Court Opinion

ID: 2964221
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:22:21.314547+00
Date Added: 2024-06-11T11:42:52.683643
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                 ____________________

          No. 94-1406

                                    UNITED STATES,

                                      Appellee,

                                          v.

                                  RICHARD G. KAYNE,

                                Defendant - Appellant.

                                 ____________________

          No. 94-1407

                                    UNITED STATES,

                                      Appellee,

                                          v.

                                   EDWARD B. KALP,

                                Defendant - Appellant.

                                 ____________________

                    APPEALS FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                   [Hon. Douglas P. Woodlock, U.S. District Judge]
                                              ___________________

                                 ____________________

                                        Before

                               Torruella, Chief Judge,
                                          ___________

                                 Cyr, Circuit Judge,
                                      _____________

                         and Skinner,* Senior District Judge.
                                       _____________________
                              
          ____________________

          *   Judge  Skinner,  of the  District  of Massachusetts,  sat  by
          designation, heard  oral argument  in this matter  and thereafter
          recused  himself.   The remaining  two panelists  therefore issue

                                _____________________

               Francis  J. DiMento,  with whom  DiMento &  Sullivan was  on
               ___________________              ___________________
          brief  for  appellant  Richard  G.  Kayne; John  L.  Roberts,  by
                                                     _________________
          Appointment of the Court, for appellant Edward B. Kalp.
               Mark J. Balthazard, Assistant  United States Attorney,  with
               __________________
          whom  Donald K. Stern, United  States Attorney, was  on brief for
                _______________
          appellee.

                                 ____________________

                                    July 24, 1996
                                 ____________________

                              
          ____________________

          this opinion pursuant to 28 U.S.C.   46(d).

                                         -2-

                    TORRUELLA, Chief Judge.   Defendants-appellants  Edward
                    TORRUELLA, Chief Judge.
                               ___________

          Kalp and  Richard Kayne were  charged with twenty-nine  counts of

          mail  fraud, in violation of 18 U.S.C.    1341.  After a six week

          trial, a  jury convicted  both defendants  on fifteen counts  and

          acquitted  them on four; the judge granted a motion for acquittal

          on one; and  the government  dropped the remaining  counts.   The

          defendants were  sentenced to 36-months imprisonment, and ordered

          to pay $339,466 in restitution.   On appeal, Kayne and Kalp argue

          (1) that jeopardy had attached  in a prior government proceeding;

          (2) that  certain evidence was improperly admitted;  (3) that the

          evidence  submitted  below  was  not sufficient  to  sustain  the

          convictions; and (4) that Kalp received ineffective assistance of

          counsel at trial.  For the reasons laid out below, we affirm.

                                    I.  BACKGROUND
                                    I.  BACKGROUND
                                        __________

                    In  the  late 1970s,  many  new  investors entered  the

          market for rare coins.  Unlike  knowledgeable hobbyists and "vest

          pocket" dealers, these  newcomers had  no specialized  expertise,

          and  were just  looking  for a  stable  investment.   Seeking  to

          capitalize  on this  booming market,  defendants Edward  Kalp and

          Richard  Kayne left  a  distinguished Boston  coin brokerage  and

          established  the Rare Coin Galleries of  America ("RCGA") in July

          1982.   Kalp, the President  of RCGA, functioned  as the in-house

          numismatist,  examining  and  valuing  coins  for  purchase  from

          wholesalers,  and pricing  them  for resale.    Kayne, as  RCGA's

          marketing  director,  recruited  financial planners and solicited

          customers.  For four years RCGA operated successfully, generating

                                         -3-

          millions  of   dollars  in  revenues  from   approximately  3,000

          customers.

