Court Opinion

ID: 195251
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:36:13+00
Date Added: 2024-06-11T09:58:14.866687
License: Public Domain

March 23, 1994    UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT

                                           

No. 92-1447 

                    UNITED STATES OF AMERICA,
                            Appellee,

                                v.

                          PETER BRANDON,
                      Defendant, Appellant.

                                           

No. 92-1465 

                    UNITED STATES OF AMERICA,
                            Appellee,

                                v.

                        CHARLES D. GAUVIN,
                      Defendant, Appellant.

                                           

No. 92-1466 

                    UNITED STATES OF AMERICA,
                            Appellee,

                                v.

                         MARVIN GRANOFF,
                      Defendant, Appellant.

                                           

No. 92-1467 

                    UNITED STATES OF AMERICA,
                            Appellee,

                                v.

                       RONALD R. HAGOPIAN,
                      Defendant, Appellant.

                                           

No. 92-1468

                    UNITED STATES OF AMERICA,
                            Appellee,

                                v.

                         MOMI A. KUMALAE,
                      Defendant, Appellant.

                                           

No. 92-1469

                    UNITED STATES OF AMERICA,
                            Appellee,

                                v.

                         OWEN B. LANDMAN,
                      Defendant, Appellant.

                                           

No. 92-1470

                    UNITED STATES OF AMERICA,
                            Appellee,

                                v.

                        NORMAN D. REISCH,
                      Defendant, Appellant.

                                           

No. 92-1471

                    UNITED STATES OF AMERICA,
                            Appellee,

                                v.

                            JOHN WARD,
                      Defendant, Appellant.

                                           

                              Before

                    Torruella, Circuit Judge,
                                            
                 Campbell, Senior Circuit Judge,
                                               
                    and Boudin, Circuit Judge.
                                             
                                           

                          ORDER OF COURT

                      Entered March   , 1994

     The opinion of  this Court  issued on January  31, 1994,  is
amended as follows:

     Page  50, last paragraph,  line 3, delete  the sentence that
starts  with  "For  the  transactions  .  .  ."  and  insert  the
following:   "Ward helped to  solicit the buyers  involved in the
transactions  for  these counts  by  telling  them that  no  down
payments were required."

     Page  51, line 2, delete  the sentence that  starts with "He
nevertheless . . ." and  insert the following:  "He directed  one
of these buyers  to provide a  down payment check  that would  be
funded by someone else and then cashed so that the funds could be
returned."

     Page 51,  line 10, delete "Brandon's  insurance company" and
insert "the buyer's insurance company."

                                    By the Court:

                                    Francis P. Scigliano

                                           Clerk.

                  UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT
                                           

No. 92-1447 

                    UNITED STATES OF AMERICA,

                            Appellee,

                                v.

                          PETER BRANDON,

                      Defendant, Appellant.

                                           

No. 92-1465 

                    UNITED STATES OF AMERICA,

                            Appellee,

                                v.

                        CHARLES D. GAUVIN,

                      Defendant, Appellant.

                                           

No. 92-1466 

                    UNITED STATES OF AMERICA,

                            Appellee,

                                v.

                         MARVIN GRANOFF,

                      Defendant, Appellant.

                                           

No. 92-1467 

                    UNITED STATES OF AMERICA,

                            Appellee,

                                v.

                       RONALD R. HAGOPIAN,

                      Defendant, Appellant.

                                           

No. 92-1468

                    UNITED STATES OF AMERICA,

                            Appellee,

                                v.

                         MOMI A. KUMALAE,

                      Defendant, Appellant.

                                           

No. 92-1469

                    UNITED STATES OF AMERICA,

                            Appellee,

                                v.

                         OWEN B. LANDMAN,

                      Defendant, Appellant.

                                           

                               -2-

No. 92-1470

                    UNITED STATES OF AMERICA,

                            Appellee,

                                v.

                        NORMAN D. REISCH,

                      Defendant, Appellant.

                                           

No. 92-1471

                    UNITED STATES OF AMERICA,

                            Appellee,

                                v.

                            JOHN WARD,

                      Defendant, Appellant.

                                           

          APPEALS FROM THE UNITED STATES DISTRICT COURT

                 FOR THE DISTRICT OF RHODE ISLAND

           [Hon. Ernest C. Torres, U.S. District Judge]
                                                      

                                           

                              Before

                    Torruella, Circuit Judge,
                                            

                 Campbell, Senior Circuit Judge,
                                               

                    and Boudin, Circuit Judge.
                                             

                                           

                               -3-

     Dana A.  Curhan, by Appointment of the  Court, for appellant
                    
Peter Brandon; John A.  MacFadyen with whom Richard A.  Gonnella,
                                                                
was on brief for appellant Charles D. Gauvin; Thomas J. May, with
                                                           
whom Carol A. Fitzsimmons and  Johnson, Mee & May, were  on brief
                                                 
for  appellant Marvin Granoff; Barbara A.  H. Smith for appellant
                                                   
Ronald R.  Hagopian; William  C. Dimitri,  by Appointment  of the
                                        
Court,  with whom Dimitri &  Dimitri, was on  brief for appellant
                                    
Momi A.  Kumalae; Donald  P.  Rothschild, by  Appointment of  the
                                        
Court, with whom Tillinghast  Collins & Graham, was on  brief for
                                              
appellant  Owen B.  Landman;  Barbara A. H.  Smith for  appellant
                                                  
Norman  D. Reisch; and Catherine  C. Czar, by  Appointment of the
                                         
Court, for appellant John Ward.
     Craig N. Moore, Assistant  United States Attorney, with whom
                   
Edwin J.  Gale, United States  Attorney, and Margaret  E. Curran,
                                                                
Assistant United States Attorney, were on brief for appellee.

                                           

                         January 31, 1994
                                           

                               -4-

          TORRUELLA, Circuit Judge.  The eight defendants in this
                                  

case were convicted of  conspiracy to commit bank fraud  under 18

U.S.C.   371  and of a varying number of  bank fraud counts under

18 U.S.C.   1344 and    2 following a jury trial  in the district

court.  They now  challenge their convictions and sentences  on a

wide variety  of grounds.   For the reasons  set forth  below, we

affirm  all  of  the  convictions  except   for  the  bank  fraud

convictions on Counts 24  and 25 against defendant John  Ward and

the  bank  fraud convictions  on  Counts  23 through  26  against

defendant Owen Landman, which we reverse.

                          I.  BACKGROUND

          This  case involves  an alleged  scheme to  obtain loan

financing   from  a   federally  insured  bank   by  fraudulently

representing the existence of down payments required  by the bank

from  the   investors  on  whose  behalf  the  loans  were  made.

According to  the record in this  case, viewed in the  light most

favorable to  the government,  United States v.  Van Helden,  920
                                                           

F.2d 99,  101 (1st Cir.  1990), the facts  of this scheme  are as

follows.

          On  January 1,  1985, defendant  Peter Brandon  and two

others formed a partnership called Dean Street Development ("Dean

Street")1  for the  purpose  of buying,  developing, and  selling

real estate.  Specifically, Brandon  planned to buy and  renovate

                    

1  Several partnerships  and corporations related to  Dean Street
were  also involved in this case.  Together they are collectively
referred to here as "Dean Street."  Brandon controlled all of the
various entities.

                               -5-

motels  along  the  Rhode  Island  seashore,  convert  them  into

condominiums and then  sell the individual rooms  to investors as

condominium  units.  As part of this plan, the condominium buyers

would lease the units  back to Dean Street and  Dean Street would

then  manage the properties  as motels.   Under  the "lease-back"

agreement  with the  buyers, Dean  Street would apply  the income

from the operation of  the motels to cover the  monthly mortgage,

tax  and  insurance  costs incurred  by  the  unit  buyers.   Any

shortfalls  in operating costs would  be made up  by Dean Street,

leaving the buyers with no monthly costs on their investment.

          In addition, buyers would be allowed to use their units

for two weeks  out of the year.  Dean  Street would also guaranty

them  a  certain level  of profit  at  sale.   Some  buyers would

receive  rebates for  each unit  they purchased.   In  short, the

buyers would be offered a sweet deal.

          To  make  the deal  even  sweeter,  Brandon planned  to

arrange all  the financing for  the buyers.   He hoped  to obtain

100% financing, that is, loans for the complete purchase price of

each  unit.   With  such financing,  buyers  could invest  in the

project without  putting any  money down and  consequently obtain

that elusive  -- yet apparently  not uncommon for  the fast-paced

world of 1980s real estate -- deal of "something for nothing." 

          In  early 1987, Brandon  approached Homeowner's Funding

Corporation  ("Homeowners"), a  mortgage broker  that acts  as an

intermediary between  banks and  borrowers, to obtain  these "end

loans" for the  buyers.  Homeowners' President told  Brandon that

                               -6-

100% financing was unavailable for the project.  Rather, the best

Brandon could  hope to  find was  80% financing  with a 20%  down

payment  required  from  the  buyers.    Homeowners  subsequently

searched  for  a lender  and,  after  approaching several  banks,

located  Bay Loan and  Investment Bank ("Bay  Loan"), a financial

institution insured by the Federal Deposit Insurance Corporation.

Bay Loan agreed to lend buyers of Dean Street's condominium units

up to 80% of the required purchase price.

          Homeowners, as well  as East-West Financial Corporation

("East West"), the other mortgage broker involved in this  case,2

acted as brokers and servicing agents for Bay Loan.  Bay Loan was

the actual lender  for the  Dean Street project  and it  financed

every  condominium  sale  involved  in  the  scheme.    By  prior

agreement,  Homeowners   and  East  West  provided  the  original

mortgages  for the  buyers  and  then  sold  them  to  Bay  Loan.

Homeowners and East West would forward  all the loan applications

to Bay Loan for approval prior to providing the mortgages for the

condominium  units.3     The  decision  of  whether   to  fund  a

particular mortgage rested  entirely with Bay  Loan and Bay  Loan

                    

2   Toward the end of 1987, Brandon became dissatisfied with what
he considered  the slow pace  at which Homeowners  was processing
the  loans and,  after a  dispute  with Homeowners,  retained the
services  of  East  West to  continue  the  project.   East  West
continued where Homeowners left off  with Bay Loan again agreeing
to act as the end loan financier.

3   The brokers  would not  provide the  financing to the  buyers
without first getting  Bay Loan's agreement to  purchase and fund
the loans.  In fact, Homeowner's line of credit for issuing funds
to the  buyers specifically prohibited the  disbursement of money
without  a commitment from the ultimate lender, in this case, Bay
Loan, to fund the loan.

                               -7-

set the terms and conditions of each mortgage.

          As Bay Loan Vice  President of consumer lending, Joseph

Gormley,  explained to Brandon, the bank required each buyer of a

condominium unit  to make  at least  a  20% down  payment to  the

seller,  Dean  Street,  before  Bay Loan  could  fund  the loans.

Instead  of  instructing  buyers  to provide  the  required  down

payments,  however,  Brandon  concocted a  scheme  that permitted

buyers to  avoid the down payments  altogether.  As a  result, he

was  able to pursue his original goal of obtaining 100% financing

for the condominium  project.  The  scheme was formulated  during

the  spring  and   summer  of  1987  when   Brandon  had  several

discussions  with,  among  other  people,  his  attorney,  George

Marderosian,   and   co-defendant  Norman   Reisch,   another  of

Marderosian's clients, concerning ways  that the 20% down payment

requirement "might  be satisfied by alternative  methods or might

be  avoided."   During  that  period, Brandon  also  told another

person  involved in the conspiracy, Claude Limoges, that the down

payments would be falsified.

          Brandon  planned and  employed  three basic  methods of

falsifying  the  down payments.    The  first method  was  simply

providing money to the various buyers which the buyers would then

use to make the down payments to Dean Street.   Usually the money

came  from  third-party  investors  to whom  Brandon  promised  a

commission for each  down payment  they funded.   Once the  buyer

made  the down payment to  Dean Street, Dean  Street would return

the  money to  the  investor leaving  a  paper trail  for  a down

                               -8-

payment that was never actually made.  The second method involved

obtaining down payment  checks from the buyers  and promising not

to  cash them.  Copies of these nonnegotiated checks would remain

in the  loan file  to give  the  appearance that  real funds  had

actually been  transferred.   The  third  method was  to  provide

second  mortgages to the buyers  to fund their  down payments and

then to discharge those mortgages after the closings.4

          The first method of avoiding down payments was employed

from  the outset of the scheme.  Co-defendants Charles Gauvin and

Marvin Granoff,  two clients of Marderosian,  agreed with Brandon

to purchase some units at the Charlestown  Motor Inn.  Gauvin and

Granoff also agreed to provide down payment funds to other buyers

for  subsequent unit sales.  Brandon promised them $1000 for each

unit  sold with their  down payment  funds.   In August  of 1987,

Gauvin,  Granoff and  a third  person each purchased  four units.

Marderosian conducted the closing  and co-defendant Owen Landman,

an  attorney who shared  office space with  Marderosian, acted as

escrow  agent.   During  the  closing,  Marderosian recorded  the

amount of each down payment ($20,500) on the closing statements -

- also called the HUD settlement sheets -- as "amounts paid by or

in behalf of borrower."5

          Gauvin provided the down payment funds for these twelve

                    

4   Brandon also  falsified the  loan  applications of  otherwise
unqualified buyers.

5   Throughout the project, the HUD settlement sheets were signed
by  Brandon  and  the  buyers,  including  those  defendants  who
purchased units.

                               -9-

purchases but no actual payment was ever made; instead, the funds

were  passed through Dean Street and returned  to Gauvin.  At the

closing, Gauvin delivered twelve separate checks for $20,500 each

to Marderosian, drawn on an account that only had a $6000 balance

at  the  time, and  Landman deposited  the  checks in  his escrow

account.    Landman then  wrote  twelve  corresponding checks  to

Marderosian who in turn wrote checks to Dean Street for identical

amounts  of  $20,500 each.   Two  days  later, Dean  Street wrote

twelve checks back to Gauvin for the same amounts of $20,500 each

and Gauvin  deposited the money in the  original checking account

to  cover his initial twelve  checks written as  down payments to

the seller.

          In late  August and September of  1987, Gauvin provided

down  payments for the purchase of units at the Charlestown Motor

Inn and at the  Bayside Motel by Reisch and others.   As with the

first  purchases, Dean  Street  returned the  down payment  money

within a matter of days and also paid Gauvin  an additional $1000

per unit.

          In the beginning of 1988, Bay Loan began requiring that

down payments be made  with certified funds.  Gauvin  and Granoff

agreed to provide  buyers with  funds so that  they could  obtain

certified checks before the closings.  In January and February of

1988, Granoff supplied $470,000  to Marderosian who deposited the

funds  and began  distributing the  money to  prospective buyers.

The  original intention was that  Dean Street would  pay back the

money to Granoff a few days after  each closing as it had done in

                               -10-

the previous transactions.   Brandon, however, never returned the

money as planned.6 

          With  no more  money  coming from  Gauvin and  Granoff,

Brandon discussed the possibility  of funding buyer down payments

with  Reisch.  Reisch had earlier supplied down payment money for

a buyer and  was reimbursed by Dean Street the  next day.  Reisch

agreed to provide the money, but only if he could  wire the money

directly to the buyers  on a transaction by transaction  basis in

order  to avoid  having large  amounts outstanding.   Funds  were

wired  to buyers on several  occasions and the  buyers then wrote

down  payment  checks with  the money.    The checks  were either

deposited in  Landman's escrow account or  endorsed directly back

over  to Reisch.  Those  funds deposited in  escrow were promptly

returned to Reisch.

          The second  method of  falsifying down  payments, using

nonnegotiated checks,  was employed less frequently.   In October

of 1987,  co-defendants Ronald  Hagopian and John  Ward purchased

several units at the Bayside Motel using nonnegotiated checks for

their down payments.   Brandon also  enlisted Hagopian and  Ward,

both  real  estate  brokers,  to solicit  other  buyers  for  the

project.  Hagopian and Ward told  several of the buyers they  had

recruited  to provide  down  payment checks  which they  promised

would never be cashed.  These buyers proceeded to write checks to

Dean Street and those checks were never negotiated. 

                    

6   Brandon  did eventually  agree to  a repayment  schedule but,
ultimately, none of Granoff's money was ever repaid.

                               -11-

          The  third  method  of  falsifying  down  payments  was

through  dischargeable mortgages.    Joseph Gormley  at Bay  Loan

approved a  plan  for buyers  to make  only 5%  down payments  in

certified funds with the  balance of a required 25%  down payment

to be satisfied  by a  second mortgage provided  by Dean  Street.

Dean Street  began providing these  mortgages to the  buyers, but

the  mortgages  were  promptly  discharged7  after  the  closings

because  Dean  Street never  actually  intended  to obligate  the

buyers.   The discharges were  accomplished by a  "purchase price

adjustment" given  to buyers after the sale  to "compensate" them

for promised renovations that Dean  Street was suddenly unable to

make.  In reality,  the renovations "were never going  to happen"

in the first place.

          At the closings, some of the buyers  inquired about the

second  mortgage   documents  because  Brandon  had   promised  a

discharge  and the  buyers wanted  to know  when that  would take

place.   The "purchase price adjustment"  letters that discharged

the mortgages were excluded from the closing documentation so the

bank would not see  them.  During the closings,  Landman gestured

to several buyers that they should not mention the matter to him.

Brandon's assistant  at Dean  Street, co-defendant Momi  Kumalae,

did  speak to buyers about  the discharges and  assured them that

they  would be taken  care of.   Kumalae also signed  many of the

                    

7   Testimony was offered  by defendants  to the effect  that the
discharges provided  by Dean Street were  not legally enforceable
and that the  buyers are still  obligated on the  mortgages.   We
find this  possibility irrelevant  as the intent  was clearly  to
discharge the mortgages.

                               -12-

discharge letters sent to the buyers.

          Despite  the sale of almost  200 units, by  the fall of

1988,  the  loan  proceeds  from  Bay  Loan's  financing of  unit

purchases was falling  well short of  Dean Street's expenses  and

its own debt service.   Dean Street quickly fell  behind schedule

in making the mortgage  payments on all the Bay  Loan condominium

unit  loans,  and it  eventually stopped  making any  payments by

early 1989. 

          Between August  1987 and October 1988,  Dean Street had

sold 196 units to 79 different  buyers, all financed by Bay  Loan

in  176 separate loans.   The face  value of the  loans was $18.8

million  and  Bay  Loan  actually distributed  $17.3  million  to

Marderosian who passed on about $16.9 million to Dean Street (the

balance  was retained as  fees or was paid  to Landman for escrow

services).  As of the trial, approximately $16.3 million remained

outstanding on the loans.

          Gormley  at Bay Loan,  who approved the  loans, did not

know that down  payment funds  came from sources  other than  the

buyers, that  some down payments were  nonnegotiated checks, that

second mortgages were being discharged, or that buyers were being

paid to purchase units.  Gormley testified that he would not have

approved  the  loans  if  he  had  been aware  of  any  of  these

circumstances.

          On February 28, 1991,  a federal grand jury sitting  in

the District of  Rhode Island handed  down a 27-count  indictment

charging the eight appellants and four others with defrauding Bay

                               -13-

Loan, a federally insured financial institution, of approximately

$18  million.    Count  1  charged  all  twelve  defendants  with

conspiracy to commit bank fraud in violation of  18 U.S.C.   371.

Counts 2  through 27  charged various defendants  with individual

acts of bank  fraud, under 18 U.S.C.   1344,  based on individual

loan transactions executed during  the scheme to defraud.8   Four

of the defendants pleaded guilty and did not go to trial.  Two of

the four,  George Marderosian  and Claude Limoges,  testified for

the government.  

          After a  trial in the United States  District Court for

the District of Rhode  Island, the jury found all  the defendants

guilty of conspiracy and each defendant guilty on multiple counts

of bank fraud.  Some defendants were acquitted on individual bank

fraud charges as discussed below.  This appeal followed. 

        II.  FAILURE OF THE INDICTMENT TO STATE AN OFFENSE

          Defendants first  argue that  the indictment  failed to

state  an offense with respect to the conspiracy count because it

did not allege that the United  States or one of its agencies was

the target of the conspiracy.   Count I of the indictment charged

defendants  with  conspiring to  commit  an  offense against  the

                    

8  One bank fraud count was later dismissed by  the government so
that 26  total counts remained  for trial.  Brandon  was the only
defendant charged in all of the counts.

   Each  bank fraud count charges  one or more  of the defendants
with facilitating  in some  way the fraudulent  representation of
the required down payment  for a specific loan for  an individual
condominium unit.  Although each unit purchase allegedly involved
the  same fraudulent scheme,  only 26 specific  executions of the
scheme were originally charged.

                               -14-

United States  in violation  of 18 U.S.C.    371  by executing  a

scheme to defraud Bay Loan  under 18 U.S.C.   1344.   Section 371

makes  it a  crime  to "conspire  either  to commit  any  offense
                                        

against  the United States, or  to defraud the  United States, or
                              

any  agency thereof" (emphasis added).  The Supreme Court held in

Tanner  v. United States, 483  U.S. 107, 128-132  (1987), that in
                        

order to establish a  conspiracy to "defraud the  United States,"

under the second clause of    371, the government must prove that

the  target of  the fraud  was the  United States  or one  of its

agencies.    Id.  (finding   a  recipient  of  federal  financial
               

assistance  and supervision  not to  be an  agency of  the United

States for purposes of   371).  The defendants contend that  this

requirement  should be extended to the first  clause of   371 for

alleged conspiracies  "to commit  any offense against  the United

States."

          18 U.S.C.   371 creates two distinct criminal offenses:

conspiracies  to commit  offenses against  the United  States and

conspiracies to  defraud the  United States.   See,  e.g., United
                                                                 

States v.  Haga, 821 F.2d 1036,  1039 (5th Cir. 1987).   The "any
               

offense"  clause of   371 ("to commit offenses against the United

States")  is aimed  at conspiracies  to violate  the laws  of the

United States.   It does not  refer to a  particular victim of  a

particular crime like the second clause does, but instead applies

generally to  federal "offenses."  The  Tanner requirement should
                                              

not be extended to a large area of criminal conspiracies, such as

mail  and  wire fraud,  that  victimize  persons  other than  the

                               -15-

government or its agencies but traditionally have been prosecuted

under the  "any offense" clause of    371.  See  United States v.
                                                              

Falcone, 960 F.2d 988,  990 (11th Cir.) (en banc),  cert. denied,
                                                                

113 S. Ct. 292  (1992) (citing the reasoning in  United States v.
                                                              

Falcone, 934 F.2d 1528, 1548-51 (11th Cir.  1991) (Tjoflat, C.J.,
       

specially concurring,  joined  by  Powell,  Assoc.  Justice,  and

Kravitch, J.) to overrule its previous extension of Tanner to the
                                                          

"any offense"  clause of   371 in United States v. Hope, 861 F.2d
                                                       

1574  (11th Cir. 1988)); United  States v. Loney,  959 F.2d 1332,
                                                

1338-40 (5th Cir. 1992);  United States v. Gibson, 881  F.2d 318,
                                                 

321 (6th Cir. 1989).  We therefore reject the contention that the

indictment  must  assert that  the United  States  or one  of its

agencies was a target of the alleged conspiracy in this case.

           III.  MULTIPLICITY OF THE BANK FRAUD COUNTS

          Defendants challenge the validity of the indictment for

charging  twenty-five individual  counts of  bank fraud  under 18

U.S.C.    1344,  when, allegedly,  all the  counts relate  to the

single  execution  of  one  scheme  to  defraud  Bay  Loan.    An

indictment  is  multiplicitous  and  in violation  of  the  Fifth

Amendment's Double Jeopardy Clause if it charges a single offense

in more than  one count.  United States v.  Serino, 835 F.2d 924,
                                                  

930  (1st Cir. 1987).  Under the  bank fraud statute, 18 U.S.C.  

1344,  each  execution  of  a  scheme  to defraud  constitutes  a

separate indictable offense.   United States v. George, 986  F.2d
                                                      

1176,  1179  (8th Cir.),  cert. denied,  114  S. Ct.  269 (1993);
                                      

United States  v. Lemons, 941 F.2d 309, 317 (5th Cir. 1991).  The
                        

                               -16-

central question for determining  multiplicity is "whether a jury

could plausibly find that the actions described in the [disputed]

counts  of   the  indictment,  objectively   viewed,  constituted

separate  executions of the [bank  fraud] scheme."  United States
                                                                 

v. Lilly, 983 F.2d 300, 303 (1st Cir. 1992).
        

