Court Opinion

ID: 32604
Source: CourtListenerOpinion
Date Created: 2010-04-25 18:55:30+00
Date Added: 2024-06-11T12:38:45.180128
License: Public Domain

United States Court of Appeals
                                                                          Fifth Circuit
                                                                       F I L E D
                       UNITED STATES COURT OF APPEALS
                            For the Fifth Circuit                     September 5, 2003

                                                                   Charles R. Fulbruge III
                                                                           Clerk
                                    No. 02-41104

                         UNITED STATES OF AMERICA,

                                                          Plaintiff-Appellee,

                                       VERSUS

                              RICHARD JAMES TUCKER,

                                                          Defendant-Appellant.

               _____________________________________________

                Appeal from the United States District Court
                      for the Eastern District of Texas
               _____________________________________________

Before WIENER and BARKSDALE, Circuit Judges, and FURGESON, District

Judge.1

FURGESON, District Judge:

     Defendant-Appellant Richard James Tucker appeals from a jury

verdict finding him guilty of one count of securities fraud and one

count     of   mail   fraud    on   the   ground   that   the   district    court

improperly excluded his securities expert. Tucker also appeals the

district court’s 1) failure to submit an element of the crimes

charged to the jury, 2) misstatement of the intent element in the

     1
       District Judge of the Western District of Texas, sitting by
designation.
                                          1
jury charge, 3)failure to provide a specific unanimity-of-theory

instruction    to    the    jury,   and   4)   imposition         of   consecutive

sentences.     For   the    reasons   stated   below       we    AFFIRM   Tucker’s

conviction and sentence in full.

                            FACTS AND PROCEEDINGS

     First Fidelity Acceptance Corporation (“FFAC”) was a Nevada

corporation founded in 1991 and headquartered in Plano, Texas. Its

purpose was to purchase and sell automobile loans in the form of

installment sales contracts, secured by automobiles and light

trucks.   Upon acquiring the automobile loans, FFAC would then

“package” the loans and sell them to financial institutions and

large investors.

     Tucker joined FFAC in April of 1992 as a consultant to aid the

corporation    in    its    first   private    placement         of    asset-backed

securities. In September of that year, the FFAC Board of Directors

named Tucker Chief Executive Officer and Chairman of the Board.

According to Tucker, FFAC was performing exceptionally well from

1992 until the first quarter of 1996, with total assets worth

$11,672,000.        The    Government,    however,    maintains         that     FFAC

experienced mixed financial results from 1991 through 1995, at

which time FFAC was facing a financial crisis.

     In 1996, FFAC created a wholly-owned subsidiary, Automobile

Receivables    Corporation       (“FFAC-ARC”),       for        the    purpose     of

establishing   certain      investment    trusts.      Thereafter,        FFAC-ARC

organized three trusts with the goal of raising money to be
                                      2
borrowed by FFAC and its subsidiaries for investment in automobile

loans.     In order to generate capital, the trusts facilitated the

offer and sale of certificates; the minimum investment amount was

$25,000.

     To     entice    potential   investors   to   purchase    the   trust

certificates, Tucker drafted a Private Placement Memorandum (“PPM”)

describing the investment, the trust, and the trust’s relationship

to FFAC.     The PPMs also contained a number of representations

regarding how FFAC would handle and use the money collected from

the investors.       Notably, the PPMs promised that (1) the proceeds

from the sale of the certificates would be used only for the

purposes denoted in the PPM; (2) the trust at all times would have

investments and cash with an aggregate value exceeding the balance

of the certificates; (3) none of the assets in the trust would be

available to FFAC or its subsidiaries without first paying to the

trust the entire carrying value of such assets; and (4) investors

could obtain refunds of their entire investments within ninety days

of their requests.      Each PPM’s “specific use of proceeds” section

indicated that the proceeds from the sale of the certificates would

only be invested in automobile loans and automobile floor planning,

or placed in insurance reserves or cash reserves.2            Finally, the

PPMs advised all potential investors that the investments were

     2
        In his appellate brief, Tucker also notes that “the PPMs
permitted the monies received from investors to be transferred to
FFAC and, in fact such a scenario was expected.”
                                     3
risky and subject to total loss, and that FFAC might be unable to

sell the loans it acquired with the proceeds from the sale of

certificates.

     Tucker described the investments as securities in both the

PPMs and in two Regulation D filings with the United States

Securities   and   Exchange   Commission    (“SEC”).3       Tucker    also

represented to the SEC in the Regulation D filings that the money

raised would not be used for “salaries and fees” or “repayment of

indebtedness.”

     The   Government   presented   as   part   of   its   case   Tucker’s

conversations with various securities brokers in which Tucker

assured them that the proceeds from the certificate sales would be

used only for the purchase of automobile loans and not FFAC’s

business costs.    Tucker allegedly made the same statements to a

member of the FFAC Board of Directors.

     The Government also offered evidence that Tucker prepared

false financial records demonstrating that the funds raised by the

sale of the certificates were invested as represented in the PPMs.

Securities broker Joe Miller testified that his firm continually

requested from Tucker financial statements reflecting the use of

the trust funds.     In response, Tucker, in July of 1997, sent

financial statements to Miller indicating that he had purchased a

large number of automobile loans with the proceeds, and that each

     3
         See 17 C.F.R. §§ 230.501-.508.
                                    4
of the trusts, not FFAC, possessed cash and automobile loans in

excess   of   the    amounts   invested.   Tucker     made   a   similar

representation to Miller’s firm in March of 1998, weeks before the

collapse of FFAC.4

     The Government contended at trial that Tucker did not use the

majority of the money raised from the sale of the certificates to

purchase automobile loans.      Instead, Tucker had used substantial

amounts of the investors’ funds to pay FFAC salaries, rent, legal

fees, and other operating costs such as travel and entertainment

expenses.     Moreover, Tucker, it was maintained, had used the

investors’ funds raised in the third trust to repay investors in

the second trust who had demanded reimbursement; had paid interest

and principal on securities that FFAC had issued in 1995, as well

as debts incurred prior to the creation of the trusts; and had paid

a settlement in a civil lawsuit against him and FFAC with the

proceeds of the certificate sales.

     In April of 1998, the Chief Financial Officer of FFAC reported

to FFAC’s Board of Directors that the corporation was insolvent.

