### FI LED U.S. COURT O F APP EALS ELEVENTH CIRCUIT Ma y 2 3, 2005 THO MAS K. KAH N CL ERK

Honora ble Fe rn M. Smith, Unit ed States District Judge f or the Nor

th er n Di s trict of * California, sitting by

desig nation. [PUBLIS H] IN THE UN ITED STATES COURT OF APPEALS FO R T HE EL EV EN TH CIRC UI T

____ ____ ____ ____ ____ ____ N o. 03- 1282 0

____ ____ ____ ____ ____ ____ D. C. Dock etNo. 0 0- 06 30 9 C R-PAS UNITED STAT ES OF AMERIC A, Plaintiff-Appellee, ve rs us JOSE PH SIL VE ST RI, D ef en dant- Appe llant.

____ ____ ____ ____ ____ ____ Appeal f rom the United State s District Court fo r the S outhe rnD istri ct

of F lor ida

____ ____ ____ ____ ____ ____ _ (M ay 2 3, 200 5) Before BL ACK

and MAR CUS , C ircuit Judg es, and SMIT H , D istrict Judg e. * MAR CUS , C ircuit Judg e:Th e un lawf ul a c tiv iti e s wh os e pr oc e e ds we re c on c e a le d o r p ro mot e d w e re ma il f ra ud , in 1 vio latio n o f 1 8 U .S. C. § 13 41 , a nd wi re fr a ud , in vio latio n o f 1 8 U .S. C. § 13 43 . Al so c ha rg e d w ith c on sp ir a c y

in t he ind ic tme nt w e re JohnMamo ne, Jose phRus so , F re d M or g e ns te rn , D avid Morg enstern, Mic hael B uccinna , David B ell, Mark Weis s , an d Dore en Russo. The indictment fu rt he r c ha rg e d Si lve str i w itha

vio latio n o f t

he Ra c ke te e r I

nf lue nc e d a nd Cor ru p t Or g anizatio ns Ac t, 18 U. S.C. § 1 96 2 e t seq . Th at cha rg e wa s dism iss e d be fo re tr ia l, a nd is n ot r e le va

nt t o th is a

pp e a l. 2 Jos ep h S ilv es tr i a

ppe al s hi s c onvi ct iona ft er aj ur y tr ia l f or c onsp ir ing to launder the proceeds of m ail and wire fra ud in v iolation of 18 U. S. C. § 195 6(h), an d f or 30 s ubst an tiv e co unt s of launde ri ng the pr oc ee ds o f m ai l and w ir e fr au d in v i o l at i o n o f 1 8 U.S .C . § § 1 9 5 7 an d2 . Al l o f t h e c h ar g es ar o s e f ro m Si l v es t ri ’s in vo lv em en t i n a frau du le nt in ve st m en t p ro gr am ba se d i n S ou th Caro li na . Si lve str i br oa dly

c ha lle nge s th e suf

fi ci en cy of the e vid en ce on the c onsp ir ac y and subs tanti ve m one y

launde ri ng c ount s, and c la im s th at the j ur y ins tr uc tio ns o n th e conspiracy

charge c aused prej udicial error. A fter thorough review, we are sa tis fi ed that the e vid en ce w as suf fi ci en t t o su sta in the j ur

y ’ s ve rd ic t be y ond a re as ona ble doubt o n a ll co unt s, and tha t the tr ia l c ourt di d no t c om m it re ve rs ibl e e rr o r i n i t s i n s t r

u c t i o n s t o th e j u ry. A c c o r d i n g l y, w e a f f i rm. I. O n Augus t 14 , 200 1, agr an d j ur y in the S outhe rnD istri ct

of F lor ida ch ar ge d S ilv es tr i i n ase co nd s upe rs ed ing ind ic tm en t w ithc onsp ir ac y to co m m it ac ts o f m one y

launde ri ng i n vi olatio n of 18 U . S. C. §§ 1 956( a) (1 )( A )( i) and ( B) (i ) an d 19 57, a ll in v iol at ionof 18 U . S. C. § 19 56( h) ( Co unt 14) . P ar ag ra

phs 2 and 3 1Mamon e , Russ o, the Mo rg e ns te rn s, B uc c inn a and Wei ss w e re a lso c ha

rg e d in the same 2 su bs tanti ve c ounts . Tang enter ed a plea of guilty to c onspiracy to c ommit fraud, agree d to cooper ate with the 3 g ov e rnme nt, and

wa s se nte nc e d to 30 months ’ i mpr iso nme nt. 3 of Co unt 14 e xpl ai ne d th at

the pur pose s and o bj ec ts o f the c onsp ir ac y w er e: ( a) to co nd uc t fi na nc ia l t ran sa ct io ns in vo lv in g t he pro ceed s o f m ai l an d wi re fra ud , a spe ci fi ed unl aw fu l a ct ivi ty

- - spe ci fi ca lly , to ca sh c he ck s ob ta ine d f ro m aS outh Carolina-based investm ent fraud -- with the intent to prom ote the specified unl aw fu l a ct ivi ty ; and ( b) to en ga ge in m one tary tr an sa ct ion s inpr ope rty

w orth m ore than $10,000, crim inally derived from

the sam e South Carolina fra ud. In ad dit ion , S ilv es tr i w as c harg ed in 30 s ubst an tiv e co unt s w ithm one y launde ri ng, in vio la tio n of

18 U . S. C. §§ 1 957 an d 2 ( Co unt s 16 -4 5) . S ilv es tr i pl ed not gui lty 2 and proceeded to trial, alone. Co ns tru in g t he ev id en ce i n a li gh t m os t fa vo rab le to th e jury’ s v erd ic t, as we m ust a t this sta ge in the pr oc ee din gs, the e sse nti al f ac ts i n th is c om

ple x f ra ud c as e are these. U . S. G uarante e Co rp or at ionin A ri zo naand N ev ad a T he sto ry be gan so m et im e in 1 997, w he n A lvi n T an g, aone -t im e re al e state 3 sales associate and som etim e “boun cer” for a bar, and Charles Sm ith, an attorney fr om Ca lif or nia , be gan w orkin g to ge the r to p ur sue vari ous inv es tm en tAl l ci t a t i o n s t o t h e t ri al tra n s cr i p twi l l b e i nth e f o l l o wi n g fo rm at : R [ Vo l um e # ] at[ p age 4 number]. For e x ample, this citation is to Volume 7 of the rec ord at pa g es 96-100. 4 oppo rtunities. Eventually , they form ed U. S. Guar antee Corporation in Nevada, with office s in Scottsdale, A rizona, wher e T ang worked. R7 at 96-100. U .S . 4 G uarante e fa ile d to pr oduc e the inc om e Sm ithha d ho pe d f or , how ev er , and b y

the en d of 199 7, S m ithc ea se d do ing bus ine ss w ithT an g and d isa sso ci at ed him se lf fr om U . S. G uarante e, le av ing T an g a s he ad of the c or por at ion . S m ithtoo k f

ro m the c or por at ionthe onl y

it em s of va lue , som e “ G inn y

Ma e” m ortga ge s. Joe K al isc h, anothe r partne r of T an g’ s, a lso pul le d ou t of U . S. G uarante e, takin g w ith hi m th e $ 40 ,00 0 h e h adin ve st ed . Thu s, Tan g was lef t wi th a sm al l cl eri cal st aff, a co rp or at ione sse nti al ly

w ith out a sse ts, and a

gr ow ing num

be r of de bts . T an g observed at trial that, “ [w ] e didn’t have any m oney , and there we re people that w er e ow ed

m one y and w e w er e ro ck

bottom , str

uggl ing , y ou know . ” I d. a t 10 4. T o he lp b ols te r U . S. G uarante e’ s m or ibund p osi tio n, T an g so ught to originate som e m ortgages, but the busi ness was inconsequential. T ang testified t h at , b ef o re l ea v i n g U.S . Gu ar an t ee i n 1 9 9 7 , C h ar l es Smit h , U. S. Gu ar an t ee ’s er stwhil e pr im ar

y share hol de r, ha d r ec om

m en de d th at

T an g c ont ac t the de fe ndant, Jos ep h S ilv es tr i, w ho c oul d he lp t o de ve lop ne winv es tm en t op portun iti es f or the co m pany . S m ithtol d T an g th at “ if the re w as asig nif

ic an t transa ct ionthat [ T an g]5

ha d inthe are a [o f] ins ur an ce bon din g or r ei nsur an ce , that [ Si lve str i] w oul d be the m an to see, but it wouldhave to be som ething th at w ouldbe very , ver y special.” Id. at 10. In late 1997 , T ang spok e to Silvestri concerning a cer tain “ railroad bond ,” one of U. S. Guar antee’ s fewrem aining assets th at T ang hop ed to use as lo an co ll at eral ; Si lv es tri su gg es te d t ha t t he bo nd was “ wor th le ss .” Id . at 1 0- 11 . From that poin t, the tw o rem ained in contact, as T ang soug ht Silvestri’ s advice co nc er nin g f urthe r busi ne ss o ppor

tun iti es . N one pr ove d pr oduc tiv e unt il 1999 . A lli an ce T ru st i n S outh C ar oli na Som etim e in July

1999 , V irgil W om ack, an (appare ntly close) ac quaintance of the de fe ndant J ose ph S ilv es tr i, ope rate d ac om pany ba se d inS en ec a, S outh Caro li na kn own in it ia ll y

as Al li an ce Tru st , and lat er re na m edCh em ic al Trus t. All ia nc e Tru st was e ng ag edin th e m ark et in g a nd sal e o f al le ge dl y hi gh -y ie ld , lo wri sk i nve stm en t op portun iti es . T he c om pany e m plo y ed anum be r of sa le s a ge nts , w ho e nti ce d in ve sto rs to put the ir m one y int o A lli an ce T ru st, w ithpr om ise s of an nua l r et ur ns r an gin g f

ro m 9. 5% to 20% . R 7 a t 14 , 15, 35, 72; R1 0 a t 18 8; R 15 at 56. T he a ge nts de sc ri be d A lli an ce T ru st t o in ve sto rs a s asor t of “pr ivate investm ent club” that invest ors could join after pay ing a fee. When investo rs asked how Alliance Tr

ust would em

ploytheir capital in order to generate such high returns, the agents said that th e com pany wa s either m aking “ overseas6

inv es tm en ts, ” buy ing spe ci al ly dis co unt ed

U . S. T re as ur

y not es , or pur ch as ing

“ di st res se d” pro pe rti es . R15 at 5 5, 6 3, 6 6. No su ch in ve st m en ts were ev er m ad e. R1 1 a t 31 , 32; R1 2 a t 72 , 115 -1 7, 119 -2 0.

Alliance T rust and U. S. Guar antee Be gin to W ork Together InMarc h 19 99, S ilv es tr i pr opos ed to T an g th at

U . S. G uarante e co uld unde rt ak e a co ur se of

a ct ionthat w oul d e nta il “ no r isk ” to the c om pany . T an g testified that althou gh Silvestri kn ewU. S. Guar antee w as “ starving,” Silvestri noneth eless suggest ed that it could is sue bond s. R 8 at 28-29. Silvestri visited with T ang in Arizona on April 6, 1999 . The def endant specifically

said that U. S. G u a r a n t e e c o u l di s s u e “ c o n s t r u c t i o n ” b o n d s t o aS o u t h C a r o l i n af i rm h e a d e db y a fr ie nd, V ir gil W om ac k, w ho h ad be enthe ow ne r an d he ad of ac onstru ct ion com pany . Later, Silvestri changed the propos al and said, instead, that U .S . G uarante e co uld

iss ue “ sur ety

bon ds, ” pur

portin g to se cure ind ivi dua l i nve stm en ts m ade in W om ack’ s organization, Alliance Tr ust. A ccording to Tang, “ Alliance w as j ust anam e that w as c re at ed

by S ilv es tr i. ” I d. a t 40 -4 6. On that visit to Scottsd ale, Ar izona in early April 1999, Silvestri ate dinn er with T ang and Kenneth Turner , anoth er U .S . Guarantee e xecutive who testified atTurner enter ed a plea of guilty to a conspirac y char g e, and fa ced a possible sentence of up 5 to five y ear s’ imprisonment. R9 at 23. 7 tr ia l. N ota

bly , dur ing thi s m ee tin g S ilv es tr i de sc ri be d hi m se lf to T ur ne r as a 5

“ liaison b etwe en U. S. Guar antee and A lliance.” Silvestri said that U. S. Guar antee wa s “ g o i n g t o g u ar an t ee th e i n v es t m en t .” R9 at 4 4 , 4 7 . U. S. Gu ar an t ee ’s invo lvem ent with the A lliance T rust schem e began at approxim ately that tim e. To m ake the security

guarantee f

acially cre dible, U .S . Guarantee pre pared and distrib uted bog us brochures and financial statem ents. T he financial state m en ts w er e atta ch ed to the br oc hur es , and e ac h f inanc ia l st at em en t i nc lud ed a phon y ba lanc e she et

li sti ng a sse ts, li ab ili tie s, and n et share hol de rs ’ e qui ty . A s th e m at er ia ls w er e cr eate d, S ilv es tr i c ri tique d and m ar ke d up dr af

ts, a dvi sin g T an g w h a ti t e ms t o i n c l u d e o r

o mi t . U. S . Gu ar a n t e e ’s b r o c h u r e d e s c r i b e dth e c o mp a n y, its c or por at e pur

pose , and c er

ta in i ndi vid

ua ls a ff ili at ed w iththe c om

pany (i nc lud ing Barr

y G oldw at er , Jr . ). R 8 a t 50 -6 7. T an g te sti fi ed

about tw o su cc es siv e an d w hol ly f ic tit iou s ve rs ion s of

the fi nanc ia l st at em en t. T he f ir st w as da te d M ar ch15, 199 9 ( al tho ugh it co nti nue d to b e r ev i s ed an ded i t ed i n Ap ri l an dMa y). It s b al an ce s h ee t l i s t ed U.S . Gu ar an t ee ’s tot al a sse ts at $1 . 7 bi lli on. A m ong the a sse ts l ist ed w er e $167 m ill ionin ce rt if ic at es of de posi t, $10 0. 1 m ill ionin re al e state , and $ 1. 51 b ill ionin ce rt ai n8

“p a rt n e r s h i p s . ” R 8 a t5 6 - 5 9 ; G o v . E x . 4 A . T a n g s a i dth a tth e c o mp a n y a tth e t i me had essentially

no assets, or at m ost “ a fe w thousand do llars in the bank.” I d. at 62. The sec ond financial statem ent was date d July13, 1999. T he balance sheet in tha t st at em en t sa id tha t the c om pany ha d $2 . 4 bi lli on i n a sse ts and $ 2. 4 bi lli on in “ tot al ne t l ia

bil iti es and n et

e qui ty . . . c om ing to a gr an d to ta l of $2. 4 bi lli on dol lars f or U . S. G uarante e. ” R8 a t 80 . A m ong the a sse ts l ist ed w er e $167 m ill ion in c er tif ic at es of de posi t, $1. 46 b ill ionin re al e state , and $ 786 m ill ionin partne rs hip s. G ov. E x. 4F . I n r ea lity , T an g te sti fi ed , U . S. G uarante e ha d “ m ay be $1 0,0 00 " i n a ss et s at th atpo in t. Id . at 7 3- 77 , 81 ; Go v. Ex . 4D. Tang further testified that Silvestri encouraged him to create the financial state m en ts i n or de r to h el p th e A lli an ce T ru st s al es a ge nts pr om ote the inv es tm en t pr ogr am . A cc or din g to T an g, he and S ilv es tr i ha d “ tw o or thr ee dis cu ssi ons” co nc er nin g th e pr ep ar at ionof

the state m en ts. R 8 a t 59 -6 0. T an g de sc ri be d th e c o n v e r s a t i o n s i n th i s wa y: Q: W as there any

discussi on abou t -- w ith Mr. S ilvestri -- about what shou ld actually

go in th ese docum ents, the Pr ofile and the balance she et ? A: Ce rta in ly the re was a cri ti qu e. Andin lo ok in g a t wh atwe subm itt ed to w ha t w as f

ina lly - - to wha t w as pe rf

ec te d a t the e nd.9

Q : Whe n y ou s ay

“ a cr iti que , ” howdid

thi s take pla ce ? H owdid the critique take place? A : We w o u l ds ub mi ti t , an dh e w o u l dl o o ka ti t , an dth e r e w e r e s o me thi ngs that, y ou know , that, y ou know , Joe w as not ha ppy w ith . Q : A nd wha t di d he say

to y ou whe n y ou s ay

he w as n’ t ha

ppy w ith som ethin g? A : T ha t sp ec if

ic al ly the re w er e som e thi ngs that sh oul d no t be in there, and, y ou kn ow, that there w ere thing s that sho uld be in th ere and there w ere thing s that sho uld no t be in there. Id . T an g a lso f

ax ed dr af ts o f the f inanc ia l st at em en ts t o S ilv es tr i’ s F lor ida ad dr es s, an d S il ve st ri “ m ark edup ” an d re tu rn edth os e d oc um en ts . R8 at 60 -6 1. A m ong oth er

thi ngs, S ilv es tr i su gge ste d th at c er ta in “ ra ilr oa d bo nds” sho uld be re m ove d f

ro m the a sse ts c olu m

n, and tha t an it em

ti tle d “ A sse ts H el d I n T ru st F or Indem nification On Corporate Guarantee” be added to the assets column. I d. at 77. T ang was not able to explain what that item ref erre d to. T ang incorporated Si lve str i’ s su gge ste d c hange s inor de r to c re at e a “ pe rf ec te d f orm ” of the doc um en t. I d. a t 61 . T an g a lso sa id tha t, dur ing the sum m er of 199 9, w hil e the financial statem ents wer e being developedand am ended, he and Silvestri had