          A number of factors are relevant in determining whether

a single or multiple  executions of bank fraud have  taken place,

including  the number of  banks, the number  of transactions, and

the number of movements of money involved in the scheme.   Lilly,
                                                                

983  F.2d at  305.   Each time  an identifiable  sum of  money is

obtained by a specific fraudulent transaction, there is likely to

be  a separate execution  of the scheme  to defraud.   See, e.g.,
                                                                

United  States v. Barnhart, 979 F.2d 647, 650-51 (8th Cir. 1992);
                          

United States v. Mason,  902 F.2d 1434, 1436-38 (9th  Cir. 1990);
                      

United States v. Poliak, 823 F.2d 371, 372 (9th Cir. 1987), cert.
                                                                

denied, 485 U.S. 1029 (1988).
      

          The government's position  is that each transaction  in

which Bay  Loan provided a mortgage  (or end loan) to  a buyer on

the  basis of  a  fraudulent  representation  of a  down  payment

constitutes  a single,  independent  execution of  the scheme  to

defraud.  We think that this position is the correct one when the

scheme  is viewed  properly from  an objective  standpoint.   See
                                                                 

Lilly,  983  F.2d  at 303  (finding  that  the  scheme should  be
     

"objectively viewed" to determine multiplicity).

          The  basic  scheme to  defraud  Bay  Loan involved  the

fraudulent representation  of buyers'  down payments in  order to

                               -17-

obtain loan financing from the bank for Dean Street's condominium

units.  The  scheme was not  designed to get  a set amount,  or a

preconceived sum,  of money.   Instead, the scheme  functioned by

obtaining  as many loans as  possible depending on  the number of

buyers Dean Street could recruit to apply for the mortgages.  The

structure  of the scheme was such that individual buyers would be

brought in to  submit separate loan  applications which would  be

fraudulently prepared and then  sent on to Bay Loan  for approval

and the disbursement of the funds for that individual sale.   Bay

Loan  approved  each loan  separately  based  on each  individual

application and each loan corresponded  to an individual piece of

property,  that is,  a  separate condominium  unit.   Objectively

viewed, each loan  application appears to be a repeated execution

of the basic scheme and not simply an additional step or stage of

one  unitary transaction.  Although only one bank was involved in

the  scheme, there were over  176 separate loans  to 79 different

buyers involving many  separate movements of money from  Bay Loan

to the mortgage  brokers and  from the mortgage  brokers to  Dean

Street  during  the fifteen  months in  which  the scheme  was in

operation.

          The fact that the end loans were sometimes processed in

bulk  does  not   alter  the  essential  nature  of  the  scheme.

Defendants highlight the fact that, on some  occasions, groups of

mortgage applications  were supplied to Bay Loan together and Bay

Loan sometimes wired money to the brokers on a bulk  basis.  This

was  usually done, however, as  a matter of  convenience (such as

                               -18-

when several unit purchases closed at the same time) and not as a

method  to package the financing in a way necessary to accomplish

a unified  scheme.9   Arguably,  one could  view this  case as  a

single  execution by Dean Street of a broad scheme to use various

buyers as  fronts in order to  get financing for a  unitary motel

condominium project.   However, we  feel it makes  more sense  to

look at each  mortgage application  as an  individual attempt  to

fraudulently obtain distinct amounts of money from Bay Loan.

          This is not, as defendants assert, a situation like the

one in Lilly where  a group of fraudulent mortgages  was assigned
            

in  a  single  package of  documents  to  the  defrauded bank  as

security for  one sum  of money used  to buy  a single  apartment

complex.   See id.  at  302-305.   In that  case,  there was  one
                 

transaction with the defrauded bank which was  executed "in order

to  obtain a single loan,  the proceeds of  which funded a single

real estate purchase."   Id. at 303.  Consequently,  we found the
                           

charges based on each mortgage to be multiplicitous.  The present

case is more akin to a check kiting scheme which we characterized

in Lilly as involving multiple executions of a fraudulent  scheme
        

because  more than  one bank  was involved  and because,  "[m]ore

                    

9   At one point, Brandon  could not guaranty clear  title to Bay
Loan  on the  condominium units  until he  sold enough  units and
obtained a large enough chunk of financing to pay off some of the
original mortgages used  to buy  the motels in  the first  place.
This did necessitate  bulk processing of  unit mortgages so  that
blocks of financing could be obtained at one time.  The execution
of  the   fraud,  however,  still  remained   the  submission  of
individual loan applications as additional buyers were recruited.
The block processing of loans did not correspond to one  loan for
each motel but  were instead an amalgamation of  individual loans
for individual condominium units.

                               -19-

importantly,   each  check   signifies  a   separate  transaction

requiring  a separate issuance of money or  credit on the part of

the victimized bank." Id. at 304.
                        

          Similarly, the  other  cases cited  by defendants  that

invalidate indictments on grounds of multiplicity involve  single

loan  transactions instead  of  the multiple  and separate  loans

fraudulently obtained in this  case.  See United States  v. Saks,
                                                                

964  F.2d 1514, 1526 (5th Cir. 1992) (single loan transaction for

single piece of property); United States v. Heath, 970 F.2d 1397,
                                                 

1401-02 (5th Cir.  1992), cert.  denied, 113 S.  Ct. 1643  (1993)
                                       

(two loans  involved in  the case  "were integrally  related; one

could not have succeeded without the other" and both were used to

accomplish essentially one  integrated real estate  transaction);

Lemons, 941 F.2d at 316-18 (separate payments of loan proceeds to
      

defendant  were  installments  from  a  single  loan  transaction

involving a single project).   We hold, therefore, that  each end

loan provided by Bay Loan was the result of a separate fraud upon

the bank which  the indictment properly charged  as an individual

bank fraud offense.

                 IV.  SUFFICIENCY OF THE EVIDENCE

          Seven of  the eight defendants argue  that the evidence

introduced at trial was insufficient to support their convictions

for  bank  fraud and  conspiracy to  commit  bank fraud.10   They

                    

10   Brandon does not  challenge the sufficiency  of the evidence
against  him on appeal.   He does argue  that certain evidentiary
rulings deprived him  of a fair  trial because he  was unable  to
present his  theory of  the case  and  convince the  jury of  his
innocence.   This issue  is discussed below  in Section VII.   We

                               -20-

argue,  with individual  variations, that they  did not  have the

requisite knowledge and  intent to defraud Bay  Loan because they

did  not  know  of,  or  intend  to  violate,  any  down  payment

requirements of  the bank.   With  the few exceptions  previously

noted, we disagree.  Before  reviewing the evidence with  respect

to each  defendant, we must  first address some  issues regarding

the substantive offenses charged in this case.

                         A.  The Offenses

                          1.  Bank Fraud

          To  prove  bank fraud  under  18 U.S.C.     1344,11 the

prosecution  must  show  beyond   a  reasonable  doubt  that  the

defendant (1) engaged in a scheme or artifice to defraud, or made

                    

note for the record that the evidence against Brandon is not only
sufficient but overwhelming.

11   At the  time when  the offenses occurred,  18 U.S.C.    1344
provided:

            Whoever  knowingly executes,  or attempts
            to execute, a  scheme or artifice --  (1)
            to  defraud  a  federally   chartered  or
            insured financial institution; or  (2) to
            obtain any of the moneys, funds, credits,
            assets,  securities,  or  other  property
            owned by, or under the custody or control
            of  a  federally  chartered   or  insured
            financial institution, by means  of false
            or fraudulent pretenses, representations,
            or  promises;  [shall  be  guilty  of  an
            offense against the United States].

   A  technical amendment  in 1989  deleted the  words "federally
chartered or  insured" from  the section leaving  just "financial
institution."  Pub. L.  No. 101-73, Title IX,    961(k), Aug.  9,
1989,  103 Stat.  500.   Apparently,  no  substantive change  was
intended  by  this  amendment  as the  definition  of  "financial
institution" for all  of Title 18,  now contained at 18  U.S.C.  
20,   still   encompasses   federally   chartered    or   insured
institutions.

                               -21-

false statements or misrepresentations  to obtain money from; (2)

a  federally  insured  financial  institution;  and  (3)  did  so

knowingly.  United States v. Goldblatt, 813 F.2d 619, 623-24 (3rd
                                      

Cir. 1987); United States v. Cloud, 872 F.2d 846, 850 (9th Cir.),
                                  

cert.  denied,  493 U.S.  1002 (1989).    The terms  "scheme" and
             

"artifice"  are defined to include "any plan, pattern or cause of

action,    including   false   and   fraudulent   pretenses   and

misrepresentations, intended to deceive others in order to obtain

something of value,  such as  money, from the  institution to  be

deceived."  Goldblatt, 813  F.2d at 624 (citing United  States v.
                                                              

Toney,  598 F.2d 1349, 1357  n.12 (5th Cir.  1979), cert. denied,
                                                                

444 U.S. 1033 (1983)).   "The term 'scheme to  defraud,' however,

is  not capable of precise definition.  Fraud instead is measured

in  a   particular  case   by  determining  whether   the  scheme

demonstrated   a  departure   from  fundamental   honesty,  moral

uprightness, or fair play and candid dealings in the general life

of  the community."  Goldblatt, 813  F.2d at 624; see also United
                                                                 

States  v.  Stavroulakis, 952  F.2d  686,  694 (2d  Cir.),  cert.
                                                                

denied, 112 S. Ct. 1982 (1992).
      

          The  alleged  scheme in  this  case  is the  fraudulent

representation of  down payments that  were not actually  paid in

order to obtain  loan financing from Bay  Loan.  There is  little

doubt  that   this  scheme  took  place.12     Defendants  argue,

                    

12   Sufficient evidence exists to indicate Bay Loan provided the
loans for the Dean Street project, required down payments for the
loans, and  approved  loans  and  disbursed money  based  on  the
understanding that  its lending  requirement was satisfied.   The
evidence  also clearly  establishes  that no  down payments  were

                               -22-

however,  that they  did  not know  of,  or participate  in,  the

scheme,  and,  to  the  extent   that  they  did  participate  in

activities  related to the scheme, such  actions were not illegal

because the actions were  not intended to deceive or  defraud Bay

Loan.   Defendants claim they  were either unaware  that Bay Loan

existed  or else  unaware  that  Bay  Loan  had  a  down  payment

requirement that prohibited the various down payment transactions

in  which they  were  involved.   The  central issue  on  appeal,

therefore,   is  whether   defendants  possessed   the  requisite

knowledge and intent.

          "To  act with  the  'intent to  defraud'  means to  act

willfully, and with the  specific intent to deceive or  cheat for

the  purpose of either causing some financial loss to another, or

bringing  about some financial gain to oneself."  Cloud, 872 F.2d
                                                       

at 852 n.6 (citations  omitted) (finding intent to defraud  where

defendant  signed instructions  "knowing that  the bank  could be

deceived by materially false statements that appeared on the face

of the instructions"); see  also United States v. Saks,  964 F.2d
                                                      

1514,  1518 (5th Cir. 1992).  "It is a well-established principle

that fraudulent  intent  may  be  established  by  circumstantial

evidence and inferences drawn from all the evidence."  Cloud, 872
                                                            

                    

actually  made to Dean  Street because  the payments  were either
falsified or quickly  returned to their  source.  Defendants  did
present evidence,  mostly testimony by Brandon  himself, that Bay
Loan  knew  and  approved   of  the  down  payment  arrangements.
However,  more than  sufficient evidence  points to  the contrary
conclusion including the unequivocal testimony of Bay Loan's Vice
President, Gormley, that the  bank never knew of nor  approved of
the skirting of the down payment requirement.

                               -23-

F.2d at 852  n.6 (citations omitted);  United States v.  Celesia,
                                                                

945  F.2d 756, 759-60 (4th Cir. 1991);  see also United States v.
                                                              

Mason, 902 F.2d 1434,  1442 (9th Cir. 1990) ("Specific  intent is
     

established by 'the  existence of a  scheme which was  reasonably

calculated   to  deceive   persons   of  ordinary   prudence  and

comprehension,  and  this intention  is  shown  by examining  the

scheme itself.'" (quoting United States v.  Green, 745 F.2d 1205,
                                                 

1207 (9th Cir. 1984) (additional internal quotation omitted))).

          Defendants argue  that the  government must  prove that

they knew that  the victim of their fraud was a federally insured

financial institution.  We  disagree.  The status of  the victim-

institution is  not a separate  knowledge element  of bank  fraud

under   1344 but  an objective fact that  must be established  in

order  for  the  statute  to  apply.    The  government  produced

evidence,  and defendants  do  not  dispute,  that  Bay  Loan  is

federally insured.  This is sufficient to satisfy the requirement

under 18 U.S.C.    1344 that  the defrauded bank  be a  federally

insured bank.   See United  States v. McClelland,  868 F.2d  704,
                                                

709-11 (5th Cir. 1989);  cf. United States v. Thompson,  811 F.2d
                                                      

841, 844 (5th  Cir. 1987) (finding  that under 18 U.S.C.    1014,

which  criminalizes the making of false statements to a bank, the

federal insured  status  of  the victim  institution  is  just  a

jurisdictional  requirement and  not a  knowledge element  of the

offense);  United States v. Trice,  823 F.2d 80,  86-87 (5th Cir.
                                 

                               -24-

1987) (same).13 

          We decline to  adopt defendants' analogy to  one of the

federal gambling  statutes, 18 U.S.C.    1084(a),  which we  have

previously held  requires knowledge  of the interstate  nature of

the wire communication involved in the offense.  United States v.
                                                              

Southard,  700 F.2d 1, 24-25  (1st Cir.), cert.  denied, 464 U.S.
                                                       

823 (1983).  Our holding in that case rested on the fact that the

word "knowingly"  in the  statute could not  reasonably refer  to

anything else except the  interstate nature of the communication.

Id.  at 24 (noting one  cannot unwittingly or  unknowingly make a
  

wire transmission).   That is not  the case  with the bank  fraud

statute  because "knowingly"  in    1344  clearly applies  to the

                    

13  We find the language of   1014 sufficiently similar to   1344
to  warrant  a similar  conclusion  about  Congress' intent  with
respect to the knowledge  requirement in the bank fraud  statute.
18 U.S.C.   1014 states in pertinent part:

            "Whoever   knowingly   makes  any   false
            statement   or   report,   or   willfully
            overvalues   any    land,   property   or
            security, for the purpose  of influencing
            in  any  way  the  action of  .  .  . any
            institution  the  accounts  of which  are
            insured by the Federal  Deposit Insurance
            Corporation  [shall  be   guilty  of   an
            offense against the Unites States]."

   Defendants contend that the use of "knowingly" in this statute
differs  significantly from  its use  in    1344  which prohibits
knowingly executing a scheme "to defraud a federally chartered or
insured financial institution."  We reject this  contention.  The
placement in   1344 of the words "federally chartered or insured"
before the  word "institution" instead of  similar language being
placed after  "institution," as  in    1014, simply  reflects the
fact  that federal  insurance  is separately  defined in  another
subsection  and thus  there is no  need to  use the  more awkward
construction  found in   1014.  The different word placement is a
distinction without a difference.

                               -25-

execution  of  a  scheme  or  artifice  to  defraud.    The  word

"knowingly" is necessary because one can execute a scheme without

knowing or understanding that it is fraudulent.  In fact, that is

what many of the defendants themselves argue in this appeal: that

they  may have facilitated the  false down payments  but they did

not  know  it  violated  the  bank's  requirements.    Therefore,

"knowingly" in    1344 has independent  meaning without reference

to the federally insured status of the financial institution.

          The  defendants  in  this  case  also  argue  that  the

government  must prove they knew that the end loans were provided

by Bay Loan and not by some other institution, such as Homeowners

or East West.  In other words,  there was no violation of    1344

because the scheme  to defraud  was not knowingly  targeted at  a

federally insured financial institution,  but instead at the non-

federally insured mortgage brokers.

          Defendants  overstate the  government's  burden.    The

specific intent under   1344 is an intent to defraud a bank, that

is, an  intent to  victimize  a bank  by  means of  a  fraudulent

scheme.  See United States v. Stavroulakis, 952 F.2d 686, 694 (2d
                                          

Cir. 1992); United States v. Mason, 902 F.2d 1434, 1442 (9th Cir.
                                  

1990).  It has been established that the government does not have

to  show  the   alleged  scheme  was  directed  solely  toward  a
                                                      

particular institution;  it is sufficient to  show that defendant

knowingly executed  a fraudulent scheme that  exposed a federally

insured  bank to  a risk of  loss.   See, e.g.,  United States v.
                                                              

Barakett,  994 F.2d 1107,  1110-11 (5th Cir.  1993), petition for
                                                                 

                               -26-

cert.  filed, (Sept.  22,  1993) (fraudulent  scheme directed  at
            

checking account customers  of bank but fraud  victimized bank as

well); United States v. Morgenstern, 933 F.2d 1108, 1114 (2d Cir.
                                   

1991), cert. denied, 112 S. Ct. 1188 (1992) (direct object of the
                   

fraud was to steal money from  third parties with deposits at the

defrauded bank).

          We hold that it is also  unnecessary for the government

to prove that  a defendant  knows which particular  bank will  be

victimized by  his fraud  as  long as  it is  established that  a

defendant   knows   that   a   financial  institution   will   be
                            

defrauded.14   The bank  fraud statute  was "designed  to provide

an effective vehicle for  the prosecution of frauds in  which the

victims  are financial  institutions that are  federally created,

controlled  or insured."   S. Rep. No. 225,  98th Cong., 2d Sess.

377 (1983), 1984 U.S. Code Cong. & Admin. News 3517.  In creating

the  statute,  Congress noted  that  "there is  a  strong Federal

interest  in  protecting   the  financial   integrity  of   these

institutions, and  the legislation  in this  part would  assure a

basis for Federal prosecution of those who victimize these  banks

through fraudulent  schemes."   Id.   Thus, Congress  intended to
                                  

criminalize bank  frauds that  harm federally insured  banks, not

                    

14   We also reject  a related claim  made by  several defendants
that the district court had no jurisdiction over their bank fraud
counts because the target of the alleged bank fraud -- Homeowners
or  East West  as opposed  to  Bay Loan  -- was  not a  federally
insured financial institution.   Bay Loan was  in fact victimized
by  defendants' scheme to defraud.   In addition,  the scheme was
designed  to  obtain  funds  from  Bay  Loan  in   particular  by
fraudulently  avoiding one of Bay Loan's requirements.  This more
than satisfies the requirements for federal jurisdiction.

                               -27-

just bank  frauds directed specifically toward  federally insured

banks.   As  other courts  have noted,  "the legislative  history

supports  a broad construction of the  statutory language" of the

bank   fraud  statute.    Mason,  902  F.2d  at  1442;  see  also
                                                                 

Stavroulakis, 952 F.2d at 694. 
            

          Defendants  are essentially  seeking to  sanitize their

fraud  by interposing  an  intermediary or  an additional  victim

between  their fraud and the  federally insured bank.   We reject

this  attempt  to escape  the reach  of  the bank  fraud statute.

Instead, we find that  defendants need not have had  the specific

intent to defraud  Bay Loan so long  as they intended to  defraud

some financial institution.   The  fact that it  should turn  out

that the financial  institution actually defrauded  was federally

insured is a fortuitous stroke of bad luck for the defendants but

does  not make it  any less  of a federal  crime.   In this case,

evidence beyond  a reasonable doubt that  defendants fraudulently

evaded  a known down  payment requirement, whether  thought to be

imposed  by  Homeowners,  East  West,  Bay  Loan  or  some  other

financing  entity,   is  sufficient  to  support   a  bank  fraud

conviction.  Of course, the government must also establish that a

federally  insured bank, Bay Loan, was victimized or exposed to a

risk  of loss  by the scheme  to defraud.   See  United States v.
                                                              

Blackmon, 839 F.2d 900,  906 (2d Cir.  1988).  This, however,  is
        

not seriously disputed in this case.15

                    

15   The  down  payment scheme  victimized  Bay Loan  because  it
devalued the  mortgages  that  the  bank  was  providing.    Down
payments on a loan  decrease the risk of default  or nonrepayment

                               -28-

          Concerns about  extending the  reach of the  bank fraud

statute  into broad new areas  of financial activity  stem from a

misunderstanding  of  the  nature  of  the  statute.    Financial

transactions are becoming increasingly integrated and  complex as

more and more financial instruments are securitized and traded on

national  and  global  markets.   Consequently,  the  effects  of

fraudulent  actions  against  one  institution  are  increasingly

likely to  spill  over  and  detrimentally  affect  others.    As

Congress'  main concern in   1344 was to provide jurisdiction for

fraudulent  schemes  that harmed  federally chartered  or insured

institutions, the  increased risks to the  institutions should be

matched  by  increased  coverage of  the  statute.    We are  not

federalizing  criminal  transactions previously  covered  only by

state law so much as recognizing that those criminal transactions

                    

by increasing the equity participation of the borrower and giving
the borrower  a larger stake in  the venture.  The  down payments
consequently have value  to the  lender bank and  the failure  to
make them deprives the bank  of this value.  Cf. Mason,  902 F.2d
                                                      
at 1441-43  (finding  intent  to commit  bank  fraud  where  bank
exposed to risk of loss  through defendants' concealment from the
bank that its customers were purchasing prostitution services and
consequently were a  greater credit  risk to the  bank which  was
processing the customers' credit  card purchases from defendants'
escort service).

   The fact that buyers were required to make their down payments
to the seller, Dean Street, does not mitigate the risk of loss to
Bay Loan  from the down payment  scheme.  There would  still be a
higher risk  of default and  the absence of  equity participation
regardless  of who was receiving, or failing to receive, the down
payments.  In addition, the value of the condominiums, the bank's
collateral,  becomes an issue where the bank, thinking it is only
providing  80% of the purchase price, is actually lending 100% of
the sale price.   Ultimately,  Bay Loan refused  to provide  100%
financing  and explicitly  required a  down payment;  the payment
became  a negotiated term of  the mortgage contract  and thus had
some value to Bay Loan.

                               -29-

are becoming more federal in nature.16

          An  additional argument  defendants  make  is that  the

government  must  prove  defendants  knew that  Bay  Loan's  down

payment   requirement  specifically  prohibited  the  funding  of

buyers'  down   payments  by   someone  other  than   the  buyer.

Defendants claim  that they  thought the  funding  of buyer  down

payments   was   just   some   complex   financial   arrangement,

"supplemental financing" or required  paperwork, and they did not

know the funding was designed to defraud the bank.

          This misrepresents  the nature of the  fraud.  Although

Bay  Loan  did  in fact  prohibit  third  party  funding of  down

payments, the  key misrepresentation in  this case  was that  the

required down payments  were being paid  when they actually  were

not.  Bay Loan required  the buyers to make down payments  to the

seller,  Dean  Street,  and the  existence  of  the  payments was

represented to the  bank on  the closing settlement  sheets.   In

reality,  the payments  were not  being  made, either  because no

funds  were  actually  transferred  or  because  the  funds  were

                    

16  We do not  address whether any scheme to defraud,  regardless
of  its intended victim, can  be prosecuted under  the bank fraud
statute  as long as it has some detrimental effect on a federally
insured bank.   In this case at  least, the government  did prove
the  scheme  was intended  to  defraud  a financial  institution:
Homeowners or East West, if not Bay Loan itself.

   We also  do not  address possible statutory  or jurisdictional
limitations on the  remoteness or foreseeability  of the harm  or
the  risk of  loss  to federally  insured financial  institutions
beyond which    1344 will no  longer apply.  We  simply note that
this  case  presents  a situation  of  direct  harm  to Bay  Loan
resulting  from a  scheme specifically  designed to  fraudulently
avoid the requirements of that federally insured bank in order to
obtain funds originating directly from Bay Loan.

                               -30-

returned  by Dean  Street  to  their  source.17   Therefore,  the

government need  only prove that  defendants knew a  down payment

was required and that  no real down payments were  actually made.

It need not establish  that defendants knew all of  the specifics

of  the down payment  requirement such  as restrictions  on third

party funding.

          In sum,  to prove  defendants knowingly engaged  in the

fraud,  the government  must establish  that each  defendant knew

that some  financial institution  was lending  the money  for the

motel-condominium project, knew that  a down payment was required

for  these  loans, knew  that  a scheme  of one  sort  or another

existed to make it appear that the down payments were being  made

when  in fact  they were  not, and  finally, that  each defendant

willfully participated in that scheme.

