Court Opinion

ID: 2967204
Source: CourtListenerOpinion
Date Created: 2015-09-22 02:08:31.617816+00
Date Added: 2024-06-11T11:43:12.686136
License: Public Domain

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

UNITED STATES OF AMERICA,
Plaintiff-Appellee,

v.
                                                                     No. 98-4613
BROTHERS CONSTRUCTION COMPANY OF
OHIO, INCORPORATED,
Defendant-Appellant.

UNITED STATES OF AMERICA,
Plaintiff-Appellee,

v.                                                                   No. 98-4694

TRI-STATE ASPHALT CORPORATION,
Defendant-Appellant.

Appeals from the United States District Court
for the Northern District of West Virginia, at Wheeling.
Frederick P. Stamp Jr., Chief District Judge.
(CR-97-47)

Argued: March 2, 2000

Decided: July 6, 2000

Before WIDENER, NIEMEYER, and TRAXLER, Circuit Judges.

_________________________________________________________________

Affirmed by published opinion. Judge Traxler wrote the opinion, in
which Judge Widener and Judge Niemeyer joined.

_________________________________________________________________
COUNSEL

ARGUED: Elgine Heceta McArdle, THE OFFICE OF MUSSER &
MCARDLE, Wheeling, West Virginia, for Appellant Brothers Con-
struction; Stephen Godfrey Jory, JORY & SMITH, Elkins, West Vir-
ginia, for Appellant Tri-State Asphalt. Michael D. Stein, Assistant
United States Attorney, Wheeling, West Virginia, for Appellee. ON
BRIEF: David E. Godwin, United States Attorney, Rita R. Valdrini,
Assistant United States Attorney, Wheeling, West Virginia, for
Appellee.

_________________________________________________________________

OPINION

TRAXLER, Circuit Judge:

Brothers Construction Company of Ohio, Incorporated ("Brothers")
and Tri-State Asphalt Corporation ("Tri-State") were charged in a
four-count indictment arising from their involvement in a federally
funded highway construction project. Following an eleven-day trial,
Brothers and Tri-State were convicted of conspiracy to defraud the
United States, see 18 U.S.C.A. § 371 (West 2000); two counts of wire
fraud, see 18 U.S.C.A. § 1343 (West 2000); and making a false state-
ment, see 18 U.S.C.A. § 1001 (West 2000). Brothers and Tri-State
challenge their convictions and sentences on multiple grounds. We
affirm.

I.

In 1994, the West Virginia Department of Transportation, Division
of Highways ("WVDOH"), solicited bids for a highway construction
project ("the Elm Grove project") that involved approximately $5.2
million in federal and state funds. Federal regulations require contrac-
tors on highway construction projects receiving federal assistance to
comply with state programs fostering the development of "disadvan-
taged business enterprises" ("DBEs"). See 49 C.F.R. § 26.13 (1999).
Contractors are also required to comply with federal regulations that
apply to DBE participation on such a project. A DBE is defined as
"a for-profit small business concern -- (1) That is at least 51 percent

                    2
owned by one or more individuals who are both socially and econom-
ically disadvantaged . . . and (2) Whose management and daily busi-
ness operations are controlled by one or more of the socially and
economically disadvantaged individuals who own it." 49 C.F.R.
§ 26.5. African-Americans and women qualify as"socially and eco-
nomically disadvantaged individuals." 49 C.F.R.§ 26.5.

If an entity is awarded a subcontract as a DBE, it must perform its
own work under its own supervision in order for its services to be
counted toward the DBE goal. See 49 C.F.R.§ 26.55. In order to pre-
clude the superficial inclusion of a DBE merely"to obtain the appear-
ance of DBE participation," 49 C.F.R. § 26.55(c)(2), funds paid to a
DBE contractor count toward the DBE goal "only if the DBE is per-
forming a commercially useful function," 49 C.F.R. § 26.55(c). The
regulations elaborate on this requirement as follows:

          A DBE performs a commercially useful function when it is
          responsible for execution of the work of the contract and is
          carrying out its responsibilities by actually performing, man-
          aging, and supervising the work involved. To perform a
          commercially useful function, the DBE must also be respon-
          sible, with respect to materials and supplies used on the con-
          tract, for . . . ordering the material . . . and paying for the
          material itself.

49 C.F.R. § 26.55(c)(1). Additionally, the cost of equipment leased by
the DBE to perform its work may be counted toward the DBE goal.
See 49 C.F.R. § 26.55(a)(1).

WVDOH's bid solicitation for the Elm Grove project included a
DBE goal of eight percent for the prime contract. Thus, companies
bidding on the prime contract were required to subcontract eight per-
cent of the project funds to certified DBEs. Tri-State was awarded the
prime contract for the Elm Grove project. In submitting its bid, Tri-
State represented to WVDOH that it would meet the DBE require-
ment, and Tri-State was required to name its DBE subcontractors
within twenty days of the award of the prime contract.

Tri-State decided to satisfy part of the DBE requirement by sub-
contracting the highway underdrain work to a DBE because Tri-State,

                    3
essentially an asphalt paving company, generally did not perform
underdrain work. The most competitive bid on the underdrain subcon-
tract, however, was submitted by Bunn Construction ("Bunn"), a non-
DBE. Initially, Tri-State told Bunn that the underdrain subcontract
would be awarded to a DBE to satisfy the DBE goal for the Elm
Grove project. Bunn persisted, however, offering to locate a DBE
subcontractor who would split the underdrain work with Bunn at
Bunn's original bid price. Although Tri-State did not normally split
the underdrain subcontract between two companies, Tri-State agreed
to Bunn's proposal based on Bunn's representation that it would work
out the details regarding which portion of the underdrain subcontract
the DBE would perform and which portion Bunn would perform and
Bunn's representation that it would "coordinate" the work. J.A. 490-
91.

Eventually, Charlie Striblin and Chuck Taylor, both of whom were
employed by Bunn, contacted Brenda Ware ("Ware"), president of
Brothers (a certified DBE), and suggested that Brothers could involve
itself in the underdrain work by essentially lending its name to the
Elm Grove Project. Striblin explained that he could oversee the proj-
ect and that Ware could put Bunn employees on Brothers' payroll.
Bunn's president, Kermit Bunn, testified that he learned Ware did not
want to participate in the Elm Grove project unless she could make
$10,000. According to Bunn employee William George, Ware and
Kermit Bunn orally agreed in May 1994 that Brothers would "partici-
pate" as a DBE in the Elm Grove project in exchange for $10,000.
J.A. 300-01. George, who prepared invoices and related documents
for Bunn, testified that Bunn was to invoice Brothers for the work
Bunn performed and that Brothers, in turn, was to pay each invoice
with the progress payments it received from Tri-State. The invoices
were to be adjusted so that Brothers would eventually net $10,000.

WVDOH held a pre-construction conference to discuss the Elm
Grove project with Tri-State and its subcontractors. Brothers did not
send a representative to the meeting. Instead, Kermit Bunn explained
the work that Brothers was to perform.

