Court Opinion

ID: 769549
Source: CourtListenerOpinion
Date Created: 2012-04-18 10:02:10+00
Date Added: 2024-06-11T17:55:43.930162
License: Public Domain

219 F.3d 698 (7th Cir. 2000)
United States of America,    Plaintiff-Appellee, v.Joseph Polichemi, et al.,    Defendants-Appellants.
Nos. 96-3866, 96-3867, 96-3868 & 96-3869
In the  United States Court of Appeals  For the Seventh Circuit
July 5, 2000

On Petition for Rehearing [Copyrighted Material Omitted][Copyrighted Material Omitted][Copyrighted Material Omitted]
Before Flaum, Rovner, and Diane P. Wood, Circuit  Judges.
Diane P. Wood, Circuit Judge.

1
This case arose out  of the government's prosecution of an elaborate  financial scam, perpetrated in large part by the  four defendants whose cases we consider on the  government's petition for rehearing. In our  original opinion, United States v. Polichemi, 201  F.3d 858 (7th Cir. 2000), we concluded that the  convictions of Joseph Polichemi, Lyle "Pete"  Neal, Oscar William Olson, and Charles Padilla on  various counts of wire fraud, money laundering,  conspiracy, and perjury, had to be overturned.  Our reason was that the trial court erroneously  failed to grant the defendants' motion to dismiss  a certain juror for cause. This in turn forced  the defendants to use a peremptory challenge to  eliminate her from the jury; they ran out of  peremptory challenges; and the court refused to  give them any more. Six days after our decision  was handed down, however, the Supreme Court  decided United States v. Martinez-Salazar, 120  S.Ct. 774 (2000), which rejected the theory on  which we had relied. In due course, the  government filed a petition for rehearing and the  defendants responded. The panel hereby grants the  government's petition, vacates Parts I-III of its  earlier opinion, and substitutes the following  opinion in their place. (We note, however, that  the petition for rehearing does not affect case  No. 96-3870, the appeal of Larry P. Oesterman. We  affirmed Oesterman's sentence in Part IV of our  original opinion, which remains undisturbed.)  Finding no reversible error other than the juror  problem that is governed by Martinez-Salazar, we  affirm all four convictions and sentences with  two qualifications noted below.

2
* We review briefly the general facts relating to  the financial frauds at issue here; to the extent  that additional details are relevant to  particular claims, we mention them there.  Polichemi, Neal, Olson, Padilla, and others were  the creators of a scheme to market so-called  "prime bank instruments" to unsuspecting victim-  investors. In fact, the instruments were phony from top to bottom. Nonetheless, the defendants  talked a good game, and they described their  "prime bank instruments" as multi-million dollar  letters of credit that had been issued by the top  50 to 100 banks in the world. They offered these  instruments to investors, telling them that they  could purchase the paper at a discount and then  resell it to other institutions at face value.  The difference in price represented the profit to  be earned. The trades, sadly, were fictional;  there was no market for the trading of these (or  any other) letters of credit, and nothing capable  of generating profits ever occurred. None of the  "investors" earned a cent, but the defendants for  a time were living off the fat of the land.  Polichemi, for example, wound up in a $6.2  million home in Florida as a result of the  scheme; Olson bought a $4.4 million villa nearby;  and Neal's luxury of choice was speed boats (he  bought eight).

3
Between 1991 and 1994, the "prime bank  instruments" yielded more than $15 million for  the defendants. Their largest patsy was the  Chicago Housing Authority, which (with the  cooperation of the dishonest former director of  employee benefits, one John Lauer, who also  landed in prison for his part in the arrangement)  turned over more than $13 million of its pension  funds to the defendants. In all, some 30  investors were victimized. The defendants passed  the monies they received through various bank  accounts, used some to pay off prior investors  and old debts, and spent the rest on themselves.

4
Each person had a particular role to play.  Polichemi was the president of "Copol," a company  that supposedly traded in the "prime bank  instruments." He held himself out to be one of a  handful of people in the world with a license to  trade that kind of financial instrument. Neal was  president of Konex Holding and Konex Marketing,  companies that marketed Copol's "product" through  a network of salespeople. Olson served as an  attorney for both Copol and Polichemi, in  addition to being a participant in many of the  deals. Last, Padilla was Copol's "stateside  banker." He served as a reference for the other  defendants and reassured potential investors that  Copol was a sound and successful company.

II

5
In this section of the opinion, we discuss the  many issues relating to the trial and convictions  of the four defendants. Some points pertain to  all of them, while others are individual in  nature.

A.  Juror Disqualification

6
We begin with the point that we are overruling  as a result of Martinez-Salazar. During the jury  selection process, prospective juror Lorena Nape  came up as a potential member of the final jury.  As a result of questioning, the parties learned  that she was a 15-year employee of the U.S.  Attorney's Office for the Northern District of  Illinois--precisely the same office from which  the prosecuting attorneys came. Based on her  affiliation with the prosecutor's office, the  defendants moved to strike her for cause. Even  though Nape, in response to questions, stated  that she could be fair and impartial, the  defendants took the position that at a minimum  she was excludable on the ground of implied bias.  The district court denied their motion, and they  then used one of their peremptory challenges to  remove her from the jury.

7
Two different questions are presented by this  scenario: the first is whether Nape should have  been excluded for cause, and the second is  whether an error in that ruling deprives the  defendants of any rule-based or constitutional  right, if the jury that actually sat was an  impartial one. We first address the question  whether the district court erred in refusing to  strike Nape, because if its ruling was correct,  we would have no need to address the Martinez-  Salazar issue.

