Court Opinion

ID: 6833
Source: CourtListenerOpinion
Date Created: 2010-04-25 05:21:48+00
Date Added: 2024-06-11T12:38:51.897517
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UNITED STATES COURT OF APPEALS
                      FOR THE FIFTH CIRCUIT

                            No. 93-1126

UNITED STATES of AMERICA,
                                       Plaintiff-Appellee,

                              versus

PAUL ARLIN JENSEN,
                                       Defendant-Appellant.

          Appeal from the United States District Court
               for the Northern District of Texas

                       (December 20, 1994)

     Before WIENER, EMILIO M. GARZA, and BENAVIDES, Circuit Judges.

     BENAVIDES, Circuit Judge:

     Paul Arlin Jensen (Jensen) appeals his convictions on 18

counts stemming from a fraudulent scheme which lead to the failure

of certain savings and loan institutions.     We affirm.

          I.   FACTS AND PROCEDURAL HISTORY

     In 1982, Jensen, Van Zinnis, and William Tar were partners in

a California mortgage brokerage company called Mountain West.     The

company was seeking borrowers through an advertisement.       Clifton

Brannon, a builder in the Dallas area, answered the ad.         As a

result, Jensen flew to Dallas and met with Brannon.            Jensen

introduced himself as a medical doctor with an impressive business

                                 -1-
career and told Brannon that he wanted larger projects than the one

presented by Brannon.     He further stated that he and his employer

at Mountain West were interested in acquiring a savings and loan.

Brannon introduced Jensen to Weldon Hays, who owned Lancaster First

Federal Savings and Loan (Lancaster) in Colony, Texas.         Jensen met

with Hays' father, James Hays, to discuss the purchase of that

institution.

       Brannon also introduced Jensen to David Faulkner, a real

estate developer, and Jim Toler, a real estate developer and former

mayor of the City of Garland.      Those two men were involved in the

development of real estate projects in an area known as the I-30

corridor in Dallas, Texas. To attract participants for the various

projects,     Faulkner   would   arrange   elaborate    Saturday   morning

breakfast meetings where high profile individuals and dignitaries

would meet with the investors and developers.          Faulkner and Toler

bought large tracts of land and sold them to "investors," "builder-

investors," or "builder-developers" at inflated prices.            United

States v. Faulkner, 17 F.3d 745, 752 (5th Cir.), cert. denied, __

U.S. __, 115 S. Ct. 193 (1994).1       The property would then change

hands in a series of "land flips" which were frequently on the same

day.    Id.

       After meeting with Faulkner and Toler, Jensen moved to Texas

and became involved in funding the loans for the projects in the I-

30 corridor.     Jensen set up an office in Dallas, and employed Tim

       1
        Faulkner provides a most comprehensive recitation of the
parties and the circumstances involved in this immense scheme.

                                    -2-
Jensen,     Bjornar   Fredricksen,   loan   processors   Ellen   Burns   and

Kateland Curly, and accountant Jay Housley.         Additionally, Jensen

operated several entities which obtained financing for the I-30

corridor projects, including Antum Financial Corporation, Mountain

West   Mortgage,      Snowball   Investment   Corporation,   and   Helaman

Investment Corporation.

       The loans made in connection with the I-30 development were

provided by federally insured institutions:          Lancaster and Bell

Savings (which were controlled by Jensen); and Empire Savings and

Loan (which was controlled by Spencer Blain).             The borrowers,

however, did not necessarily have to be financially qualified to

take out these loans.

       Faulkner referred individuals to Clifford Sinclair to put

together loan packages for the condominium deals.            Sinclair and

Mike Faldmo2 were associated with a company called Kitco.            Kitco

would put together these packages for the borrowers.                Faldmo

testified that Toler and Faulkner would acquire the land and then

decide how much money needed to be made out of a transaction.            The

personnel at Kitco would calculate the valuation amount of the land

necessary to generate the cash requested.           The Kitco employees

would contact the appraisers and advise them of the needed amount

per square foot. The personnel at Kitco would assist the borrowers

in preparing the financial statement.           The personnel would use

false tax returns to insure the borrowers would qualify for the

        2
         Faldmo testified for the government and had previously
plead guilty.

                                     -3-
loans.     The borrowers would receive "rebates" or "kickbacks" at

closing.    Frequently, the properties would undergo "land flips" on

the closing date among intermediate buyers and others who were

designated to make money on the ultimate loan taken by the last

purchaser.     Faldmo testified that the deals were not driven by

market demand but rather, they were based on the amount available

to be loaned.

