordingly, 3 2

we find that a heightened burd e n o r p r o o f, even if required by due process in certain situations, is not appropr iate here, and the district court did not err in refusing to apply one. 2. Calculation of Guidelines Range The Defendants-Appellants assert a number of errors in the calculation of their S e nt e nc i n g Gui d e li n e s
. I n p artic ul ar , th e D e f e n dants-Appellants challenge the district court’s calculation of loss, its calculation of the number of victims of that loss, and its finding that the Defendant-Appellants obstructed justice. Tu r n i n g first to the calculation of loss, “[w]e review de novo the district court’s method for determining loss, while clear error applies to the background factual findings that determine whether or not a particular method is appropriate.” Isiwele , 635 F.3d at 202. “[A] district court need only make a reasonable estimate of loss, and, ‘because the sentenc i n g j udge is in a unique
p o s i t ion to assess the evidence and estimate the loss

. . . the court’s loss determination is entitled to appropriate defer e n c e
. ’ ” Murray , 648 F.3d at 254 (ellipsis in o r i gi n a l) (quoting United States v. Goss , 549 F.3d 1013 (5th Cir. 2008)).

See also Uni ted States v. Vi ttek , 228 F. App ’x 469, 475–76 & n. 23 (5t h Cir. 2007) (p er

3 2
cur iam ) (f

indi ng increa se in re com me nd se nten cing range fr om 51- to- 63 m onth s to se nten ce of 168 mo nths d id not requ ire height eneds tand ardof p roo f)

. 50 Case: 09-20871 Document: 00511861304 Page: 50 Date Filed: 05/18/2012No. 09-20871

The Defendants-Appellants fail to show that the distric t c o urt ’ s m e thod for determining loss was erroneous. The district court, adopting the method used i n t h e PSRs, relied on O’Loughlin’s calculations about the effect of the false reports on the published index prices, and El Paso’s own calcu l a t ions, in its “Basis Summaries,” about its “exposure” to changes in those index prices. The various losses we r e t h e n attributed to each Defendant-Appellant based on his responsibility for the various reports. The method provided a “reasonable estimate,” and, inde e d , a conservative estimate, of the loss caused by the D efendants-Appellants’ fraudulent scheme. Although the editors of t h e 3 3 industry publications used some e d i t o r ial discretion to determine what index price to publish, and did not rotely publish the volume-weighted average of the reported trades, O’Loughlin d e m onstrated that the published price and the volume-weighted average of the reported trades was identical eighty percent of the time, and a strong correlation between the tw o w as observable for the remainder o f t h e t r ades. Admittedly, as Hume observed over 250 years ago, 3 4

one can never know with certainty that one event is caus e d b y a n o ther. 3 5 Unfortunately for the Defendants-Appellants, the law does n ot require such absolute certainty. 3 6

T h e e st im ate did not inclu de any los s caus ed to count erp art ies wh o pur chas ed 3 3 natur al gas fr om El Paso at in d e x pr ice, or thos e par tie s wh o did not cont rac t wi th El Paso , but nevert heles s payed an infl ated pr ice for natur al gas due to De fen dant s- App ellant s act ions

.

Indeed , the PSRs exclud ed gains wh ere the publ ish ed inde x pr ices wa s dif fer ent than 3 4 the volum e w eighte d average w ouldhave d ict ated

.

SeeD avid Hu me , An Enqu iry Conce rning Hu manU nder st andi ng ( 1748)

. 3 5
Mo reo ver, los s may be me asu red not only by the act ual los s caus ed by a def enda nts ’ 3 6 act ions , but by the los s the d e f e n dant s inte nded to caus e. See U. S. Sent enci ng Gu ide lines Man ual § 2B1.1 cm t. n.2(A) (200 1). Los s is the “gre ater of t h e a c tual los s or inte nded los s. ” See id. Thus, even if th e C o u r t w e r e to conc lude O’ Loughlin’ s tes tim ony wa s ins uff icie nt to dem ons tra te the act ual infl uence the VWA had on the publ ish ed inde xes, suc h dif fer ence wa s a fai r app roxim atio n of the change the De fen dant s- App ellant s inte nded to have on the publ ish ed inde xes. 51 Case: 09-20871 Document: 00511861304 Page: 51 Date Filed: 05/18/2012No. 09-20871