8
In spite of the government's arguments to the  contrary in its petition for rehearing, we  continue to be of the view that the implied bias  doctrine applies in the particular circumstances  of this case, and that it required the  disqualification of prospective juror Nape. If  she had sat on the final jury, this appeal would  be quite different, and we note that Martinez-  Salazar rejected the contention that "a defendant  is obliged to use a peremptory challenge to cure  the judge's error." 120 S.Ct. at 777. But here,  Nape did not sit, and we suspect that prudent  defense counsel will continue to use peremptory  challenges to protect their clients against  potentially biased jurors, rather than gambling  everything on their ability to show bias  after-the-fact and to obtain a reversal of a  conviction on this basis.

9
The concept of implied bias is well-established  in the law. Many of the rules that require  excusing a juror for cause are based on implied  bias, rather than actual bias. For example, a  court must excuse a juror for cause if the juror  is related to one of the parties in the case, or  if the juror has even a tiny financial interest  in the case. See, e.g., United States v.  Annigoni, 96 F.3d 1132, 1138 (9th Cir. 1996);  Getter v. Wal-Mart Stores, 66 F.3d 1119, 1122  (10th Cir. 1995). Such a juror may well be  objective in fact, but the relationship is so  close that the law errs on the side of caution.

10
In its decision in United States v. Haynes, 398  F.2d 980, 984 (2d Cir. 1968), the Second Circuit  traced the implied bias doctrine back to Chief  Justice John Marshall's opinion in United States  v. Burr, 25 Fed. Cas. 49 (No. 14692g) (C.C. Va.  1807), one of several opinions in the prosecution  of Aaron Burr. There the Chief Justice addressed  the ways in which the law strives to assure an  impartial jury:

11
Why is it that the most distant relative of a  party cannot serve upon his jury? Certainly the  single circumstance of relationship, taken in  itself, unconnected with its consequences, would  furnish no objection. The real reason of the rule  is, that the law suspects the relative of  partiality; suspects his mind to be under a bias,  which will prevent his fairly hearing and fairly  deciding on the testimony which may be offered to  him. The end to be obtained is an impartial jury;  to secure this end, a man is prohibited from  serving on it whose connexion with a party is  such as to induce a suspicion of partiality.

12
22 Fed. Cas. at 50. The Second Circuit later  reviewed different grounds on which jurors were  excusable for presumptive bias under the common  law: kinship, interest, former jury service in  the same cause, or because the prospective juror  was a master, servant, counselor, steward, or of  the same society or corporation. United States v.  Haynes, 398 F.2d at 984.

13
We agree with the United States that government  employment alone is not, and should not be,  enough to trigger the rule under which an  employee is disqualified from serving as a juror  in a case involving her employer. But one need  not adopt such a broad rule to find a problem in  this case. Here, Nape was a long-time employee of  the very U.S. Attorney's Office that was  conducting the prosecution.

14
The Supreme Court had no such problem before it  in United States v. Wood, 299 U.S. 123 (1936), or  in Dennis v. United States, 339 U.S. 162 (1950),  on which the government relies. Wood rejected the  sweeping proposition that no government employee  of any kind, and no recipient of government  largesse such as a pension, could sit in any  criminal case. Dennis raised a similarly broad  challenge to all government employees as jurors,  because the defendant there had been charged with  failing to comply with a subpoena issued by the  House Committee on Un-American Activities. The  defendant's theory, which was rejected by the  Court, was that the loyalty oath all government  employees were required to sign automatically  disqualified them from jury service. Finally,  this case is unlike Smith v. Phillips, 455 U.S.  209 (1982), also cited by the government, in  which a juror submitted a job application to the  prosecuting attorney's office during a murder  trial. The Court there rejected the defendant's  effort to obtain habeas corpus relief on imputed  bias grounds. But, of course, that juror was not  an employee of the office; had no actual or  perceived access to confidential information  within the office; and had done little more than  demonstrate an interest in the office.

15
A 15-year employee inside the prosecutor's  office is in a materially different position. We  note as well that nothing in 28 U.S.C. sec.  1866(c) mandates the sitting of biased jurors;  that statute simply forbids disqualification of  individuals or classes of individuals on other  grounds. Although the case is not before us, we  freely acknowledge that a proceeding brought by  the Securities and Exchange Commission in  Chicago, or by the Department of Housing and  Urban Development (to the extent it was not using  U.S. Attorney's office personnel) would not  present the problem we have here.

16
We reaffirm our conclusion, therefore, that the  district court should have excused Nape when the  defendants moved to strike her for cause.  Nevertheless, just as in United States v.  Patterson, 215 F.3d 776  (7th Cir. 2000), we find that this was  not the kind of error that calls into question  the impartiality of the jury ultimately selected.  Id. at 779-80. It is not like the situation this  court faced in United States v. Underwood, 122  F.3d 389 (7th Cir. 1997), where the entire  process of jury selection was infected with  ambiguity. As we recognized in Patterson, "[i]n  any given situation there remains the possibility  that a blunder affects a right that is  substantial in the sense of Kotteakos v. United  States, 328 U.S. 750 (1946): that it 'had  substantial and injurious effect or influence in  determining the jury's verdict.'" 215 F.3d at 782-83. This, however, is a far cry from the  automatic reversal rule of Swain v. Alabama, 380  U.S. 202 (1965), which Martinez-Salazar  overruled. It is, in effect, a way in which  someone challenging the jury selection process  might show that an error (or set of errors) were  not harmless.

