Court Opinion

ID: 2967427
Source: CourtListenerOpinion
Date Created: 2015-09-22 02:34:14.739764+00
Date Added: 2024-06-11T11:43:13.611170
License: Public Domain

PUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT

UNITED STATES OF AMERICA,              
                 Plaintiff-Appellee,
                 v.
                                                No. 00-4498
PHOTOGRAMMETRIC DATA SERVICES,
INCORPORATED,
              Defendant-Appellant.
                                       
UNITED STATES OF AMERICA,              
                 Plaintiff-Appellee,
                 v.                             No. 00-4499
DAVID G. WEBB,
             Defendant-Appellant.
                                       
          Appeals from the United States District Court
        for the Eastern District of Virginia, at Alexandria.
               Leonie M. Brinkema, District Judge.
                           (CR-99-471)

                      Argued: March 2, 2001

                      Decided: July 30, 2001

 Before WILKINS, WILLIAMS, and TRAXLER, Circuit Judges.

Affirmed by published opinion. Judge Traxler wrote the majority
opinion, in which Judge Wilkins joined. Judge Williams wrote an
opinion concurring in part and concurring in the judgment.
2        UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES
                            COUNSEL

ARGUED: Laurin Howard Mills, NIXON PEABODY, L.L.P.,
Washington, D.C., for Appellants. Jack I. Hanly, Assistant United
States Attorney, Alexandria, Virginia, for Appellee. ON BRIEF:
Laura Ariane Miller, NIXON PEABODY, L.L.P., Washington, D.C.,
for Appellant Webb; David F. Geneson, Lara S. Zick, HUNTON &
WILLIAMS, Washington, D.C., for Appellant Photogrammetric.
Helen F. Fahey, United States Attorney, Alexandria, Virginia, for
Appellee.

                             OPINION

TRAXLER, Circuit Judge:

   Photogrammetric Data Services, Inc. ("PDS") and David G. Webb
("Webb") appeal their convictions and sentences for highway project
fraud, see 18 U.S.C.A. § 1020 (West 2000), and mail fraud, see 18
U.S.C.A. § 1341 (West 2000). We affirm.

                              I. Facts

   Appellant PDS is a Virginia corporation engaged in the business of
preparing topographic maps from aerial photography and ground sur-
veys. Between 1994 and 1999, PDS performed subcontracting work
for firms having contracts with the Virginia Department of Transpor-
tation ("VDOT") to perform preliminary engineering work for high-
way construction. Appellant Webb was employed by PDS as the
photogrammetric manager during this time period. In December 1999,
the United States filed an indictment against PDS and Webb charging
highway project fraud, in violation of 18 U.S.C.A. § 1020, and mail
fraud, in violation of 18 U.S.C.A. § 1341. The charges stemmed from
allegations that PDS and Webb had engaged in a broad, long-term
practice of submitting inflated invoices to VDOT’s prime contractors,
who in turn passed the invoices on to VDOT for payment.

   According to the evidence, VDOT set initial limits on the amount
of money that its contractors could bill for a particular job awarded,
          UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES              3
based upon estimates of hours submitted in advance by the contrac-
tors. The contractors were then paid according to the actual number
of hours worked, up to the preapproved limit, after which additional
approval was required. At PDS, employees and managers completed
time sheets showing the amount of hours worked on each particular
job, which were then used to prepare the PDS invoices for the VDOT
jobs. The actual hours worked by PDS employees, however, would
often fall short of the number of hours pre-approved by VDOT and,
if billed correctly, would have resulted in PDS leaving "money on the
table." Consequently Webb’s predecessor and Webb, who were
responsible for the PDS billings on the VDOT jobs, manipulated the
employee timesheets and the amount of hours allotted to PDS manag-
ers in order to ensure that PDS billed close to the dollar limits pre-
approved by VDOT.

   In late 1997, an employee of PDS approached law enforcement
officers with information concerning PDS’s long-standing practice of
inflating the VDOT invoices. With the assistance of this employee
acting as a government informant, including his recording of incrimi-
nating statements made by Webb at the workplace, FBI and state law
enforcement agents began investigating the alleged billing fraud and
eventually procured a warrant to search the PDS offices for documen-
tation of the fraudulent scheme.

   On the morning of January 20, 1999, agents executed the search
warrant at the offices of PDS. At the beginning of the search PDS
employees were directed to a conference room, away from the areas
to be searched and, while the search was being conducted, some of
these employees were interviewed by other agents. That same morn-
ing, two agents traveled to Webb’s home, arriving before he left for
work, to interview him concerning the allegations of fraudulent bill-
ing practices. During the interview, Webb made several admissions,
including an admission that PDS had been "padding" the hours on the
VDOT jobs for five years, a responsibility that he had assumed from
the prior VDOT manager four years previously. By Webb’s estima-
tion, PDS had increased the billed amounts on almost every VDOT
job by approximately ten to fifteen percent, resulting in overbilling of
approximately $100,000 to $200,000 per year for five years. Ulti-
mately, documents seized during the search at PDS, as well as the
statements made by Webb to the agents that day, were introduced at
4         UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES
trial. However, no statements made by the other PDS employees at
the time of the search at PDS were introduced as evidence.

   At the conclusion of the trial, PDS and Webb were convicted by
a jury of two counts of highway project fraud and three counts of mail
fraud. Webb was sentenced to 24 months in prison and two years of
supervised release, and was ordered to make restitution jointly with
PDS in the amount of $435,038.33. In addition to the order to make
joint restitution with Webb, PDS was placed on one year of probation
and fined $522,045.29. See United States v. Photogrammetric Data
Servs., Inc., 103 F. Supp. 2d 875 (E.D. Va. 2000). This appeal fol-
lowed.

                       II. Motions to Suppress

   We begin with Appellants’ assertion that the district court erred in
denying their motion to suppress all fruits of the January 20, 1999
search at PDS, including various timesheets and handwritten notes
seized at that time, and in denying their motion to suppress the state-
ments obtained from Appellant Webb during the interview at his
home that same day. In reviewing the district court’s denial of a
motion to suppress evidence, we review the district court’s factual
findings for clear error, and its legal conclusions de novo. See United
States v. Rusher, 966 F.2d 868, 873 (4th Cir. 1992).

                                   A.

   Appellants contend that the district court erred in (1) failing to con-
duct an evidentiary hearing on the issue of whether the FBI agent pro-
curing the warrant to search the PDS offices made material omissions
or misrepresentations to the magistrate judge in his affidavit to obtain
the search warrant, (2) failing to exclude all fruits of the search
because the law enforcement agents exceeded the permissible scope
of the search warrant by detaining and interviewing PDS employees
during the search, and (3) denying their motion to suppress without
conducting an evidentiary hearing on the issue of whether the law
enforcement agents exceeded the scope of the warrant by their
actions. We address these claims in turn.
          UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES               5
                                   1.

   In a detailed affidavit filed five days before the search at PDS, the
investigating FBI agent outlined the suspected fraudulent scheme by
PDS, the information obtained from the cooperating PDS employee
concerning PDS’s long-standing practice of overbilling VDOT con-
tractors, the corroborating evidence that had been located by the FBI
at VDOT, and the corroborating information obtained from the
recorded conversations between the PDS employee-informant and
Webb. The magistrate judge determined that there was probable cause
to conduct the requested search at PDS and issued the search warrant.

   Appellants now assert that the affidavit was faulty because it failed
to inform the magistrate judge that the government had issued a grand
jury subpoena to PDS for many of the same materials on the same
day, that the government intended instead to use the search warrant
as subterfuge to obtain statements from PDS employees in addition
to the requested documents, and that the government’s cooperating
employee witness had stolen documents from PDS, all of which
would allegedly have called into question the credibility of the gov-
ernment and its inside witness.

   An affidavit supporting an application for a search warrant is enti-
tled to a strong presumption of validity. See Franks v. Delaware, 438
U.S. 154, 171 (1978). Consequently, in order to obtain an evidentiary
hearing on the integrity of an affidavit, a defendant must make "a sub-
stantial preliminary showing that a false statement knowingly and
intentionally, or with reckless disregard for the truth, was included by
the affiant in the warrant affidavit." Id. at 155-56. The "showing
‘must be more than conclusory’ and must be accompanied by a
detailed offer of proof." United States v. Colkley, 899 F.2d 297, 300
(4th Cir. 1990) (quoting Franks, 438 U.S. at 171)). "Mere negligence
in recording the facts relevant to a probable-cause determination is
not enough." Id. at 301 (internal quotation marks and alterations omit-
ted).

   "[T]he false information must [also] be essential to the probable
cause determination: ‘if, when material that is the subject of the
alleged falsity or reckless disregard is set to one side, there remains
sufficient content in the warrant affidavit to support a finding of prob-
6         UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES
able cause, no hearing is required.’" Id. at 300 (quoting Franks, 438
U.S. at 171-72). Thus, a Franks hearing "serves to prevent the admis-
sion of evidence obtained pursuant to warrants that were issued only
because the issuing magistrate was misled into believing that there
existed probable cause." United States v. Friedemann, 210 F.3d 227,
229 (4th Cir.), cert. denied, 121 S. Ct. 180 (2000).

   We are satisfied that the district court did not err in refusing to con-
duct a Franks hearing. Appellants failed to make a substantial prelim-
inary showing that the FBI agent procuring the PDS search warrant
made any false statements knowingly and intentionally, or with reck-
less disregard for the truth, in the warrant affidavit. Nor do the alleged
omissions of which Appellants complain alter the probable cause
determination such that the warrant was issued by the magistrate
judge because he was misled into believing that probable cause
existed. First, the fact that a grand jury subpoena existed and that the
FBI intended to interview PDS employees at the time of the search
obviously had no effect upon whether probable cause existed to
search the PDS offices for documents which were properly included
within the warrant’s scope. Second, the alleged "stolen" documents
appear to consist of one document which the informant had reviewed
during the normal course of his employment, but which he actually
took from Appellant Webb’s locked desk drawer. When provided to
the FBI, the document was locked away and never used. Appellants
have made no claim that the documents relied upon in the warrant
affidavit were "stolen" or otherwise improperly obtained and no
showing that the document taken by the informant from the locked
desk drawer was ever relied upon by the government in any way.
And, Appellants have not demonstrated that this isolated act on the
part of the informant somehow operated to defeat the sufficiency of
the probable cause showing otherwise made or that it so seriously
undermined his credibility as to render the balance of the substantial
probable cause showing unreliable.

