Court Opinion

ID: 18081
Source: CourtListenerOpinion
Date Created: 2010-04-25 07:10:53+00
Date Added: 2024-06-11T15:04:35.679939
License: Public Domain

UNITED STATES COURT OF APPEALS
                         For the Fifth Circuit

                        ___________________________

                                No. 97-50405
                        ___________________________

                         UNITED STATES OF AMERICA,

                                                        Plaintiff-Appellee,

                                   VERSUS

           RICARDO BRIBIESCA, MANUEL PACHECO, ALSO KNOWN AS
           MANUEL OCTAVIO PACHECO ALVAREZ, FELIPE ZARAGOZA,
                      RMI SERVICES INTERNATIONAL,

                                                     Defendants-Appellants.

          ___________________________________________________

              Appeal from the United States District Court
                    for the Western District of Texas
                             (SA-95-CR-171-2)
          ___________________________________________________

                                June 29, 199

Before POLITZ, HIGGINBOTHAM, and DAVIS, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:*

      Defendants-Appellants Manuel Pacheco, Felipe Zaragoza, and

Ricardo Bribiesca appeal their respective convictions and sentences

for   violations   of    the   Travel    Act,   18   U.S.C.   §   2314,   money

laundering, and conspiracy. For reasons that follow, we affirm the

defendants' convictions, vacate their sentences, and remand for

resentencing.

                                        I.

      This case arises out of the operations of Defendant RMI

      *
      Pursuant to 5TH CIR. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
Services International, Inc. ("RMI"), which from 1991 to 1995

carried out a scheme to defraud cash-strapped businesses in Mexico

of millions of dollars. Pacheco opened RMI in April 1991 in San

Antonio, Texas. Zaragoza and Bribiesca were brought in as employees

of RMI, and remained so until the FBI shut the operation down in

June       1995.   The    defendants        falsely   held    themselves   out    as

sophisticated middlemen in the arena of international finance. They

falsely claimed to have good contacts with legitimate financial

institutions and lenders worldwide from whom they could obtain

loans for their customers. Under this guise, the defendants induced

their victims to travel from Mexico to the United States and to pay

millions of dollars' worth of fees to RMI.

       Though the particulars of the scheme changed and became more

sophisticated over time, RMI's activities followed a characteristic

pattern.1 Its customers came primarily from Mexico, where business

financing was difficult to obtain. In nearly every instance, the

customer was at a point of desperation, and was hoping to obtain

multi-million dollar loans in the international lending community

to consolidate his debts and to keep his business alive. Upon

arriving at RMI, the customer was treated like royalty. Pacheco

made a presentation on the international services he could provide,

and regardless           of   how   bleak   the   financial   situation    was,   he

invariably informed the customer that RMI could secure for him the

       1
     The record below encompasses a trial transcript in excess of
10,000 pages and thousands of pages of documentary exhibits
detailing the particulars of the defendants' scheme. Lacking both
the inclination and the resources to recount the entire record
here, we necessarily confine our description of the defendants'
actions to a general summary.

                                             2
loans he needed. First, however, the customer was required to pay

RMI significant advance fees for a "feasibility study." These

studies   consisted   of   translating   the   customers'   business   and

financial documents into English and appraising their properties.

RMI misrepresented the qualifications of the people preparing the

studies and overcharged for their services. The studies were then

assembled into leather binders that supposedly were to be presented

to   financial   institutions   in   support   of   the   customers'   loan

requests. More often, however, the binders were merely kept in

Zaragoza's office.

      Once the preliminary work was completed, Pacheco usually

informed the customer that he could expect his loan within thirty

days. Contrary to this assurance, however, the customer soon met

with excuses and delays. As time passed and the customer became

increasingly anxious, Pacheco would propose an alternate plan for

quick funding, typically a letter of credit. In order to obtain the

letter of credit, the customer was required to pay additional fees

based on the face value of the instrument. When the customer

received the letter of credit, however, he quickly discovered that

it was worthless. Moreover, the customer then found that Pacheco

had disappeared and could not be contacted. It was undisputed at

trial that no RMI customer ever received a loan or a valid letter

of credit through the efforts of RMI.