Shortly before the project was to begin, Tri-State notified Kermit
Bunn that Bunn Construction was officially a subcontractor on the
Elm Grove project, but that Tri-State needed Bunn to explain how the

                    4
underdrain work was to be split between Bunn and the DBE. Based
on information supplied by Kermit Bunn, Tri-State drafted subcon-
tracts obligating Bunn and Brothers to do different portions of the
underdrain work. The proposed subcontract between Tri-State and
Brothers provided that Brothers would be paid $185,835.20 for its
portion of the drainage work. Bunn was to receive $180,944.80 for its
portion of the work. After the drainage work was complete, however,
the total amount to be paid by WVDOH to Tri-State for the under-
drain was reduced by $33,985.80 because the project required fewer
linear feet of underdrain than anticipated. In turn, Tri-State was
required to pay Brothers $169,487.60 for the work that Brothers was
supposed to perform on the Elm Grove project.

Bunn executed the subcontract immediately. Brothers, however,
did not sign the agreement, thus delaying the start of construction. At
Tri-State's insistence, Bunn attempted to have Ware sign the subcon-
tract so the project could begin; however, construction began on June
13 without a signed subcontract from Brothers.

After the project began, Ware confirmed to Bunn's project man-
ager, Jimmy Collett, that Brothers was being paid to execute the sub-
contract and lend its name to the project. Brothers' responsibility
consisted of creating the payroll for submission to WVDOH and pay-
ing the invoices for the materials required for the construction of the
underdrain. No Brothers employees appeared on the worksite.
Instead, Bunn supplied the workforce that performed Brothers' por-
tion of the underdrain work, as well as its own. Over the course of
the Elm Grove project, Collett, Bunn's project manager, acted as
Brothers' project "superintendent." J.A. 278. Collett ordered all of the
construction materials in Brothers' name and arranged for the deliv-
ery of the materials to Bunn's construction office. In fact, Bunn paid
for several items directly. He ensured the proper equipment, all of
which belonged to Bunn, was available at the job site. And, Collett
prepared Brothers' payroll for Ware's signature even though the pay-
roll listed Bunn employees.

On June 18, after the project had been underway for one week,
Ware notified Collett that Brothers did not have sufficient funds to
make the first payroll. Kermit Bunn directed Collett to have funds
transferred from Bunn's account to Brothers' account so that Brothers

                    5
could meet the payroll. Two days later, however, Ware informed Col-
lett that she would not meet the payroll because she had not been paid
the money promised to her, and Ware threatened to shut down the
underdrain work. Bunn Construction was forced to pay the workers
directly. While the underdrain work was being performed, Brothers
did not submit certified payrolls to Tri-State detailing the work that
its employees were ostensibly performing on the project.

On June 30, after approximately half of the underdrain work had
been completed, Brothers and Bunn entered into a sub-subcontract for
the underdrain work. This agreement called for Brothers to subcon-
tract to Bunn the same work that Brothers was supposed to do for Tri-
State, i.e., Brothers' part of the underdrain work. Specifically, Bunn
was to complete 97,808 linear feet of underdrain and Brothers, in
return, would make ten cents per linear foot, which totaled $9,780.
Neither Brothers nor Bunn informed WVDOH about the sub-
subcontract. Tri-State, the prime contractor, was not immediately
notified of this arrangement. According to Dale Russell, Tri-State's
superintendent for the Elm Grove project, Tri-State was unconcerned
with who performed the subcontract work as long as the work was
completed; Tri-State made no effort to ensure that the DBE require-
ments were met during construction.

The underdrain work was completed on July 13. An inspector for
WVDOH made a routine visit to the job site to determine if DBE
requirements were being met. Essentially, the inspector was merely
attempting to verify that Brothers had in fact done its own work. The
inspector became concerned when he failed to observe any Brothers
employees and was informed by Bunn's foreman that Bunn was rep-
resenting Brothers. Moreover, Striblin, a Bunn employee, held him-
self out to the inspector as a Brothers employee and appeared to be
working in a supervisory capacity. The inspector searched the Elm
Grove project field office to examine Brothers' payrolls, but could
find none. Only Bunn had submitted certified payrolls relating to the
underdrain work. Moreover, the WVDOH inspector concluded that
the materials invoices had been signed by Bunn employees.

WVDOH contacted Ware and requested that she provide various
documents demonstrating that Brothers had actually performed the
work and furnished its own equipment, including equipment lease

                    6
agreements relating to the Elm Grove project and a list of employees.
When Brothers failed to respond, WVDOH de-certified Brothers as
a DBE but allowed Brothers the chance for reinstatement if it could
produce evidence demonstrating that it had done the work using its
own employees and equipment. WVDOH also notified Tri-State that
because Bunn had apparently performed Brothers' work on the proj-
ect, Tri-State would fall short of its DBE goal and would be penalized
unless it could demonstrate that the DBE requirements had been met.
Tri-State's in-house counsel, Robert Samol, ordered that further pay-
ments to Bunn and Brothers be withheld, and directed Charles Taylor,
Tri-State's estimator for the Elm Grove project, to investigate the
matter. Taylor requested that Kermit Bunn provide a written response
"clarifying this situation," J.A. 1096, which Taylor would then pass
along to WVDOH.

On August 3, Brothers faxed Tri-State copies of the signature
pages of what purported to be Brothers' certified payrolls for the Elm
Grove project, accompanied by a transmittal page that was addressed
to the EEO Division of WVDOH. The signature pages had been
signed by Ware, but no Brothers employees were listed on the pay-
rolls. J.A. 1249-57; 836. Ware testified that the fax was inadvertently
sent to Tri-State. Whatever the case, on August 11, Ware sent a fax
to the WVDOH EEO Division claiming that "Brothers Construction
Company of Columbus, Inc., did perform [its] work on the above ref-
erenced project, as a subcontractor" and promising to supply "certi-
fied payrolls, [and an] equipment lease/rental agreement and
manpower utilization report." J.A. 1114.

On August 16, Ware faxed what purported to be Brothers' certified
payrolls to the WVDOH EEO Division. The workers listed on these
payrolls were identical to the workers listed on Bunn's payrolls for
the same period, except that Brothers had added two individuals.
These documents were faxed to Tri-State before they were faxed to
WVDOH. Brothers also faxed to WVDOH a document purporting to
be an agreement signed by Brothers and Bunn under which Brothers
leased construction equipment from Bunn. The lease agreement,
which Ware drafted, was dated May 15, 1994. However, on August
15 -- the day before Brothers faxed this document to WVDOH --
Brothers faxed an unsigned draft of the document to Tri-State, and
then moments later faxed to Bunn a copy that had been signed by

                    7
Ware on behalf of Brothers. Bunn signed it and faxed it back to
Brothers the same day.

On August 22, Tri-State finally responded to WVDOH's letter
warning that Tri-State faced possible penalties for failing to meet its
DBE goal. Answering on behalf of Tri-State, Samol took the position
that Brothers properly performed its work and that"[a]s far as we are
concerned, we have met all of the DBE requirements necessary for
this project." J.A. 1135. The Government introduced grand jury testi-
mony from Samol that prior to sending Tri-State's response to
WVDOH, he learned from Tri-State's supervisor that Brothers never
supplied its own independent workforce for the Elm Grove project.