17
Polichemi points out in his brief responding to  the government's petition for rehearing that  there is a factual difference between Martinez-  Salazar's case and his own that might have been  important, which Justice Souter highlighted in  his concurring opinion. Martinez-Salazar and his  co-defendant exhausted all of their peremptory  challenges, but they failed to request any more  (as they were entitled to do under Fed. R. Crim.  P. 24(b)), and at the close of jury selection  Martinez-Salazar's lawyer affirmatively told the  district judge that he had no objections to the  final list of jurors to be seated. Martinez-  Salazar, 120 S.Ct. at 778. Polichemi and his co-  defendants, in contrast, preserved their  objections to the final jury and did request  additional peremptories. But in the end,  Martinez-Salazar's handling of his jury selection  process was not what caused the majority of the  Court to rule as it did. First, the Court noted  that Martinez-Salazar received all the peremptory  challenges to which he was entitled under Rule  24(b). Second, the Court stressed the fact that  the ultimate jury was impartial. Third, just as  in our case, there was no allegation that "the  trial court deliberately misapplied the law in  order to force the defendants to use a peremptory  challenge to correct the court's error," or that  the district court's ruling "result[ed] in the  seating of any juror who should have been  dismissed for cause." 120 S.Ct. at 782.

18
Perhaps a majority of the Supreme Court will  some day accept the distinction between curative  and non-curative uses of peremptory challenges  offered by Justice Souter, but in our view it did  not do so in Martinez-Salazar. Just as in that  case, the defendants here opted to use one of  their peremptories to strike a juror who should  have been eliminated for cause. That was a choice  they were free to make, but the fact that it had  its basis in an error by the district court does  not amount to a violation under either Rule 24(b)  or the Due Process Clause. We thus reject this  argument for reversal, made by all four  defendants, and move on to the remainder of their  challenges to their convictions.

19
B.  Sufficiency of the Evidence: Single Scheme

20
The jury convicted Polichemi, Neal, and Padilla  of engaging in a single wire fraud scheme, in  violation of 18 U.S.C. sec. 1343, and it  convicted Polichemi and Neal of participating in  a single money laundering conspiracy, in  violation of 18 U.S.C. sec.sec. 1956 and 371. (It  acquitted Olson on these charges.) The defendants  argue that their convictions should be overturned  because there was a prejudicial variance between  the indictment and the proof offered at trial.  The indictment charged a single scheme or  conspiracy, but, they claim, the evidence showed  multiple schemes. See Kotteakos, 328 U.S. 750.

21
The defendants concede that the government  produced enough evidence to allow the jury to  find that there was a single scheme or conspiracy  with respect to the CHA, and that separately it  produced enough evidence to show a scheme or  conspiracy with respect to the so-called  Truckstop and Deanthorpe transactions (referring  to two of the overt acts charged). They urge,  however, that those transactions were distinct  from one another, and that each was distinct from  other deals (i.e. the Sovran, Glavinovitch,  Reynolds, and Medema transactions). The same  people did not participate in each "subscheme,"  for example. Neal did not even meet Polichemi and  Padilla until 1992. The results of the earlier  transactions were not used in later schemes or  mentioned to later investors, and the  transactions differed in their factual details.

22
We have held more than once that "[a]  conspiracy variance claim amounts to a challenge  to the sufficiency of the evidence supporting the  jury's finding that each defendant was a member  of the same conspiracy." United States v.  Townsend, 924 F.2d 1385, 1389 (7th Cir. 1991)  (emphasis added); see also, e.g., United States  v. Magana, 118 F.3d 1173, 1185-86 (7th Cir.  1997); United States v. Whitt, 211 F.3d 1022,  1027 (7th Cir. 2000). Here, there was ample  evidence to support the jury's finding that the  defendants joined together with the common design  and purpose to defraud investors through the sale  of false financial instruments and then to  launder the proceeds of the fraud. This common  scheme extended from the 1991-92 transactions  through the CHA deal. The jury could have found  that the following common elements, all of which  the government amply proved, demonstrated the  existence of a single conspiracy: (1) in each  case, there was an attempt to sell "prime bank  instruments" through Polichemi and his company,  Copol; (2) the defendants played set roles in  each transaction--Polichemi the trader, Padilla  the banker, and Neal the marketer (starting in  1992); (3) each time, the defendants laundered  the proceeds quickly and frequently, through bank  accounts in Europe and the United States. The  fact that each defendant's relative role may have  varied somewhat from transaction to transaction  is not enough to undermine the jury's conclusion.

23
C.  Sufficiency of the Evidence: Money  Laundering

24
At issue here are convictions under three  different money laundering provisions: 18 U.S.C.  sec. 1956(a)(1)(A)(i) (knowingly conducting a  financial transaction involving the proceeds of  specified unlawful activity "with the intent to  promote the carrying on of specified unlawful  activity"); 18 U.S.C. sec. 1956(a)(2)(B)(i)  (transporting or transferring funds from within  the United States to a place outside the country,  knowing that the funds represent the proceeds of  unlawful activity and knowing that the  transportation is designed to conceal source,  ownership, etc.); and 18 U.S.C. sec. 1957  (engaging in monetary transactions in property  derived from specified unlawful activity). In  reviewing a sufficiency of the evidence  challenge, this court views the evidence in the  light most favorable to the government and will  reverse only if there is no evidence from which  the jury could find guilt beyond a reasonable  doubt. E.g., United States v. Brown, 71 F.3d  1352, 1354 (7th Cir. 1995); United States v.  Jocic, 207 F.3d 889, 892 (7th Cir. 2000).