“ co ns ta nt co nv ers at io n[ s] of o urworrywartan d o urna gg in g, you k no w, th atwe did no t have the ability

to, y ou kn ow, to cover them [the surety

bond s] ,” but that10

“ Joe . . . w oul d gi ve us, y ou know , w oul d c om fo rt us s ay ing that the inv es tm en t w as se cure and tha t the inv es tor s w oul d no t be hurt, and, y ou know , and the non de ple tio n a cc ount

and n on- de ple tio n, y ou know , and s ai d a ll the w or ds. ” I d. a t 81 . Inor de r to a ssure inv es tor s th at the A lli an ce T ru st p ro gr am w as ind ee d a low-r isk inv estm ent, the sales a gents explain ed that each investm ent was sec ured by U. S. Guar antee. A t early stages in the ventu re, sales agents prom oting Alliance Trus t wo ul d c al l U.S. Gu aran te e fo r ad di ti on al in fo rm at io n t o p ro vi de in ve st or s. In de ed , T ur

ne r ini tia lly

r ef er re d th es e ca lls to Si lve str i. R 9 a t 47 . A s ti m e pa sse d, that arrangem ent “ got to be too m uch” for Silvestri, who then suggest ed that U. S. G uarante e fi el d th e ca lls dir ec tly . I d. S ilv es tr i sp ec if ic al ly ins tr uc te d T ur ne r to tell Alliance sales agents that “ the investm ent was ver y safe, that the m oney

wa s put in to banks , . . . that U .S . Guarantee w as backing [it] up,” and that “ the m oney co uld be gotte n w ith in s ev enday s. ” I d. a t 47 , 64. Me an w hil e, T ur ne r an d Silvestri held a num

ber of discussion s regarding whether various U. S. Guar antee as se ts c oul d be use d a s lo anc oll at er al . S ilv es tr i c onc lud ed , how ev er , that “ he w as n’ t a ble to do anythi ng w ithany of the m . ” I d. a t 82 -8 3. Whe n an in ve sto r se nt a

c he ck to A lli an ce T ru st, he or

she w oul d be giv ena l amin at ed U.S . Gu ar an t ee b o n d , wh i ch p u rp o rt ed t o g u ar an t ee th e i n v es t o r’s ca pit al a ga ins t l oss . R 15 at 68 . T he a ge nts a lso pr ovi de d in ve sto rs w ithone of the“ Th e te rm ‘P on zi sc he me ’ i s der ive d fr om Cha rl e s Ponzi, a fa

mou s Bo sto n swi nd le r. With 6 a ca pital of $150, Ponz i beg an to borrow money on his own promissory

notes at a 5 0% rate of interest payable in 90 day s. Ponz i c ollected near ly $10 milli on in 8 months beginningin 1919, using the funds of ne w investors to pay off those whose not es had come due.” United St ates v. Maste n, 1 7 0 F . 3d 790, 797, n. 9 ( 7 th Ci r . 1 9 9 9 ) ( qu o tati o n s an d c it ati o n s o mi tt e d ) . “ G e n e r ic a ll y , a Po n zi sc he me is a

ph ony inv e stm e nt pla

n in wh ic h mon ie s pa id by late r inv e sto rs are us e d to pa y art if ic ia lly high r eturns to the initial investors, with the goa l of attrac ting more investors.” In re B onham, 229 F.3d 750, 759, n.1 (9th Cir. 2000). See a lso Cunningham v. B rown, 265 U.S. 1, 44 S. Ct. 424, 68 L . Ed. 873 (1924). 11 financial statem ents issu ed by U. S. Guar antee, which, again, indicated that U .S . Guar antee had extensive assets. I n reality , the e ntire program wa s a sham . U. S. G uarante e, portr ay ed

a s af inanc ia lly sta ble bul w ar

k a ga ins t i nve stm en t r isk , in fa ct ha d vi rt ua lly no a sse ts. I n a ddi tio n to te lli ng i nve sto rs that pr om ine nt ind ivi dua ls w er e as soc ia te d w ithU . S. G uarante e, sa le s a ge nts sa id tha t part of the co m pany ’ s m iss ionw as to pr ovi de hou sin g f or ind ige nts . I d. a t 57 -5 8; R 8 a t 53 - 54; G ov. E x. 4A . F or

it s se rv ic es , U . S. G uarante e re ce ive d af ee of be tw ee n 7% and 10% of the am ount of eac h investm ent; Silvestri rece ived 40% of U. S. G uarante e’ s sh ar e. R 8 a t 30 , 32. Howthe Schem e W orked Special A gent Ronald W ise of the Internal R evenue Ser vice testified at trial that a “ Po nz i sc he m e” is “ a sc he m e w he re inv es tor s are not r ea lly pa id a r et ur n on t h ei r i n v es t m en t s . Th ey ar e, i n fa ct , p ai dwh at ’s al l eg ed t o b e a re tu rn , b u ti t ’s m oney actually taken from

the next level or tier of investm ents.” R 12 at 116 . By 612

all appearance s, A lliance / Chem ical T rust tookon the form of a “ Ponzi schem e. ” T he e ar lie st i nve sto rs in the sc he m e re ce ive d so m e paym en ts tha t w er e fi nanc ed by using the principal invested b y others who j oined th e schem e later . Meanw hile, m ill ion s of

dol lars w er e ski m

m ed of f fo r pe rs ona l us e by

the m em be rs of the sc he m e (i nc lud ing S ilv es tr i) . Whil e al l of the inv es tor s be lie ve d th at the ir investm ent principal was guarantee d, in rea lity all the funds wer e being used either to m ak e sm al l paym en ts t o th e ini tia l “ tie rs ” of inv es tor s, or

f or the pe rs ona l us e of the schem e’ s m asterm inds. The principal, w hich the schem e’ s organizers had prom ised was guaranteed and earning interest, w as actually being dis persed as so on as i t was tak en in by the en te rp ris e. Id . at 1 16 -1 7. Investors first m ade out and m ailed checks to Alliance T rust (later, Ch em ic al T ru st) . S om e of the c he ck s w er e de posi te d in to a cc ount s he ld i n th e nam e of “ Prestige A ccounting Ser vices,” and the funds from these acc ount s wer e used to m ake “ interest” paym ents to earlier investors. T he funds from other inv es tor c he ck s w er e w ir ed

to U . S. G uarante e as paym en t f or it s se rv ic es . T he re m ai nde r of

the c he ck s w er e se nt t o G old Co as t C he ck

Ca shi ng, aF lor ida busi ne ss o w ne d and c ontro lle d by c o- co nspi rator s D av id and F re d M or ge nst er n, al so a cqua int an ce s of

S ilv es tr i. R 9 a t 21 8- 22; R1 2 a t 57 -6 2, 76- 78, 81- 82, 113 -1 6, 12 0- 24 .13

Peggy Pre ston, who had prior experience working for banks, w as em ploy ed by Fre d Morgenstern in his various bus iness ventu res. She w as aw are that Fred previousl y

had been convicted of bank fraud. R9 at 212. Fre d purchased Check Ca shi ng U nli m ite d inthe sum m er of 199 9, and P re sto n m an ag ed six c he ck

c as hin g stores for him . Fred told her that his brother, D avid Morgenstern, had introduced him to a new client whose checks w ouldbe deposited regularly at the check ca shi ng s tor es . T he ne wc lie nt w as V ir gil W om ac k, and h is S outh C ar oli na inv es tm en t c om

pany w as A lli an ce / C he m ic al T ru st. I d. a t 21 8- 22. From the summ er of 1999 throug h the end of that y ear, Fre d Morgenstern de posi te d so m e of

the se c he ck s in to a cc ount s he c ontro lle d a t a F lor ida br an chof Ci tib an k, and o the rs int o an a cc ount m ai nta ine d a t a

F lor ida br an chof

F ir st Unio n Bank. R 9 a t 22 1, 223 , 234 ; R 11 at 27 . Whe n F ir st Unio n late r cl ose d th e ac co unt in Augus t 19 99 ( fo r re as ons dis cu sse d be low ), S ilv es tr i he lpe d W om ac k and the Mor ge nst er

ns s et up s ev er al ne wa cc ount s a t a F lor ida br an chof

A dm ir al ty

Bank, w ithw hose c ha irm anS ilv es tr i ha d apr ior r el at ion shi p. R 10 at 10 0- 108. T he Mor ge nst er

ns d ep osi te d th e Fi rs t U nio n f unds and a ddi tio na l i nve sto r ch ec ks i nto those accounts in Septem ber 1999. Id. at 11-15. T he Morgensterns also depo sited in ve st orch eck s i nt o o ffs ho re ac co un ts at Am eri cas Int ern at io na l Ba nk in g C or p.,A m o n go th e r th i n g s , T an gt e s t i f

i e d o nd i r e c te x am i n at i o ni nth i s w ay: 7 Q: Di d you

e ve r [h ave] any disc us sio ns wi th M r. Silv e str i du ri ngthi s ti me pe ri od a bo ut t he fa c t that U.S. Gu ara

nte e did no t hav e the a sse ts t o b a c k th e se bo nd s? A: Ye s. 14 Ltd. (A IBC) , based in the Baham as, where the Morgensterns and Silvestri had op en edsev eral ad di ti on al acco un ts . R9 at 23 7; R1 1 a t 2 5- 26 . Co nsi de ra

ble e vid en ce pr es en te d a t tri al de ta ile d S ilv es tr i’ s r ole in the A lli an ce / C he m ic al T ru st P ro gr am . T an g te sti fi ed that he and S ilv es tr i sp oke re pe at ed ly

about the f ac t tha t U . S. G uarante e did not have the a sse ts t o c ove r the sur ety bon ds. S ilv es tr i c ont inu al ly a ssure d T an g th at

the inv es tm en ts w oul d go int o a“ non- de ple tio n a cc ount , ” an d th at the f unds w oul d ne ve r be a t r isk sin ce the “c ap i t a l w a s a l w a ys s t ab l e . ” R 8 a t6 2 - 6 4 , 6 8 . A s t i me w e n to n , an dth e v o l u me an d nu m be r of bon ds r eque ste d and i ssu ed be cam e “ ve ry

unc om fo rt ab le , ” T an g ha d w ha t he te rm ed

“ ne ve r en din g” dis cu ssi ons w ithS ilv es tr i. I d. a t 82 . H e sa id to S ilv es tr i, “ H ey , Joe , y ou knowthat w e don’ t have apot to pis s in . I m ean, y ou know that,” and that U.S . Guarantee’ s financial statem ent as issued was

“ worthless.” Id. at 83, 246. A ccording to Tang, S ilvestri would respond that

“ ev erythi ng was p ret ty oka y an d t he in ve st m en t was m ak in g m on ey , and . . . ev er y body w as goi ng t o be f

ine . ” I d. a t 82 - 7Q: Could y ou descr ibe for us a s best y ou can those conversations with Mr. Silvestri, particularly

in this t ime frame -- a

nd then we w ill move on to later

- - b u tf r o mM ar c h , Ap r i l i n t o M ay? A: Probably the m ost common conver sation that Iwould have w ith J oe wa s the - - wa s this conversation. And the c onversation that J oe and Iwould have would be that, you know, the investment, wher e the funds would g o. And J oe would tell me that the investments would g o into a non-deple tion account a nd the funds we re ne ver at risk, and t h e ca p ital was, you know, alwa y s -- the capital wa s alway s stable, and the capital wa s never -- a g ain, neve r at risk. And, y ou know, the investors we re ne ver g oing to be hurt, and, you know, differ ent terms, you know, but there was -- R8 at 62-63. At another

point on direct examination, Tangsaid: Q: Di d you

e ve r d isc us s w ithMr . Si lve str i du ri ngthi s time fr ame , s umm e r i nto fall of 1999, about the vol ume and the num ber of bonds that were now being r e qu e s t e d an d th e ns u b s e qu e n t l y

i s s u e d ? A: Th e vo lum e wa s v e ry un c omf or ta ble , a nd , ye s, we -- y e s, Idid

dis c us s it wi th him . Y ou kn ow , th e dis c us sio ns we re ne ve r e nd ing , a nd -- but, you

kn ow , h is -- you know, he c onstantly ju s t gav e us t he comf

ort and sec urity

that every t h i n g was g oing to be okay . And so ce rtainly in -- out of e very

three conver satio n s that we ha d, Imean, two of them wer e just, y ou know, confirmingthat ev er y

t h ing is oka

y and the investment wa s fine, and, you know, there was no question, that ever y thing was g oing to b e - - every thing was pre tty

okay and the investment was makingmoney , and, you know, ever y thing wa s g oing to be fine. Q : Di d y o u e v e r d i s c u s s w i th M r . S i l v e s tr i d ur i n g th e c o ur s e o f th e s e sa me c o n v e r s at i o n s , th e s um m e r o f ‘ 9 9 i n t o th e f a l l o f ‘ 9 9 , th e f

a c t tha t U .S. Gu ara nte e qu ite sim

ply did no t ha ve the a sse ts t o b a c k th e bo nd s? A: There wer e seve ral times that I s aid that, y es, that, you know -- I mean, pardon the expression -- that, “He y , J oe, you know that we don’ t have a pot to piss in. Imean, you know that.” Q: And what r esponse would Mr. Silvestri have to y ou when you said something lik e that? 15A: “You don’ t worry -- you don’t have to w orry about it. This is a non-depletion acc ount and, y ou know, t he tra des ar e g oing f ine, you know, which is how the money was be ing ma de, and, you k n o w, the investment is goingwell, and, y ou know, and . . . nobody is at risk and this is goingto be fine.” I d. at 82-83. On c ro ss- e xami natio n, Ta

ngg ave the fo llo wi ngans we r t o c ouns e l’ s q ue sti on s: Q: You neve r told him: We don’t rea lly have these t hings. This is all a fr aud? Did y ou? A: Sure we did. Q: Oh , you

did ? An d whe n w a s th at? W he n w a s th at? A: Fr om the -- Q: Idid

n’ t he ar you

te ll the pr os e c uto r. Whe n w a s it ? A: J oe knew

that the ag ree ments we ha d with -- Joe knew the a g ree ment we ha d. I d. at 195-96. Finally , on redire ct examination, Tangsaid: Q: So what discussions did y ou have c oncer ning - - I am sorry -- that further ed thi s f ra ud , what c onve rs atio ns wi th t he de fe nd ant? A: After

bonds had alre ady

been issued, I

had told Mr. Silvestri that, y ou know, that ou r f ina nc ia l st ate me nt w a s w or

thl e ss. Q: And ca

n y ou tell us which bonds y ou are discussing at this poi nt beca use we had a se ries of bonds in 1999? A: We had this discussion at various points f rom, you know, whethe r we are ta lk in ga b o u t, y o ukn o w , M ay , Jun e o r , y o ukn o w , e v e na f te r th e A rizona corpor ation commission incident, so -- Q: An d what w a s Mr . Si lve str i’ s r e sp on se a bo ut the fi na

nc ia l situatio n o f U .S. Guar antee ? 16A: Be ing that the investment was fine and in pl ace , that, y ou know, t hat it didn’t matter. Q: What didn’t matter? A: Th at w e we re wo rt hle ss. I d. at 246.