Brothers, Tri-State and Ware were subsequently convicted of con-
spiracy to commit wire fraud against the United States and to make
false statements in a matter within the jurisdiction of the United States
Department of Transportation, see 18 U.S.C.A. § 371; wire fraud
based on the August 3 exchange of faxes involving the false payroll
certifications that were later submitted to WVDOH, see 18 U.S.C.A.
§ 1343; wire fraud based on the August 15 exchange of faxes to
create the purported equipment lease agreement and the August 16
submission of these documents to WVDOH by facsimile, see 18
U.S.C.A. § 1343; and making a false statement in a matter within the
jurisdiction of a United States agency based on the August 22 submis-
sion of Tri-State's letter to WVDOH representing that Brothers had
done all of the underdrain work that it was required to do, see 18
U.S.C.A § 1001. Tri-State was sentenced to pay a fine of $500,000.
The district court imposed no fine against Brothers because of the
company's insolvency.1

II.

Tri-State and Brothers both assert that the district court improperly
allowed the grand jury testimony of Robert Samol, who served as an
officer and in-house counsel for Tri-State during the Elm Grove proj-
ect, to be read to the jury at trial.
_________________________________________________________________
1 Ware was sentenced after the corporate defendants. She filed an
appeal that is proceeding separately.

                     8
Samol's written response to WVDOH's August 1 letter indicating
that Tri-State would face penalties for falling short of its DBE goal
provided the basis for convicting both Tri-State and Brothers for mak-
ing a false statement in violation of 18 U.S.C.A.§ 1001. In an August
22 letter to Jesse Haynes, Director of the EEO Division for the West
Virginia Department of Transportation, Samol wrote on behalf of Tri-
State:

          I spoke to the Project Superintendent who advised me that
          both Brothers Construction and Bunn Construction were
          performing work on [the underdrain]. This work was com-
          pleted on July 13, 1994. He saw the same employees per-
          form the installation of the outlet pipe and head walls
          throughout the whole project. The same employees per-
          formed the trenching throughout the project. It was his
          understanding that Brothers Construction performed the por-
          tion of the Subcontract that it was required to perform and
          that Bunn Construction performed that portion of the project
          that it was required to perform pursuant to their subcon-
          tracts.

          As far as we are concerned, we have met all of the DBE
          requirements necessary for this project.

J.A. 1134-35. Based on this letter, Count 4 of the Indictment charged
Tri-State with knowingly and willfully making a false representation
that Brothers performed the work it was required to perform on the
Elm Grove project and concealing the fact that Brothers had sub-
subcontracted to a non-DBE all of the work that it was supposed to
perform. Brothers was charged with aiding and abetting the violation
of section 1001.

The Government called Samol as a witness at trial, but he invoked
his rights under the Fifth Amendment and refused to testify. There-
fore, to demonstrate that Tri-State knew this letter contained false rep-
resentations, the Government proffered Samol's grand jury testimony
that, prior to sending the August 22 letter, Samol knew that "the same
employees performed the work throughout the whole project," J.A.
443, and that "there was no distinction between Brothers and Bunn
employees." J.A. 437. The district court admitted the grand jury testi-

                     9
mony under the residual hearsay exception contained in Rule
804(b)(5) of the Federal Rules of Evidence.2

The Confrontation Clause of the Sixth Amendment does not bar the
use of hearsay statements against a criminal defendant. See Maryland
v. Craig, 497 U.S. 836, 847-48 (1990) (explaining that the Confronta-
tion clause "permits, where necessary, the admission of certain hear-
say statements against a defendant despite the defendant's inability to
confront the declarant at trial"); see also White v. Illinois, 502 U.S.
346, 353-54 (1992) (observing that "hearsay rules and the Confronta-
tion Clause are generally designed to protect similar values and stem
from the same roots" (citation and internal quotation marks omitted)).
When the hearsay at issue consists of statements made during prior
judicial proceedings, the Confrontation Clause requires that the Gov-
ernment "produce, or demonstrate the unavailability of, the declarant
whose statement it wishes to use against the defendant." Ohio v. Rob-
erts, 448 U.S. 56, 65 (1980); see White, 502 U.S. at 354. Additionally,
the Government must show that the prior testimony it proposes to use
"bears `indicia of reliability' sufficient to enable the factfinder to
evaluate the truth of the hearsay." United States v. McHan, 101 F.3d
1027, 1037 (4th Cir. 1996); see Roberts, 448 U.S. at 65-66. If the
statement "falls within a firmly rooted hearsay exception," then "no
independent inquiry into reliability is required." Bourjaily v. United
States, 483 U.S. 171, 183 (1987) (internal quotation marks omitted).
However, statements admitted under Rule 804(b)(5), the residual
exception to the hearsay rule, will be deemed sufficiently reliable
only if the Government makes a "`particularized' showing of trust-
worthiness." McHan, 101 F.3d at 1037. 3 We review a district court's
factual finding regarding the reliability of the prior statement or testi-
mony for clear error. See McHan, 101 F.3d at 1038.
_________________________________________________________________
2 Shortly after the conclusion of the trial, Rule 804(b)(5) was consoli-
dated with the other residual hearsay exception, Rule 803(24), in Federal
Rule of Evidence 807. The text was not altered in any material way
because "[n]o change in meaning [wa]s intended." Fed. R. Evid. 807
advisory committee's note.
3 The relevant portion of Rule 804(b)(5), now Rule 807, provides for
the admission into evidence of a "statement not specifically covered by
[another Rule] but having equivalent circumstantial guarantees of trust-
worthiness."

                   10
Tri-State and Brothers do not quarrel with the district court's deter-
mination that Samol was unavailable because he invoked the Fifth
Amendment. The district court also concluded that Samol's grand
jury testimony was sufficiently reliable:

          [T]estimony in a grand jury proceeding [is] given in a sol-
          emn setting of the grand jury under oath and which carries
          with it the possibility of a perjury charge if the witness
          knowingly testifies falsely. And in here, the testimony was
          recorded verbatim, minimizing the risk of error or intimida-
          tion by the United States. The grand jury was allowed to
          question Mr. Samol to explore his testimony and credibility.
          . . . I have never seen . . . the grand jurors ask[] so many
          questions of a witness, some of them were pretty good ques-
          tions, too, and, furthermore, Mr. Samol voluntarily went to
          the grand jury and agreed to be truthful and waived his Fifth
          Amendment privilege.

          Consequently, I will find that there is an indicia of trust-
          worthiness.

Tr. 1149-50. Tri-State and Brothers take issue with the district court's
finding that Samol's grand jury testimony was reliable.

In McHan, we observed that "[t]he nature of grand jury testimony
. . . provides some indicia of trustworthiness" because it "is given in
the solemn setting of the grand jury, under oath and the danger of per-
jury, and in the presence of jurors who are free to question witnesses
and assess their credibility and a court reporter who prepares an offi-
cial transcript of the testimony." 101 F.3d at 1038. Although these
general observations apply, they do not necessarily render Samol's
grand jury testimony admissible. McHan, in fact, rejected the idea
that grand jury testimony is sufficiently reliable per se and cautioned
that we are required to consider "the totality of the circumstances" for
"particularized guarantees of trustworthiness." Id. (internal quotation
marks omitted).

