### The Honorable Elmo B. Hunter, Senior United States District 1 

### Judge for the Western District of Missouri. ___________ No. 95-3960

___________ United States of America, * * Appellee, * * Appeal from the United States v. * District Court for the * Western District of Missouri. Jack Conrad Choate, * * Appellant. *

___________ Submitted: September 12, 1996 Filed: November 29, 1996

___________ Before LOKEN, HEANEY, and JOHN R. GIBSON, Circuit Judges.

___________ JOHN R. GIBSON, Circuit Judge.

Jack Conr ad Choate, having pleaded guilty to two counts of wir e fraud, 18 U.S.C. § 1343 (1994), appeals his sentence. The indictmen t charged Choate with eight counts of wire fraud for selling franchises by misr epresenting what the buyers would receive for their money and b y exaggerating the amou nt of money the buyers would be able to make through operating the franchises. Choate pleaded guilty to only two counts, but his offens e level took into account the relevant conduct in the othe r counts, a s well as similar conduct Choate engaged in while out on bond

. Accordingly, the district court sentenced Choate to thirty-eight month s 1 on each count, to be served consecutively; and three years supervised

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release. He was required to pay $26,360 in restitution. Choate attacks as clearly erroneous the district court's findings that Choate's business dealings while out onbond were relevant conduct that should increase his offense level. He also contends that the district court erred in includin g as a term of his supervised release that he should not be self-employed. We affirm the sentence.

I.

Choat e owned a business known as CMD, which sold "commercial loa n broker franchises" to would-be loan brokers. CM D advertised in newspapers
aro und the country, listing a toll-free telephone number. When someon e responded to the ad, Choate or another salesman would go to the person's city and meet the prospect at a hotel. Choate o r the salesman offered the prospect the chance to buy a franchise, which wo uld enable the prospect to arrang e loans, using a computer and software containing lists o f participating financial institutions, to be provided by CMD. The prospect s were told that CMD would train them to become a loan broker at a three-day seminar in Kansas City. CMD promised the prospects that they would receiv e support from CMD rega rding equipment, supplies, and technical assistance. The prospects were told that they would be the o nly CMD broker in an area, and that if they could not obtain a loan, anothe r Choate company would cobroker the loan. CMD gave the prospective buyers names of people who woul d act as references. Unbeknownst to the buyers, the references had been pai d to give positive reports on their experiences as CMD brokers. Th e references inflated the amounts they were earning as CMD brokers and the length o f time they had been in the business. The buyers paid betwee n $10,000 and $24,000 for their franchises.
After franchise buyers wired CMD the franchise fee, they encountered problems with the franchises. The buyers found that the financia l institutions listed on the CMD software would not do

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business with them, were out of business, could not be located, or for som e other reason did not make any loans through the franchise owner. Som e franchise owners would find that they were not the only CMD franchise owne r in their area. CMD did not help the franchise owners arrange the loans

. Many f ranchise owners who asked CMD for their money back never got a refund. The presentence investigation report listed a total of $792,826 that 48 investors lost by investing in CMD franchises during the date s covered in the indictment.
Starting in 1991, Choate began operating a business called Physi

Care, through which he sold franchises for electronic billing services

. Physi- Care franchisees were supposed to be able to provide electroni c billing services for doctors and dentists for a fee. The franchisee would transmit insurance claims electronically to a clearing house. This proces s was supposed to result in quicker payment than c onventional paper billing. Physi-Care's franchis e sales methods were similar to CMD's methods, using newspaper ads, a toll-free telephone number, and sales meetings at local hot els. The franchise fee was $7,990, which entitled the buyer t o software, marketing tools, a video, stationery, medical language books, an d training. Physi-Care told the franchisees that they would be provided ten doctors to service an d that they could charge $4 per claim filed and earn $16,08 0 annually per doctor. Again, Physi-Care gave the prospectiv e fra nchise purchasers lists of references, who actually had been paid t o give p ositive responses overestimating the amount of money a franchise e could earn.