      In August 1996, a grand jury issued a 44-count superseding

indictment against RMI, Pacheco, Zaragoza, and Bribiesca. Counts 1-

42 alleged individual violations of 18 U.S.C. § 2314, and aiding

and abetting such violations. Count 43 alleged money laundering in

                                     3
violation of 18 U.S.C. § 1956(a)(2)(a), and aiding and abetting

such money laundering. Count 44 alleged conspiracy to carry out the

scheme in violation of 18 U.S.C. § 371. The government also

included a demand for civil forfeiture of various properties,

including real estate, motor vehicles, and bank accounts, pursuant

to 18 U.S.C. §§ 1956(a)(2)(A), 2314, and 982(a)(1).

     Trial commenced in October 1996, and concluded in December

1996. The jury returned 22 guilty verdicts against Pacheco--20

Travel Act counts2 plus the money laundering and conspiracy counts.

Pacheco was sentenced to concurrent terms of 60 months', 132

months', and 180 months' imprisonment on the conspiracy, Travel

Act, and money laundering offenses, respectively. Additionally, he

received concurrent 3-year supervised release terms, a $1,150

mandatory special assessment, and was ordered to pay $8,115,562 in

restitution. The jury found Zaragoza guilty on 10 Travel Act counts

plus the money laundering and conspiracy counts. He was sentenced

to concurrent terms of 60 months' imprisonment on the conspiracy

offense and 90 months on the Travel Act and money laundering

offenses. He further received concurrent 3-year supervised release

terms, a $600 mandatory special assessment, and was ordered to pay

$8,115,562 in restitution. The jury found Bribiesca guilty on 9

Travel Act counts plus the money laundering and conspiracy counts.

       2
        Before trial, the government and the defense reached a
Stipulation and Agreement whereby the government agreed to present
only half of the 42 Travel Act counts to the jury and to dismiss
the remaining counts prior to deliberations, and the defense
agreed, inter alia, to stipulate that the clients named in the 21
dismissed counts had paid the amounts listed in the indictment and
had not received any loans. During trial, the government dropped
another Travel Act count and went forward only on the 20 remaining
Travel Act counts plus the money laundering and conspiracy counts.

                                4
Bribiesca    was    sentenced       to    concurrent         terms   of       97   months'

imprisonment on the conspiracy offense and 60 months on the Travel

Act and money laundering offenses. He also received concurrent 3-

year supervised release terms, a $550 mandatory special assessment,

and was ordered to pay $6,600,692 in restitution. This appeal

followed.

                                          II.

     Pacheco objects to the government's pursuit of multiple civil

forfeiture lawsuits in the months leading up to his criminal trial,

arguing that the government's actions exhausted his resources,

chilled his ability to defend himself, and violated due process and

fundamental fairness. This argument is without merit. There is no

constitutional,      statutory,          or       common    law   rule    barring      the

simultaneous prosecution of separate civil and criminal proceedings

against the same defendant. The Supreme Court has expressly held

that the government may pursue civil and criminal actions either

simultaneously or successively. Standard Sanitary Manufacturing Co.

v. United States, 226 U.S. 20, 52 (1912); United States v. Kordel,

397 U.S. 1, 11 (1970). Apart from his groundless assertion that the

government's    very      pursuit    of       civil    forfeiture        in    this   case

evidences bad faith, Pacheco fails to present any evidence that the

government was motivated by anything other than its legitimate

interest in recovering stolen property. Indeed, the government

moved   to   stay   the    civil     forfeiture            proceedings    pending      the

resolution of the criminal proceeding. These are hardly the actions

of a body intent on using its "awesome and coercive power" to

deprive a defendant of due process and fundamental fairness. We

                                              5
conclude that no right of Pacheco's was violated, and that no

prejudice resulted from the government's simultaneous pursuit of

civil forfeiture and criminal prosecution.