Brothers and Tri-State contend that Samol's grand jury testimony
was particularly suspect because, following Samol's appearance
before the grand jury, the Government began an investigation to

                     11
determine whether Samol committed perjury through the very same
grand jury testimony the Government sought to introduce. At oral
argument, the Government acknowledged that it considered bringing
perjury charges against Samol, but not because Samol testified that he
was aware that the same group of workers performed the underdrain
work in its entirety. According to the Government, the perjury investi-
gation stemmed from Samol's grand jury testimony that he had not
seen the Brothers-Bunn sub-subcontract prior to sending the August
22 letter. This testimony contradicted testimony from another Tri-
State employee that, in fact, Samol had seen the sub-subcontract.
Whatever the reason for the investigation, we have serious reserva-
tions about the reliability of testimony which, at least in part, the Gov-
ernment finds so untrustworthy that it would consider bringing
perjury charges. Thus, we cannot conclude that Samol's grand jury
testimony was properly admitted under Rule 804(b)(5).

It is not apparent from the record whether the district court admit-
ted the grand jury testimony on the alternative basis that it was an
admission by a party and thus was not hearsay pursuant to Rule
801(d)(2)(A). We can affirm, however, "`on any legal and factual
basis fairly presented in the district court.'" Adventure Communica-
tions, Inc. v. Kentucky Registry of Election Fin. , 191 F.3d 429, 439
n.9 (4th Cir. 1999) (quoting PHP Healthcare Corp. v. EMSA Ltd.
Partnership, 14 F.3d 941, 945 (4th Cir. 1993)). With respect to Tri-
State, we conclude Samol's grand jury testimony was admissible as
an admission by a party.

The Constitution generally does not forbid the use of a criminal
defendant's own grand jury testimony against him in a subsequent
prosecution. See United States v. Washington, 431 U.S. 181, 187
(1977). Likewise, the rule against hearsay testimony is usually no
impediment to the use of such testimony. The grand jury testimony
of a criminal defendant falls within the purview of Rule 801(d)(2),
which excludes various party admissions from the definition of hear-
say. See, e.g., United States v. Slone , 833 F.2d 595, 601 (6th Cir.
1987) (affirming the admission pursuant to Rule 801(d)(2) of criminal
defendant's testimony before the grand jury); United States v. Hef-
fington, 682 F.2d 1075, 1082 (5th Cir. 1982) (same); United States v.
Rios Ruiz, 579 F.2d 670, 675-77 (1st Cir. 1978) (same). Because a
corporation can act only through its employees, a statement by a cor-

                     12
porate official such a Samol can certainly be considered an admission
by a corporate defendant. Rule 801(d)(2)(D) provides that "[a] state-
ment is not hearsay if . . . [t]he statement is offered against a party
and is . . . a statement by the party's agent or servant concerning a
matter within the scope of the agency or employment, made during
the existence of the relationship." The corporation's agent need not
have authority to make the statement at issue, but rather the subject
of the statement must relate to the employee's area of authority. See
Precision Piping & Instruments, Inc. v. E.I. du Pont de Nemours &
Co., 951 F.2d 613, 619 (4th Cir. 1991). At the time of his grand jury
testimony, Samol still served as an officer for Tri-State. His testimony
related to his role in the Elm Grove project and how he responded,
as both an officer and in-house counsel, on behalf of Tri-State to
WVDOH's investigation. These were clearly matters that were within
the scope of Samol's employment at Tri-State. Thus, we conclude that
Samol's grand jury testimony was admissible against Tri-State as an
admission under Rule 801(d)(2)(D).

Brothers contends that the admission of Samol's testimony
abridged its rights under the Sixth Amendment "to be confronted with
the witnesses against [it]." U.S. Const. amend. VI. We conclude that
even if the admission of this testimony was erroneous as to Brothers,
it was harmless. See Idaho v. Wright, 497 U.S. 805, 823 (1990)
(applying harmless error review to Confrontation Clause violations);
Fed. R. Crim. P. 52(a). Although the Government suggested at oral
argument that this testimony was "essential" to its case for making a
materially false statement, we are not bound by the Government's
characterization of the evidence. "[I]n order to find a district court's
error harmless, we need only be able to say with fair assurance, after
pondering all that happened without stripping the erroneous action
from the whole, that the judgment was not substantially swayed by
the error." United States v. Brooks, 111 F.3d 365, 371 (4th Cir. 1997)
(brackets in original) (internal quotation marks and citations omitted).

In view of the evidence presented by the Government, we are satis-
fied that the outcome of the trial, and Brothers' conviction pursuant
to § 1001 in particular, was not influenced substantially by the intro-
duction of Samol's grand jury testimony. In response to an August 1,
1994, letter from the WVDOH's EEO Division that indicated Broth-
ers was to be decertified as a DBE because Bunn had performed

                    13
Brothers' work on the Elm Grove project, Brenda Ware created a
number of documents designed to support the fiction that Brothers
had, in fact, fulfilled its obligations under its subcontract with Tri-
State. Ware acknowledged that on August 3, Brothers faxed to Tri-
State copies of what purported to be Brothers' certified payrolls,
signed by Ware, for the underdrain work, along with a transmittal
page that was addressed to the EEO Division of WVDOH. The fax,
however, did not include a list of Brothers' employees who worked
on the Elm Grove project. On August 16, Brothers sent Tri-State
another fax of the certified payrolls which listed workers this time.
Brothers' list of Elm Grove employees was identical to Bunn's crew,
except that two workers were added. Additionally, Ware acknowl-
edged that two drafts of a purported equipment lease agreement
between Brothers and Bunn were faxed to Tri-State on August 15.
The first document was an unsigned draft of the agreement. The sec-
ond document, which was faxed minutes later, was identical to the
first, except that it had been signed by Ware on behalf of Brothers.
The evidence established that these facsimile transmissions were sent
to a fax machine located on the same floor as Samol's office. Less
than one week later, Samol sent to WVDOH the August 22 letter
which referred to the completed version of Brothers' certified payroll
and represented that Brothers had performed the work it was required
to perform pursuant to its subcontract with Tri-State.

Samol's grand jury testimony did not amplify the evidence of
Brothers' role in the conspiracy, nor did it provide additional evi-
dence that Brothers aided and abetted Tri-State's false representation
that Brothers had pulled its own weight on the Elm Grove project. To
the extent that Samol mentioned Brothers or Ware during his grand
jury testimony, the testimony was, at worst, cumulative. For example,
Samol acknowledged that a number of phone calls, perhaps as many
as ten, had been made between Brothers and Tri-State after WVDOH
notified Tri-State that it was not in compliance with the DBE require-
ment for the Elm Grove project, but before Samol sent his August 22
letter. Samol explained that he had not participated in any of the calls,
but he understood that Ware was trying to supply support for the
claim that Brothers had performed its work. Samol's testimony, how-
ever, was hardly the only evidence on this issue. The Government
introduced telephone records establishing that Brothers and Tri-State
made a flurry of telephone calls to each other during this period. The

                     14
Government introduced evidence, and Ware even admitted, that docu-
mentation to support her position that Brothers satisfied the DBE
requirements was faxed to Tri-State shortly before Samol sent the
August 22 letter.