After the franchise owners wired the franchise fee to Physi-Care , they found they could not get the software to work, that Physi-Care did no t provide them doctors to work for, and that they would have to negotiate th e fee they would get for each claim. The FBI investigation revealed tha t
none of the Physi-Care franchise owners interviewed were able to operate the business as promised.

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Aga in, when they tried to get their money back from Choate, they wer e unsu ccessful. The presentence investigation report listed $508,335 i n losses to Physi-Care customers.
After Choate was indicted and while he was out on bond, the pro bation officer learned that Choate had engaged in selli ng more electronic billing franchises under a di fferent company, named Medical Data Systems Express. The probation officer amended the pre-sentence investigation report t o include the post-indictment business dealings as relevant conduct, thu s increasing Choate's offense level, taking away h is downward adjustment for acceptance of responsibility, and assessing more points for obstruction of justice.

II.
Choate argues that the findings concerning relevant conduct, U. S.S.G. § 1B1.3, and his role in the offense, U.S.S.G. § 3B1.1, are erroneous. At the outset, we must a ddress the standard of review, which Choate contends is de novo.
We review the district court's findings of fact only for clear error. United St ates v. Hulshof , 23 F.3d 1470, 1472 (8th Cir. 1994). We ma y reverse findings of fact only if, after review of the entire record, we ar e lef t with the definite and firm conviction that a mistake has bee n committed. United States v. Williams , 890 F.2d 102, 104 (8th Cir. 1989) (per curiam).

Aft er the probation officer amended the presentence investigatio n report to include Choate's post-indictment business dealings as relevant cond uct, Choate objected to the inclusion. He contended that he ha d operated Medical Data Systems Express lawfully and that the references wer e no longer making any misrepresentations to potential clients. The court held a hearing on the issue and made the following findings:

### -5- (1) defendant Choate eng aged in unlawful conduct by continuing to unlawfully sell medical billing center software through MDSE while upon bond; (2) defendant Choate was the leader of a criminal activity which included five or more parti cipants; (3) defendant Choate obstructed justice by providing a materia l false statement to the Probation Officer which necessitate d additional investigation , time, and expense; and (4) defendant Choate failed to accept responsibility for such crimes by such continued activity.

Choate ar gues that these findings are not findings of fact, bu t findings of law. However, he does not ask us to remand for better findings , as we must do if the findings are inadequate to allow meaningful review,
see United States v. Fetlow , 21 F.3d 243, 248 (8th Cir.), cert. denied , 11 5 S. Ct. 456 (1994). Instead, he "urges this court to deem the recor d adequate for meaningful appellate review." Choa te does not ask us to send the case back for the district court to make different findings of fact-- instead, he wants us to make different findings. His argument is solely directed to avoiding the clearly-erroneous standard of review and having this court make its o wn assessment of the facts. This, of course, we may not do. The district court's findings, though somewhat conclusory, ar e clear e nough in light of the issues that were presented to the court t o resolve.

Choate also argues that the district court's findings were clearl y erroneous on the issue of whether Choate's busin ess practices while out on bond were fraudulent. Choate argues that the government did not prove tha t Medical Data Systems Express sold software that did not work. The record could have supported opposite conclusions on this issue. The government produced three witnesses: Mark Phillips, MDSE's computer programming and training consultant, and two MDSE franchise customers, Carolyn Necessary and Michelle Ballard Koelling. Phillips testifi ed that he could never get the MDSE software to connect to the clearinghous e to transmit a claim, and that he had told Choate the software did not wor k. Necessary and Koelling were computer novices, but had received

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their promised training from MDSE, which consisted of training by Mar k Phillips. Neither was able to process a claim using MDSE's software. On the ot her hand, Choate introduced testimony of another MDSE compute r trainer, Brad Bowzer, who stated that the software was "rough," but that he was able to use the software to transmit claims to the clearinghouse. Choate also introduced the testimony of a representative of th e clearinghouse, Christ opher Heller, who said that the Physi-Care software, which he believed was the same software MDSE used, did in fact transmi t claims to the clearinghouse when used in conjunction with software provide d bythe clearinghouse. The testimony is conflicting, but is adequate t o support the district court's conclusion that Choate was continuing his pas t pattern of selling franchise packages that the franchisees were not able to use as promised. On this record, we cannot say that we are left with a definite and firm conviction that the district court made a mistake.