17 83. A s th e pr ogr am

got und er w ay , and the inv es tor s be gan su bm itt ing c he ck s to Alliance T rust, S ilvestri or Clifton W ilkin son, W om ack’ s brother-in-law , dire cted U. S. Guar antee how m any bond s to write, to whom , and in what am ount s. R 8 at 30, 38, 39. In return for

the bond s, A lliance T rust wire d m oney to U. S. G uarante e’ s a cc ount s a t W es te rnS ec ur ity Bank and A ri zo naBank, both lo cate d in Ph oe nix , A ri zo na . I n turn , e ac h w ee k T ur ne r obt ai ne d c as hie r’ s c he ck s f or Silvestri and sent them

to him or to Risk Managem ent (a c om pany Silvestri controlled) by

overnight d elivery . R9 at 88-94. T he fee s that U. S. Guar antee actually rec eived for its role in the “program ” totaled $3,916,376. Silvestri’ s share cam e to ap pr ox im at el y

$1 .5 m il li on . R8 at 13 1. W iththe inv es tor

c he ck s thus d ep osi te d, S ilv es tr i, W om ac k, and the Mor ge nst er

ns b eg anto tr an sf

er f unds f ro m one bank t o anothe r, e ith er thr ough w ir e tr an sf

er s or by havin g c as hie r’ s c he ck s se nt f ro m bank t o bank. T hus, the18

Mor ge nst er

ns transf er re d m one y

f ro m the A dm ir al ty

and C iti bank a cc ount s, in Florida, to the A IBC a ccounts, in the Baham as, and to a Morgenstern-controlled account at Bar clay s Bank, located in L ondo n, E ngland . From the accounts at each of the four banks (Adm iralty , C itibank , A IBC and Barclay s), the various parties withdrewm oney

for their ow n uses. U ltim ately , a ll of the investo rs’ capital, other than what w as used to pay “ interest” to other investors andto pay U. S. Guar antee an d S ilv es tr i, w as div er

te d in to a cc ount s he ld b y W om ac k, and the Mo rg en ste rn s, fo r th ei r pe rs on al us e. Howthe Funds were Tr ansferr ed T he m ove m en t of

f unds w as c om

ple x and i nvol ve d m

ult ipl e banki ng ins tit uti ons. F ir st, inv es tor s se nt c he ck s to A lli an ce T ru st o r Ch em ic al T ru st i n Se ne ca , S outh C ar oli na . R 9 a t 21 8- 22. W om ac k th ene ndor se d th e ch ec ks o n be ha lf of A lli an ce or

Ch em ic al , and f

or w ar de d th e ch ec ks ( via

D H L pa ck ag es ) to Fred Mo rg en st ern ’s Gol d C oa st Ch eckCas hi ng st or e in Marg at e, Fl or id a. Id .; R1 5 a t 4- 11. G old

Co as t, in tur

n, de posi te d th e ch ec ks i nto thr ee dif fe re nt b an ks: A dm ir al ty

Bank i n W es t P al m

Be ac h, F lor ida , R1 2 a t 59 -7 3; C iti bank i n F t. L au de rd al e, F lor ida , R9 a t 22 3; o r A IB C i n N as sau, Baha m as , R 11 at 9- 19, 25- 26. A t A dm ir al ty

Bank, the c he ck s w er e de posi te d in to thr ee dif fe re nt a cc ount s: Gold Coast Check Ca shing , w ith Peggy Pre ston andJason Crossen list ed as19

sig na tor ie s, R1 2 a t 73 ; A lli an ce T ru st, w ithW om ac k li ste d a s si gna tor y , id. a t 59 ; an d C he m ic al Trus t, al so de si gn at in g Wom ackas s ig na to ry . Id. at 59 , 60 , 73 . At Ci tib an k, the c he ck s w er e de posi te d in to v ar iou s a ddi tio na l a cc ount s li ste d inthe na m e of A m er ic as Re sour ce Co rp . , w ithF re d M or ge nst er n li ste d a s si gna tor

y . I d. at 82- 83, 85. A t A IB C, the c he ck s w er e de posi te d in to the A m er ic as F ide lity Assurance Corp., Ltd. account. D avid Morgenstern had po we r of attorney over that a cc ount . R 11 at 9, 13, 14, 19. F r o m th e A l l i a n c e T r

u s ta c c o u n ta tA d mi r a l t y B a n k , Wo ma c kw i r e ds o me $2. 8 m ill ionto D av id M or ge nst er n’ s A IB C a cc ount . R 11 at 23 -2 4. F ro m the A l l i a n c e Tru s tan dC h e mi c a l Tru s ta c c o u n t s a tAd mi r a l t y B a n k , c o l l e c t i v e l y, W om ac k tr an sf

er re d $1 . 5 m ill ionto an oth er A dm ir al ty

a cc ount in the nam e of Pr es tig e A cc ount ing S er

vic es , R1 2 a t 11 3; those f unds w er e use d to m ak e the

“ in te res t” pa ym en ts to earl ie r ro un ds of i nv es to rs in th e All ia nc e Tru st pro gr am . Id . a t 11 4- 16. W om ac k a lso tr an sf er re d $3 . 1 m ill ionf

ro m the A lli an ce T ru st and Ch em ic al T ru st a cc ount s to U . S. G uarante e’ s a cc ount s a t W es te rnS ec ur ity Bank an dAr i zo n a B an k . Id . a t1 2 0 . Th i s m o n ey wa s u s ed t o p ay U.S . Gu ar an t ee ’s

“ fe e” a s th e “ unde rwri te r” of the inv es tm en ts; aportio n of it w as se nt o n to Silvestri’ s own acc ount at A IBC in the Baham as, a s his sh are of the fee . Id. at 121, 129-30 . W om ack transfer red still another $42 5,000 to Nelson Jarnagin, anWomack also g ave some $1.4 milli on in endorse d investors’ checks to J arna g in; $500,000 8 of the tot al fu n d s gi v en to J arna g in were transfe rre d to Bruc e Ha rvey , an attorne y

for Womack himself. 20 attor ne y f or Ch em ic al T ru st. I d. a t 14 3. F ina lly , W om ac k tr an sf er re d $6 . 25 8 m illion from

the Chem ical T rust account into the Falcon T rust account m aintained at Bar clay s Bank in London, England, w ith David Morgenstern as signatory . Id. at 11 2. From

Fre d Morgenstern’ s Citibank account, $10.3 m illion wa s transferr ed into th e Fa lcon Trust acc ount at Bar clay s Bank. I n additio n, $6.25 m illion wa s tr an sf er re d in to D av id M or ge nst er n’ s A IB C a cc ount , $85 0, 000 int o aP re sti ge Ac countin g Services a ccount at Pointe Bank in Florida, and an additional $ 4 1 7 ,0 0 0 i n t o an es cr o w a cc o u n tfo r S t ev en Sa d o w ( an at t o rn ey fo r Wo m ac k ’s w if e) a t S untru st B an k inA tlanta , G eo rg ia . R 12 at 93 , 96, 97, 100 -1 2. Fr om D av id M or ge nst er

n’ s A IB C a cc ount , $2. 1 m ill ionw as tr an sf er re d in to still anot her ac count, in the nam e of A m erica s Capital Managem ent, a lso at AIB C in N as sau. R 11 at 46 . A nothe r $2. 8 m ill ionw as tr an sf er re d in to an a cc ount m ai nta ine d a t a

S w iss bank i n th e na m e of S la tto ck s I nve stm en t, S . A . , $2. 9 m ill ion w a s w i t h dr a w n t o s e t t l e l i t i g a t i o n r e l a t e dt o 5 S t a r G l o b a l , an o t h e r

P o n z i s c h e me in W is co ns in , and $3 .2 m il li on was wi th dr awn to set tl e li ti ga ti on in th e UK. A furthe r sum

of $54 1, 464 w as w ith dr awn to c ove r A m er ic anE xpr es s c harg es ,21

inc lud ing a ir fare to an d f ro m N as sau f or D av id M or ge nst er

n, S ilv es tr i, W om ac k, and their respective w ives, as w ell as various Morgenstern fam ily expenses. I d. at 36- 46. T he c ount s li ste d inw ha t w as c al le d by the gov er

nm en t C at eg or

y A( Co unt s 17, 18, 20, 21, and 22) each involved d eposits of the investors’ checks, e ndorsed by W om ac k, int o th e G old

Co as t C he ck

Ca shi ng a cc ount

a t A dm ir al ty

Bank i n Fl or ida . R 12 at 68 -8 4. T he se de posi ts w er e m ad e in S ep te m be r an d O ct obe r of 1999 . I d. T he Cate gor

y B co unt s ( Co unt s 19 , 24- 25, 30- 32, 34- 36, and 3 9- 44) invo lved depos its of the W om ack-endorsed investors’ c hecks into Fred Mor ge nst er

n’ s C iti bank a cc ount

in Fl or ida ; the y

w er e m ad e fr om

O ct obe r to D ec em be r of 199 9. I d. a t 84 -9 3. T he Cate gor y C co unt s ( Co unt s 28 , 33, 38, and 45) inv olv ed

the w ith dr aw al of

f unds f ro m F re d M or ge nst er

n’ s C iti bank a cc ount , by c he ck s dr awn onthe a cc ount , sig ne d by F re d M or ge nst er

n, and m ad e pay ab le to “ A m er ic as I nte rn at ion al Bank C or por at ion , L td. ” (A IB C) . I d. a t 93 -9 6. T he se checks we re drawn and sent from Novem ber to De cem

ber of 1999. T he Category D c ount s ( Co unt s 23 , 26, 27, 29, and 3 7) inv olv ed w ir e tr an sf

er s of f unds f ro m F r e dM o r g e n s t e rn ’s C i t i b a n ka c c o u n tt o Da v i dM o r g e n s t e rn ’s a c c o u n ta tB a r c l a ys Bank i n E ngl an d. R 12 at 96 -1 00. T he f unds w er e w ir ed

f ro m O ct obe r thr ough D ec em be r of 199 9. F ina lly , the Cate gor y E c ount ( Co unt 16) inv olv ed

asin gle22

w ir e tr an sf

er , oc curr ing on Augus t 8, 199 9, f ro m W om ac k’ s A lli an ce T ru st ac co unt a t A dm ir al ty

Bank t o D av id M or ge nst er n’ s a cc ount

a t A IB C. I d. a t 10 0- 10 1. O ff ic ia l S cr uti ny of U . S. G uarante e by

the Co rp or at ionCo m

m iss ionof

A ri zo na During the latter part of 1999, Tang inform ed Silvestri that he had rece ived a subp oe naf

or U . S. G uarante e’ s r ec or ds f ro m the Co rp or at ionCo m

m iss ionof A ri zo na . R 8 a t 10 0- 101. S ilv es tr i a ssure d T an g th e Co m m iss ionw as “ a busy

body organization,” and that the worst that could happen would b e the issuance of a ce as e an d de sis t or de r, in w hic h c as e U . S. G uarante e w oul d si m ply sto p do ing busi ne ss. I d. a t 10 2. Aw ee k late r, S ilv es tr i c al le d T an g and i ntr oduc ed him to Dav idMo rg en st ern , who m Sil ve st ri d es cri be d a s “ a p owe rfu l b an ke r.” Id . at 1 03 . Mor ge nst er

n a lso r ea ssure d T an g th at e ve ry thi ng w oul d be f

ine . I d. a t 10 4. T an g hired an Ar izona lawy er f or the com

pany , who sub sequentlyadvised him and U. S. Gu ar an t ee v i ce p re s i d en tKe n n et h Tu rn erth at Al l i an ce /Ch emic al Tr u s t ’s in ve st m en t p ro gr am

“ so un de d l ik e” a Po nz i s ch em e. Id . at 1 12 ; R9 at 9 5- 97 . Silvestri assured Tang and th e attorney , how ever, that the program wa s not a Ponzi sc he m e. R 9 a t 96 -9 7. T an g c ont inu ed to iss ue the bon ds g uarante ei ng i nve sto r pr inc ipa l, e ve n th oughhe kne wU . S. G uarante e ha d no f inanc ia l a bil ity to unde rwri te any

los t i nve stm en t.23

FB I an d I RS S cr

uti ny of A lli an ce / C he m ic al in So uthCaro lin a T he m as siv e fr au d w as la te r unc ove re d by the F ed er al Bure auof In ve sti ga tio n, w hic h e xe cu te d se ar chw ar rants on W om ac k’ s vari ous So uth Caro lin a of

fi ce s onJanuary

7, 200 0. F BI a ge nts se iz ed num er ous doc um en ts related to the A lliance T rust program . FBI agents arrested W om ack and seized co m put er s and b usi ne ss r ec or ds o f A lli an ce T ru st / Ch em ic al T ru st i n S outh Carolina, at Morgenstern’ s Gold Coast Check Cashing in Florida, and at U .S . Guar antee. T ang worrie dly asked Silvestri for guidance. Again, Silvestri re as sur ed T an g, opi ne d th at

the re w as no p ro ble m , and urg ed T an g to j ust

“ hang i n th ere.” R12 at 2 1- 22 , 25 , 27 -3 0; R8 at 1 22 -2 3. In te rn al Re ve nue S er

vic e Sp ec ia l A ge nt W ise , w ho r ev ie w ed m an y of the se doc um en ts, te sti fi ed

e xte nsi ve ly

a t tri al a bout the de ta ils of

thi s c om ple x se ri es of financial transactions and the specific transfer s underly ing th e char ges for w hich Silvestri wa s indicted andultim ately convicted. More specifically , W ise outlin ed the tr an sa ct ion s onw hic h th e subs tanti ve m one y launde ri ng c ount s intheThe de tails of these transac tions a re as follows. In Categ ory A: Counts 17, 18, 20, 21, and 9 22 re fe r t o de po sit s of Che mic a l Tr us t c he c ks int o a Go ld Coa st a c c ount, #3 00 13 90 47 , at A dmi ra lty B an k , d at e d , r e s p e c t i v e l y, S e p t e mb e r 2 9 ; O c t o b e r 5 , 1 2 , 1 2 , an d 1 2 , 1 9 9 9 , an d

t o t a l i n g , r e s p e c t i v e l y, $261,914.21, $577,296.94, $449,578.26, $262,259.16, and $250,940.77. In Categ ory B: Counts 19, 24, 25, 30, 31, 32, 34, 35, 36, 39, 40, 41, 42, 43, and 44 ref er to deposits of Chemical Trust che cks i n t o th e M o r g e n s t e r

n s ’ “ Am e r i c a s R e s o u

r c e ” a c c o u

nt , # 3 2 0 0 3 9 5 5 1 8 , a

t C i t i b a nk , d at e d , r e s p e c t i v e l y, October 12, 22, and 28; November 15, 16, and 17; and Decembe r 1, 7, 15, 21, 21, 22, 23, 28, and 29, 1999 and totaling , respe ctively , $297,000 .00, $266,602.02, $233,294.52, $402.137.00, $292,244.32, $350,000.00, $374,180.24, $1,250,174.70, $258,654.13, $651,567.00, $598,990.00, $827,689.00, $300,358.99, $622,159.55, and $297,019.68. In Categ ory C: Counts 28, 33, 38 and 45 ref er to withdra

wals of f unds by chec ks drawn on the Americ as R esourc e C itibank acc ount, dated, respe ctively , November

5 and 18, and Dec ember 20 and 31, 1999, eac h in the amount of $500,000. In Categ ory

D: Counts 23, 26, 27, 29 and 37 r efe r to wire tr ansfe rs from the Citibank ac count to the Morg ensterns’ acc ount at Ba rcla y s in L ondon, #637 72677, dated, r espec tively , October 20; November

