Court Opinion

ID: 70483
Source: CourtListenerOpinion
Date Created: 2010-04-26 07:02:43+00
Date Added: 2024-06-11T09:39:41.746981
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United States Court of Appeals,

                                Eleventh Circuit.

                                   No. 94-2300.

               UNITED STATES of America, Plaintiff-Appellee,

                                             v.

               Charles S. CANCELLIERE, Defendant-Appellant.

                                  Nov. 29, 1995.

Appeal from the United States District Court for the Middle
District of Florida. (No. 93-213-CR-T-21C), Ralph W. Nimmons, Jr.,
Judge.

Before BLACK, Circuit Judge, HILL, Senior Circuit Judge, and
ALAIMO*, Senior District Judge.

     HILL, Senior Circuit Judge:

     Charles S. Cancelliere appeals his conviction and sentence on

each of three counts of bank fraud in violation of 18 U.S.C. §

1344,    two    counts    of    false    statements    to     insured   depository

institutions in violation of 18 U.S.C. § 1014, and two counts of

money laundering in violation of 18 U.S.C. § 1956(a)(1)(A)(i).

Cancelliere was convicted on all counts after a jury trial and

sentenced to fifty-seven months imprisonment as to each count, with

all counts running concurrently, followed by thirty-six months of

supervised release.            For the following reasons, we affirm his

convictions       and    sentences      on    Counts   1-5,    and   reverse   his

convictions and sentences on Counts 6 and 7.

                                  I. BACKGROUND

     During the relevant time period, Cancelliere was a bank

officer at several banks in Florida.              Between December of 1984 and

     *
      Honorable Anthony A. Alaimo, Senior U.S. District Judge for
the Southern District of Georgia, sitting by designation.
December of 1988, Cancelliere secured numerous unsecured loans from

three different banks.       Counts 1, 2 and 3 of the Indictment allege

that Cancelliere committed bank fraud in violation of 18 U.S.C. §

1344 by misrepresenting to three different banks his assets and

liabilities.     Counts 4 and 5 allege that Cancelliere made false

statements to a financial institution in violation of 18 U.S.C. §

1014 by representing to a bank that he owned stock in the Daily

News   Publishing      Company   (Count   4)   and   by   representing   to   a

different bank that he was the beneficiary of a trust account in

Pittsburgh, Pennsylvania (Count 5).            Counts 6 and 7 allege that

Cancelliere committed money laundering in violation of 18 U.S.C. §

1956 by writing two checks from his personal checking account

knowing   that   the    checks   represented    the   proceeds   of   illegal

activity.

       Over objection, the government was allowed to introduce into

evidence three letters written to Cancelliere by his deceased

father.     The first letter discusses the father's purchase of his

son's stock in the Daily News Publishing Company.                 The second

letter states that Cancelliere's mother's estate no longer existed.

Cancelliere's father also wrote that he would no longer help his

son financially and suggested that Cancelliere sell his jewelry to

ease his financial situation.         In the last letter, Cancelliere's

father offered financial advice on how to deal with his creditors,

but criticized Cancelliere for his self-indulgence and profligacy.

       Also over objection, the government introduced evidence of

other allegedly fraudulent transactions which are not charged or

mentioned in the Indictment.         Under Fed.R.Evid.Rule 404(b), the
district court permitted the government to introduce evidence that

Cancelliere (1) obtained a fraudulent loan from an individual named

David Diaz;    (2) made false statements to two banks other than

those named in the Indictment;     and (3) bounced checks from his

personal checking account.

      At trial, the government sought to prove the money laundering

counts by establishing (1) that Cancelliere deposited the proceeds

of the fraudulently-obtained loans into his personal checking

account;   and (2) that some of the checks he wrote against this

account were to pay interest on the fraudulently-obtained loans.

      After the close of the evidence, the government moved to

strike the word "willfully" from Counts 6 and 7 of the Indictment

which charged Cancelliere with "knowingly and willfully" committing

the offense of money laundering.      Over objection, the district

court permitted this redaction.