Thereafter, the Board forced Tucker to resign.      A team charged with

reviewing the books and records of the trusts and FFAC concluded

that FFAC was bankrupt and that the trusts held almost no assets of

     4
        Although the Government alleges that Tucker created “bogus
financial statements,” Tucker asserts that his “records disclosed
the expenditure of every dollar, whether raised from the investors
or other sources, and [that] there was no second set of sham
accounting records.” We find it difficult to reconcile these two
conflicting statements.
                                    5
value.   Those investors who had not withdrawn their investment by

April 15, 1998, lost the principal of their investment in addition

to any interest accrued.    The losses incurred by all investors

totaled over $15 million.

     On November 14, 2001, a federal grand jury in the Eastern

District of Texas returned a two-count indictment against Tucker,

charging him with one count of securities fraud and one count of

mail fraud.5

     The first count accused Tucker of the “[u]se of interstate

commerce for [the] purpose of fraud or deceit.”6     The indictment

alleged that Tucker had engaged in all of the activities prohibited

in 15 U.S.C. § 77q(a)(1), (2), and (3).7   The Government averred in

the indictment that Tucker’s “scheme and artifice” to defraud was

evinced in the various statements contained in the PPMs, as set

     5
        15 U.S.C. §§ 77q(a) & 77x (securities fraud); 18 U.S.C. §
1341 (mail fraud).
     6
        Section 77q, entitled “Fraudulent interstate transactions,”
makes it a crime:
     for any person in the offer or sale of any securities .
     . . by the use of any means or instruments of
     transportation or communication in interstate commerce or
     by use of the mails, directly or indirectly
     (1) to employ any device, scheme, or artifice to defraud,
     or
     (2) to obtain money or property by means of any untrue
     statement of a material fact or any omission to state a
     material fact necessary in order to make the statements
     made, in light of the circumstances under which they were
     made, not misleading; or
     (3) to engage in any transaction, practice, or course of
     business which operates or would operate as a fraud or
     deceit upon the purchaser. 15 U.S.C. § 77q(a).
     7
         See id.
                                 6
forth above.8

     Specifically, count one of the indictment included charges

that while making certain promises in the PPMs, Tucker neglected to

disclose to potential investors, inter alia, that: (1) their

investments would not be held in the trusts but rather deposited

directly into FFAC’s operating account; (2) the proceeds would be

used to pay FFAC’s operating costs; (3) previously invested funds

had not been expended as promised; and (4) the “interest” paid to

some investors consisted of the proceeds from certificate sales and

not actual interest earned on investments in automobile loans. The

Government   averred     that   Tucker    sent   the   fraudulent   PPMs   to

potential    investors    via   the   United     States   mail,   commercial

interstate carriers, and interstate facsimile, and that he directed

the investors to mail payments to FFAC’s offices in Plano, Texas.

Finally, the Government listed thirteen individuals whom Tucker had

allegedly swindled, along with the dates of their investments, the

     8
        According to the indictment, Tucker promised in the PPMs
that:
     (1) the investors’ money would be held in the trust, (2)
     the investors’ money would be used to invest in
     automobile loans and not used to pay FFAC’s operating
     costs, (3) the trusts would have investments and cash
     with an aggregate value or “liquidation value” in excess
     of the aggregate balance of the certificates at all
     times, (4) none of the assets of the trusts would be
     available to FFAC or its subsidiaries without first
     paying the trusts the full carrying value of such assets,
     (5) investors could receive their investments back in
     full in less than ninety days after requesting their
     funds, and(6) management of FFAC believed that there were
     no legal proceedings that were likely to have a material
     adverse effect on FFAC.
                                      7
amounts, and their out-of-state addresses.

     The second count of the indictment accused Tucker of mail

fraud.9   This count reiterated the allegations of count one, but

added that Tucker, in effecting his scheme and artifice to defraud,

knowingly and willfully caused investors to place into the United

States mail envelopes addressed to FFAC and containing payment for

the purchase of the trust certificates.       The Government also

duplicated the listing of investors in count one.

                            DISCUSSION

I.   Exclusion of Expert Testimony

     A.    Standard of Review

     Tucker argues on appeal that the district court erred in

     9
       The Mail Fraud statute provides:
     Whoever, having devised or intending to devise any scheme
     or artifice to defraud, or for obtaining money or
     property by means of false or fraudulent pretenses,
     representations, or promises, or to sell, dispose of,
     loan, exchange, alter, give away, distribute, supply, or
     furnish or procure for unlawful use any counterfeit or
     spurious coin, obligation, security, or other article, or
     anything represented to be or intimated or held out to be
     such counterfeit or spurious article, for the purpose of
     executing such scheme or artifice or attempting so to do,
     places in any post office or authorized depository for
     mail matter, any matter or thing whatever to be sent or
     delivered by the Postal Service, or deposits or causes to
     be deposited any matter or thing whatever to be sent or
     delivered by any private or commercial interstate
     carrier, or takes or receives therefrom, any such matter
     or thing, or knowingly causes to be delivered by mail or
     such carrier according to the direction thereon, or at
     the place at which it is directed to be delivered by the
     person to whom it is addressed, any such matter or thing,
     shall be fined under this title or imprisoned not more
     than 20 years, or both. 18 U.S.C. § 1341.
                                8
preventing his securities expert from testifying.             We review the

admission or denial of expert evidence for abuse of discretion.10

“District    courts   enjoy   wide       latitude    in    determining   the

admissibility of expert testimony, and the discretion of the trial

judge and his or her decision will not be disturbed on appeal

unless manifestly erroneous.”11      If it is found that the district

court abused its discretion in denying the admission of expert

evidence, we must then consider whether the error was harmless,

“affirming the judgment unless the ruling affected a substantial

right of the complaining party.”12          In the criminal context, in

assessing whether an error affected a “substantial right” of a

defendant, the necessary inquiry is “whether the trier of fact

would have found the defendant guilty beyond a reasonable doubt

with the additional evidence inserted.”13

     The Supreme Court in Daubert v. Merrell Dow Pharmaceuticals,

Inc.14 laid down the analytical framework for determining whether

     10
        See Moore v. Ashland Chem., Inc., 151 F.3d 269, 274 (5th
Cir.1998) (en banc) (citing General Elec. Co. v. Joiner, 522 U.S.
136 (1997)).
     11
        Watkins v. Telsmith, Inc., 121 F.3d 984, 988 (5th Cir.1997)
(internal quotations and citations omitted).
     12
          United States v. Norris,           217    F.3d   262, 268-69 (5th
Cir.2000) (citations omitted).
     13
        United States v. Roberts, 887 F.2d 534, 536 (5th Cir.1989)
(citing United States v. Lay, 644 F.2d 1087, 1091 (5th Cir. Unit A
1981) and United States v. Lueben, 812 F.2d 179, 187 n.7 (5th
Cir.1987)).
     14
          509 U.S. 579 (1993).
                                     9
expert testimony is admissible under Federal Rule of Evidence 702.15