Nor does the Defendants-Appellants’ challenge to the use of the use of El Paso’s Basis Summaries fare better. As the record shows, the summaries were created so that El Paso could determine its exposure to changes in the various index prices. El Paso entered into a t r a de to buy or sell natural gas at some price at a certain hub. That c o n t r a c t h a d value so long as there was some difference between the specified price and the market price for natural gas at the hub at the time of the contract’s execution. For example, a contract to buy a unit of natural gas at $5 next month would gain value if the price of natural gas at the hub increased to $6: the contract would allow the holder to net a $1 profit by b u y i n g the gas at $5 and selling it at $6. Conversely, the contract w o u l d 3 7 negatively impact the company if the price of natural gas fell to $4, as the
company would be required to spend $5 on the natural gas and then could only sell it at a $1 loss. El Paso’s basis summary charts aggregated these various 3 8 risks, and thus reflected the inflation or deflation in value of El Paso’ s futures contracts. While the Defendants-Appellants are correct that these charts did not necessarily reflect the flow of cash, they identify no legal authority suggesting 3 9 that the Sentenci n g G uidelines are incapable of taking into account the losses and gains described above. The Sentencing Guidelines state that “fair market value of the property unlawfully taken” shall be used to determine the value of loss. See U.S. Sentencing Guidelines Manual § 2B1.1 cmt. n. 2(C)(i) (2001). Here, the Defendants-Appellants’ scheme drove up the market price of their

As dis cus se d above , thes e tra nsa cti ons rar ely res ulte d in the act ual tra nsf er of 3 7 phys icalgas , but we re ins teadr es olvedf inanc ially.
This als o expla ins wh y tra des th at sp ecif ied the pr ice to be paid as the publ ish ed 3 8 inde x pr ice did not cre ate this type of r i s k : a n y v ariat ions in the mar ke t pr ice wo uld be ref lect ed in the pr ice at wh ich El Pas o w ouldhave t o b uy ors ell.
Altho ugh it is dif

fic ult to belie ve that the value of thes e cont rac ts we re not conver ted 3 9 to cas h, or so me othe r ass et, at any poi nt dur ing the De fen dant s- App ellant s’ tw o-ye ar sc hem e. 52 Case: 09-20871 Document: 00511861304 Page: 52 Date Filed: 05/18/2012No. 09-20871

contracts, which necessarily drov e do w n th e m ark e t p ric e of their counterparties’ contracts. Thus, the basis summaries’ calculation of the increase in the value

4 0 of El Paso’s futures contracts provides a reasonable basis from which to infer the counterparties’ loss in market value to their contracts. Moreover, in contrast to the Defendants-Appellants’ protests, the method employed by the district court provided a “real i s t i c , economic approach” to determining the loss caused by their fraud. See United States v. Olis , 429 F.3d 540, 546 (5th Cir. 2005) (quotati o n omitted). Unlike the typical valuation of damages in a securities fraud scheme, where the effect of the fraud must be inferred from the changes in the market price of t h e security and where, consequently, external forces on that price must be accounted, see, e.g. , id. at 546–48, the method employed by the district court directly measured the loss. As described above, the dist r i c t c o urt relied on the government’s expert’s conclusion that the false trades move the various index prices by definite amounts, and the company’s calculations about the effect of such moves on the value of its assets. With such a method, there is no need to account for external factors that may have also increased or decreased the value of t h e f u tures contracts. Next, the Defendants-Appellants challenge the calculation used to determine the number of victims of thei r f r a u d

. Each of the DefendantsAppellants received a four-point enhancement to their offense level due to the district court’s finding that their scheme involved fifty or more victims. See U.S. Sentencing Guideline § 2B1.1(b)(2)(B). In light of the entire record, the district

This can be se en fr om the exam ple above. If El Paso has a cont rac t to buy gas at $5, 4 0 then the count erp art y has a cont rac t to se ll gas at $ 5. If the De fen dant s- App ellant s coul d fr audul ent rais e the mar ke t pr ice to $ 6 , t h e i r cont rac t wo uld be wo rth $1, wh ile the count erp art y’s co n t r a c t w o u l d have a negati ve value of $1. In es se nce, the De fen dant sApp ellant s wo uld have st olen $1 fr om thei r count erp art y by fr audul entl y shi ft ing the mar ke t value of the tra de. Furt her, if the count erp art y wa s hedge d, it wo uld me rely shift the loss to yet anot her thir d par ty. 53 Case: 09-20871 Document: 00511861304 Page: 53 Date Filed: 05/18/2012No. 09-20871