Samol also testified regarding his understanding of whether Broth-
ers had complied with the DBE requirements. During this portion of
his testimony, Samol acknowledged that "[i]f Brothers['] certified
payrolls were legitimate, the State would have to be wrong in saying
that Brothers did not have employees working on the job." J.A. 431.
On this point, Samol's testimony was nothing new. The Government
examined two witnesses at length regarding the requirement that
Brothers must perform its own work. Moreover, the payrolls created
by Ware were introduced into evidence, along with the payrolls sub-
mitted by Bunn. The two sets of payrolls were virtually identical
(except for the addition of two individuals on Brothers' payroll), a
fact that Ware admitted at trial. Significantly, Samol never testified
that Brothers failed to perform its work on the Elm Grove project; if
anything, Samol implied the opposite, or at least that, as far as he
knew, Brothers did not necessarily act improperly. 4

On the whole, our review of Samol's testimony reveals no signifi-
cant additional evidence that the jury would have considered in con-
victing Brothers of conspiracy to defraud the United States or of
aiding and abetting the violation of section 1001. Accordingly, we
conclude that the district judge did not commit a reversible error in
permitting Samol's grand jury testimony to be read to the jury.

III.

Tri-State and Brothers both challenge the sufficiency of the evi-
dence to sustain a conviction against them on any of the four counts
included in the indictment. When assessing the sufficiency of the evi-
dence of a criminal conviction on direct review,"[t]he verdict of [the]
_________________________________________________________________
4 For instance, Samol testified that "I did not know if the Bunn employ-
ees . . . were hired by Brothers . . . to perform various portions of the
work. And based upon . . . what I had examined there was a certification
from Brenda Ware at Brothers Construction, that these employees were
her employees who performed the work." J.A. 440.

                    15
jury must be sustained if there is substantial evidence, taking the view
most favorable to the Government, to support it." Glasser v. United
States, 315 U.S. 60, 80 (1942).

Construing both direct and circumstantial evidence in the light
most favorable to the Government, it is sufficient to support the jury
verdicts that Brothers and Tri-State engaged in a conspiracy to
defraud the United States by misrepresenting to WVDOH that Broth-
ers performed work on the Elm Grove highway construction project.
In light of our previous review of the evidence adduced at trial, we
will summarize only briefly here. Following completion of the under-
drain work, Tri-State learned that Bunn had performed all the work
pursuant to a sub-subcontract between it and Brothers. Tri-State then
received documents prepared by Brothers showing that Brothers
intended to misrepresent to WVDOH that it had performed work on
the underdrain item. With this knowledge, Tri-State sent a letter to
WVDOH representing that Brothers had completed its portion of the
underdrain work necessary to satisfy the DBE requirements of the
project. The numerous communications via telephone and facsimile
between Tri-State, Brothers, and Bunn that occurred after the comple-
tion of the underdrain work provide additional evidence of a conspir-
acy to defraud the Government about who actually performed the
work.

The evidence is also sufficient to sustain the defendants' convic-
tions for wire fraud. Brothers and Tri-State used interstate wire com-
munications to send and receive fraudulent documents that were
either submitted to WVDOH or used in connection with their scheme
to defraud WVDOH. In light of the evidence presented at trial, a rea-
sonable jury could have rejected the explanation offered by Brothers
that copies of the certified payroll information prepared by Brothers
were faxed to Tri-State by mistake and concluded instead that the
faxes were intentionally sent to Tri-State to further the scheme to
defraud WVDOH.

Finally, the letter sent to WVDOH by Samol, on behalf of Tri-
State, representing that Brothers performed its contractual obligations,
coupled with Samol's grand jury testimony, provided sufficient evi-
dence upon which the jury could find that Tri-State knowingly made
a false representation. Likewise, the numerous facsimile transmis-

                    16
sions from Brothers to Tri-State shortly before Samol's letter was sent
to WVDOH, coupled with the letter itself, were sufficient to permit
a jury to convict Brothers for aiding and abetting the making of a
false representation.

IV.

Next, both Tri-State and Brothers contend that they were deprived
of a fair trial as a result of prosecutorial misconduct and argue that
the district court erred in refusing to grant their motion to dismiss the
indictment, which they renewed during and after trial. Our analysis is
two-fold: we must first determine whether the challenged conduct
was improper; if so, then we must ascertain whether the improper
conduct prejudicially affected the defendants' substantial rights so
that the defendants were deprived of a fair trial. See United States v.
Wilson, 135 F.3d 291, 297 (4th Cir.), cert. denied, 523 U.S. 1143
(1998). Tri-State and Brothers allege that the prosecution engaged in
misconduct in three ways.

A.

First, Tri-State and Brothers contend that the Government improp-
erly continued to investigate the case after the indictment was
returned on August 7, 1997. In particular, they challenge the propriety
of recalling various witnesses, who would later testify at trial, to
appear before the grand jury between the time the indictment was
returned and the commencement of trial. Dale Russell, Tri-State's
Elm Grove project superintendent, was recalled to testify about vari-
ous telephone calls between him and Samol. Chuck Taylor, Tri-
State's estimator for the project, was recalled and asked questions
relating to whether Taylor and Samol discussed the fact that Brothers
had sub-subcontracted its work to Bunn. Brothers and Tri-State allege
that Russell and Taylor changed their testimony during their second
appearance before the grand jury. The significance, they insist, is that
the Government used the grand jury process to elicit more favorable
testimony, which Russell and Taylor then repeated at trial.5
_________________________________________________________________
5 Brothers and Tri-State argue that the Government's abuse of the
grand jury is evidenced from the fact that the district judge excluded the

                     17
In response, the Government relies on its representations to the trial
court -- that Russell and Taylor were called to provide grand jury tes-
timony a second time in connection with the investigation of Samol
for committing perjury during his grand jury testimony. Brothers and
Tri-State argue that the Government's claim that Samol was being
investigated for perjury is a mere ruse because the Government
claimed at trial that Samol's perjury occurred during his pretrial
debriefing, which took place after the second grand jury session. It is
clear from the record, however, that the Government was investigat-
ing "the question of whether Mr. Samol had committed perjury in his
testimony before [the grand jury]." J.A. 170.

We recognize the "universal rule that prosecutors cannot utilize the
grand jury solely or even primarily for the purpose of gathering evi-
dence in pending litigation." United States v. Moss, 756 F.2d 329, 332
(4th Cir. 1985). Therefore, once a criminal defendant has been
indicted, the Government is barred from employing the grand jury for
the "sole or dominant purpose" of developing additional evidence
against the defendant. Id. (internal quotation marks omitted). How-
ever, a "`presumption of regularity attaches to a grand jury's proceed-
ings,'" id., and Brothers and Tri-State bear the burden of rebutting the
presumption. The Government is allowed to make a good-faith
inquiry into charges that are not covered in the indictment, "even if
it uncovers further evidence against an indicted person." Id. (internal
quotation marks omitted). We will reverse the factual findings of a
district court regarding the Government's purpose for calling post-
indictment witnesses to appear before the grand jury only if the find-
ings are clearly erroneous. See id.

Before trial, the district court found that the Government did not
call Russell and Taylor to reappear before the grand jury solely or pri-
marily for obtaining additional evidence to use against Tri-State or
Brothers. Accordingly, Russell and Taylor were permitted to testify
_________________________________________________________________

testimony of certain witnesses based on his perception that their "grand
jury testimony seems to impart some things that may very well be con-
sidered discovery." J.A. 342. Because the witnesses were excluded, we
conclude that any post-indictment discovery provided did not strip
Brothers or Tri-State of a fair trial. See Wilson, 135 F.3d at 297.