“Under Daubert, Rule 702 charges trial courts to act as ‘gate-

keepers,’ making a ‘preliminary assessment of whether the reasoning

or methodology underlying the testimony is scientifically valid and

of whether that reasoning or methodology properly can be applied to

the facts in issue.’”16 Accordingly, in order to be admissible,

expert testimony must be both “relevant and reliable.”17        The

Daubert considerations apply to all species of expert testimony,

whether based on “scientific, technical, or other specialized

knowledge.”18

     B.    Analysis

     The district court concluded during trial that Rule 702 barred

all of the testimony of Tucker’s proposed expert, Joel Held.    The

reliability of Held’s testimony does not seem to be in dispute.

     15
        Rule 702 of the Federal Rules of Evidence provides:
     If scientific, technical, or other specialized knowledge
     will assist the trier of fact to understand the evidence
     or to determine a fact in issue, a witness qualified as
     an expert by knowledge, skill, experience, training, or
     education, may testify thereto in the form of an opinion
     or otherwise, if (1) the testimony is based upon
     sufficient facts or data, (2) the testimony is the
     product of reliable principles and methods, and (3) the
     witness has applied the principles and methods reliably
     to the facts of the case. FED. R. EVID. 702.
     16
         Pipitone v. Biomatrix, Inc., 288 F.3d 239, 243-44 (5th
Cir.2002) (quoting Daubert, 509 U.S. at 592-93).
     17
          Id. at 244 (citing Daubert, 509 U.S. at 589).
     18
         FED. R. EVID. 702; see also Pipitone, 288 F.3d at 244
(citing Kumho Tire Co. v. Carmichael, 526 U.S. 137, 147 (1999)).
                                 10
For instance, the district court declared that Held was “qualified

to give opinions on customs and practices that are followed by

competent     practitioners     in    practicing      security    law   and   the

preparation of Private Placement Memoranda and Offerings.”                    The

brunt of the Government’s argument was that Held’s testimony would

not   have    assisted    the   jury.        The   appropriate    inquiry   here,

therefore, is “whether expert testimony proffered in the case is

sufficiently tied to the facts of the case that it will aid the

jury in resolving a factual dispute.”19

             1.      Definition of “invest”

      Held was prepared to elucidate the meaning of “invest in

automobile loans” as that phrase was employed in the “specific use

of proceeds” section of the PPMs.              Specifically, Held would have

refuted      the    Government’s     contention      that   an   investment    in

automobile loans meant only the purchase of the principal amount of

the loans.         Held would have urged instead that an investment in

automobile loans entails not only the purchase of                loans, but also

the operating expenses and costs, such as payment of commissions,

travel and entertainment, finder’s fees, evaluation services, and

attorney’s fees.

      This testimony is relevant to the issue of the definition of

“invest,” as the term was used in the PPMs.                 Thus, the district

court should have allowed Held to provide the jury with the usage

      19
        Daubert, 509 U.S. at 591 (quoting United States v. Downing,
753 F.2d 1224, 1242 (3d Cir.1985)).
                                        11
of the word “invest” within the securities industry.

     We find that the district court’s failure to allow Held to

testify   as   to   an    expanded   definition     of    “invest,”    although

improper, was not “manifestly erroneous.”20              While Held’s broader

definition might have justified some of Tucker’s expenses outside

the purchase of automobile loans, the Government offered evidence

that many of Tucker’s expenditures violated even his liberal

definition.       For    instance,   Tucker,   in   addition   to     using   the

proceeds for the operating costs of FFAC, also dispersed the funds

in payment of principal and interest on loans unrelated to FFAC-

ARC; settlement in a civil lawsuit; and interest and principal to

investors in the previous trusts, perpetuating what is known as a

Ponzi scheme.21

     Tucker’s proposed expert testimony would have been limited to

an understanding of the term “invest in auto loans” that would

include various operating expenses associated with the purchase of

automobile loans. Thus, even though the district court should have

allowed Held to offer a definition that might have justified some

of Tucker’s expenses, Tucker still deceived the investors by

spending the money in other unauthorized ways.             Because the expert

     20
         Watkins v. Telsmith, Inc., 121 F.3d at 984 (internal
quotations and citations omitted).
     21
        The Government also presented evidence that of the proceeds
raised in the third trust, less than one percent was used to
purchase automobile loans. Held was not prepared to testify that
the term “invest” included this kind of minimum purchase of
automobile loans.
                                      12
only addressed a fragment of the misuse of funds, and did not

address substantial areas of Tucker’s other applications of those

funds, any error in excluding Held’s testimony in this regard was

minimal.     Moreover, even if we were to conclude that the district

court     abused    its     discretion,     Tucker     cannot    demonstrate     how

excluding the expert testimony affected a substantial right, that

is, that     Held’s       testimony    regarding      the   meaning   of   the   word

“invest” would have planted a seed of doubt in the jurors’ minds

sufficient to acquit him of fraud.

             2.     Nature of the certificates

     Tucker argues on appeal that Held also sought to testify that

the certificates issued to the investors were not securities as

defined by the Securities Exchange Act of 1934.22                 Under the terms

of the Act, a security does not include “currency or any note,

draft, bill        of   exchange,     or   banker’s    acceptance     which   has a

maturity at the time of issuance of not exceeding nine months . .