court’s finding is not clearly erroneous. The record includes backup for the Basis Summaries reports that list the details of the various financial trades that went into those calculations. Just one of those b a c k u p spreadsheets, showing the trades for a single hub in a single month, shows in excess of fifty counterparties to El Paso’s futures trades—the counterparties who would have seen the value of their contracts artificially lowered by the D e f endants-Appellants’ false statements. Accordingly, Defe n d a nt s - Ap p e ll a nt s f ail t o show error in the district court’s finding that their scheme, which occurred over at least tw o y e a r s a nd covered multiple hubs, involved more than fifty victims. Lastly, the Defendants-Appellants challenge the two-point enhancement they received as a result of the district court’s finding that the y o b s t r u c ted justice. In parti c ular, the Defendants-Appellants argue that the district court improperly found that they pro vi d e d materially false information to the inves ti g ati n g gov e rn m e nt o f f ic i als because they mislead the individuals involved in El Paso’s internal investigation. The Defendants-Appellant s a rgue they cannot be found to have obstructed the inve s t i gation because, (1) their statements occurred before any government investigation started, (2) their false statements were not made directly to government agents, and (3) their false statements did not actually impede the investigation. The relevant Sentencing Guidelines allow for an enhancement where: (A) the defendant willfully obstructed or impeded, or attempted to obstruct or impede, the administration of justice during the course of an investigation, prosecution, or sentencing of the instant offense of conviction, and (B) the obstructiv e c o nduct related to (i) the defendant’s offense of conviction and any relevant conduct; or (ii) a closely related offense . . . .
SeeU.S. Sentencing Guideline § 3C1.1 (2001). 4 1

The Gu ide lines pr ovide a non- exhaus tive lis t of exam ple s of suc h cond uct , inclu ding 4 1 “d es tro ying or conc ealing or dir ect ing or pr ocur ing anot her to des tro y or conc eal evide nce that 54 Case: 09-20871 Document: 00511861304 Page: 54 Date Filed: 05/18/2012No. 09-20871

F i r s t , with regard to Brooks, the district court found, in addition to h i s false statements, that in or about May of 2002 he destroyed or ordered another
person to dest r o y material evidence when he ordered an El Paso employee to shred records related to reports to an industry newsletter. As noted in the PSR, and unchallenged by the D e f e n d a nt s - Appellants, such conduct occurred during 4 2 the course of a state investigation into false reporting at El Paso of which Brooks had knowledge. Brooks’ sole challenge to the district court’s finding of 43 obstruction for his destruction of documents was his conduct was innocent. Looking to the record as a whole, the district court’s finding to the contrary was not implausible. Accordingly, Brooks fails to show such a finding is clearly

is mat eria l to an off

icia l inves tigat ion or judic ial pr oce edi ng,” and “p rovid ing a mat eria lly fal se st atem ent to a law enf orc em ent off

icer that signi fic antly obs tru cte d or im ped ed t he off icia l inves tigat ion or pr os ecut ion of the ins tant off ens e.” See id. at cm t. n.4 (d), (g)

. The Gu ide lines fur ther pr ovide exam ple s of non- cover ed cond uct , suc h as “m ak ing fal se st atem ents , not unde r oath , to law enf

orc em ent off

icer s, unles s App lica tio n Not e 3(g) above app lies ,” and “p rovid ing inco mp let e or mi sle adin g inf orm atio n, not amo untin g t o amate rialfals ehoo d in res pec t to a pr es ente nce investi gation .” See id. at cm t. n. 5(b) , (c ). A 2006 ame ndm ent to the Guid eline s allow s cons ide r a t i o n of pr e-i nves tigat ion cond uct

. See Uni ted States v. Al exa nder , 602 F.3d 639, 642 n. 3 ( 5th Cir. 201 0).

The dis tri ct cour t ado pt ed the fac tual find ings of the PSR. “[ I]f no rele vant aff idavit s 4 2
or othe r evide nce is sub mi tte d to rebu t the info rm atio n cont ained in the [p res ente nce rep ort ], the co urtis fr ee to ad optits find ings wi thou t fur therin quiry or expl anati on. ” Uni ted States
v. V ital , 68 F. 3d 114, 121 ( 5th Cir. 199 5).
While the pr e-2 007 Gu ide lines requ ired cond uct to occ ur d u r i n g t h e cour se of an 4 3 inves tigat ion into the cond uct at iss ue, they did not require the investi gation to be led by the fed eral governm ent, or to be a c r i m i nal inves tigat ion, so long as it wa s led by governm ent off i c i als