                                III.

     Pacheco and Zaragoza both challenge the trial court's ruling

admitting in evidence, without limitation, a threatening letter.

This letter was sent by Maruicio Aguirre Orcutt, an employee of

RMI, to Eugenio Albo Moreno, a former client of RMI who had

attempted to expose RMI's fraudulent practices. Pacheco argues that

the letter should have been excluded under Fed. R. Evid. 404(b),

because it is extrinsic evidence not relevant to the issue of

intent. Zaragoza and Pacheco further argue that the letter should

have been excluded under Fed. R. Evid. 403, because its probative

value is outweighed by the danger of unfair prejudice. We find

these arguments unpersuasive.

     The admissibility of evidence is a matter within the sound

discretion of the trial court. United States v. Dixon, 132 F.3d
192, 196-97 (5th Cir. 1997). This court reviews the district

court's evidentiary rulings for an abuse of discretion. United

States v. Garcia Abrego, 141 F.3d 142, 174 (5th Cir. 1998). We find

no abuse of discretion here. First, we agree with the government

that Rule 404(b) is inapplicable. The evidence of the threatening

letter was not extrinsic within the meaning of Rule 404(b), because

it involved conduct within the conspiracy. Paragraph 8 of the

superseding indictment charged that "it was a further part of the

aforementioned scheme and artifice to defraud that the defendants

threatened employees and victims who tried to expose said scheme."

                                 6
In    this circuit,       acts   committed      in    furtherance     of    a    charged

conspiracy are themselves part of the conspiracy. Garcia Abrego,
141 F.3d at 175. The letter from Orcutt to Moreno is evidence of an

act    committed     in     furtherance         of    the   charged        conspiracy;

specifically, it is evidence of a threat designed to intimidate a

victim       attempting    to    expose    the       conspiracy.    Such        evidence

constitutes intrinsic evidence, and is not subject to exclusion

under Rule 404(b). See id.; United States v. Krout, 66 F.3d 1420,

1431 (5th Cir. 1995).3

       Likewise, Rule 403 is inapposite. Most evidence presented by

the government will be prejudicial to a criminal defendant. But

Rule 403 "only excludes evidence that would be unfairly prejudicial

to the defendant." United States v. Townsend, 31 F.3d 262, 270 (5th

Cir. 1994) (emphasis added). The threatening letter was admitted as

direct evidence of the existence of the conspiracy charged, a

conspiracy in which both Pacheco and Zaragoza participated. Though

undoubtedly prejudicial in the sense that it was indicative of the

defendants' guilt, the letter was not unfairly prejudicial. As

such, the district court did not abuse its discretion in admitting

the letter without limitation.

                                          IV.

       Pacheco asserts that the trial court erred in denying his

         3
       Pacheco notes that the letter was not received by Moreno
until July 10, 1995, several weeks after the life of the conspiracy
alleged in the indictment. That fact does not change our analysis.
This court has held that evidence of acts committed pursuant to a
conspiracy remains intrinsic evidence, even though it was adduced
before or after the dates alleged in the indictment, so long as it
is "inextricably intertwined" with the crime charged. United States
v. Clements, 73 F.3d 1330, 1337 (5th Cir. 1996); United States v.
Hass, 150 F.3d 443, 449 (5th Cir. 1998).

                                           7
motion to compel the government to elect counts on which to go to

trial, or to sever the trial into separate units. He argues that

joinder of all the offenses into one trial was prejudicial to him

due to the volume and complexity of the documentary and testimonial

evidence.     Similarly,      Zaragoza     and       Bribiesca     contend     that    the

district court erred in denying their respective motions to sever.

Each argues that he was prejudiced by the spillover effect of the

voluminous     evidence     against      Pacheco       and    by   the    evidence     of

Pacheco's unsavory and potentially violent personal conduct. We

disagree.

      Denial    of   a    motion    to   sever        is    reviewed     for   abuse    of

discretion. United States v. Bermea, 30 F.3d 1539, 1572 (5th Cir.