   Accordingly, we conclude that the district court did not err in refus-
ing to hold a Franks hearing and in refusing to grant the motion to
suppress the evidence obtained as a consequence of the warrant exe-
cuted at PDS.
          UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES             7
                                  2.

   Appellants next claim that the court should have suppressed all
fruits of the search at PDS because, by detaining and interviewing
PDS employees, the agents acted in "flagrant disregard" of the scope
of the search warrant, which authorized only the seizure of certain
documentary and computer records, rendering the otherwise legal
search violative of Appellants’ Fourth Amendment rights. See United
States v. Ruhe, 191 F.3d 376, 383 (4th Cir. 1999). We conclude that
the agents did not exceed the scope of the warrant by detaining and
interviewing the PDS employees and, in any event, that blanket sup-
pression of all documentary evidence seized in accordance with the
warrant would not be required by the Fourth Amendment.

   As an initial premise, we find unpersuasive Appellant’s argument
that the agents unlawfully "seized" the PDS employees at the time of
the search. Because they were in possession of a valid warrant to
search the premises of PDS for evidence of the fraudulent billing
scheme, the agents at PDS necessarily had authority to secure the
premises and detain the employees temporarily in order to conduct the
search with minimal interference. Cf. Michigan v. Summers, 452 U.S.
692, 702-03 (1981) (noting that law enforcement officers searching
premises for contraband pursuant to a valid search warrant have the
authority to temporarily detain the occupants at the premises while the
search is being conducted); United States v. Smith, 704 F.2d 723, 725
(4th Cir. 1983) (same). In particular, the agents at PDS, suspecting a
widespread fraudulent billing practice within the company, had a
valid interest in assuring that the altered timesheets they expected to
find could be seized before any employee or manager had the oppor-
tunity to destroy them. Cf. Michigan, 452 U.S. at 702-03 (noting law
enforcement’s interest in detaining occupants in order to prevent
"frantic efforts to conceal or destroy evidence" which could pose a
risk of harm to both the police and the occupants).

   Even were we to conclude that the employees were improperly
detained and interviewed during the search, however, Appellants have
not made a showing that their Fourth Amendment rights were violated
by the agents’ actions in doing so. As a general rule, items properly
seized by agents executing a search warrant "may still be admitted
even when they are obtained at the same time as improperly seized
8         UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES
items." Ruhe, 191 F.3d at 383; see also United States v. Squillacote,
221 F.3d 542, 556 (4th Cir. 2000), cert. denied, 121 S. Ct. 1601
(2001). Thus, "[w]hile all evidence which is not identified within a
search warrant may be excluded if the executing officer exceeds the
scope of the warrant, such exclusion does not extend to evidence actu-
ally named in the search warrant which is discovered during the
course of the search." United States v. Jones, 31 F.3d 1304, 1314 (4th
Cir. 1994). Properly seized evidence will be excluded only "[i]n
extreme circumstances . . . when the officers executing the warrant
exhibit a ‘flagrant disregard for its terms.’" Ruhe, 191 F.3d at 383
(quoting Jones, 31 F.3d at 1314). "The extraordinary remedy of blan-
ket suppression of all evidence seized should be used only when the
violations of the warrant’s requirements are so extreme that the search
is essentially transformed into an impermissible general search,"
Squillacote, 221 F.3d at 556 (internal quotation marks omitted), such
as when officers have seized "large quantities of evidence clearly not
within the scope of the warrant," id.

   In this case, of course, Appellants contend that the district court
erred in admitting the properly seized documents obtained at PDS
pursuant to the valid search warrant because the agents also inter-
viewed employees while the search was being conducted. However,
there is no allegation that the agents ever exceeded the scope of the
search warrant in the seizure of the documents, and no statements
obtained from the employees were admitted as evidence during the
trial. Nor is there even an assertion that any documents ultimately
obtained or admitted into evidence were only able to be procured as
a result of statements made by the employees that day. Under the cir-
cumstances, we do not view the agents’ interviewing of employees
who had been detained during the execution of a search warrant as
acts taken in "flagrant disregard" of the terms of the search warrant.
Therefore, the extreme remedy of blanket suppression of the docu-
mentary evidence covered by the terms of the warrant was not
required and the district court properly denied Appellants’ motion to
suppress on this basis.

                                  3.

   For similar reasons, we reject Appellants’ alternative contention
that the district court should have held an evidentiary hearing on the
          UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES              9
motion to suppress because there was a factual dispute as to whether
the employees were forcibly detained and coercively questioned. Cf.
United States v. Taylor, 13 F.3d 786, 789 (4th Cir. 1994) (holding that
"[w]hen material facts that affect the resolution of a motion to sup-
press evidence seized during a warrantless search are in conflict, the
appropriate way to resolve the conflict is by holding an evidentiary
hearing after which the district court will be in a position to make
findings"). Appellants assert that they created a material factual dis-
pute through the affidavits of several of the PDS employees who were
interviewed during the search. However, while there does appear to
be some discrepancy in the extent of the detention and questioning
employed by the agents, as well as in the perceptions of the employ-
ees concerning their rights at the time, we cannot say that the district
court erred in failing to conduct an evidentiary hearing. Even if we
were to accept the version of events as set forth in the employee affi-
davits, Appellants were not entitled to suppression of the timesheets
and other documents obtained in the search at PDS. Appellants
offered no support for their conclusory claim that the search warrant
was "mere subterfuge" to detain and interrogate the employees. And,
as noted previously, the documentary evidence obtained and sought
to be admitted was unquestionably within the scope of the search war-
rant, whereas the statements taken from the employees were not
admitted into evidence.

                                  B.

   Webb next contends that the statements in which he admitted pad-
ding the invoices submitted to the prime contractors, given to law
enforcement agents during the January 20, 1999 interview at his
home, should have been suppressed because they were made during
a custodial interrogation without his having been advised of his right
not to incriminate himself. We disagree.

   It is, of course, well established that persons who are "‘taken into
custody or otherwise deprived of [their] freedom of action in any sig-
nificant way’" must be given Miranda warnings before being ques-
tioned. Stansbury v. California, 511 U.S. 318, 322 (1994) (per
curiam) (quoting Miranda v. Arizona, 384 U.S. 436, 444 (1966)). In
Miranda, the Supreme Court afforded protection to the Fifth Amend-
ment privilege against compelled self-incrimination "from the coer-
10        UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES
cive pressures that can be brought to bear upon a suspect in the
context of custodial interrogation." Berkemer v. McCarty, 468 U.S.
420, 428 (1984). To determine whether a statement is voluntary, we
look to see "whether the confession was extracted by any sort of
threats or violence, or obtained by any direct or implied promises,
however slight, or by the exertion of improper influence." Hutto v.
Ross, 429 U.S. 28, 30 (1976) (per curiam) (internal quotation marks
and alterations omitted). "[C]oercive police activity is a necessary
predicate to the finding that a confession is not voluntary." United
States v. Braxton, 112 F.3d 777, 780 (4th Cir. 1997) (internal quota-
tion marks omitted). However, "[t]he mere existence of threats, vio-
lence, implied promises, improper influence, or other coercive police
activity . . . does not automatically render a confession involuntary.
The proper inquiry is whether the defendant’s will has been overborne
or his capacity for self-determination critically impaired." Id. at 780
(internal quotation marks omitted). "[C]ourts must consider the total-
ity of the circumstances, including the characteristics of the defen-
dant, the setting of the interview, and the details of the interrogation."
Id. at 781 (internal quotation marks omitted); see also United States
v. Howard, 115 F.3d 1151, 1154 (4th Cir. 1997) ("An individual is
‘in custody’ for Miranda purposes when, under the totality of the cir-
cumstances, the ‘suspect’s freedom of action is curtailed to a degree
associated with formal arrest.’" (quoting Berkemer, 468 U.S. at 440)).
When reviewing a motion to suppress admissions of a defendant on
the grounds that they were made during a custodial interrogation
without Miranda warnings, we must accept the district court’s find-
ings of fact on the circumstances surrounding a confession unless
clearly erroneous, but must make an independent determination on the
issue of voluntariness. See Braxton, 112 F.3d at 781.

   On the morning of January 20th, two law enforcement agents trav-
eled to Webb’s home and parked on the street to wait for him to leave
for work. Webb came out at approximately 7:00 a.m. and drove down
his driveway. The agents then pulled forward to block the driveway,
got out of their car, and asked to speak with Webb about his employ-
ment at PDS. Webb told the agents that he needed to take his son to
the bus stop at a local store first, but that they could follow him to
the store. The agents agreed. At the store, Webb dropped his son off
and entered the store alone. After returning with a cup of coffee,
Webb spoke briefly with the agents. The agents, however, told Webb
          UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES               11
that they would prefer to return to Webb’s home for the interview,
and Webb agreed. After returning to Webb’s home, Webb and the
agents began to speak on Webb’s deck, but because of the January
weather, the agents asked to go inside. The men then entered Webb’s
home, where Webb closed his dog in another room before sitting
down for the interview. Webb also paused to make a telephone call
to his employer to let them know he would be late for work. The
interview lasted approximately one and one-half hours, during which
time Webb admitted padding the VDOT bills on PDS’s behalf.

   After receiving evidence concerning the events on that day, the dis-
trict court found that the officers were not required to give Webb
Miranda warnings and that the statements made by Webb during the
interview in his home were voluntary. Considering the totality of the
circumstances, we agree. Prior to the interview at his home, Webb
was never placed under arrest, handcuffed, or otherwise restrained.
Webb was interviewed in familiar surroundings, in his own home, for
a reasonable period of time, where his movements were not restricted.
No threats or promises were made to obtain his cooperation, nor was
intimidation brought to bear upon him. Indeed, Webb testified that he
agreed to speak with the agents both at the store and on the deck of
his home.