                          2.  Conspiracy

          Each defendant contests the sufficiency of the evidence

of his or her knowledge of the conspiracy to defraud Bay Loan and

his or her level of participation in that agreed upon scheme.  To

prove conspiracy, the  government must show  the existence of  an

agreement  between defendant  and  another to  commit a  crime,18

                    

17  In those cases where Dean Street failed to repay down payment
funds  as  promised, the  intention  was still  to do  so  and to
execute the same fraud as was executed on the other unit sales.

18  To the extent that the existence of a conspiracy is at issue,
the  evidence is  overwhelming  to support  the  convictions.   A
conspiracy is an agreement to commit  a crime and may be inferred
from  the circumstances.  United States v. Concemi, 957 F.2d 942,
                                                  
950  (1st Cir.  1992).   Brandon planned  and executed  a complex
scheme to  defraud  Bay Loan  that  required the  cooperation  of
investors, brokers, and other agents involved in facilitating the

                               -31-

that  each  defendant  knew  of  the  agreement,  and  that  each

defendant  voluntarily  participated  in  the  conspiracy through

conduct that  was interdependent with  the actions  of the  other

conspirators.  United States v. G mez-Pab n, 911 F.2d 847, 852-53
                                           

(1st Cir.  1990),  cert. denied,  498  U.S. 1074  (1993);  United
                                                                 

States  v. Evans,  970  F.2d 663,  668  (10th Cir.  1992),  cert.
                                                                

denied, 113  S. Ct. 1288 (1993).   The defendants  must have both
      

the  intent  to agree  to participate  in  the conspiracy  and an

intent  to commit  the  underlying substantive  offense.   G mez-
                                                                 

Pab n, 911 F.2d at 853; United States v. Drougas, 748  F.2d 8, 15
                                                

(1st  Cir. 1984).  The  government, however, need  not prove that

each   defendant  knew  all  of  the   details  and  members,  or

participated  in all of the objectives, of the conspiracy as long

as  it can show knowledge  of the basic  agreement.  G mez-Pab n,
                                                                

911 F.2d at  853;  United  States v. Marsh,  747 F.2d 7,  13 (1st
                                          

Cir. 1984).   Such proof of knowledge and intent  "may consist of

circumstantial  evidence,  including inferences  from surrounding

circumstances,  such  as acts  committed  by  the defendant  that

furthered the  conspiracy's purposes."  G mez-Pab n,  911 F.2d at
                                                   

853.

          The   government   must   also  establish   defendants'

participation in the  conspiracy with the  intent to further  the

                    

transactions.  Brandon told  several co-conspirators of his plans
to falsify down payments, including  Marderosian, Reisch, Gauvin,
Granoff,  Hagopian,  and  Ward.   The  evidence  indicates  these
defendants  agreed  to  become  involved  in  the  conspiracy  by
performing such critical tasks as drawing up mortgage discharges,
wiring money, and providing down payment checks that would not be
used.

                               -32-

aims of the  conspiracy.  Direct Sales Co.  v. United States, 319
                                                            

U.S. 703, 712 (1943).   Once a conspiracy is established, as well

as  defendant's intent to further it,  any connection between the

defendant  and  the  conspiracy,  even  a  slight  one,  will  be

sufficient to  establish knowing participation.   Marsh, 747 F.2d
                                                       

at 13. 

          In  this  case,  the  government must  prove  that  the

defendants knew there was  an agreement to fraudulently represent

down payments in  order to get loans from Bay  Loan and that they

willfully participated in this scheme by taking some overt action

with the intent  to further  the scheme's objective.   Thus,  the

evidence must  be sufficient to  establish the  intent to  commit

bank  fraud  as discussed  above  and,  in  addition,  must  also

establish an intent to  commit the fraud in conjunction  with the

broader conspiratorial agreement.

               B.  The Case Against Each Defendant

          Our  task on review of  the verdicts is  to examine the

evidence  in  its entirety  in the  light  most favorable  to the

government to determine  whether a rational  trier of fact  could

have  found  the  essential  elements   of  the  crime  beyond  a

reasonable doubt.   The government  receives the  benefit of  all

legitimate and favorable inferences, and it can prove its case by

circumstantial  evidence   without   having  to   exclude   every

reasonable hypothesis of innocence.  United States v. McLaughlin,
                                                                

957 F.2d 12, 18 (1st Cir. 1992); United States v. Boldt, 929 F.2d
                                                       

35,  39 (1st. Cir. 1991);  United States v.  Van Helden, 920 F.2d
                                                       

                               -33-

99, 101 (1st Cir. 1990).  Below, we review each defendant's  case

individually.

                        1.  Marvin Granoff

          Granoff was  convicted of conspiracy and  two counts of

bank  fraud in  connection  with his  purchase  of units  on  one

occasion and with his  funding of buyer down payments  on another

occasion.    Granoff argues  that the  evidence  in this  case is

insufficient to show that  he was anything more than  an innocent

investor duped  by his lawyer, Marderosian,  into providing money

for a project  he really did not  know anything about.   Although

the evidence against Marvin  Granoff reveals a more circumscribed

role than some of  the other defendants,  we are not prepared  to

overturn  the  jury's guilty  verdict  on  either the  conspiracy

charge or on the two counts of bank fraud.

          Sufficient evidence supports the jury's conclusion that

Granoff  knew  Bay Loan  was  funding  Dean Street's  condominium

project, that he knew down payments were required from the buyers

and that he  knowingly participated  in a scheme  to deceive  the

bank into thinking the requirement was satisfied.  To begin with,

Granoff  bought four  units  on one  occasion  and provided  down

payment  funds on another occasion.  Both times Bay Loan financed

the purchases without knowing the required down payments were not

actually made.    Prior to  each of  these transactions,  Granoff

attended a series of  meetings with Brandon concerning the  motel

condominium scheme.  Brandon told Granoff that down payments were

required and that he needed Granoff to provide money for the down

                               -34-

payments of other buyers.19  Granoff agreed to do so.20

          For Granoff's purchase of  units at the Charlestown Inn

                    

19  Specifically, Marderosian  testified that Brandon told Gauvin
and Granoff in  the summer  of 1987 that  "Homeowners required  a
twenty-five  percent down  payment  and while  that down  payment
would not  be required of Mr. Gauvin and Mr. Granoff, he did have
the problem of the down payment with subsequent purchasers and he
asked  Mr. Gauvin and Mr. Granoff for their assistance in meeting
that problem."  Despite the offer to "waive" Gauvin and Granoff's
down payments,  checks representing  down payments were  required
for their purchases.

   In  another meeting, Brandon asked  Gauvin and Granoff if they
were  "willing  to  provide  the down  payment  money  for  other
purchasers" and they agreed to do so.  Marderosian also testified
that Brandon told Granoff at a meeting in January of 1988 that he
needed someone  to provide funding for the certified down payment
funds required  from unit buyers.   Brandon asked  whether Gauvin
and Granoff were "interested  in providing those certified funds"
and they agreed.

20    Marderosian  testified   that  Granoff  agreed  on  several
different  occasions  to  participate  in  Brandon's  scheme  and
referred several  times  to the  "agreement  Mr. Gauvin  and  Mr.
Granoff  made to  provide Mr.  Brandon with  monies for  the down
payments."    Despite  this, Granoff  argues  that  Marderosian's
testimony indicates Granoff said little or nothing at the various
meetings  with  Brandon and  this  is  insufficient to  establish
Granoff agreed to participate  in the conspiracy.  The  fact that
Granoff  provided  $470,000  that  was  used  for  down  payments
following the meetings  with Brandon in  which the agreement  was
discussed, however, is sufficient  to support the conclusion that
Granoff in fact did agree and did participate in the conspiracy.

   Furthermore, Granoff's involvement in  the conspiracy was more
than just the  provision of  goods and services  to an  operation
that he knew might use the funds illegally.  See Direct Sales Co.
                                                                 
v. United States, 319 U.S. 703, 711, 713 (1943); United States v.
                                                              
Falcone, 109 F.2d 579, 581 (2d Cir.), aff'd, 311 U.S. 205 (1940).
                                           
The  evidence,  as  we  discuss  below,  indicates  that  Granoff
provided  money  specifically for  the  purpose  of funding  down
payments  he knew would be  falsified and was  promised $1000 per
unit  for his efforts.  Granoff's provision of down payment funds
was  a specialized  transaction without  loan documents  or other
paperwork and did not constitute merely the provision of goods or
services to the conspiracy.   Overall, the evidence is  more than
adequate to support the finding that Granoff adopted the goals of
the  conspiracy as his own and provided the down payment funds to
further the conspiracy.

                               -35-

in August of 1987, his partner, Gauvin, provided down payments to

Dean  Street on Granoff's behalf in the  form of checks that were

not  backed by  sufficient  funds.   Copies  of the  checks  were

included in the closing  files.  The "payments" were  returned to

Gauvin  two days later  when Dean  Street wrote  identical checks

back to Gauvin which Gauvin deposited in his account to cover the

original down payment  checks.   The fact  that Gauvin's  checks,

totalling $246,000, were drawn  on an account with only  $6000 at

the  time  when they  were written  indicates  that there  was no

intent on  Gauvin's part  to make an  actual down payment  in the

first place.21

          Granoff likewise provided down payment funds for  other

buyers  and  the evidence  indicates  he  did  this  knowing  and

expecting  that  the money  would be  returned  to him  after the

closing.   Granoff provided  $470,000 for  down  payments on  the

                    

21   Granoff argues that  with respect to  Count 2,  charging him
with bank fraud in connection with his purchase of a  unit at the
Charlestown Motor  Inn, the  requisite knowledge element  was not
established.   Brandon  had told  Granoff that  the down  payment
would be waived for  his purchase and there was  nothing, Granoff
claims,  in  the  closing  procedure sufficient  to  support  the
conclusion that he knew his  purchase took place under fraudulent
pretenses.   On the contrary, even if we disregard the reasonable
possibility  that  Granoff's  partner, Gauvin,  told  Granoff all
about the complex recycling transaction Gauvin undertook with the
checks used  for Granoff's  down payment,  the fact that  Granoff
signed the  HUD settlement sheets establishes  a sufficient basis
to  conclude Granoff knew  he was  representing the  existence of
down  payments  that  he  was  not  actually  paying.    The  HUD
settlement sheet for Granoff's purchases clearly indicated that a
$20,500 down  payment was  being paid  by the  buyer.   If indeed
Granoff was under the impression, up to that point, that the down
payment  had been  "waived,"  the $20,500  figure on  the closing
documents  must have tipped him off that something suspicious was
going on.

                               -36-

Atlantic  Inn-Westerly units in the  form of two  checks, one for

$270,000 from Marvin Granoff Real Estate and another for $200,000

from Granoff's  Eastern  Wire  Products  Co.   In  turn,  Brandon

promised  to pay Granoff $1000 for each unit sold using Granoff's

down payment money.

          As it turns out,  Granoff was never paid back,  but the

evidence shows that Granoff expected and  intended for this money

to be promptly  returned to him after the closings.   A recycling

arrangement had been used earlier for Granoff's own purchase, and

for  subsequent purchases  funded  by Gauvin,  under the  initial

agreement  between   Granoff,   Gauvin,  and   Brandon.      More

importantly, about  two weeks after the  first closings involving

Granoff's  $470,000,   Gauvin sent  a letter  to  Marderosian, on

Manchester   Associates22   letterhead,   complaining  that   the

transaction involving  the $470,000  was taking  too  long.   The

letter stated  that the transaction involving  Granoff's $470,000

"was  to take  at  most two  to  three days."   Marderosian  also

testified that  on a different occasion,  Gauvin told Marderosian

that  Gauvin and Granoff "can  make money without  putting up any

money."    In addition,  there was  no  promissory note  or other

formal  documentation to  indicate that  the $470,000  was normal

loan  financing.23   Consequently,  Granoff knew  that his  money

                    

22    Manchester  Associates  was  a  partnership  formed  by and
consisting of Gauvin and Granoff.

23  Gauvin and Granoff documented a previous  loan to Brandon for
the smaller  sum  of  $200,000  indicating that  if  they  really
intended the money  to be a loan  instead of a tool  to show down
payments  through  a  recycling   transaction,  they  would  have

                               -37-

was used to create  the appearance that down payments  were being

paid when in fact they were not; they were being falsified.

          The  arrangement of  rapidly  recycling "down  payment"

funds  through  Dean Street  meant  that,  in  reality,  no  down

payments were  being made at all.  A  paper trail was left in the

closing files indicating that  the buyer had made a  down payment

to  the seller,  Dean  Street, when,  in  fact, the  seller  just

returned  the money  to  its source,  effectively rendering  that

paper trail fraudulent.  Bay  Loan's down payment requirement was

thus  avoided  without  the  bank's  knowledge.    As  a  knowing

participant  in  this  recycling  scheme,  Granoff possessed  the

necessary  intent   to  defraud   and  the  requisite   level  of

involvement  in the larger conspiracy  to be found  guilty of the

offenses charged.

          Although   not   essential   for  upholding   Granoff's

conviction,  we also find that the evidence is sufficient to show

that  Granoff knew  Bay  Loan  was  loaning  the  money  for  the

condominium units.   Granoff  bought four  units financed  by Bay

Loan and he put up nearly half a million dollars  to provide down

payment  funds  for other  units to  be  purchased with  Bay Loan

financing.    Homeowners  furnished  a  letter  at  the  closings

including  the  closing  on Granoff's  purchases,  which  Granoff

attended,  stating that  Homeowners had  "transferred all  of its

                    

documented it.

                               -38-

rights and interests"  in the  mortgage to Bay  Loan.24   Granoff

had occasion  to see  the letter  and it  is not unreasonably  to

assume he also read it.

          Granoff also  attended  a number  of planning  meetings

with Brandon in  which plans  for closing on  various units,  the

funding  of down payments, and  other details of  the scheme were

discussed.   The evidence also indicates  Granoff was continually

kept  abreast of various detail of Brandon's scheme; details, one

could infer,  that included the source of  the financing.  In the

last half of 1987, Granoff and Gauvin formed a partnership called

Manchester Associates for the  purpose of real estate investment.

On behalf of Manchester Associates, Gauvin met several times with

Brandon  who discussed  his overall  plans to  close on  over 400

motel units as well as the schedule for  those closings.  Letters

referencing these meetings were  written on Manchester letterhead

and one could reasonably infer that  Gauvin related the substance

of  the meetings to his partner  Granoff.25  One such letter from

                    

24   There is  some dispute  whether this  letter, which was  not
signed  by the parties, was  included among the  documents at the
closings.  Homeowners' Vice  President, Gregory Cambio, testified
that  the letter  "was  part of  the  closing package"  but  also
testified  that it  may have  been sent after  the closing.   The
trial exhibits  containing the loan  files for each  of Granoff's
purchases do contain  the letter which is dated on  the same date
as  the  closing.    However,  the  file  contains  both  closing
documents, signed by Granoff, as well as other documents that may
or may not have been  at the closing.  The letter,  therefore, is
not  dispositive of  Granoff's knowledge,  but does  provide some
evidence of  knowledge that can be considered in conjunction with
the other circumstantial evidence.

25  For example, Granoff was cc'd on a letter to Dean Street that
referenced  plans  to  close  on  107  units  and  discussed  the
repayment of Granoff's $470,000.

                               -39-

Gauvin states  that "it would seem that  the lending institutions

will be in a position  to begin closing."  As Homeowners  and Bay

Loan were the only  institutions involved at the time  the letter

was written,  the  plural reference  to "institutions"  indicates
                                                     

that  Gauvin and  his partner,  Granoff, were  aware not  only of

Homeowners but of Bay Loan as well.

          In sum, the evidence  indicates that Granoff was aware,

on a fairly  detailed level, of a large real  estate scheme whose

only source of funding happened to be Bay Loan.  With substantial

sums of his own money at stake in this extensive project, Granoff

was likely to become aware  at some point of the source  of money

behind  it all.  It  is not unreasonable  to conclude, therefore,

that Granoff knew of Bay Loan's involvement in the project.

          Furthermore, the  fact that Bay Loan  was providing the

financing  was known  to several  others who, like  Granoff, were

involved in buying and investing in the units.  Brandon testified

that he was "completely open" about, and "made no secret" of, Bay

Loan's involvement.  Although Brandon testified that he generally

told people outside  Dean Street that  the lender was  Homeowners

and not Bay Loan, he also testified that he told  Hagopian, Ward,

Reisch, and Limoges about Bay Loan's involvement.   These people,

like Granoff,  bought units  or provided  down payment funds  and

were not Dean Street  employees.  Even an investor  named Michael

Parvin, who bought only one unit, testified that he knew Bay Loan

was involved.  It is  not unreasonable, therefore, for a jury  to

conclude that Granoff discovered this fact as well.

                               -40-

          Granoff challenges any inferences of criminal knowledge

or  intent drawn  from  the pool  of  circumstantial evidence  as

impermissibly based merely on  Granoff's association with his co-

defendants.  He  claims that amidst  the fast-paced wheeling  and

dealing of the 1980s  real estate market, investors did  not have

the ability to know all the details and purposes behind every one

of  their transactions.  It  was common for  investors to entrust

their money to developers and lawyers without learning any of the

specifics of  the various projects  in which they  were involved.

Details  such  as  the exact  nature  of  a  bank's down  payment

requirement  were not,  Granoff implies,  important enough  to be

discussed  between a  developer and  an investor.   Add  to these

circumstances the unscrupulous and  deceptive acts of Brandon and

Marderosian, who allegedly got Granoff into this  whole mess, and

Granoff  contends that we cannot help but conclude he was lied to

about the true nature of the project.

          While it  may  be true  that  the typical  real  estate

investor  in the 1980s would readily put up hundreds of thousands

of dollars for  "down payment funds," expect the money  back in a

few days, and still not  suspect he is defrauding a bank,  we are

certainly  not  prepared, given  the  facts  discussed above,  to

preclude  a jury from concluding  otherwise.  The government need

not disprove  every reasonable hypothesis of  innocence, provided

the record in its  entirety supports the jury's verdict.   United
                                                                 

States v. Ortiz, 966 F.2d 707, 714 (1st Cir. 1992), cert. denied,
                                                                

113 S.  Ct. 1005 (1993).   In this case, the  record does provide

                               -41-

the   requisite  support.     Therefore,   we  affirm   Granoff's

convictions.

                        2.  Charles Gauvin

          Gauvin was  convicted of conspiracy and  five counts of

bank fraud in connection  with his purchase of several  units and

his  funding of  buyer  down  payments.    Gauvin  was  Granoff's

business partner and the more active of the two in their dealings

with Dean Street.  According  to the record, he knew at  least as

much  as Granoff,  and  most likely  more,  about the  scheme  to

defraud Bay Loan.   Gauvin also participated to a  greater extent

in the scheme than  Granoff did.  Consequently, there is  no need

to  discuss at  length  the evidence  sufficient  to support  his

conviction.  

          The jury could have found that Gauvin knew Bay Loan was

providing loans  for the  condominium project and  requiring down

payments for these  loans based  on the evidence  of the  several

meetings  Gauvin  attended and  correspondence that  he exchanged

with   Brandon  discussing  the   condominium  projects  and  his

agreement with Brandon to provide buyers with down payment  funds

that  were required  for the financing  of the  units.   The jury

could infer that Gauvin knew the  down payments were not in  fact

being  paid  in violation  of  the bank's  requirement,  and that

Gauvin willfully  participated in  the scheme to  accomplish this

fraud,  based on the evidence  that Gauvin: 1)  delivered to Dean

Street twelve  down payment  checks backed by  insufficient funds

for the  Charlestown  closings in  August  of 1987  and  received

                               -42-

twelve  equivalent checks  back from Dean  Street two  days later

which  he used  to cover  his original  checks; 2)  provided down

payment money for  Reisch and  others which was  returned to  him

within a matter  of days;  3) commented to  Marderosian that  the

down payment checks  he was providing "did not have  to be backed

by good  funds because the timing  was so quick" and  that he and

Granoff could "make money  without putting up any money;"  and 4)

delivered Granoff's $470,000 in down payment funds to Dean Street

and wrote in a subsequent letter to Brandon that he  expected the

transaction involving those funds  "to take at most two  to three

days."

          Gauvin  argues  that  the  evidence  of  his activities

clearly  indicates a lawful intent  in his writing  the checks to

Dean  Street.  As  he testified at  trial, Gauvin  thought he was

simply lending money to  Dean Street for its condominium  project

and he  had no intention  that his  money be used  for fraudulent

purposes.   Evidence in  the record indicates  that "supplemental

financing," similar  to what Gauvin  thought he was  providing to

Dean Street, was  a standard  practice in the  industry.   Gauvin

also  testified that he was  "surprised" to see  his first twelve

checks come back  so quickly.  But  Gauvin was not  so surprised,

apparently, so as to be tipped off that anything illegitimate was

going  on because  such rapid  turn  around of  loans was  also a

standard  practice during  the  real estate  boom  of the  1980s.

Gauvin  suggests  that  maybe   Dean  Street  was  packaging  the

secondary financing and selling it off at a profit, thus removing

                               -43-

Gauvin's participation as a lender fairly quickly. 

          Maybe, but then again, maybe  not.  The jury considered

Gauvin's arguments  and decided  that the evidence  proved Gauvin

knew what was really happening at Dean Street.  Our job on appeal

is to measure the sufficiency of  that evidence and not to search

for  every logical  or  rational conclusion  that  can be  drawn.

Ortiz, 966 F.2d at 714.  Gauvin was told several times that funds
     

were needed  to make down payments for buyers.  We find it rather

difficult,   therefore,  to   believe  Gauvin   thought  he   was

legitimately loaning  money for down payments  when the recipient

of the payments  was giving the money  right back to the  lender.

If Gauvin loaned  money to a friend to buy a car and then had his

loan paid off by  the car dealership, we  might wonder about  his

characterization of the transaction as normal financing.   In the

present case, the suspicious nature of the transactions, combined

with  evidence  of  the  underlying  scheme  to  defraud  and  an

agreement  between  Gauvin   and  the   scheme's  mastermind   to

contribute funds to the scheme, is more than ample to support the

jury's verdict.

                        3.  Norman Reisch 

          Reisch was convicted of  conspiracy and seven counts of

bank fraud.  The  evidence against Reisch indicates that  he knew

Bay Loan was financing  the condominium units, that he  knew down

payments were  required for  the condominium  loans  and that  he

knowingly  participated  in a  scheme  to  recycle funds  through

buyers to make  it look  like these down  payments were  actually

                               -44-

being  made.   Reisch  had "at  least  a dozen"  discussions with

Brandon and  Marderosian about  the 20% down  payment requirement

and ways that the "requirement might be satisfied  by alternative

methods  or  might be  avoided,"  including  the  use  of  second

mortgages and loaning the down payment money to the buyers.

          Proof   of  Reisch's   knowing  participation   in  the

conspiracy is as follows.   Reisch bought four  Charlestown units

for which  Gauvin provided the down  payment funds.  At  the same

time, Reisch provided  another buyer with down  payment money for

three other units.   Dean Street returned the money to Reisch the

next day.   Reisch later agreed  with Brandon  to wire money  for

down payments directly into buyers' accounts.  After each closing

that utilized Reisch's  wired funds, the  down payment money  was

returned to Reisch.   On  some occasions, the  buyers' checks  to

Dean Street,  which were funded by Reisch, were endorsed directly

back over to Reisch.  Reisch once remarked about this arrangement

"we  would just have to keep  bringing the funds back and rolling

them to wire more funds out for the projects."

          As  for   Reisch's  knowledge  of   Bay  Loan,  Brandon

testified that it was  "very probable" that he told  Reisch about

Bay Loan's  involvement in the  project during a  conversation in

the  summer of  1988.   The jury  could reasonably  conclude that

Reisch had knowledge of Bay  Loan even before this  conversation.

Reisch's  contact with  Brandon and  his involvement in  the down

payment  scheme  was  more  significant  than  that  of  Granoff.

Because we  found sufficient  evidence to support  the conclusion

                               -45-

that Granoff had knowledge  of Bay Loan,  we think that, for  the

reasons  discussed  above,  there  is  also  sufficient  evidence

against Reisch. 