                    A typical RCGA investor paid between $5,000 and $25,000

          for a portfolio of coins.  In the  rare coin market, the value of

          a  coin  is dependent  upon its  "grade,"  which is  a numismatic

          measure  of  comparative  wear  on  a  70  point  scale.    Small

          distinctions in grade can yield large differences in the value of

          a  coin.   For example,  among relatively  pristine, uncirculated

          "mint state"  ("MS") coins, an MS65 coin  can fetch ten times the

          price of an  MS63.  For "certified" coins, grade is determined by

          a  certification  service  which  typically employs  a  panel  of

          numismatists.    Prior  to  1986, the  only  independent  grading

          service  was  the American  Numismatic  Association Certification

          Service  ("ANACS").    For  "raw"  coins  (which  have  not  been

          certified),  grade  and  value  may be  established  between  two

          knowledgeable  collectors,   or  an  amateur  may   rely  on  the

          representation of a respected  numismatist.  Most of the  raw and

          certified coins which RCGA  supplied its customers were purported

          to be MS65 coins.

                    By mid-1986, at least two federal agencies had received

          many complaints from RCGA customers asserting that the coins sold

          by RCGA  were  of  substantially lower  quality  and  value  than

          represented.  After a preliminary investigation in July 1986, the

          United  States  Postal  Service   applied  for  and  was  granted

          authority  by the late Chief Judge Andrew Caffrey of the District

          of Massachusetts to intercept RCGA's mail.

                                         -4-

                    At the same time,  the Federal Trade Commission ("FTC")

          was conducting  a parallel  nationwide investigation of  the rare

          coin  investment market.   The  investigation quickly  focused on

          RCGA,  among others.  On September 16, 1986, the FTC instituted a

          civil  action  alleging  that  RCGA  was  engaged in  unfair  and

          deceptive  business practices under 15 U.S.C.   45(a).  This case

          was  also  assigned to  Judge  Caffrey, who  forthwith  entered a

          temporary restraining order "freezing"  not only the business but

          the  personal assets  owned by Kayne  and Kalp.   On  October 14,

          RCGA filed  a Chapter 11 petition  for bankruptcy reorganization,

          which was removed to the district court and consolidated with the

          Postal Service  and  FTC  actions.   The  following  week,  Judge

          Caffrey granted preliminary  injunctions requested by  the Postal

          Service and  the  FTC, and  appointed a  Bankruptcy Trustee,  who

          initiated adverse proceedings against Kayne and Kalp.

                    The  conclusion  of  the   civil  litigation  came  the

          following  spring, when  the FTC,  the  Trustee, Kayne,  and Kalp

          entered into a  settlement agreement requiring Kayne  and Kalp to

          surrender $2.2  million in  personal  assets to  the Trustee  and

          never to market coins to the public again.  Also pursuant to this

          agreement,  the  FTC's  claim   for  $11.9  million  in  consumer

          restitution was given priority status for payment of the Trustee.

                    On January  11, 1991,  an indictment charging  Kalp and

          Kayne  with  29 counts  of mail  fraud  was filed,  based  on the

          correspondence intercepted the summer of 1986.  The prosecution's

          evidence  consisted  of  testimony  from  former  RCGA employees,

                                         -5-

          financial  planners, suppliers,  and customers,  as well  as coin

          dealers  and  numismatic experts.     After  almost six  weeks of

          testimony,  the jury  convicted Kayne  and Kalp  of 15  counts of

          fraud.   The  prosecution  dropped nine  counts  prior  to  their

          submission  to the jury, the  jury acquitted on  four counts, and

          the  district judge acquitted on one count.  Defendants have been

          sentenced to 36 months' imprisonment and  ordered to pay $339,466

          in  restitution.  The sentence has been stayed pending resolution

          of this appeal.