   Nonetheless, Webb asserts on appeal that his admissions were not
made voluntarily because one agent got out of his car "brandishing"
a sidearm when Webb was first leaving his home, the agents insisted
on going inside instead of staying on the deck when they returned for
the interview, and he eventually asked for an attorney. We are unper-
suaded. First, Webb’s own account of the events that morning do not
substantiate Appellants’ exaggerated claim that "[o]ne of the agents
got out of the car brandishing his sidearm." Appellants’ Brief at 17.
Webb testified, in response to a question as to whether he knew the
agent approaching his car was a law enforcement officer, that he "no-
tice[d] that [the officer] was wearing a side arm," J.A. 337 (emphasis
added), but made no claim that a side arm was "brandished." Second,
like the district court, we cannot infer that the agents’ request that the
interview take place inside Webb’s home instead of on the deck
somehow turned the interview coercive as opposed to consensual in
nature, especially given the fact that it took place in the month of Jan-
uary. Third, and with regard to the only matter in direct dispute, we
12        UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES
cannot say that the district court’s finding that the evidence was insuf-
ficient to find that Webb requested an attorney was clearly erroneous.

   In sum, we are at best left with Webb’s after-the-fact assertion that
he felt he had little or no choice but to accede to the agents’ request
for an interview, which is entitled to limited consideration given the
totality of the circumstances before us. See Braxton, 112 F.3d at 781
("Subsequent testimony by an accused about his prior subjective men-
tal impressions and reactions must be carefully scrutinized, as such
testimony is always influenced by his self-interest." (internal quota-
tion marks and alterations omitted)). Webb failed to establish that the
law enforcement agents were so intimidating or overpowering as to
overcome his will to resist. Because this was not a custodial situation,
the district court did not err in concluding that Miranda warnings
were not required and, consequently, in refusing to suppress Webb’s
statements.

                                   C.

   PDS separately challenges the district court’s admission of the
incriminating statements made by Webb to the law enforcement
agents on January 20, 1999, as well as Webb’s statements made to the
government informant and tape-recorded by the informant prior to
that time. Specifically, PDS asserts that because Webb did not testify
at trial, the admission of Webb’s statements against PDS violated
PDS’s Sixth Amendment right to confrontation. See Bruton v. United
States, 391 U.S. 123, 126 (1968). The district court ruled that the
statements were admissible under Rule 801(d)(2)(D) of the Federal
Rules of Evidence and that their admission into evidence did not vio-
late PDS’s Sixth Amendment right to confrontation.

   "Because a corporation can act only through its employees, a state-
ment by a corporate official . . . can certainly be considered an admis-
sion by a corporate defendant." United States v. Brothers Constr. Co.,
219 F.3d 300, 310-11 (4th Cir.), cert. denied, 121 S. Ct. 628 (2000).
And, under Rule 801(d)(2)(D), an out-of-court statement offered as
evidence at trial is not considered 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." Fed. R.
          UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES                13
Evid. 801(d)(2)(D). There is no dispute that the statements Webb
made to the government informant (a co-employee) and to the law
enforcement agents concerned Webb’s billing practices and proce-
dures at PDS while he was employed as the manager of the photo-
gram department. Thus, the statements concerned matters within the
scope of Webb’s employment with PDS, made during the existence
of the employment relationship, and were admissible against PDS
under Rule 801(d)(2)(D). See Brothers, 219 F.3d at 309-311 (holding
that grand jury testimony of officer and in-house counsel for corpo-
rate defendant was properly admitted as admission against the corpo-
rate defendant). Indeed, PDS seemingly agrees that Webb’s
statements would be admissible under the provisions of Rule
801(d)(2)(D), contending instead that the admission of Webb’s state-
ments against PDS was improper because it nevertheless ran afoul of
PDS’s constitutional right of confrontation. We disagree that admis-
sion of the statement was error.

   The Confrontation Clause of the Sixth Amendment guarantees the
right of a criminal defendant "to be confronted with the witnesses
against him." U.S. Const. amend. VI. But while "the Confrontation
Clause reflects a preference for face-to-face confrontation at trial,"
Ohio v. Roberts, 448 U.S. 56, 63 (1980) (footnote omitted), it does
not foreclose the admission of all hearsay statements when the declar-
ant is unavailable, see id. at 64. Rather, "[r]eflecting its underlying
purpose to augment accuracy in the factfinding process by ensuring
the defendant an effective means to test adverse evidence," the Con-
frontation Clause does not prohibit the introduction of hearsay state-
ments of an unavailable declarant which are "marked with such
trustworthiness that there is no material departure from the reason of
the general rule." Id. at 65 (internal quotation marks omitted). "‘The
focus of the Court’s concern has been to insure that there are indicia
of reliability which have been widely viewed as determinative of
whether the statement may be placed before the jury though there is
no confrontation of the declarant, and to afford the trier of fact a satis-
factory basis for evaluating the truth of the prior statement.’" Id.
(internal citation omitted) (quoting Mancusi v. Stubbs, 408 U.S. 204,
213 (1972)). From these principles, the Court has held that a hearsay
statement is admissible and does not violate the Confrontation Clause
where the witness is unavailable and the statement bears sufficient
"indicia of reliability" in that it falls within a "firmly rooted hearsay
14        UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES
exception," or has "particularized guarantees of trustworthiness." Id.
at 65-66; see also Lilly v. Virginia, 527 U.S. 116, 124-25 (1999) (plu-
rality).

   First, a hearsay exception is "firmly rooted" if it "rest[s] upon such
solid foundations that admission of virtually any evidence within [it]
comports with the ‘substance of constitutional protection.’" Roberts,
448 U.S. at 66. For example, in United States v. Saks, 964 F.2d 1514
(5th Cir. 1992), the Fifth Circuit identified several "firmly rooted"
exceptions to the hearsay prohibition that would serve as exceptions
to Bruton: the hearsay exception for co-conspirators in Rule
801(d)(2)(E), the "spontaneous declaration" exception in Rule 803(2),
and the "medical examination" exception in Rule 803(4) of the Fed-
eral Rules of Evidence. See id. at 1525; White v. Illinois, 502 U.S.
346, 356 (1992); see also Bourjaily v. United States, 483 U.S. 171,
183 (1987) (holding that "no independent inquiry into reliability is
required when the evidence falls within a firmly rooted hearsay
exception" like that for co-conspirators under Rule 801(d)(2)(E)
(internal quotation marks omitted)); United States v. Shores, 33 F.3d
438, 442 (4th Cir. 1994) (observing that Bruton does not apply if the
non-testifying co-defendant’s statement is admissible as a nonhearsay
statement under Fed. R. Civ. P. 801(d)(2)(E)); Folston v. Allsbrook,
691 F.2d 184, 187 (4th Cir. 1982) (same).

    Failing to see any meaningful distinction between Rule
801(d)(2)(E) and Rule 801(d)(2)(D) for purposes of Bruton, the Saks
court held that the agency exception set forth in Rule 801(d)(2)(D) "is
equally rooted in our jurisprudence," Saks, 964 F.2d at 1525, and,
therefore, "if statements meet the requirements of Rule 801(d)(2)(D)
. . . the Confrontation Clause is satisfied," id. at 1526; see also United
States v. Walker, 148 F.3d 518, 522 (5th Cir. 1998). Consequently,
the court ruled that the prior testimony of defendant’s business part-
ner, offered in a prior civil suit pertaining to the alleged criminal acts,
was admissible against the defendant in his subsequent criminal suit.
See Saks, 964 F.2d at 1526.

  PDS asserts, however, that the Saks court overlooked the fact that
current Rule 801(d)(2)(D) broadened the traditional exception for
agents’ statements in our jurisprudence, which only allowed for the
admission of statements "made by the agent acting in the scope of his
          UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES               15
employment," and not for all "statements related to a matter within
the scope of the agency or employment." Fed. R. Evid. 801(d)(2)(D)
advisory committee’s note; see also United States v. King, 134 F.3d
1173, 1174 n.1 (2d Cir. 1998) (noting that "[s]ection 801(d)(2)(D)
broaden[ed] the prior definition of admissible statements of agents,"
but finding it unnecessary to "decide whether this broadening renders
the current version not ‘firmly rooted’ as a hearsay exception, for pur-
poses of the Confrontation Clause" (internal citation omitted)). Thus,
PDS contends that while statements made by Webb to his co-
employee during the course of his employment might fall within the
historical exception to the hearsay rule, Webb’s statements to the law
enforcement agents during the interview at his home would not fall
within this traditional, or "firmly rooted," exception because he was
not acting within the scope of his employment at the time he made
the statements.

   Although PDS correctly notes that Rule 801(d)(2)(D) broadened
the original exception for the admissibility of hearsay statements
made by an agent against the agent’s employer, we need not decide
whether Webb’s statements to the law enforcement officials in his
home, which clearly fall within the current hearsay exception of Rule
801(d)(2)(D), would also fall within a "firmly rooted" exception to the
hearsay rule. Even were we to assume that they do not, the statements
contain "particularized guarantees of trustworthiness" such that they
need not be subjected to the adversarial testing normally required by
the Confrontation Clause.

   PDS disagrees, asserting that Webb’s statements cannot satisfy the
second prong of the Ohio v. Roberts test because the Court has firmly
held to the general rule that an accomplice’s confession that incrimi-
nates a defendant is presumptively unreliable. See Lee v. Illinois, 476
U.S. 530, 541 (1986). But while PDS’s recitation of the general rule
is an accurate one, it fails to recognize that the Court’s holding in this
regard was premised upon the "basic understanding that when one
person accuses another of a crime under circumstances in which the
declarant stands to gain by inculpating another, the accusation is pre-
sumptively suspect and must be subjected to the scrutiny of cross-
examination." Id. In other words, when a defendant, in the hopes of
helping himself, has made a statement which shifts or spreads blame
to another defendant or accomplice, the Court has held that statement
16        UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES
does not fall within a firmly rooted exception to the hearsay rule and
falls outside the realm of trustworthy hearsay statements in general.
See Lilly, 527 U.S. at 134.

   This presumption of unreliability, however, is just that — a pre-
sumption. It may be rebutted if the statement "is supported by a show-
ing of particularized guarantees of trustworthiness." Lee, 476 U.S. at
543 (internal quotation marks omitted). And, consistent with the basis
upon which the presumption rests, the Supreme Court has also recog-
nized that "the very fact that a statement is genuinely self-
inculpatory" — rather than an attempt to shift blame or curry favor
— "is itself one of the ‘particularized guarantees of trustworthiness’
that makes a statement admissible under the Confrontation Clause."
Williamson v. United States, 512 U.S. 594, 605 (1994).