25
Before addressing the particular claims here, we  note that the government has conceded that Count  18 of the indictment, under which both Polichemi  and Neal were convicted, and which dealt with a  wire transfer of $850,000, was legally  insufficient. Count 18 charged that an April 26,  1993 wire transfer in that amount from an account  at Oak Trust Bank to an account held by one of  the participants in a New Jersey bank was part of  the fraud scheme. The government concedes in its  brief, page 68 n.10, that this transfer did not  involve "proceeds" of the scheme, as this court  has defined the term for purposes of 18 U.S.C.  sec. 1956. See United States v. Mankarious, 151  F.3d 694, 705 (7th Cir. 1998). After looking at  the record, we accept this concession and vacate  Polichemi's and Neal's convictions on Count 18.  This has no effect on their sentences, however,  because the total amount of the money laundered  during the conspiracy still exceeds $10 million  even without this $850,000.

26
Polichemi and Neal were convicted under Counts  17 and 19 of money laundering in violation of  sec. 1956(a)(1)(A)(i). In order to prove that  violation, the government had to show (among  other things) that they conducted the financial  transaction knowing that it involved the proceeds  of "specified unlawful activity" and "with the  intent to promote the carrying on of specified  unlawful activity." The evidence supporting these  counts shows that Polichemi and Neal transferred  CHA funds (obtained as a result of specified  unlawful activity--the fraud) to Ray Starkey, a  potential investor with whom they were working on  a deal, and to the CHA's John Lauer, as payment  to him for "future administrative fees" (i.e. to  make sure that the unlawful activity could  continue). A reasonable jury could conclude, as  this one did, that these transfers met the  statutory requirements.

27
The same two defendants, Polichemi and Neal,  were also convicted of money laundering under  Counts 20-22, which charged violations of sec.  1956(a)(2)(B)(i). As noted above, that statute  prohibits moving illegal funds out of the  country, knowing that the transportation will  help disguise the money. The evidence showed that  Polichemi and Neal transferred CHA funds from the  United States to a Copol bank account in  Switzerland, and then from the Swiss bank to  Olson and Lauer's accounts back in the United  States. The government also introduced evidence  that transactions are difficult to investigate  once funds are moved through foreign bank  accounts, and that Polichemi and Neal lied to  Lauer about the whereabouts of the CHA funds  (once again showing that there is no honor among  thieves). Even though the transfers were made in  the Copol name, a reasonable jury could have  concluded that the two schemers intended to  disguise their source.

28
Although both Polichemi and Olson were convicted  of money laundering under sec. 1957 (Counts 23-  26), only Olson is appealing his conviction on  those counts. The evidence against him showed  that there were two payments of $25,000 each by  Copol into Olson's bank account, and one $25,000  payment by Olson to Edward Bergmann (a business  associate to whom Olson owed money). Olson (the  lawyer, recall) argues that the Copol payments  were simply for legal services, and that the  government failed to prove that Olson knew the  monies were the proceeds from the illegal scheme.

29
Olson makes a superficially persuasive argument  when he points out that the jury acquitted him on  all charges pertaining to the scheme to defraud  and conspiracy to launder money, and it convicted  him only on three substantive counts of money  laundering. Nevertheless, even if these were  inconsistent verdicts, that is not enough for us  to conclude that the jury lacked sufficient  evidence to support the counts on which it did  convict. See United States v. Powell, 469 U.S.  57, 64 (1984); United States v. Sims, 144 F.3d  1082, 1084 (7th Cir. 1998). While the evidence  may not have been overwhelming against Olson on  the sec. 1957 charges, there was enough to meet  the generous standard of review that applies  here. Olson was a signatory on the Swiss bank  account where the CHA proceeds were held. At the  time the transfers took place, Polichemi and  Olson had been working together on the fraud  scheme for years. The government notes in  particular the evidence pertaining to the  attempted, but unsuccessful, Sovran Bank swindle  in 1991, in which Olson, Polichemi, and Padilla  were involved. The government also points to  other evidence of Olson's active fraud--evidence  that the jury evidently did not find persuasive  enough to convict on some charges, but which it  was entitled to consider for the sec. 1957  charges. We reject Olson's invitation to second-  guess the jury on this point.

30
D. Olson:  Adequacy of Money Laundering Jury  Instructions

31
Olson is the only defendant who has attacked  the district court's instructions on the money  laundering counts under which he was convicted  (Counts 24, 25, and 26, all of which charged  violations of sec. 1957). Olson alleges that  those instructions erroneously told the jury that  the government did not need to show that Olson  knew the funds transferred to him were criminally  derived. He also complains that the court should  not have given an "ostrich" instruction with  respect to him.

32
As a preliminary matter, we note an odd dispute  over the standard of review that applies here.  The government argues that it should be for abuse  of discretion, citing United States v. Neville,  82 F.3d 750, 759 (7th Cir. 1996), while Olson has  suggested the more deferential standard of plain  error applies, because he failed to object to the  instructions at trial. See United States v.  Olano, 507 U.S. 725, 732 (1993).