                         LANCASTER SAVINGS AND LOAN

      To   obtain      control      of   Lancaster,     Jensen   purchased    the

resignations of the board of directors for $150,000 pursuant to an

agreement.        The    board      members    signed    undated    letters   of

resignation, which Jensen never exercised.                  Jensen was named

chairman of the board, and Hays introduced Jensen to the employees

of   Lancaster    as    the   new    boss.     After    acquiring   control    of

Lancaster, Jensen and his companies continued brokering loans to

Lancaster.       Jensen also taught the Lancaster personnel how to

obtained brokered funds.3           Jensen testified that the brokers were

anxious to do business with Lancaster because it was federally

insured.     Jensen instructed Carole Harris, Hays' secretary, "how

much money" to order on a certain day and "how high to negotiate

rates."    Numerous such brokered funds transactions were conducted

      3
        A "brokered funds" transaction was described at trial as
follows. "If I had a million dollars I would break my million
dollars up into ten $100,000 investments. And rather than myself
calling to savings and loans and banks all around the country, I
would call a local brokerage house who would, in turn, know who was
paying the best interest rates at banks and savings and loans for
me to invest my money and they would invest it for me for a
commission." A brokered funds transactions in and of itself was
legal.

                                         -4-
from out of state using wire transfers to Lancaster in $100,000

increments.           Jensen hired Charles Brizius as executive vice-

president        of    Lancaster     in   November   1982.       Brizius      was   an

experienced         savings   and    loan   executive     and   was    to   implement

policies and procedures.             Brizius testified that he examined the

loan files and discovered that the loans were poorly underwritten

and much documentation was missing. Brizius also noticed that fees

were being paid to companies affiliated with Jensen, and so Brizius

confronted Jensen and informed him that there was a conflict of

interest for the institution to fund loans with fees paid to

entities controlled and owned by Jensen. Brizius further explained

that affiliated party transactions required approval of the Federal

Home Loan Bank Board. Jensen expressed surprise and indicated that

he was not aware of the regulation on conflicts of interest.

Brizius testified that Jensen's surprise appeared sincere.                       As a

result of this conversation, Jensen resigned as chairman of the

board       of   Lancaster.     Jensen      was   made   an   advisory      director.4

Brizius further recommended that no further loans be funded until

he returned from his Christmas vacation.                 Contrary to that advice,

Lancaster funded the Oates Corners project, a multi-million dollar

transaction, in Brizius' absence.

     During Lancaster's annual audit in 1982, Kenneth Stein, an

auditor, noticed that the assets had grown at an "unusual" and

"very       fast"     rate:   from    $17,000,000    (August)     to     $55,000,000

        4
        Jensen testified that initially he was not aware that the
board had made him an advisory director.

                                            -5-
(September) to $105,000,000 (December).                Stein and the other

auditors became very concerned about:          loans in apparent violation

of the limit to individual borrowers; potential conflicts of

interest; concentrations of credit in the I-30 corridor; the

validity of appraisals made in such a short period of time prior to

purchase; and whether the transactions were at arms' length.

     In    December   of   1982,    the    Federal    Home    Loan   Bank   Board

conducted an examination of Lancaster.              An examiner asked Jensen

about the brokerage fees received by companies owned by Jensen.

Jensen responded that after he learned that such an affiliation was

inappropriate, he separated himself from those institutions and

resigned as chairman of the board at Lancaster.                 Jensen wrote a

letter stating that he had no interest in either Snowball or

Helaman.    The evidence, however, showed that Jensen did receive

proceeds from Snowball and Helaman.                Jensen testified that his

attorney drafted that letter and that, according to his attorney's

advice, he understood that he had no conflict of interest because

he was not an officer or a director.

     In early 1983, a meeting was held to discuss the conversion of

Lancaster from a mutual institution to a stock institution. During

that meeting, Jensen revealed that he had purchased the resignation

of the board of directors.           Brizius was concerned because no

application for change of control had been filed with the Federal

Home Loan Bank Board.       The Federal Home Loan Bank Board was then

notified, and Lancaster's board was neutralized by bringing in

outside    directors.      Jensen    was    then    removed    as    an   advisory

                                     -6-
director.

                     BELL COUNTY FEDERAL SAVINGS AND LOAN

     In September 1982, Jensen met with Kenneth Law, a lawyer and

the president of Bell Savings and Loan, to discuss the acquisition

of Bell.     Jensen again represented that he was a medical doctor.

An oral agreement was reached in which Jensen, James Hays, and

Weldon Hays would purchase Bell's outstanding stock subject to the

approval of the Federal Home Loan Bank Board.

     While the application for change of control was pending, Law

requested that Jensen buy some stock that certain Bell shareholders

wanted to sell.    Law advised Jensen that he could not put the stock

in his own name so Jensen bought the stock in the name of other

persons.     Jensen told Law that he was interested in funding some

loans in the five to ten million dollar range, and Law informed him

that Bell did not have that amount of money to loan.          Jensen

responded that was not a problem and suggested brokering funds.

Jensen then ran an ad for Bell offering rates on jumbo certificates

of deposit and instructed the personnel how to offer brokered

funds.   Jensen indicated to personnel at Bell the amount of money

needed for a project, and they would receive the money through

brokered funds transactions. Law testified that Bell had no reason

to take these brokered funds except to fund the large loans brought

by Jensen.

           Law examined the loan documents and found them to be

incomplete. Law advised Jensen of the problem and Jensen responded

that his people would take care of it.    Certain remarks Jensen had

                                  -7-
made gave Law the impression that Jensen owned or was connected

with    a    company    that    received     proceeds      funded    by    Lancaster.