                    18
at trial; however, the district court restricted the Government from
impeaching the witnesses with testimony from their second grand jury
appearance and from examining them as to such testimony.

We conclude that the district court did not clearly err in finding that
the Government's primary purpose in recalling Russell and Taylor
before the grand jury was not to conduct discovery with respect to the
charges pending against Tri-State and Brothers. The investigation of
Samol for a possible perjury charge is a logical result of Samol's testi-
mony that he did not have knowledge of critically important docu-
ments despite his position as in-house counsel for Tri-State --
testimony that contradicted the original grand jury testimony of Tay-
lor. Because the Government was permitted to investigate charges
that were not included in the indictment, as it was doing when it
recalled Russell and Taylor, we find no impropriety.

B.

Next, Brothers and Tri-State contend that shortly before trial, the
Government issued target letters to certain trial witnesses informing
them that they were subjects of the grand jury's on-going investiga-
tion. Brothers and Tri-State do not dispute the Government's assertion
that only two witnesses, Kermit Bunn and Charles Striblin, received
target letters. The thrust of this argument is that the Government used
the target letters to coerce favorable testimony from the witnesses.6
Brothers and Tri-State also argue that the Government identified three
other witnesses (Taylor, Russell and Greg Kilpatrick) as unindicted
co-conspirators for coercive purposes as well. Brothers and Tri-State
have failed to show us how these witnesses were coerced into chang-
ing their testimony to suit the Government or that the Government
intimidated any of these witnesses into refusing to testify at trial. We
reject the use of these target letters as a basis for prosecutorial mis-
conduct.
_________________________________________________________________
6 Brothers and Tri-State also contend that the Government coerced
Samol into asserting his Fifth Amendment rights at trial, which caused
him to be unavailable and resulted in the admission of his grand jury tes-
timony. As we discussed previously, the admission of Samol's testimony
was, at worst, harmless error as to Brothers. With respect to Tri-State, the
testimony was properly admitted in any event.

                     19
C.

Finally, Brothers and Tri-State seek a remand to district court for
additional fact finding based on what they contend is "new" evidence
of prosecutorial misconduct, discovered well after the conclusion of
trial. Tri-State's president Glen Straub testified on behalf of Tri-State
during its sentencing hearing. As a result of that testimony, Straub
was indicted for making a false statement. See 18 U.S.C. § 1623
(West 1984 & Supp. 2000). Straub was represented by the same attor-
ney who represented Tri-State. During the course of Straub's prosecu-
tion, counsel made a request under the West Virginia Freedom of
Information Act (FOIA), see W. Va. Code§ 29B-1-1 to -7 (Michie
1998), and obtained an audit file, assembled by WVDOH, on the Elm
Grove project.

Although the Government had disclosed a report (which Tri-State
introduced as an exhibit at trial) from the audit file summarizing the
audit conducted on the Elm Grove project, it did not disclose the exis-
tence of an audit file during the prosecution of Brothers and Tri-State.

Tri-State and Brothers assert that the audit file contains material
that should have been turned over to Brothers and Tri-State in this
case under the Jencks Act, see 18 U.S.C.§ 3500 (West 1985), and
Brady v. Maryland, 373 U.S. 83, 87 (1963).7 In particular, Brothers
and Tri-State point to notes taken by WVDOH personnel during an
interview of Brenda Ware that allegedly differ from a summary of the
interview given at trial. Also, they contend that the audit file summa-
rized statements made by Jesse Haynes, the Director of WVDOH's
EEO Division who was called by the Government to explain the DBE
requirements to the jury, indicating that he did not believe that it was
necessary to refer the Elm Grove matter to federal officials with
respect to Brothers. Based on this information, Straub moved to dis-
miss his indictment because of prosecutorial misconduct, alleging that
documents from the internal audit file should have been turned over
pursuant to Brady and the Jencks Act. The district judge denied this
_________________________________________________________________
7 In Brady, the Court held"that the suppression by the prosecution of
evidence favorable to an accused upon request violates due process
where the evidence is material either to guilt or to punishment, irrespec-
tive of the good faith or bad faith of the prosecution." 373 U.S. at 87.

                     20
claim and refused to dismiss Straub's indictment. 8 In ruling on
Straub's motion, the district court observed in passing that the investi-
gation and prosecution of Brothers and Tri-State"could have been
conducted more professionally, more carefully and with more dili-
gence on the part of the [AUSA] assigned . . . to the Brothers Con-
struction Company case."

Because we conclude that the Brady and Jencks Act claims clearly
lack merit, we need not remand for additional fact finding. To estab-
lish a Brady claim, the defendant must demonstrate three things: "(1)
the evidence at issue must be favorable to the defendant, whether
directly exculpatory or of impeachment value; (2) it must have been
suppressed by the state, whether wilfully or inadvertently; and (3) it
must be material." Spicer v. Roxbury Correctional Inst., 194 F.3d
547, 555 (4th Cir. 1999). However, "`the Brady rule does not apply
if the evidence in question is available to the defendant from other
sources,'" United States v. Wilson, 901 F.2d 378, 380 (4th Cir. 1990)
(quoting United States v. Davis, 787 F.2d 1501, 1505 (11th Cir.
1986)), either directly or via investigation by a reasonable defendant,
see Barnes v. Thompson, 58 F.3d 971, 975 n.4 (4th Cir. 1995). The
defendants do not dispute the Government's assertion that the
WVDOH internal audit file on the Elm Grove project was available
through sources other than the Assistant United States Attorney.
Indeed, Straub's counsel -- who also represented Tri-State -- was
able to obtain the information by making a FOIA request. And, it is
readily apparent from the audit report itself, which is merely a sum-
mary of the audit of the Elm Grove project, that the audit was based,
at least in part, upon documents maintained and collected by the
WVDOH. A reasonable defendant would have concluded-- as coun-
sel did later when he filed an FOIA request -- that there were addi-
tional audit materials.

Furthermore, we have not been informed as to how the notes
regarding the Brenda Ware interview are exculpatory as to Brothers
or Tri-State -- we have only been advised, in the broadest terms, that
there are notes of an interview of Brenda Ware that"differ" from a
summary of the interview given by a government witness at trial.
_________________________________________________________________
8 Straub's indictment was later dismissed voluntarily by the Govern-
ment.

                     21
And, Tri-State has not explained how Haynes' alleged statements
would be exculpatory as to it. We also fail to see how the "new evi-
dence" would be material since it would not, in our view, "put the
whole case in such a different light as to undermine confidence in the
verdict." Spicer, 194 F.3d at 559 (quoting Strickler v. Greene, 527
U.S. 263, 290 (1999)) (internal quotation marks omitted). We do not
perceive a Brady violation here.