   We hold that the self-inculpatory statements of Webb contain such
"particularized guarantees of trustworthiness" and were properly
admitted as evidence against PDS. First, neither Lee nor Lilly
involved the question of the admissibility of an employee’s inculpa-
tory statements against his corporate employer, or the question of the
criminal liability of the corporate employer based upon the agency
relationship with the declarant. Indeed, aside from the question of
whether Rule 801(d)(2)(D) is a firmly rooted hearsay exception, we
note that the commentary to the current version of the Rule itself rec-
ognizes "the reliability and reasonableness of admitting" inculpatory
statements made by an employee concerning the very tasks that "he
was hired to do." 30B Michael H. Graham, Federal Practice & Pro-
cedure § 7023 (2000). The inherent reliability and reasonableness of
admitting such statements as evidence against the employer is even
more compelling where, as here, the statement is inculpatory of the
employee and, thereby, his employer, but is not exculpatory of the
employee. Webb’s statements admitting that he inflated the VDOT
invoices were genuinely self-inculpatory and, while also inculpatory
of PDS, the statements in no way attempted to shift blame to another
or curry favor at the expense of others. Nor are we persuaded by
PDS’s argument that we should regard Webb’s self-inculpatory state-
ments as unreliable because Webb made a reference to his predeces-
sor at PDS engaging in similar actions. Webb’s reference to his
predecessor was fleeting at best and, instead of attempting to shift
blame, Webb implicated himself in criminal conduct from the
          UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES             17
moment he became the photogram manager to the exclusion of all
others.

   For the same reasons, we reject PDS’s claim that because Webb’s
statements were procured either by law enforcement agents or by the
informant, the presumption of unreliability cannot be rebutted. This
argument is premised upon the plurality’s statement in Lilly that "[i]t
is highly unlikely that the presumptive unreliability that attaches to
accomplices’ confessions that shift or spread blame can be effectively
rebutted when . . . the government is involved in the statements’ pro-
duction, and when the statements describe past events and have not
been subjected to adversarial testing." Lilly, 527 U.S. at 137 (empha-
sis added). Relying upon this statement, PDS argues that an accom-
plice’s hearsay statement cannot be admitted against a defendant
whenever the government has been involved in the production of the
statement. We do not read Lilly so broadly, nor are we inclined to
adopt such an all-encompassing rule of exclusion. Webb’s self-
inculpatory statements, although made to law enforcement agents and
the agents’ informant, made no attempt to "shift or spread blame" to
another.

   In summary, Webb’s statements are not analogous to those state-
ments made by a defendant who seeks to shift blame to another for
conduct in which the two were involved, thereby calling the reliability
of the statements about his co-defendant into question.1 In such cases,
"[t]he danger against which the Confrontation Clause was erected —
the conviction of a defendant based, at least in part, on presumptively
unreliable evidence —" is present. Lee, 476 U.S. at 543. Here,
Webb’s statements are not fairly characterized as presumptively unre-
liable and bore sufficient "indicia of reliability" to be admissible
against his employer. Because Webb’s self-inculpatory admissions to
the agents are among those statements which carry "particularized
  1
   PDS also claims that Webb made the statements in a setting that
Webb perceived to be coercive, possibly creating an incentive for Webb
to tell the agents what he may have thought they wanted to hear to get
them to leave. Webb and PDS, of course, failed to substantiate the claim
that Webb’s interview by the two agents in his home was "coercive" in
nature, and even Webb never claimed that he proceeded to make self-
inculpatory statements just to get the agents to leave.
18          UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES
guarantees of trustworthiness," they were properly admissible under
the Confrontation Clause. Accordingly, the district court did not err
in admitting Webb’s statements against PDS under Rule
801(d)(2)(D), and did not violate PDS’s rights under the Confronta-
tion Clause in doing so.

                      III. Mail Fraud Convictions

                                    A.

   Appellants challenge their convictions for mail fraud under 18
U.S.C.A. § 1341, asserting (1) that Congress did not intend for the
mail fraud statute to apply to mailings placed with private or commer-
cial interstate carriers for the purpose of executing a fraudulent
scheme if the mailing itself only actually travels intrastate, and (2)
that if the statute is interpreted otherwise, the statute exceeds Con-
gress’s power under the Commerce Clause.

     The mail fraud statute provides in pertinent part that:

       Whoever, having devised or intending to devise any scheme
       or artifice to defraud, or for obtaining money or property by
       means of false or fraudulent pretenses, representations, or
       promises, . . . for the purpose of executing such scheme or
       artifice or attempting so to do, places in any post office or
       authorized depositor for mail matter, any matter or thing
       whatever to be sent or delivered by the Postal Service, or
       deposits or causes to be deposited any matter or thing what-
       ever to be sent or delivered by any private or commercial
       interstate carrier, or takes or receives therefrom, any such
       matter or thing, or knowingly causes to be delivered by mail
       or such carrier according to the direction thereon, or at the
       place at which it is directed to be delivered by the person to
       whom it is addressed, any such matter or thing, shall be
       fined under this title or imprisoned not more than five years,
       or both.

18 U.S.C.A. § 1341 (emphasis added).
          UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES               19
   In this case, the fraudulent invoices prepared by PDS on the VDOT
jobs were always mailed from PDS’s offices in Virginia to VDOT’s
prime contractors in Virginia through either the United States Postal
Service or the United Parcel Service ("UPS"). Although the govern-
ment was unable to present evidence as to which carrier was used for
any particular invoice or that any particular invoice actually crossed
state lines in route from PDS to the prime contractor, it did success-
fully prove that one of these interstate carriers (the Postal Service or
UPS) was always used to execute the fraudulent overbilling scheme.2
The district court concluded that the jurisdictional requirement of the
mail fraud statute was satisfied because UPS was a commercial inter-
state carrier and that, although the government could not establish that
the invoices deposited for delivery with UPS actually traveled inter-
state, such was not required. We agree.

                                    1.

   We first address Appellants’ assertion that Congress did not intend
for the "private or commercial interstate carrier" provision to extend
coverage of the mail fraud statute to the use of interstate carriers when
the item deposited for delivery to further the fraudulent scheme actu-
ally travels only intrastate. Specifically, they assert that the language
of § 1341 is ambiguous as to the question of whether it applies to
intrastate deliveries of matters or things deposited with a private or
commercial interstate carrier, or only to matters or things delivered
interstate, that the legislative history counsels that we adopt the more
narrow construction, and that as a last resort we should apply the rule
of lenity to overturn their convictions.

  Our first step in analyzing the meaning of the statute is to "deter-
mine whether the language at issue has a plain and unambiguous
meaning with regard to the particular dispute in the case." Robinson
  2
   Relevant to this issue, the jury was instructed that to convict of mail
fraud, it must find "beyond a reasonable doubt that the use of the mails
or the interstate commercial carrier furthered or advanced or carried out
in some way the scheme or plan to defraud or to obtain money or prop-
erty by means of fraudulent representations," and also that "an interstate
commercial carrier is a carrier . . . engaged in transporting persons or
property across state lines." J.A. 556-57.
20        UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES
v. Shell Oil Co., 519 U.S. 337, 340 (1997). "If the language is plain
and the statutory scheme is coherent and consistent, we need not
inquire further." Holland v. Big River Minerals Corp., 181 F.3d 597,
603 (4th Cir. 1999) (internal quotation marks omitted), cert. denied,
528 U.S. 1117 (2000). "The plainness or ambiguity of the statutory
language is determined by reference to the language itself, the spe-
cific context in which that language is used, and the broader context
of the statute as a whole." Robinson, 519 U.S. at 341. As a general
rule, only "[i]f the statutory language is ambiguous[ ] [do] we look
beyond the language of the statute to the legislative history for guid-
ance." Holland, 181 F.3d at 603 (internal quotation marks omitted).
And, then, "[i]f congressional intent is not apparent from an examina-
tion of the legislative history, we apply the traditional tools of statu-
tory construction." Id. (internal quotation marks omitted).

   Prior to 1994, the mail fraud statute criminalized the use of the
United States Postal Service to execute a fraudulent scheme, but had
no application to private or commercial interstate carriers. See United
States v. Lefkowitz, 125 F.3d 608, 617 (8th Cir. 1997). Then, as now,
the statute made no distinction between intrastate and interstate mail-
ings, and it had been extended to both as a proper exercise of the
Postal Power. See United States v. Elliott, 89 F.3d 1360, 1364 (8th
Cir. 1996) (holding that "the jurisdictional basis of the mail fraud stat-
ute is grounded in the Postal Power and therefore necessarily encom-
passes all items passing through the United States mails, even if their
passage is purely intrastate").

   In 1994, however, Congress broadened the application of the mail
fraud statute to also criminalize "deposit[ing] or caus[ing] to be
deposited any matter or thing whatever to be sent or delivered by any
private or commercial interstate carrier" for the purpose of carrying
out a scheme or artifice to defraud. Violent Crime Control and Law
Enforcement Act of 1994, Pub. L. No. 103-322, § 250006, 108 Stat.
1796, 2087 (1994) (emphasis added). Although the amendment was
added pursuant to the Commerce Clause power, and was obviously
intended to extend the mail fraud statute to reach those defendants
who use commercial interstate carriers such as UPS and Federal
Express in lieu of the United States Postal Service, Congress added
no distinction which would serve to exempt from the statute’s
          UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES              21
intended reach intrastate mailings handled by such private or com-
mercial interstate carriers.