. .”23    Held would have opined that since the certificates at issue

here were due immediately, they had a maturity date of less than

nine months and therefore did not qualify as securities.                   Further,

based on his expertise in the field of securities, Held would have

testified that “generally companies take the position that notes

that . . . have nine months or less of maturity and are similar to

     22
           15 U.S.C. § 78a.
     23
           15 U.S.C. § 78c(a)(10).
                                           13
commercial transactions, . . . are generally not secured, not

treated as securities for the purpose of registration with the

SEC.”     Finally, Held would have posited that the certificates were

part of a secured transaction regulated by the Uniform Commercial

Code and not the securities laws.        The basis for this latter

opinion was the filing of a UCC-1 financing statement on behalf of

the three trusts, conferring upon each one an equal security

interest in all of the assets of FFAC.

     Although Tucker raises this point of error on appeal, it is

apparent from the record that he never intended to submit the

information described above to the jury.       Rather, Tucker agreed

throughout the trial that Held’s proffer with regard to the issue

of whether the certificates were securities was helpful only to the

district court’s separate legal determination.24    Thus, it was not

error for the district court to exclude evidence that Tucker never

intended to have the jury consider in the first place.

     Moreover, even allowing that the district court somehow erred,

Tucker has failed to show that Held’s testimony with regard to the

nature of the certificates would have affected the outcome of the

trial.     The fact that the certificates sold to the investors were

redeemable on demand does not automatically remove them from

     24
        At three points during the trial, Tucker asserted that whether
the certificates were securities was a matter of law for the district
court to decide.
                                  14
classification as a security.          In Reves v. Ernst & Young,25 The

Supreme Court determined that a demand note could properly be

considered a “security” regulated by the anti-fraud provisions.

The Reves court rejected the notion that “legal formalisms”26 were

controlling and instead found that all suspect items should be

adjudged by the “family resemblance” approach.27           The Supreme Court

in Reves also found the “fundamental essence of a ‘security’ to be

its character     as   an   ‘investment.’”28   Under     the   circumstances,

notwithstanding    Held’s    opinion   that    certain    qualities   of   the

certificates favored the position that they were not securities, we

agree with the district court’s legal conclusion that the facts

     25
          494 U.S. 56 (1990).
     26
        Id. at 61 (noting that “Congress’ purpose in enacting the
securities laws was to regulate investments, in whatever form they
are made and by whatever name they are called”).
     27
         Pursuant to the “family resemblance” approach, a court
must, after concluding that the disputed      transaction does not
strongly resemble a member of the non-security “family,”
     [f]irst . . . examine the transaction to assess the
     motivations that would prompt a reasonable seller and
     buyer to enter into it . . . Second, [the court must]
     examine the “plan of distribution” of the instrument . .
     . to determine whether it is an instrument in which there
     is “common trading for speculation or investment” . . .
     .    Third, [the court must] examine the reasonable
     expectations of the investing public . . . . Finally,
     [the court must] examine whether some factor such as the
     existence of another regulatory scheme significantly
     reduces the risk of the instrument, thereby rendering
     application of the Securities Acts unnecessary. . . .
Reves, 494 U.S. at 66-67 (citations and internal quotations
omitted); see also Trust Co. of Louisiana v. N.N.P. Inc., 104 F.3d
1478 , 1489 (5th Cir.1997).
     28
          Reves, 494 U.S. at 68-69.
                                     15
overwhelmingly supported a finding that the certificates were

indeed securities.29

     Additionally, the record reveals that Tucker was able to

elicit    the    testimony      regarding    the   UCC-1   financial      statement

through Patti Plunkett, FFAC’s former Chief Financial Officer.

Plunkett testified about the existence of the UCC-1 filing and also

explained that the trustee possessed a first lien position on all

of the assets of FFAC for the benefit of the investors in the three

trusts.     Held’s testimony in this regard, which would have merely

highlighted      these    same     characteristics,        was   cumulative     and

unnecessary.

     In light of these matters, Tucker has not convinced us that

the district court erred.            Certainly, Tucker has not raised a

plausible suspicion that the trier of fact would not have found him

guilty beyond a reasonable doubt “with the additional evidence

inserted.”30

            3.       Tucker’s     belief     as    to   the      nature    of   the

                     certificates

     Much       of    Held’s     proposed     testimony       centered     on   his

“understanding from the facts that Mr. Tucker believed, and relied

upon, advice from counsel and others that the trust certificates

     29
        The district court concluded that a weighing of the four
family-resemblance   factors   “clearly  indicate[d]  that   the
certificates sold by FFAC were securities.”
     30
            United States v. Roberts, 887 F.2d at 536 (citations
omitted).
                                        16
involved were not securities, and therefore not regulated by the

federal securities laws.”31 Tucker’s argument, boiled down, is that

he cannot be charged with a criminal violation of § 77q(a) if he

did not subjectively believe that the certificates were securities.

     We believe that Held’s testimony in this regard was nothing

more than an attempt by Tucker to testify by proxy, that is, to

elicit the aid of a so-called expert to expound on Tucker’s mental

state and thereby avoid taking the witness stand and undergoing

rigorous cross-examination.

     Further, with regard to Tucker’s belief concerning the nature

of the certificates, the Ninth Circuit has explained that:

      the government is required to prove specific intent only
      as it relates to the action constituting the fraudulent,
      misleading or deceitful conduct, but not as to the
      knowledge that the instrument used is a security under
      the Securities Act. The government need only prove that
      the object sold or offered is, in fact, a security; it
      need not be proved that the defendant had specific
      knowledge that the object sold or offered was a
      security.32

Thus, by utilizing this view of specific intent, the Ninth Circuit

reasoned that the Securities Exchange Act’s raison d’etre, to

prevent a seller’s fraudulent behavior, was served rather than

     31
         Also in his written proffer, Held stated that he was
prepared to testify that although he “did not provide Mr. Tucker
with the original advice that the trust certificates were not
securities, the law nonetheless supported the proposition.”
     32
         United States v. Brown, 578 F.2d 1280, 1284 (9th Cir.
1978); see also Buffo v. Graddick, 742 F.2d 592, 597 (11th Cir.
1984); Cook v. State, 824 S.W.2d 634, 637 (Tex. App.– Dallas 1991).
                                17
undermined.33       The focus is then necessarily on whether a defendant

possessed the intent to defraud investors, his belief as to the

nature of the certificates notwithstanding.