                                   II.  DISCUSSION
                                   II.  DISCUSSION
                                        __________

                                 A.  Double Jeopardy
                                 A.  Double Jeopardy

                    Both defendants have asserted that jeopardy attached to

          the  1986 civil litigation and should bar this prosecution.  This

          defense has surfaced for the  first time on appeal.  Even  though

          the fundamental  constitutional issue of double  jeopardy was not

          raised  at trial, we will  entertain the appeal,  but review only

          for  plain error.1  See, e.g.,  United States v. Rivera, 872 F.2d
                              ___  ____   _____________    ______

          507, 509 (1st Cir.), cert. denied, 493 U.S. 818 (1989).
                               ____________

                    The Double Jeopardy  clause protects against  "multiple

          punishments for the same offense," even if one of the proceedings

          is  civil and one criminal,  regardless of the  sequence.  United
                                                                     ______

                              
          ____________________

          1  The government argues  that the defendants' appendix  consists
          almost  entirely of documents which  were not part  of the record
          below  and which the district  court declined to  certify to this
          court, and therefore  they should be stricken  from the appendix.
          See Massachusetts v. United States Veterans Admin., 541 F.2d 119,
          ___ _____________    _____________________________
          123 n.5  (striking portions of an appendix  that were not part of
          the record in the district court).  Even assuming these documents
          are properly before us, defendants cannot prevail.

                                         -6-

          States  v.  Halper, 490  U.S. 435,  439  (1989).   In determining
          ______      ______

          whether  the  protections  of  the  Double  Jeopardy  Clause  are

          implicated, our  first  line  of  inquiry is  whether  the  civil

          sanction constituted "punishment," see United States  v. Stoller,
                                             ___ _____________     _______

          78 F.3d  710, 720-21 (1st Cir.  1996); our second is  whether the

          purported punishments  are for the same offense, Halper, 490 U.S.
                                                           ______

          at 439.  Because we conclude that the civil sanction in this case

          did not constitute punishment, we discern no plain error.

                    Defendants  argue that  the  civil proceedings  against

          them  were the  equivalent  of civil  forfeiture proceedings  and

          imposed punishment for the  same offense in two or  more separate

          proceedings.    In  characterizing  their  settlement  with   the

          Bankruptcy Trustee  and the  FTC as  a punitive forfeiture,  they

          cite two  expansive double jeopardy opinions  from other circuits

          which,  since oral  argument, have  been reversed by  the Supreme

          Court.  See United States v. Ursery, 59 F.3d 568 (6th Cir. 1995),
                  ___ _____________    ______

          rev'd  ___  U.S. ___,  1996 WL  340815  (1996); United  States v.
          _____                                           ______________

          $405,089.23 U.S.  Currency, 33 F.3d  1210 (9th Cir.  1994), rev'd
          __________________________                                  _____

          sub nom. Ursery, ___ U.S. ___, 1996 WL 340815.
          ________ ______

                    Assuming,  arguendo, that the  civil proceeding against
                               ________

          defendants is  the equivalent  of a civil  forfeiture proceeding,

          the Supreme Court's  opinion in  Ursery makes it  clear that  the
                                           ______

          1986 civil  proceeding was  not "punishment" for  double jeopardy

          purposes.  Ursery, ___ U.S. at ___, 1996 WL 340815, *9.  In  that
                     ______

          case, the Supreme Court reaffirmed its "traditional understanding

                                         -7-

          that  civil forfeiture  does  not constitute  punishment for  the

          purpose of the Double Jeopardy Clause."  Id.
                                                   ___

                    Furthermore, even to  the extent that defendants'  1986

          civil proceeding was not a civil forfeiture proceeding, it was by

          nature  remedial.    The  monetary  sanction  was  exacted  in  a

          bankruptcy case, and  the $2.5  million paid to  the trustee  was

          used  to pay a portion of claims against the defendants totalling

          $11.8 million resulting  from their  sale of coins.   A  monetary

          sanction which  has no  punitive function,  i.e., has  no purpose
                                                      ____

          other than restitution or compensation for the loss engendered by

          the defendants' conduct is not punishment within the ambit of the

          double jeopardy clause.   Halper, 490 U.S. at 446-49.   This is a
                                    ______

          near-perfect  exemplar of  compensation  for loss,  and does  not

          constitute   punishment   for   purposes   of   double  jeopardy,

          notwithstanding its financial impact on the defendants.