                             II. ISSUES

A. Was the evidence on Counts 6 and 7 (money laundering) sufficient
     to prove that the financial transaction in each count
     "involved" proceeds of a specified unlawful activity as
     required by 18 U.S.C. § 1956?

B. Did the district court err in striking the word "willfully" from
     Counts 6 and 7 of the Indictment after the close of evidence?

C. Did the district court abuse its discretion in admitting letters
     written by Cancelliere's deceased father in violation of the
     hearsay rule.

D.   Did the district court abuse its discretion in admitting
      evidence of several other fraudulent transactions as extrinsic
      evidence under Rule 404(b)?

                          III. DISCUSSION

A. Money Laundering

      In order to establish the crime of money laundering, the
government must prove that Cancelliere "conduct[ed] ... a financial

transaction which in fact involve[d] the proceeds of specified

unlawful   activity...."     18   U.S.C.   §   1956.    The   government

introduced evidence that Cancelliere wrote two checks on his

personal bank account into which he had deposited the proceeds of

the fraudulently-obtained loans. The district court instructed the

jury that "the Government need not prove that all of the money

involved in the transaction was the proceeds of bank fraud.        It is

sufficient if the Government proves that at least part of the money

represents such proceeds."

     Cancelliere does not contest on appeal that there was evidence

that he deposited fraudulent loan proceeds into his checking

account or that he wrote two checks from this account to pay

interest on his loans.     He contends, however, that the government

failed to prove that the money paid by these checks came from

previously deposited fraudulent loan proceeds, either in whole or

in part.

     Cancelliere argues that it is not enough for the government

simply to show that fraudulent loan proceeds went into his checking

account at some indefinite point, and that subsequently two checks

were written from this account to pay interest on the loans if the

account at issue has other sources of deposit.         He contends that

because the checking account contained many legitimate deposits,

including his salary deposits, the government failed to prove that

the money paid by these checks came from previously deposited

fraudulent loan proceeds, either in whole or in part. According to

Cancelliere, salary or other legitimate deposits paid these two
checks.

     To convict under § 1956(a)(1)(A)(i), the government bears the

burden of proving beyond a reasonable doubt that the party engaged

in the transaction knew that the funds used represented, in whole

or   in    part,    proceeds   of   a   specified     unlawful    activity.1

Cancelliere argues that unless the government proved that the

checks written to pay the interest on his loans were actually paid

at least in part with fraudulently-obtained funds, the government

did not carry its burden.

     The issue is whether the government should be required to

trace the origin of all funds deposited into a bank account to

determine exactly which funds were used for what transaction.

Although    Cancelliere    characterizes   this     issue   as   one   of   the

sufficiency of the evidence, we believe that initially it is one of

statutory construction.        The statute requires that a transaction

"involve" the proceeds of an activity which the participant knows

is unlawful.       The question is what Congress intended by the word

"involve."

     Although this question has not yet been answered in this

circuit, we find persuasive the reasoning of the Seventh Circuit in

United States v. Jackson, 935 F.2d 832 (7th Cir.1991).            In Jackson,

the defendant deposited proceeds from his drug-dealing activities

     1
      At the time of the offenses charged in Counts 6 and 7, the
definition of "specified unlawful activity" at 18 U.S.C. §
1956(c)(7) included bank fraud offenses under 18 U.S.C. § 1344.
The current amended version of the Money Laundering Control Act
of 1986 does not include § 1344 bank fraud offenses under the
"specified unlawful activity" definition, although it does
include offenses involving false statements to banks under 18
U.S.C. § 1014.
into the checking account of the 15th Street Baptist Church, where

he was the preacher.       The defendant then wrote checks from this

account to pay for beepers which were used for drug dealing.         After

his conviction for money laundering, the defendant argued that no

rational   juror   could   decide   that   the   checks   alleged   in   the

indictment involved money derived from drug proceeds.