Consequently, Law told Jensen that, as an owner of a savings and

loan, he could not receive money other than the brokerage fees.

Jensen assured Law that he understood and that it would not happen

at Bell.

       Subsequently, Law began to suspect that Jensen was secretly

taking money from the projects.             Because of those suspicions, Law

and Brizius went to the scheduled closing of a project named

Tiffany Cove.        Jensen was out of state at the time, and Fredricksen

represented him at the closing.             None of the borrowers appeared at

the closing. Law and Brizius then called the borrowers involved in

the Tiffany Cove project to determine whether they were to receive

money from the deal.         They also talked to the Dallas Title Company

to determine whether the property was changing hands.                     As a result

of these conversations, Law and Brizius called Jensen and told him

that they "were satisfied that he lied to us," and they were not

going   to    fund     the   transaction.         They   also     told    Jensen    that

Fredricksen     admitted       that   he   was    to    receive    $150,000    of    the

proceeds, that the loan was going through three or four different

hands, and that the borrowers were to receive cash from the

proceeds.      This information had been concealed because it was not

on   the     borrower's      statement,      it   was     on    another    disclosure

statement.

       In March 1983, the board of directors of Bell terminated the

agreement in which Jensen, Weldon Hays, and James Hays were to

                                           -8-
acquire the Bell stock.       Law and others borrowed the money to buy

back the stock Jensen had purchased.

     In his defense, Jensen testified that he did not realize he

was violating any regulation or law.          He was relying on the advice

of his attorneys and other individuals who he believed had more

expertise in the area of savings and loans.

                              RESULT OF LOANS

     During 1982 and 1983, loans totaling over 300 million dollars

were made on the real estate projects in the I-30 corridor.                   Of

that amount, Jensen received approximately $25,000,000.5                  The

Federal Deposit Insurance Corporation suffered financial losses

totaling $327,942,431, in connection with the above scheme.              As a

result of the above activities, an 88-count indictment was filed

charging Jensen and seven other defendants with numerous offenses.

Ultimately, Jensen was severed from the other defendants and tried

on 18 counts of the indictment.           The jury found him guilty on all

the following 18 counts:       count 1, conspiracy (18 U.S.C. § 371);

counts 7, 15, 22, 24, 27, and 36, fraudulent participation in loan

monies and false entries (18 U.S.C. § 1006); counts 14, 16, 21, and

23, fraudulent misapplication of bank funds (18 U.S.C. § 657);

counts 52, 53, 65, and 66, wire fraud (18 U.S.C. § 1343); counts 84

and 85, interstate transportation of property taken by fraud (18

U.S.C.   §   2314);   and   count   88,    RICO   conspiracy   (18   U.S.C.   §

1962(d)).

         5
            In one real estate transaction, Jensen received a
$4,000,000 mansion for what he termed as "equity participation."

                                     -9-
     The court sentenced Jensen to:             5 years on count 1; 5 years on

counts 7, 15, 22, 24, 27, and 36 (concurrent to each other but

consecutive to count 1); 5 years on counts 14, 16, 21, and 23

(concurrent   with      each     other    and    the   preceding   group,     but

consecutive to count 1); 5 years on counts 52, 53, 65, and 66

(concurrent with each other and the preceding two groups, but

consecutive to count 1); 10 years on counts 84 and 85 (concurrent

to each other and concurrent with the preceding three groups but

consecutive to count 1); and 20 years on count 88 (concurrent with

all counts). The court, pursuant to the jury's finding, entered an

order of forfeiture against Jensen in the amount of $23,000,000.

     II.    THE DISTRICT COURT'S DENIAL OF JENSEN'S REQUEST FOR
            CERTAIN JURY INSTRUCTIONS

     Jensen contends that the district court erred in refusing his

request for a jury instruction to limit the use of evidence

regarding extrinsic offenses for purposes of impeachment.              He also

contends the district court erred in refusing his request for an

instruction on his theory of the case.

       A trial court's refusal to include a requested instruction

in the jury charge is reviewed under an abuse of discretion

standard,   and   the    court    is     afforded   substantial    latitude    in

formulating its instructions. United States v. Rochester, 898 F.2d
971, 978 (5th Cir. 1990).              Refusal to include an instruction

constitutes reversible error only upon the occurrence of all three

of the following conditions:              (1) the requested instruction is

substantially correct; (2) the actual charge given to the jury did

not substantially cover the content of the proposed instruction;

                                         -10-
and (3) the omission of the instruction would seriously impair the

defendant's ability to present his defense.             United States v.

Daniel, 957 F.2d 162, 170 (5th Cir. 1992).

     Jensen contends that the court erred in refusing his requested

instruction which limited the jury's use of certain evidence of

extrinsic offenses to purposes of impeachment.6         Jensen identifies

the following evidence which he contends required the limiting

instruction:      (1) evidence regarding false statements he provided

on a bankruptcy document; (2) a false tax return; and (3) false

loan documents.