                    In view of our conclusion that there was no duplication

          of punishment, it is  unnecessary to consider the second  part of

          the double jeopardy analysis:   whether the purported punishments

          were  for  the same  offense.   In  any  case, we  note  that the

          offenses charged in this indictment contain crucial elements that

          by no stretch  of the imagination could be part of the resolution

          of  the bankruptcy  case  or of  the  underlying FTC  and  Postal

          Service  cases; e.g., criminal  intent to defraud  and devising a

          scheme to  defraud.   Hence there  was no  double jeopardy.   See
                                                                        ___

          Blockburger v. United States, 284 U.S. 299 (1932).
          ___________    _____________

                                         -8-

                              B.  Evidentiary Challenges
                              B.  Evidentiary Challenges

          1.   Appraisals and valuations by dealers of "raw" coins supplied
          1.   Appraisals and valuations by dealers of "raw" coins supplied
          by      RCGA 
          by      RCGA 

                    The  defendants argue that evidence of the value of the

          coins  sold by  the  defendants was  erroneously  admitted.   The

          government offered, and the district court admitted, testimony of

          eight  coin dealers that the  coins bought by  the RCGA customers

          were of substantially lower quality and value than represented in

          the accompanying documentation.   On appeal, the defendants argue

          that  this  testimony  was  not properly  the  subject  of expert

          testimony  and  was irrelevant,  neither  of  which grounds  were

          argued  to  the district  judge.   As  neither ground  was argued

          below, we  review only for plain error.  See, e.g., United States
                                                   ___  ____  _____________

          v. Montas, 41 F.3d 775 (1st Cir. 1994), cert. denied,  115 S. Ct.
             ______                               ____________

          1986 (1995).

                    The value  of the coins  involved in a  prosecution for

          their fraudulent  sale is indisputably  relevant.  The  fact that

          the subject matter is not "scientific" is no bar to admissibility

          of expert testimony.  Federal Rule of Evidence 702 specifies that

          expert  testimony  covering   "scientific,  technical,  or  other

          specialized knowledge [which]  will assist the  trier of fact  to

          understand  the  evidence or  to determine  a  fact in  issue" is

          admissible.   See Daubert  v. Merrell Dow  Pharmaceuticals, Inc.,
                        ___ _______     ___________________________________

          509  U.S.  579, 589  (1993) (emphasis  omitted).   A  trial judge

          "enjoys  broad  discretion  in determining  the  admissibility of

          expert testimony."   Montas, 41 F.3d  at 783.  Opinions  of value
                               ______

          are a traditional  subject of  expert testimony, and  it is  well

                                         -9-

          within the discretion  of the district judge to  admit them.  One

          could hardly expect a  lay jury to form conclusions about such an

          esoteric subject as the value  of rare coins without the help  of

          experts.   The  defendants complain,  however, that  the opinions

          were not  based  on consistent  standards,  and were  subject  to

          factors  of  taste and  assessment of  the  market, and  that the

          experts  often disagreed  among themselves.  This is not unusual.

          These  matters  are  properly  the subject  of  searching  cross-

          examination.  See Daubert, 113 S. Ct. at 2798.   Defendants argue
                        ___ _______

          further that this testimony should have been excluded under  Fed.

          R.  Evid.  403, because  its  prejudicial  effect outweighed  its

          probative value.   This determination  is committed to  the sound

          discretion of the  trial court,  and will be  overturned only  in

          "extraordinarily compelling circumstances,"   Montas, 41 F.3d  at
                                                        ______

          783,  which we do not detect in this case.  Review of  the record

          reveals that the experts were experienced,  the chains of custody

          of  the coins  were carefully  established, the  experts' methods

          were  explained,  and  the  appraisals  were reasonably  current.