      By arguing that the certificates were not securities and

therefore       not    subject     to   the    anti-fraud   provisions    of    the

Securities Exchange Act of 1934, Tucker implicitly urges us to

conclude that he was free to make whatever kind of representation

he wanted to the potential investors, whether misleading or not.

We   flatly     reject      this   reasoning    and   instead   adopt   the    Ninth

Circuit’s view that the defendant’s belief concerning the nature of

the securities is irrelevant. Additionally, we find that Tucker’s

efforts    to      elicit    factual    testimony     through   his   expert   were

impermissible.         Therefore, the district court properly excluded

this portion of Held’s testimony.

              4.      Regulation D evidence

      Finally, in what would have been Tucker’s response to the

Government’s presentation of evidence that Tucker had submitted

various filings with the SEC pursuant to Regulation D, Held sought

to testify that based on his experience, the lead underwriters of

the trusts, and not Tucker, were required to comply with the

regulation. To fall within the safe harbor provision of Regulation

D, and therefore be immune from certain registration requirements

with the Securities and Exchange Commission, there can be no more

      33
           Brown, 578 F.2d at 1284.
                                          18
than thirty-five unaccredited investors in a given endeavor.34               The

regulation helps to ensure that mostly “sophisticated” purchasers

are investing in private placements.

     Tucker does not refute the Government’s contention that he in

fact filed Regulation D exemptions with the SEC.               Rather, Tucker

contends he was not responsible for complying with Regulation D

regarding the permissible number of unaccredited investors.              Thus,

Tucker    argues    that   Held’s   testimony   was    relevant   as    to   the

Regulation D information because Held “would have rebutted the

prosecution’s claim that Mr. Tucker violated Regulation D.”35                The

district    court    excluded   the   evidence    on    Rule    702    grounds,

concluding that Held was improperly attempting to evaluate the

evidence and render his opinion as to what the brokers should have

drawn from it.

     At trial, the Government brought forth Joe Miller, who is the

Chief Financial Officer of United Pacific Securities (“UPS”), one

of the brokers offering the trust certificates.            Miller testified

that UPS could only monitor the number of unaccredited investors by

cooperating with the issuer, since it only had the information of

its own investors.         Miller attested that if there were several

brokers offering the same investment, it would be impossible to

     34
          See 17 C.F.R. § 230.501-.508.
     35
        Obviously, Held’s beliefs were patently unreliable insofar
as he would have opined that sellers in the securities industry
commonly seek Regulation D protection for investments they do not
consider to be securities.    Thus, Held’s speculative testimony
regarding Tucker’s intent was properly excluded.
                                      19
monitor the number of unaccredited investors without the aid of the

issuer, in this case, the trusts.                The Government also offered a

facsimile cover sheet from Tucker to Miller containing notations

from a conversation between the two.                    Apparently, Miller had

telephoned Tucker to inquire whether Tucker was monitoring the

number of unaccredited investors. Miller wrote on the cover sheet:

“Tucker   says   no   problem       with    non-accredited.      Has   monitored

closely.”

      The Government also presented the testimony of Plunkett, who

testified   that      she     tracked      the    number   of   accredited   and

unaccredited investors in each trust and prepared a spreadsheet

containing that information, as well as the investors’ names, the

dates, and amounts of their investments.                Plunkett testified that

she later noticed Tucker’s assistant concealing the accreditation

information when faxing the spreadsheet to the broker dealers.

Plunkett also claimed that Tucker subsequently instructed her to

prepare two spreadsheets, one with the accreditation information

and one without.

      Finally, the Government offered the testimony of Adamont

Georgeson, an attorney who performed legal work for FFAC, regarding

the contents of a letter he prepared and sent to UPS.                  The letter

informed UPS that, based on Georgeson’s discussions with Tucker,

the   investment      would    be    limited       to   accredited   purchasers.

Georgeson also testified that he had discussed the issue of the

Regulation D restrictions with Tucker who “was very clear” that

                                           20
there would be no unaccredited investors in the investments.

     At the presentation of each of these witnesses, Tucker’s trial

counsel objected to the testimony on the grounds that Tucker was

not being charged with a violation of Regulation D.           In response,

the Court agreed to provide a cautionary instruction advising that

jury that it could

     not find the Defendant guilty of any crime charged in the
     indictment solely because he may have violated a
     regulation of the Securities and Exchange Commission.
     However, you may but are not required to consider
     evidence of violations of these regulations as you would
     any other evidence in determining whether the Defendant
     had the motive or required intent to commit the crimes
     charged in the indictment.

     In   response,   Held   proposed   to   testify   that   UPS,   FFAC’s

principal broker, who had the list of investors, was primarily

responsible for monitoring the number of non-accredited investors.

According   to   Held,   upon    reaching    thirty-five      unaccredited

investors, it was incumbent upon UPS, rather than Tucker, not to

add more unaccredited investors so as to remain within the shelter

of Regulation D.

     We find that Held’s testimony was not helpful to the trier of

fact, and therefore was properly excluded by the district court.

First, in the face of direct evidence that Tucker had doctored the

spreadsheets which would have demonstrated whether a particular

investor was accredited or unaccredited, and thereby aided the

brokers in monitoring the investors’ status, it is difficult to

perceive how Held’s “specialized knowledge” of the regulation would

have assisted the jury in any way.       Moreover, the record reveals
                                   21
that    UPS   did   in   fact     attempt     to   monitor   its     Regulation   D

obligations      but     was    thwarted      from   doing    so     by   Tucker’s

misrepresentations and omissions.             Consequently, even accepting as

true Held’s assertion that it was the broker’s responsibility, and

not Tucker’s, to ensure compliance with Regulation D, the facts as

developed during the course of the trial show that, at any rate,

Tucker sabotaged this obligation. Thus, the district court weighed

the value of Held’s testimony, not in a vacuum, but by focusing

upon the particular facts and circumstances of the case, and

determined that the testimony would not aid the jury.36                   We concur

with that conclusion.