3, 4 and 15; a n dDec ember 17, 1999, and totaling , respe ctively , $425,000.00, $550,000.00, $1,000,000.00, $1,000,000.00, and $500,000.00. In Categ ory E: Count 16 ref ers to a wi re tr ans fe r f

ro m th e Al lia

nc e Tr us t a c c ount, #3 00 13 75 6, at A dmi ra lty B ank to t he Mo rg e ns te rn s’ acc ount at Ba

rcla y s Ba nk in New Yor

k (subseque ntly

rew ired to B arc lay s Ba

nk i n the B ahama s), dated August 9, 1999 and totaling $2,800,000.00. 24 indictm ent wer e based. R12 at 68-101. In addition, W ise testified that Silvestri 9 ha d ne ve r fi le d ape rs ona l i nc om e ta x r et ur n f or 199 9. He nry Marvin H arrison, who was appointed bythe United State s District Court for the D istrict of South Carolina to assist a court-appoin ted rece iver in an inv es tig at ionand c ivi l a ct ionini tiate d to r ec ove r the inv es tor s’ f unds , a lso an al y ze d th e se iz ed

r ec or ds and t es tif

ie d a t S ilv es tr i’ s tr ia l. H ar ri son ide nti fi ed

a chart that sum

m arize d “ m aj or transfer s of victim s’ investor fund s” and “ use of” th os e fu nd s wi th reg ardto th e Mo rg en st ern s’ AIBC ac co un t i n t he Bah am as . In cl ude d inthe se tr an sf

er s w er e the tr an sa ct ion s a lr ea dy de sc ri be d, upo n w hic h a num ber of the char ges wer e based. Harrison also testified about the further25

dis posi tio n of

the inv es tor s’ f

unds , inc lud ing the ir

use f or pe rs ona l e xpe nse s. R 11 at 26- 64. T e s t i mo n y o f th e V i c t i ms The governm ent also elicited extensive testim ony from several victim ized inv es tor s. O ne of

the m w as D en nis D ost er

t, ar et ir ed

pub lic sc hool te ac he r w ho ul ti m at el y

lo st m or e th an ha lf o f th e fu nd s h e h adin ve st edin Ch em ic al Trus t. D ost er t sa id tha t he ha d le ar

ne d a bout the inv es tm en t pr ogr am

f ro m am anw ho ad dr es se d hi s pr ay er

gr oup, and who e xpl ai ne d th at inv es tor s w oul d r ec ei ve r et ur ns on the ir inc om e of

be tw ee n 15 % and 2 0% . R 15 at 54 -5 6. D ost er t no te d th at

he re ad ba lanc e she et s f

or U . S. G uarante e, w hic h, he w as tol d, w oul d be iss uin g sure ty bond s th at

guarante ed

his inv es tm en ts i n C he m ic al T ru st. D ost er t a dde d th at

he wa s assured U. S. Guar antee w as a re putable and reliable operation, and that after he pa id $ 99 t o j ointhe “pr ivate inv es tm en t c lub , ” he c oul d r ea liz e a pr of it of 20% annually on any investm ent. D ostert actually invested a total of $19 2,000. Id. at 55-56, 66, 68. H e ultim ately lost m ore than half the funds he put in to Chem ical T ru st, and r ec ove re d on ly 44% of the tot al , and the n on ly

w iththe a ssi stanc e of

the co ur t-app oi nt edrece iv er. Id . at 7 9, 1 01 . Som etim e in late 1999, Dostert bec am e very concerned about the legitim acy of the inv es tm en t pr ogr am , and s poke w ithar ep re se ntativ e of Ch em ic al T ru st ( the26

ren am edAll ia nc e Tru st ), who ad vi se d h im to cal l “ Jo e Si lv es te r” [s ic ]. R15 at 8 4. D ost er t ph one d S ilv es tr i t o e xpr es s a ppr eh en sio n a

bout his inv es tm en ts, and expla ine d to S ilv es tr i tha t a dif fe re nt p ro gr am

in w hic h D ost er

t ha d pr ev iou sly invested hadturned out to be a P onzi schem e. Si lve str i r ep lie d th at Ch em ic al T ru st wa s “ not a Ponzi Schem e[, ] that they actually did m ake investm ents and that he, as underwriter , had m ade investm ents for Chem ical T rust.” (em phasis add ed). Id. at 89 -9 0. Whe n D ost er

t a ske d ho wthe pr ogr am

w as able to pay

suc h hi gh r et

ur ns, Si lve str i c la im ed

that i t w as inv es tin g inD eu tsc he Bank, aG er m anbank, w hic h, Si lv es tri sai d, was y ie ld in g 5 % a m on th on in ve st m en ts of o ve r $1 m il li on do ll ars . R1 5 a t 90 . A ft er

D ost er t e xpl ai ne d th at

he ne ed ed

the f unds he ha d in ve ste d to s up p o rth i s mo t h e r

i n as e n i o r

h o me , S i l v e s t r i t o l d

h i m th a tC h e mi c a l T r

u s tw a s “a soun d in ve stm en t, ” as sur ed him that U . S. G uarante e w as ar el ia ble c om pany , and ad de d “ [y ]ou k no w, th e b an ks do n’t re al ly pay en ou gh , do th ey ? ” Id . at 9 0, 9 2. Si lve str i a lso a dvi se d hi m that U . S. G uarante e “ ha d ar ea l go od d ea l f or [ D ost er t] co m ing up[ , ] ” but

tol d D ost er

t tha t he [ Si lve str i] c oul d no t di vul ge the de ta ils . I d. at 9 2 . In fa ct , t h er e w as n o s u ch l u cr at i v e d ea l i n th e w o rk s , a n dSi l v es t ri ’s assurances w ere false.27

Another victim

of the fr aud was F ran Roscoe, a re tiree living on s ocial se curi ty w ho i nve ste d $3 27, 601 -- he r lif e sa vin gs - - int o th e Ch em ic al T ru st sc he m e. B ef

or e Ro sc oe m ad e an y

inv es tm en ts, asa le s a ge nt t old he r that sh e would earn a 10% return. T he agent assured Roscoe that her funds wer e gu aran te edby U .S. Guar an te e, a co m pa ny the ag en t s ai d h ad$6 bi ll io n i n a ss et s. T he a ge nt p ro m ise d R osc oe that U . S. G uarante e “ ap pr ove [d ] a ll inv es tm en ts, ” an d assured “ the integrity

of eac h investm ent,” so that “ [t] here w as no risk inv olved.” R10 at 188-91 . Like D ostert, Roscoe e ventuallylost m ore than half of her inv es tm en t, and r ec ove re d on ly 44% of he r funds w iththe a ssi stanc e of the rece iv er. Roscoe and Dostert w ere j ust two of the m any victim s of the schem e. Y et an oth er r et ir ee to be sw ind le d w as P hy lli s G old be rg , a67- y ear- old

w om anw ho, with her husband, invested alm ost $4 0,000 in Chem ical T rust. L ike the other vic tim s, G old

be rg w as pr om ise d aguarante ed hig h r at e of

r et ur n onhe r inv es tm en t, and was told that all investm ents wer e backed by bond s guaranteed by

U. S. G uarante e. G old

be rg los t 56 % of

he r inv es tm en t. R 7 a t 80 , 83. S im ilarl y , 79- y ear- old Abbot K iss eninv es te d $2 60, 000 in C he m ic al T ru st, e ve ntu al ly los ing m or e than ha lf

of his inv es tm en t. L ike the oth er vic tim s, K iss enm ad e his investm ent onlyafter

being assured his principal was e ntirely safe and fullybacked28

by sur ety bon ds i ssu ed

by U . S. G uarante e. I d. a t 5, 12, 16- 18, 22. S haro n B ohl en , a 62-y ear- old wom an, a lso los t a substanti al portion of the fund s she had inv ested in the f ra udul en t sc he m e. I d. a t 46 . D ost er t, Ro sc oe , G old

be rg , K iss en , and Bo hle n r ep re se nt o nly

asm al l po rt ionof

the num er ous vic tim s of the f ra ud, but th ei r acc ou nt s ar e typi cal of t he m an y eld erl y in ve st or s d efra ud ed . Indeed, I RS Sp ec ia l A ge nt W ise te sti fi ed that he ha d r ev ie w ed

the f ile s of som e 1, 200 indiv idual inv estors, seize d at W om ack’ s office in Se neca, South Carolina. R 12 at 51. Si lve str i’ s F urthe r In vol ve m en t T he gov er

nm en t e lic ite d st ill m or e te sti m ony c onc er nin g S ilv es tr i’ s r ole in the subs equent transfer of the A lliance T rust investo rs’ funds int o the personal ac co unt s of

W om ac k, the Mo rg en ste rn s, and S ilv es tr i hi m se lf . P eg gy P re sto n te sti fi ed that i n Augus t 19 99, F ir st Unio n B an k - - one of the banks in whic h th e Mor ge nst er

ns h ad ini tia lly de posi te d th e inv es tor s’ c he ck s - - be gan to r ai se que sti ons ab out

the Mo rg en ste rn s’ G old

Co as t a cc ount . T he bank w as part ic ularl y co nc er ne d w iththe vol um e of

c he ck s m ad e out

to Ch em ic al T ru st, and the not ab le fact that sever al of them

had portion s whited out. In f act, First U nion em

ploy ees co nta ct ed som e of the inv es tor s w ho h ad

w ri tte n th e ch ec ks i n qu es tio n, and dis co ve re d th at

the inv es tor s w er e el de rl y pe opl e w ho b el ie ve d th ey w er e m ak ing29

le git im at e inv es tm en ts. S uspi ci ous of w ro ngdo ing , F ir st Unio n c los ed the a cc ount an d te rm inate d it s r el at ion shi p w iththe Mo rg en ste rn s. R 10 at 9- 11. So on th erea fte r, FredMo rg en st ern ad vi se d P res to n t ha t “ we ne edto fin d . . . another bank[.] ” R10 at 11. O n Septem ber 23, 1999, Pr eston, Crossen, F red Mo rg en st ern an d S il ve st ri m etat Ad m ira lt y Ban k i n F lo rid a to op en a ne w acco un t. Id. at 11-15. Silvestri had contacted an old acquaintance, Br uce Mahon, who was the c ha irm anof

A dm ir al ty

Bank. A lth oughS ilv es tr i and M ah on h ad not spo ke n in y ears , Sil ve st ri wa s ab le to co nv in ce M ah on to op en an acco un t fo r Ch em ic al Trus t. Si lve str i t old

Mahon that he w as se lli ng i nsur an ce bon ds u se d to guarante e the principal of investm ents that W om ack sold. Id. at 100-108 . Eventually , F red Morgenstern opened several other accounts at Adm iralty Bank, w ith sig natories includi ng “ Gold Coast Checking,” “ The A dbank Com panies,” and “ First Capital Accep ta nc e Co rp .” Id . at 1 6- 20 . Mahon te sti fi ed

that w ith in a

m onth of ope nin g th e fi rs t A dm ir al ty Bank ac co unt , the bank b ec am e co nc er ne d a bout the a cc ount s be ca

use alarg e am ount

of m one y w as be ing w ir ed

f ro m the a cc ount

to banks in f

or ei gn j ur isd ic tio ns, includi ng the Baham as and the United K ingd om . Som e of the transfers struck Mahon as im

pr ope r, and the ba ck s of

som e of the de posi te d c he ck s a

ppe ar ed to have been tam

pered w ith. Mahon called Silvestri, who told him the checks had30

been m istakenlydeposited at the wrong bank. R10 at 118-19. W illiam Burke, A dm ir al ty

Bank’ s c hie f ope ratin g of fi ce r, a lso spo ke w ithS ilv es tr i a bout the Ch em ic al T ru st- re la te d a cc ount s. Whe n B urke inquir ed a s to the na tur e of

the investm ents that the group wa s selling , S ilvestri refer red to certain W orld W ar I Ier a bond s, w hic h S ilv es tr i c la im ed Ch em ic al T ru st w as pur ch as ing in E ur ope . I d. at 169 -7 2. N ot s ur

pr isi ngl y , the se e xpl an at ion s f ai le d to r ea ssure Mahon an d Burk e, and A dm ir al ty

Bank, li ke F ir st Unio n e ar lie r, de ci de d to c los e the vari ous acco un ts . Id. at 11 9- 20 . Mahon te sti fi ed

that he and o the r bank a dm ini str at or s w er e w or ri ed that the bank c oul d be im

pli cate d ina“py

ram id s ch em e” and i n “ m one y launde ri ng. ” R1 0 at 120. Burke testified that prior to closing the accounts, an “ agitated” Silvestri ca lle d B urke and c om

pla ine d th at

“ [i ] f thi s . . . is the w ay

. . . y ou tre at

r ef er ra ls o r co m panie s th at

I r ef er . . . to the bank, the n ho wc anI c ont inu e to r ef er bus ine ss t o A dm ir al ty

Bank[ ?] ” I d. a t 18 0- 81. The T apes T he gov er

nm en t a lso intro duc ed

the ta pe r ec or din gs and transc ri pts of e igh t telephone calls between Silvestri and Fr ed Morgenstern that occurred betw een January 8 and J anuary

19, 200 0, w hic h th e FB I ha d in te rc ep te d purs uant t o ac ourtor de redTit le III wi ret ap on Mo rg en st ern ’s cel lu la r te le ph on e. R1 5 a t 1 1- 20 . On31

January 8, a fter the F BI r aids, Silvestri spoke to Fred Morgenstern. Morgenstern t o l dSi l v es t ri , “ I’m n o ts ayi n g th at th ey . . . g o tan yth i n g i n o u r o ff i ce th at ’s part ic ularl y

c om pe lli ng. Y ou knowpr oba bly c opi es of c he ck s and s om e ch ec ks that hadn’t bee n deposi ted.” Gov. Ex. 52C at 1-2; R15 at 22. In anoth er co nve rs at iona ft er

the r ai d, S ilv es tr i a ske d M or ge nst er n, “ [t ] he 400 , 000 that y ou tr ie d to m ove , do y ou knowhowit w en t?” G ov. E x. 52D a t 1; R1 5 a t 23 . I n st ill an oth er c onve rs at ion , S ilv es tr i t old Mo rg en ste rnthat c he ck s w er e sti ll be ing se nt t o U. S. Guar antee: SI L V E ST RI : A h, . . . I tol d y ou tha t U . S. Guarante e is g ettin g e nve lop es w ith m one y in it, r igh t? MO RG EN ST E RN : Y eah. SIL VE ST RI: W ith checks. W e’ re sending ‘ m back. They ’ ve got abou t five s o f a r . ( Lau g h s ) . Th e y g o ttw o th e o t h e r d a y. MO RG EN ST E RN : Y eah. SI L V E ST RI : C an ’ t e ve n turnthi s th ing of f. T he f au ce t’ s op en , it

w on’ t qu it pour ing . G ov. E x. 52Ja t 6- 7; R 15 at 48 . S ilv es tr i a lso tol d M or ge nst er n th e “ ex ce lle nt news” that the A rizona Com m issio n had dropp ed its action against U.S . Guarantee, ha vin g m er el y

iss ue d ac ea se -and- de sis t l ette r. G ov. E x. 52Ja t 1- 2.32

On J an u ary 1 9 , 2 0 0 0 , S i l v es t ri ad v i s ed Fr ed Mo rg en s t ern th at “ t h e r ec ei v er ’s te lli ng p eo ple . . . the y

thi nk the y

kno ww he re the re ’ s ba sic al ly 20 [ m ill ion ] and a ll the r es t i s lo st. A nd . . . the y a lso c la im ed

the y ’ ve se nt o ut 1 , 200 le tte rs , w hic h is alm ost the am ount of the ah, investors . . . and the letters ah, start out ‘D ear vic tim . ’ ” G ov. E x. 52K

a t 1- 2; R 15 at 49 . I n part , the f oll ow ing c onve rs at ion en sue d: SI L V E ST RI : O kay . A h, the le tte rs start out de ar vic tim , and I don ’ t kn ow what else to say , but that’ s wonderful. (Chuckles). M O R G EN S T E R

N : T h e y s t a rto u td e a r

v i c t i m? S I L V E S T R I : D e a r

v i c t i m. MOR GENS TE RN: ( La

ughs ). W ell that’ s certainly subtle. SIL VE ST RI: But I . . . think. . . that m ay be . . . the goodnews is that they cl ai m the y ’ ve f ound 20 [ m ill ion ] but

a ll the r es t i s lo st. MO RG EN ST E RN : W el l i f the y ah. SIL VE ST RI: So if

they haven’ t contacted the right peopl e then they ’ re never gonn a fi nd i t any

how , are the y ? So ah. MO RG EN ST E RN : N o. Ex. 5 2K at 1-2 ; R1 5 a t 4 9. Jur y I nstru ct ion s33