          Like Gauvin and Granoff, Reisch argues that he was just

making  loans that he thought were completely legal.  Like Gauvin

and Granoff, we find this argument unconvincing, especially given

Reisch's greater involvement in the scheme.  We reject, moreover,

Reisch's  application of the holding in United States v. Falcone,
                                                                

109 F.2d 579,  581 (2d Cir.  1940) (holding the mere  delivery of

goods or services to a conspiracy does not constitute  membership

in the conspiracy), to  this case.  Reisch's conduct  amounted to

more than a mere delivery of loans to a conspiracy.  The evidence

indicated  that Reisch was involved  in the planning  of the down

payment  scheme and that  he played a key  role in furthering the

success  of a conspiracy that was starved for new funds before he

began supplying them.  In particular,  Reisch provided a specific

loan  arrangement (involving  a  complex system  of wired  funds)

especially tailored  to falsifying  the down payments.   Reisch's

actions  thus were not limited  to the mere  provision of lending

services but instead were strong evidence of an intent to further

the conspiracy.

                       4.  Ronald Hagopian 

          Hagopian was convicted of  conspiracy and six counts of

bank fraud for his role as a broker for Dean Street who solicited

                               -46-

buyers and  facilitated their purchases.26   The evidence against

Hagopian more  than adequately  establishes his knowledge  of Bay

Loan's down payment requirement  and his knowing participation in

various schemes to fraudulently  represent the existence of those

down payments.   To begin  with, Brandon testified  that he  told

Hagopian  about   "his  relationship"   with   Bay  Loan,   which

establishes Hagopian's knowledge that  Bay Loan was providing the

financing.  Hagopian  knew a  down payment was  required for  the

units by virtue of the fact that he provided a down payment check

for his own purchase, and he discussed down payments with some of

the buyers he recruited.27

          Hagopian also knew about and participated in the scheme

to  falsify  the  existence  of  the  down  payments.    Hagopian

purchased  several condominium  units and  wrote  a corresponding

down payment check that  Dean Street never negotiated.   Hagopian

told the buyers he recruited that  they needed to write checks to

Dean Street for the purchases of their units but  that the checks

would  either not  be used  or would  be  covered by  Dean Street

itself.28   Hagopian also told  some buyers that  they would have

                    

26    The court  entered a  mid-trial  judgment of  acquittal for
Hagopian on one count of bank fraud.  Hagopian was also found not
guilty by the jury on two counts of bank fraud.

27   In  addition, Hagopian's  business partner,  John Ward,  who
rounded up buyers with Hagopian, told one of these buyers to give
Ward a check "for the down payment that was required."

28   In addition,  Hagopian was  present during  several meetings
with  Brandon including one where Brandon told a buyer that there
were no down  payments.  Hagopian  also told this  to the  buyer.
The buyer eventually  did produce  a down payment  check for  his
purchase and  the  check  was never  negotiated.    Hagopian  was

                               -47-

second  mortgages to cover part  of their down  payment but these

mortgages would later be  discharged.  All of these  schemes were

actually  executed with  many of  the buyers  Hagopian solicited.

Sometimes Hagopian returned voided or nonnegotiated  down payment

checks back to the buyers.   Hagopian also told buyers they would

be paid  for each unit  they bought and he  usually provided this

rebate money to the buyers he had solicited after the closings. 

          Hagopian  adds a new twist to the familiar refrain that

he  thought he was participating in a perfectly legal real estate

project.  He  claims that the fact he openly solicited buyers for

a  "no money down" investment  opportunity proves that  he had no

knowledge that Brandon's down  payment scheme defrauded the bank.

Hagopian placed public  advertisements for the  condominiums that

explicitly  promised "no  money  down."   Hagopian contends  that

because Dean Street took  care of all the financing,  his job was

limited to soliciting buyers for a type of real estate investment

that  was allegedly  common  at that  time  and  not in  any  way

suspicious.29

                    

subsequently  asked about that check by the buyer who expected it
to  be returned  to him and  was concerned  it might  actually be
cashed.  Hagopian said he would look into it.

29   Hagopian makes a related  argument that his conduct  did not
further the conspiracy to a significant degree and that there was
not  sufficient interdependence  between  Hagopian and  the other
conspirators  to  establish  that  he joined  the  conspiracy  as
required.   United States v. Evans  970 F.2d 663,  670 (10th Cir.
                                  
1992); United States  v. Horn,  946 F.2d 738,  740-41 (10th  Cir.
                             
1991).   All  that is  required is  that the  alleged conspirator
facilitate the  endeavors  of other  alleged  co-conspirators  or
facilitate the venture  as a whole.  See Evans,  970 F.2d at 670;
                                              
Horn 946 F.2d at 740-41.   The government has more than  met this
    
burden.

                               -48-

          The  evidence  clearly supports  the  jury's conclusion

that  Hagopian did  more than  innocently broker  deals for  Dean

Street.  Hagopian told  buyers of his "no money  down" investment

opportunity  to provide  down payment  checks that  would  not be

cashed  and  to sign  mortgages that  would  be discharged.   His

"openness" in advertising no  money down investments simply shows

he was actively  soliciting buyers  to further the  scheme.   The

scheme  relied  on  new  faces  to  serve  as  frontmen  for  the

individual  bank loans  and Hagopian's  actions were  an integral

part of furthering the scheme's success.

          Hagopian was  not open  about the  fact that  "no money

down"  meant providing  false paperwork  to the  bank so  that it

would  think down payments were  actually being made.  Regardless

of whether 100% financing was customary at the  time and thus not

suspicious, the fake down payments and fake second mortgages were

certainly  not  customary (or  if customary  in the  1980s, still

illegal),  and the jury was warranted in concluding that Hagopian

knew this.   Finally, the  jury could reasonably  infer that  the

public advertising was just a necessary, and minor, risk taken by

Hagopian to  attract new  buyers and not  particularly convincing

evidence of his innocence. 

                          5.  John Ward

          Ward was convicted of conspiracy and six counts of bank

fraud for purchasing a  unit and for soliciting and  facilitating

                               -49-

unit sales.30  The  evidence against Ward,  at least in terms  of

knowledge and intent, is essentially the same as that against his

partner,  Hagopian, and the two played  essentially the same role

in the conspiracy.   Brandon  testified that he  told Ward  about

"his  relationship"  with Bay  Loan.   Ward  also knew  that down

payments were  required as he  was involved in  many of  the same

discussions with potential buyers  that Hagopian was involved in.

Specifically, Ward  told one buyer to  give him a check  "for the

down payment that was required."

          Ward knew down payments were not actually being made as

his own down  payment was not negotiated  and he told one  buyer,

whose  down  payment funds  were to  be  wired into  that buyer's

account, that the down payment check would be cashed the same day

so that the people wiring the funds "got their money back."

          We  reject Ward's  assertion that  he thought  Bay Loan

approved  all of the various down payment shenanigans in which he

was  involved.  Ward  contends that the  down payment arrangement

that he was aware of was simply a paperwork requirement and not a

"real" requirement; that  is, Ward  only knew that  some sort  of

paper representing down payments had to exist but thought no real

funds  were actually required from the buyers.  We suppose Ward's

contention is within  the realm  of the possible.   However,  the

jury  looked at the  intricate down payment  arrangements and the

way Ward explained them to the buyers and found, quite reasonably

                    

30   The district court entered a mid-trial judgment of acquittal
in favor of Ward on one count of bank fraud.  The jury found Ward
not guilty on two additional counts of bank fraud.

                               -50-

we  think,  that Ward  knew his  actions  were a  "departure from

fundamental  honesty."  Goldblatt, 813  F.2d at 624.   The common
                                 

sense understanding of a  down payment is the transfer  of actual

funds from  the buyer to the  seller or financier.   With this in

mind, it  is more than reasonable for a  jury to find that once a

defendant  learned   of  the   structure  of  the   down  payment

arrangement  used  in  this  case,  with no  real  down  payments

changing hands, the  defendant would  be tipped off  to the  fact

that  a fraudulent  transaction  was contemplated.    Even if  we

assume Brandon lied to Ward and  told him that Bay Loan  directed

Dean  Street to  arrange  for paper,  as  opposed to  real,  down

payments,  the evidence was sufficient to  support a finding that

Ward knew he was engaging in a sham transaction.  

          The evidence is also sufficient to prove Ward's willful

participation in  the overall conspiracy and  Ward's execution of

the bank  fraud scheme  charged in  Counts 9,  15, 18,  and 19.31

However,  the evidence is not  sufficient to show  that Ward took

any actions  that would constitute  the engagement in  bank fraud

set  forth  in Counts  24 and  25  of the  redacted indictment.32

Consequently we uphold  the convictions on the  former counts and

reverse the verdict against Ward on the latter two counts.

                    

31  Count 9 charges bank fraud in connection with Ward's purchase
of a unit at the Bayside Motel.  Counts 15, 18 and 19 charge bank
fraud  in relation to unit  purchases at the  Sandpiper Motel and
the Hillside Motel that were facilitated by John Ward and others.

32  Counts 24 and 25 charged Ward and four  other defendants with
defrauding Bay Loan by obtaining an end loan for the purchases of
units  at the Sandcastle Motel by Bruce Schulbaum and John Mills,
III.

                               -51-

          As stated in Count 9, Ward bought a condominium unit at

the Bayside  Motel in October of 1987.  The down payment check he

provided  for the sale was never negotiated.  This is sufficient,

given his  knowledge discussed  above, to support  the conclusion

that  Ward  never intended  to provide  real  funds for  the down

payment  but   just  paperwork  to  deceive  the  bank.    Ward's

conviction for bank fraud on Count 9 is thus upheld.  

          The  evidence   is  also  sufficient  to   support  the

conviction on  Counts 15, 18 and 19  which each charged Ward with

bank fraud for  facilitating the sale  of a separate  condominium

unit.   Ward  helped  to  solicit  the  buyers  involved  in  the

transactions for  these  counts  by  telling them  that  no  down

payments  were  required.   He directed  one  of these  buyers to

provide down a payment check that would be funded by someone else

and  then cashed  so  that the  funds  could be  returned.   Ward

provided the  buyers in Counts  15 and  18 with the  rebates they

were promised for purchasing units.  For the transaction in Count

19, the evidence indicates that Ward was the intermediary for the

funds  wired  by  Brandon  to  cover  the  buyer's  down payment.

Brandon's  wire transfer  was directed  to the  buyer's insurance

company to the  attention of "John Ward."  Thus, we uphold Ward's

convictions for conspiracy and on Counts 15, 18 and 19.

          The evidence  is not sufficient, however,  to show that

Ward  engaged in bank fraud  with respect to  the transactions in

Counts 24 and 25.  Although Ward was present at  the closings and

several  of the  meetings  where down  payment arrangements  were

                               -52-

discussed for the sales in Counts 24 and 25, there is no evidence

that  Ward  said  anything  to these  particular  buyers  or  did

anything  to otherwise  facilitate their  purchases.33   Ward did

not provide the  buyers in Counts  24 and 25  with rebates as  an

incentive to buy nor did he  direct these buyers to falsify their

down  payments.34  As such,  Ward neither executed  nor aided the

execution  of  the  scheme to  defraud  in  these two  instances.

Because  we  see  no  evidence  in  the  record  to  support  any

reasonable  finding  by  the jury  that  Ward  played  a role  in

obtaining  the  loans  in  Counts  24  and  25,  we  reverse  his

convictions for these two counts.  

                        6.  Owen Landman 

          Landman was  convicted of conspiracy and  six counts of

bank  fraud in connection  with his facilitation  of down payment

arrangements  for  Dean  Street.35    Ample  evidence  exists  to

support the finding that Landman knew  a down payment requirement

existed and  that he  knew about the  various fraudulent  methods

                    

33  Ward was involved in running the newspaper advertisement that
originally  attracted  the buyers  to  the  Dean Street  project.
However,  that  act was  not  necessarily  directed toward  these
specific fraud counts and,  while contributing to the  fraud, was
not  alone  sufficient  to   constitute  an  affirmative  act  of
facilitation  of  the  fraudulent  loan  transactions charged  in
Counts 24 and 25.

34   We note that Hagopian,  who was also convicted  on these two
charges  and  whose conviction  we  are  upholding, did  actively
solicit the  buyers, discuss down payment  arrangements with them
(such as dischargeable mortgages), and provide rebate money after
their purchases.

35   The  jury found  Landman not  guilty on  two counts  of bank
fraud.

                               -53-

used to avoid that requirement.  As in Ward's case, however,  the

evidence is  not sufficient to  show Landman participated  in the

execution of  a scheme to  defraud for four  out of the  six bank

fraud counts.

          Landman  acted as an escrow  agent for a  number of the

condominium  closings and  one of  his main  responsibilities was

receiving down payments from buyers and  transferring them to the

seller,  Dean Street.  Marderosian testified that he told Landman

that  Gauvin and Granoff would  be funding down  payments for the

initial  purchasers and  Landman  should hold  that down  payment

money.    Landman knew  that the  down  payment funds  were being

returned to  whoever provided  them as Landman  himself delivered

the money back to its source on several occasions.36   

          Landman also knew about the fraudulent second mortgages

that were  supposed to cover part  of the down payment.   He knew

the buyers  were signing meaningless promissory  notes for second

mortgages at the closings because Marderosian told him beforehand

that the mortgages would be discharged.  At the closings, several

buyers asked  Landman when  the  mortgages would  be released  as

promised because the discharge  letter accomplishing this was not

part of the closing  documents (presumably so Bay Loan  would not

                    

36   Marderosian explained to Landman that Reisch would be wiring
money  directly into  buyers'  accounts  to  pay for  their  down
payments and  that buyers  would then  write  checks to  Landman.
Landman assured Reisch  that he would look after the  money.  The
evidence  indicates that  with respect  to at  least some  of the
transactions, Landman returned the down payment funds that Reisch
had provided back to  Reisch, writing checks back to  Reisch from
the money Reisch had originally given to the buyers.

                               -54-

see  the letter).    Landman made  gestures  to these  buyers  to

indicate  that  they should  not talk  to  him about  it.37   All

these facts,  taken together, support the  jury's conclusion that

Landman  knew that something illegal was being done to get around

the down payment requirement.

          We reject Landman's argument that there is insufficient

evidence  to prove he knew Bay Loan  was the target of the scheme

to defraud.  To  begin with, Brandon was "completely  open" about

Bay  Loan's involvement and told  a number of  people involved in

the  scheme.  Several buyers  testified that they  knew about Bay

Loan,  including  one  person  whose  only  involvement  was  his

purchase  of a  single unit.   Landman  shared office  space with

Brandon's  point   man  in  the  scheme,   Marderosian,  who  was

intimately involved in all  the details of the scheme.   Finally,

the closing documents included  a letter indicating Bay Loan  was

the ultimate lender;38  Landman acted  as escrow  agent for  many

                    

37   At  one closing,  Kumalae "asked  Owen if  he wanted  her to
address  [the  mortgage  discharge]  at the  time,"  and  Landman
responded that  it "had nothing  to do with  him . . .  he didn't
want to know  anything about it."  Another time  "Mr. Landman did
not want to hear about it in front of us. I do recall him saying,
his  hands  saying not  in  front of  me."   Still  another buyer
testified  that  Landman  "gestured"  when  confronted  with  the
mortgage discharge issue.  Landman argues that his  responses and
gestures could  mean he just did  not know anything about  it and
could  not  answer  the  buyers'  inquiries.    We  find  that  a
reasonable  jury  could  also  conclude  that  Landman's  actions
indicated he already knew that something illegal was going on and
was trying to disassociate himself from it.

38   As discussed in  footnote 24, Homeowners  furnished a letter
stating that they transferred their rights in the mortgage to Bay
Loan.   A  similar  document was  furnished for  the transactions
brokered by East  West.  Although the same  uncertainty regarding
the presence of the letter at the closings discussed in Granoff's

                               -55-

of the closings and also conducted a few of them himself.39

          Sufficient  evidence  exists  to  support   the  jury's

verdict on the conspiracy count and  on Counts 21 and 22.  Counts

21  and 22 allege bank  fraud in connection  with the closings of

two  units  at the  Hillside Motel.    The evidence  reveals that

Landman  returned the  down payment  funds provided by  Reisch in

connection with these transactions back to Reisch in violation of

the down  payment requirement.40   In addition,  one Dean  Street

employee,  Marie Lynch,  testified  that, in  general, she  would

bring  buyers' certified  down  payment checks  to Landman  after

money was wired by  Reisch to the buyers' accounts  to accomplish

the certification.   Lynch testified  that she  once saw  Landman

write a check to Reisch for the amount of the  down payment funds

she had  just  brought to  him.    Lynch did  not  specify  which

transactions she was referring to in her testimony but the record

does  contain checks written by  Landman to Reisch  for the exact

amount of the down payment funds wired by Reisch for the Hillside

                    

case above also  exists with  respect to Landman,  there is  more
reason to  believe  Landman saw  and  read at  least one  of  the
letters because Landman had greater exposure and familiarity with
the closing documents.

39  Marderosian testified  that when he prepared Landman  for the
closings which  Landman conducted,  he "explained  what documents
[Marderosian]  would  be  preparing  and that  [Landman]  had  to
oversee their execution at the closing."

40   That  evidence consists  of a  check written  by  Landman to
Reisch for the  exact amount of the funds which  Reisch had wired
into the buyers' accounts for the purchases in  Counts 21 and 22.
As discussed  above, at the time Landman  wrote the check, he had
already  been told what Reisch  was doing and  had agreed to look
after Reisch's money.

                               -56-

purchases referred to  in Counts 21 and 22.41   We therefore find

the evidence sufficient to support the convictions for bank fraud

charged in Counts 21 and 22.  This evidence is also sufficient to

show willful  participation in  the conspiracy and  thus supports

Landman's conviction on Count 1.42

          Landman argues  that his actions were just a normal and

proper   function   of   his   job   as  escrow   agent.      His

responsibilities, he  claims, were strictly limited  to receiving

and distributing  money at Dean  Street's direction.   See United
                                                                 

States v. Bruun, 809 F.2d 397, 402-03, 410 (7th Cir. 1987).  This
               

"just following orders" defense  cannot stand in the face  of the

evidence  showing  that Landman  knew  down  payments were  being

falsified,  that he  agreed  to safeguard  Reisch's down  payment

funds, and  that  he personally  falsified two  down payments  by

returning  the funds to Reisch.   The evidence  was sufficient to

indicate that Landman's intent was to participate in transactions

                    

41  Although the testimony that Landman "[c]ut a check to Norman"
Reisch  referred to a transaction  sometime in the  fall of 1988,
roughly a month after the Hillside  closings in Counts 21 and 22,
it  does  add  some  credence  to  the  government's  account  of
Landman's involvement in the scheme to defraud.

42   Landman  is wrong  in claiming  that the  jury impermissibly
ascribed  the illegal  actions of  Marderosian  to Landman.   Cf.
                                                                
United  States  v. Crocker,  788 F.2d  802,  806 (1st  Cir. 1986)
                          
("[A]scribing criminal liability to [an alleged] conspirator  for
a co-conspirator's acts by way of the adoption mechanism inherent
in  a conspiracy requires that the imputed acts be in furtherance
of  the conspiracy  or  that  they  fall  within  its  reasonably
foreseeable  scope.").   Returning  down payment  funds that  are
required by the bank is not only within  the foreseeable scope of
the conspiracy but directly in furtherance of it.  The government
thus  established Landman's  criminal conduct  independently from
that of Marderosian.

                               -57-

designed to deceive Bay Loan. 

          With  respect  to Counts  23  through  26, relating  to

closings  at the Sandcastle Motel,  no checks written  by, or to,

Landman that involved down  payment funds were in evidence.   The

government  stipulated   that  the  relevant   checks  for  these

transactions  were forgeries.  In particular, Landman's signature

on  the  checks for  the Sandcastle  transactions were  forged by

Marderosian.43   It is  true that Landman  conducted the closings

for the Sandcastle units  and thus in some sense  facilitated the

scheme to defraud,44  but that  alone is not  sufficient to  show

that  Landman participated  in the  relevant act  of fraudulently

violating  the  down  payment  requirement  for  those individual

transactions.  On the  contrary, it seems that Landman  never saw

the down  payment  checks as  the money  did not  go through  his

escrow account.  Instead, the checks were transferred directly to

Reisch.

                    

43    The existence  of forgeries  does  not, as  Landman claims,
provide conclusive  proof  of his  innocence on  all the  counts.
Just  because his name was forged on  some of the checks does not
necessarily  imply that Landman  did not know of,  or agree to go
along with,  the conspiracy.  In other words, it is not true that
the forgeries could only indicate that  Marderosian was forced to
go behind  Landman's back to  accomplish the  scheme to  defraud.
For one,  Marderosian testified  that Landman authorized  some of
the forgeries  and indicated  that forging  Landman's name was  a
method  of convenience rather than a way to hide illicit activity
from  Landman.  More  importantly, Landman  did write  checks for
illegal transactions  in Counts 21 and 22,  which, in conjunction
with  the  other  proof of  Landman's  knowledge  and  intent, is
sufficient to uphold the conspiracy charge.

44  Lynch's  testimony that Landman  wrote a check to  Reisch for
the   Sandcastle  units   is   decisively  contradicted   by  the
government's stipulation that the checks were forgeries.

                               -58-

          We note that Landman  also conducted closings for units

at the Atlantic Inn-Narragansett,  but the jury acquitted Landman

on the charges connected to those transactions (Counts 16 and 17)

apparently because it  found the act  of conducting the  closings

was, by  itself,  insufficient to  establish the  execution of  a

scheme to defraud.  For Counts 23 through 26, once the stipulated

forgeries  are  removed  from consideration,  there  is similarly

little  evidence to  support a  conviction  beyond the  fact that

Landman conducted the  closings.  While  the jury is not  held to

consistent  results, we think that the acquittal on Counts 16 and

17 reinforces our judgment that  (absent some confusion about the

forged checks),45  there was insufficient evidence  to convict on

Counts  23 through 26.   Because the evidence  is insufficient to

prove  that Landman  executed or  aided in  the execution  of the

schemes to defraud Bay  Loan charged in Counts 23  through 26, we

reverse his conviction on those counts.

                         7.  Momi Kumalae

          Kumalae was convicted of conspiracy and three counts of

bank fraud  in connection  with  various actions  she took  while

                    

45  There  was apparently some confusion surrounding the exhibits
containing the forged checks.   The government agreed to  use the
checks  only against  the  other defendants,  namely Reisch,  but
argued during  closing argument that Landman  was responsible for
the  checks written  to  Reisch on  the  Sandcastle units.    The
government  did  not explicitly  state  that  Landman signed  the
forged checks; however, it  failed to acknowledge the stipulation
of forgeries and  seemed to imply  no forgeries existed.   In any
event, we are  convinced that the jury improperly  considered the
forged checks in their guilty finding on Counts 23 through 26.

                               -59-

working  as  an  assistant to  Brandon  at  Dean  Street.46   The

evidence  establishing Kumalae's  knowledge  of  Bay Loan's  down

payment requirement and the scheme to fraudulently violate  it is

the  following:  (1) Brandon testified that he told Kumalae about

his  relationship  with  Bay  Loan,  (2)  an East  West  employee

testified that she asked Kumalae to forward information about the

unit buyers so that she could  satisfy the guidelines established

by  Bay  Loan;  (3)  Kumalae  was  present  during  some  of  the

conversations  between Brandon,  Ward,  Hagopian and  a buyer  in

which down payments were discussed; (4) Kumalae was also  present

at a meeting  at which  Brandon said  "they needed  to show  down

payments or something  so they were going to  wire money into the

accounts or deposit it and they needed one of our checks to prove

that it came out of our account"; (5) Kumalae told one buyer that

she needed  a check  from him  and that she  would be  "doing the

transactions at the banks";  (6) Kumalae assured one  buyer whose

down payment check had not been negotiated that his check had not

been  used;  and,  (7)  Kumalae instructed  another  Dean  Street

employee,  Marie Lynch, who had asked about the discharges of the

second mortgages  that "there weren't  supposed to be  any second

mortgages  and to  just don't  worry about  it.  They  were being

taken care of."

          The evidence  that she  willfully participated  in this

scheme is as  follows: (1)  Kumalae advised buyers  of how  their

                    

46  The jury found Kumalae not guilty on one count of bank fraud.

                               -60-

down  payment  requirement would  be  satisfied;47  (2) she  once

wired  money from her own account to a buyer in order to fund his

down  payment;48   (3)  she   signed  several  of   the  mortgage

discharge  letters  provided  to   the  buyers;49  and,  (4)  she

received  some of the down payment checks, and because several of

these checks  were  deposited  directly  into  Reisch's  account,

presumably by Kumalae,  she effected the  return of down  payment

funds  to  their   source  in  violation  of  the   down  payment

requirement.   All  of  this evidence  is  sufficient to  support

Kumalae's bank fraud and conspiracy convictions.