33
Olson is probably right, but he has lost little  as a practical matter, because we see no problem  with the instructions under either standard of  review. The jury was told that the government  must show that "the defendant knew that the money  involved in the financial transaction represented  proceeds from some form, though not necessarily  which form, of activity which constitutes a  felony offense under state or federal law." While  there may have been smoother ways of phrasing  this, we think it was enough to convey the key  idea to the jurors that knowledge that the funds  were criminally derived was an element of the  offense. Similarly, given the fact that Olson  defended himself by claiming lack of guilty  knowledge, and the fact that the government had  rebutted this defense with evidence of Olson's  long-standing participation in Copol and had  suggested that at best he was deliberately  indifferent, the district court appropriately  gave an ostrich instruction. See United States v.  Graffia, 120 F.3d 706, 713 (7th Cir. 1997).

34
E. Olson:  Admission of Evidence--Bergmann and  Merchants' National Bank Transactions

35
Olson is also the only person raising this  point. In 1990, Edward Bergmann gave Olson  $100,000 to invest through a trading account that  Olson had established at Merchants' National  Bank. Olson's proposed investments for Bergmann  were similar to the "prime bank instruments" that  formed the basis of the indictment. Shortly  thereafter, Merchants' Bank closed Olson's account, when it found itself unable to complete  several transactions he had orchestrated. In  1993, Olson repaid Bergmann his investment money  using CHA funds and a check drawn on a Copol bank  account. That repayment formed the basis for  Count 23 of the indictment, a money laundering  charge on which Olson was acquitted. Olson later  (in 1994) paid $25,000 to Bergmann; this payment  gave rise to Count 26, on which Olson was  convicted.

36
The government wanted to admit evidence about  the 1990 Merchants' Bank/Bergmann episode under  Fed. R. Evid. 404(b), as relevant to Olson's  knowledge and intent concerning the investment  fraud. The district court ruled that it could  admit evidence of Olson's dealings with Bergmann  only insofar as it related to the 1994  transaction charged in the indictment.  Nevertheless, at trial Bergmann testified for the  government both about his 1990 investment with  Olson and the 1993 and 1994 repayments. Olson was  permitted to testify that the Bergmann investment  was associated with an account he had at the bank  for purposes of trading capital market  instruments, and that the bank decided to  discontinue trading with that account, but the  court did not permit him to answer when asked if  the bank attempted to conduct any trades.

37
These kinds of decisions about where to draw  the line in the admission or exclusion of  evidence are matters for the district court's  discretion. See United States v. Poole, 207 F.3d  893, 897 (7th Cir. 2000). Here, the government  also argues that Olson waived his right to  challenge the exclusion of the Merchants' Bank  evidence, because he had filed a motion in limine  trying to exclude everything (which the court had  denied). We are reluctant to rest our decision on  waiver, because not exploring something at all is  quite a different matter from exploring it in  part. Nevertheless, we see no abuse of discretion  in the court's rulings. It was entitled to find  that any probative value of the additional  evidence about Merchants' Bank that Olson wanted  to introduce would be outweighed by its  prejudicial effect, and moreover would be  confusing to the jury.

38
F. Neal:  Admission of Evidence on Prior Fraud  Conviction

39
Over defense objections, the district court  allowed the government to introduce evidence of  Neal's 1980 guilty plea in a Virginia federal  court to charges of investor fraud and aiding and  abetting in the preparation of false tax returns  pertaining to fraudulent investments. It is not  clear from the transcript whether the court found  the evidence admissible under Fed. R. Evid.  404(b) or directly admissible as "intricately  related" to the acts charged in the indictment.  See United States v. Spaeni, 60 F.3d 313, 316  (7th Cir. 1995).

40
In the end, the theory does not matter, because  we find no abuse of discretion in the district  court's decision either way. The court did not  allow evidence of the conviction itself to be  introduced; it allowed only evidence of the  underlying conduct. It explained that the  Virginia fraud was intricately related to the  charged conduct because Neal had lied to Lauer  (of the CHA) about the nature of the earlier  conviction and Lauer relied on these lies in  deciding to invest the CHA funds. The defendants  also misrepresented Neal's past "successes" in  the materials they gave prospective investors.  The evidence is also weak support for Neal's  intent to defraud, see Rule 404(b), even though  the Virginia conduct occurred more than 10 years  prior to the charged conduct and thus (without  the intricate relation to the later activity) is  at the outer edges of the requirement for Rule  404(b) that the prior crime be close enough in  time to be relevant. See, e.g., United States v.  Kreiser, 15 F.3d 635, 640 (7th Cir. 1994)  (finding seven year time gap to be close enough  to allow admission under Rule 404(b)); see also  United States v. Wimberly, 60 F.3d 281, 285 (7th  Cir. 1995) (finding 13 year time gap close enough  where prior evidence was almost identical to  current charged crime).

41
G. Padilla:  Sufficiency of Evidence for  Perjury Conviction

42
Padilla was convicted of three counts of  perjury arising from statements he made to SEC  investigators during a 1994 deposition. "To  sustain a perjury conviction, the government must  prove that, while under oath, the defendant  knowingly made a statement that was both false  and material." United States v. Gulley, 992 F.2d  108, 112 (7th Cir. 1993). Padilla makes the  familiar argument that his statements were  literally true, even if misleading, and that they  were in any event not material. See Bronston v.  United States, 409 U.S. 352 (1973) (recognizing  that it is not a violation of the perjury statute  to give an answer that is literally true, even if  it is nonresponsive or misleading); Kungys v.  United States, 485 U.S. 759, 770 (1988) (defining  materiality as something having "a natural  tendency to influence, or capable of influencing,  the decision of the decision-making body to which  it was addressed").