T he dis tr ic t c ourt i nstru ct ed the j ur y on t he ge ne ra l e le m en ts a

ppl ic ab le to Co unt 14, the c harg e of

c onsp ir ac y

to launde r m one y . I t e xpl ai ne d: Inthi s c as e, w ithr eg ar d to the a lle ge d c onsp ir ac y , the I ndi ctm en t ch arg es th atth e d efen da nt kn owi ng ly andwil lfu ll y co ns pi redto : 1 , co nduc t and atte m

pt t o c ondu ct

f inanc ia l transa ct ion s a ff

ec tin g interstate and foreign com m erce , that is the ca shing of checks obtained fr om the S outh C ar oli na -b as e[ d] inv es tm en t f ra ud, w hic h in vol ve d th e proceeds of specified unlawf ul activity , specif

ically m ail fra ud and wire fr au d, w ithint en t t o pr om ote the c ar ry ing on o f the spe ci fi c unl aw fu l activities; and, secondly , e ngage and attem pt to engage in m onetary tr an sa ct ion s a ff

ec tin g in te rs ta te and f

or ei gn c om

m er ce in cr im ina lly derived property

that wa s of a value of gre ater than $10,000, w hich was derived from

specified unlawf

ul activity , that is m ail fra ud and wire fraud, which property

wa s obtained from

a South Carolina-based inv es tm en t f

ra ud. It is ch ar ge d, in oth er

w or ds, that the de fe ndant c onsp ir ed w ithoth er s to co m m it tw o se parate , sub stanti ve c ri m es or of fe nse s. Insuc h ac as e, w hil e y ou m ay f ind that the de fe ndant c onsp ir ed to co m m it both su

bst an tiv e of

fe nse s, it is not ne ce ssary

f or the G ove rn m en t t o pr ove that the de fe ndant c onsp ir ed to co m m it both of

the subs tanti ve of

fe nse s. 2d Supp . E x. at 97 (e m

phasis add ed). Th e d i s t r i c tc o u rtf

u rt h e r i n s t r u c t e dth e ju ry: The ter m “ sp eci fie d u nl awfu l ac ti vi ty” m ean s ei th er a v io la ti on of . . . 18 [U.S.C.] [§] 134 1, wh ic h i s m ai l fr au d, o r a v io la ti on of 1 8 [U.S.C .] [§ ] 134 3, w hic h is w ir e fr au d a s de sc ri be d inthe ind ic tm en t. Se ct ion134 1 m ak es it

af ed er al c ri m e or

of fe nse f or any one to use the U nit ed S ta te s m ai ls i n c ar

ry ing out asc he m e to d ef

ra ud.34

Section 1343 m akes it a fe deral cr im e or off ense for any one to use an int er state w ir e co m

m uni catio ns f

ac ili ty in carr y ing out asc he m e to de fr au d. I furthe r ins tr

uc t tha t the G ove rn m en t m ust pr ove be y ond a re as ona

ble doub t that the proceeds invol ved in each count of the indi ctm ent are proceeds either f

rom m ail fra ud or wire fraud as the “ specified unl aw fu l a ct ivi ty . ” H ow ev er , the gov er nm en t ne ed

not pr ove that the de fe ndant w as dir ec tly

inv olv ed in the c om

m iss ionof

e ith er the m ai l or w ir e fr au d c ri m es that c onst itu te the spe ci fi ed unl aw fu l a ct ivi ty ch ar ge d inthe c ount s of

the I ndi ctm en t. I nst ea d, the gov er nm en t m ust pr ove be y ond a re as ona

ble doubt tha t the de fe ndant w as aw ar e that the “ m onetary

transactions” charged in each c ount in the indi ctm ent wer e fr om “ cr im ina lly

de ri ve d pr ope rty ” . . . . H ow ev er , sho uld y ou conclude bey ond a reasonable doub t that the defendant was involved ei the r in the m ai l or

w ir e fr au d a ct ivi tie s id en tif ie d inthe I ndi ctm en t, the n y ou m ay

c onsi de r thi s f

ind ing in ev al ua tin g w he the r the defendant had kno wledge that the procee ds inv olved in the m onetary transaction charged in the indictm ent wer e fr om a cr im inal offense. Id . a t 10 1- 102. A ft er the dis tr ic t c ourt f

ini she d in str

uc tin g th e j ur

y , it a ske d th e part ie s f

or ex ce pti ons or

obj ec tio ns. T his c oll oquy e nsue d: TH E C OU RT : Any

exception or objections to the content or m anner in whic h th e ins tr

uc tio ns w er e giv en ? [A US A] FE RNA

ND EZ : . . . I believe in lookin g at the instruction s as a w hol e, wha t the j ur

y a lso ne ed s to be c harg ed on i s th e el em en ts o f 1956 , w hic h is the . . . f

ir st o bj ec t of

the c onsp ir ac y . Wha t w e ha ve ch ar ge d and i nc lud ed

. . . is a [§ ] 195 7 - - but

in loo kin g ba ck

a t the ins tr uc tio ns I j ust

don ’ t se e the e le m en ts o f [§ 19] 56 g ive n. I thi nk i t i s n e c e s s a ry. T H E CO U RT : M r. S harp ste in?35

[D ef en se c ouns el ] S H A RP ST E IN : I m ean, y ou h av e al re ady ins tr uc te d the j ur

y . I don ’ t kn owthe sub stanti ve dif fe re nc e the re . Y ou ha ve tol d the m

- - I tho ught

it c ove re d th e ba se s. MS . F E RN A

N D E Z : I tho ught

it did , too , unt il I w en t ba ck and lo ok ed , and th en I real iz edth atwhat itdo es tal k abo ut is th e two objec ts and so forth. A nd y ou read the obje cts and it gives -- MR . S H A RP ST E IN : I t’ s se lf -e xpl ai ne d. Y ou know , c as hin g th e checks and/or, y ou kn ow, passing the m oney . And y ou have explained t h e mo n e t ary t r a n s a c t i o n , f i n a n c i a l i n s t i tu t i o n s , a l l o f th e s a me el em en ts. *** THE COURT (to Ms . Fern an de z): Mr. Sh arp st ei n i s n ot ask in g fo r it . If he is w ai vin g it , the n w hy do w e ne ed

to go b ac k and d o it ? *** T H E C O U R T ( t o M r . S h a r p s t e i n ) : Wh a t ’s yo u r

p o s i t i o n o n my read in g § 19 56 . . . ? M R . S H A R P S TE I N : I ju s ts a i di t . I d o n ’tth i n ki t ’s n e c e s s a ry. T H E CO U RT : H owabout thi s a s an op tio n? Wha t’ s y our pos iti on o n my r e a d i n g i tb u tn o ts e n d i n g i tb a c ki n aw r i t t e n f o rm? MR . S H A RP ST E IN : I w ill le av e it to the c ourt’ s di sc re tio n. I a m j ust say ing that I a m

not r eque sti ng i t. 2d S upp. E x. a t 10 8- 10 ( em pha sis a dde d) . F oll ow ing S harp ste in’ s a dvi ce , the dis tr ic t c ourt de ci de d no t t o f urthe r ins tr

uc t the j ur

y a s to the f

ir st o bj ec t of

the co ns pi racy all eg edin Co un t 1 4. The V erdict and Sentence36

The j ury found Silvestri gu ilty

on all counts , specif

y ing as part of its verdict that Silvestri was guilty

of both of the purpo ses and objects of the c onsp iracy set fo rth inCo unt

14. O n M ay

23, 200 3, S ilv es tr i w as se nte nc ed to 122 m onths o f im prisonm ent, f

ollowed by

2 y ears of supervised release, ordered to pay a special as se ss m en t o f $3 ,10 0, an d t o fo rfei t m on ey an d p ro pe rty deri ve d fr om th e fra ud . T his appe al e nsue d. C ur

re ntl y 73 y ears old , S ilv es tr i r em ai ns i nc ar ce rate d pe ndi ng the out co m e of

the appe al . II. A. T he suf fi ci en cy of e vid en ce sup portin g ac ri m ina l c onvi ct ionis a que sti on o f law , w hic h w e re vie wde nov o. U nit ed S ta te s v. D ia z, 248 F . 3d 1 065, 108 4 ( 11th Cir. 2001 ). W e re view the suffic iency of the evidence to determ ine whether a re as ona ble j ur y c oul d have c onc lud ed

that the e vid en ce e sta

bli she d S ilv es tr i’ s gu ilt be y ond a re as ona

ble doubt. I d. S ta te d anothe r w ay , w e w ill not dis tur b agui lty ve rd ic t un le ss, giv enthe e vid en ce in the r ec or d, “ no tri er of f ac t c oul d have f

ound gui lt be y ond a re as ona

ble doubt. ” U nit ed

S ta te s v. L y ons, 53 F . 3d 1 198, 120 2 (1 1thCi r. 199 5) . A t this sta ge in the pr oc ee din gs, w e ex am ine the e vid en ce in the lig ht m ost

f av or ab le to the gov er

nm en t, dr aw ing a ll re as ona ble inf er en ce s and m ak ing a ll cr ed ibi lity

c hoi ce s inthe gov er

nm en t’ s f av or . I d. a t 12 00.37

A s f or the c ha lle nge d j ur

y ins tr uc tio ns, “ [i ] t i s ac ar din al r ule of appe llate re vie wthat a

party m ay not c ha lle nge a s e rr or

ar uli ng o r oth er

tr ia l pr oc ee din g inv ite d by

that party . ” U nit ed

S ta te s v. Ro ss, 131 F . 3d 9 70, 988 ( 11th C ir . 199 7) (i nte rn al c itatio n and quot at ionm ar ks o m itt ed ). “ T he doc tr ine of inv ite d e rr or

is im plicated when a par

ty induces or invi tes the district court into m aking an error. ” U nit ed S ta te s v. S ton e, 139 F . 3d 8 22, 838 ( 11th C ir . 199 8) . “ Whe re inv ite d e rr or exists, it precludes a court fr om invok ing th e plain error

rule and rever sing.” Ford ex r el . E state of

F or d v. G ar ci a, 289 F . 3d 1 283, 129 4 ( 11th C ir . 200 2) , c er t. de nie d, 537 U . S. 114 7, 123 S . Ct . 868 , 154 L . E d. 2d 8 49 ( 2003 ) (i nte rn al c itatio n and quot at ionm ar

ks o m itt ed ). S ee a lso U nit ed S ta te s v. Je rn igan, 341 F . 3d 1 273, 1289 -9 0 ( 11th C ir . 200 3) ( fi ndi ng tha t de fe ndant whose c ouns el ha d a ff irm at ive ly sti pul at ed to the pla

y ing of ata pe -r ec or de d st at em en t ha d in vit ed any e rr or re sul tin g f

ro m the j ur y ’ s he ar ing the ta

pe , and thus that the e rr or w as not reversible). Si lve str i f ir st arg ue s th at

the e vid en ce w as ins uf

fi ci en t t o c onvi ct ; and, se co nd , th atth e o m is si on fro m th e jury ins tru ct io ns of t he ele m en ts of t wo co m pone nts of

the c onsp ir ac y

c harg ed - - the m ai l and w ir e fr au d c onst itu tin g th e

“ specified unlawful ac tivity ” and the objec t of prom otion al m oney -laundering -- co nst itu te d pr ej udi ci al e rr or . A ft er tho ro ugh re vie wof

the r ec or d and the part ie s’38

br ie fs and o ra l arg um en ts, w e ar e pe rs ua de d th at the e vid en ce w as suf

fi ci en t t o sus ta in the j ur

y on a ll co unt s, and w e de cl ine to re vie wthe j ur y ins tr uc tio ns be cau se Sil ve st ri i nv it edan y cla im ederro r.

B. Si lve str i say s th at

the e vid en ce w as ins uf

fi ci en t t o su

ppor t hi s c onvi ct ionf

or co nspi ri ng t o la

unde r m one y

be ca use the gov er

nm en t f ai le d to e sta

bli sh tha t he kne wthe f

unds f ro m the A lli an ce / C he m ic al T ru st p ro gr am w er e pr oc ee ds o f ill eg al f ra ud. Mo re spe ci fi ca lly , he c la im s th at the gov er

nm en t f ai le d to pr ove ei the r that he kne w( 1) U . S. G uarante e ha d in suf fi ci en t a sse ts t o ba ck

up the bon ds it ha d is sue d to guarante e the inv es tor s’ c ap ita l; or ( 2) A lli an ce / C he m ic al T ru st w as not le git im at el y

inv es tin g th e inv es tor s’ f unds . W e ar e unpe rs ua de d.

“ To support a convictio n of conspiracy , the governm ent m ust prov e [1] that an agreem ent existed between tw o or m ore persons to comm it a crim e and [2] that the defendants kno wingly and volu ntarily

j oined or participated in the cons piracy .” U nit ed S ta te s v. V er a, 701 F . 2d 1 349, 135 7 ( 11th C ir . 198 3) . S ee a lso Whit fi el d v. United States, --- U. S. --- -, 125 S. Ct. 687, 160 L. Ed. 2d 611 (2005) (holdi ng that co nvi ct ionund er

18 U . S. C. § 19 56( h) f

or c onsp ir ac y

to co m m it m one y

launde ri ng doe s no t r equir e pr oof

of an ov er t a ct in furthe ranc e of

the c onsp ir ac y ). T he ex ist en ce of

an a gr ee m en t m ay

be pr ove n by

c ir cum stanti al e vid en ce , inc lud ing39

“ inference s from

the conduct of the alleged participants or from circum stantial evidence of a schem e. ” U nited States v. T am argo, 672 F. 2d 88 7, 889 (11th Cir. 1982 ) (c itatio n and m ar

ks o m itt ed ). I nde ed , the gov er nm en t m ay

e sta bli sh know le dge of

an il le ga l a gr ee m en t by

sho w ing that the de fe ndant “ kne wthe es se nti al obj ec t of

the c onsp ir ac y . ” U nit ed S ta te s v. Ru sse ll, 703 F . 2d 1 243, 125 0 (1 1thCi r. 198 3) . I t i s no t ne ce ssary f or the gov er

nm en t’ s e vid en ce to be inc onsi ste nt w ithe ve ry

r ea sona ble hy pothe sis e xc ep t tha t of

gui lt in o rd er

to be sufficient. Ly ons, 53 F.3d at 1202. Moreover, in review ing th e prosecution’s c ase, w e dr awno d ist inc tio n be tw ee n c ir cum stanti al and d ir ec t e vid en ce . U . S. v. Navarro-O rdas, 770 F.2d 959 , 966 (11th Cir. 1985). Si lve str i pr im ar ily

c ha lle nge s th e gove rn m en t’ s e vid en ce a s to the se co nd r e qu i r e men t- - th a th e kn e wo f an dv o l u n t a r i l y jo i n e di n th e c o n s p i r a c y. N o t ab l y, he does not dispu te that the program invol ving Alliance / Chem ical T rust and U. S. G uarante e w as an e la

bor at e sc he m e de sig ne d to de fr au d m an y inv es tor s of

the ir m one y , and i t i s un de nia

ble that the m oni es r ec ei ve d w er e ne ve r use d to m ak e le git im at e inv es tm en ts. N or doe s he dis put e that U . S. G uarante e ne ve r ha d a sse ts re m ote ly suf fi ci en t t o ba ck

A lli an ce / C he m ic al T ru st a s pr om ise d, and tha t the inv es tor s’ m one y

ins te ad w as shu ff

le d to f or ei gn b an k a cc ount s and p ai d ou t t o se ve ra l e nti tie s and p er sons , inc lud ing : A lli an ce / C he m ic al T ru st, r un b yT i t l e 1 8 U. S . C. § 1956 (h) pr ovides that “[a]ny person who c onspires to commit any 10 of fe ns e de fi ne d in th is se c tio n o r s e c tio n 1 95 7 s ha ll b e su bje c t to the same pe na lti e s a s th os e presc ribed for

the offe nse the c ommissi on of which w as the objec t of the conspira cy .” The spec ified unlawf

ul activities listed were mail fraud, in violation of 18 U.S.C. § 1341, 11 and wire fra

ud, in violation of 18 U.S.C. § 1343. 40 W om ac k; U . S. G uarante e, r un b y T an g; G old

Co as t C he ck

Ca shi ng, r

un b y the Mor ge nst er

ns; and S ilv es tr i hi m se lf

. F ina lly , S ilv es tr i do es not dis put e that i f the ev ide nc e es ta

bli she d th at

he kne we ith er

that U . S. G uarante e w as w ri tin g bo nds without assets or that W om ack w as not actually investin g the investo rs’ funds -- or, m or e ge ne ra lly , that the pr oc ee ds i n any tr an sa ct ionhe part ic ipate d inw er e ill eg al -

- it w as r ea sona

ble f or the j ur y to fi nd h im

gui lty be y ond a re as ona

ble doubt. Si lve str i w as c onvi ct ed

of c onsp ir ing to vio la te 18 U . S. C. §§ 1956 (a)( 1)(A )(i) and (B)( i) and 1957 , a s proscribed by 18 U. S. C. § 195 6 (h). In 10 Count 14 , the indictm ent charged that the purposes and o bje cts of the conspiracy we re to engage in financial transactions aff ecting interstate and foreign com m erce by c as hin g c he ck s ob ta ine d f ro m aS outh C ar oli na -b as ed

inv es tm en t f

ra ud inv olv ing the pr oc ee ds o f a spe ci fi ed unl aw fu l a ct ivi ty , w ithint en t t o pr om ote the 11 carr y ing on of the specified unlawf ul activity , knowing the transactions wer e de sig ne d to c onc ea l and d isg uis e the na tur e, loc at ion , sourc e, ow ne rs hip , and control of the proceeds of the specified unlawf ul activity , and further knowing thatSilvestri does not c halleng e the pr oof of the inter state nature of the tra nsactions, nor that 12 the sche me involved proc eeds of the spec ified unlawf

ul activity g reater than $10,000. 41 the pr ope rty

inv olv ed r ep re se nte d sa id p ro ce ed s. I t w as a lso a lle ge d th at the cr im ina lly

de ri ve d pr oc ee ds i nvol ve d pr ope rty of ava lue gr eate r than $1 0, 000. 12 If the j ury found that Silvest ri knew that one ele m ent of the schem e w as fr au dul en t, it

c oul d r ea sona

bly c onsi de r that kn ow le dge , und er a ll the f ac ts pr es en te d, a s e vid en ce that he kne woth er a spe ct s of

the sc he m e w er e sim ilarl y fraudulent. T hus, if there is sufficient evidence Silvestri knew that U .S . Guarantee w as ba sic al ly

aw orthl es s c om

pany , w ith out

suf fi ci en t a sse ts t o e nsur e the investo rs’ “ capital investm ents,” that evidence c ouldbuttress a finding that Si lve str i kn ewthe f

unds w er e not

be ing le git im at el y

inv es te d, and v ic e- ve rs a. T he m utu al ly r ei nf or ci ng n at

ur e of thi s e vid en ce m ay

sup port a f ind ing that the know le dge e le m en t w as sa tis fi ed . Ba se d onour

tho ro ugh re vie wof

thi s r ec or d, w e ar e sa tis fi ed that the governm ent presented sufficient evidence fr om which a j ury

could find (as it did), be y ond a re as ona

ble doubt, that S ilv es tr i kn ewboth th at U . S. G uarante e ha d no assets to back its su rety

bond s and that the Alliance / Chem ical T rust program wa s a fr au dul en t sc he m e. Whe n T an g f ir st c ont ac te d S ilv es tr i i n late 199 7, he did so pr eci se ly becau se hi s co m pa ny hadno ass et s an d was in di re n eedof a way ou t.42