II.    Faulty Jury Charge

       Before the jury retired to deliberate, the district court

instructed the jury on the laws that Tucker had been charged with

violating.       With    regard    to   the   securities     fraud    charge,   the

district court explained the elements of the crime.37                 Although the

       36
            See CHARLES ALAN WRIGHT & VICTOR JAMES GOLD, FEDERAL PRACTICE AND
PROCEDURE: EVIDENCE § 6264 at 210 (1997).
       37
          Specifically, the district court explained that the
Government was required to prove beyond a reasonable doubt that:
     (1) the defendant knowingly or willfully (a) employed a
     device, scheme, or artifice to defraud, or; (b) obtained
     money or property by means of an untrue statement of a
     material fact or an omission to state a material fact
     necessary in order to make the statement not misleading,
     in the light of the circumstances under which they were
     made, or; (c) engaged in a transaction, practice, or
     course of business that operated or would operate as a
     fraud or deceit upon the purchaser; (2) that the
     Defendant’s acts or omission were in connection with the
     purchase or sale of securities; (3) that the Defendant
     used, or caused to be used, the United States mail or
                                         22
jury charge        did   not   contain   the    phrase   “intent   to   defraud,”

immediately following the delineation of the elements, the district

court explained that Tucker acted with the requisite “intent to

defraud” if he “acted knowingly and with the specific intent to

deceive, ordinarily for the purpose of causing some financial loss

to another or [to] bring about some financial gain” to himself.

The district court also provided the jury with a definition of the

term        “security”   mirroring   the       definition   contained    in    the

Securities Exchange Act of 1934.38

       Then, turning to the mail fraud charge, the district court

spelled out the essential elements of that crime for the jury.39

       other means of transportation or communication                     in
       intestate commerce in furtherance of the scheme.
       38
          The district court described a security as:
       any note, stock, treasury stock, bond, debenture, evidence of
       indebtedness, certificate of interest or participation in any
       profit-sharing   agreement,   collateral-trust    certificate,
       reorganization certificate or subscription, transferable
       share,   investment   contract,    voting-trust   certificate,
       certificate of deposit for a security, fractional undivided
       interest in oil, gas, or other mineral rights, any put call,
       straddle, option, or privilege on any security, certificate of
       deposit, or group or index of securities (including interest
       therein or based on the value thereof), or any put, call,
       straddle, option, or privilege entered into on a national
       securities exchange relating to foreign currency, or, in
       general, any interest or instrument commonly known as a
       “security,” or any certificate of interest or participation
       in, temporary or interim certificate for, receipt for,
       guarantee of, or warrant or right to subscribe to or purchase,
       any of the foregoing. See 15 U.S.C. § 78c(a)(10).
       39
        The district court explained that in order to find Tucker
guilty of mail fraud, the Government was required to prove beyond
a reasonable doubt:
     (1) that the defendant knowingly created a scheme to
     defraud, that is made false statements or omission of
                                         23
Following the recitation of these elements, the district court

clarified that “‘knowingly,’ as that term has been used from time

to   time   in   these   instructions,      means   that   the    act   was   done

voluntarily      and   intentionally   and    not   because      of   mistake   or

accident.”

      Tucker raises a number of potential shortcomings related to

the jury instructions. First, he complains that the district court

precluded the jury from determining whether the certificates sold

to the investors were securities, a required element of a charge of

securities fraud in violation of § 77q(a).             Next, Tucker alleges

that the district court did not adequately explain the requisite

criminal intent for a § 77q(a) violation.             Finally, Tucker calls

attention to the district court’s failure to include in the jury

charge an instruction on specific unanimity of theory.

      A.    Standard of Review

      Tucker did not raise these objections to the district court’s

instructions at trial.         Pursuant to Federal Rule of Criminal

Procedure 52(b), we “may correct forfeited errors only when the

appellant shows (1) there is an error, (2) that is clear or

      material facts in the offer and sale of securities; (2)
      that the defendant acted with the specific intent to
      defraud; (3) that the defendant mailed something, or
      caused another person to mail something, through the
      United States Postal Service, or through a private or
      commercial interstate carrier, for the purpose of
      carrying our the scheme; and (4) that the scheme to
      defraud employed false material representations.
                                       24
obvious, and (3) that affects his substantial rights.”40            Once the

appellant establishes these factors, “the decision to correct the

forfeited error is within the sound discretion of the court, and

the court will not exercise that discretion unless the error

seriously affects the fairness, integrity, or public reputation of

judicial proceedings.”41

     B.     Analysis

            1.     Failure to submit “security” element to the jury

     Tucker contends on appeal that the district court committed

plain error by removing the issue of whether the certificates were

securities from the jury’s consideration.             As noted above, the

district court, at Tucker’s urging, determined that whether the

certificates were securities was purely a legal question.42            Post-

trial,    the    district   court   issued   a   ruling   finding   that   the

certificates at issue were, as a matter of law, securities.

     Tucker asserts that the district court did not instruct the

jury that in order to convict him of either count charged in the

indictment, it would have to find beyond a reasonable doubt that

the certificates sold to the investors were in fact securities.

     40
        United States v. Waldron, 118 F.3d 369, 371 (5th Cir.1997)
(citing United States v. Blocker, 104 F.3d 720, 735 (5th
Cir.1997)); FED. R. CRIM. P. 52(b).
     41
          Waldron, 118 F.3d at 371 (citing Blocker, 104 F.3d at 735).
     42
        It is rather disingenuous for Tucker to argue now that the
matter of whether the certificates were securities should have been
submitted to the jury when throughout the trial he argued that it
was a matter of law to be decided solely by the district court.
                                      25
Yet a reading of the jury charge reveals that the district court

did submit this element to the jury.     The district court explained

to the jury that the second element, which the Government was

burdened with proving beyond a reasonable doubt, required a showing

“that the Defendant’s acts or omissions were in connection with the

purchase or sale of securities.”       As already noted, the district

court then provided the jury with the definition of a security.    We

disagree with Tucker that the district court’s definition of

“security” was “cursory” and “superfluous.”      Rather, the district

court furnished the definition of “security” as contained in the

Securities Exchange Act of 1934.       Most importantly, the district

court at no time informed the jury that it was not to consider

whether this element of the crime had been satisfied.

     In refutation of the Government’s claim that the security

issue was actually delivered to the jury for consideration, Tucker

points to the district court’s post-trial order finding that the

certificates were indeed securities.        But the district court’s

later determination does not change the fact that three months

prior, the “security” element appeared in the jury charge, and the

jury made a finding that the certificates were securities in

arriving at its decision to convict on this charge.      As such, the

district did not act improperly since it did not preclude the jury

from making that determination.