1994). The district court did not abuse its discretion in denying

the defendants' motions. With respect to Pacheco's motion, prior to

trial the government agreed to present to the jury only 21 of the

42   Travel    Act   counts    contained        in    the    indictment.       The   trial

involved only three defendants and one conspiracy, and lasted only

two and a half months. This court has declined to find an abuse of

discretion in cases of much greater magnitude and complexity. See,

e.g., United States v. Phillips, 664 F.2d 971, 1016-17 (5th Cir.

1981)    (6-month        trial;     36-count,         100-page        indictment;       12

defendants); United States v. Martino, 648 F.2d 367, 385-86 (5th

Cir. 1981) (3-month trial; 35-count indictment; 20 defendants; more

than 200 witnesses). The case on which Pacheco relies, United

States   v.    Stratton,      649 F.2d 1066    (5th    Cir.    1981),    is    not

applicable here, as the decision in that case was based on the

absence of a key defendant at trial and the resulting prejudice to

                                           8
the other co-defendants. Accordingly, the district court did not

abuse its discretion in denying Pacheco's motion.

     With respect to Zaragoza's and Bribiesca's motions, it is the

general rule of this circuit that persons indicted together should

be tried together, especially in conspiracy cases. United States v.

Tencer, 107 F.3d 1120, 1132 (5th Cir. 1997). Under the abuse of

discretion standard, a defendant challenging a district court's

denial of   severance      must   show       that   he    suffered   specific   and

compelling prejudice against which the trial court was unable to

afford protection, and that this prejudice resulted in an unfair

trial. United States v. Cortinas, 142 F.3d 242, 248 (5th Cir.

1998). Zaragoza and Bribiesca argue that they suffered compelling

prejudice   because   of    evidence     that       was   offered    only   against

Pacheco. This court has held, however, that when one conspiracy

exists, severance is not required, even when the quantum and nature

of the proof is different as to each defendant, so long as the

trial court repeatedly gives cautionary instructions. United States

v. Rocha, 916 F.2d 219, 228 (5th Cir. 1990). Here, the district

court expressly instructed the jury on numerous occasions to

evaluate separately the evidence against each defendant. These

repeated cautionary instructions were sufficient to protect against

the threat of prejudice. See Zafiro v. United States, 506 U.S. 534,

539 (1993). Consequently, the district court did not abuse its

discretion in denying Zaragoza's and Bribiesca's motions.

                                       V.

     All three defendants challenge the sufficiency of the evidence

as to the Travel Act counts and the conspiracy count. In reviewing

                                         9
sufficiency of the evidence, this court must determine whether a

rational trier of fact could have found that the government proved

all essential elements of the crime beyond a reasonable doubt.

United States v. Mackay, 33 F.3d 489, 493 (5th Cir. 1994). For

purposes of this determination, we view the evidence in the light

most favorable to the jury verdict. Id. Following a careful review

of the testimony and exhibits in the record, we are satisfied that

the evidence was sufficient to sustain the defendants' convictions.

       To prove a violation of 18 U.S.C. § 2314, the government must

show (1) a scheme devised to defraud any person of money by false

representations; (2) which causes or induces that person to travel

in interstate or foreign commerce in furtherance of that scheme.

United States v. Kelly, 569 F.2d 928, 933 (5th Cir. 1978). To prove

aiding and abetting, the government must show that the defendant

associated himself in some way with the crime and participated in

it as if it were something that he wished to bring about. United

States v. Parekh, 926 F.2d 402, 407 (5th Cir. 1991). To prove

criminal conspiracy, the government must show: (1) an agreement

between two or more persons; (2) to commit a crime against the

United States; and (3) an overt act committed by one of the

conspirators in furtherance of the agreement. Mackay, 33 F.3d at

493.