          Kumalae  attempts  to  rely  on cases  holding  that  a

defendant's  mere  presence at  the scene  of  the crime  or mere

association  with criminals  to whom  all the  evidence  at trial

pertains is insufficient to  support a conviction for conspiracy.

United  States v.  Ocampo, 964  F.2d 80  (1st Cir.  1992); United
                                                                 

States v. Mehtala, 578 F.2d 6,  10 (1st Cir. 1978); United States
                                                                 

v. Joiner, 429 F.2d 489, 493 (5th Cir. 1970).  Kumalae's reliance
         

on these cases is misplaced  because the government's case rested

                    

47   Kumalae told one buyer "no  down payments" were required and
that  Brandon was a "stand-up guy" who would "take care of things
and not to worry."  On another occasion she told a buyer that his
mortgage discharge "would be taken care of after the closing."

48   This was the basis for  the transaction for Count  15 and is
sufficient to support her conviction on that count.

49  One buyer  testifies that he picked  up his discharge  letter
and the letter  of another  buyer directly from  Kumalae.   These
discharges  were made for the  transactions in Counts  24 and 25.
We  note that the jury  acquitted Kumalae on  Count 23 presumably
because  there  was  no   such  testimony  to  support  Kumalae's
involvement with the discharge.

                               -61-

on Kumalae's own knowledge of the scheme to defraud based on  her

own statements  to others  and on  a series  of actions taken  by

Kumalae  herself that  directly  defrauded Bay  Loan.   Kumalae's

argument that she  was just  acting in good  faith by  performing

ministerial duties for Dean Street  and nothing more also  fails.

The  record is  clear that  Kumalae wired  down payment  funds to

buyers  from  her  own  account  and  signed  mortgage  discharge

letters.  These actions were not merely "ministerial duties."

                          V.  SEVERANCE

          The district court  denied the motions for  severance50

made by several  of the  defendants51 who argued  that they  were

unfairly prejudiced  by the  evidentiary spillover from  the case

presented   against  their  more  culpable  co-defendants.    The

defendants' claim is that the  joint trial seriously limited  the

jury's ability  to sift  through all  the  evidence against  each

individual defendant and increased  the risk that the  jury would

base  its verdicts on evidence which  has no bearing on the guilt

or innocence of defendants with a more limited involvement in the

                    

50    The  rule  authorizing  motions  for  severance  states  in
pertinent part:

            If  it appears that a defendant  . . . is
            prejudiced   by  a  joinder   .  .  .  of
            defendants . . .  for trial together, the
            court  may .  .  . grant  a severance  of
            defendants  or   provide  whatever  other
            relief justice requires.

Fed. R. Crim. P. 14.

51   Granoff,  Gauvin,  Hagopian, Reisch,  Kumalae, and  Ward all
moved for severance  before and  during trial and  all raise  the
issue on appeal.

                               -62-

scheme.   Whatever the advisability, in general,  of holding mass

trials  in  complicated cases  with  many  defendants of  varying

culpabilities,  we   do  not  find  any   significant  degree  of

unfairness  or  prejudice in  this  case  that  would  warrant  a

reversal of the district court's refusal to sever the trial. 

          The decision to grant or deny a motion for severance is

committed to  the sound discretion of the trial court and we will

reverse  its refusal  to sever  only upon  a finding  of manifest

abuse of  discretion.  United  States v. Olivo-Infante,  938 F.2d
                                                      

1406,  1409 (1st Cir. 1991);  United States v.  Natanel, 938 F.2d
                                                       

302, 308 (1st  Cir. 1991), cert. denied,  112 S. Ct. 986  (1992);
                                       

United  States v.  Boylan, 898  F.2d 230,  246 (1st  Cir.), cert.
                                                                

denied, 498 U.S. 849  (1990); see also United States  v. Searing,
                                                                

984 F.2d 960, 965 (8th Cir. 1993) ("In the context of conspiracy,

severance  will  rarely, if  ever,  be  required.").   Defendants

seeking  a separate trial must  make a strong  showing of evident

prejudice.  United States v. O'Bryant, No. 91-2132, slip op. at 8
                                     

(1st Cir. June  29, 1993);  United States v.  Mart nez, 922  F.2d
                                                      

914, 922 (1st Cir. 1991).  This showing must demonstrate that the

joint  trial  prevented the  jury  from  separating the  evidence

against  each defendant and reaching a  reliable verdict.  Zafiro
                                                                 

v. United States, 113  S. Ct. 933, 938 (1993); O'Bryant,  No. 91-
                                                       

2132, slip. op. at 8-9.   

          There is no indication  in this case that the  jury was

unable to distinguish  the various charges  and defendants or  to

sort properly  through the  evidence relating to  each defendant.

                               -63-

The  jury demonstrated  its ability  to independently  assess the

evidence when it  acquitted four of the  defendants on individual

bank  fraud counts, see United States v. Figueroa, 976 F.2d 1446,
                                                 

1452  (1st Cir.  1992),  cert. denied,  113  S. Ct.  1346  (1993)
                                     

(finding acquittals to be a relevant factor in upholding a denial

of severance); United  States v.  Dworken, 855 F.2d  12, 29  (1st
                                         

Cir.  1988) (same), and when  it asked that  specific portions of

the transcript relating  to specific defendants be read  to them.

In  addition,  the trial  judge  provided  a number  of  limiting

instructions throughout the  trial that alleviated any  potential

prejudice.   See  Figueroa, 976  F.2d at  1452; United  States v.
                                                              

Tejeda, 974 F.2d 210, 219 (1st Cir. 1992).  
      

          The  degree of prejudicial spillover appears minimal as

no defendant  has demonstrated which, if  any, evidence presented

at trial would have  been inadmissible if presented against  that

defendant  at  a  separate   trial.    The  government  presented

sufficient  evidence to show that all defendants were involved in

a single  interdependent conspiracy, see Section  IX.B., and most
                                        

of  the  evidence at  trial was  related  to the  development and

operation  of that  conspiracy.   "Where  evidence featuring  one

defendant is  independently admissible against a codefendant, the

latter  cannot convincingly  complain  of  an improper  spillover

effect."   O'Bryant,  No. 91-2132,  slip  op. at  10  (collecting
                   

cases).  Moreover, "[e]ven  where large amounts of testimony  are

irrelevant to one defendant, or where one defendant's involvement

in  an  overall agreement  is far  less  than the  involvement of

                               -64-

others, we have been reluctant to secondguess severance denials."

Boylan, 898 F.2d at 246 (citations omitted).  We therefore affirm
      

the judge's decision to deny the severance motions.

                     VI.  PRETRIAL PUBLICITY 
                     VI.  PRETRIAL PUBLICITY

          On  January  1,  1990,  the Governor  of  Rhode  Island

ordered  the closure of credit unions  in that state insured by a

private  entity  known  as   the  Rhode  Island  Savings  Deposit

Insurance Corporation (RISDIC).  After years of risky real estate

investments, many credit  unions were unable to  weather the late

1980s crash in  the real estate market and RISDIC could not cover

their anticipated losses.   In the process of closing  the credit

unions, the governor froze the assets of hundreds of thousands of

angry  depositors.  The ensuing panic among depositors as well as

the public  hearings, criminal investigations, and civil lawsuits

received extensive media coverage.  The Rhode Island credit union

crisis, although  coexistent with Dean Street's  downfall, is not

related to the present case.

          Defendants  raised a  series of  claims related  to the

district  court's  alleged  failure   to  shield  them  from  the

prejudicial effects  of publicity  surrounding  the Rhode  Island

credit union crisis.  They argue that their right to an impartial

jury  was jeopardized by the trial court's denial of their change

of  venue motion, their  request for individual  voir dire, their

request to question the  jurors about losing money in  the credit

union  crisis,  and  their request  for  a  mistrial or  curative

instructions after the admission  of certain evidence relating to

                               -65-

the failed credit unions.   As we  find no significant threat  to

the trial's  fairness from the effects  of unfavorable publicity,

we uphold the district  court's denial of the motions  related to

prejudicial publicity.

                       A.  Change of Venue

          The  decision to  grant a  change of venue52  is within

the sound discretion of the trial court and is reviewed for abuse

of  discretion.   United  States v.  Rodr guez-Cardona, 924  F.2d
                                                      

1148, 1158 (1st Cir.), cert. denied, 112 S. Ct. 54 (1991); United
                                                                 

States  v. Angiulo, 897 F.2d 1169, 1181 (1st Cir.), cert. denied,
                                                                

498 U.S. 845 (1990).   Change of venue is proper where  the level

of  prejudice against a defendant precludes  a fair and impartial

trial  because  the  community  is  saturated  with  inflammatory

publicity about the case.   Rodr guez-Cardona, 924 F.2d at  1158;
                                             

Angiulo, 897 F.2d at  1181; United States v. Moreno  Morales, 815
                                                            

F.2d 725, 731 (1st Cir.), cert. denied, 484 U.S. 966 (1987).
                                      

          Defendants  proffered   forty-four  newspaper  articles

relating to Dean Street and their criminal case, as well as other

examples from the media which purported to show negative feelings

stemming from the credit union crisis against those who benefited

                    

52  The trial court, upon a defendant's motion, will transfer the
trial to another district

            if  the  court  is  satisfied  that there
            exists   in   the   district  where   the
            prosecution   is   pending  so   great  a
            prejudice against the defendant  that the
            defendant  cannot  obtain   a  fair   and
            impartial trial.

Fed. R. Crim. P. 21(a).

                               -66-

from failed  financial institutions.  Defendants  claim that this

demonstrated widespread prejudice among potential  jurors against

them.  They argue that the jurors would  not distinguish Bay Loan

from  the failed credit unions  and consequently the jurors would

direct their hostility toward those involved in  the credit union

crisis against the defendants at trial.

          We find that  the publicity relating  to this case  did

not   particularly  saturate  the   community  with  inflammatory

sentiment nor do we have any  reason to believe that the jury was

anything but impartial.  The articles presented by the defendants

evidence standard factual  press coverage of a  criminal case and

are neither inflammatory nor sensational.  See Angiulo,  897 F.2d
                                                      

at 1181 (stating that  prejudice will not be presumed in the case

of merely factual reporting, instead "the publicity  must be both

extensive and sensational in  nature").  Only five of  the forty-
             

seven  prospective jurors had ever  read or heard  about the case

and  none of them sat on the jury.  We find nothing in the record

to indicate that the jurors' feelings about the credit crisis, if

they had any,  impaired their impartiality  in the present  case.

The trial judge  appropriately cautioned the jury  about the need

to  separate the credit crisis  from this case  and, as discussed

below, he  conducted a  voir dire that  sufficiently investigated

possible  bias.  The trial judge determined that the jurors would

understand  that the credit crisis had no connection to this case

when he denied the change of venue motion and we find no abuse of

                               -67-

discretion in this conclusion.53

                          B.  Voir Dire

          Defendants argue  that the denial of  their request for

individual voir dire  and their  request for jurors  to be  asked

whether they  had  lost money  in the  credit unions  jeopardized

their right  to an impartial jury.   See Irvin v.  Dowd, 366 U.S.
                                                       

717, 722  (1961).   Defendants claim  that as a  result of  these

rulings the  court did  not adequately investigate  possible bias

against defendants stemming  from the credit union  crisis.  See,
                                                                

e.g., United States v. Gillis, 942 F.2d 707 (10th Cir. 1991). 
                             

          The trial court has broad discretion in conducting voir

dire.   United States  v. McCarthy, 961  F.2d 972, 976  (1st Cir.
                                  

1992); Real v.  Hogan, 828 F.2d 58,  62 (1st Cir. 1987).   "It is
                     

more  than  enough  if the  court  covers  the  substance of  the

appropriate  areas of concern by framing its own questions in its

own words."  Hogan, 828 F.2d at 62 (citations omitted).   In this
                  

case, the judge adequately probed prospective jurors for possible

bias  related  to  the  credit union  crisis54  and  specifically

                    

53  We also reject the allegation of actual juror prejudice based
on  the unsubstantiated claim that there was a chance that actual
                                                     
prejudice existed which  could have  been revealed  if the  judge
asked the right questions during voir dire.  As we find no errors
in  the voir  dire  process,  see  subsection  B,  and  no  other
                                 
indication  of   actual  prejudice,   we  find   this  allegation
unfounded.

54  Specifically the judge told prospective jurors:

            One thing I should  caution you about  is
            some of  you may be aware  that there has
            been  some  publicity  in   Rhode  Island
            recently about the credit unions  and the
            difficulties  that  they've  experienced,

                               -68-

inquired  several  times  whether  any  of  the  jurors  or their

families had  "lost money  in a  bank fraud  or anything of  that

sort."    One  juror   responded  affirmatively  to  the  court's

questions  in this area and  was excused.55   Throughout the voir

dire, any juror responding to  the court's queries was  subjected

to individual questioning by the judge and by counsel.  For these

reasons, we find no errors in the voir dire process. 

                     C.  Prejudicial Evidence

          During the trial, the  judge admitted evidence relating

to some of the  failed credit unions and individuals  involved in

the credit  union crisis.  Specifically,  during the government's

direct  examination of  Marderosian  in which  he was  questioned

about  the use  of Bay  Loan funds  obtained from  the Sandcastle

closings,   Marderosian  explained   that,  in   accordance  with

Brandon's  instructions,  he had  deliberately  failed  to pay  a

preexisting  $1.5  million  mortgage  held by  the  Rhode  Island

                    

            and  I want  to  be  sure  that  everyone
            understands that this case is not  in any
            way related  to those  events.   Is there
            anybody  who  thinks   they  would   have
            difficulty in separating  this case  from
            anything  you might have  heard about the
            problems  credit  unions in  Rhode Island
            have experienced?

55  Defendants  make an additional  argument that because  jurors
were told  that the credit  crisis had no relation  to this case,
they  did not think losing  money in credit  unions was important
before the trial started and thus would not have responded to the
judge's comments  during voir dire.   Yet, once  evidence linking
defendants  to the  credit  crisis was  presented  at trial,  see
                                                                 
subsection C, the issue  of losing money became critical  and the
risk of bias was no longer adequately addressed by the voir dire.
The  creativity  of   this  argument  is  matched  only   by  its
improbability and speculative nature.  We summarily reject it.

                               -69-

Central Credit Union.  Instead, he used the loan proceeds to  pay

off other Dean Street creditors.  Included in the lengthy list of

these  creditors admitted  at trial  were Robert  Barbato, Atrium

Financial, and Davisville  Credit Union.   All of these  entities

and  individuals  were  involved   in  the  RISDIC  credit  union

crisis.56   Defendants objected to  the evidence and  moved for a

mistrial  arguing that  the  evidence was  irrelevant and  highly

inflammatory.

          The decision to admit or exclude evidence under Fed. R.

Evid. 40357 is  committed to  the broad discretion  of the  trial

court and we will reverse the court's judgment only rarely and in

extraordinary  compelling   circumstances.    United   States  v.
                                                             

Nickens,  955 F.2d 112, 125 (1st Cir.),  cert. denied, 113 S. Ct.
                                                     

108  (1992); United States v.  McMahon, 938 F.2d  1501, 1507 (1st
                                      

Cir. 1991).  Rule 403 requires a balancing of the probative value

of  a piece of evidence  against its prejudicial  effect.  United
                                                                 

States  v. Rodr guez Cort s, 949  F.2d 532, 540  (1st Cir. 1991).
                           

                    

56  Rhode Island  Central Credit Union and the  Davisville Credit
Union  were among the institutions closed as a result of RISDIC's
failure.  (Davisville  apparently  failed  despite  Dean Street's
preferred  payment on its debt  with them).   Robert Barbato, who
purportedly  was  connected  to  organized  crime,  was  a  heavy
borrower of the  credit unions.   Atrium Financial  was owned  in
part by one of the key figures in the credit union crisis.

57  Rule 403 provides in part:

            Although   relevant,   evidence  may   be
            excluded  if  its   probative  value   is
            substantially outweighed by the danger of
            unfair prejudice . . . .

Fed. R. Evid. 403.

                               -70-

Exclusion   is  proper   only   when  the   probative  value   is

"substantially outweighed"  by the  risk of prejudice.   McMahon,
                                                                

938 F.2d at 1508.

          The  admitted evidence  was  relevant to  the issue  of

whether Marderosian was stealing the  loan proceeds for Bay  Loan

or  passing them  on  as  Brandon  directed.    Marderosian,  the

government's key witness,  was attacked  by the  defense and  the

media as the main culprit in the scheme and the government sought

to  bolster the  credibility  of his  testimony  by showing  that

Marderosian  did not improperly divert  any of the  large sums of

money that he  handled into his  own pocket.   The evidence  also

helped provide a foundation  for later expert testimony regarding

what  happened to the funds obtained from  Bay Loan in the course

of the scheme to defraud. 

          The relevancy  of the evidence  sufficiently outweighed

the  minimal  prejudicial effect  that was  created by  the brief

mention  of individuals and  entities that were  connected to the

credit union crisis.  First  of all, nothing at trial  linked the

named individuals  and entities  to  RISDIC or  the credit  union

crisis.   In order to find prejudice, the court would have had to

infer that the  jury had  heard of the  individuals and  entities

from an external source and also knew of their involvement in the

credit  union scandal.58   Even  if  the jurors  did know  of the

involvement  of  the  named   individuals  and  entities,  it  is

                    

58  The judge offered to question the jurors about their possible
knowledge  of the  persons named  in  the disputed  testimony but
defense counsel refused.

                               -71-

doubtful, given  the court's various cautioning  instructions and

the voir dire process, that jurors would likely be biased against

defendants just  because certain  names were mentioned  at trial.

At most, the jurors might conclude that defendants contributed to

the failure of at least one  credit union by not repaying certain

loans.   The trial judge  asked the jurors, however,  if they had

lost any money  from bank  fraud related schemes  and no  sitting

jurors said they had.  Thus we have no reason to believe that any

juror who  may have inferred  that defendants contributed  to the

credit  union  crisis  would   be  particularly  likely  to  find

defendants  guilty  without  fairly  considering   the  evidence.

Finally, to  the  extent  that  the balancing  of  relevance  and

prejudice was a close  call, we find no  abuse of discretion  and

uphold the trial court's admission of the disputed evidence.

                   VII.  EXCLUSION OF EVIDENCE

          During  the  trial,  defendants  attempted  to  proffer

evidence  regarding  the allegedly  common practice  by financial

institutions  of  requiring  no  down  payment  on  the  sale  of

commercial  real   estate.    On   cross-examination  of  several

government  witnesses, Hagopian's  attorney asked whether  it was

customary  during  the  relevant  time  period  to  buy and  sell

commercial  properties  with no  money  down and  to  obtain 100%

financing.  The government objected on relevancy  grounds and the

district court  sustained the  objections.  On  another occasion,

Brandon presented an expert witness, James  White, to bolster the

credibility of certain testimony.  Brandon had testified that Bay

                               -72-

Loan Vice  President Gormley  acknowledged that the  proposed end

loans to  unit buyers actually constituted  one single commercial

loan  to Dean  Street,  even though  they  were to  be  submitted

individually as  consumer residential  loans.  Brandon  sought to

present Mr. White's  opinion that  the loans at  issue were  more

consistent  with  commercial rather  than  consumer  loans.   The

district court again excluded the testimony on relevancy grounds.

We affirm the trial court's rulings.59

          In general, "[a]ll relevant evidence is admissible" and

"[e]vidence  which is not relevant  is not admissible."   Fed. R.

Evid. 402.   The district  court has broad  discretion in  making

relevancy determinations  and we  must review its  decisions only

for abuse of that discretion.  United States v. Griffin, 818 F.2d
                                                       

97,  101  (1st Cir.),  cert. denied,  484  US 844  (1987); United
                                                                 

States v. Lamberty, 778 F.2d 59, 61 (1st Cir. 1985).  Evidence is
                  

relevant if  it has "any  tendency to  make the existence  of any

fact  that is of consequence  to the determination  of the action

more  probable  or less  probable than  it  would be  without the

evidence."  Fed. R. Evid. 401; Lamberty, 778 F.2d at 61.  
                                       

          Defendants argue that the excluded evidence is relevant

to one  of their theories of  the case: (1) either  that Bay Loan

knew of and approved their falsification of down payments; or (2)

that defendants did  not know  about, or intend  to violate,  Bay

Loan's  down  payment  requirement.     The  proffered  evidence,

                    

59  Because  we find the  disputed evidence was  not relevant  to
defendant's  case, we  also  reject Brandon's  argument that  the
trial court impaired his right to present his theory of defense.

                               -73-

however, does not make  either of these theories any  more likely

to be true and thus the evidence is irrelevant.

          As for the first theory, Brandon tried to show at trial

that  Bay Loan aggressively  purchased non-conforming loans, that

he openly sought 100% financing from  the bank, and that Bay Loan

agreed  to  provide  the   financing  without  down  payments  by

directing  Dean  Street  to falsify  the  paperwork  to show  the

existence of  down  payments.    The  expert  testimony  and  the

government witness's  testimony about  the common practice  of no

down  payment  financing  may  add  support  to  the  first   two

assertions,  but those assertions are simply not at issue in this

case.  Rather, Bay Loan's alleged approval of false down payments

is  at issue.  The defendants, however, have not demonstrated any

relationship between the proffered  evidence that no down payment

financing  was a common practice and the likelihood that Bay Loan

directed  Dean Street  to falsify  paperwork to  misrepresent the

existence of down payments that were never made.

          The  problem  with  defendants'  argument  is  that  no

connection between the common  use of 100% financing and  the use

of  false down  payments was  ever established.60   That  is, for

                    

60   The same problem exists regarding the connection between the
fake  down   payments  and   the  expert's   distinction  between
residential and commercial loans.  Brandon sought to characterize
the mortgages from Bay Loan as more like commercial than consumer
loans  and  thus subject  to  different  standards and  policies.
Specifically, he  sought to show  that 100% financing  was normal
for  commercial  loans  and  to counter  the  allegedly  critical
contention   that  residential   loans  typically   require  down
payments.  This  is basically the  same type of  evidence as  the
testimony  that 100%  financing  was customary  in the  industry.
That  is, a  showing that  Bay Loan's  mortgages  were commercial

                               -74-

the evidence to be relevant, there must be some reason to believe

that 100% financing, or no down payment financing, is customarily

provided  in  conjunction   with  paperwork  showing  fake   down

payments.   A no down  payment custom does  not establish a  fake

down  payment  custom.    The  defendants  lack,  therefore,  any

foundation that would make the proffered evidence relevant.

          "'Trial judges have wide discretion in deciding whether

an adequate  foundation  has  been  laid  for  the  admission  of

evidence.'"    Veranda Beach  Club  Ltd.  Partnership v.  Western
                                                                 

Surety Co., 936  F.2d 1364, 1371 (1st  Cir. 1991) (citing  Real v
                                                               

Hogan, 828 F.2d 58,  64 (1st Cir. 1987)); see also  United States
                                                                 

v. Young, 804 F.2d  116, 119 (8th  Cir. 1986), cert. denied,  482
                                                           

U.S. 913 (1987).   No foundation was laid in this  case.  Even if

we  accept 100%  financing was  in fact  generally common  in the

industry and  for Bay Loan,  it does not  follow that Bay  Loan's

approval of false down  payment transactions is any  more likely.

Defendants  must provide,  for  example, some  evidence that  the

recording  of down payments in no down payment transactions was a

common  formality, perhaps  for  accounting, tax  or  bookkeeping

                    

helps  to establish the  likelihood that the  loans were actually
"no  down payment  loans."   This  still  leaves us  without  the
missing foundational  link -- that  no down payment  financing is
somehow associated with falsified down payments.

   In response  to Brandon's claim that the government proved its
case  by showing the transactions deviated from the norm, we note
that the relevant norm is  not 100% versus 80% financing but  the
standard method  of representing down payments,  or lack thereof,
in loan transactions.  Proof  of a no down payment norm  does not
establish a fake down payment norm.

                               -75-

purposes,61  or for  the  convenience of  some interested  party.