      The Seventh Circuit affirmed the conviction, reasoning that:

     We do not read Congress' use of the word "involve" as imposing
     the requirement that the government trace the origin of all
     funds deposited into a bank account to determine exactly which
     funds were used for what transaction. Moreover, we cannot
     believe that Congress intended that participants in unlawful
     activities could prevent their own convictions under the money
     laundering statute simply by commingling funds derived from
     both "specified unlawful activities" and other activities.
     Indeed, the commingling in this case is itself suggestive of
     a design to hide the source of ill-gotten gains.... (citation
     omitted)

Id. at 840. We agree and hold that Section 1956(a)(1)(A)(i) allows

for convictions where the funds involved in the transaction are

derived from a commingled account of which only a part comes from

"specified unlawful activities."

     The evidence in this case was that Cancelliere fraudulently

obtained over $80,000 in loans from banks and systematically

deposited the loan proceeds into his personal checking account.

Thereafter, Cancelliere wrote two checks on this account to pay the

interest on these loans.       A rational juror could find that the

government sustained its burden of proving beyond a reasonable

doubt that Cancelliere's payment of the checks alleged in Counts 6

and 7 "involved" the proceeds of his fraudulently-obtained loans

and we find no error regarding this issue.

B. The Redaction of "Willfully"
     Cancelliere      asserts       that   reversal      is    required        on     the

convictions     for   Counts    6    and   7   because      the   district          court

impermissibly amended the Indictment by redacting the willfulness

allegation from those counts and by so instructing the jury.                          The

government counters that the willfulness allegation was surplusage

which the district court may redact without error.

     Counts 6 and 7 of the Indictment charged Cancelliere with

"knowingly     and    willfully"      committing      the     offense     of        money

laundering.2    Cancelliere testified at trial.             His defense from the

stand, and throughout trial, was that his personal finances were

indeed in disastrous condition, but that the statements he made to

procure loans were made with a good faith belief in their truth,

without fraudulent scienter, but without meticulous accuracy.

     After the close of the evidence, the government moved to

strike the word "willfully" from Counts 6 and 7.                  Over objection,

the district court permitted the redaction.              The jury instructions

did not contain "willfulness" as an element of money laundering,

but did mention willfulness in defining the term "intentionally."

         We have held that "a fundamental principle stemming from the

[fifth] amendment is that a defendant can only be convicted for a

crime charged in the indictment."              United States v. Keller, 916

F.2d 628, 633 (11th Cir.1990), cert. denied, 499 U.S. 978, 111

S.Ct. 1628, 113 L.Ed.2d 724 (1991). Per se reversible error occurs

"when the essential elements of the offense are altered to broaden

the possible bases for conviction beyond what is contained in the

     2
      This language came from a model indictment issued by the
United States Department of Justice.
indictment."     Id. at 634.      An amendment to an indictment occurs

when the charging terms of the indictment are altered.                      United

States v. Weissman, 899 F.2d 1111, 1114 (11th Cir.1990).                    A jury

instruction that constructively amends a grand jury indictment

constitutes per se reversible error because such an instruction

violates a defendant's constitutional right to be tried on only

those charges presented in a grand jury indictment and creates the

possibility that the defendant may have been convicted on grounds

not alleged in the indictment.           Stirone v. United States, 361 U.S.

212, 217-18, 80 S.Ct. 270, 273-74, 4 L.Ed.2d 252 (1960); Weissman,

899 F.2d at 1114.

         On the other hand, mere surplusage may be deleted from an

indictment without error.        United States v. Miller, 471 U.S. 130,

105 S.Ct. 1811, 85 L.Ed.2d 99 (1985).                   Willfulness is not a

statutory    element   of   money    laundering,        and   "[a]   part   of   an

indictment unnecessary to and independent from the allegations of

the offense proved may normally be treated as a useless averment

that may be ignored."       Id. at 136, 105 S.Ct. at 1815.           It is not an

unconstitutional     amendment      to   "drop   from    an    indictment    those

allegations that are unnecessary to an offense that is clearly

contained within it...."       Id. at 144, 105 S.Ct. at 1819.