     Jensen relies on Rule 105 of the Federal Rules of Evidence

which provides that "[w]hen evidence which is admissible as to one

party or for one purpose but not admissible as to another party or

for another purpose is admitted, the court, upon request, shall

restrict the evidence to its proper scope and instruct the jury

accordingly."

     Jensen requested the following instruction:

     [Y]ou have heard evidence concerning alleged false
     statements made by the Defendant concerning matters
     separate from those alleged in the Indictment.        The
     Defendant is not charged with an offense for making these
     statements.    You should not find him guilty of the
     charges in this Indictment based upon his allegedly
     making those statements.

   The    trial   judge   denied   Jensen's   request   for   the   limiting

      6
         Jensen acknowledges that the district court apparently
admitted this evidence pursuant to Rule 608(b) of the Federal Rules
of Evidence, which provides that the trial court, in its
discretion, may allow inquiry of specific instances of conduct
during cross-examination concerning the witness' character for
truthfulness.

                                    -11-
instruction,   stating   that   he    thought      it   was   "covered."     In

pertinent part, the court's charge provided as follows:

          The testimony of a witness may be discredited by
     showing that the witness testified falsely concerning a
     material matter, or by evidence that at some other time
     the witness said or did something, or failed to say or do
     something, that is inconsistent with the witness's
     testimony at this trial. If you believe that a witness
     has been discredited in this or any other manner, you are
     to give this testimony such weight as you may think it
     deserves.

                           *     *          *

          You are to determine the guilt or innocence of the
     defendant from the evidence in this case. The defendant
     is not on trial for any act or conduct or offense not
     alleged in the indictment.

     The instruction requested by Jensen was substantially covered

in the charge given to the jury.            Therefore, the trial court did

not abuse its discretion in denying the limiting instruction

requested by Jensen.

     Jensen also contends that the trial court erred in denying the

requested   jury   instruction        on     his   theory     of   the     case.

Specifically, Jensen requested the following instruction:

     Mr. Jensen's theory of the defense is that he did not
     wilfully violate any of the laws he's charged with
     violating. Mr. Jensen's defense is that the Government
     has failed to prove beyond a reasonable doubt that he
     knowingly and wilfully did an act which the law forbids
     with the intent to violate the law. If you believe that
     the Government has failed to prove beyond a reasonable
     doubt that Mr. Jensen wilfully and knowingly did acts,
     which the law forbids, with the intent to violate the
     law, you must find Mr. Jensen not guilty.

     The district court did not abuse its discretion in refusing to

submit the above instruction because the charge properly set forth

the government's burden of proving the defendant guilty beyond a

                                     -12-
reasonable doubt.            Further, as the government asserts, the charge

defines      the     terms      "knowingly,"         "willfully,"    and   "intent   to

defraud."7         See United States v. Cartwright, 6 F.3d 294, 302 (5th

Cir. 1993) (district court did not err in refusing requested

instruction on presumption of innocence because instruction was

substantially covered by charge given to jury), petition for cert.

filed,      (U.S.    July       19,   1994)    (No.     94-5410).      The   requested

instruction was substantially covered by the charge given to the

jury.       Moreover, Jensen has not demonstrated that his ability to

present his defense was impaired. Consequently, the refusal of the

requested instructions did not constitute an abuse of discretion.

                         III. SUFFICIENCY OF THE EVIDENCE

     Jensen contends that the evidence is insufficient to support

his convictions. He contends that although the evidence shows that

he received money from loan proceeds that he should not have

received, the evidence is insufficient to prove that he acted

willfully or with the intent to defraud.                           When reviewing the

sufficiency         of    the    evidence,     we     view   all    evidence,   whether

circumstantial or direct, in the light most favorable to the

government with all reasonable inferences and credibility choices

to be made in support of the jury's verdict.                         United States v.

Salazar, 958 F.2d 1285, 1290-91 (5th Cir.), cert. denied, __ U.S.

__, 113 S. Ct. 185 (1992).              The evidence is sufficient to support a

        7
        The instructions on the terms "knowingly" and "willfully"
follow those approved in this circuit. See United States v. St.
Gelais, 952 F.2d 90, 93-94 (5th Cir.), cert. denied, __ U.S. __,
113 S. Ct. 439, 121 L. Ed. 2d 358 (1992); Rochester, supra.

                                              -13-
conviction if a rational trier of fact could have found the

essential elements of the crime beyond a reasonable doubt.               Id.

The evidence need not exclude every reasonable hypothesis of

innocence or be completely inconsistent with every conclusion

except guilt, so long as a reasonable trier of fact could find that

the   evidence   established      guilt    beyond    a   reasonable   doubt.

Faulkner, 17 F.3d at 768.

      Jensen does not dispute that "[t]he evidence at trial showed

various   acts   by   different    persons    that   were   fraudulent   and

illegal."   Nevertheless, Jensen claims that "the evidence wholly

failed to prove that Mr. Jensen was aware of the illegality of

these acts by other persons."             In other words, Jensen simply

challenges the sufficiency of the evidence proving his intent or

mental state, but does not challenge any of the other elements of

his 18 convictions.