          Thorough cross-examination  was permitted  on all of  the issues,

          such as  subjective judgments  and variable markets,  which might

          impeach the expert  testimony.  We perceive  no error,   plain or

          otherwise.

          2.  Purchasers' evidence of resale
          2.  Purchasers' evidence of resale

                    Defendants  complain   further  that  several   of  the

          purchasers from RCGA  were permitted to  testify about the  price

          they realized  on resale  of the  coins.   See  United States  v.
                                                     ___  _____________

                                         -10-

          DiMarzo, 80 F.3d  656, 659-60  (1st Cir. 1996).   Their  argument
          _______

          that this testimony  was outside the competence  of lay witnesses

          under Fed. R. Evid. 701 is far off the mark.   This testimony was

          not  opinion  testimony at  all, but  a  simple recitation  of an

          observed  phenomenon:   the price  paid for  the coins.   A  more

          cogent argument  is that  these may  have  been distress  prices,

          rather than  fair market prices.   This might have  been a ground

          for exclusion  in a clear  case of  a distress sale,  but whether

          they were  distress sales or not, in  the context of the evidence

          in  this case,  was a  question of  fact properly left  to cross-

          examination and ultimately to the jury.    This was the procedure

          correctly permitted by the district judge.

          3.  ANACS' evaluations of RCGA raw coins
          3.  ANACS' evaluations of RCGA raw coins

                    Defendants   challenge   the  admission   of  testimony

          concerning  the   grades  the  American   Numismatic  Association

          Certification Service  (ANACS) assigned to certain  coins sold by

          RCGA.  Throughout the trial the government attempted to introduce

          ANACS certificates  of value obtained after  RCGA's bankruptcy by

          two dissatisfied customers, Dr. Anthony Scapicchio ("Scapicchio")

          and Caleb Morgan ("Morgan").   While Morgan's coins were  not the

          subject of  any count of  the indictment,  Scapicchio's were  the

          subject  of Count  VIII.   The ANACS  graders who  prepared these

          certificates  were  not  available  for  cross-examination,  and,

          indeed, were not even identified.

                    On  the  fourth  day   of  trial,  the  district  judge

          conditionally admitted  the certificates, based  on the testimony

                                         -11-

          of  Richard  Montgomery, director  of  ANACS from  1980  to 1987,

          concerning ANACS' valuation  procedure.  The next  day, the judge

          allowed  Morgan to read  his certificates to  the jury.   The day

          after that, the  judge excluded a  similar reading by  Scapicchio

          and struck the Morgan  testimony.  Finally, on the  sixteenth day

          of trial, the court ruled that "the jury is fully informed and is

          in  a  position  to  make  a discriminating  judgment  about  how

          reliable, if at all, the ANACS determinations are," and permitted

          a postal inspector to read the Morgan and Scapicchio certificates

          to  the  jury at  the  close  of the  government's  case.   Since

          specific  objections   were  made  to  the   admission  of  these

          certificates,  we review  for  abuse of  discretion.   See, e.g.,
                                                                 ___  ____

          Cameron  v. Otto Bock Orthopedic  Industry, Inc., 43  F.3d 14, 16
          _______     ____________________________________

          (1st Cir. 1994).

                    We find no such abuse here.  The     foundation     for

          admission  of  a  business  record  under Fed.  R.  Evid.  803(6)

          requires  both the testimony of a qualified custodial witness and

          a showing that the  declarant was a person with  knowledge acting

          in the course of  a regularly conducted business activity.   See,
                                                                       ___

          e.g.,  Petrocelli v. Gallison, 679 F.2d 286, 290 (1st Cir. 1982).
          ____   __________    ________

          Montgomery's evaluation adequately established the genesis of the

          records  and their subsequent custody.   See, e.g., Wallace Motor
                                                   ___  ____  _____________

          Sales  v. American Motors Sales  Corp., 780 F.2d  1049, 1061 (1st
          _____     ____________________________

          Cir. 1985)  (noting that  the qualifying  witness  need not  have

          actually  prepared the record, but "is simply one who can explain

                                         -12-

          and be cross-examined concerning the manner in which the  records

          are made and kept").  