      We believe the redaction in this case more closely resembles

the impermissible broadening of the indictment condemned by Keller

than the simple elimination of unnecessary averments approved by

Miller.    In this case, the government moved the district court to

delete     the   requirement     that     they   prove        willfulness    after

Cancelliere prepared and put on a defense based upon good faith.
Although the inclusion of the term "willful" was a mistake by the

government,3 the charge was read to the jury at the beginning of

the trial, the jury listened to Cancelliere attempt to prove he had

not acted willfully, and then the court instructed them that they

could convict without mentioning any requirement that they find he

acted willfully.

       This impermissible broadening of the bases upon which the jury

could convict is similar to that in United States v. Leichtnam, 948

F.2d 370 (7th Cir.1991).            In Leichtnam, the indictment charged that

Leichtnam "knowingly used and carried a firearm, to wit a Mossberg

rifle."         At trial, the government showed the jury three guns,

including the Mossberg rifle.              The judge then instructed the jury

that it could convict if Leichtnam had used "a firearm."                         On

appeal,         the   Seventh    Circuit   reversed    Leichtnam's     conviction,

holding that "the introduction of the handguns, together with the

jury       instructions,        inpermissibly   amended       the   indictment   by

broadening the possible bases for conviction to include knowingly

using      or    carrying   any    firearm.     That    was    clear   error,    and

Leichtnam's firearm conviction on count two must be reversed." Id.

at 380-81.

       3
      The parties do not contest that the statute does not
require the government to prove willfulness. The statute
provides:

                 Whoever, knowing that the property involved in a
                 financial transaction represents the proceeds of some
                 form of unlawful activity, conducts or attempts to
                 conduct such a financial transaction which in fact
                 involves the proceeds of specified unlawful activity
                 ... with the intent to promote the carrying out of
                 specified unlawful activity ... [shall be sentenced
                 according to law].
     In    Leichtnam,   changing   the   term   "Mossberg   rifle"   to   "a

firearm" impermissibly broadened the bases for conviction, even

though proving the use of a particular firearm is not required

under the firearm statute.     Similarly, in this case, changing the

requirement from proof of "knowingly and willfully" to "knowingly"

impermissibly broadened the bases for Cancelliere's conviction,

even though willfulness is not required under the money laundering

statute.    We agree with the Seventh Circuit that:

     New [bases for conviction] may not be added without
     resubmitting the indictment to the grand jury, whether they
     are added literally, by a formal amendment to the indictment
     ... or by instructions to the trial jury which would allow a
     conviction on grounds not charged by the grand jury.

Leichtnam, 948 F.2d at 379 (internal citations omitted).

     We do not agree with the government that the district court's

use of the word willful in defining the term "intentional" renders

the error harmless.     Cancelliere prepared his defense to a charge

of "knowing and willful" money laundering.             Indeed his whole

defense to this charge rested on his lack of willfulness.                 The

government alleged it even though it need not have, and it must be

charged with proving it.     The government may not decide after the

close of evidence that it would prefer not to have the jury hear

that term again.   The redaction was error, and it was not harmless.

Conviction on these two counts must be reversed.

C. Admission of the Letters

     The letters from Cancelliere's father were hearsay if they

were admitted to prove the truth of the matter asserted in them,

i.e., that Cancelliere's trust fund was depleted and that his

father would not help him financially.          Cancelliere argues that
they were so offered, because if the statements in the letters are

not true they would be irrelevant to the government's case, and

therefore, inadmissible.

     The government counters that the letters were not offered to

prove the truth of the matters asserted therein, but rather to

establish Cancelliere's state of mind, knowledge, beliefs or intent

as a consequence of reading them.      Cancelliere's knowledge and

intent were in issue both with regard to the allegations of the

Indictment and his good-faith defense. The letters, the government

concludes, were relevant, non-hearsay evidence.

     The government points to   United States v. Harris, 942 F.2d

1125 (7th Cir.1991) as support for their theory that letters

offered to prove a defendant's state of mind are not inadmissible

hearsay.   In Harris, several letters from a man to his mistress, in

which he wrote that the things he was giving her were gifts, were

excluded as hearsay from her tax fraud trial.     In reversing their

exclusion, the Seventh Circuit wrote that the letters were not

hearsay because they were offered to prove the mistress's lack of

wilfulness in not reporting the gifts as income, not for the truth

of the matters asserted.    Id. at 1130.   In reversing, the court

noted:

     But the letters were not hearsay for the purpose of showing
     what [the mistress] believed, because her belief does not
     depend on the actual truth of the matters asserted in the
     letters.   Even if [the declarant] were lying, the letters
     could have caused [the mistress] to believe in good faith that
     the things he gave her were intended as gifts.       This good
     faith belief, in turn, would preclude any finding of
     willfulness on her part.