   We believe that the unambiguous language of current § 1341 crimi-
nalizes all mailings in furtherance of a fraudulent scheme if the mail-
ings are placed with either the United States Postal Service or with
other private or commercial mail delivery services which operate
interstate, regardless of whether any particular mailing actually
crosses state lines. Had Congress intended to criminalize only inter-
state deliveries by such interstate private or commercial carriers, and
thereby create a different jurisdictional requirement when such carri-
ers are used in lieu of the United States Postal Service, it could easily
have done so. For example, the drafters need only have inserted the
words "interstate" or "across state lines" immediately after the phrase
"sent or delivered." Instead, Congress elected to use virtually identical
language as that dealing with the use of the United States mail; i.e.,
imposing criminal liability when one "places in any post office or
authorized depository for mail matter, any matter or thing whatever
to be sent or delivered by the Postal Service, or deposits or causes to
be deposited any matter or thing whatever to be sent or delivered by
any private or commercial interstate carrier" for the purpose of exe-
cuting the scheme to defraud. 18 U.S.C.A. § 1341. (emphasis added).
Consequently, we find no indication that Congress, in amending a
statute which criminalizes depositing things with the United States
Postal Service for delivery, interstate or intrastate, intended to limit
the extension to private and commercial interstate carriers for only
interstate deliveries. On the contrary, we think it obvious that Con-
gress intended to prohibit the use of private and commercial interstate
carriers to further fraudulent activity in the same way such use of the
United States mail had long been prohibited.

   Although we discern no ambiguity in congressional intent to crimi-
nalize such conduct, we are also unpersuaded by Appellants’ assertion
that the legislative history of the 1994 amendment indicates that Con-
gress did not intend to extend the reach of the mail fraud statute to
situations in which a private or commercial interstate carrier delivers
the particular mailing only intrastate. Courts are to "venture beyond
the plain meaning of a statute only in those rare instances in which
there is ‘a clearly expressed legislative intent to the contrary.’" Hol-
land, 181 F.3d at 603 n.2 (quoting Russello v. United States, 464 U.S.
22        UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES
16, 20 (1983)). Although Appellants argue that references were made
in the legislative history to increased interstate deliveries by facilities
other than the United States Postal Service as a reason to amend the
statute, they candidly acknowledge that the legislative history is silent
regarding whether the amendment was intended to be applicable only
to interstate deliveries by such private and commercial interstate car-
riers.

   For similar reasons, we reject Appellants’ argument that we should
apply the rule of lenity to overturn the mail fraud convictions. The
rule of lenity generally calls for courts to construe ambiguous crimi-
nal statutes against the government and in favor of the defendant. See
United States v. Hall, 972 F.2d 67, 69 (4th Cir. 1992) ("Under the rule
of lenity any criminal statute . . . must be construed in favor of the
accused and against the government if it is ambiguous"). However, "a
provision is [not] ‘ambiguous for purposes of lenity merely because
it [is] possible to articulate a construction more narrow than that
urged by the Government.’" See United States v. Ehsan, 163 F.3d
855, 857 (4th Cir. 1998) (alterations in original) (quoting Moskal v.
United States, 498 U.S. 103, 108 (1990). And, "[t]he simple existence
of some statutory ambiguity . . . is not sufficient to warrant applica-
tion of th[e] rule, for most statutes are ambiguous to some degree."
Muscarello v. United States, 524 U.S. 125, 138 (1998). "Rather, there
must be a ‘grievous ambiguity or uncertainty in the language and
structure of the Act, such that even after a court has seize[d] every-
thing from which aid can be derived, it is still left with an ambiguous
statute.’" Ehsan, 163 F.3d at 858 (alteration in original) (quoting
Chapman v. United States, 500 U.S. 453, 463 (1991). Because we
conclude that the meaning of § 1341 is unambiguous, the rule of len-
ity is inapplicable. The statute prohibits the act of depositing or caus-
ing to be deposited any matter or thing to be delivered by the Postal
Service or by any private or commercial interstate carrier for the pur-
pose of executing a scheme or artifice to defraud, irrespective of
whether the matter or thing deposited for delivery is intended to or
acually does travel interstate or intrastate.

                                    2.

   Having determined that the mail fraud statute applies to the use of
private and commercial interstate carriers to execute a fraudulent
          UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES              23
scheme, regardless of whether the particular matter deposited for
delivery actually travels across state lines, we turn to the question of
whether the mail fraud statute, when applied to the use of a private
or commercial interstate carrier employed solely to deliver an item
intrastate, is a permissible exercise by Congress of its power under the
Commerce Clause. U.S. Const. art. I, § 8, cl. 3 ("Congress shall have
the Power . . . To regulate Commerce . . . among the several States.
. . .").

   In United States v. Lopez, 514 U.S. 549 (1995), the Supreme Court
identified three broad categories of activity that Congress may regu-
late under its commerce power. "First, Congress may regulate the use
of the channels of interstate commerce. Second, Congress is empow-
ered to regulate and protect the instrumentalities of interstate com-
merce, or persons or things in interstate commerce, even though the
threat may come only from intrastate activities. Finally, Congress’s
commerce authority includes the power to regulate those activities
having a substantial relation to interstate commerce, i.e., those activi-
ties that substantially affect interstate commerce." Id. at 558-59 (cita-
tions omitted). The district court concluded that the 1994 amendment
to the mail fraud statute to encompass private and commercial inter-
state carriers was a permissible exercise of Congress’s authority under
the second Lopez category, i.e., the authority to regulate instrumental-
ities of interstate commerce. We agree.

   Private and commercial interstate carriers are facilities or instru-
mentalities of interstate commerce, which Congress can regulate and
protect from harm, "even though the [particular] threat may come
only from [an] intrastate activit[y]." Lopez, 514 U.S. at 558; cf.
Shreveport Rate Cases, 234 U.S. 342, 351 (1914) (noting that Con-
gress’s authority to protect and advance interstate commerce extends
to interstate carriers as instruments of interstate commerce: "the fact
that carriers are instruments of intrastate commerce, as well as inter-
state commerce, does not derogate from the complete and paramount
authority of Congress over the latter, or preclude the Federal power
from being exerted to prevent the intrastate operations of such carriers
from being made a means of injury to that which has been confided
to Federal care."); Southern Ry. Co. v. United States, 222 U.S. 20, 27
(1911) (noting that railroads "are highways of both interstate and
intrastate commerce" and that the Safety Appliance Act may be made
24        UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES
applicable to all railway vehicles, even those used only in intrastate
commerce, under Congress’s plenary power to regulate interstate
commerce). Thus, when Congress acts to regulate or protect an instru-
mentality of interstate commerce under the second Lopez category,
"federal jurisdiction is supplied by the nature of the instrumentality or
facility used, not by separate proof of interstate movement," and "fed-
eral jurisdiction based on intra state use of inter state facilities is an
appropriate exercise of the commerce power." United States v. Marek,
238 F.3d 310, 317 (5th Cir. 2001) (footnotes omitted), petition for
cert. filed, 69 U.S.L.W. 3673 (U.S. Apr. 4, 2001) (No. 00-1526).

   In Marek, a defendant’s intrastate use of Western Union, an instru-
mentality of interstate commerce, to transfer payment to a hit man
was found to be sufficient to permit the court to exercise jurisdiction
under the federal murder-for-hire statute, 18 U.S.C.A. § 1958 (West
2000), even though the wire transfer was initiated in Houston, Texas
and received in Harlingen, Texas, and the government introduced no
evidence that the transmission ever actually crossed the Texas state
line en route between the two points. After determining that the lan-
guage of the statute applied to such intrastate uses of interstate instru-
mentalities, the court concluded that the statute was also a permissible
exercise of Congress’s power under the Commerce Clause. As sup-
port, the court endorsed the similar conclusion reached by the district
court in this case with respect to the 1994 amendment to the mail
fraud statute:

     [T]hrough passage of a 1994 amendment to the federal mail
     fraud statute, Congress expanded 18 U.S.C. § 1341 to reach
     private interstate commercial carriers, such as Emery, DHL,
     and Federal Express, in addition to the U.S. Postal Service.
     Although no circuit court has addressed whether that
     amendment requires the crossing of state lines to establish
     jurisdiction, one district court recently held that the
     amended statute does cover "purely intrastate delivery of
     mails by private or commercial carriers as long as those car-
     riers engage in interstate deliveries. . . . While jurisdiction
     lies only under the Commerce Clause for the use of private
     or commercial carriers, Congress may still regulate their
     intrastate activities because they are instrumentalities of
     interstate commerce." Here again, the conclusion is appro-
          UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES              25
    priate because intrastate use of interstate facilities is prop-
    erly regulated under Congress’s second-category Lopez
    power.

Marek, 238 F.3d at 318 (footnote omitted) (quoting Photogrammetric
Data Services, 103 F. Supp. 2d at 882).

   Other courts have reached similar conclusions, upholding convic-
tions based upon criminal statutes which serve to protect instrumen-
talities of interstate commerce even though the specific conduct
involved arose from intrastate activities. For example, in United
States v. Baker, 82 F.3d 273 (8th Cir. 1996), the Eighth Circuit upheld
the conviction of a police officer under the Travel Act, see 18
U.S.C.A. § 1952(a) (West 2000), premised upon extortion activity in
which the officer escorted his victim, a man he had arrested, to an
automatic teller machine to withdraw money in return for being
released from custody. Because an interstate network of automatic
teller machines is a facility in interstate commerce, the court held, it
falls within the second prong of Lopez, subject to regulation even
though the withdrawal in question triggered an entirely intrastate elec-
tronic transfer. See id. at 275-76. Similarly, in United States v. Gil-
bert, 181 F.3d 152 (1st Cir. 1999), the court upheld a conviction
under 18 U.S.C.A. § 844(e) (West 2000), premised upon the use of
a telephone to make a bomb threat, even though there was no evi-
dence that the threat was routed through an interstate system.
"[B]ecause a telephone is an instrumentality of interstate commerce,"
the court held, "this alone is a sufficient basis for jurisdiction based
on interstate commerce." Id. at 158; see also United States v. Hea-
cock, 31 F.3d 249, 255 (5th Cir. 1994) (holding that "whenever a per-
son uses the United States Post Office to deposit, to transport, and to
deliver parcels, money, or other material by means of the mail, that
person clearly and unmistakably has used a ‘facility in interstate com-
merce,’ irrespective of the intrastate destination of the item mailed,"
and that such intrastate use satisfies the jurisdictional requirement of
the Travel Act); United States v. Clayton, 108 F.3d 1114, 1117 (9th
Cir. 1997) (holding that because cellular telephones and cellphone ID
numbers are instrumentalities of interstate commerce, protectable
under the second category of Lopez, no further inquiry was necessary
to sustain conviction under 18 U.S.C.A. § 1029(a) (West 2000));
United States v. Kunzman, 54 F.3d 1522, 1527 (10th Cir. 1995) ("As
26          UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES
long as the instrumentality used is itself an integral part of an inter-
state system, Congress may regulate intrastate activities involving the
use of the instrumentality. . . .")3

   In its current form, the mail fraud statute prohibits one from "depo-
sit[ing] or caus[ing] to be deposited any matter or thing whatever to
be sent or delivered by any private or commercial interstate carrier"
for the purpose of executing a scheme or artifice to defraud. 18
U.S.C.A. § 1341. As such, it too constitutes a permissible exercise of
Congress’s power to protect interstate facilities from being utilized to
accomplish fraudulent goals.