Indeed, S ilvestri advised Tang that several item s Tang ho ped to uti lize as collater al were “ wor th le ss .” Mo reo ve r, Tang ad vi se d S il ve st ri t ha t t he co m pa ny was b ro ke . At one point in h is testim ony , T ang unam bigu ouslysaid that he had dis cu sse d w iththe de fe ndant “ the f ac t tha t U . S. G uarante e did not have the a sse ts to back” the bond s it had issu ed. R8 at 63. I ndeed, T ang said that in th e sum m er an d f al l of 199 9, he w as “ ‘ unc om fo rt ab le ’ about the vol um e an d th e num

be r of bond s . . . be ing r eque ste d and the n su bse que ntl y

iss ue d, ” an d he dis cu sse d th is t oo w ithS ilv es tr i. I d. a t 82 -8 3. O n di re ct e xa m inatio n, T an g te sti fi ed that duri ng the summ er of 1999 and into the fall of that y ear, he told Silvestri that U.S . Guarantee d i dn o th av e t h e a s s et s t o b ac kth e b o n d s . “ Th er e w er e s ev er al t i m es ,” i n Ta n g ’s wor ds , th athe sai d, “ Hey , Jo e, y ou kn ow t ha t we d on ’t hav e a p ot to pi ss in . I m ean, y ou kn ow that. ” Id. at 83. S ilvestri, however , r eassured T ang that there w as no th in g t o wo rry

ab ou t b ecau se th e “ in ve st m en t i s g oi ng well , and , y ou kn ow, . . . nobo dy is at r isk and this is goi ng t o be f

ine . ” I d. A t st ill anothe r poi nt, on c ro ssex amin at i o n , wh en d i re ct l y as k ed b y d ef en s e c o u n s el : “ Yo un ev ert o l dh i m : ‘W e do n’t re al ly hav e th es e th in gs . This is all a frau d.’? Didy ou ? ” Tan g s ai d “ Su re we did.” Id. at 195. H e further responded, on cross-exam ination , that S ilvestri knew

“ that w e didn’ t have any

m one y . . . , ” al tho ugh he sa id h e didn’ t us e tho se particular w ords. Id. at 197. Finally , on re direct exam ination , T ang said that43

“ [a]fter[th e] bo nd s h adalr ead y . . . is su ed , I . . . to ldMr. Si lv es tri th at , y ou kn ow, that our fi nanc ia l st at em en t w as w orthl es s. ” I d. a t 24 6. Additionally , S ilvestri, by his own account, ser

ved as “ liaison b etwe en U. S. G uarante e an d A lli an ce . ” N ota bly , he a ssi ste d indr aw ing up the sam ple sur ety bond and the pho ny

f inanc ia l st at em en ts f

or U . S. G uarante e; he too k c al ls f ro m Alliance / Chem ical T rust sales agents regarding questi ons abou t U. S. Guar antee; he instructed Turner on re spon ding to sim ilar ca lls; and he directed U. S. Guar antee howm an y

bon ds s houl d be iss ue d and t o w hom the y sho uld be se nt. A s th e sc he m e pr ogr es se d, S ilv es tr i c ont inu ed to re ce ive c le ar

not ic e of the pr ec ar iou sne ss of U . S. G uarante e’ s a ct

ua l f inanc ia l po sit ion . N one the le ss, S ilv es tr i r ep eate dly dis m iss ed the se c onc er

ns, a ssuri ng T an g th at

U . S. G uarante e w oul d ne ve r ha ve to m ake good on its bon d obli gations because of the sec urity and success of the Allied / Ch em ic al Trus t i nv es tm en ts . Si lve str i su gge sts , how ev er , that T an g’ s te sti m ony w as inc onsi ste nt i n m an y re s p ec t s , a n demph as i ze s th at Ta n g d i dn o tt es t i fy th at h e t o l dSi l v es t ri “ we d o n ’t have any m oney .” While Tang m ay not have used th ose exact w ords, the re cord re fl ec ts tha t he tol d S ilv es tr i U . S. G uarante e w as in dir e fi nanc ia l stra its , and tha t i t did no t have the assets to guarantee the investm ents. Whether his testim ony wa s w hol ly c onsi ste nt o r al tog ethe r cr ed ibl e w as aque sti on f or the j ur y , w hic h, qui te44

ap p a r e n t l y, a c c e p t e dTa n g ’s a c c o u n to f th e c o mm

u n i c a t i o n s a s a c c u r a t e . P l a i n l y, the j ury wa s free to choose am ong reasonable interpretations o f the testim ony . See Ly ons, 53 F.3d at 1202; United States v. C alderon, 127 F. 3d 13 14, 1325 (11t h Cir. 1997 ), U nited States v. Br own, 186 F.3d 661 , 666, n. 8 (5th Cir. 1999); United States v. Guer

ro, 169 F. 3d 93 3, 939 (5th Cir. 1999). T he tr ia l r ec or d f

urthe r ind ic at es that S ilv es tr i ha d pl en ty of r ea son to k

now that the investo rs’ funds were being m isappropriated. Both victim Dostert and U. S. G uarante e’ s law y er

dir ec tly a dvi se d hi m

of the ir c onc er n th at the pr ogr am

m igh t be a Po nz i sc he m e; in fa ct , the law y er r el at ed the A ri zo naCo m

m iss ion ’ s c onc lus ion that the pr ogr am

w as ind ee d su chasc he m e, and s ta te d th at she a gr ee d. B oth Dostert and Burke, of A dm iralty Bank, questioned Silvestri as to how the program w as able to of

fe r its unu sua lly

hig h r at es of

r et ur n. Mo re ove r, Mahon expr es se d to Si lve str i hi s c onc er

n r eg ar din g ir

re gul ar iti es in ce rt ai n tr an sa ct ion s in vol vin g th e inv es tor s’ f

unds . S ilv es tr i gave dub iou s and s hif tin g r es pons es to ea chof

the se inqu iries, telling Dostert and Burke, r espectively , that the m oney wa s invested either in De utsche Bank or in certain W orld W ar I I-er a bonds, advisin g Mahon that the c he ck s a t i ssu e ha d be ende posi te d a t the w ro ng b an k, and t el lin g T an g si m ply th atU.S. Guara nt ee’s l awy er “ di dn ’t kn ow wh atsh e was tal ki ng ab ou t.”45

InU nit ed S ta te s v. S im on, 839 F . 2d 1 461( 11th C ir . 198 8) , the de fe ndants , w ho h ad be ene m plo y ed a s sa le spe rs ons in a

“ boi le r ro om

ope ratio n” that so ld fr au dul en t oi l and g as le as es , w er e co nvi ct ed of c onsp ir ac y

to co m m it m ai l and w ir e fr au d. W e af

fi rm ed the c onvi ct ion , not ing that the inv es tm en t t er m s th e de fe ndants c onve y ed

to the inv es tor s in cl ude d th e pr om ise of “ unbe lie vable ” ri skfr ee r et ur ns, that se ve ra l i nve sto rs ha d e xpr es se d th ei r co nc er n th at the inv es tm en ts m igh t be af

ra ud, and tha t the de fe ndants kne wthat a gov er nm en t i nve sti ga tio n in to a re la te d sa le s pr ogr am

ha d be enlaunc he d. I d. a t 14 70. G ive n th es e cl ear ind ic ia of im pr opr ie ty , w e fo und that the de fe ndants ’ c ont inu ed part ic ipatio n inthe operation am ount ed at least to “ a re ckless indi ffer ence to the truth, which sup plies the crim inal intent n ecessar y ” for a conspiracy

conviction . Id. While there ce rt ai nly w as r ec kle ss i ndi ff

er en ce on S ilv es tr i’ s part , it is not ne ce ssary

to re ly on th atth eo ry , bec au se he re t he jury ha d s uf fic ie nt ev id en ce t o fi nd di rect kn owl ed ge . Furtherm ore, the wir etapped phon e conversations stron gly suggest that Silvestri wa s not su rprised or dism ay ed by the failure of

the fund or by

the FBI inv es tig at ion , w hic h w oul d have be enanor m al r es pons e fo r som eo ne w ho h ad j ust dis co ve re d th at

the f und he ha d be entou tin g to so m an y inv es tor s f

or so l ong w as a46

sc am . R athe r, he ind ic at ed an in te nt t o e lud e the F BI unt il the sto le n m one y c oul d be tra ns ferr edto acco un ts th e g ov ern m en t co ul d n ot reac h. F ina lly , S ilv es tr i pe rs ona lly play ed asig nif ic an t r ole in the tr an sf

er of the investo rs’ funds to v arious bank accounts . Mahon testified that Silvestri was an

“ integral participant” in establishi ng accounts for W om ack and the Morgensterns at A dm ir al ty

Bank, w he re m an y

of the inv es tor s’ c he ck s w er e de posi te d. I n f ac t, it w as S ilv es tr i w ho u se d hi s pr ior r el at ion shi p w ithMahon to o pe n up the a cc ount s at that bank. I nde ed , S ilv es tr i t ook the le ad in atte m pti ng t o di ssu ad e Mahon an d Burk e fr om

c los ing the a cc ount s, and p ro te ste d vi gor ousl y w he n th e bank nevertheless closed the accounts. A dditi onally , S ilvestri him self w as the signatory on at l eas t o ne of t he Bah am ia n b an k a cco un ts (atAIBC). Si lve str i arg ue s, ne ve rthe le ss, that the re w as no e vid en ce he kne wthat the pr obl em s w ithW om ac k’ s vari ous ac co unt s w er e an ythi ng b ut “ m ist ak es ” in deposit ing checks to th e w rong accounts andthat no on e ever “ told” Silvestri that A dm ir al ty ’ s c he ck s and w ir es w er e be ing se nt e ve ry w he re . B ut, the j ur

y c oul d ha ve inf er re d ( an d no doubt d id i nf er ) that S ilv es tr i c le ar ly

kne wthat the vari ous bank account activities were invo lved in laun dering the funds Allied / Chem ical T ru st r ec ei ve d f

ro m the inv es tor s.47

Q uit e sim ply , the e vid en ce , take n inali ght m ost f av or ab le to the gove rn m en t, ind ic at es that S ilv es tr i w as inv olv ed in ev er y m aj or f ac et of the f ra ud, inc lud ing the m ar

ke tin g of the inv es tm en t pr ogr am , the iss uanc e of the sur ety bond s from

U. S. Guar antee, and the transfer of funds to variou s accounts at m ult ipl e banks. T he e vid en ce w as suf fi ci en t t o e sta

bli sh b ey ond a re as ona

ble doub t tha t the c onsp ir at or s ( inc lud ing S ilv es tr i) c re at ed an e la bor at e sc he m e to b ilk inv es tor s ou t of

m an y m ill ion s of

dol lars . I nde ed , S ilv es tr i a ppe ar s to have be ena m aj or orchestrator of the fraud, the one person in th e entire schem e w ho had co nta ct w itha ll the m aj or

play er s. A lth oughthe gov er

nm en t on ly

ha d to e sta

bli sh S ilv es tr i’ s kn ow le dge of ei t h erth e i n s u ff

i ci en cy o f U .S . Gu ar an t ee ’s as s et s o r o f A l l i an ce /Ch emic al Tr u s t ’s ill eg iti m at e use of

inv es tor f unds in or de r to s howthat he kne wthe pr oc ee ds o f the p ro g ra m we re i l l eg al , t h e r ec o rd , v i ew ed i n a l i g h tm o s tfa v o rab l e t o th e ju ry’s ve rd ic t, ind ic at es that S ilv es tr i w el l kn ewof both a spe ct s of

the f ra ud. I n sh ort, the evidence wa s sufficient to sust ain the j ury ’ s verdict on the consp iracy charge. C. Si lve str i a lso arg ue s th at

the e vid en ce w as ins uf

fi ci en t t o su

ppor t hi s subs tanti ve m one y

launde ri ng c onvi ct ion s. A ga in, S ilv es tr i w as ind ic te d f or and co nvi ct ed of 30 c ount s of

m one y launde ri ng, a ll ar isi ng f

ro m c he ck de posi ts i nto ,48

withdraw als from , and wire tr ansfers am ong v arious bank accounts . The e vidence of the und er ly ing tr an sa ct ion s w as or ganiz ed by tr an sa ct ion -ty

pe ( de posi t, wit hd rawal or wi re t ran sf er) a nd th e b an k a t wh ic h e ach tra ns act io n t oo k p la ce. T hus, f or e xa m ple , Cate gor

y Atr an sa ct ion s c onsi ste d of f ive de posi ts o f inv es tor funds in to the Gold Coast Check Cashing account at Adm iralty Bank and totaled ap p r o x i mat e l y $ 1 . 8 mi l l i o n ( c o rr e s p o n d i n g t o C o u n t s 1 7 - 1 8 , 2 0 - 2 2 ) . C a t e g o ry B tr an sa ct ion s c onsi ste d of

f if te enc he ck

de posi ts i nto an a cc ount

a t C iti bank co ntr oll ed

by F re d M or ge nst er

n, and t ota le d ov er

$7 m ill ion( co rr es pond ing to Co unt s 19 , 24- 25, 30- 32, 34- 36, 39- 44) . C at eg or y C tr an sa ct ion s c onsi ste d of f our w ith dr aw al s of

f unds , e ac h inthe a m ount of $50 0, 000, f

ro m the Ci tib an k a cc ount (c or re spon din g to Co unt s 28 , 33, 38, 45) . C at eg or y D tr an sa ct ion s c onsi ste d of fi ve w ir e tr an sf

er s f ro m the Ci tib an k a cc ount

to ana cc ount

a t B ar cl ay s B an k in E ngl an d, c ontro lle d by

the Mo rg en ste rn s, tot al ing about $3. 5 m ill ion (c or re spon din g to Co unt s 23 , 26- 27, 29, 37) . F ina lly , Cate gor y E c onsi ste d of

one w ir e tr an sf

er , in the a m ount

of $2. 8 m ill ion , f

ro m aW om ac k a cc ount

a t A dm ir al ty Bank to a Morgenstern account at A IBC in the Baham as (Count 16). Silvestri contends, nevertheless, that the evidence w as insufficient to sup port his m one y -l aunde ri ng c onvi ct ion s un de r 18 U . S. C. § 19 57 f or the Cate gor

y Aand Category B chec k-deposit transactions because the deposits only cre ated illegalWe also are unpersua ded by Silvestri’s additiona l argument that as to the substantive 13 counts the g overnme nt f

ailed to establish “unlaw ful intent.” As discussed in Part I I .B, supr a, we are satisfied that there was suff icient evidenc e to establish his knowledg e of the fra ud. 49 pr oc eed s, an d t hu s co ul d n ot ha ve be en tra ns act io ns in pre ex is ti ng il le ga l p ro ceed s. He also argues that the governm ent’ s evidence wa s insu fficient as to the Category B, C, or D transactions because the governm ent did no t show that he associated w ithor f urthe re d any

of tho se tr an sa ct ion s. F ina lly , he arg ue s th at the gov er

nm en t fa ile d to e sta

bli sh l ia bil ity und er P ink er tonv. U nit ed

S ta te s, 328 U . S. 640 , 66 S . Ct . 1180 , 90 L . E d. 148 9 ( 1946 ), be ca use the pr oof

did not sho wthat the tr an sa ct ion s w er e in f urthe ranc e of

, w ith in the sc ope of

, or r ea sona bly f or es ee ab le a s a ne ce ssary or na tur al c onse que nc e of

an un law fu l a gr ee m en t. W e re m ai n unpe rs ua de d. 13 1. As fo r t h e C at eg o ry A a n dB c o u n t s , S i l v es t ri s ays th at th e g o v ern m en t ’s ev ide nc e show ed

onl y the a cquis iti on o f the pr oc ee ds f ro m the spe ci fi ed

unl aw fu l act iv it y (he re, m ai l an d wi re fra ud ), an d n ot a tr an sa ct io n i n t he un la wfu l p ro ceed s. A cc or din g to S ilv es tr i, the re is no § 195 7 vi olatio n ba se d so le ly on c he ck de posi ts because the deposito r (or his aider/abettor) does not have po ssessio n of the illegal funds unt il the f

unds are w ith dr awn. W e dis ag re e w iththi s r ea din g of § 19 57, and50

co nc lud e that onthe f

ac ts o f thi s c as e Si lve str i w as pr ope rl y c onvi ct ed

ba se d onthe de posi t of the c he ck s ob ta ine d th ro ugh m ai l f ra ud. Se ct ion195 7 sanc tio ns any one w ho “ know ing ly e nga ge s or

a tte m pts to en ga ge in a m one tary

tr an sa ct ionin cr im ina lly de ri ve d pr ope rty

that i s of ava lue greater than $10 ,000 and is derived from specified unlawf

ul activity [. ] ” 18 U. S. C. § 19 57( a) . T he te rm

“ m one tary

tr an sa ct ion ” is d ef

ine d by the statut e as “ the de posi t, w ith dr aw al , tr an sf er , or e xc hange , in or

a ff ec tin g in te rs ta te or

f or ei gn com m erce , of funds or a m onetary instrum ent . . . by , through, or to a f inancial ins tit uti on[ . ] ” I d. a t § 1957 (f