          2.   Failure to submit proper charge on § 77q(a) intent

               element
                                  26
     The Government indicted Tucker for violating § 77q(a), which

prohibits the fraudulent offer or sale of securities in interstate

commerce.43   In criminal prosecutions, violations of § 77q(a) are

charged simultaneously with § 77x which contains the applicable

mens rea.44     Accordingly, § 77x provides that only “willful”

violations of § 77q(a) trigger criminal liability.45

     Tucker complains that with regard to the § 77q(a) violation,

the district court failed to instruct the jury that in order to

convict, it needed to find that he acted with the specific intent

to defraud.    According to Tucker, the root of the problem is the

district court’s direction that the jury could convict upon finding

that Tucker acted knowingly or willfully.     To be sure, the federal

pattern jury charge for this crime employs the phrase “knowingly

and deliberately.”46 Further, Tucker argues that since the district

court did include the phrase “intent to defraud” in the elements of

     43
          15 U.S.C. § 77q(a).
     44
          Id. §§ 77q(a) & 77x.
     45
       Section 77x provides that:
     Any person who willfully violates any of the provisions
     of this subchapter, or the rules and regulations
     promulgated by the Commission under authority thereof, or
     any person who willfully, in a registration statement
     filed under this subchapter, makes any untrue statement
     of a material fact or omits to state any material fact
     required to be stated therein or necessary to make the
     statements therein not misleading, shall upon conviction
     be fined not more than $10,000 or imprisoned not more
     than five years, or both. 15 U.S.C. § 77x.
     46
          2B FED. JURY PRAC. & INSTR. § 62.03 (5th ed.).

                                   27
mail fraud, there exists a real possibility that the jury believed

the definition provided for that phrase related only to the mail

fraud count.         Thus, Tucker believes that the jury might have

convicted him on a finding of lesser intent than that which is

required by § 77x.         Finally, Tucker faults the district court for

failing to define the term “willfully” in the charge.              All of these

arguments fail.

      With regard to district court’s substitution of “or” for “and”

in the phrase “knowingly or willfully” in the jury instructions, we

find that this typographical mistake constitutes an obvious error.

However, the district court’s placement of the definition of

“intent to defraud” immediately following the elements of the first

count      effaced   any   confusion   the   jury   might   have   encountered

concerning the requisite mens rea. In addition, even assuming that

the jury convicted Tucker on the “lesser” criminal intent of

“knowingly,” the definition of that term provided to the jury in

the   mail    fraud    count   –   voluntarily   and   intentionally     –   was

sufficiently like “willfully” to remove any doubt regarding the

applicable mental state.

      Tucker’s second complaint that the district court failed to

add “intent to defraud” into the elements of a § 77q(a) violation

is equally unavailing.         The district court’s instructions mimicked

the federal pattern jury charge, which makes no mention of “intent

to defraud.”47       Thus, the failure to include that phrase within the

      47
            2B FED. JURY PRAC. & INSTR. § 62.03.
                                       28
essential elements of a § 77q(a) violation cannot constitute

reversible error.

       Finally, Tucker does not point to any case requiring the trial

court to define within the jury charge “willfully,” as that term is

referred to in § 77x.

       The Government points out that the evidence presented in the

case clearly bespoke of willful, fraudulent behavior on the part of

Tucker.       The Government produced evidence that Tucker purposefully

deceived the brokers, investors, regulators, and FFAC’s Board of

Directors. The Government also offered proof that Tucker concealed

financial information, falsified financial summaries, drafted the

PPMs, and controlled and directed the transfer of all of the

investors’ money.        Tucker did not rebut this evidence with his own

fact witnesses.

       All of these factors, taken together, indicate that although

the instructions concerning the requisite intent in the first count

were    not    “faultless,”   they   nonetheless      provided   the    jury   an

adequate understanding of the intent element.48                 Certainly, the

forfeited       errors   alleged   by   Tucker   do    not   leave     us   “with

substantial and ineradicable doubt whether the jury has been

properly guided in its deliberations.”49

               3.   Failure to charge jury on specific unanimity of

       48
         Pierce v. Ramsey Winch Co.,               753   F.2d    416, 425 (5th
Cir.1985) (citations omitted).
       49
            Id.
                                        29
                   theory

     Tucker asserts that the district court further erred by not

including a specific unanimity-of-theory instruction in the jury

charge.    Each count of the indictment identified thirty mailings,

each one creating a separate act of securities and mail fraud.50

Thus, Tucker argues that in the absence of a specific unanimity

instruction, the jurors might have convicted him despite internal

disagreement about which mailing or mailings he initiated.

     Tucker points to two Fifth Circuit decisions which he urges

are controlling.       In the first, United States v. Gibson, we

considered a defendant’s timely objection to “a court instruction

that may have judicially sanctioned a non-unanimous verdict.”51          We

found such an instruction to be reversible error.                Presently,

Tucker’s reliance on Gibson is unfounded since he has not alleged

that the district court affirmatively instructed the jury to

disregard unanimity while deliberating.

     In the second, United States v. Holley,52 a jury convicted the

defendant of two counts of perjury.         Each count alleged that the

defendant    had    made    multiple   statements,   any   one   of   which

established criminal liability. Before submitting the instructions

     50
        Sanders v. United States, 415 F.2d 621, 626 (5th Cir.1969)
(reiterating that “[i]t is settled that each separate use of the
mails in the execution of a scheme to defraud constitutes a
separate offense”)(citations omitted)).
     51
          553 F.2d 453, 457 (5th Cir. 1977).
     52
          942 F.2d 916 (5th Cir.1991).
                                       30
to the jury, the defendant in Holley “specifically objected to the

charge because it contained no . . .    requirement . . . that all of

the jurors concur in the knowing falsity of at least one particular

statement.”53    Finding   the   indictment   to    be   duplicitous,   we

concluded that there was a “reasonable possibility that the jury

was not unanimous with respect to at least one statement in each

count” and ordered a new trial.54      Significantly, in Holley, the

defendant lodged explicit objections to the charge; here, Tucker

complains after having forfeited any potential errors in his

charge, with his only relief residing in his ability to convince us

that one or more of the errors he cites were clear and affected his

substantial rights.