       The evidence against Pacheco on the Travel Act and conspiracy

counts was not just sufficient; it was overwhelming. The government

presented a "caravan of misery" at trial--witness after witness who

testified   about   their   experiences   with   Pacheco   and   RMI,   and

described in detail how Pacheco had manipulated them and defrauded

                                   10
them out of millions of dollars. The witnesses recounted one by one

how Pacheco induced them to travel to the United States, won their

confidence, persuaded them to pay his exorbitant fees, and then

abandoned them with no loans and worthless letters of credit. The

government also unveiled evidence of incriminating statements made

by Pacheco, and evidence that Pacheco made threats against former

employees who might have exposed his scheme. This evidence was more

than sufficient for a rational trier of fact to find Pacheco guilty

beyond a reasonable doubt as to each Travel Act count and the

conspiracy count.

     Though the evidence against Zaragoza and Bribiesca was not

quite so overwhelming, it was still sufficiently damning to sustain

their   convictions.   With    regard    to    Zaragoza,      the   government

presented undisputed evidence that Zaragoza was an officer of RMI

and was Pacheco's right hand man. Several witnesses testified that

Zaragoza threatened former employees of RMI who might "bring down"

their scheme. One witness testified that he saw Zaragoza signing

fraudulent letters of credit from Universal Funding and Investment

("UFI"), and the government presented evidence that Zaragoza forged

a signature on a UFI letter of credit. A computer disk found in

Zaragoza's office contained further samples of UFI letters of

credit.   Moreover,    the    government      showed   that    Zaragoza   was

instrumental in establishing the identity of two shell corporations

used by RMI to carry out the scheme. With respect to Bribiesca, the

government established that Bribiesca attended and was an integral

part of numerous meetings between Pacheco and his clients, that

Bribiesca fraudulently misrepresented to a client that a letter of

                                    11
credit was completed when it was not, and that Bribiesca used

bugging devices to listen to and monitor RMI's clients. Several

witnesses further testified as to various misrepresentations made

by Bribiesca in the course of his dealings with them. Finally,

blank copies of various letterheads used by RMI in furtherance of

its scheme were found in Bribiesca's office. This evidence was

sufficient for a rational trier of fact to find that Zaragoza and

Bribiesca aided and abetted Pacheco in his scheme, and that they

conspired with Pacheco to further that scheme. As such, their

convictions must be affirmed.

                                       VI.

     All three defendants further challenge the sufficiency of the

evidence    as   to   the   money   laundering    count.   To   prove   money

laundering under 18 U.S.C. § 1956(a)(2)(A), the government must

demonstrate that there was a transportation or transfer or attempt

to transfer monetary instruments or funds from a place outside the

United States to a place inside the United States with the intent

to promote the carrying on of a specified unlawful activity. United

States v. $9,041,598.68, 163 F.3d 238, 254 (5th Cir. 1998). To

prove aiding and abetting, the government must show that the

defendant    associated      himself     with    the   unlawful   financial

manipulations, participated in them as something he wished to bring

about, and sought by his actions to make the effort succeed. United

States v. Willey, 57 F.3d 1374, 1383 (5th Cir. 1995). Following a

careful review of the testimony and exhibits in the record, we

conclude that there was sufficient evidence for a rational trier of

fact to find each defendant guilty beyond a reasonable doubt of

                                       12
money laundering.

     The record is replete with evidence supporting the money

laundering convictions. Numerous financial records, including wire

transfers and checks, show that approximately $4.2 million was

transferred from victims' accounts in Mexico to RMI's accounts in

San Antonio. The testimony of RMI's own accountant establishes that

much of this money went directly into RMI's overhead. Moreover,

numerous witnesses testified that they were impressed by the lavish

decor and opulent furnishings of RMI, by the swank luxury cars

driven   by   Pacheco,   and   by   Pacheco's   extravagant   personal

appearance. The witnesses testified that these trappings of success

were part of what induced them to entrust their money to RMI. Based

on this evidence, the jury was certainly entitled to infer that the

money transferred from Mexico was used to promote the defendants'

fraudulent scheme. This and other circuits have found such evidence

sufficient to sustain a conviction for money laundering. See, e.g.,

United States v. Alford, 999 F.2d 818, 824 (5th Cir. 1993); United

States v. Johnson, 971 F.2d 562, 565-66 (10th Cir. 1992).