)( 1) . T he te rm

“ m one tary

ins tr um en ts” m eans “ (i ) co in o r curr en cy

of the U nit ed

S ta te s or of any oth er c ountry , tr av el er s’ c he ck s, pe rs ona l c he ck s, bank c he ck s, and m one y or de rs , or

( ii) inv es tm en t se curi tie s or ne got ia ble ins tr um en ts, in be ar er

f orm or oth er w ise in suc h f

orm that t itl e the re to passes upo n delivery [. ] ” Id. at § 1956(c)(5). T he term “ crim inally

derived property ” m eans “ any

property constitu ting, or derived from , proce eds obtained fro m a cri m in al off

en se . . . .” Id . at § 19 57 (f)(2 ). Whil e the te rm

“pr oc ee ds” is not

de fi ne d by

the statut e, “ w e re ad

the statut e usi ng the nor

m al m eanin gs o f its w or ds. ” Co nsol . Bank, N . A . , H ia le ah , F la . v. U nit ed S ta te s D ep ’ t of

T re as ur y , 118 F . 3d 1 461, 146 3 ( 11th C ir . 199 7) . “ Co urts m us t as su m e th atCo ng res s i nt en de d t he ord in ary m ean in g o f th e wor ds itus ed. . .51

. ” I d. ( int er

na l c itatio n and quot at ionm ar ks o m itt ed ). Mo re ove r, “ ab se nt a c le ar ly expressed legislative int ent to the contrary , that language is generally dispo sitive.” Id . ( int er na l c itatio n and quot at ionm ar ks o m itt ed ). “ [T ] o de te rm ine the c om m on usa ge or or din ar y m eanin g of

ate rm , c ourts o ft entur

n to dic tio nary

de fi nit ion s f

or gui danc e. ” U nit ed

S tate s v. Mc N ab , 331 F . 3d 1 228, 123 7 ( 11th C ir . 200 3) , c er t. de nie d, 540 U . S. 117 7, 124 S . Ct . 140 6, 158 L . E d. 2d 7 7 ( 2004 ) (a lte ratio n in or igi na l) ( int er

na l c itatio n and quot at ionm ar ks o m itt ed ). T he te rm

“pr oc ee ds” sim ply repre sents “ what is produced by or derived fr om

som ething (as a sale, investm ent, levy , business) by way of total revenue; the total am ount brought in.” W ebster’ s Third N ewInternational Dictionary 1807 (3d ed. 1961). Procee ds does no t m ean on ly cash or m on ey . B L ACK ’ S L A W D I CT I ONARY 108 4 ( 5the d. 197 9) (citing Phelps v. Harris, 101 U.S . 370, 380, 25 L . E d. 855 (1879) (“ Procee ds are not ne ce ssari ly

m one y . T his is al so a

w or d of gr eat ge ne ra lity . T ak ing the w or ds in the ir or din ar y se nse , age ne ra l po w er

to dis pose of

land o r re al e state and t o take in r et ur n th er ef or suc h pr oc ee ds a s on e thi nks be st, w ill inc lud e the pow er of di sp os in g o f th em

in ex ch an ge forot he r la nd s.”) ). Ina ddi tio n, Bl ac k’ s L awD ic tio nary e xpl ai ns tha t m one y , c he ck s, and the lik e ar e ge ne ra lly

c al le d “ ca sh p ro ce ed s, ” w hil e al l othe r pr oc ee ds are “ non- ca sh proceeds.” B L ACK ’ S L A W D I CT I ONARY 108 4. S ee a lso U nit ed S ta te s v. A kin tob i,52

159 F. 3d 4 01, 403 -0 4 ( 9thCi r. 199 8) ( ch ec ks s tol enf ro m the m ai l or

obt ai ne d by fr au d w er e “ pr oc ee ds” f

or pur pose s of m one y launde ri ng s ta tut e, e ve n th ough checks ultim ately

proved worthless because acc ount s backing th em up wer e either em pty or c los ed ); U nit ed

S ta te s v. H aun, 90 F . 3d 1 096, 110 1 ( 6thCi r. 199 6) (c he ck s de fe ndant r ec ei ve d f ro m the f ra udul en t sa le s of

the auto m obi le s f

al l w ith in the c om m on unde rs tandi ng o f “ pr oc ee ds, ” an d thus c onst itu te “pr oc ee ds” f or m oney laundering pu rposes). Si lve str i c la im s th at

the a ct of pla ci ng the inv es tor s’ m one y int o bank ac co unt s f

or pe rs ona l us e co nst itu te d an a ct c re at ing “pr oc ee ds, ” rathe r than a tr an sa ct ionin pr oc ee ds. H e ar gue s th at be fo re the c he ck s w er e de posi te d, the

“ pr oc ee ds” w er e not

in poss es sio n or

“ obt ai ne d. ” S ee U nit ed

S ta te s v. G re gg, 179 F. 3d 13 12, 1315 (11th Cir. 1999 ) (stating that convictio n und er § 1957 requires pr oof that “be fo re [ the tr an sa ct ionoc curr ed ] , . . . pr oc ee ds . . . w er e ‘ obt ai ne d f ro m a cr im inal offense. ’ ”) How ever, using the ordinary m eaning of the word

“ pr oc eed s,” t he ch eck s t he m se lv es co ns ti tu te d p ro ceed s o f th is cri m in al act iv it y . T he re is nothin g in§ 19 57 tha t r equir es that the pr oc ee ds b e in the f orm of c as h or that the checks m

ust be contain ed in a bank account before being consid ered

“ proceeds.”53

In de ed , c om

m on u sa ge of

the te rm “pr oc ee ds” sug ge sts abr oa de r de fi nit ion of the w or d e nc om

pa ssi ng c he ck s. S ec tio n 19 57 e ve n sp ec if ic al ly inc lud es w ith in its definitio n of “ m onetary transactions” the deposit of m onetary instrum ents such as c he ck s in to b an k a cc ount s, ind ic at ing that po sse ssi on o f unpr oc es se d c he ck s w oul d be c onsi de re d a s po sse ssi on o f pr oc ee ds. I n U nit ed S ta te s v. W ill iam son, 339 F.3d 129 5 (11th Cir. 2003), c ert. denied by McK ee v. United State s, 540 U. S. 1184 , 124 S . Ct . 142 7, 158 L . E d. 2d 8 8 ( 2004 ), w e he ld tha t “ the de posi tin g and cashing of checks that represented the proceeds of the m ail fra ud [which co nst itu te d th e spe ci fi ed

unl aw fu l a ct ivi ty ] pr om ote d no t on ly the Appe llants ’ pr ior unlawful activity , but also their ongoi ng and futu re unlaw ful activity . Such evidence is sufficient to sustain a conviction for prom otion al m oney laundering.” Id. at 1302 (em

phasis add ed). T o su ppor t hi s narr ow er

de fi nit ionof

“pr oc ee ds, ” Si lve str i c ite s to our decisions in Gre gg and United States v. N olan, 223 F.3d 1311 (11t h Cir. 2000 ), both of w hich are distingu ishable from this case. In G regg and Nolan, we held that the specified unlawful ac tivitywa s a com pleted crim e only

when m oney

wa s deposit ed into a bank account. See Gr egg, 179 F.3d at 1316; Nolan, 223 F. 3d at 1315 -1 6. Mo re spe ci fi ca lly , the Co urt st at ed that be ca use “ [m ] one y

launde ri ng i s anof fe nse to be pun ish ed

se parate ly

f ro m an un de rl y ing c ri m ina l of fe nse , ” the54

“ pr im ar y iss ue in a m one y

launde ri ng c harg e inv olv es ‘ de te rm ini ng whe n th e predicate cr im e becom es a “ com pleted offense” af

ter w hich m oney

laundering can oc cur. ’ ” 223 F . 3d at 13 15 ( quot ing U nit ed S ta te s v. Ch ri sto , 129 F . 3d 5 78, 579 -8 0 (1 1thCi r. 199 7) ). T hus, in N olan, w he re the und er ly ing c ri m ina l of fe nse w as the t h e f to f mo n e y fr o m th e g o v e rn men tb y d i v e rt i n g mo n e y fr o m an a c c o u n th e l db y a gove rn m en t c ontra ct or

int o ape rs ona l a cc ount

und er the de fe ndant’ s c ontro l, the theft offense w as com

pleted onlywhen the def

endant ordered the deposit o f a du pl ic at e p aym en t i nt o h is acco un t “ wit h t he in te nt to us e th e m on ey forhi s o wn purpos es.” N olan, 223 F.3d at 1316 (quot ing Gregg, 179 F.3d at 1315 ). L ikewise, in G re gg, the und er ly ing bank f ra ud o ff en se w as c om

ple te d a s so on a s th e de fe ndant f

ra udul en tly obt ai ne d th e de posi t of

an in sur an ce c he ck

int o hi s bank acco un t. 1 79 F.3d at 1 31 5- 16 ; s ee al so 18 U.S.C. §1 34 4. Inthi s c as e, by

c ontra st, the c om

ple tio n of the und er ly ing c ri m ina l of fe nse oc curr ed be fo re the Mo rg en ste rn s de posi te d th e ch ec ks. Ma il fr au d, und er 18 U . S. C. § 13 41, is co m

ple te d w he n so m eo ne “ ha vin g de vis ed or int en din g to de vis e an y sc he m e or

art if ic e to d ef ra ud, or f or obt ai nin g m one y

or pr ope rty by m eans o f fa lse or f ra udul en t pr et en se s, r ep re se ntatio ns, or pr om ise s, ” “ fo r the pur

pose of executing su ch schem e or ar tifice or attem

pting so to do ,” places in any post office or m ai l de posi tor

y anythi ng t o be de liv er ed by the P ost al S er

vic e, or de posi ts o rIn 1994, Congr ess expanded the pr ovisions of § 1341 to include any “m att er or

thing 14 whateve r t o be sent or delivered by any private or commerc ial interstate c arr ier.” See United States v. Mare k, 238 F.3d 310, 318 (5th Cir. 2001). Deliver ies by DHL are cover ed under

the expanded definition. United States v. Chua, 16 Fe d. Appx. 737 (9th C ir. 2001). 55 ca use s to be de posi te d anythi ng t o be se nt o r de liv er ed by any pr ivate or co m m er ci al int er state c ar

ri er , or r ec ei ve s anythi ng thr oughthe m ai ls. I d. a t § 1341 . T his Co urt ha s sa id tha t the c ri m e of m ai l f ra ud w as c om

ple te d w he n th e 14 de fen da nt de li ve reda le tt er co nt ai ni ng fal se , m at eri al rep res en ta ti on s v ia FedEx. S e e Un i t e dS t a t e s v . Gr a y, 3 6 7 F . 3 d1 2 6 3 , 1 2 6 9 ( 1 1 t h C i r . 2 0 0 4 ) . I n d e e d , i n Gr a y, we noted that th e deposit of m ail is sufficient, and that th ere is no requirem ent that th e m ai l ac tu al ly be rec ei ve d. Se e id . at 1 27 0. T he spe ci fi ed

unl aw fu l a ct ivi ty

in thi s c as e w as c om

ple te d a s so on a s th e inv es tor c he ck s w er e se nt thr oughthe m ai ls, f ro m A lli an ce / C he m ic al T ru st i n So uthCaro lin a to the Mo rg en ste rn s and/ or S ilv es tr i i n F lor ida , f

or the pur pose of executing the fraudulent schem e. T he subsequ ent deposit of the checks, as pr oc ee ds o f the spe ci fi ed unl aw fu l a ct ivi ty

of m ai l f ra ud, sa tis fi ed

the r equir em en ts of the m oney -laundering count s. S ee W illiam son, 339 F.3d at 1302 (ho lding that

“ the de posi tin g and c as hin g of c he ck s th at

r ep re se nte d th e pr oc ee ds o f the m ai l fr au d pr om ote d no t on ly

the Appe llants ’ pr ior

unl aw fu l a ct ivi ty , but

a lso the irL ikewise, in United States v. Manka rious, 151 F.3d 694, 704- 06 (7th Cir. 1998), our sister 15 c ir c uit dis tin guis he d pro c e e ds ob ta ine d thr ou g h bank fr a ud , an d oft e n thr ou g h wir e fr a ud , fr om m a il fra ud, citing United States v . S am p s o n , 371 U.S. 75, 83 S. C t. 173, 9 L . Ed. 2d 136 (1962) a nd Sch mu c k v . U . S. , 4 8 9 U . S. 7 0 5 , 1 0 9 S. Ct . 1 4 4 3 , 1 0 3 L . E d . 2 d 7 3 4 ( 1 9 8 9 ) , d is ti n gu ishing the Eleventh Circuit’s United States v. Christo (involving bank f raud pr ocee ds) and the T enth Circuit’s United States v. J ohnson, 971 F.2d 562 (10th Cir. 1992) ( involving wire fra ud proce eds). Silvestri raises still ot her sub- arguments as to ea ch o f t h e categ ories that we need not 16 a d dr e s s s e p ar at e l y. T h e y ar e s u b s um e d w i th i no ur

d i s c u s s i o no f

P i n k e rt o nl i a

b i l i ty. 56 ongo ing and f

uture unl aw fu l a ct ivi ty . S uc h e vid en ce is suf fi ci en t t o su sta in a convictio n for prom otion al m oney laundering.” (e m

phasis add ed)). 15 T he re fo re , w e hol d th at

the j ur y c oul d ( as it

did ) pr ope rl y

f ind S ilv es tr i gu ilty of m one y launde ri ng b as ed

on the de posi ts o f inv es tor s’ c he ck s in to v ar iou s bank ac co unt s, a s c harg ed

in 20 c ount s f

or the Aand B tr an sa ct ion s. 2. Si lve str i m ak es avari ety

of a ddi tio na l arg um en ts a s to the suf fi ci en cy of the evidence on the sub stantive m oney -laundering count s contained in categories B, C, an d D . S ilv es tr i a sse rt s th at he c oul d no t pr ope rl y

be c onvi ct ed

on any of tho se co unt s. A ga in, w e re m ai n unpe rs ua de d.

16

“ Basic to crim inal law principles is the concept that the com m issio n of a subs tantive offense and a conspiracy to com m it it are separ ate and distinct of fe nse s. ” U nit ed

S ta te s v. Mo the rs ill , 87 F . 3d 1 214, 121 8 ( 11th C ir . 199 6) (i nte rn al c itatio n and quot at ionm ar ks o m itt ed ). “ U nde r w el l e sta bli she d E le ve nth Ci rc uit pr ec ed en t c onsp ir at or s are li ab le f or a ll of the a ct s and f

or es ee ab le57

co nse que nc es of

the c onsp ir ac y . ” U nit ed S ta te s v. A la s, 196 F . 3d 1 250, 125 1 (1 1thCi r. 199 9) ( em

pha sis a dde d) . “ E ac h party to a co nti nui ng c onsp ir ac y m ay be vic ar iou sly

li ab le f or sub stanti ve c ri m ina l of

fe nse s c om

m itt ed by ac o- co nspi rator dur ing the c our se and i n th e furthe ranc e of the c onsp ir ac y , notw ith standi ng the party ’ s no n- part ic ipatio n inthe of fe nse s or la ck of kno w le dge the re of

. ” Mo the rs ill , 87 F.3d at 1218 (em

phasis add ed); see a lso Pinkerton , 328 U. S. at 647 (holdi ng that

“ al l m em be rs are r es pons ibl e” in a co nspi ra cy f or the f or es ee ab le a ct s of

ac oco ns pi rat or ); Un it edSta te s v . Hans en , 26 2 F .3d12 17 , 12 46 -4 7 (1 1t h C ir. 2 00 1) .