43
There was sufficient evidence to support the  jury's conclusions about truth and materiality on  each of the three counts. For example, on Count  27 Padilla was asked why he left Nationsbank, and  he replied that it was because he did not want to  move to Richmond, Virginia, after Nationsbank  merged with C&S Sovran. That was a lie. Sovran  fired Padilla when it discovered his involvement  with a fraudulent discounted letter of credit  transaction. He also lied about where he went  after he left Nationsbank, telling the SEC  investigator that it was to Starbank, when it  really was to Copol. Furthermore, these lies were  material to the SEC, which was trying to find out  who had worked for Copol and whether Padilla had  engaged in any of the discounted letter of credit  transactions.

44
Without recounting the evidence here for Counts  28 and 29, it is enough to say that we have  reviewed the record and are satisfied that the  jury's verdict was supported for these two counts  as well. Were we to accept Padilla's view, the  SEC investigators would literally have needed to  know ahead of time the answer to each question  they asked in order to be specific enough. That  is not the law, nor is his somewhat odd idea that  if his answers were not material to questions  designed to elicit material information, that  element has not been shown.

H.  Polichemi:  Juror Coercion

45
After the jury reported that it had reached a  verdict, the district court polled the jurors to  ensure that the verdict was unanimous. During the  polling, juror Thomasina Jackson said that she  did "not totally" agree with the verdict. The  court immediately reminded the jurors that the  verdict had to be unanimous and it instructed  them to return for further deliberation. Not long  thereafter, the jury returned again with a  unanimous verdict. When polled again, juror  Jackson answered "yes" when asked if the jury's  final verdict was her own verdict.

46
Polichemi argues that the district court should  have conducted a separate inquiry of Jackson to  make sure she had not been coerced into the  verdict. As evidence that she might not have  freely assented to the verdict, he points to the  facts that the jury delivered its first verdict  at 4:30 p.m. on a Friday afternoon, that the  jurors were probably eager to finish up before  the weekend, that one juror had a vacation  scheduled to begin five days later, and that the  trial had lasted weeks longer than the jurors had  originally been advised. Polichemi did not raise  these objections at trial, however, and thus we  would overturn the district court's decision not  to conduct a separate interrogation only if plain  error were present. None of the factors to which  Polichemi points, however, suggest that the  result of the trial was fundamentally unfair or  that the judge should have disregarded Jackson's  affirmation that the final verdict was indeed her  own.

47
I. Polichemi:  Mistrial Based on Exhibit Sent  to Jury

48
During its examination of fraud victim Sylvia  Field, the government introduced Exhibit 77,  which was a letter to Olson from Field in which  Field demanded the return of the money she had  invested with Copol. At the request of defense  counsel, the district court ruled that the  following two sentences had to be redacted from  the letter: "The Securities and Exchange  Commission agent visited me and said Copol has  been served with a suit against it for fraud. I  was horrified by their revelations."  Unfortunately, when the exhibit books were  prepared for the jury's use, an unredacted copy  of that letter was used and thus, for a time, the  jury had the complete letter with it in the jury  room.

49
Two days after the jury began deliberating, the  prosecutors discovered the error. They  immediately notified defense counsel and the  court, and defense counsel moved for a mistrial.  The court denied the motion, observing that the  two sentences were "trivial in relation to the  evidence in this case." At the same time, the  court ordered that the unredacted copies should  be removed and replaced with the redacted copies,  which was done. We see no reversible error in  this course of events. The district court was in  the best position to assess whether any prejudice  was likely from that slip, and as the court  pointed out, there was ample evidence properly  before the jury that revealed the existence of  the SEC's fraud investigation. Additionally,  there is no evidence indicating that the use of  the wrong version of Exhibit 77 was anything but  inadvertent.

J.  Polichemi:  Double Jeopardy

50
The last conviction issue any of these  defendants raises is Polichemi's complaint that  the prosecution against him was barred under the  Double Jeopardy Clause of the Constitution by two  earlier actions: (1) a 1994 civil action that the  SEC brought against the defendants in federal  court in Chicago, and (2) a 1996 civil action  that the CHA brought against the defendants in a  Florida state court. This is a frivolous argument  that requires little discussion. The Double  Jeopardy Clause is not implicated at all, because  both prior actions were civil proceedings. See  Hudson v. United States, 522 U.S. 93, 99 (1997)  (the clause protects only against imposition of  multiple criminal punishments for the same  offense). The SEC received only injunctive  relief, and so by no stretch of the imagination  could its proceedings be thought to resemble a  criminal prosecution, and the CHA is not even a  federal prosecutorial agency. As far as the  Double Jeopardy Clause is concerned, the  government was entirely free to prosecute  Polichemi for his crimes.

III

51
Individually, the four defendants have also  challenged the sentences they received on varying  grounds. Those sentences were as follows:

52
(1) Polichemi received a term of 210 months on  each of counts 17 through 22, a term of 60 months  on each of counts 1 through 16, and a term of 120  months on each of counts 23 and 24, all to be  served concurrently, along with a term of  supervised release of two years and a $10,000,000  restitution order;

53
(2)  Neal received a term of 235 months on each  of counts 18, 19, 21, and 22, and a term of 60  months on each of counts 1-13, 16, 31, 32, and  33, all to run concurrently with one another, a  two-year supervised release term, and the same  $10,000,000 restitution order;

54
(3) Olson was sentenced to concurrent 120 month  terms on counts 24 and 25, and also a consecutive  one month sentence on count 26, a two-year term  of supervised release, $10,000,000 in  restitution, and an order by the court directing  the Clerk of the Court to send a copy of the  judgment of conviction to the Illinois Attorney  Registration and Disciplinary Committee and to  the Executive Committee of the Northern District  of Illinois; and

55
(4) Padilla was sentenced to a term of 78  months, which consisted of concurrent 60 month  terms on each of counts 1-13, 18 months each on  counts 27, 28, and 29, which were concurrent with  one another but consecutive to the 60-month  terms, two years' supervised release, and  $10,000,000 in restitution.