      To prove a conspiracy, the government must show that an

agreement between two or more persons to violate the law, that the

defendant had knowledge of the agreement, and that the defendant

voluntarily participated in the conspiracy.               United States v.

Casilla, 20 F.3d 600, 603 (5th Cir.), cert. denied, __ U.S. __, 115
S. Ct. 240 (1994).      Each element of a conspiracy may be inferred

from circumstantial evidence.       Id.    The agreement may be inferred

from a "concert of action."        Id. (citation omitted).       "Once the

government has produced evidence of a conspiracy, only `slight'

evidence is needed to connect an individual to that conspiracy."

Id. (quoting United States v. Duncan, 919 F.2d 981, 991 (5th Cir.

                                    -14-
1990),   cert.     denied,    500 U.S. 926,   111 S. Ct. 2036   (1991)).

"Knowledge    of   a   conspiracy     and     voluntary       participation   in   a

conspiracy may be inferred from a `collection of circumstances.'"

Id. (citation omitted).

     The evidence at trial was largely undisputed. In fact, it was

undisputed that Jensen received approximately $25,000,000 in a

matter   of   months   from    the    transactions       at    issue.     From   the

beginning of trial, the defense focused the jury on the issue of

whether Jensen had the intent to commit the charged offenses.

During opening statement, defense counsel argued as follows:

          Now, I don't mean to imply and I don't want to
     mislead you. I'm not trying to tell you that the things
     that Paul did were all right.     Paul Jensen took some
     money. He took a lot of money out of these savings and
     loans, out of these deals that were -- that he took in
     violation of laws and regulations. He should not have
     taken that money.    There is no question about that.
     That is not the issue of this case. Don't -- don't waste
     one second worrying about that because we can set that
     aside right now. Paul Jensen took money that he should
     not have taken.

          As I said before, that's not what this case is
     about. The question is: Did he know that he was taking
     money he should not have taken. . . .

                               *      *       *

     The Government's evidence is going to show, and this is
     another thing that is totally uncontested, there was a
     conspiracy.   The conspiracy involved Faulkner, Toler,
     Blain, Clifford Sinclair and others.      And this was a
     conspiracy that was going on long before Paul Jensen ever
     came to Dallas. It is a conspiracy that continued after
     he left Dallas. That is not an issue in the case. These
     people were engaged in illegal activity. There is no
     question about that.

          The question is: Did Paul [Jensen] willfully and
     knowingly engage in illegal activity with those people?
     The answer to that is no. So don't worry about trying to
     decide whether there's something illegal going on.

                                       -15-
     Faulkner, Toler, Blain, Sinclair, they're all doing
     things that are illegal. That's not the question for
     this trial.

     Jensen was a central figure in this scheme. As the government

asserts, Jensen personally participated in the planning of the

deals when he negotiated the high points for his mortgage companies

and instructed the personnel at Lancaster and Bell how to obtain

brokered funds to have money available to loan on the various real

estate projects.            He purchased the resignation of the board of

directors at Lancaster to gain control of that institution. Jensen

gained    control      of    both   Lancaster    and    Bell    to    finance       these

projects.    Without the funding Jensen organized, the scheme would

not have been possible or at least not on such a grand scale.                          In

addition,        his    actions        were   accompanied        by     deceit        and

misrepresentations.           For instance, although Jensen still received

proceeds from Snowball and Helaman, he represented to the Federal

Home Loan Bank Board that he had no interest in either company.

Jensen knew that the mortgage companies were receiving high points

without    the    proper      underwriting,      that   buyers       were       receiving

"upfront" money or "kickbacks," and that the property would undergo

a series of "land flips" at inflated prices on the day of closing.

As a result of these intermediate transactions, Jensen received

millions of dollars in loan proceeds.

     Although Jensen testified at length regarding his lack of

intent to defraud, the jury obviously did not believe him.                         Intent

to   defraud      was       properly    before    the    jury     for       a     factual

determination.         After a review of the record, we conclude that a

                                         -16-
rational    jury   could    have   inferred   Jensen's        knowledge    of   and

participation in the conspiracy beyond a reasonable doubt.

      Jensen   also     blanketly      contends   that        the    evidence    is

insufficient to demonstrate that he had the requisite intent

regarding the substantive counts.           However, "under the Pinkerton

rule `[a] party to a conspiracy may be held responsible for a

substantive offense committed by a coconspirator in furtherance of

a conspiracy, even if that party does not participate in or have

any knowledge of the substantive offense.'"            Faulkner, 17 F.3d at

771 (quoting United States v. Garcia, 917 F.2d 1370, 1377 (5th Cir.

1990)).     Accordingly, because we have determined that Jensen's

conspiracy conviction should stand, Jensen may be held responsible

for   any   substantive     offenses    committed   by    coconspirators         in

furtherance of the conspiracy regardless whether he had knowledge

of or participated in the substantive offenses.