Id. at 1131 (emphasis added).

     In this case, however, unless the statements in the letters
are true, Cancelliere is guilty of no crime.                   There is no law

against knowingly making true statements to a financial institution

(if the statements in the letters were false and Cancelliere in

fact had a trust fund as he represented to the banks).                     Unlike

Harris, the truth of the statements in the letters is relevant to

the   element   to    be   proved   by     its   admission—that    Cancelliere

knowingly made false statements.

        Hearsay issues like this one where evidence is admissible for

one purpose but not for another present difficult problems. As the

Seventh Circuit noted in Harris, jurors are not robots, and can

rarely consider evidence strictly for the sole purpose admitted to

the exclusion of the other, often more obvious, purpose.                   Id. at

1130.     In Harris, the letters were admitted because they were of

crucial importance to the defense of good faith even though the

court noted that the jury would be hard pressed not to consider

them on the impermissible issue of what the declarant actually

intended.

      For Cancelliere, the letters were of crucial importance as

well.       Cancelliere    is    correct      that   his   father—through     the

letters—turned out to be one of the most damaging witnesses against

him at trial.        Therefore, the evidence, if it was hearsay, was

highly prejudicial.

      Furthermore,     this     issue    is   not    readily   resolved.      The

government is correct that proof of Cancelliere's state of mind was

an element of its case, and that the letters are probative of that

state.     Cancelliere is also correct, however, that unless the

statements in the letters were true, i.e., that the trust fund was
exhausted and the father would no longer assist him financially,

the letters were irrelevant.     If in fact Cancelliere did have a

trust fund he could not have been guilty of the underlying crime of

making false statements.    So the truth of the statements contained

in the letters is not unrelated to their relevance in proving

Cancelliere's state of mind, as in Harris.

     Nevertheless, we are persuaded that the letters were not

inadmissible hearsay.     The government was required to prove two

things. It had to prove (1) that Cancelliere made false statements

to the banks (e.g., that he was beneficiary of a trust fund;    that

he could count on financial help from his father, etc.);     and (2)

that Cancelliere knew that the statements were, in fact, false.

         The statements, under the circumstances here, bore at least

a patina of truth.    Cancelliere had, at one time, an interest in a

trust fund;     he had received substantial funds from a well-to-do

father.    He mounted a persuasive defense that he believed he still

had access to these resources.      There was ample proof that the

trust fund was long-since depleted and the family assets were no

longer available to him.4    The letters went to show that he   knew

these facts at the time he misrepresented them because he had been

advised, specifically, that these sources of funds were gone.

     The letters could not be considered as evidence that the funds

     4
      Our result might be different if the government had not
introduced independent evidence going to the truth of the matters
asserted in the letters. The record contains, however, ample
evidence, including admissions made by the defendant both before
trial and during cross-examination, that his mother's trust fund
was, in fact, depleted at the times he was representing that he
was still its beneficiary, and that in fact he would receive no
further financial help from his father.
were   non-existent     or     unavailable.         However,     if    the   jury     was

persuaded by other evidence of the truth of the matters asserted in

the letters, it was proper for the jurors to conclude, from the

letters, that Cancelliere knew when he made the statements to the

banks, that the statements were false.

       The   judge    dissected       the   situation     with     the   scalpel      of

instruction to the jury to consider the letters for the proper

purpose and not to consider them for any other—improper—purpose.

As we noted above, there is a danger that jurors will consider such

letters for the improper purpose—their truth.                    Nevertheless, we

expect jurors to follow instructions.

       Furthermore, if there be such danger, it is assumed by the

defendant who puts the government to its proof of his knowledge and

then protests that its ready-at-hand proof of that knowledge might

harm him.