Choate al so attacks the district court's factual conclusion that he
wa s the leader of a criminal activity that involved five or mor e participan ts. Choate argues that there was no showing that the othe r participants were criminally responsible, and therefore the requirements of U.S.S.G. § 3B1.1(a) have not been met. Choat e has waived this argument by his assertions in response to the presentence investigation. I n res ponse to the proposed assessment of four points under section 3B1.1 , Choate contended that "the appropriate level increase should be 3 and not 4 in that CMD and [Physi-Care] were in reality communal operations wit h which all participants were fully knowledgeable and responsible." H e argued that the other people were sufficiently involved in the enterprise that he was not reall y their leader or organizer. By asking for a threelevel increase rather than a four-level increase, Choate was arguing that he should come within section 3B1.1(b), which assesses three points fo r being a "manager or supervisor," rather than section 3B1.1(a), whic h
assesses four points for being an "organizer or leader." Both sections require that the defendant

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oversaw an activity that involved "five or more participants or wa s otherw ise extensive"; therefore, by arguing that he came within sectio n 3B1.1(b), Choate has conceded that there were "f ive or more participants." This question was not disputed at sentencing, and the government did not, therefore, introduce proof on this issue at the hearing. Choate canno t resurrect a factual issue on appeal that he conceded below.

We conclu de that the district court's findings of fact were no t clearly erroneous.

III.
Finally, Choate contends that the district court erred in adding as
a condition of Choate's supervised release that he cannot maintain selfemployment during his term of supervised release. Choate contends th e restriction is overly broad.

Unde r U.S.S.G. § 5F1.5 a court is subject to the followin g limitations in imposing occupational restrictions:
Occupational Restrictions (a) The court may impose a condition of probation o r su pervised release prohibiting the defendant fro m engaging in a specified occupation, business, o r profession, or limiting the terms on which the defendant may do so, only if it determines that: (1) a reasonably direct relationship existe d between the def endant's occupation, business, or profession a nd the conduct relevant to the offense of conviction; and (2) imposition of such a restriction is reason ably necessary to pr otect the public because there is reason to believe that, absent suc h rest riction, the defendant will continue t o engage in unlawful conduct similar to that for

### -8- which the defendant was convicted. (b) If the court decides to impose a condition of probatio n or supervised release restricting a defendant' s engagement in a specified occupation, business, o r profession, the court shall impose the condition for the min imumtime and to the minimum extent necessary t o protect the public.
During the sentencing the district court explained its reason fo r imp osing the restriction on self-employment: "We're trying to keep hi m from getting into this same problem again and fr om taking advantage of any member or members of the public."
The Guidelines give the district court discretion in determini ng the appropriate conditions on supervised release. United States v. Mills , 959 F.2d 516, 519 (5th Cir. 1992). Choate has demonstrated that he is given to excess es of salesmanship that tend to creep up in business afte r busin ess. The district court had before it evidence of three separat e businesses Choate operated that all ended up perpetuating the same cycle of fraud. One of these businesses started up after Choate was indicted

. The district court is not required to pit its im agination against Choate's to anti cipate what sort of business he could put to fraudulent use. H e needs an employment s ituation in which he is not left to his own devices. The prohibition on self-employment seems a reasonable way to protect the public from Choate's practices and to channel Choate's energies into a les s destructiv e path. While the restriction was general in its terms, w e cannot say that upon the evidence in this record, the district court abuse d its discretion in imposing it. We see no abuse of discretion.
We affirm the sentence imposed.

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Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.