                    Further, we do not find that the "source of information

          of the method  or circumstances of  preparation indicate lack  of

          trustworthiness"  in  the certificates.    Fed.  R. Evid.  803(6)

          (excluding business  records on that basis);  see Petrocelli, 679
                                                        ___ __________

          F.2d  at  291  (excluding  business record  testimony  where  the

          records  were "so  cryptic  that pure  guesswork and  speculation

          [was] required to  divine the source of  the cited information").

          It  was not  for the  trial  judge, but  the  jury, to  determine

          whether the opinions in the certificates reliably assigned values

          to the coins.  Indeed, the district court allowed the defense  to

          conduct liberal (if not excessive) inquiry into the unreliability

          of the ANACS certificates.  

                    Defendants  also challenge  the  admissibility of  this

          evidence  on  constitutional  grounds, claiming  that  they  were

          denied  their Sixth Amendment  right of confrontation.2   We find

          Manocchio v. Moran, 919  F.2d 770 (1st Cir. 1990),  cert. denied,
          _________    _____                                  ____________

          500  U.S. 910  (1991),  controls  our  analysis in  this  matter.

          There,  the government sought to enter an autopsy report about an

          autopsy  performed by a forensic pathologist  who had since moved

          to Israel.  The testimony of another signatory to the report, the

          keeper of the records, was offered in order to lay the foundation

          for admission.   Id. at 772.  Relying on  United States v. Inadi,
                           ___                      _____________    _____
                              
          ____________________

          2  The Government  argues that defendants have waived  this issue
          by  failing to  object  on Confrontration  Clause grounds  below.
          Regardless of whether the issue was waived, the argument fails.

                                         -13-

          475 U.S. 387, 394  (1986), we found  that the government was  not

          required    to    demonstrate    the   examining    pathologist's

          unavailability in  order to enter  the report.   We  specifically

          stated  that  the  reasoning  in  Inadi  which  led  us  to  that
                                            _____

          conclusion  would  apply  equally   to  other  types  of  hearsay

          exceptions  -- including business records.  Id. at 774; see White
                                                      ___         ___ _____

          v. Illinois, 502 U.S. 346, 354 (1992) ("[U]navailability analysis
             ________

          is a necessary part of the Confrontation Clause inquiry only when

          the challenged out-of-court statements were made in the course of

          a  prior judicial  proceeding.").   Having  determined that,  our

          decision  in  Manocchio  noted that  it  was  "left  .  . .  with
                        _________

          reliability as  the determining  factor for the  admissibility of

          the autopsy  report under the Confrontation  Clause."  Manocchio,
                                                                 _________

          919 F.2d at 776.  However, we specifically noted that reliability

          could  be  shown by  "showing that  the  evidence falls  within a

          firmly  rooted hearsay exception."   Id.; see White,  502 U.S. at
                                               ___  ___ _____

          356,  n.8  (noting   that  "'firmly  rooted'"  exceptions   carry

          sufficient indicia  of  reliability to  satisfy  the  reliability

          requirement posed  by the Confrontation Clause");   United States
                                                              _____________

          v. Trenkler, 61  F.3d 45,  64 (1st Cir.  1995) (Torruella,  C.J.,
             ________

          dissenting on other grounds).   Since we have already  shown that

          to be true in the present case, we need not address this argument

          further.3
                              
          ____________________

          3  Defendants seek  to rely on the Confrontation  Clause analysis
          in  United States v. McClintock,  748 F.2d 1278  (9th Cir. 1984),
              _____________    __________
          cert. denied, 474  U.S. 822  (1985).  However,  that opinion  was
          ____________
          written  before Inadi or White were decided.  Rather than look to
                          _____    _____
          McClintock for guidance, therefore, we will apply the case law of
          ___________