Likewise, we conclude that the claim made pursuant to the Jencks
Act is without merit. The Jencks Act requires the Government to turn
over any statement of a witness in its possession once the witness has
testified on direct examination, provided the statement relates to the
testimony of the witness. See 18 U.S.C.A.§ 3500(b). The Act defines
a "statement" to include a written statement that has been signed or
adopted by the witness or a transcription of an oral statement of a wit-
ness that is substantially verbatim. See 18 U.S.C.A. § 3500(e). There
is nothing before us indicating that the "new" evidence would consti-
tute witness statements as defined by the Jencks Act. The purported
Jencks material in our case consists of interview notes compiled by
government agents during an interview of Ware and summaries of
statements made by a government witness. Brothers and Tri-State do
not suggest that any of this evidence was adopted by the witnesses as
their own statements, nor do they claim that these notes or summaries
amount to verbatim transcriptions. See United States v. Hinton, 719
F.2d 711, 722 (4th Cir. 1983) (recognizing that the Government is not
required to disclose rough interview notes that later become part of
a final report). We do not detect a viable basis for the claim that the
Government violated the Jencks Act. Accordingly, we conclude that
Brothers and Tri-State were not deprived of a fair trial as a result of
prosecutorial misconduct.

V.

Tri-State next attacks its sentence, arguing that the district court
erroneously imposed a three-level enhancement for obstruction of jus-
tice. See United States Sentencing Guidelines Manual ("U.S.S.G.")
§ 8C2.5(e) (1997). The district court followed the recommendation
contained in the presentence report that Tri-State receive a three-level
obstruction of justice enhancement pursuant to section 8C2.5(e) based
on Samol's August 22 letter asserting that Brothers had performed its

                    22
work, and also based on Samol's grand jury testimony, which the sen-
tencing court found to be perjurious. Tri-State asserts that neither
basis is sufficient to support the imposition of an obstruction of jus-
tice enhancement.

First, Tri-State contends that the use of Samol's August 22 letter
constitutes double counting because the sending of the August 22 let-
ter was the act for which Tri-State was convicted on Counts one (con-
spiracy to defraud the United States) and four (making a false
statement) of the indictment. This argument, however, is of no aid to
Tri-State because the district court identified another separate, inde-
pendent basis for applying the obstruction of justice enhancement:
Samol's grand jury testimony. Because we conclude that Samol's
grand jury testimony provided a sufficient factual basis to support the
obstruction of justice enhancement, we need not consider Tri-State's
argument that the district court engaged in double counting when it
considered Samol's August 22 letter for sentencing purposes.9

Next, Tri-State argues that the obstruction of justice enhancement
was improper in any event because Samol's grand jury testimony was
largely consistent with the testimony of other trial witnesses. Thus,
Tri-State's argument is essentially that the district court made an erro-
neous factual determination that Samol had testified falsely at the
grand jury. We review a district court's application of the guidelines,
to the extent such application depends primarily upon findings of fact,
for clear error. See United States v. France, 164 F.3d 203, 209 (4th
Cir. 1998), cert. denied, 507 U.S. 1010 (1999).

The district court concluded that Samol's grand jury testimony was
false "as to a material fact and was wilfully[given] in order to
obstruct justice." J.A. 983. We cannot say that this conclusion was
clearly erroneous. The trial testimony of two Tri-State employees
contradicted Samol's grand jury testimony. Chuck Taylor testified
that, after Tri-State received a letter from WVDOH indicating that
Tri-State was not going to meet its DBE requirement because Broth-
_________________________________________________________________
9 For this reason, we also reject Tri-State's contention that the August
22 letter cannot support an obstruction of justice enhancement under
§ 8C2.5(e) because the letter was not sent"during the investigation, pros-
ecution, or sentencing of the instant offense."

                     23
ers had not performed its work, Samol directed Taylor to look into the
matter; Samol denied doing so. Taylor also testified that he and Samol
discussed the sub-subcontract between Bunn and Brothers before
Samol sent the August 22 letter indicating the DBE requirement had
been satisfied; Samol denied knowledge of the sub-subcontract before
sending the letter. The record provides a basis upon which the district
court could reasonably conclude that Samol obstructed justice by
falsely testifying before the grand jury. We affirm the district court's
application of the obstruction of justice enhancement.

VI.

Brothers and Tri-State argue that the sentencing court should not
have attributed any loss to their conduct. According to the guidelines,
"[i]n a case involving diversion of government program benefits, loss
is the value of the benefits diverted from intended recipients or uses."
U.S.S.G. § 2F1.1, application note 7(d). Brothers and Tri-State
emphasize the fact that, after WVDOH determined that Brothers had
not contributed any work to the Elm Grove project, Tri-State was per-
mitted to use Hodges and Company, a certified DBE, to perform addi-
tional work on the Elm Grove project (apparently at no additional cost
to the Government) that was counted toward the DBE requirement.
Moreover, WVDOH counted excess DBE "credit" from other Tri-
State projects toward the satisfaction of the DBE goal. In the end, Tri-
State was credited as having satisfied the DBE requirement on the
Elm Grove project. Thus, Brothers and Tri-State contend that the
required percentage of project funds went to a certified DBE and all
of the work was performed, i.e., WVDOH received exactly what it
bargained for. Therefore, Brothers and Tri-State claim no loss can be
attributed to their conduct because the federal benefits eventually
reached the intended recipient -- a qualified DBE.

We review de novo the district court's legal determination of
whether any loss can be attributed to Brothers or Tri-State. See United
States v. Castner, 50 F.3d 1267, 1274 (4th Cir. 1995). We conclude
that there was certainly loss as contemplated by the guidelines. A sub-
stantial sum of money -- initially $185,835.20-- was earmarked for
DBE project participation by Brothers. Despite the fact that the DBE
goal was met, the funds were not put to the intended use -- to com-
pensate Brothers for its work on the underdrain construction.

                    24
Moreover, Tri-State and Brothers conspired in a scheme that was
intended to divert this money to Bunn, a non-DBE. If not for the audit
that revealed Brothers' failure to participate, the DBE funds would
not have eventually reached a DBE. These facts demonstrate a loss
under § 2F1.1 of the guidelines because the conspiracy would have
diverted the funds entirely from any DBE but for the audit. See
U.S.S.G. § 2F1.1 comment. n.7 ("[I]f an intended loss that the defen-
dant was attempting to inflict can be determined, this figure will be
used if it is greater than the actual loss."); United States v. Brown, 151
F.3d 476, 489 (6th Cir.), cert. denied, 525 U.S. 1026 (1998); United
States v. Stockheimer, 157 F.3d 1082, 1089 (7th Cir. 1998), cert.
denied, 525 U.S. 1184 (1999). Accordingly, we conclude that the dis-
trict court properly determined that economic loss can be attributed
to both Brothers and Tri-State.

VII.

Finally, Tri-State contends that, even if monetary loss is attribut-
able to Tri-State's conduct during the Elm Grove project, it was still
erroneously sentenced because the district court improperly calculated
the amount of loss attributable to it. The presentence report deter-
mined that the conduct of Brothers and Tri-State inflicted a loss in the
amount of $185,835.20. The presentence report stated specifically
that this figure reflected the amount that Tri-State was contractually
obligated to pay Brothers for its work on the underdrain. At sentenc-
ing, Tri-State objected to a loss determination as a general matter,
arguing that no loss whatsoever should be attributed to it, a position
which, as we explained above, the district court rejected. Tri-State,
however, did not object to the specific loss figure arrived at in the pre-
sentence report, nor did Tri-State challenge the report's assertion that
Tri-State was contractually obligated to pay Brothers $185,835.20.