       We conclude, therefore, that the letters were not hearsay when

admitted to prove Cancelliere's state of mind.

D. The Admission of the Extrinsic Evidence

       The   district       court    permitted     extrinsic     evidence       in    the

following categories:          (1) the testimony of Dennis Diaz regarding

an   uncharged      loan;      (2)    evidence     involving       uncharged     false

statements;     and (3) evidence that Cancelliere bounced checks from

his personal checking account.

       Diaz testified that Cancelliere obtained fraudulent loans from

an institution not charged in this case. The government maintains,

however,     that    this    testimony      is   not   extrinsic      because    it   is

inextricably intertwined with evidence of the charged crimes.
       The evidence involving uncharged false statements came in

through a witness named Passer, who testified that Cancelliere

filed   Chapter    Seven   bankruptcy    after    accumulating      substantial

unsecured debts from many banks, including two uncharged banks.

Cancelliere     contends   that    Passer's    testimony     went   beyond   the

purpose    of   Rule    404(b)    because   through     this   testimony      the

government established that Cancelliere's debt to the three charged

banks was discharged in bankruptcy.           The two uncharged banks filed

adversary complaints alleging fraud in the non-dischargeability

bankruptcy proceeding.      The district court admitted into evidence

the entire bankruptcy court files.            The government contends that

this    evidence   is   proper    Rule   404(b)   evidence     going   to    show

knowledge, intent, or absence of mistake or accident because

Cancelliere     made    certain    admissions     in   the   bankruptcy      case

concerning his representations to the charged banks.

       Finally, the government introduced evidence that Cancelliere

bounced checks from his personal checking account.                  Cancelliere

contends that this evidence did not involve any scheme to defraud.

Rather, it served only to establish bad character.             The government

responds that this evidence is linked in time and circumstances

with the charged crimes and provides a context for the charged

crimes for the jury.

       Cancelliere asserts that all the extrinsic evidence allowed by

the district court was highly prejudicial, unnecessary to the

government's case, and served only to establish propensity, rather

than some permissible purpose under Rule 404(b) such as absence of

mistake or accident.
      Rule 404(b) provides that "[e]vidence of other crimes,

wrongs, or acts is not admissible to prove the character of a

person in order to show action in conformity therewith.                   It may,

however, be admissible for other purposes, such as proof of motive,

opportunity, intent, preparation, plan, knowledge, identity, or

absence    of     mistake   or    accident...."         The    rule   permits   the

introduction of evidence of a prior or uncharged act if the

government can demonstrate:          (1) a proper purpose for introducing

the evidence;        (2) that the prior act occurred and that the

defendant was the actor;            and (3) that the probative value of

introducing the evidence outweighs any prejudicial effect the

evidence might have. United States v. Perez-Garcia, 904 F.2d 1534,

1544 (11th Cir.1990).

     Evidence of criminal activity other than the offense charged,

however,     is    not   extrinsic      evidence    if    it    is    inextricably

intertwined with the evidence of the charged offense.                       United

States v. Collins, 779 F.2d 1520, 1531-1532 (11th Cir.1986).

Furthermore, Rule 404(b) does not apply where the evidence concerns

the "context, motive, and set-up of the crime" and is "linked in

time and circumstances with the charged crime, or forms an integral

and natural part of an account of the crime, or is necessary to

complete the story of the crime for the jury."                  United States v.

Williford, 764 F.2d 1493, 1499 (11th Cir.1985).

      (1) The testimony of Diaz regarding bank fraud was not

extrinsic.      Although not charged, these loans were alleged in the

bank fraud counts as part of the manner and means by which

Cancelliere       carried   out   his   scheme     to   defraud.      Cancelliere
understated his liabilities to the uncharged institution in order

to   obtain    loans     from    the   charged   banks.      In   view    of   these

allegations, the evidence was not extrinsic and Rule 404(b) is

inapplicable.