                                     3.

     Because we find the language of the mail fraud statute to be unam-
  3
   We pause briefly to address Appellants’ suggestion that Congress
intended the mail fraud statute, like the wire fraud statute, to be a regula-
tion of the "use of channels of interstate commerce" under the first Lopez
category and, therefore, that we should look to the wire fraud statute,
which requires proof that a wiring actually crossed state lines, for guid-
ance in interpreting the mail fraud statute. See e.g., United States v.
Darby, 37 F.3d 1059, 1067 (4th Cir. 1994) (holding that "while the Gov-
ernment was required to prove that [the defendant]’s phone call crossed
a state line . . ., the Government did not need to prove that [the defen-
dant] knew of the interstate nexus.").
   In contrast to the mail fraud statute, the wire fraud statute criminalizes
a communication in interstate commerce, providing that it is a crime to
"transmit[ ] or cause[ ] to be transmitted by means of wire, radio, or tele-
vision communication in interstate or foreign commerce, any writings,
signs, signals, pictures, or sounds for the purpose of executing [a]
scheme or artifice" to defraud, 18 U.S.C.A. § 1343 (West 2000) (empha-
sis added), whereas the mail fraud statute criminalizes the act of deposit-
ing or causing to be deposited "any matter or thing whatever to be sent
or delivered by any private or commercial interstate carrier," 18 U.S.C.A.
§ 1341. In other words, the language of the wire fraud statute requires
that a communication actually travel "in interstate or foreign commerce,"
whereas the language of the mail fraud statute requires only that a mail-
ing be deposited with an "interstate carrier." Given these significant tex-
tual differences, we do not find the wire fraud statute to be helpful to our
inquiry.
          UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES               27
biguous, and that Congress’s authority under the Commerce Clause
extends to protect the instrumentalities of interstate commerce from
being used to further fraudulent activity even if the use itself is purely
intrastate, the rule of constitutional doubt raised by Appellants is like-
wise inapplicable. As Appellants note, "where a statute is susceptible
of two constructions, by one of which grave and doubtful constitu-
tional questions arise and by the other of which such questions are
avoided, our duty is to adopt the latter." Jones v. United States, 529
U.S. 848, 857 (2000) (internal quotation marks omitted). However,
we do not view the language of § 1341 as susceptible to the construc-
tion advanced by Appellants, at least not without considerable strain;
nor do we discern a "grave and doubtful constitutional question[ ]" to
arise from the construction we have settled on. Id.

   We are similarly unpersuaded by Appellants’ suggestion that Con-
gress’s decision to protect private and interstate commercial carriers,
in addition to the United States Postal Service, from being utilized to
further fraudulent schemes where the use itself is intrastate, runs afoul
of the respected federal-state balance. See e.g., id. at 858 (holding that
application of federal arson statute to a private home would federalize
a typically state crime and, thereby, "significantly change[ ] the
federal-state balance in the prosecution of crimes") (internal quotation
marks omitted); United States v. Bass, 404 U.S. 336, 349 (1971) (not-
ing policy that "unless Congress conveys its purpose clearly, it will
not be deemed to have significantly changed the federal-state balance.
Congress has traditionally been reluctant to define as a federal crime
conduct readily denounced as criminal by the States."). The mail
fraud statute prohibits use of the United States Postal Service and
other private or commercial interstate carriers to further a fraudulent
scheme; it does not attempt to criminalize such injurious intrastate
use of a private or commercial intrastate carrier or delivery service.

                                    4.

   To conclude, we hold that the mail fraud statute criminalizes the
use of private and commercial interstate carriers to execute fraudulent
schemes to the same extent that the statute criminalizes such use of
the United States mail. The jurisdictional element of the mail fraud
statute is satisfied by defendant’s act of depositing the matter or thing
with a private or commercial interstate carrier, even though the deliv-
28        UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES
ery may be only intrastate. We also hold that criminalizing such con-
duct is a permissible exercise of Congress’s power under the
Commerce Clause to protect private and commercial interstate carri-
ers from the burdens of being used to execute fraudulent schemes.

                                    B.

   Appellants also challenge their mail fraud convictions on the
grounds that the district court’s mail fraud instruction impermissibly
broadened the charges in the indictment. Specifically, Appellants
assert that the district court erred in failing to instruct the jury that it
must find that the four invoices specified in the indictment were
delivered by mail or interstate carrier and that they were false or
fraudulent. This failure, Appellants assert, broadened the possible
bases for conviction beyond the grounds alleged in the indictment,
thereby constructively amending the indictment and constituting error
per se. See e.g., United States v. Randall, 171 F.3d 195, 203 (4th Cir.
1999), cert. denied, 121 S. Ct. 248 (2000); United States v. Floresca,
38 F.3d 706, 710 (4th Cir. 1994) (en banc). We disagree.

   The indictment charged Appellants with four counts of mail fraud.
After describing the scheme to defraud, the indictment goes on to
identify four specific dates on which the Appellants deposited four
specific invoices for delivery by mail or interstate commerce carrier
"for the purpose of executing and attempting to" execute the scheme
to defraud. J.A. 47. The indictment did not charge that the four indi-
vidual invoices sent by mail or interstate carrier were themselves false
or fraudulent, but rather only that the over-billing scheme was false
and fraudulent and that the mailings were in furtherance of the
scheme. Nor does the mail fraud statute require such a charge.

   It is well-settled that a conviction for mail fraud requires a showing
of (1) knowing participation in a scheme to defraud, and (2) a mailing
in furtherance of the scheme. See United States v. Dozie, 27 F.3d 95,
97 (4th Cir. 1994) (per curiam). The use of the mails, however, need
not be an essential element of the scheme to be part of the execution
of the fraud. Rather, it need only "be incident to an essential part of
the scheme or a step in the plot." Schmuck v. United States, 489 U.S.
705, 710-11 (1989) (internal citations and quotation marks omitted).
Accordingly, Appellants’ mail fraud convictions did not require the
          UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES                 29
government to prove that the four invoices referenced in the indict-
ment were false or fraudulent, but only that they were placed in the
mails in furtherance of the fraudulent scheme. See id. at 715 (noting
that "‘innocent’ mailings — ones that contain no false information —
may supply the mailing element").

   Also, while the district court’s standard mail fraud instruction did
not specifically refer to the invoices set forth in the indictment, the
indictment provided to the jury clearly referenced and described the
four invoices which served as the basis for the four separate mail
fraud counts and identified each as a separate count, and the jury was
instructed that it must consider each alleged offense or count sepa-
rately. The court also instructed the jury that it must determine that
the Appellants used the mails or an interstate commercial carrier to
advance the scheme to defraud, and that the government must prove
that the mails or an interstate commercial carrier were used in some
manner to further, advance, or carry out the scheme to defraud. We
conclude that the district court’s instruction did not unconstitutionally
broaden the charges in the indictment.

                   IV. Highway Fraud Convictions

   Appellants also assert that their convictions for highway fraud
under 18 U.S.C.A. § 1020 must be reversed because the government
failed to prove that they acted willfully, failed to establish that the rel-
evant highway projects were approved by the Secretary of Transpor-
tation or a properly authorized delegee of the Secretary, and failed to
prove that the false invoices were made in connection with the con-
struction of a highway project. We address each claim in turn.

                                    A.

   We begin with Appellants’ contention that willfulness is an essen-
tial element of a § 1020 conviction which the government failed to
establish. The district court refused Appellants’ proffered charge to
this effect, instructing the jury instead that it must find that the Appel-
lants made false statements knowingly.

   The highway fraud provision, 18 U.S.C.A. § 1020, provides in per-
tinent part that "[w]hoever . . . knowingly makes any false statement,
30        UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES
false representation, false report, or false claim with respect to the . . .
cost of any work performed or to be performed . . . in connection with
the construction of any highway or related project approved by the
Secretary of Transportation . . . [s]hall be fined under this title or
imprisoned not more than five years, or both." Id. (emphasis added).
Thus, the language of the statute requires that a false statement be
made knowingly in order to convict, but includes no element of will-
fulness. Appellants acknowledge as much. However, they contend
that we should read an element of willfulness into the statute, primar-
ily because the Federal Highway Administration ("FHWA"), in fed-
eral regulation 23 C.F.R. § 633, subpt. C, App. ¶ 5 (1999), has done
so.

   The FHWA is charged with authorizing federal-aid highway proj-
ects. Under Subpart C of the regulation, highway construction con-
tracts under the direct supervision of the FHWA must incorporate a
form containing various labor standards provisions set forth in its
Appendix A. This form, in turn, includes a provision which reminds
contractors that they should "perform their functions as carefully,
thoroughly, and honestly as possible," and advises contractors that
"[w]illful falsification, distortion, or misrepresentation with respect to
any facts related to the project is a violation of Federal law." Id.
Based upon this, Appellants assert that we should defer to the
FHWA’s interpretation of § 1020 and also read into § 1020 an ele-
ment of willfulness. We decline to do so.

   For reasons unknown to us, the FHWA requires that the language
in its direct construction contracts notify contractors that willfully
false statements are a violation of federal law. However, even were
we to determine that this reference in the Appendix fairly represents
an agency’s interpretation of the statute as requiring willfulness in
order to convict a contractor of highway project fraud (which we do
not), we would owe that interpretation no deference. The text of the
statute is unambiguous on this point and the FHWA is not charged
with nor granted the authority to interpret or implement § 1020. Con-
sequently, the department’s regulation has no effect on how we must
interpret the statute. See e.g., Chevron U.S.A., Inc. v. Natural
Resources Defense Council, Inc., 467 U.S. 837, 842-43 (1984). In
summary, we decline to read an element of "willfulness" into the
          UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES                31
                                            4
plain and unambiguous text of § 1020. The government was not
required to prove "willfulness" to convict Appellants under 18
U.S.C.A. § 1020 and, accordingly, the district court did not err in
refusing Appellants’ proposed instruction to the contrary.