      Jensen does not challenge any element of the substantive

convictions except for his requisite mental state. Again, Jensen's

intent was a question for the fact finder.                    We find there is

sufficient evidence to support the jury's conclusion that Jensen

had the requisite mental state to commit the substantive offenses.

      IV.   WHETHER PROOF WAS OF ONE OR MANY CONSPIRACIES

      Jensen   claims      the   government   failed     to    prove     that   one

conspiracy existed as charged in the indictment.                    He claims that

the evidence introduced demonstrated multiple conspiracies rather

than the single overarching conspiracy alleged in count one,

resulting in a material variance that prejudiced his substantial

                                     -17-
rights.

     When reviewing a claim of fatal variance, we will reverse only

if the evidence at trial varied from what the indictment alleged,

and the variance prejudiced the defendant's substantial rights.

Faulkner, 17 F.3d at 760.      The following factors are considered to

determine whether one or multiple conspiracies existed: (1) a

common goal; (2) the nature of the scheme; and (3) an overlapping

of participants in the various transactions.             Id. at 761.

     Jensen has not set forth with any specificity the facts

necessary to support his claim that more than one conspiracy

existed or that there was a material variance between what was

charged and the facts adduced at trial.                 Nevertheless, as in

Faulkner, the evidence at Jensen's trial demonstrated that the

defendants   "shared    a   common   goal    of    enriching   themselves     by

profiting from the leveraged selling and reselling of real estate

along I-30." 17 F.3d at 761 (citing United States v. Richerson,

833 F.2d 1147, 1153 (5th Cir. 1987)).             Likewise, "[t]he nature of

the scheme was such that different participants played different

but important functions necessary to its success."             Id.    As for the

third   factor,    Jensen   implicitly      acknowledges   that      there   were

overlapping participants in the various transactions when he states

that the existence of common participants does not demonstrate only

one conspiracy.

     Assuming arguendo that more than one conspiracy existed,

Jensen is not entitled to relief.        In Faulkner, we concluded "that

where the indictment alleges a single conspiracy and the evidence

                                     -18-
established    each        defendant's    participation     in   at    least    one

conspiracy a defendant's substantial rights are affected only if

the   defendant      can     establish    reversible   error     under    general

principles of joinder and severance." 17 F.3d at 762.        Jensen was

tried separately, and thus, the jury could not have been confused

as to compartmentalizing evidence against other defendants. Jensen

has not shown improper joinder or severance.

      V.   COMMISSION OF PREDICATE ACTS UNDER RICO STATUTE

      Jensen   was    convicted     of    conspiring   to   violate      the   RICO

statute, 18 U.S.C. § 1962(d), as alleged in Count 88 of the

indictment.       Jensen       claims     insufficiency     of   the   evidence,

contending that the law of this Circuit requires the government to

prove that a RICO conspirator, and thus Jensen himself, agreed to

personally commit two racketeering acts.8

      The court below instructed the jury that the evidence must

show beyond a reasonable doubt:

      That at the time the Defendant knowingly and wilfully
      agreed to join in such conspiracy, he did so with the
      specific intent either to personally participate in the
      commission of two "racketeering acts," as elsewhere
      defined in these instructions, or that he specifically
      intended to otherwise participate in the affairs of the
      enterprise with the knowledge and intent that other
      members of the conspiracy would commit two or more
      "racketeering acts" as a part of a "pattern of
      racketeering activity."

       8
         Jensen cites, inter alia, the following cases: United
States v. Elliott, 571 F.2d 880 (5th Cir.), cert. denied, 439 U.S.
953, 99 S. Ct. 349 (1978); United States v. Martino, 648 F.2d 367
(5th Cir. 1981), cert. denied, 456 U.S. 943, 102 S. Ct. 2006 (1982).

                                         -19-
(emphasis added).9

     The government argues that we have not definitely resolved the

personal agreement argument presented by Jensen,10 and urges us to

resolve it in favor of the majority of the Circuits that require

only that there is evidence of an agreement that members of the

conspiracy will commit two proscribed acts.

     Faulkner controls the disposition of this insufficiency claim.

There,   we    held   that   regardless   whether   the   conviction   for

conspiracy to violate RICO required the defendant to agree to

personally commit two predicate acts or only that he agree with the

other conspirators that two predicate acts be committed pursuant to

the conspiracy, the RICO conviction was supported by the jury's

finding that each had committed the requisite predicate acts. 17
F.3d at 774.    Likewise, in this case, the jury found Jensen guilty

of four counts of wire fraud (counts 52, 53, 65, and 66).        There is

sufficient evidence to support the wire fraud convictions, which

are racketeering acts.       Jensen is not entitled to relief on this

claim, and we need not resolve the personal agreement argument

presented by Jensen.

     VI.      EXTRINSIC OFFENSES

     Jensen argues that the district court erred in allowing the

government to cross-examine him regarding three extrinsic offenses.