       (2) The evidence in the bankruptcy files established that

Cancelliere testified at a creditors' meeting that he did not own

any shares of the Daily News stock on the date that he had told one

of the banks that he did in order to secure a charged loan.                      The

files also demonstrated that he signed a financial statement

claiming ownership of a trust fund valued at $195,000.                    Finally,

the bankruptcy files revealed that Cancelliere agreed to exempt

from bankruptcy a portion of two loans he obtained from uncharged

institutions     because        he   had   obtained   them   through     fraudulent

representations.       This evidence, although extrinsic, was properly

admitted under Rule 404(b) as going to knowledge, intent or plan.

At   the      relevant     time,       Cancelliere    was    making      the    same

misrepresentations to uncharged banks as he was making to the

charged banks.      The prejudice of having the jury hear of two more

victims was minimal in light of the evidence of his repeated

fraudulent representations over the course of the four years

alleged in the Indictment.             The probative value of this evidence

outweighed its prejudicial effect.               The district court give an

appropriate limiting instruction which was agreed upon by the

parties at the time of admission and in final instructions.                    There

was no abuse of discretion in the admission of this evidence.

      (3) Cancelliere contends that the evidence concerning his

issuance of insufficient funds checks was improperly admitted to
establish    bad   character    in   violation    of   Rule   404(b).        The

government's position is that the evidence was linked in time and

circumstances with the charged crimes and formed an integral and

natural part of the account of the crimes, and was admissible to

complete the story of the crimes for the jury.           See Williford, 764

F.2d at 1499.

      The testimony concerning the bad checks came in through the

president of the bank where Cancelliere was employed.                   After

Cancelliere wrote the bad checks, the president met with him on

several different occasions to counsel him regarding his financial

situation. During one of these sessions, Cancelliere admitted that

he had understated his debt to one of the charged banks.                     The

admission came in, therefore, through the context of the bad check

discussions between Cancelliere and his bank president.                  Such

evidence is not extrinsic under Williford, and Rule 404(b) is

inapplicable.

                               IV. CONCLUSION

     The    convictions   on   Counts   6   and   7    were   based   upon   an

unconstitutional redaction of the Indictment and are REVERSED.

Having found no error in the admission of the letters or the

extrinsic evidence, the convictions and sentences on Counts 1-5 are

AFFIRMED.

     BLACK, Circuit Judge, specially concurring:

     I concur.     I write separately as to the redaction of the term

"willfully" from counts 6 and 7 of the indictment.

     I view the redaction as more closely resembling a variance
than an amendment 1 and must, therefore, consider the question of

whether or not the redaction was prejudicial.          Keller, 916 F.2d at

633 (citing United States v. Figueroa, 666 F.2d 1375, 1379 (11th

Cir.1982)).   In this case, the defense attorney built his entire

defense   around   the   inclusion   of   the   term   "willfully"   in   the

indictment.   At the end of trial, after the close of evidence, the

term was deleted from the indictment and was not included in the

instructions to the jury.      Although I believe the evidence might

well have supported a verdict of guilty with the term "willfully"

remaining, that is not the issue. Deleting "willfully" at the last

minute undermined the credibility of the defense attorney to the

extent that it was impossible for him to make a credible argument

to the jury. The redaction was prejudicial, and I therefore concur

in the result reached by the majority.

     1
      The majority holds that the redaction in this case more
closely resembles an impermissible broadening of the indictment
as discussed in United States v. Keller, 916 F.2d 628 (11th
Cir.1990), cert. denied, 499 U.S. 978, 111 S.Ct. 1628, 113
L.Ed.2d 724 (1991), and United States v. Leichtnam, 948 F.2d 370
(7th Cir.1991), than the elimination of unnecessary averments as
discussed in United States v. Miller, 471 U.S. 130, 105 S.Ct.
1811, 85 L.Ed.2d 99 (1985). Keller and Leichtnam are amendment
cases and if the redaction of "willfully" were an amendment, the
conviction on counts 6 and 7 would be per se reversible. Keller,
916 F.2d at 633. This would also mean that the term could not
have been redacted before trial without the grand jury returning
an amended indictment. See Miller 471 U.S. at 135, 105 S.Ct. at
1815.