If  such evidence  existed,  then maybe  a sufficient  foundation

would exist for  the relevance  of 100% financing.   However,  no

such foundation is evident in the record.

          What defendants were really trying to show  is that the

bank or its officials  were themselves perpetrating some sort  of

fraud and  the defendants were unwittingly caught up in it.  This

assertion,  however,  also  lacks   foundational  support.    The

defendants want the proffered evidence to establish that Bay Loan

was in the practice  of providing 100% financing and  thus likely

to be providing 100%  financing in this case as  well, regardless

of whether such financing  involved fake down payments, kickbacks

or fraudulent paperwork.  This formulation, however, obscures the

real issue: if Bay Loan intended to provide 100% financing, or if

defendants thought down payments  were waived, why did they  have

to  take actions  to  falsify down  payments?   To  satisfy  this

requisite  foundational  question,  the  defendants had  to  show

either  that,  (1)  officials at  Bay  Loan  stood  to reap  some

personal  gain  by  offering  loans  with  no  down  payments  in

violation of the  bank's requirements and thus  needed to falsify

                    

61   Brandon claims that  Bay Loan  directed him to  falsify down
payments so that the  bank could package the commercial  loans as
residential  loans.  Were his  claim true, however,  it would not
make the common practice of  providing commercial loans, and  the
100% financing such loans allegedly involve, any more relevant to
the  issue  of  why   the  falsification  of  down  payments   is
justifiable.   Still lacking is  some indication that  the common
practice of lending  money without  down payments  makes it  more
likely  that the bank would find  it necessary to mischaracterize
loans and consequently  direct Dean Street to produce  false down
payment paperwork.

                               -76-

down payments to hide  the violation from bank superiors;  or (2)

the bank  as a whole  stood to  reap some gain  by lending  money

under  false  pretenses,  perhaps  to  deceive  their  creditors,

shareholders,  or regulators.62  In  the absence of some evidence

supporting these  two propositions, the custom  of 100% financing

or  the characterization of the loans as commercial as opposed to

residential does not make Bay Loan's  approval of fraudulent down

payments any more  likely to  be true.   Again, the  foundational

link is simply missing.

          The   excluded  evidence  is  similarly  irrelevant  to

defendants'  lack of  knowledge or  intent to  defraud Bay  Loan.

Defendants claim that evidence that 100% financing was a standard

practice supports their claim  that they did not know  or suspect

anything was unusual or illegal about the  loan transactions they

participated in.   Again, what  is at issue  is the existence  of

falsified  down payments.   There  is no  basis for  finding that

defendants  were  more likely  to  think  that  their actions  to

facilitate  the documentation of  nonexistent down  payments were

somehow legitimate just because 100% financing was customary.  To

put  it another  way, the  proffered evidence  does not  make the

false  down  payment  maneuvers  less  likely  to  tip   off  the

defendants to the  illegal nature of the transaction without some

foundation  connecting 100%  financing to  creative down  payment

                    

62   Defendants presented  evidence that  Bay Loan  was knowingly
lending in violation  of other requirements  it imposed, not  the
least  of which  was  the requirement  that  buyers live  in  the
condominiums they purchased which  was impossible given the units
were to be operated as motels.

                               -77-

paperwork  of some  kind.   Defendants were  not engaged  in what

appeared to them to be a "no down payment transaction"; they were

doing  what appeared to  them to be  a transaction  where a paper

down  payment was documented and  recorded but not actually paid.

The no  down payment custom would  only be relevant to  intent if

that custom  involved something even vaguely similar to this sort

of paper  down payment.  Because no such foundation exists on the

record, and because we find no abuse of discretion on the part of

the trial court in refusing to  allow the jury to assume or infer

that  foundation,  we  uphold  the  exclusion  of  the  proffered

evidence.63

  VIII.  PREJUDICE FROM COMMENTS REGARDING DEFENDANTS' ETHNICITY

          During the  fifth day  of trial, the  government's main

witness, Marderosian, testified about a comment made by defendant

Landman concerning the religious affinity between Landman and co-

defendant  Reisch.     Marderosian   was  describing   on  direct

examination the arrangement for Reisch to wire down payment money

into buyers' accounts.  The arrangement was designed, in part, to

allay Reisch's  concern that too much money  would be outstanding

between the time he provided funds to the buyers and the time the

funds were  returned to him  by Dean Street.   In reference  to a

                    

63  Unlike  the cases cited  by defendant that  have held that  a
certain custom or practice  in an industry may be relevant to the
defendant's case, United States v. Aversa, 984 F.2d 493 (1st Cir.
                                         
1993)  (en  banc); United  States v.  Seelig,  622 F.2d  207 (6th
                                            
Cir.), cert. denied, 449 U.S. 869 (1980); United States v. Riley,
                                                                
550 F.2d 233 (5th  Cir. 1977), the proffered custom  in this case
is unrelated to the alleged illegal activity.

                               -78-

discussion  between Marderosian  and  Landman,64  the  government

asked:  "What, if  anything  did Mr.  Landman  say to  you  about

concerns expressed by Mr. Reisch?"  Marderosian responded:

            Mr. Landman stated to me on one occasion,
            I am  not sure  if it was  that occasion,
            that  Mr.   Reisch  appeared  comfortable
            doing it this way  and part of the reason
            for that, Mr. Landman explained, was that
            Mr. Landman  was  involved  and   he  was
            Jewish and Mr. Reisch was Jewish and that
            the   level   of  comfort   shouldn't  be
            underestimated by me.

          Defendants did not immediately object to this statement

after it was  made; however, Reisch's  attorney moved to  dismiss

later that same day.  The judge denied the motion and also denied

later  defense motions for a mistrial.  Defendants argue that the

testimony invited  the jury  to make the  impermissible inference

that members of the same  religion would be more likely to  trust

each other and join  in a conspiracy and also  that the testimony

may  have  provoked anti-Semitic  feelings  among  jurors.   When

defendants first  raised their objections, the  trial judge asked

counsel what they  wanted him to do and the  judge offered to try

and ferret out any possible anti-Semitism on the jury.  Counsel's

only  request was for dismissal.  Counsel did not request further

questioning of the jury on this matter and  expressed displeasure

                    

64   Marderosian's testimony  about Landman's  statement properly
falls  under the  co-conspirator exception  to the  hearsay rule,
Fed.  R.  Evid.   801(d)(2)(E),  because  the  evidence   clearly
establishes  beyond   a  preponderance   of  the  evidence   that
Marderosian,  Landman   and  Reisch  were  all   members  of  the
conspiracy and the statement was made during the course of and in
furtherance of the conspiracy.  See United States v. Angiulo, 897
                                                            
F.2d 1169, 1201-02 (1st Cir.), cert. denied, 498 U.S. 845 (1990).
                                           

                               -79-

with the  possibility of providing curative  instructions because

"instructions would only magnify the problem."

          Under  these circumstances,  we do  not think  that the

trial court's  actions  constitute reversible  error despite  the

possible  inappropriateness  of  the  testimony.   The  level  of

prejudice, if  any, was not sufficiently  significant to overturn

the judge's decision to accept the defendants' tactical choice to

forgo  more  appropriate  methods  of  addressing  the  potential

prejudice in favor of the unrealistic and unnecessary solution of

a dismissal or a new trial.  Cf. United States v. De La Cruz, 902
                                                            

F.2d  121, 124  (1st Cir.  1990) (noting  the reluctance  of this

court  to require  trial judges  to override  plausible strategic

choices  on the  part  of counsel  in  the context  of  remedying

potential prejudice); United States v. Goldman, 563 F.2d 501, 505
                                              

(1st  Cir. 1977), cert. denied, 434 U.S. 1067 (1978) (refusing to
                              

reverse verdict in trial  with prejudicial references to religion

because the trial judge gave curative instructions).

          The  prejudicial  effect  of   Marderosian's  statement

appears quite limited.  The reference to defendants' Judaism  was

the only such mention of  religion at trial.  It amounted  to one

brief sentence in nineteen days of testimony and argument.  There

was  no subsequent reference to  the challenged testimony nor did

the government use the issue of religious affinity in its closing

argument.  The inference of Jewish affinity was not, as defendant

Landman claims, central to  the government's case.  The  basis of

Landman's  agreement to participate in the conspiracy was not his

                               -80-

promise to protect the interests of Reisch but his agreement with

Marderosian and Brandon to facilitate the unit sales without down

payments.   As discussed above,  see Section  IV.B.6, the  record
                                    

contains  sufficient  facts   regarding  Landman's  actions   and

statements  made by,  and to,  him to  support his  knowledge and

participation  in  the  conspiracy.   None  of  these  facts have

anything to  do with  Landman's supposed religious  affinity with

Reisch.65 Likewise,  the evidence  against Reisch  centers around

his agreement with Brandon to provide money to the scheme and not

around  his  relationship with  Landman.   In  fact,  Landman was

acquitted by the jury on two bank  fraud counts that involved the

funding of down payments by Reisch in which Landman conducted the

closings. This indicates that the jury was not prejudiced and did

not rely on the disputed testimony in its verdict.  

          Nothing  like  the  serious  prejudicial  circumstances

found in United  States v.  Rodr guez Cort s, 949  F.2d 532  (1st
                                            

Cir. 1991) (finding reversible error  from ethnically prejudicial

evidence),  exists  in  this  case.   In  Rodr guez  Cort s,  the
                                                           

district court  had found a  defendant's Colombian identification

card  admissible  based  on  the  impermissible  assumption  that

Colombians  were more  willing  to trust  fellow Colombians  than

anyone  else, and therefore, defendant  was likely to be involved

                    

65   There  is also  sufficient testimony,  quite apart  from the
disputed  comment, that  Landman  agreed to  look after  Reisch's
interests.   Marderosian testified that Reisch  told Landman that
"he  wanted Mr. Landman  to look out for  his interest to protect
his   money  to  the  extent  possible."     Landman  later  told
Marderosian "he would  try to  protect Mr. Reisch  to the  extent
possible."

                               -81-

with his Colombian co-defendants.   Id. at 540.   This connection
                                      

was emphasized in the government's closing argument.  Id. at 541.
                                                        

Here, there  was no objection  to the relevancy  of Marderosian's

statement and thus no ruling based on an impermissible inference.

The judge recognized the potential  for prejudice and offered  to

take  steps to  rectify  the  problem.    More  importantly,  the

government  did  not invoke  any  inferences  based on  religious

affinity in  its  final argument  before  the jury.    Similarly,

United States v.  Cruz, 981 F.2d  659 (2d Cir. 1992),  and United
                                                                 

States  v. Doe, 903 F.2d 16 (D.C. Cir. 1990), are distinguishable
              

from  the   present  case   because  those  cases   involved  the

government's explicit  use of the  impermissible reasoning,  upon

extensive direct examination and  on summation, for crucial parts

of its theory of the case.

          Defendants   suggest   there    was   an   element   of

prosecutorial misconduct in eliciting the disputed testimony from

Marderosian.   Marderosian  had  made a  similar statement  about

defendants' Judaism when  he testified before the  grand jury and

the pattern  of questioning  prior to Marderosian's  statement at

trial  could  be  construed as  an  attempt  to  elicit the  same

testimony from him a second time.   At the bench conference  with

the  judge,   the  prosecutor  denied  knowing   beforehand  that

Marderosian would make the comment about defendants' religion and

claimed to  have instructed Marderosian to limit his testimony to

the  fact  that Landman  said  Reisch felt  comfortable  with the

arrangement.  While the  circumstances are somewhat troubling, we

                               -82-

do not  find sufficient  evidence of prosecutorial  misconduct to

reverse the verdicts  in this  case, especially in  light of  the

absence  of  any  reference  to  the  religious  comment  in  the

government's  summation.   Compare  Goldman  563  F.2d at  504-05
                                           

(prosecutor, on summation, referred to fact defendant was wearing

"what  they call in the Jewish  religion a yamaka [sic]" and that

the  symbol  he  was  wearing  "has  been  defamed,  defiled  and

scandalized"). 

                      IX.  JURY INSTRUCTIONS

          Defendants   make  three   challenges   to   the   jury

instructions  in this case.66   They allege that  the trial judge

failed to provide proffered instructions concerning the  required

proof of intent  for conspiracy and  the possibility of  multiple

conspiracies.  They also argue that it was error for the judge to

give an instruction concerning willful blindness.

                    

66  Defendant Granoff makes an additional argument that the trial
judge erroneously failed to instruct the jury that they must find
that defendants knew  of Bay Loan's federally  insured status and
that defendants knew  Bay Loan  was the target  of the scheme  to
defraud.   Because we found  that neither of  these elements were
required for a conviction under the bank fraud statute, see supra
                                                                 
Section IV, the trial court  did not err in refusing to  give the
proffered instructions.

   The trial judge was thus correct in instructing the jury that:

            it is not necessary for the Government to
            prove   that   the  Defendant   knew  the
            identity  of   the  particular  financial
            institution  or  that the  Defendant knew
            that   that  institution   was  Federally
            chartered  or insured.  . .  .   It must,
            however,   prove   that   the   Defendant
            intended    to   defraud    a   financial
            institution.

                               -83-

           A.  The Direct Sales Conspiracy Instruction
                               

          The defendants  proffered  a jury  instruction67  based

on the rule derived from  Direct Sales Co. v. United States,  319
                                                           

U.S. 703, 711, 713 (1943), that one who supplies goods to another

knowing that the recipient  will use them for an  illegal purpose

cannot, on that basis  alone, be found guilty of  conspiring with

the recipient.   Rather, for the  supplier to be  culpable, he or

she  must have the intent  to further, promote,  and cooperate in

that  illegal purpose.  Id.;  United States v.  Falcone, 109 F.2d
                                                       

579, 581 (2d  Cir.), aff'd., 311 U.S.  205 (1940).   The district
                          

court  did not  give  the defendants'  proffered instruction  but

instead instructed the jury that "to be a member of a conspiracy,

a Defendant must have  willfully joined it or participated  in it

                    

67  The instruction stated, in pertinent part:

            You are instructed that  a person who may
            have furnished goods,  money or  services
            to another person who he knows is or will
            be  engaged in  criminal activity  .  . .
            does not by  furnishing such goods, money
            or services necessarily  become a  member
            of the  conspiracy.   Instead, . .  . the
            government must show beyond  a reasonable
            doubt that the defendant was aware of the
            conspiracy and  knowingly and voluntarily
            joined it  with the intent  of furthering
            its illegal aims.

            To reiterate,  it is not  enough that the
            Government   prove   that  a   particular
            defendant acted in  a way that  furthered
            the   purposes   or  objectives   of  the
            conspiracy.  Instead the  Government must
            prove  beyond a reasonable doubt that the
            defendant  acted  while  knowing  of  the
            unlawful agreement and with the intention
            to participate in it.

                               -84-

for  the   purpose  of  advancing  or   furthering  its  unlawful

purposes."   The court also stated that the government must prove

each defendant's "intent to  participate in the unlawful scheme."

Defendants argue that this instruction inadequately addressed the

intent requirement laid out in Direct Sales and Falcone.
                                                       

          The   trial  court's   failure  to  give   a  proffered

instruction will not be  reversed unless that instruction  is (1)

substantively correct;  (2) was not substantially  covered in the

charge actually given; and (3)  concerned an important point such

that the failure to give it seriously undermined the  defendant's

ability  to  present a  particular  defense.   United  States  v.
                                                             

McGill,  953  F.2d  10, 13  (1st  Cir.  1992);  United States  v.
                                                             

Perkins, 926  F.2d 1271,  1283 (1st  Cir. 1991).   In this  case,
       

defendants fail to get past the second prong of the test.

          The district  court's instruction, which states  that a

defendant must have "the purpose of  advancing or furthering" the

unlawful  purpose  of the  conspiracy,  substantially  covers the

substance of  defendant's proffered instruction.   The judge also

informed the jury  that defendant had  to "willfully join[]"  the

conspiracy, that defendant had  to have both the intent  to agree

to join the  conspiracy and  the specific intent  to commit  bank

fraud, and that defendant  had to have the intent  to participate

in  the unlawful scheme.  All of these instructions together more

than  adequately address  the  requirements of  Direct Sales  and
                                                            

Falcone that defendant must join the conspiracy with the specific
       

intent to accomplish its  illegal purpose.  See United  States v.
                                                              

                               -85-

Arias-Santana, 964 F.2d  1262, 1268 (1st  Cir. 1992) (finding  no
             

error  where jury  charge  covered the  substance of  defendant's

requests); McGill, 953 F.2d at 12-13 (same).   We have upheld the
                 

adequacy  of  nearly identical  instructions  in the  past.   See
                                                                 

United States v. Hensel, 699 F.2d 18, 37-38 (1st Cir. 1983).
                       

          The defendants focus on  the fact that the trial  judge

did not explicitly  state that  mere knowledge  by the  defendant

that the  goods he or she  provides to a conspiracy  will be used

illegally  is not  sufficient  to prove  an  intent to  join  the

conspiracy.  This instruction, defendants allege, is necessary to

properly define  "intent to  participate" or  "intent to  join" a

conspiracy.   Without an expression  of the  innocent case,  they

add,  the instructions leave open  the door for the impermissible

inference that a defendant can be guilty of conspiring to defraud

Bay  Loan simply  by providing  money to  Dean Street  knowing it

would be used illegally.  Defendants claim that because the murky

distinction between lawful cooperation and  illegal participation

is  especially close  in  this case,  the  district court  had  a

special obligation to be clear.

          In  some  situations, this  type  of "negative"  Direct
                                                                 

Sales  instruction might be required,  but we see  nothing in the
     

facts  of this  case that  makes the  distinction  between simply

knowing  of  the illegal  nature of  the  scheme and  agreeing to

further the  scheme particularly  crucial to  the  defense.   The

central defense of  most defendants  was that they  did not  know

that  Dean Street  was doing  anything  illegal in  obtaining the

                               -86-

loans.  Once knowledge of illegality is established, the evidence

of  defendants' participation,  as  opposed  to merely  providing

goods and services to the conspiracy, is overwhelming and not, as

defendants assert, a close call.  See supra Section IV.
                                           

          In any  event, we think the  trial court's instructions

were  quite clear  that  (1) "[i]n  order  to be  a  member of  a

conspiracy,  a  Defendant  must   have  willfully  joined  it  or

participated in it for the purpose of advancing or furthering its

unlawful  purpose"; and  (2)  that defendant  must  have both  an

intent to agree to join the conspiracy and the specific intent to

commit  bank fraud.   These  instructions adequately  defined the

requisite "intent  to participate" and  foreclosed any  inference

that knowingly providing goods to a criminal enterprise is itself

sufficient to support a finding of intent to join the conspiracy.

The  trial  court need  not employ  the  most elegant  or concise

phraseology  nor  must it  incorporate  the  precise language  of

defendants'  request as long as the instructions taken as a whole

"accurately  communicated  the  meat  of  the defense's  theory."

McGill,  953 F.2d at 12.  In this case,  the court's instructions
      

adequately   communicated  the   defendants'  theory   that  mere

knowledge  and  assistance,  without  an intent  to  further  the

enterprise, is not enough. 

             B.  Instruction On Multiple Conspiracies

          The defendants also challenge the trial court's refusal

to  instruct  the  jury   as  to  the  possibility   of  multiple

                               -87-

conspiracies.68   Such an instruction was  warranted, they claim,

because  the evidence  indicated  that  different defendants  had

different  relationships with  Dean Street  and were  involved in

separate  schemes.  Although the judge may have erred in refusing

to charge  multiple conspiracies, we  find insufficient prejudice

to warrant a reversal of the convictions.

          A trial court should grant a  defendant's request for a

multiple conspiracy  instruction if, "on the  evidence adduced at

trial,  a reasonable jury could  find more than  one such illicit

agreement, or  could find  an  agreement different  from the  one

charged."  United States  v. Boylan, 898 F.2d 230, 243  (1st Cir.
                                   

1990); see also United States v. Dennis, 917 F.2d 1031, 1033 (7th
                                       

Cir. 1990); United States  v. Dwyer, 843 F.2d 60, 61-62 (1st Cir.
                                   

1988).   As it  is highly likely that  the voluminous and complex

record  in this case, viewed  in the light  most favorable to the

                    

68  The defendants' proffered instruction stated in part:

            Where  persons  have  joined together  to
            further  one  common  unlawful design  or
            purpose, a single conspiracy exists.   By
            way  of  contrast, multiple  conspiracies
            exist  when  there are  separate unlawful
            agreements to achieve distinct purposes.
                             . . . .
            In  deciding  whether  a  single  overall
            conspiracy as charged  in the  indictment
            has been proven beyond a reasonable doubt
            you  should look  at  whether there  were
            multiple   agreements  reached,   whether
            there  were  additions or  withdrawals of
            alleged     conspirators,    and     most
            significantly, whether the evidence shows
            beyond a reasonable doubt that all of the
            alleged   conspirators   directed   their
            efforts  toward  the accomplishment  of a
            common goal or overall plan.

                               -88-

defendants, would allow for a plausible conclusion that more than

one  conspiracy took place, we start from the assumption that the

trial  court erred in its failure to give the multiple conspiracy

instructions.  Our task,  then, is to determine if  the degree of

prejudice  from the possible  error necessitates a  reversal.  We

find that it does not.

          We will reverse a  court's erroneous refusal to  give a

substantively  correct  instruction  only  when  that instruction

concerned an important  point such  that the failure  to give  it

seriously  undermined  the  defendant's  ability  to  effectively

present a given defense.   United States v. McGill, 953  F.2d 10,
                                                  

13 (1st Cir. 1992); United States v. Perkins, 926 F.2d 1271, 1283
                                            

(1st  Cir.   1991).     In  the   context  of  alleged   multiple

conspiracies, the defendant's main concern is that jurors will be

misled into  attributing guilt to a particular defendant based on

evidence  presented  against  others   who  were  involved  in  a

different and separate conspiratorial scheme.  Dwyer, 843 F.2d at
                                                    

62; United States v. Flaherty, 668 F.2d 566, 582 (1st Cir. 1981).
                             

The prejudice  we must  guard against, therefore,  is evidentiary

spillover resulting from trying  defendants en masse for distinct
                                                    

and  separate offenses committed by others.   Kotteakos v. United
                                                                 

States,  328  U.S. 750,  756-77  (1946); see  also  Blumenthal v.
                                                              

United States, 332 U.S. 539, 558-60 (1947).
             

          We  find  the  risk  of  evidentiary  spillover  to  be

significantly  limited in this case because we fail to see which,

if  any,  pieces  of  evidence  would  not  be  relevant  to  and

                               -89-

admissible against any of  the defendants individually.  Although

the  record  does  not  foreclose  the  possibility  of  multiple

conspiracies, the  evidence convincingly indicates  the existence

of  a  single, unified  conspiracy  in which  all  the defendants

participated.    Thus,  all  of  the  evidence  would  have  been

available  to  the jury  for  consideration  of the  government's

single conspiracy claim against  each defendant regardless of the

possibility of multiple conspiracies.

          Determining the number of  conspiracies in a particular

case  depends  on a  variety  of factors  including  the "nature,

design,  implementation, and logistics  of the  illegal activity;

the participants' modus operandi; the relevant geography; and the

scope of coconspirator  involvement."  Boylan,  898 F.2d at  241;
                                             

United States v. Rivera-Santiago, 872 F.2d 1073, 1079 (1st Cir.),
                                

cert.  denied, 492 U.S. 910  (1989).  A  single conspiracy exists
             

where the totality of the evidence demonstrates that "'all of the

alleged  co-conspirators  directed  their  efforts   towards  the

accomplishment of a common  goal or overall plan.'"   Boylan, 898
                                                            

F.2d at  242 (quoting United  States v.  Drougas, 748 F.2d  8, 17
                                                

(1st Cir.  1984)); United  States v.  Bello-P rez, 977  F.2d 664,
                                                 

667-68 (1st Cir. 1992).

          The conspiracy in  this case consisted  of a scheme  to

obtain   financing  for   a   condominium   project  by   falsely

representing the existence of down payments that were never made.