                                    B.

   We next turn to Appellants’ assertion that the government failed to
prove that the false claims were submitted in connection with a "high-
way or related project approved by the Secretary of Transportation,"
18 U.S.C.A. § 1020, or a properly-authorized delegee of the Secre-
tary, see 49 U.S.C.A. § 322(b) (West 1997) (providing that the Secre-
tary of Transportation "may delegate, and authorize successive
delegations of, duties and powers of the Secretary to an officer or
employee of the Department" and that an officer may in turn "dele-
gate, and authorize successive delegations of, duties and powers of
the officer to another officer or employee of the Department").

   Appellants assert that their convictions must be reversed because
there is no evidence that the Secretary delegated his duty to approve
the projects in this case to a natural person. See Halverson v. Slater,
129 F.3d 180, 185-86 (D.C. Cir. 1997) (holding that the Secretary
may only delegate the powers and duties of the office to a natural per-
son, not to an "administration" or entity other than a natural person).
However, at trial, Mr. John Grounds testified that he had been
employed by the FHWA for 27 years and had been the financial man-
ager with the FHWA office in Richmond, Virginia, for the past 10
  4
   Appellants also rely upon a single district court case involving alleged
highway fraud under § 1020, in which the court posed the pertinent ques-
tion for the jury as "whether the government has proved beyond a rea-
sonable doubt that that particular defendant has . . . knowingly and
willfully by a false statement defrauded the government of the United
States with a specific intent and purpose of accomplishing a fraud against
the United States." United States v. Molin, 244 F. Supp. 1015, 1017 (D.
Mass. 1965) (emphasis added). The Molin case, however, is comprised
of nothing more than the court’s publication of its jury charge in a § 1020
case which also for unexplained reasons wrote a willfulness requirement
into the unambiguous text of § 1020. For the reasons stated, we find this
to be improper.
32        UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES
years. He testified that he was authorized on behalf of the Secretary
of Transportation to commit the federal funds to pay VDOT for high-
way projects. There was no evidence presented to dispute Grounds’
testimony that he was authorized to approve the relevant highway
projects for federal funding. And, Appellants did not challenge at trial
his testimony in this regard. Accordingly, we conclude that there was
sufficient evidence to support the jury’s determination that the false
claims submitted by Appellants were submitted in connection with
highway projects approved by an authorized delegee of the Secretary
of Transportation.

                                  C.

   Finally, Appellants contend that we should reverse their highway
fraud convictions because the government failed to prove that the
false statements were made "in connection with the construction of
[a] highway or related project." 18 U.S.C.A. § 1020. We disagree.

   The highway fraud provision, in separate paragraphs, criminalizes
the making of false statements in connection with highway projects
"submitted for approval to the Secretary" and highway projects "ap-
proved by the Secretary":

     Whoever . . . knowingly makes any false statement, false
     representation, or false report as to the character, quality,
     quantity, or cost of the material used or to be used, or the
     quantity or quality of the work performed or to be per-
     formed, or the costs thereof in connection with the submis-
     sion of plans, maps, specifications, contracts, or costs of
     construction of any highway or related project submitted for
     approval to the Secretary of Transportation; or

     Whoever knowingly makes any false statement, false repre-
     sentation, false report, or false claim with respect to the
     character, quality, quantity, or cost of any work performed
     or to be performed, or materials furnished or to be furnished,
     in connection with the construction of any highway or
     related project approved by the Secretary of Transportation;
          UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES               33
18 U.S.C.A. § 1020 (emphasis added), is guilty of highway project
fraud.

   Appellants were indicted under the second paragraph of § 1020 for
their submission of false invoices in connection with the construction
of highway projects already approved by the Secretary’s delegee.
Appellants assert, however, that the second paragraph is only applica-
ble to activities associated with actual construction of the highway,
and not to preliminary engineering contracts such as that performed
by PDS. In other words, Appellants assert that their convictions must
be reversed because the second paragraph does not apply to the pre-
liminary engineering work they performed.

   We do not read the second paragraph of § 1020 so narrowly. The
first paragraph of § 1020 pertains to "false statement[s], false repre-
sentation[s], or false report[s]" made "in connection with the submis-
sion of plans, maps, specifications, contracts, or costs of construction
of any highway or related project submitted for approval to the Secre-
tary of Transportation," whereas the second paragraph of § 1020 per-
tains to "false statement[s], false representation[s], false report[s], or
false claim[s]" made "in connection with the construction of any
highway or related project approved by the Secretary of Transporta-
tion." Id. (emphasis added). Contrary to Appellants’ proffered inter-
pretation, we do not read the two paragraphs as seeking to distinguish
between types of contracts (preliminary engineering contracts for a
construction project as opposed to contracts for "actual" construction),
but rather as seeking to distinguish between statements made in con-
nection with a highway or related project submitted for approval and
statements (including "claims") made in connection with a highway
or related project already approved. Under Appellants’ strained read-
ing, their services, although performed in connection with an
approved highway project, would fall within a gap between the two
paragraphs. No such gap exists. Although in the nature of preliminary
engineering work, the work of Appellants was furnished in connec-
tion with the construction of a highway project approved by the Sec-
retary of Transportation through an authorized delegee.

                            V. Sentencing

  The district court sentenced PDS concurrently on each count of
conviction to one year of probation, a fine of $522,045.29, and resti-
34        UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES
tution of $435,038.33. Webb was sentenced concurrently on each
count to 24 months imprisonment, two years of supervised release,
and restitution of $435,038.33. The sentences were based upon a cal-
culated loss of $435,038.33 to the victim VDOT as a result of the
overbilling scheme. This amount, which resulted in a nine-level
increase in the applicable offense level, see U.S. Sentencing Guide-
lines Manual § 2F1.1(b)(1)(J) (1998), was consistent with the admis-
sions of Webb, who had estimated an inflation of ten to fifteen
percent per job, or $100,000 to $200,000 per year for five years, and
with PDS records reviewed by the investigating agent, which indi-
cated that ten percent of the VDOT jobs for the years at issue totaled
just over $452,000.

   Appellants assert that the district court improperly based their sen-
tences upon this calculated loss. They contend that the court should
have instead calculated their sentences based solely on the loss
reflected by the individual invoices listed in the indictment, which
they calculate at $19,008 and which would have resulted in only a
three-level increase in the applicable offense level. See U.S.S.G.
§ 2F1.1(b)(1)(D). By employing the loss calculation called for by the
guidelines, Appellants assert, the loss calculation became the "tail
which wags the dog of the substantive offense," in violation of their
due process rights as interpreted under McMillan v. Pennsylvania,
477 U.S. 79, 88 (1986). In the alternative, Appellants assert that the
amount of loss was an essential element of the offenses of conviction
not proven beyond a reasonable doubt, requiring that their sentences
be reversed in light of the Supreme Court’s decision in Apprendi v.
New Jersey, 530 U.S. 466 (2000). They seek a remand for re-
sentencing based upon the amount of loss reflected by the invoices
listed in the indictment. Although the Supreme Court decision in
Apprendi was issued three days after sentencing in this case, the
Appellants raised the due process challenge as a McMillan issue
before the district court. Accordingly, we review the matter de novo.

   The Due Process Clause of the Fifth Amendment "protects the
accused against conviction except upon proof beyond a reasonable
doubt of every fact necessary to constitute the crime with which he
is charged." In re Winship, 397 U.S. 358, 364 (1970). In McMillan,
the Supreme Court found constitutional a statute that imposed a man-
datory minimum sentence for a defendant who is convicted of speci-
          UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES              35
fied felonies when a judge finds by a preponderance of the evidence
that the defendant "‘visibly possessed a firearm.’" 477 U.S. at 81.
Because the statute "neither alter[ed] the maximum penalty for the
crime committed nor create[d] a separate offense calling for a sepa-
rate penalty," id. at 87-88, the Court reasoned that the statute merely
"limit[ed] the sentencing court’s discretion in selecting a penalty
within the range already available to it without the special finding of
visible possession of a firearm," id. at 88. Thus, the statute merely
raised the minimum sentence that could be imposed within the per-
missible statutory range; it was not "tailored to permit the visible pos-
session finding to be a tail which wags the dog of the substantive
offense." Id.

   In Apprendi, however, the Court held that the imposition of a sen-
tence in excess of a maximum statutory sentence allowable for an
offense, based upon a separate statute allowing for the increase if the
sentencing court determined by a preponderance of the evidence that
the offense was committed with a racially biased purpose, did violate
the defendant’s due process rights. Specifically, the Court held that
"[o]ther than the fact of a prior conviction, any fact that increases the
penalty for a crime beyond the prescribed statutory maximum must be
submitted to a jury, and proved beyond a reasonable doubt." Id. at 490
(emphasis added). But, contrary to Appellants’ assertion that
Apprendi effectively strips McMillan of any meaningful vitality and
counsels that we require all facts that expose a defendant to a sentenc-
ing range, whether by statute or by the guidelines, to be proven to a
jury beyond a reasonable doubt, the Apprendi Court expressly noted
that McMillan remains good law, albeit limited to cases "that do not
involve the imposition of a sentence more severe than the statutory
maximum for the offense established by the jury’s verdict—a limita-
tion identified in the McMillan opinion itself." Apprendi, 530 U.S. at
487 n.13; see also id. at 495 ("When a judge’s finding based on a
mere preponderance of the evidence authorizes an increase in the
maximum punishment, it is appropriately characterized as "a tail
which wags the dog of the substantive offense." (quoting McMillan,
477 U.S. at 88)).