“ L ia bil ity w ill not li e, how ev er , if

the sub stanti ve c ri m e ‘ did not f al l w ith in the scope of the unlawful proj ect, or w as m erely a part of the ram ifications of the plan w hic h c oul d no t be r ea sona bly f or es ee n a s ane ce ssary

or na tur al c onse que nc e of the unl aw fu l a gr ee m en t. ’ ” Mo the rs ill , 87 F . 3d at 12 18 ( quot ing P ink er ton , 328 U. S. at 647-48, 66 S. C t. at 1184 ). “ He nce, the court need not assess th e individ ual cu lpa bil ity of apart ic ular co nspi rator

pr ovi de d th at

the ‘ subs tanti ve c ri m e w as a reasonably

foresee able consequence of the conspiracy .’ ” Id. (quoting United St at es v. Al va rez, 7 55 F.2d 83 0, 8 49 -5 0 (1 1t h C ir. 1 98 5) ). Inf ac t, the P ink er

tondoc tr ine ha s be enappl ie d to m one y launde ri ng co nspi ra cy

c as es ; a de fe ndant who j oin s am one y launde ri ng c onsp ir ac y

m ay be fo und subs tanti ve ly

li ab le f or m one y launde ri ng o ff

en se s c om

m itt ed by c o-58

conspirators. See United State s v. T okars, 95 F. 3d 15 20, 1539 (11t h Cir. 1996 ); United States v. Mathiason, 157 F.3d 541, 551 (8th Cir. 1998). Si lve str i arg ue s th at

the re w as no e vid en ce that he w as spe ci fi ca lly aw ar e of the use of Ci tib an k inthe m one y -l aunde ri ng s ch em e, and that the re fo re the c ount s related to Citibank transactions (Categories B, C and D ) ar e insupp ortable. Such spe ci fi c know le dge , how ev er , is not r equir ed in or de r to e sta

bli sh P ink er

ton lia bil ity . T he gov er

nm en t ne ed ed

to de m onstrate onl y

that i t w as r ea sona

bly fo re se ea ble that a c o- co nspi rator

w oul d us e banks oth er

than A dm ir al ty

( of w hose us e Si lv es tri was p la in ly andful ly aware) t o t ran sf er t he in ve st m en t fu nd s. A m ong oth er

thi ngs, the arr an ge m en t am ong Si lve str i, U . S. G uarante e, and A lli an ce / C he m ic al T ru st c al le d f or U . S. G uarante e to r ec ei ve be tw ee n 7% and 10% of the f unds inv es te d inthe pr ogr am , and f or S ilv es tr i t o r ec ei ve f

orty pe rc en t of that sh ar e. U nde r the m ost ge ne ro us m ea sur e, S ilv es tr i w as thu s to r ec ei ve 4% of the total invested fun ds. T he governm ent presented evidence that Silvestri ult im at el y

r ec ei ve d m or e than $1 . 5 m ill ionund er the arr an ge m en t, thu s pe rm itt ing a rea so nabl e jury to i nf

er t ha t t he to ta l i nv es te d fu nd s wer e atlea st $3 7.5 m il li on . Mor eo ve r, in the te le phon e ca ll int er ce pte d onJanuary 19, 200 0, w hil e dis cu ssi ng the rece iver’ s efforts to locate and recover the investors’ funds, Silvestri told Fred Mor ge nst er

n th at “ the goo d ne w s is that the y c la im the y ’ ve f ound 20 [ m ill ion ] but59

all the rest is lost.” T he evidence stronglyindicates that Silvestri knew betwe en $20 m ill ionand $ 37. 5 m ill ionin inv es tor f unds ha d be enm isa

ppr opr ia te d th ro ugh the f ra udul en t sc he m e. H ow ev er , S pe ci al A ge nt W ise te sti fi ed that a tot al of onl y $17. 1 m ill ionw as ult im at el y de posi te d in to A dm ir al ty Bank, and S ilv es tr i hi m se lf tol d M ah on, a t the ope nin g of the ini tia l A dm ir al ty

Bank a cc ount , that a

m er e $4 m ill ionto $5 m ill ionw oul d be de posi te d. T his too a m ply sup ports the r ea sona

ble inf er en ce that S ilv es tr i kn ewthat m ill ion s of dol lars in inv es tor s’ f

unds w er e be ing de posi te d so m ewhe re oth er than inA dm ir al ty . S ee Mathi as on, 157 F . 3d at 55 0- 51 (E vid en ce w as suf

fi ci en t t o su

ppor t m one y launde ri ng unde r vic ar iou s li ab ili ty w he re gov er

nm en t sh ow ed

that de fe ndant w as c los el y a sso ci at ed

w ithinv es tm en t group, wa s instrum ental in its organization , a ccepted a siza ble am ount of m oney fro m it , and en co ur ag edvi ct im s t o i nv es t i n i t.). Mor eo ve r, I RS S pe ci al A ge nt W ise te sti fi ed that S ilv es tr i hi m se lf

, upo n re ce ivi ng h is c om

m iss ionc he ck s f

ro m U . S. G uarante e, de posi te d th em int o

“ vari ous bank a cc ount s a ll ar ound S outh F lor ida

and thr ough out

oth er part s of the co untry , a s w el l a s inN as sau, the Baha m as . ” A dm ir al ty Bank w as onl y

one of se ve ral ba nk s t ha t Wise id en ti fie d a s re cei vi ng de po si ts fro m Sil ve st ri h im se lf. A cc or din g to W ise , S ilv es tr i us ed his A dm ir al ty

a cc ount m er el y a s a“ co ndui t ac co unt , ” thr oughw hic h S ilv es tr i’ s f unds w oul d pa ss o n th ei r w ay to oth er banks.60

In de ed , it w as S ilv es tr i hi m se lf

w ho i ntr oduc ed

F re d M or ge nst er

n and W om ack to Adm iralty

Bank, where they

established several accounts and depo sited m ill ion s of

dol lars . T he de fe ndant p er sona lly kne wthe Ch ai rm anof

A dm ir al ty

and vouc he d f

or W om ac k a s w el l a s f

or the guarante ed

inv es tm en t pr ogr am . A nd i t wa s Silvestri who acc om panied Peggy

Pre ston to Adm iralty

Bank on the very

day G old Co as t C he ck

Ca shi ng o pe ne d it s a cc ount . Mo re ove r, S ilv es tr i so ught to re as sur e the bank’ s of

fi ci al s th at

the a cc ount s w er e not

pr obl em a cc ount s inthe hope of m ai nta ini ng the a cc ount s a s lo ng a s po ssi ble . W e al so o bse rv e that the ac co unt s m ai nta ine d at A dm ir al ty Bank p ro vid ed

an im portant v eh ic le f

or tr an sf er ri ng m ill ion s of

dol lars , inv es te d by

the m an y vic tim s, of

fs hor e to the Baha m as and A IB C. O nc e of fs hor e, the se f

unds w er e tr an sf

er re d a ga in t o bank accounts in England and Switzerland. Finally , it is w orthy of note that Silvestri him se lf ope ne d hi s own a cc ount

a t A IB C whe re f

ra ud p ro ce ed s w er e de posi te d. On this record, it wa s m ore than rea sonable to con clude that Silvestri expe ct ed , or

sho uld have e xpe ct ed , c o- co nspi rator s su cha s th e Mor ge nst er ns t o sim ilarly em ploya w ide array

of banks in th eir laundering schem e. In short, w e ar e fu lly sa tis fi ed that a r ea sona ble j ur y c oul d have f

ound , be y ond a re as ona

ble doubt, that the use of the Citibank accounts wa s altogether foreseea ble, and thu s convicted Si lv es tri on th e co un ts rel at edto th os e acc ou nt s as well .61 D. Finally , S ilvestri argues that the dist rict court er red in om itting from

its jury ins tr uc tio ns o n th e co nspi ra cy c harg e de fi nit ion s of

( 1) the spe ci fi ed

unl aw fu l activity of m ail and wire fra

ud and (2) the conspi racy objec t of prom otion al m oney laundering. Beca

use any such om issio ns, even if am ount ing to err or, w ere invit ed by S ilv es tr i, w e re

j ec t this arg um en t. It is we ll establish ed in this Circuit that to invite error is to preclude re view of that e rr or on a ppe al . S ee F or d, 289 F . 3d at 12 94. Whe n aparty r es pond s to a co urt’ s pr opos ed

j ur y ins tr uc tio ns w iththe w or ds “ the ins tr uc tio n is a cc ep ta

ble to us, ” suc h a ct ionc onst itu te s in vit ed e rr or . I d. ( quot ing U nit ed S ta te s v. F ulf

or d, 267 F. 3d 1 241, 124 7 ( 11th C ir . 200 1) ). T he se w or ds s er ve to w ai ve aparty ’ s r igh t t o challenge the acce pted inst ruction on app eal. Id. See also Jernigan, 341 F.3d at 1290 ( fi ndi ng tha t a

party inv ite d e rr or

inv olv ing intro duc tio n of ar ec or din g in to ev ide nc e w he n hi s c ouns el r es pond ed to the c ourt’ s qu es tio n “ Is e ve ry body agreea ble to that? ” by

respondin g “ Ye s, y our hono r. ”). Si lve str i a ff

irm at ive ly

w ai ve d hi s r igh t t o c ha lle nge the ins tr uc tio n w he n hi s counsel tol d the district court that the jury instruction s “ covered the bases.” Si lve str i no t on ly

f ai le d to r ai se the iss ue on h is o w n a cc or d, but w he n th e gove rn m en t r eque ste d f

urthe r el ab or at ionon the e le m en ts o f the § 19 56 c harg e fo rEven if he did not invite err or, S ilvestri cer tainly did not object. Thus, the standar d is at 17 least that of plain e rror , an extremely high sta ndard of revie w that Silvestri d o es notmeet. See United States v. Hansley , 54 F.3d 709, 715 ( 11th Cir. 1995 ). Fo r t h e court to corre ct plain er ror: (1) ther e must be er

ror; (2) the err or must be plain or obvious; (3) the e rror must affe ct substantial rig h ts in th at it w a s p r e

ju d ic ia l an d n o t h ar

ml e s s ; an d ( 4 ) th e mi s ta

k e mu s t s e r io u s ly

aff ect the fairne ss, integr ity , or publ ic reputation of judicial proce eding s. United States v. Chisholm , 73 F.3d 3 0 4 , 3 0 7 ( 1 1 thC i r . 1 9 9 6 ) . T h e p l a i n e r r o r s t an d ar d i s a “ h i g h s t an d ar d o f e g r e g i o u s e r r o r . ” H an s l e y, 54 F.3d at 715. The district court instructed the jury that violations of 18 U.S.C. § 1341 (mail fra ud) or 18 U.S.C. § 1343 (wire fr aud) c onstitut ed the spe cified unla wful ac tivit y for pur

poses of the mone y la un de ri ngc ha

rg e s. I t f ur the r e xpla ine d th at § 1 34 1 “ make s it a c ri me or of fe ns e fo r a

nyon e to u se the United States mails in car rying out a

scheme to defra

ud , ” an d t h at § 1 3 43 “make s it a fede ral cri me or of fe ns e fo r a

nyon e to u se an inte rs tate wi re c omm un ic atio ns fa c ili ty

in c arr yingout a schem e t o d efr aud.” A lthough the district c ourt did not define the te rms “def raud” or “pr omote,” we a re satisfied that these ter ms are well “within the common under standingof the jury” and there fore need not be define d. See United States v. Gonzalez, 940 F.2d 1413, 1427 (11th Cir. 1991). The district cour

t’s descr iption of the specifie d unlawful a ctivity was th u s s u fficient to satisfy the court’s duty to char g e the jury on the money

launder ing c ounts. I n short, the jury instructions were not “so clea

rly err oneous as to re sult in a substantial likelihood of a grave miscarr iag e of justice,” as re quired to show plain er ror. I d. (quoting United States v. Pepe, 747 F .2d 632, 674, n.7 (11th Cir. 1984)). 62 m oney laundering, Silvestri’ s counsel respon ded by say ing he did n’ t thinkit wa s

“ necessary ,” that the m oney -laundering count wa s “ self-explained” and that he wa s not r eque sti ng f

urthe r ins tr

uc tio n. I nde ed , his w or ds e xpr es sly a cc ep te d th e langua ge of

the j ur y ins tr uc tio ns, the re by

inv iti ng any

c la im ed e rr or . O n th is record, we conclude that Silvestri waived his right to challeng e the j ury ins tr uc tio ns. 17 Be ca use the re w as suf

fi ci en t e vid en ce to fi nd S ilv es tr i gu ilty be y ond a re as ona ble doubt o n a ll co unt s, and b ec au se S ilv es tr i i nvi te d any a lle ge d e rr or s inSilvestri also attempts for the first time, in a Notice of S upplemental Authority submitt ed 18 pursuant to Fe d. R. App. P. 28(j), to ch al l en ge his sentence under the Supreme Court’s re cent d e c i s i o ni nU n i t e d

S t at e s v . B o o k e r , - - - U . S . - - - - , 1 2 5 S . C t . 7 3 8 , 1 6 0 L. E d . 2 d 6 2 1 ( 2 0 0 5 ) . In Booke r, the Court held that the Six th Amendment prohibited a judg e fr om enhanc ing a defe ndant’s sentenc e accor ding to the Feder al S entenc ing Guidelines based on fac ts not found by the jury , if the judge treated the Guidelines as mandatory in doing so. Sil vestri ar gues that bec ause the district court here applied such enhanc ements, t he case should be remanded f or re sentenc ing. B eca

use Silvestri wa ive d th is a

rgume nt by no t a sse rt ing it in his ini tia l br ie f to thi s Co ur t, h e is b arr e d f

ro m r a isi ngit here . In Booke r, the Court st ated that revie wing courts are ex pecte d “to apply ordinary prudential doctrines,” including (but not lim ited to) “plain er ror” revie w for issues not ra ised at the district cour t level. 125 S. Ct. at 76 9 . Un d er t he law of this Ci rcuit, an issue not ra ised in a par ty ’s initial appellate brief is c onsidered w aived, a nd the par

ty is prohibited from ra isi n g t h e i s s u e later in the appea l. See United States v. Njau, 386 F.3d 1039, 1041-42 (11th Cir. 2004) (re fusingto consider a cla im under B lakely

v. Washington, 542 U.S. --- -, 124 S. Ct. 2531, 159 L . Ed. 2d 403 (2004) ( the p re d ec es sor ca se to Booke r), f irst raised in a le tter submitted pursuant to Fe d. R. App. P. 28(j)); United Stat es v . He m b re e, 381 F.3d 1109, 1110 (11th Cir. 2004) (de nying a motion to fil e a substitut e or a

mended p ri n cipal brie f ra ising a Blakely claim); United States v. Curtis, 380 F.3d 13 08 , 1 31 0- 11 (1 1th

Cir . 200 4) , modi fi e d on o the r gro un ds , 4 00 F .3 d 1 33 4, 20 05 WL45 32 90 (1 1th Cir. Feb. 28, 2005) (deny ing a motion to fil e a supple mental brief r aisinga B lakely claim); United State s v. L e vy , 3 79 F .3 d 1 24 1, 12 42 -4 3 ( 11 th C ir . 2 00 4) (r e fu sin gto c on sid e r a B lake ly c la im f ir st raised in a

peti t i o n fo r rehe aring ); United States v. Padilla-Reyes, 247 F .3d 1158, 1164 (11th Cir. 20 01 ) ( “ [B ]ec a

us e Pa dil la

did no t r a ise thi s issu e in his ini tia l bri e f to this c ourt , we a pp ly the ru le that parties c annot prope rly raise ne w issues at s upplemental briefing , even if the issues arise ba sed on intervening decisions or new developments cited in supple mental authority .”); United States v. Ar dle y , 2 42 F .3 d 9 89 , 9 90 (1 1th Cir . 2 00 1) (r e fu sin gto c on sid e r, on rem and fro m the Sup re me C o urt , ani s s u e ar i s i n g un d e r Ap p r e n d i v . N e wJ e r s e y , 5 3 0 U . S . 4 6 6 , 4 9 0 , 1 2 0 S . C t . 2 3 4 8 , 1 4 7 L. Ed. 2d 435 (2000) ( another Booke r p re d ece ssor), not ra ised in the initial or reply brief dur ing the orig inal appea l). Moreove r, F ed. R. App. P. 28(j) spec ifically say s that a party must “state the rea sons for the supplemental citations, re fer ringeither to the p age o f the brie f or to a point ar gued ora lly .” (e mp h as i s ad d ed ). W e h av e n o t edth a t “[ t ] h i s l an gu age fu rt h er un d er s co re s th atan ap p el l an t 's supplemental authority

must relate to an issue pr eviously raised in a p ro p erfashion, and that an appellant c annot ra ise a wholly new issue in a supplemental authority letter or br ief.” L evy , 379 F.3d at 1244. No thi ngin B oo ke r or in any of our sub se qu e nt ca se s indi c ate s that the tr a dit ion a l w a ive r r ule 63 the j ur y ins tr uc tio ns, w e A FF IRM the dis tr ic t c ourt’ s e ntr y of j udgm en t purs uant t o j ur y ve rd ic t. 18has been altere d or overturne d. In this case, Silvestri did not address sente ncingat all -- le t alone the

Sixth A me ndme nt o r the Ap pr e nd i/B lake ly /B oo ke r lin e of c a se s -- in h is i nit ia l br ie f t o th is C ourt . Thus , un de r c ontr oll ing c a se law, Silv e str i ha s wa ive d the argume nt, and may no t ra ise it o n a pp e a l. 64 AF FIRMED .