Although some of the  details and tactics changed  throughout the

scheme, the main objective, structure, intended victim, and modus

                               -90-

operandi remained  constant: the  continuous recruitment  of unit

buyers to submit loan  applications to Bay Loan in which the down

payments were falsified in order to fraudulently avoid the bank's

down  payment requirement,  followed by  the disbursement  of Bay

Loan's loan  proceeds  to Dean  Street.   Defendants  all  worked

together interdependently to further the entire scheme.  Hagopian

and Ward  recruited buyers,  Gauvin, Granoff and  Reisch provided

the  buyers   with  down  payment  funds,   Kumalae  and  Landman

facilitated the  fraudulent representation of the  down payments,

and  Brandon  coordinated  the   entire  conspiracy.    With  the

exception of  Gauvin and  Granoff, all  of the  defendants played

essentially the same role throughout the entire operation  of the

conspiracy.69    Gauvin   and  Granoff  stopped   providing  down

payment funds after Brandon stopped giving them their money back;

however, negotiations between Brandon and the two continued until

the  scheme  ended.   Regardless, the  cessation of  Gauvin's and

Granoff's funding did not represent the end of one conspiracy and

the beginning of a second one but a snag in the ongoing operation

of the single conspiracy.  See  United States v. Aracri, 968 F.2d
                                                       

1512, 1522 (2d Cir. 1992) (finding acrimony among participants of

conspiracy consistent with single conspiracy).

          Defendants'  arguments   for  distinguishing  different

conspiracies  have all been  previously rejected and  none of the

factors  they  highlight  indicates  the  existence  of  multiple

                    

69  Hagopian and Ward joined the scheme just two months after the
first condominium sales.

                               -91-

conspiracies.   The presence  of different methods  of falsifying

the down payments --  e.g., recycled funds, nonnegotiated checks,

dischargeable mortgages -- does not create separate conspiracies.

See,  e.g., Aracri, 968 F.2d at 1521-23; United States v. Aponte-
                                                                 

Su rez, 905 F.2d 483,  486-88 (1st Cir.), cert. denied,  498 U.S.
                                                      

990  (1990); United States v. Crosby,  294 F.2d 928, 945 (2d Cir.
                                    

1961), cert. denied,  368 U.S.  984 (1962).   This is  especially
                   

true because  the various  methods were used  interchangeably and

often simultaneously  in furtherance  of an  identical objective.

Likewise, the differing relationships various defendants had with

the  head conspirator,  Brandon, does  not signify  that multiple

conspiracies existed.  See United States v. Bello-P rez, 977 F.2d
                                                       

664, 668 (1st  Cir. 1992);  United States v.  Townsend, 924  F.2d
                                                      

1385, 1389 (7th Cir.  1991) ("The crime of conspiracy  focuses on

agreements,   not  groups.").70      The   fact  that   different

defendants  were  involved  in   separate  transactions  for  the

purchase  of  different properties  at  different  motels is  not

significant so  long as there is  a single continuing  plan.  See
                                                                 

Boylan, 898 F.2d at 242; Drougas, 748 F.2d at 8; United States v.
                                                              

                    

70  The present conspiracy is not, as defendants allege, the type
of  conspiracy discussed in Kotteakos, 328  U.S. at 753-55, where
                                     
different conspirators had separate and independent relationships
with  the  hub conspirator  and were  thus  separate spokes  on a
rimless  wheel.   Here,  all  the  defendants  were  part  of  an
integrated,   interdependent  scheme  in   which  each  defendant
depended upon  and was connected to the others.  The scheme could
not function without a  steady stream of new buyers  recruited by
Hagopian and Ward.  New buyers were useless, however, unless they
could get down  payment funds  provided by  Gauvin, Granoff,  and
Reisch.   In  turn,  down payment  funds  could not  be  properly
recycled  or falsified  to defraud  the  bank unless  Landman and
Kumalae facilitated the transactions.

                               -92-

Kelley, 849 F.2d 999, 1003 (6th Cir.), cert. denied, 488 U.S. 982
                                                   

(1988).  Finally, the  fact that Dean Street was engaged in other

licit  and illicit commercial enterprises does  not relate to the

present case against defendants and is irrelevant.

          Almost all aspects of the government's case  describing

the  scheme to defraud Bay Loan were relevant to each defendant's

respective role in the conspiracy.  Thus, we see no risk that the

jury  based a defendant's  conviction on evidence  relating to an

unrelated offense.  The  lack of prejudice is underscored  by the

fact that  ample evidence  was presented against  each individual

defendant based on each defendant's  actions and statements.  See
                                                                 

supra Section  IV.   The jury  did not need  to rely  on evidence
     

relating specifically  to other  defendants in order  to convict.

In  addition, the judge  repeatedly cautioned the  jury to assess

the evidence  separately against  each defendant.71   See Boylan,
                                                                

898  F.2d at  244  (finding similar  instructions contributed  to

protecting defendant's rights). 

                C.  Willful Blindness Instruction

                    

71   The  district court  also told  the jury  to determine  each
charge against each defendant based  only on the evidence against
that defendant on  that charge.   More  significantly, the  judge
also cautioned the jury:

            to consider only  the evidence  regarding
            that Defendant's actions  or the  actions
            of individuals belonging to  a conspiracy
            to  which  that Defendant  also belonged.
            That is  to say, it would  be improper to
            return a guilty verdict with respect to a
            Defendant based on  evidence relating  to
            acts committed by  someone belonging to a
            conspiracy of which the Defendant was not
            a member.

                               -93-

          The  district  court  instructed   the  jury  that  "in

deciding  whether  a Defendant  acted  knowingly,  you may  infer

knowledge  of a fact  if you find beyond  a reasonable doubt that

the  Defendant deliberately closed his or her eyes to a fact that

otherwise would  have  been obvious  to that  Defendant."72   The

evidence  supporting this  instruction related only  to defendant

Landman  but   the  instruction  was  given   generally  for  all

defendants  without any  mention of  Landman's name.   Defendants

claim the  instruction was  reversible error  because it  was not

applicable to this case and because it caused the jury to convict

defendants  without  finding  sufficient  evidence  of  knowledge

beyond a reasonable doubt.

          We  find,  first  of  all,  that  the  instruction  was

                    

72  The rest of the court's willful blindness instruction stated:

            In  order  to infer  knowledge,  you must
            find   that   two   things    have   been
            established.

            First, that the Defendant was aware  of a
            high probability of the fact in question.

            And    second,    that   the    Defendant
            consciously   and  deliberately   avoided
            learning of those facts.  That is to say,
            that the Defendant willfully made himself
            blind to those facts.   It is entirely up
            to you to  determine whether a  Defendant
            deliberately  closed his  or her  eyes to
            the facts and, if  so, what inference, if
            any, should be drawn.

            However, it  is important to bear in mind
            that  mere  negligence   or  mistake   in
            failing  to   learn  the  facts   is  not
            sufficient.   There must  be a deliberate
            effort to remain ignorant of the facts.

                               -94-

appropriate and accurate as to defendant Landman; hence, no error

was made  in his case.   The  trial court may  instruct the  jury

concerning willful  blindness when a  defendant claims a  lack of

knowledge,   the  facts  support   an  inference  of  defendant's

conscious course  of deliberate ignorance,  and the  instruction,

taken as a whole, cannot be misunderstood by a juror as mandating

the  inference  of knowledge.    United States  v.  St. Michael's
                                                                 

Credit Union, 880 F.2d 579, 584 (1st Cir. 1989); United States v.
                                                              

Picciandra,  788 F.2d 39, 46  (1st Cir.), cert.  denied, 479 U.S.
                                                       

847 (1986).   More specifically, the  instruction is proper  when

there is  evidence to "support  the inference that  the defendant

was aware of  a high probability of the existence  of the fact in

question and  purposely contrived  to avoid  learning all of  the

facts  in order to  have a defense  in the event  of a subsequent

prosecution."  United States v. Rivera, 944 F.2d 1563, 1571 (11th
                                      

Cir. 1991) (citing United  States v. Alvarado, 838 F.2d  311, 314
                                             

(9th Cir. 1987), cert. denied, 487 U.S. 1222 (1988)).
                             

          The core  of Landman's defense  as argued at  trial was

that he was simply doing his job as an escrow  agent in receiving

and dispersing funds at the direction of Dean Street and  that he

did  not know  that  the transactions  he  was involved  in  were

illegally defrauding  the bank.73   As  discussed in Section  IV,

                    

73   Landman  made this  argument in  various motions  before the
judge and before the  jury which satisfies the first  requirement
that the  defendant claim a  lack of  knowledge.  It  is not  the
case, as Landman argues, that a defendant must testify or present
evidence  indicating  a  lack   of  knowledge  before  a  willful
blindness  instruction can  be  deemed appropriate.   See  United
                                                                 
States v. Lizotte, 856 F.2d 341, 343 (1st Cir. 1988).
                 

                               -95-

sufficient evidence  exists that Landman knew  down payments were

required.  The evidence also supports the conclusion that Landman

knew about the scheme to fraudulently represent the  existence of

down payments.74    However, on  cross-examination,  the  defense

attempted to impeach Marderosian's testimony that he told Landman

about  the dischargeable  second  mortgages to  be  given to  the

buyers  which  called  into  question  a key  piece  of  evidence

regarding Landman's knowledge.  There was, nevertheless, evidence

that Landman tried to avoid learning of particular buyers' use of

dischargeable mortgages for their  down payments.  During several

closings Landman was asked by  buyers about the second mortgages.

On one occasion,  he told the buyer that he  "didn't want to know

anything about it."   At other times, Landman  gestured in a  way

that one buyer described as trying to say "not in front of me."

          This  evidence is  sufficient to  support the  district

court's  willful blindness  instruction.   The  attempt to  avoid

discussion  of dischargeable  mortgages  with the  buyers can  be

interpreted as a "pattern of behavior predicated upon a knowledge

of  the conspiracy  together with a  desire to  limit inculpatory

evidence of complicity."   United States v.  Ciampaglia, 628 F.2d
                                                       

632, 643 (1st  Cir.), cert.  denied, 449 U.S.  956, 1038  (1980).
                                   

                    

74    We  reject the  argument  that  proof  of direct  knowledge
precludes  a  willful  blindness instruction  that  is  otherwise
appropriate.  As long as separate and distinct evidence  supports
a  defendant's  deliberate   avoidance  of   knowledge  and   the
possibility  exists that the jury does not credit the evidence of
direct   knowledge,  a  willful   blindness  instruction  may  be
appropriate.   See  Lizotte, 856  F.2d at  343; United  States v.
                                                              
Ochoa-Fabi n, 935 F.2d 1139, 1142 (10th Cir. 1991), cert. denied,
                                                                
112 S. Ct. 1565 (1992).

                               -96-

The actual  instructions given by the district  court were proper

and  cannot  be  misunderstood   as  mandating  an  inference  of

knowledge.  See St.  Michael's, 880 F.2d at 585  (finding similar
                              

language proper);  United States  v. Ochoa-Fabi n, 935  F.2d 1139
                                                 

(10th  Cir. 1991), cert. denied,  112 S. Ct.  1565 (1992) (same);
                               

United  States v.  Hiland, 909  F.2d 1114,  1130 (8th  Cir. 1990)
                         

(same).    Significantly,  the court  said  the  jury "may  infer
                                                          

knowledge"  (emphasis added) and that it was "entirely up to" the

jury to  find deliberate blindness.  See Ciampaglia, 628  F.2d at
                                                   

642.75

          Unlike the  case against Landman, the  evidence did not

warrant  a  willful blindness  instruction  for  the other  seven

defendants.  This left the trial judge with a difficult decision.

He could either, (1) give  no willful blindness instruction  even

though  it  was  warranted; (2)  give  the  instruction  only for

defendant Landman and thus highlight the evidence against him; or

(3) give a general instruction for all the defendants.  We do not

think the judge erred by choosing the third option.

                    

75  The holding in United States  v. Mankani, 738 F.2d 538, 547 &
                                            
n.1 (2d Cir. 1984) does not apply in this case.  First of all, at
most,  Mankani  stands  for   the  specific  proposition  that  a
              
"conscious  avoidance" instruction  cannot be  used  to establish
membership in a  conspiracy and not the more  general proposition
that the instruction is  never proper in a conspiracy case.   The
willful blindness instruction  in this  case had to  do with  the
finding that "defendant acted knowingly"  and not with a  finding
that defendant willfully joined the conspiracy.  In any event, to
the extent our holding in this case differs from that in Mankani,
                                                                
we  agree  with the  Seventh  Circuit  that a  willful  blindness
instruction  can  be permissible  with  respect  to a  conspiracy
charge.   United States  v.  D az, 864  F.2d 544,  549 (7th  Cir.
                                 
1988), cert. denied,  490 U.S. 1070 (1989) (citing  United States
                                                                 
v. Kehm, 799 F.2d 354, 362 (7th Cir. 1986)).
       

                               -97-

          Assigning  error to  the district  court's decision  to

give  the general  instruction puts  the court  in an  impossible

position  because  the  government  is entitled  to  the  willful

blindness  instruction as to Landman and the judge is entitled in

turn to give an instruction that  would not turn the spotlight on

a single defendant.  On the  facts of this case, we are satisfied

that the jury could be expected to apply the instruction properly

to defendants  whose conduct arguably calls  for that application

and not randomly or  recklessly to defendants who do  not deserve

the instruction.  It is common during multi-defendant trials  for

the  court  to  give  a number  of  boilerplate  instructions  --

concerning,   for  example,   a  missing   witnesses,  accomplice

liability,  or  withdrawal  from   the  conspiracy  --  that  are

pertinent,  on particular facts, to only one defendant and not to

the  others.   The instruction  in this case  is similar  in many

respects to  these other instructions and  is equally appropriate

given the risk of prejudice  to the other defendants is low.   We

do  not exclude  the possibility  that, on  particular facts,  it

might so mislead  a jury  to give a  general instruction,  rather

than  one  tailored to  a specific  defendant  or rather  than no

instruction at  all, as  to be  an abuse  of  discretion, but  we

emphasize that judgments  of this kind are primarily entrusted in

the  trial judge  who  inevitably has  a  superior feel  for  the

dynamics of the trial and the likely reaction of the jury.

          The danger of an improper willful blindness instruction

is  "'the possibility  that  the jury  will  be led  to  employ a

                               -98-

negligence standard and convict  a defendant on the impermissible

ground  that he  should have  known [an  illegal act]  was taking

place.'"  United  States v.  Littlefield, 840 F.2d  143, 148  n.3
                                        

(1st Cir.),  cert. denied,  488 U.S.  860 (1988) (quoting  United
                                                                 

States v. White, 794  F.2d 367, 371 (8th Cir.  1986)) (additional
               

citation omitted).  In this case, as in Littlefield,  840 F.2d at
                                                   

147-48, the willful blindness  instruction clearly had little, if

any, effect  on the jury's verdict.   First of all,  unlike those

cases  where  insufficient  facts  were present  to  support  any

willful blindness  instruction at all,  see,  e.g., United States
                                                                 

v.  Barnhart, 979 F.2d 647, 651-53 (8th Cir. 1992); United States
                                                                 

v. Alvarado, 838 F.2d 311, 316 (9th Cir. 1987), cert. denied, 487
                                                            

U.S.  1222 (1988),  this case  involved an  instruction  that was

proper for at least one  defendant.  The jury had an  opportunity

to  correctly apply  the  instruction  and  was  less  likely  to

improperly   consider  a   defendant's   willful   blindness   in

conjunction  with  facts  that  only supported  that  defendant's

direct knowledge, or complete lack of knowledge.  Thus, there was

little  risk  that  the  jury  was  confused  into  convicting  a

defendant  who  merely  should  have  known  about  the  criminal

venture.  See United States v.  D az, 864 F.2d 544, 551 (7th Cir.
                                    

1988); see also Rivera, 944 F.2d at 1570-71.
                      

          In  addition,  the  instructions  properly  and clearly

directed  the jury not to find knowledge based on mere negligence

and extensively instructed  the jury as  to the requirements  for

finding  knowing  participation  in  the  conspiracy  and knowing

                               -99-

execution  of bank fraud.   See Littlefield, 840  F.2d at 147-48;
                                           

D az, 864  F.2d at 551.  The court instructed the jury that "mere
    

negligence  or mistake  in  failing to  learn  the facts  is  not

sufficient" and that  a defendant's willful  ignorance had to  be

deliberate   beyond  a   reasonable   doubt.     Throughout   the

instructions,  the court told the jury that the government had to

prove each and  every element  of the  offenses, including  those

elements  requiring knowledge,  beyond a  reasonable doubt.   For

example, knowing participation in  the scheme to defraud required

the  actions  of  each  defendant  to  be  "done  voluntarily and

intentionally  and not  because of  mistake or  accident or  some

other  innocent reason."    The court  was  clear that  to  prove

participation in a  conspiracy, the government  must show that  a

"defendant  knew  of  the  existence of  the  conspiracy  and its

unlawful  purpose"  and  the  court  added  that  "knowledge  and

willfulness like  all of the  other elements  of a crime  must be

established beyond a reasonable doubt."  Twice the district court

explained that actual proof of knowledge was essential "to insure

that no one will be convicted for  an act that he or she did  not

intend to  commit  or the  nature  of which  he  or she  did  not

understand."

          The instructions,  taken as  a whole,  went a long  way

toward curing any possible prejudice that may  have resulted from

the willful blindness instruction.  As evidence of this, the jury

delivered  verdicts  that demonstrated  it  was  not confused  or

affected by the willful  blindness instruction.  Three defendants

                              -100-

were acquitted on  multiple bank  fraud counts and  a fourth  was

acquitted  on one  count of  bank fraud.   Defendant  Landman was

acquitted  on one count in which  the principal witness testified

that  Landman  did not  want to  know  about the  second mortgage

discharges.  Thus, it appears that the jury declined to apply the

willful blindness instruction when  it was given the first  clear

opportunity to do so.  We therefore find no error  in the court's

decision to give a general willful blindness instruction.

              X.  REHEARING OF TESTIMONY BY THE JURY

          Defendant Gauvin assigns error to  the district court's

failure to read back certain testimony to the jury in response to

the jury's request.  Four days into the jury's deliberations, the

jury  asked to  rehear  several areas  of  testimony.   One  jury

request stated:  "We would  also like to review the testimony  of

Mr. Marderosian  concerning  a  meeting   in  which  Mr.  Gauvin,

Mr. Granoff and Mr. Brandon  discussed the purchase of  Pidge and

Meeting  Street."  As several  references were made  to Pidge and

Meeting Street it  was not  clear which discussion  the jury  was

referring to.  The court and  the attorneys spent nearly two days

trying  to cull together the parts of the transcript that related

to all of the requested subject  matter.  At one point, the court

suggested,  and  the prosecutor  later  argued,  that the  entire

transcript of  Marderosian's testimony should be  provided to the

jury, but counsel for Granoff objected to this suggestion.

          The court read to  the jury a portion  of Marderosian's

testimony relating to Pidge  and Meeting Street and to  a meeting

                              -101-

where  the Pidge project was discussed.  Against the objection of

Gauvin's counsel,  the court stopped reading  the transcript just

before testimony concerning  additional meetings relating to  the

same deal as the  one involving Pidge and Meeting  Street but not

specifically mentioning  Pidge  or Meeting  Street.   We find  no

abuse of discretion  in the  trial judge's decision  not to  read

additional portions of the transcript. 

          The decision  to reread  testimony rests  entirely upon

the trial  court's sound discretion.   United States  v. Akitoye,
                                                                

923  F.2d 221, 226 (1st  Cir. 1991); United  States v. Argentine,
                                                                

814  F.2d 783,  787  (1st Cir.  1987)  (citing United  States  v.
                                                             

Almonte,  594 F.2d 261,  265 (1st Cir.  1979)).  The  exercise of
       

that  discretion  should not  be  disturbed  absent good  reason.

Argentine, 814 F.2d at 787.    
         

          In this  case, the trial judge, with advice of counsel,

reviewed  the record  for two  days in  order to  locate material

responsive  to  the jury's  request.   Faced  with a  request for

testimony  relating to  a meeting  discussing "Pidge  and Meeting

Street" and  faced with multiple references to  Pidge and Meeting

Street  in  the  record,  the judge  decided  to  read  testimony

concerning  a meeting where Pidge  was mentioned but  not to read

testimony relating  to a  subsequent meeting  in which Pidge  and

Meeting Street were  not mentioned.  We find  this decision to be

appropriately within the judge's discretion.

          The fact that the  omitted testimony concerned the same

deal as the one  involving Pidge and Meeting Street  and the fact

                              -102-

that  it   also  contained   some  discussion  of   down  payment

arrangements  does not suggest any abuse of discretion.  First of

all, to the extent  the omitted testimony is crucial  to Gauvin's

defense,  as  he  claims,  we  find  the  testimony  to  be  more

inculpatory  in nature  than  exculpatory.76   More  importantly,

the  judge was  attempting  to respond  appropriately  to a  jury

request that  turned out to be  far from narrowly  focussed.  See
                                                                 

                    

76  The omitted testimony included the following:

            A.  Mr.  Brandon explained to  Mr. Gauvin
            and Mr. Granoff that  Homeowners required
            a  twenty-five  percent down  payment and
            while  that  down  payment  would  not be
            required of Mr.  Gauvin and Mr.  Granoff,
            he  did  have  the  problem  of  the down
            payment with subsequent purchasers and he
            asked  Mr. Gauvin  and  Mr.  Granoff  for
            their assistance in meeting that problem.

            Q.   What,  if anything  did  Mr.  Gauvin
            respond?

            A.   Mr. Gauvin, as I  recall, initially,
            didn't quite understand what  Mr. Brandon
            wanted  and  after  further  explanation,
            Mr. Gauvin  responded  that  he might  be
            interested  under  some circumstances  in
            helping out.

            Q.  What about Mr. Granoff?

            A.  I  believe Mr. Granoff indicated  his
            consent also.

   Defendant  Gauvin claims  this  testimony was  crucial to  his
defense  because   it  corrects  a   mischaracterization  in  the
government's closing  argument about what Marderosian  said about
the down payments.   Defense counsel explicitly told the  jury to
review the  testimony regarding the  alleged mischaracterization.
We have some doubts,  given the request for a  meeting concerning
"Pidge  and Meeting  Streets," that  this particular  request was
related  to the issue of the alleged mischaracterization.  In any
event, we find  no abuse  of discretion in  the judge's  decision
that the omitted material was not what the jury was looking for.

                              -103-

Akitoye, 923 F.2d at 226.  The extra burdens on the court created
       

by rehearing testimony is  relevant to judging the reasonableness

of the court's  refusal to read back testimony to  the jury.  See
                                                                 

id.   If  the  trial judge  had  searched for  all  the testimony
  

related to the deal involving Pidge and Meeting Street or all the

discussions of down payment arrangements for that deal, the judge

would have had to spend considerably more time and effort than he

had already expended.  Such extra effort was not required.  

          XI.  REFUSAL TO APPOINT PARALEGAL FOR BRANDON

          Defendant Brandon alleges that the trial court's denial

of his request for a court-appointed paralegal denied him his due

process right to present a defense.  Prior to the indictment, the

Federal Bureau of Investigation took possession of 137 file boxes

from Dean Street's offices which contained documents kept by Dean

Street.  Although Brandon was given complete access to the files,

he claims  that without the  services of  a paralegal he  and his

court-appointed attorney were incapable of meaningfully examining

the  contents of  the files,  effectively denying  him access  to

potentially exculpatory  evidence.  Brandon and  his attorney did

spend four hours one afternoon examining the contents of three of

the file boxes.

          Defendant cites Brady v.  Maryland, 373 U.S. 83 (1963),
                                            

and its progeny for  the proposition that his due  process rights

were  violated.   Brady requires  the government to  disclose any
                       

exculpatory  evidence  that is  "material either  to guilt  or to

punishment."   Brady, 373 U.S. at  87.  Before we  even reach the
                    

                              -104-

issue  of  whether the  lack  of  paralegal services  effectively

constituted a failure of the  government to disclose evidence, we

must first  consider whether  the defendant established  that the

file  boxes contained potentially  exculpatory, or even material,

evidence in the first place.

          To  establish a  violation of  Brady, a  defendant must
                                              

provide  the  court with  some indication  that the  materials to

which he  or she  needs access contain  material and  potentially

exculpatory evidence.  See United States v. Bagley, 473 U.S. 667,
                                                  

674 (1985); cf.  United States v.  Mateos-S nchez, 864 F.2d  232,
                                                 

240 (1st Cir. 1988) (holding that a Criminal Justice Act rule, 18

U.S.C.    3006A(e)(1),  which  provides  for  the  provision   to

defendants of necessary investigative or other services, requires

a  defendant  to make  at least  some  showing why  the requested

assistance would  produce evidence "likely  to be pivotal  to his

defense").  In  his initial  request before the  trial court  and

subsequently on  appeal, the  defendant speculated that  the Dean

Street files  might contain exculpatory evidence.   Brandon never

presented,  however,  any  supporting  evidence  or  arguments to

indicate this was,  in fact, the  case.  Because Brandon  did not

make  any  showing  at  all  as to  the  nature  of  the disputed

materials, we find no  error in the court's refusal to  appoint a

paralegal for Brandon's defense.