  In this case, it is undisputed that the fines and terms of imprison-
ment imposed upon the Appellants were within the statutory maxi-
mums allowed for the offenses for which Appellants were convicted.
36        UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES
Consequently, we are not dealing with the imposition of a sentence
by a district court which exceeds the applicable statutory maximum.
Rather, we are presented with the question of whether facts that serve
to increase the defendant’s sentence within the maximum sentence
authorized by the statute, pursuant to application of the Sentencing
Guidelines, must be charged in the indictment and proven to the jury
beyond a reasonable doubt. We believe that Appellants’ argument in
this regard is foreclosed by the Court’s holding in McMillan, which
remains good law, and by our recent decision in United States v. Kin-
ter, 235 F.3d 192, 201 (4th Cir. 2000), cert. denied, 121 S. Ct. 1393
(2001). In Kinter, we held that the "the relevant ‘maximum’ [sen-
tence] under Apprendi is found on the face of the statute rather than
in the Sentencing Guidelines," id. at 201, and that where the sentences
imposed by the sentencing court pursuant to the guidelines are less
than the maximum permitted by the statute for the offense for which
the defendants were convicted, the factual determinations which
increased the defendants’ sentences under the applicable guidelines
do not run afoul of the due process concerns raised by Apprendi, see
Kinter, 235 F.3d at 198-202 (rejecting due process challenge to dis-
trict court’s findings that increased the sentencing range from ten
months to 46 to 57 months). See also United States v. Obi, 239 F.3d
662, 667 (4th Cir. 2001), petition for cert. filed, ___ U.S.L.W. ___
(U.S. May 8, 2001) (No. 00-9843) (rejecting claim that sentencing
based upon drug quantity found by a preponderance of the evidence
under the guidelines offends the principles set forth in Apprendi).

   Nor do we view the sentencing factors based upon additional losses
associated with the submission of false invoices in the case before us
today as so great or disproportionate as to otherwise implicate due
process concerns reserved by McMillan; i.e., that sentencing factors,
including those that affect the sentencing range within the statutory
maximum, should not be permitted to be found by a preponderance
of the evidence in the extraordinary case where the factors can be said
to be the "tail which wags the dog of the substantive offense." McMil-
lan, 477 U.S. at 88. In United States v. Watts, 519 U.S. 148 (1997),
the Supreme Court reiterated McMillan’s holding "that application of
the preponderance standard at sentencing generally satisfies due pro-
cess," but recognized the "divergence of opinion among the Circuits
as to whether, in extreme circumstances, relevant conduct that would
dramatically increase a sentence must be based on clear and convinc-
          UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES             37
ing evidence." Watts, 519 U.S. at 156. However, the Court held that
the guideline application, which resulted in an increase in the sentenc-
ing range from 15-21 months to 27-33 months, did not present an "ex-
ceptional circumstance[ ]" as contemplated by McMillan. Watts, 519
U.S. at 156-57. Nor does the case before us today. See e.g., United
States v. Fenner, 147 F.3d 360, 366 (4th Cir. 1998) (rejecting argu-
ment that increases from 42 years imprisonment to 55 years imprison-
ment for one defendant and from 115 months imprisonment to 210
months imprisonment were "so profound that it is sufficient to impli-
cate due process concerns or to give the impression of having been
tailored to permit the application of [a] cross-reference to be a tail
which wags the dog of the substantive offense" (internal quotation
marks omitted)); United States v. Galloway, 976 F.2d 414, 425-26
(8th Cir. 1992) (holding that a potential increase in a guideline range
from 21-27 months to 63-78 months did not raise due process con-
cerns); cf. United States v. Lombard, 72 F.3d 170, 186-87 (1st Cir.
1995) (holding that sentencing court may depart downward in an "ex-
treme case" where the application of the § 2K2.1(c)(1)(B) cross-
reference to account for a murder charge, of which defendant was
acquitted in state court, raised the guideline range from 262-327
months to a mandatory life sentence, but distinguishing "cases involv-
ing even sizable sentence increases based on an uncharged quantity
of drugs . . . or any number of kindred sentence enhancements").

   Because the sentences imposed upon the Appellants were within
the statutory maximum sentences for commission of the offenses of
conviction, and no other exceptional circumstances are apparent to
counsel a different result, we hold that Appellants’ constitutional
rights were not offended by the loss calculation employed by the dis-
trict court to impose the sentences at issue. Accordingly, we affirm
the Appellants’ sentences as well as their convictions.

                           VI. Conclusion

  For the foregoing reasons, we affirm the Appellants’ convictions
and sentences.

                                                           AFFIRMED
38        UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES
WILLIAMS, Circuit Judge, concurring in part and concurring in the
judgment:

   The majority concludes that the mail fraud statute, when applied to
the use of a private or commercial interstate carrier employed solely
to deliver an item intrastate, is a permissible exercise of Congress’s
Commerce Clause power under Lopez’s second category. Because I
believe that the constitutionality of the mail fraud statute more appro-
priately is sustained under Lopez’s third category, I decline to join
Section III A. 2-4 and write separately to explain my reasoning but
concur in the remainder of the majority’s opinion and in the judg-
ment.

                                    I.

   In United States v. Lopez, 514 U.S. 549 (1995), the Supreme Court
established three categories by which to evaluate Congress’s exercise
of its Commerce Clause power: Congress may (1) regulate the "use
of the channels of interstate commerce"; or (2) "regulate and protect
the instrumentalities of interstate commerce, or persons or things in
interstate commerce, even when the threat may come only from intra-
state activities"; or (3) regulate "activities that substantially affect
interstate commerce." Id. at 558-59.

   Using Lopez’s second category, the majority concludes that the
mail fraud statute is a regulation that protects private mail carriers, as
instruments of interstate commerce, from harm. In so concluding, the
majority interprets Lopez’s second category in a manner that allows
Congress unbounded authority to legislate federal criminal laws that
only incidentally involve instrumentalities of interstate commerce,
which, in my opinion, leads to an untenable result. See Gibbs v. Bab-
bitt, 214 F.3d 483, 490 (4th Cir. 2000) ("It is essential to our system
of government that the commerce power not extend to effects on
interstate commerce that are so remote that we would effectually
obliterate the distinction between what is national and what is local."
(internal quotation marks omitted)). Supreme Court precedent analyz-
ing Lopez’s second category does not necessitate the majority’s broad
interpretation of the category. For example, in the Shreveport Rate
Cases, the seminal opinion involving Lopez’s second category, the
Supreme Court affirmed Congress’s power to regulate the instrumen-
          UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES               39
talities’ operations and the setting of varying rates and taxes by differ-
ent states, noting the importance of direct regulation and protection
of the instrumentalities of interstate commerce. Houston, East & West
Texas Ry. Co. v. United States (Shreveport Rate Cases), 234 U.S. 342,
356-60 (1914). Congress’s ability to regulate and protect instrumen-
talities of interstate commerce stems from the underlying rationale
that harm to the instrumentalities necessarily results in harm to inter-
state commerce generally. See Southern Ry. Co. v. United States, 222
U.S. 20, 26-27 (1911) (upholding amendment to Safety Appliance
Act, 27 Stat. at L. 531, chap. 196, U. S. Comp. Stat. 1901, p. 3174,
32 Stat. at L. 943, chap. 976, U. S. Comp. Stat. Supp. 1909, p. 1143,
which provided for all locomotives, cars, and similar vehicles used on
any railway engaged in interstate commerce to be equipped with cer-
tain designated safety appliances, regardless of whether the vehicles
were used in moving intrastate or interstate traffic); Perez v. United
States, 402 U.S. 146, 155-156 (1971) ("[F]or example, the destruction
of an aircraft (18 U.S.C. § 32), or . . . thefts from interstate shipments
(18 U.S.C. § 659)"); see also United States v. Cobb, 144 F.3d 319,
321 & n.2 (4th Cir. 1998) (recognizing that the federal carjacking
statute fell within Lopez’s second category because the statute regu-
lated harm to automobiles). This underlying purpose, however, is not
served where, as here, the legislation simply prohibits illegal or
immoral use of an instrumentality but does not directly or indirectly
regulate the instrumentality to protect it from harm resulting from the
improper use.

   Moreover, interpreting Lopez’s second category to include all
improper uses of an instrumentality conflates Lopez’s second category
with its first, which allows Congress to legislate to keep the channels
of interstate commerce free from immoral or injurious uses. Because
the mail fraud statute regulates the improper use of an instrumentality
but in no way regulates and protects the instrumentality itself, I would
hold that Lopez’s second category is inapplicable. Instead, I would
evaluate the mail fraud statute under Lopez’s third category to deter-
mine whether the statute, as applied to PDS and Webb’s intrastate
activities, has a substantial effect on interstate commerce.
40        UNITED STATES v. PHOTOGRAMMETRIC DATA SERVICES
                                    II.

   To constitute a proper exercise of Congress’ power over an intra-
state activity under Lopez’s third category, the regulated activity must
"arise out of or [be] connected with a commercial transaction, which
viewed in the aggregate, substantially affects interstate commerce."
Lopez, 514 U.S. at 561; see also United States v. Morrison, 529 U.S.
598, 611 (2000) ("Lopez’s review of Commerce Clause case law dem-
onstrates that in those cases where we have sustained federal regula-
tion of intrastate activity based upon the activity’s substantial effects
on interstate commerce, the activity in question has been some sort
of economic endeavor."). I have no difficulty concluding that the fur-
therance of schemes devised for the purpose of defrauding others can
be viewed as economic activity within the meaning of Lopez and
Morrison. See Gibbs v. Babbitt, 214 F.3d 483, 491 (4th Cir. 2000)
("[E]conomic activity must be understood in broad terms."). Further,
in the aggregate, the intrastate use of interstate carriers to further
fraudulent schemes has a substantial harmful effect on interstate com-
merce.* Thus, I would hold that the mail fraud statute, as applied to
PDS and Webb’s intrastate activities, is constitutional because the
fraudulent mailings have a substantial effect on interstate commerce.

                                   III.

   Because I believe that Congress did not intend the mail fraud stat-
ute to regulate and protect private and commercial interstate mail car-
riers as instrumentalities, I disagree with the majority’s holding in
Section III A. 2-4 that Lopez’s second category renders the mail fraud
statute constitutional under the Commerce Clause. Nevertheless,
because the regulated activity at issue has a substantial effect on inter-
state commerce and is, therefore, a permissible exercise of Congress’s
Commerce Clause power under Lopez’s third category, I concur in the
judgment. I also concur in the remainder of the opinion.

  *This is illustrated by the fraudulent activity in this case, wherein PDS
and Webb used their commercial relationship with VDOT to defraud
prime contractors on VDOT projects, some of which involved federal
highways.