56
We take their sentencing claims in the order in  which we have listed them.

A.  Polichemi

57
Polichemi raises three arguments in an effort  to reduce his sentence: (1) the court should have  given him the downward departure for a minor or  minimal participant provided by U.S.S.G. sec.  3B1.2; (2) the court erred in its calculation of  the total amount of money lost because of the  scheme; and (3) the court should have found him  eligible for the safety valve provided in  U.S.S.G. sec. 5C1.2. We find no merit in any of  these points.

58
Polichemi initially argued that because the  district court found that the total amount  attributable to the money laundering conspiracy  was between $10 and $20 million, the court should  have imposed a nine-level increase over the base  rather than ten. See U.S.S.G. sec. 2S1.1(b). But,  as the government points out, that is what the  court did. In his reply brief, he has also tried  to argue that the evidence was insufficient to  support the $10-20 million figure, but (a) he has  waived that point, and (b) the evidence supports  that range quite handily.

59
As for his claim that he should have received  the minor participant adjustment offered by  U.S.S.G. sec. 3B1.2, we find no clear error in  the district court's handling of the matter. It  is in fact quite impossible to think of  Polichemi, the president of Copol and purported  master trader of prime bank instruments, as  "substantially less culpable than the average  participant" in the scheme. See United States v.  Stephenson, 53 F.3d 836, 850 (7th Cir. 1995).  Finally, the safety valve provision on which he  is trying to rely, sec. 5C1.2, applies only to  convictions under Title 21 (drug offenses). This  indictment charged no such thing, which is the  end of the matter.

B.  Neal

60
Neal argues only that the district court should  not have increased his sentence under U.S.S.G.  sec. 3B1.1(b), which calls for an increase of  three levels for someone who was a "manager or  supervisor" of a criminal activity that involved  five or more persons. Our review is once again  for clear error, and we find none. To qualify for  the increase, the district court had to find that  Neal had control over at least one participant in  the criminal activity. United States v. Fones, 51  F.3d 663, 668 (7th Cir. 1995). Although the court  did not find this fact explicitly, its discussion  of Neal's relationship to Edward Russey and Larry  Oesterman indicates that it found the necessary  supervision. Neal was president of Konex  Marketing, and Russey and Oesterman were salesmen  for the company. As such, Neal was their boss,  not their equal.

C.  Olson

61
Four sentencing issues appear in Olson's  separate brief: (1) the relevant conduct  determination that more than $10 million was  involved, when Olson himself was convicted only  on three counts involving a total of $75,000; (2)  the two-level enhancement he received under  U.S.S.G. sec. 3C1.1 for obstruction of justice  (by committing perjury); (3) the decision to  increase his offense level by two for his  leadership role, under U.S.S.G. sec. 3B1.1; and  (4) the decision to hold him responsible for the  full $10 million in restitution.

62
Olson plainly considers it unfair that he  should be held responsible, under the relevant  conduct provisions, for money laundering and  fraud covered in the counts on which he was  acquitted. But that fact did not prevent the  district court from making its own assessment of  the proper sentence, see United States v. Watts,  519 U.S. 148, 157 (1997), and taking into account  for sentencing purposes the conduct that underlay  the other charges. The district court recognized  this after it had initially denied the nine-level  increase, when it found that Olson "had a hand  in" the more than $10 million that was laundered  through the various transactions.

63
Under the provisions that relate to money  laundering, relevant conduct includes all acts or  omissions, including jointly undertaken criminal  endeavors, "that were part of the same course of  conduct or common scheme or plan as the offense  of conviction." U.S.S.G. sec. 1B1.3(a)(2). This  is the part of the relevant conduct guideline  that applies to money laundering, because money  laundering is an offense for which sec. 3D1.2(d)  requires grouping of multiple counts; indeed,  sec. 3D1.2(d) specifically refers to sec.sec.  2S1.1 and 2S1.2, which are the guidelines for  money laundering offenses under 18 U.S.C.  sec.sec. 1956 and 1957. (Olson is incorrect when  he asserts that sec. 1B1.3(a)(1)(B) governs here,  under which we would restrict our consideration  to activities that occurred "during the  commission of the offense of conviction," or in  preparation for that offense or to avoid  detection or responsibility for that offense.  Compare United States v. Gabel, 85 F.3d 1217 (7th  Cir. 1996).)

64
The question boils down to whether the district  court found that Olson participated in the CHA  transaction underlying his money laundering  conviction, and if so, whether that finding was  supported by a preponderance of the evidence. Our  review once again is for clear error only. The  district court certainly made the necessary  finding, and our review of the record and the  court's comments indicates that there was an  adequate evidentiary basis for it.