Predicated on its finding that $185,835.20 served as an appropriate
amount of loss, the district court determined that Tri-State's fine
range was $334,503.36 to $669,006.7210 and set Tri-State's fine at
_________________________________________________________________
10 The guideline fine range is determined by multiplying the base fine
determined under § 8C2.4 by the applicable minimum and maximum
multipliers set forth in § 8C2.6. See U.S.S.G. § 8C2.7. The appropriate

                     25
$500,000. No fine was imposed upon Brothers because of its inability
to pay.

Subsequently, the Government discovered that Tri-State and
WVDOH had entered into a supplemental contract on July 25, 1994,
which was shortly after the underdrain work had been completed.
This supplemental agreement reduced the amount of work that Tri-
State was required to subcontract to a DBE. As a result, the Govern-
ment filed a sentencing memorandum in Ware's case, which was still
ongoing, indicating that the correct amount to be paid to the DBE on
the underdrain item was $169,487.60 and representing that, of this
amount, at least $146,710.52 was diverted away from the DBE pro-
gram.11 Finally, on May 17, 1999, the district court sentenced Ware.
In doing so, the court determined that the amount of loss attributable
to Ware's conduct under the guidelines was $146,710.52. However,
the district court concluded that this amount would overstate the seri-
ousness of the offense and departed downward based upon a loss
amount of $10,000, which the district court determined more accu-
rately reflected the loss attributable to Ware.

Tri-State makes two contentions. First, Tri-State argues that the
amount of loss attributed to it must be identical to that attributed to
its co-conspirator Ware. Tri-State, however, misapprehends what
occurred at Ware's sentencing when it contends that $10,000 must
necessarily be the loss attributed to Tri-State. The district court con-
cluded that, under the guidelines, the appropriate amount of loss
attributable to Ware was $146,710.52 (the exact amount which the
Government now contends was diverted away from the DBE pro-
_________________________________________________________________

multipliers are based on the corporate defendant's culpability score
determined under § 8C2.5. See U.S.S.G.§ 8C2.6. In sentencing Tri-
State, the district court adopted the guideline application contained in the
presentence report. Thus, the court established Tri-State's base fine at
$185,835.20, see U.S.S.G. § 8C2.4(a), and its maximum and minimum
multipliers were based on a culpability score of 9, which Tri-States does
not challenge.
11 Portions of this argument were presented to this panel in a motion for
a remand to district court for resentencing. We deferred ruling on the
motion, and we dispose of it here.

                    26
gram). The sentencing court arrived at the $10,000 amount of loss
only after concluding that a downward departure was warranted
because the guideline amount overstated the seriousness of Ware's
individual conduct. Thus, for Tri-State to argue that it is also entitled
to the $10,000 amount of loss figure is to argue that it is entitled to
a downward departure because Ware received one. Apart from the
fact that a sentencing court cannot depart from the appropriate guide-
line merely because of a disparity in sentencing, see United States v.
Davis, 98 F.3d 141, 145 (4th Cir. 1996), there were obvious differ-
ences between the two defendants. We reject this contention.

Second, Tri-State argues that it was sentenced based on an incor-
rect fine range because, as the Government concedes, the amount of
loss was actually less than the amount determined by the district
court. Tri-State maintains that, if the district court's use of the con-
tractual amount to be paid to Brothers by Tri-State is the appropriate
measure of the amount of loss, then the correct figure is $169,487.60
(not $185,835.20) based on the supplemental agreement between Tri-
State and WVDOH. The lower loss figure, in turn, would produce a
lower fine range under section 8C2.7 of the sentencing guidelines;
according to Tri-State, the new range would be $305,077.68 to
$610,155.36 (not $334,503.36 to $669,006.72).

Thus, Tri-State wants to be resentenced in light of the amended
contract amount between Tri-State and WVDOH, which was not
brought to the sentencing court's attention until after Tri-State had
been sentenced. Surprisingly, Tri-State suggests to us that this is
newly-disclosed information that the Government failed to disclose to
the sentencing court. Tri-State was in as good a position as anyone
involved in this matter to correct the facts regarding a contractual
arrangement between WVDOH and Tri-State itself. It is clear to us
that Tri-State could have challenged, but did not, the specific loss fig-
ure that the district court settled upon at sentencing. Tri-State's "fail-
ure to object to a sentencing issue amounts to a waiver of [its] right
to raise that issue on appeal, absent plain error." United States v.
Ford, 88 F.3d 1350, 1355 (4th Cir. 1996); see Castner, 50 F.3d at
1277. Thus, to obtain the relief it seeks, Tri-State must establish that
the district court committed plain error when it imposed Tri-State's
$500,000 fine. See Fed. R. Crim. P. 52(b); United States v. Olano,
507 U.S. 725, 731-32 (1993). We will exercise our discretion to cor-

                     27
rect plain error if Tri-State demonstrates the satisfaction of four con-
ditions:

          (1) [A]n error, such as deviation from a legal rule; (2) the
          error must be plain, meaning obvious or, at a minimum,
          clear under current law; (3) the error must affect substantial
          rights -- in other words, the error must be so prejudicial as
          to affect the outcome of the proceedings in the district court;
          and, finally, (4) . . . the error seriously affects the fairness,
          integrity or public reputation of judicial proceedings.

Castner, 50 F.3d at 1277 (internal quotation marks omitted).

Tri-State contends that our decision in Ford established that the
imposition of a sentence under an improper guideline range qualifies
as plain error. See Ford, 88 F.3d at 1355-56. In Ford, the sentencing
court erroneously included two criminal history points in the calcula-
tion of the defendant's sentence, resulting in a criminal history cate-
gory III for the defendant. The sentencing court sentenced the
defendant at the low end of the applicable range, but expressly noted
that the sentence would have been at the bottom of the sentencing
range even if the defendant's criminal history had only been a cate-
gory II. Only after sentencing was it determined that the defendant's
criminal history category was improperly determined, an error that the
Government conceded. Conducting a plain error review, we observed
that if the erroneous inclusion of the two criminal history points were
not corrected, the defendant would serve a prison term three years
longer than required under the sentencing guidelines. See id. at 1356.
Under those circumstances, we concluded that such an error impacted
the integrity of our judicial process:

          We cannot casually ignore th[e] fact [that the defendant
          would serve three years more than required] because of an
          overly-strict adherence to technical requirements. Three
          years of a man's life is not a trifling thing. No court of jus-
          tice would require a man to serve three undeserved years in
          prison when it knows the sentence is improper. The fairness,
          integrity, and public reputation of our judicial system
          demand that we correct Reid's sentence.

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Id.

Not so here. Assuming that the sentencing court committed an
error that is plain, we conclude that this is not an error affecting Tri-
State's substantial rights. The district court imposed a fine against
Tri-State that was almost exactly in the middle of the fine range used
by the district court. The fine would be only slightly above the middle
of the fine range as calculated by Tri-State. There is nothing before
us to indicate that the outcome would be different, even if we
accepted Tri-State's position on this issue. In Ford, by contrast, it was
crystal clear that, but for the error, the defendant's sentence would
have been substantially different. Moreover, because the fine imposed
by the district court fits into the middle of the fine range that Tri-State
asserts is correct, we do not perceive this as the type of error that seri-
ously calls the integrity of the judicial system into question. Accord-
ingly, we are satisfied that Tri-State's sentence should be affirmed.

VIII.

Based on the foregoing, we affirm the convictions and sentences of
Brothers and Tri-State.

AFFIRMED

                     29