     The guiding principle here should be our pronouncement in

Gibson that “absent competent evidence to the contrary, a court has

no reason to assume that an inconsistent or compromise verdict is

not unanimous, and therefore has no justification for inquiring

into the logic behind the jury's verdict.”55       Moreover, we affirmed

in Holley that a specific unanimity-of-theory charge was required

under those circumstances where “there exists a genuine risk that

the jury is confused or that a conviction may occur as the result

of different jurors concluding that a defendant committed different

     53
          Id. at 929.
     54
          Id.
     55
          Gibson, 553 F.2d at 457 (citations omitted).
                                  31
acts.”56

     Other than his bare assertion that the error “was plain and

substantially prejudiced [him],” Tucker does not corroborate his

claim of prejudicial error with a modicum of evidence tending to

show that     the   jury   was   confused   or    possessed   any   difficulty

reaching a unanimous verdict.57       Thus, even if we were to conclude

that the district court’s failure to include an instruction on

specific unanimity of theory established clear error so as to have

affected his substantial rights, Tucker cannot convince us that our

failure to correct the error will “seriously affect[] the fairness,

integrity, or public reputation of judicial proceedings.”58

III. Double Jeopardy

     As a final point of error, Tucker maintains that the district

court’s imposition of consecutive sentences caused him to be

punished twice for the same offense in violation of the Fifth

Amendment    protection    against   double      jeopardy.    Multiplicitous

indictments, or indictments that charge a single offense in several

counts, raise this concern.59         “A defendant must challenge the

multiplicity of an indictment before trial or forfeit the issue. .

     56
        Holley 942 F.2d at 926 (citations and internal quotations
omitted).
     57
        The Government directs our attention to the fact that the
jury took only thirty-six minutes to deliberate before finding
Tucker guilty.
     58
        United States v. Waldron, 118 F.3d at 371 (citing Blocker,
104 F.3d at 735).
     59
           United States v. Reedy, 304 F.3d 358, 363 (5th Cir.2002).
                                      32
. .        He may, however, raise claims about the multiplicity of

sentences for the first time on appeal.”60                We have consistently

held that “[t]he test for determining whether the same act or

transaction      constitutes     two    offenses   or    only    one   is   whether

conviction under each statutory provision requires proof of an

additional fact which the other does not.”61

      In     United   States    v.     Bruce,   this     Court   considered     the

similarities between the crimes of mail fraud and securities fraud

and concluded that “there is one element in 77q(a) which is not

present in § 1341 – the offer or sale of a security.”62 Tucker

argues that by contrast, the district court deleted this sole

distinction by instructing the jury that, with regard to the count

of mail fraud, it could convict Tucker upon a finding that he

“knowingly      created   a    scheme    to   defraud,    that   is    made   false

statements or omissions of material facts in the offer and sale of

securities.”      Tucker avers that the district court’s inclusion in

the mail-fraud charge of the one distinguishing element between the

two crimes rendered them one and the same.

      60
        Id. at 364 (citing United States v. Soape, 169 F.3d 257,
265-66 (5th Cir.1999) and United States v. Cooper, 966 F.2d 936,
940 (5th Cir.1992)).       Although Tucker mainly contests the
multiplicitous nature of the jury charge and subsequent sentencing,
he also points out the similarities between the counts charged in
the indictment. Tucker has clearly forfeited any consideration of
the latter.
      61
            Reedy, 304 F.3d at 363. (citations omitted).
      62
            United States v. Bruce, 488 F.2d 1224, 1230 (5th Cir.1973).
                                         33
     We agree with the Government’s supposition that the district

court     was   merely   copying   the   Fifth   Circuit   pattern   jury

instructions when it described the scheme or artifice to defraud.

Indeed, the first essential element for the crime of mail fraud in

the pattern jury charge is as follows: “First: That the defendant

knowingly created a scheme to defraud, that is _______ [describe

scheme from the indictment] . . . .”63      Moreover, the pattern jury

instructions provide:

     It is not necessary that the government prove all of the
     details alleged in the indictment concerning the precise
     nature and purpose of the scheme, or that the mailed
     material was itself false or fraudulent, or that the
     alleged scheme actually succeeded in defrauding anyone,
     or that the use of the mail was intended as the specific
     or exclusive means of accomplishing the alleged fraud.64

Although the district court did not include this instruction in its

jury charge, the comment nonetheless evinces the drafters’ intent

to clarify the scheme underlying the allegation of mail fraud,

rather than an intent to add an additional element to the crime.

As such, the description of the scheme need not be proved to

establish Tucker’s guilt for the crime of mail fraud, and the

sentences imposed were not multiplicitous.

                               CONCLUSION

     The district court erred in not allowing Tucker’s expert

witness to endorse an expanded interpretation of the term “invest,”

and thereby refute the Government’s more restrictive meaning.         But

     63
          PATTERN CRIM. JURY INSTR. Fifth Circuit. § 2.59.
     64
          Id.
                                    34
because Held’s explanation would have accounted for only a small

portion of the widespread misuse of the proceeds, the district

court’s error does not constitute grounds for reversal.

     We reject Tucker’s argument that the district court improperly

excluded evidence pertaining to the nature of the certificates,

having found that it was never Tucker’s aim to submit this issue to

the jury.

     Similarly, we find that the district court properly excluded

Held’s testimony as to Tucker’s belief about the nature of the

certificates.

     The district court did not abuse its discretion by excluding

Held’s expert opinion that it was incumbent upon the underwriters

and not Tucker to comply with Regulation D since this information

would not have assisted the jury.

     Turning to the jury charge, we conclude that the district

court did   submit   the   issue   of    whether   the   certificates   were

securities to the jury and therefore did not err by withholding

this element.   Moreover, Tucker cannot demonstrate that either the

district court’s jury instruction with respect to the intent

element of a § 77q(a) violation, or its failure to instruct the

jury on specific unanimity of theory, amounted to clear error

sufficient to reverse the conviction.

     Finally, Tucker failed to substantiate his claim that the

sentences imposed were multiplicitous in violation of the Fifth

Amendment protection against double jeopardy.

                                    35
AFFIRMED.

            36