. See Uni ted States v. Fior e , 381 F.3d 89, 94 (2d Cir. 2004) (f indi ng SEC civil inves tigat ion into cond uct giving ris e to late r cri mi nal char ge suf fic ient to rend er obs tru cti ve cond uct rele vant for se nten cing enhanc em ent) ; Uni ted States v. Mc Go ve rn , 329 F.3d 247, 252 (1s t Cir. 2003) (f

indi ng Me dic aid & Me dic are civil inves tigat ion suf fic ien t t o allow for obs tru cti on enhanc em ent) ; seea ls o Uni ted Sta tes v. U pc hurc h , 88 F. Ap p’x 794, 795 –96 (5t h Cir. 200 4) (p er cur iam ) (f indi ng stat e inves tigat ion into condu ct atiss ue suf fic ientt o t rigger obs tru cti on enhanc em ent)

. While the De fen dant s- App ellant s ass ert the earl ier inves tigat ion
wa s into wa sh tra ding, the rec ord indi cat es the inves tigat ion als o cover ed fal se rep ort ing, and,
acc ord ingly, the dis tri ct cour t’s c oncl usi on wa s not im plau sib le. 55 Case: 09-20871 Document: 00511861304 Page: 55 Date Filed: 05/18/2012No. 09-20871

erroneous, and, in l i gh t o f such a finding, the district court did not err in providing a two-point enhancement. With regard to Phillips and Walton, the PSRs found obstruction based on their statements to El Paso’s legal counsel and independent investigat o rs during the company’s investigation arising from inquiries b y t h e C FTC, the Federal Energy Regulatory Commission, and the U.S. Attorney’s O ffice. The 4 4 Defendants-Appellants show n o error in the district court’s finding that they made their false statements during the course of the investigations. Similarly, they show no error in the district court’s finding the Phillips’s and Walton’s statements were not made in ignorance of the investigations and were not “the result of a spur of the mo m e n t decision.” See United States v. Greer , 158 F.3d 228, 235 (5th Cir. 1998) (f i n d i n g obstruction limited to “egregiously wrongful behavior whos e e x ecution requires a significant amount of planning and presents an inherentl y high risk that justice will in fact be obstructed”). Further, although the statements were no t m a d e dir e c tly t o gov e rn m e nt o f f ic i als, the district court’s finding that they were made with intent to be communicated to government officials, and thus to impede the investigation into their wrongdoing, was not implausible. See U.S. Sentencing Guidelines Manual §3C1.1 cmt. n.9 (providing obstruction may be “induced, procured, or willfully caused”); see also United States v. Aguilar , 515 US 593, 601 (1995) (holding, to secure conviction for obstruction of justice charge, government must show defendant “knew that his false statement would be provided to the grand jury”). Finally, the Defendants-Appellants fail to show error in the district court’s adoption of the PSRs’ finding that their false statements significantly impeded

The PSR als o fou nd Brook s obstr uct ed the inves tigat ion bas ed on his st atem ents to 4 4 E l Paso ’s legal couns el and inte rnal inves tigat ion. None thel es s, beca use the dis tri ct cour t’s find ing of obs tru cti on wa s s upp ort ed by Brook s’ s de st ruc tio n of evide nce, the Courtdoes not add res s Brook s’ s fal se s tat em ents

. 56 Case: 09-20871 Document: 00511861304 Page: 56 Date Filed: 05/18/2012No. 09-20871

the investigation. False statements which significantly delay an investigation and prosecution, even if not successful in preventing it, may provide a sufficient basis for an obstruction enhancement. See Un i ted States v. Phipps , 319 F.3d 177, 191–92 (5th Cir. 2003) (holding de f endant’s false identification of accomplice, delaying investigation, constituted obstruction). While DefendantsAppellants objected to the PSRs’ finding, they presented no evide n c e to rebut that finding. See Vital , 68 F.3d at 121. Consequently, the di s t r i c t c o u r t could rely on the PSRs, see id., and the D e f endants-Appellants fail to show that the district court’s finding was implausible based on the record. Thus, they fail to show error in the obstruction enhancement. Accordingly, the Defendants-Appellants fail to sh o w a ny error in their sentences. 4 5 C O N C L U S I O N For the reasons stated above, Defendants- Ap p ellants’ convictions and sentences are AFFIRMED.

The De fen d a n t s -Ap pel lants ’ add itio nal pur por ted err or, that the dis tri ct cour t 4 5
err oneo usl y tre ated the guide lines as pr es ump tivel y reas onable , see Ga ll v. Uni ted States , 552 U. S. 38, 50 (200 7), is wi thou t any sup por t in the rec ord

. Indeed , the dis tri ct cour t’s st atem ent of reas ons indi cat es that it mad e “an indi vidual ized ass es sm ent bas ed on the fac ts pr es ente d. ” See id. 57 Case: 09-20871 Document: 00511861304 Page: 57 Date Filed: 05/18/2012