          This  is not  a Catch-22  situation in  which defendant

cannot make the initial showing needed to get a paralegal without

first having a paralegal to assist in making the initial showing.

                              -105-

Instead, the  defendant can  establish the possible  existence of

material  and  exculpatory  evidence   by,  at  the  very  least,

describing the kinds of  documents that might be in  files which,

if  they were found, might  exculpate the defendant.77   At most,

defendant and  counsel  could have  spent a  few more  afternoons

looking in the files for representative samples of documents that

might be useful to the defense.  We do not think this  places too

much of a burden on defendant or defendant's counsel.

                XII.  CUMULATIVE EFFECT OF ERRORS

          Defendants argue that the cumulative effect of numerous

alleged  errors made before and during the trial deprived them of

a fair trial and enabled the  jury to convict despite the lack of

evidence against each  individual defendant.   Our review of  the

record and trial proceedings as a whole does not reveal pervasive

unfairness or  any error or  combination of errors  that deprived

the defendants of due process.  See United States v. Barnett, 989
                                                            

F.2d 546,  560 (1st Cir.),  cert. denied, 114 S.  Ct. 148 (1993);
                                        

United States v.  Steffen, 641  F.2d 591, 598  (8th Cir.),  cert.
                                                                

denied,  452 U.S. 943 (1981).   We thus  conclude that defendants
      

received a fair trial.

                        XIII.  SENTENCING

                    

77  Brandon posits in his brief that the files may have contained
a letter from Bay  Loan acknowledging that no down  payments were
required.  This example was  not pointed out to the  trial judge.
Even if the  example was  presented at trial,  however, it  would
probably not, by itself, be sufficient to establish the existence
of   material  exculpatory   evidence  without   some  additional
substantiation.   Defendant made no  claim as to  the probability
such a letter exists  nor provided an affidavit that  he received
such correspondence.

                              -106-

             A.  Amount of Loss and Relevant Conduct

          Defendants  attack  the district  court's determination

and  apportionment  of  Bay  Loan's  losses  for  the purpose  of

calculating  their sentences  under the  Sentencing Guidelines.78

The district court set the offense level for each defendant based

on  the actual  loss  to Bay  Loan resulting  from the  scheme to

defraud.  See  U.S.S.G.    2F1.1; United States  v. Haggert,  980
                                                           

F.2d 8, 11-12 (1st Cir. 1992).  The court  arrived at a figure of

$11.4 million by reducing the outstanding principal amount of the

fraudulently obtained end loans by, among other things, the value

of the collateral used  to secure them.  The court  then included

the  entire amount  of  the  loss  in  the  calculation  of  each

defendant's offense  level under    2F1.1.   The resulting  total

offense level was set by adding an 11-level  increase to the base

offense  level because  the total  loss was over  $5,000,000, the

highest  point on  the  loss  scale at  that  time.   U.S.S.G.   

2F1.1(b)(1).

          The  defendants first  challenge  the district  court's

valuation of the collateral used to  secure the loans.  We review

the valuation for  clear error.   United States v.  St. Cyr,  977
                                                           

F.2d 698, 701 (1st Cir. 1992).  Determination of actual loss need

not be precise; "[t]he court need only make a reasonable estimate

of the range of loss, given the available information."  U.S.S.G.

  2F1.1 comment note 8.

                    

78  The district court applied the 1988 version of the Sentencing
Guidelines   and  therefore   all  citations,   unless  otherwise
indicated, are to that version.

                              -107-

          The court  determined the value of  the collateral used

to secure the loan  after an evidentiary hearing with  respect to

the amount of loss.   At this hearing, the court heard  testimony

by Bay Loan's president and a real estate appraiser called by the

defense.  The court also reviewed exhibits containing information

on the value of each of the motel condominiums.  Defendants argue

that the  $2.7 million dollar figure  chosen by the  court as the

total value of  the collateral (the motels) was  improperly based

on a  1991 appraisal as opposed to  an earlier 1989 appraisal for

$7.8  million.    Defendant  seems  to  argue  that  the  earlier

appraisal is the more accurate one because  it was made closer to

the time of the  crime and because  the latter appraisal is  more

likely to be  affected by  causes not related  to the actions  of

defendants.   Given  the  evidentiary basis  -- a  professionally

prepared  appraisal --  for  the trial  court's determination  of

loss, however, we do not see any error, let alone clear error, in

the court's  decision  to  choose  the  lower  valuation  of  the

collateral. 

          A  more significant  objection  raised by  many of  the

defendants  is that the court improperly assigned to each of them

the  entire value  of  the loss  regardless  of their  degree  of

participation  in the scheme to defraud Bay Loan.  The Guidelines

provide   that  for  conspiracy   convictions,  relevant  conduct

"includes conduct in furtherance of the conspiracy that was known

to or was reasonably  foreseeable by the defendant."   U.S.S.G.  

1B1.3(a)(1)  comment note 1;  see also United  States v. O'Campo,
                                                                

                              -108-

973 F.2d  1015, 1023  (1st Cir. 1992).   This  language has  been

subsequently clarified  to state  that relevant  conduct includes

"all  reasonably  foreseeable acts  and  omissions  of others  in

furtherance  of  the   jointly  undertaken  criminal   activity."

U.S.S.G.    1B1.3(a)(1)(B), 1993 Guidelines.   The  clarification

was designed  to highlight the  distinction between the  scope of

criminal liability  and the  scope of sentencing  accountability.

Regardless,  "[t]he  central  concept  then  is  foreseeability."

O'Campo, 973 F.2d at 1023.
       

          There is first the question in this case of whether the

district  court applied the  correct standard  of foreseeability.

Defendants argue  that instead  of limiting the  determination of

losses  that each  individual defendant  could foresee  solely to

those  losses  connected  with   the  criminal  activity  that  a

particular  defendant agreed  to jointly  undertake,79 the  court

simply held all  the defendants  responsible for  all the  losses

attributable to the entire  scope of the conspiracy.   See, e.g.,
                                                                

United States v.  Lanni, 970 F.2d 1092 (2d Cir.  1992).  While it
                       

is true that the criminal venture a defendant intended to join is

                    

79   The  1993  Guidelines  define, in  a  rather  unilluminating
fashion,  "criminal activity the  particular defendant  agreed to
jointly  undertake" as  "the scope  of the  specific  conduct and
objectives embraced  by the  defendant's agreement."   U.S.S.G.  
1B1.3 comment note  2, 1993 Guidelines.  The  Guidelines go on to
point out  that "the criminal activity that  the defendant agreed
to jointly  undertake, and the reasonably  foreseeable conduct of
others  in  furtherance  of   that  criminal  activity,  are  not
necessarily  identical."  Id.  In other words, one can reasonably
                            
foresee conduct in furtherance of an agreed upon  enterprise even
though  one did not specifically agree to join in that particular
conduct.  Id.
            

                              -109-

not necessarily the same  as the scope of the  entire conspiracy,

U.S.S.G.   1B1.3  comment note  2, 1993 Guidelines,  there is  no

reason why a defendant cannot intend to join and thus foresee the

operation  of   the  entire   conspiracy.    As   the  Guidelines

acknowledge,   the  two   can   be  coterminous,   although  "not

necessarily" so.

          In  this case, the district court did find the scope of

the  conspiracy  and the  scope  of  the  foreseeable conduct  in

furtherance  of  each  defendant's  jointly  undertaken  criminal

activity  to  be  the  same.    The  judge  held  the  defendants

responsible for "acts of co-conspirators to the extent that those

acts were  committed in furtherance  of the  conspiracy and  were

known  to or reasonably foreseeable by the Defendant."  The judge

then  recited  all  the  actions taken  by  each  defendant which

indicated  they were  involved  in  the  entire  breadth  of  the

conspiracy.80    Most telling  is  the  judge's statement  during

sentencing that "the agreement that each [defendant] entered into

was  to participate in a  continuing scheme to  obtain loans from

Bay Loan  by means  of fraudulent misrepresentations."   Although

the sentencing judge  did not employ all  the expository language

recently added to the  Guidelines, it is evident from  the record

that  he conducted the proper analysis.   We thus see no error in

                    

80   This is not a  case where the sentencing  court merely found
that the  defendant "knew what was  going on."  See  O'Campo, 973
                                                            
F.2d  at 1025.   The judge in this  case recounted specific facts
regarding  each individual  defendant which  indicated that  each
defendant  embraced the full scope  of the scheme  to defraud Bay
Loan.  See id. at 1025-26 n.11.
             

                              -110-

the district court's application of the Guidelines.

          Several  defendants contend  that some  portion of  the

loss  was  not  foreseeable  to  them  because  of their  limited

participation in the scheme.   Each claims the court  should have

reduced by some unspecified amount  the loss attributable to  him

or  her as  relevant  conduct.    The  determination  of  what  a

defendant can  foresee for  the purposes of  determining relevant

conduct at sentencing is inherently fact-bound and, consequently,

reviewable only  for clear error.   United States  v. Innamorati,
                                                                

996 F.2d 456, 489 (1st Cir. 1993).

          All the defendants, except Hagopian, Ward  and Kumalae,

were  involved in the  scheme to defraud  Bay Loan from  the very

beginning.    Before  the  scheme  was  first  executed,  Brandon

discussed  with Reisch methods  to avoid making  down payments on

the end  loans.   The first  unit sales were  made to  Gauvin and

Granoff  with Landman acting as escrow agent.  The involvement of

these defendants continued  throughout the scheme and we  find no

clearly discernable limits  to the scope of  the criminal venture

in  which they agreed to participate such that the district court

erred in finding all the losses from the entire conspiracy  to be

foreseeable.   The fact that  Gauvin and Granoff  stopped lending

down payment funds after  February of 1988 does not  absolve them

of responsibility for the continued actions of  the conspiracy to

obtain more  loans from Bay Loan.   The issue is  not whether the

two continued to  commit acts  in furtherance of  the scheme  but

whether, at  the time  of the relevant  conduct, they  reasonably

                              -111-

could  have  foreseen the  actions of  the  other members  of the

conspiracy.       The   evidence,    particularly   the   ongoing

correspondence with  Brandon made until  the end  of the  scheme,

clearly indicates that  Gauvin and Granoff not only could foresee

the continued sale of condominium units, they actually knew about

it.81

          We have  recently held that a  defendant's base offense

level cannot be based  on knowledge of historic facts.   O'Campo,
                                                                

973 F.2d at  1022-26.  Thus,  with respect to Hagopian,  Ward and

Kumalae, losses attributable to fraudulent activity that occurred

before  they   became  involved  in  the   conspiracy  cannot  be

considered as relevant  conduct.   See id.   The judge's  error82
                                         

in  this regard, however, had no effect  on their sentences so we

find no reason for reversal on this issue.

          Hagopian  and  Ward  did  not become  involved  in  the

                    

81  We disagree with Gauvin and Granoff that the evidence clearly
indicates some kind of withdrawal from the conspiracy so that the
scope  of the  criminal venture  in which  they  participated was
limited  to something less than the entire conspiracy.  The trial
judge carefully considered this  issue and we see no  clear error
in his rejection of their arguments.

   Similar arguments are made by Hagopian, Ward and Reisch to the
effect that they were not responsible for sales arranged by other
brokers  or  funded  by  other  people.    These   arguments  are
unavailing.  The  defendants agreed to participate in  the entire
operation,  even  though  their  individual role  may  have  been
limited  to  a  specific  function  within  the  broader  scheme.
Consequently, only a showing of  the foreseeability of the  other
co-conspirators'   conduct  is  required  to  find  that  conduct
relevant  for  sentencing  purposes.     That  standard,  as  the
sentencing judge correctly found, was clearly met.

82  We  note that, to  the district judge's  credit, the  O'Campo
                                                                 
decision  settling this issue was not handed down until after the
judge conducted the sentencing of the defendants in this case.

                              -112-

conspiracy  until  after  October  of  1987,  after  all  of  the

Charlestown  units had already been  sold.  Kumalae  did not join

until after some units had already been sold  at the Bayside, the

second motel  involved in the  scheme.  It  may well be  arguable

that the total losses to Bay Loan resulted from conduct occurring
                     

after  the  participation  of   these  three  defendants.    When

Hagopian, Ward  and Kumalae joined the  conspiracy, payments were

being  made on the  end loans.   It was  not until the  scheme to

defraud expanded to more and more condominium units that it began

to  collapse under its own  weight as additional  loan funds from

Bay Loan were required to pay off  the existing obligations.  The

conduct of Hagopian, Ward  and Kumalae, therefore, contributed to

the overall losses to  Bay Loan which took  place when the  loans

defaulted.

          More importantly, however, even if the losses resulting

from the loans  made for  the Charlestown and  Bayside units  are

excluded  from  the  loss  calculation  for  Hagopian,  Ward  and

Kumalae,  the  total would  still be  well  over $5  million, the

highest level  under the  1988 version  of U.S.S.G.    2F1.1.   A

lion's share of the loans  were made for units in the  five other

motels  after  all  the  defendants had  joined  the  conspiracy.

Therefore, any error in  apportioning losses was harmless because

it   did  not  affect   the  offense   level  assigned   to  each

defendant.83

                    

83  We also find no error in the district court's refusal to take
into account multiple causes for Bay Loan's losses in determining
the  sentences.     "'[T]he  victim  loss  table  in  U.S.S.G.   

                              -113-

      B.  Upward Adjustments for More Than Minimal Planning

          Defendants  Granoff, Ward  and Landman  argue that  the

district  court committed  clear  error by  imposing a  two-level

increase  in   their   offense  levels,   pursuant  to   U.S.S.G.

  2F1.1(b)(2)(A), for  more than minimal planning.84   "More than

minimal planning" is defined as:

            [M]ore  planning  than  is   typical  for
            commission  of the  offense  in a  simple
            form.  "More than minimal  planning" also
            exists  if significant  affirmative steps
            were taken to conceal the offense.

            "More  than  minimal planning"  is deemed
            present  in  any case  involving repeated
            acts over a period  of time, unless it is
            clear  that  each  instance   was  purely
            opportune.  Consequently, this adjustment
            will   apply  especially   frequently  in
            property offenses.

U.S.S.G.   1B1.1, comment note 1(f).

          We  review   the  district  court's   minimal  planning

                    

2F1.1(b)(1) presumes that the  defendant alone is responsible for
the entire amount of victim loss specified in the particular loss
range  selected  by the  sentencing  court.'"   United  States v.
                                                              
Shattuck, 961  F.2d 1012,  1016 (1st  Cir. 1992)  (quoting United
                                                                 
States v.  Gregorio, 956  F.2d 341,  347 (1st  Cir. 1992)).   The
                   
Guidelines treat multiple causation only as a possible ground for
downward departure -- a matter within the sound discretion of the
sentencing court.  Shattuck, 961 F.2d at 1017; Gregorio, 956 F.2d
                                                       
at  346-48.  In this  case, the sentencing  court, upon extensive
consideration  of the issue, declined to  grant such a departure.
None of  the  factors  that  defendants  point  to  as  allegedly
contributing  to  Bay Loan's  losses  are  so  compelling  as  to
convince us that the court erred in reaching its decision.

84   To the extent defendant Gauvin also appeals this decision by
reference  in his brief to arguments made by the other defendants
we find no error.   As there is no error with regard to defendant
Granoff,  there can also be no error for Gauvin whose involvement
in the scheme  was greater than  Granoff's.  The same  applies to
defendant Hagopian  whose involvement was  greater than defendant
Ward's.

                              -114-

assessment only for clear error.  United States v. Beauchamp, 986
                                                            

F.2d  1, 5 (1st  Cir. 1993).   We are  not inclined  to reverse a

finding of more than minimal planning unless the evidence compels

the conclusion that defendant's  actions were purely opportune or

"spur of the  moment."  Gregorio, 956 F.2d at  343; United States
                                                                 

v. Fox, 889 F.2d 357, 361 (1st Cir. 1989) ("We cannot conceive of
      

how obtaining even  one fraudulent  loan would  not require  more

than minimal planning.").

          In light of the rather complex and sophisticated scheme

involved in  this case,  we find any  assignment of error  to the

sentencing  judge's ruling  that the  defendants engaged  in more

than  minimal planning to be  rather far-fetched.   In any event,

the judge made more than adequate findings based on the record to

support  his  decision.   The  judge  found  that  Ward took  the

initiative  to find buyers for the scheme and helped falsify down

payments which constituted "repeated acts" over a period of time.

Ward protests that there  is no evidence that he  "initiated" any

of the contacts  with the buyers.  This is  mere quibbling.  Ward

was actively involved in the recruitment process, he told  buyers

no  down payments were required,  he told buyers  to provide down

payments  checks that  he knew  would not  be negotiated,  and he

provided buyers with  rebates for  their purchases.   Any one  of

these  facts  would  support  a  finding  of  more  than  minimal

planning. 

          As for defendant Granoff, the district court found that

the scheme to  defraud Bay  Loan involved more  planning than  is

                              -115-

typical  for  commission  of  the  offense  in  its  simple form.

Looking at the scheme as a whole, this fact is indisputable.  But

this  fact is  also  true when  viewed  from the  perspective  of

Granoff's specific  involvement.  Granoff first  met with Brandon

in  the summer  of 1987  to discuss  the condominium  project and

eventually he agreed  to purchase  some units and  to fund  buyer

down  payments.   Pursuant to  this agreement,  Granoff purchased

four units in August of  1987 in which funds were recycled  via a

sophisticated  arrangement.    Five  months  later,  he  provided

$470,000 to Dean Street on the understanding it would be returned

to him  after it was used to fund buyers' down payments.  Granoff

also  formed  a partnership  with Gauvin  to  invest in  the Dean

Street project.   All of these  activities reflect a  significant

level of involvement in the  scheme.  We therefore find no  error

in his case.

          Finally,   the  sentencing  judge  found  that  Landman

engaged  in  "repeated acts"  during the  scheme  in his  role as

escrow  agent   or  closing  attorney   for  most  of   the  loan

transactions.  There is no basis for any error in his case.

  C.  Denial of Role-In-The-Offense Decrease for Marvin Granoff

          Defendant Granoff claims the  court erred in finding he

was not a minor  participant and thus not entitled to  a decrease

in his offense level pursuant to U.S.S.G   3B1.2(b).  "[A]  minor

participant means  any participant who is less culpable than most

other  participants." U.S.S.G.    3B1.2(b)  comment note  3, 1993

Guidelines.  No defendant,  however, is automatically entitled to

                              -116-

a  reduction, even if the  defendant happens to  be less culpable

than his or her co-defendants.  United States v. Valencia-Lucena,
                                                                

925 F.2d 506, 514 (1st Cir. 1991); United  States v. Rexford, 903
                                                            

F.2d  1280, 1282 (9th Cir. 1990).  The sentencing court has broad

discretion  in determining  whether  this downward  departure  is

appropriate   and  we   will   reverse  only   if  the   evidence

overwhelmingly demonstrates that the defendant played a part that

makes   him  substantially   less  culpable   than  the   average

participant  in  the  convicted  offense such  that  the  court's

decision  was  clearly erroneous.    Gregorio, 956  F.2d  at 344;
                                             

United States v. Ocasio, 914 F.2d 330, 333 (1st Cir. 1990).
                       

          Although the district court found that Granoff was less

culpable than the  major participants in the scheme like Brandon,

the  court found that  Granoff did play  more than  a minor role.

The $470,000 Granoff provided  to fund buyer down payments  was a

significant contribution to the  scheme to defraud Bay Loan.   We

find  that the record  supports the court's  finding that Granoff

was not less culpable than most of the other defendants let alone

substantially  less culpable  than  an average  defendant and  we

therefore affirm Granoff's sentence.85

                    

85    Granoff also  claims  that the  district  court erroneously
failed  to  depart  downward  based   on  his  age  and  physical
condition, pursuant to U.S.S.G.   5H1.1 and   5H1.4.  This  issue
is not properly before the court because defendant did not seek a
downward departure on this  basis during sentencing.  See  United
                                                                 
States v.  Slade, 980 F.2d 27, 30 (1st  Cir. 1992).  The issue of
                
age and health were raised only with respect to the  range of the
sentence  and to  bail  pending  appeal.    Thus,  the  issue  of
departure based on  age and physical condition was  not preserved
for appeal.

                              -117-

     D.  Costs of Supervised Release and Special Assessments

          The government correctly concedes  that our decision in

United States v. Corral, 964 F.2d 83, 84 (1st Cir. 1992) mandates
                       

that  we find erroneous the  court's decision to  impose costs of

supervised  release on five  defendants found to  be indigent for

purposes of a punitive fine.  We therefore reverse the imposition

of supervised release costs on defendants Brandon, Ward, Landman,

Hagopian, and Kumalae.

          Brandon further argues that because he is indigent, the

district court was without  authority to order him to  pay either

restitution or the  statutory assessments.  In  imposing an order

of restitution,  the district court  must consider  not only  the

amount  of the victim's loss but also "the financial resources of

the  defendant, the financial  needs and  earning ability  of the

defendant and the defendant's  dependents, and such other factors

as the court  deems appropriate."   18 U.S.C.    3664(a);  United
                                                                 

States v. Savoie, 985 F.2d 612, 618 (1st Cir. 1993).
                

          In  this  case,  the  sentencing  judge considered  the

required factors  and, without  error, arrived at  the conclusion

that a $500,000  restitution order, payable after  the three year

period of supervised release, was appropriate.  Specifically, the

judge  stated:   "[I]n arriving  at that  figure, Mr.  Brandon, I

recognize that based on the pre-sentence report, you don't appear

to have  any assets at the  present time but it  appears that you

have the prospect of  receiving or inheriting some assets  in the

future."   The court also  noted that a  man of Brandon's talents

                              -118-

ought to be able to obtain gainful employment upon release.

          Although the  restitution order may be  burdensome, and

although it  may be true to  some extent that "if  a defendant is

indigent  for purposes  of one  [fine], he  must be  indigent for

purposes of the other."  United States v. Labat 915 F.2d 603, 607
                                               

(10th  Cir. 1990),  we  do not  think  Corral's ban  on  imposing
                                             

certain  fines on  indigent  defendants  extends  to  restitution

orders.   Corral  dealt specifically  with  the interplay  of two
                

provisions of the United States Sentencing Guidelines, U.S.S.G.  

5E1.2(a) and    5E1.2(i).  Corral, 964  F.2d at 84.   We found in
                                 

that case that because  the fine imposed under   5E1.2(i)  was an

additional fine  to be instituted  only in  conjunction with  the

punitive fine imposed under    5E1.2(a), the former could  not be

imposed  once  the  latter  was  waived  because  of  defendant's

indigency.   Id.  In the case of restitution, however, a separate
               

statutory  scheme has  been  established which  includes its  own

independent  consideration of  defendant's  ability to  pay.   18

U.S.C.   3664.  Therefore,  the district court's determination of

indigency  under  U.S.S.G    5E1.2(a)  in  the  present  case  is

independent of and does not affect its ruling on restitution.86

          The judgments are affirmed  except that the judgment of
                                                                 

                    

86    To the  extent Brandon  also  challenges the  $50 statutory
assessment  fee imposed  for each count  (totaling $1300)  by the
district court pursuant to  18 U.S.C.   3013,  we find no  error.
The assessment fee is  mandatory; the judge has no  discretion to
waive  it based on  the defendant's ability  to pay  nor does the
Constitution require him to do so.  United States v.  Nguyen, 916
                                                            
F.2d 1016, 1020  (5th Cir. 1990); United States  v. Rivera-V lez,
                                                                
839 F.2d 8, (1st Cir. 1988).

                              -119-

conviction of defendant Ward on Counts 24 and 25 and the judgment
                                                                 

of  conviction of defendant Landman  on Counts 23  through 26 are
                                                                 

vacated  and their  cases  are remanded  for  resentencing.   The
                                                                 

district court's  imposition of costs for  supervised release are
                                                                 

vacated  for  defendants  Brandon,  Landman,  Hagopian,  Ward and
                                                                 

Kumalae.
       

                              -120-