     9
        Additionally, the court below instructed the jury that it
was not to find Jensen guilty unless it unanimously agreed that he
committed at least two particular racketeering acts.
    10
        The government cites United States v. Neapolitan, 791 F.2d
489, 496 n.3 (7th Cir.), cert. denied, 479 U.S. 940, 107 S. Ct. 422
(1986).

                                   -20-
The extrinsic offenses involved false statements he made on a

bankruptcy document, a false tax return he provided in connection

with the purchase of a car, and submission of false loan documents

concerning a project called Riverbend.                     He also contends that the

admission       of    evidence   regarding         those    extrinsic      offenses   was

error.11        This Court reviews evidentiary rulings for abuse of

discretion.          United States v. Lopez, 979 F.2d 1024, 1032 (5th Cir.

1992), cert. denied, __ U.S. __, 113 S. Ct. 2349 (1993).

     Both parties agree that the district court apparently admitted

the impeachment evidence pursuant to Rule 608(b) of the Federal

Rules of Evidence, which provides as follows:

     Specific instances of the conduct of a witness, for the
     purpose of attacking or supporting the witness'
     credibility, other than conviction of crime as provided
     in rule 609, may not be proved by extrinsic evidence.
     They may, however, in the discretion of the court, if
     probative of truthfulness or untruthfulness, be inquired
     into on cross-examination of the witness . . .
     concerning the witness' character for truthfulness or
     untruthfulness . . . .

     Jensen, however, argues that the cross-examination regarding

the extrinsic offenses should not have been allowed because the

probative value was substantially outweighed by the danger of

unfair        prejudice.     Fed.R.Evid.       403.         We     disagree.    As    the

government argues, the evidence regarding false statements made by

Jensen        was   probative    of   his    character       for    untruthfulness     as

contemplated by Rule 608(b).                 He has not shown that the court

abused        its    sound   discretion       in    allowing        such   examination.

         11
          Regarding the false loan documents connected with the
Riverbend project, the government only questioned Jensen; it did
not introduce the documents into evidence.

                                            -21-
Moreover, as discussed below, this testimony was probative to rebut

Jensen's defense theory that he was an innocent dupe and without an

intent to defraud.

     Jensen also argues that the district court erred in admitting

into evidence the documents showing his previous false statements.

As quoted above, Rule 608(b) prohibits proof of specific instances

of the conduct of a witness for the purpose of attacking the

witness' credibility.        The documents were not admissible into

evidence under Rule 608(b).

     That is not the end of the inquiry, however.          If the evidence

was admissible on any ground, the district court's reliance on

other grounds does not affect the defendant's substantial rights.

United States v. Blake, 941 F.2d 334, 339 (5th Cir. 1991), cert.

denied, __ U.S. __, 113 S. Ct. 596 (1992).            In part, Rule 404(b)

provides that:

     Evidence of other crimes, wrongs, or acts is not
     admissible to prove the character of a person in order to
     show action in conformity therewith. It may, however, be
     admissible for other purposes, such as proof of motive,
     opportunity, intent, preparation, plan, knowledge,
     identity, or absence of mistake or accident . . . ."

     The evidence introduced regarding Jensen's intentional false

statements and misrepresentations was admissible under Fed.R.Evid.

404(b) to prove Jensen's knowledge of the fraud. As the government

asserts, Jensen's defense was that he lacked a culpable state of

mind and did not intentionally mislead people.         Under Rule 404(b),

the government properly introduced the evidence to rebut Jensen's

defense   of   lack   of   intent.    Jensen   has   not   shown   that   his

substantial rights were prejudiced.

                                     -22-
          VII. WHETHER EVIDENCE WAS RELEVANT

     Jensen next contends the district court erred in admitting

into evidence testimony that he purported to be a medical doctor

and testimony regarding how he spent the money he acquired through

the loan transactions at issue.      Jensen contends that the evidence

was not relevant under Fed.R.Evid. 401, and further, any probative

value was outweighed by the danger of prejudice.

     Rule 401 defines relevant evidence as "evidence having 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."        Clearly, the challenged

evidence was relevant as it tended to prove Jensen's efforts to

take control of the lending institutions and to further the overall

fraudulent scheme of the defendants.        Additionally, in regard to

the evidence of large expenditures of money, such evidence is

relevant to   prove   the   funds   were   obtained   illegally   when   "a

defendant is on trial for a crime in which pecuniary gain is the

usual motive for or natural result of its perpetration and there is

other evidence of his guilt."        United States v. Chagra, 669 F.2d
241, 256 (5th Cir.), cert. denied, 459 U.S. 846, 103 S. Ct. 102

(1982).   Jensen has failed to show that the admission of the

evidence was improper.

     Moreover, after the introduction of the evidence, the district

court orally instructed the jurors as follows:

     There was testimony concerning statements that were
     allegedly made by the Defendant that he was a doctor.
     There was testimony concerning money, large sums of money
     that were spent. I just want to emphasize to you the

                                    -23-
     Defendant's not being charged in this case with making
     misrepresentations that he was a doctor. He's not being
     charged with spending a lot of money. He's charged with
     bank fraud, conspiracy to commit bank fraud and the other
     crimes that were described to you. So I'm cautioning you
     that on that evidence I don't want you to go back in the
     jury room during deliberation and say we're going to find
     Mr. Jensen guilty because he represented that he was a
     doctor and that he spent a lot of money. That's not what
     he's charged with.