     Zaragoza concedes that the evidence was sufficient to convict

Pacheco of money laundering, but argues that the evidence was

nonetheless insufficient as to him. He contends that there was no

evidence indicating that he had any control over RMI's funds or

financial transactions, nor that he received anything from RMI

other than regular paychecks and two loans. In the absence of any

evidence showing that he was directly involved in RMI's financial

dealings, Zaragoza asserts that his conviction for money laundering

must be vacated. We disagree. A defendant is not shielded from

                                    13
conviction for money laundering merely by virtue of the fact that

he is not directly involved in the formal receipt and disbursement

of funds. Here, the government presented substantial evidence that

Zaragoza was directly and intimately involved in a fraudulent

scheme to induce Mexican companies to transfer their funds to RMI's

accounts in the United States. The jury could readily infer that

Zaragoza was aware that these funds were being used to carry on the

operation, that he wished to bring this result about, and that he

directed his actions to that end. Whether Zaragoza was immediately

involved in the actual financial transactions is irrelevant, so

long as he associated himself with those transactions and sought to

make them succeed. That being the case, we affirm his conviction.

                                       VII.

     All three defendants argue that the district court applied the

Sentencing Guidelines incorrectly in determining their sentences.

This court reviews the district court's interpretation of the

guidelines de novo, and its application of the guidelines to the

facts for clear error. United States v. Cho, 136 F.3d 982, 983 (5th

Cir. 1998). A sentence imposed under the guidelines will be upheld

on appeal unless the defendant demonstrates that the sentence was

imposed    in   violation   of   the    law,   was    imposed    because   of   an

incorrect application of the guidelines, or was outside the range

of applicable guidelines and was unreasonable. United States v.

Leahy, 82 F.3d 624, 637 (5th Cir. 1996).

     The    relevant   guideline       provision     for   a   money   laundering

offense is U.S.S.G. § 2S1.1. The relevant fraud provision is

U.S.S.G. § 2F1.1. Pursuant to U.S.S.G. § 3D1.2(d), offenses covered

                                        14
by these provisions are grouped together for sentencing. Because

the counts involve offenses of the same general type to which

different guidelines apply, the offense guideline that produces the

highest offense level will be applied. U.S.S.G. § 3D1.3(b). In this

case, for each defendant the guideline producing the highest

offense level was Section 2S1.1, the money laundering provision.

Each defendant argues that the district court miscalculated the

"value of the funds" in determining the appropriate offense level

under Section 2S1.1. We agree.

     Unlike     the   fraud    guideline      (Section   2F1.1),    the    money

laundering guideline is not premised upon the amount of "loss" a

scheme produced, but rather on the "value of the funds" that were

laundered. United States v. Allen, 76 F.3d 1348, 1369 (5th Cir.

1996). This court has explained that these are distinct standards

of measurement:

     Section 2S1.1 measures the harm to society that money
     laundering causes to law enforcement's efforts to detect the
     use and production of ill-gotten gains. Section 2F1.1 measures
     the harm to society and the individual suffered when an
     innocent person is deprived of her money. In applying Section
     2S1.1, courts should follow the guideline's plain language and
     focus on the value of the funds laundered.

Id. at 1369.

     Here, both the probation officer and the district court

applied the wrong standard of measurement; they applied the loss

standard   to   the   money    laundering     guideline.     In   the   original

presentencing report ("PSR") for each defendant, the probation

officer    identified    the    value    of    the   funds    transferred     as

$8,115,562. The government objected, arguing that the total should

be $4,200,000, as that figure reflects the value of the funds

                                        15
actually transported from Mexico and the Dominican Republic to the

United States. The probation officer subsequently revised each

defendant's      PSR.     In    the     revised    PSR    for    each    defendant,     the

probation       officer    identified        the     "value       of    the   funds"    as

$6,993,275. Commenting on this revision, the probation officer

stated:

      According to our calculations based on information provided by
      the FBI, the total amount transported is $6,993,275.00. This
      amount is based on all, or part of, the amounts specified for
      victims named in the indictment and 4 additional victims
      unnamed in the indictment. The total includes $2,280,000.00
      involved in the Enrique Posadas transaction.