                                         -14-

                           C.  Sufficiency of the Evidence
                           C.  Sufficiency of the Evidence

                    Appellants  next  challenge  the  sufficiency   of  the

          evidence  marshalled against them.  We  review such challenges to

          "determine  whether a  rational jury  could find  guilt  beyond a

          reasonable doubt,"  United States v. Flores-Rivera,  56 F.3d 319,
                              _____________    _____________

          232  (1st  Cir. 1995),  viewing the  evidence  in the  light most

          favorable to  the verdict,  id.   Our review of  the record  here
                                      ___

          persuades  us  that  the   evidence  was  sufficient  to  warrant

          conviction beyond a reasonable doubt.   

                    First, the government  presented extensive evidence  of

          systematic overgrading.   Ten customers testified  that they sold

          their portfolios for a small fraction of the purchase price.  Two

          experts indicated that the  coin market did not account  for this

          precipitous drop.  Two suppliers  of RCGA's coins indicated  that

          Kalp  only purchased  MS63 coins.   An expert  witness correlated

          RCGA's records with  pricing data and  determined that RCGA  only

          paid MS63  prices for the  coins it sold  to consumers.   Several

          former  RCGA  employees  testified  inter  alia that  coins  were
                                              ___________

          routinely upgraded.   One  employee testified that  Kayne ordered

          her to alter an ANACS certificate.

                    As  for the  ANACS  certificates, as  noted above,  the

          district  court allowed  the defense  liberal inquiry  into their

          unreliability.  Indeed, defense counsel was repeatedly allowed to

          cross-examine coin dealers on  subjects well beyond the scope  of

                              
          ____________________

          this  circuit, which has been informed by the later Supreme Court
          decisions.

                                         -15-

          direct examination.   Although the court  invited the defense  to

          propose a limiting instruction, this offer was not accepted.  The

          testimony about the certificates  came into evidence after eleven

          separate  appraisals were  presented to  the jury.    Neither the

          ANACS documents  nor  the appraisals  were allowed  to come  into

          evidence,  and the  district  judge required  the prosecution  to

          structure the  presentation of  the certificates to  be virtually

          identical to the appraisals. 

                    Third, systematic  overgrading was  only a part  of the

          government's demonstration of fraud.  Several employees indicated

          that statements in RCGA's promotional literature  were misleading

          by  stating that RCGA  had achieved $90  million in sales,  had a

          multi-million dollar inventory,  and had a Paris affiliate.  Five

          customers whom  RCGA  cited as  making substantial  profits on  a

          "liquidation" report sent to prospective investors testified that

          they never received payment, or were  paid only after instituting

          civil litigation.  There was evidence of a $1 million discrepancy

          in  RCGA's books,  that  Kayne encouraged  financial planners  to

          conduct transactions  in cash, and that Kayne  and Kalp routinely

          skimmed cash from office accounts.  

                        D.  Ineffective Assistance of Counsel 
                        D.  Ineffective Assistance of Counsel

                    We  trumpet the  message  for the  umpteenth time  that

          allegations of  ineffective assistance of counsel  must be raised

          initially before  the district court, typically by a motion under

          28  U.S.C.   2255.   See, e.g., United States  v. Costa, 890 F.2d
                               ___  ____  _____________     _____

          480, 482-83  (1st Cir. 1989) (discussing  rationale behind rule).

                                         -16-

          Moreover,   the  asserted   ineffective  assistance   of  counsel

          consisted  of counsel's  failure  to raise  the  issue of  Double

          Jeopardy; in view  of our ruling on that claim,  it may simply be

          that trial counsel was quite perceptive.

                                         -17-

                                   III.  CONCLUSION
                                   III.  CONCLUSION
                                         __________

                    For the foregoing reasons,  the opinion of the district

          court is affirmed.
                   affirmed
                   ________

                                         -18-