65
Olson's next argument is that he should not  have received two extra levels under the  aggravating role enhancement provided in sec.  3B1.1 for an "organizer, leader, manager, or  supervisor." To qualify, the defendant must have  been the organizer, leader, etc., of one or more  of the participants. U.S.S.G. sec. 3B1.1,  application note 2. The district court found that  Olson had control over at least one participant  in the criminal activity. See id. application  note 4. In response to defense counsel's question  about whom exactly Olson was supposed to have  controlled, the court named Padilla, Lauer,  Oesterman, and Russey. The judge also commented  that "[w]ithout Mr. Olson, I think Mr. Polichemi,  with all due deference, wouldn't be able to write  a letter."

66
Like many of the other sentencing issues we  have examined, this one involves factual findings  that we review for clear error. Even if we took  the position that a lawyer typically does not  control his client, and thus that the judge may  have been mistaken to think that Olson was  pulling the strings for Polichemi, and even if  Olson, as he argues, never even met or  corresponded with Russey, Oesterman, or Lauer, as  the government argued in the alternative, the  two-level increase Olson actually received  (instead of the four-level increase that would  have been possible under sec. 3B1.1(a)) can also  be upheld on the basis that Olson "used a special  skill, in a manner that significantly facilitated  the commission or concealment of the offense."  U.S.S.G. sec. 3B1.3. Although the district court  did not address this specifically in its  findings, we think the record is quite clear that  Olson did use his skills as a lawyer to  facilitate the commission of the offense. See id.  application note 3. We therefore find no  reversible error with respect to the two-level  enhancement.

67
The district court increased Olson's offense  level by two, relying on U.S.S.G. sec. 3C1.1,  upon finding that Olson perjured himself when he  "testified to the validity of the prime bank  instruments." As Padilla argued with respect to  his conviction on perjury, Olson asserts here  that his statements were neither false nor  material. He claims that he testified only that  he believed the prime bank instruments to be  valid, not that they were valid. But this  statement takes his testimony out of context.  Olson testified at length about the mechanics of  such instruments, and overall made it clear that  he was portraying them as legitimate investment  vehicles. Furthermore, this perjury was material  to the offense of conviction--laundering the  proceeds of an illegal investment scheme. We find  no clear error in the district court's decision  to adjust Olson's sentence accordingly.

68
Last, Olson complains that the district court  erred in holding him jointly and severally liable  for the $10 million restitution payment designed  to go to the victims of this group. The  government concedes that restitution cannot be  ordered that relates to conduct for which the  defendant has been acquitted. See United States  v. Kane, 944 F.2d 1406, 1415 (7th Cir. 1991).  Because the $10 million order necessarily had  this effect, we must remand the order of  restitution that runs against Olson so that the  district court can recalculate the amount he  owes. In so doing, the court must follow the  provisions of the Mandatory Victim Restitution  Act of 1996, 18 U.S.C. sec. 3663A, because Olson  was convicted of an offense of property as  described in sec. 3663A(c)(1)(A)(ii).  Furthermore, the order may not take into account  Olson's own economic circumstances. See 18 U.S.C.  sec. 3664(f)(1)(A). On the other hand, the burden  is on the government to prove by a preponderance  of the evidence the amount of the loss sustained  "as a result of the offense." To the extent that  Olson's financial resources and needs are  pertinent to other issues, such as the rate of  payment he must make, the burden will be on him  to show those facts. See id. sec. 3664(e). See  also United States v. Walton, 217, F.3d 443, 451-52 (7th Cir. June 14,  2000).

D.  Padilla

69
Padilla argues that the district court should  not have sentenced him to consecutive terms on  his fraud and perjury convictions, when the  perjury conduct was used to support an upward  adjustment for obstruction of justice in the  offense level and the court should have grouped  the perjury conviction with the fraud conviction.  See U.S.S.G. sec. 3D1.5 and illustration #3. The  government responds that Padilla did not raise  this objection during sentencing and thus our  review can only be for plain error.

70
Padilla did not address the waiver point in his  reply brief, and so we agree that plain error is  the governing standard. In any event, the  district court did not err. The wire fraud counts  under which Padilla was convicted carry a five-  year statutory maximum. See 18 U.S.C. sec. 1343.  Padilla's sentencing range as computed by the  guidelines, however, was 78 to 97 months. In  circumstances in which the guidelines range  exceeds the highest statutory maximum in a  multiple-count conviction, the guidelines  instruct that "the sentence imposed on one or  more of the other counts shall run consecutively,  but only to the extent necessary to produce a  combined sentence equal to the total punishment.  In all other respects, sentences on all counts  shall run concurrently, except to the extent  otherwise required by law." U.S.S.G. sec.  5G1.2(d). That is exactly what the district court  did. It accepted the 60-month maximum on the wire  fraud counts, and imposed an 18-month consecutive  sentence on the other counts, which was just  enough to reach the bottom of the guideline range  that applied to Padilla. This is just what sec.  5G1.2(d) orders, and it could thus hardly be  called error.

IV

71
To summarize, we re-confirm our holding in Part  IV of United States v. Polichemi, 201 F.3d 858  (7th Cir. 2000), in which we affirmed the sentence  imposed upon Larry Oesterman. We affirm the  convictions of defendants Polichemi, Neal, Olson,  and Padilla, with the exception of the  convictions against Polichemi and Neal under  Count 18, which are hereby vacated. We affirm the  sentences imposed on Polichemi, Neal, and Padilla  in their entirety, and we affirm the sentence  imposed upon Olson with the exception of the  order of restitution. As to that, we order a  limited remand for the purpose of the district  court's recalculation of the amount of  restitution he must pay.