Based on this revision, the probation officer used the figure of

$6,993,275 to determine the appropriate offense level under Section

2S1.1, rather than the government's figure of $4,200,000. In short,

the probation officer used the aggregate of the fraud loss rather

than the value of the funds actually transferred in determining the

offense level under the money laundering guideline. The district

court adopted the probation officer's calculations. The result was

an incorrect application of the guidelines in calculating the

defendants' sentences.

      The government contends that the phrase "value of the funds"

as   used in     Section        2S1.1    should    be    broadly       interpreted.     The

additional $2.7 million, argues the government, could properly be

considered      for   sentencing         purposes    as     relevant      conduct   under

U.S.S.G.    §    1B1.3.        We   disagree.      Though       the    relevant   conduct

guideline is broad, it cannot erase the distinction, recognized by

this court in Allen, between losses suffered and the value of funds

transferred. We therefore vacate the defendants' sentences and

remand    for    resentencing         on   the     money    laundering        counts.   In

                                            16
calculating the value of the funds under Section 2S1.1(b)(2) on

remand, the district court is instructed to consider only those

funds shown to be transported into the United States with the

intent to carry on an unlawful activity. The district court may

consider relevant conduct not charged in the indictment in making

this determination, but is limited to relevant money laundering

conduct. That is, the district court may consider relevant conduct

that involves the actual transportation of funds into the United

States with the intent to carry on an unlawful activity, but it may

not consider total losses produced by the underlying fraudulent

scheme.4

     The defendants' remaining sentencing challenges are without

merit.     Pacheco   argues   that   the   probation   officer   incorrectly

determined the total "value of the funds" under Section 2S1.1 by

including travel expenses and interest paid on the money borrowed.

He is mistaken. Although the computation contained in the original

PSR included travel expenses and interest, the PSR was subsequently

revised. The revised PSR eliminated travel expenses and interest

from its calculations, and reduced the total from $8,940,029 to

$6,993,275. Though that figure was incorrect for the reasons given

above, it did not include travel expenses and interest.

     Bribiesca contends that he was improperly held accountable for

     4
      This instruction also relates to Pacheco's argument that the
probation officer incorrectly added to the loss calculation losses
from nine individuals who were never mentioned in the indictment.
The district court is not prohibited from considering those losses
just because the nine victims were never mentioned in the
indictment. It must, however, confine its consideration to those
funds transported to the United States with the intent to carry on
an unlawful activity. Proof of loss, standing alone, may not be
used to calculate the value of the funds under Section 2S1.1.

                                      17
acts of the other defendants that occurred prior to November 1993,

when he joined RMI. He too is mistaken. Although the original PSR

held Bribiesca      accountable   for     the    total    value   of   the   funds

fraudulently obtained, the PSR was revised to reflect Bribiesca's

more limited participation in the conspiracy. The parole officer

reduced   Bribiesca's    total    accountability          from    $8,940,029    to

$5,834,000.   His    total   restitution        was   similarly    decreased    to

$6,600,692.   These    reduced    figures       reflect    Bribiesca's       shared

responsibility following his entry into the conspiracy; they do not

hold him accountable for conduct that occurred before he joined the

conspiracy.

                                   VIII.

     For the foregoing reasons, the defendants' convictions are

AFFIRMED, their sentences are VACATED, and this case is REMANDED to

the district court for resentencing.5

     5
      In his reply brief, Zaragoza requests permission to reurge
his request for a downward departure on resentencing in light of
this court's decision in United States v. Hemmingson, 157 F.3d 347
(5th Cir. 1998). That issue is not properly before this court, and
therefore we do not decide it. Nothing in this decision, however,
should be read to prohibit the district court from considering such
a request.

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