Assuming arguendo the evidence was erroneously admitted, it did not

affect     Jensen's   substantial   rights     given   the   court's   oral

instructions.

    VIII.      DISTRICT COURT'S FAILURE TO MAKE EXPLICIT FINDINGS
                     REGARDING THE ADMISSIBILITY OF CO-CONSPIRATOR
STATEMENTS.

     Jensen, relying on United States v. Powell, 973 F.2d 885 (10th

Cir. 1992), cert. denied, __ U.S. __, 113 S. Ct. 1598 (1993),

contends that the district court erred in failing to make explicit

findings     regarding   the   admissibility     of    the   co-conspirator

statements.

     The government does not deny that the district court failed to

make any findings as to the predicate facts pursuant to Rule

801(d)(2)(E). Instead, the government argues that the omission was

harmless.    In United States v. Fragoso, 978 F.2d 896, 900-01 (5th

Cir. 1992), cert. denied, __ U.S. __, 113 S. Ct. 1664 (1993), we

determined that, in denying the defendant's motion for directed

verdict of acquittal, the district court implicitly had found

sufficient evidence to establish a conspiracy.                We therefore

reasoned that the error was harmless.          Likewise, in the case at

bar, the court denied Jensen's motion for directed verdict of

acquittal.     We must follow the decision of the prior panel in

                                    -24-
Fragoso and accordingly, reject Jensen's claim.

     IX.   DISTRICT COURT'S DISMISSAL OF A PROSPECTIVE JUROR

     Jensen contends that his right to a fair trial under the Sixth

Amendment was violated when the district court erred in sua sponte

dismissing a prospective juror because the court found her not

competent to be on the jury.     The Sixth Amendment guarantees a

criminal defendant the right to a trial by impartial jury and the

trial judge is entrusted with the implementation of this guarantee.

United States v. Hinojosa, 958 F.2d 624, 631 (5th Cir. 1992).     We

will not disturb a trial court's determinations of impartiality

absent a clear abuse of discretion.    Id.

     During voir dire, the follow colloquy transpired:

     [COURT:] Now, I want to make absolutely sure that I've
     covered anything that you want to tell me about whether
     or not you should be on the jury. Sometimes I may fail
     to ask questions that somebody may have a concern in
     their mind. I'm going to ask the lawyers to come back
     up. And if any of you have anything you want to tell me
     in confidence at the bench about whether or not you
     should serve on this jury now is your time just to come
     up.   I'm talking about personal feelings, publicity,
     business reasons, just any other reason.     If there's
     anything at all if you would just raise your hand and
     just come up to the bench.

     (Side bar)

     THE COURT:   Just come right up here?

     A JUROR: This building, I can't handle the air in this
     building.

     THE COURT:   The air?

     A JUROR:   Smokers I tried to get -- except they didn't do
     it.

     THE COURT: You seem to be having trouble since we got
     here today?

                                -25-
     A JUROR:   Yes, it is worse.

     THE COURT:   Today?

     A JUROR: Because of the cold air.   I'm not used to cold
     air on me.

     THE COURT: I'm just going to excuse you from further
     jury service.

                     *     *   *

     (Juror leaves side bar)

     THE COURT: I'm going to excuse that juror on the Court's
     own motion. If there's any objection?

     MR. UDASHEN: Judge, I would object. I don't think she
     gave a specific reason enough that -- of health reasons
     than maybe something the Court can do to alleviate her
     problem.

     THE COURT:    Apparently you weren't looking at her or
     listening to her because there wasn't a word she said.
     It was the manner in which she was talking to me. I
     don't think she's competent to be on the jury. That's my
     specific finding.     This is the same juror that the
     Government wanted me to ask to come up because of the way
     she had been sitting in Court covered up from the time
     she got here.

     Jensen argues "that it was improper for the Court to remove

this juror over his objection without further inquiry into the

alleged health problem," and "[w]ithout further inquiry the court

did not have a sufficient basis to conclude that the juror was

unqualified to sit on the jury."

     In United States v. Bourgeois, 950 F.2d 980, 987 (5th Cir.

1992), the trial court excused a juror who had called in sick and

replaced her with an alternate juror.      The defendant objected

because the court had failed to notify the parties of the excusal,

which "depriv[ed] them of the ability to determine the nature of

her illness and the length of time she would be unavailable."

                               -26-
Therefore, as in the case at bar, the defendant argued that his

conviction should be overturned because there was an insufficient

factual basis to excuse the juror. We rejected that contention and

found no abuse of discretion.

     Here, the trial court observed the actions and the demeanor of

the prospective juror and expressly found her not competent to sit

on the jury.   Jensen has not shown that the basis for her excusal

was a clear abuse of discretion.12     Moreover, Jensen does not

contend that any of the jurors on the panel were not impartial.    As

such, he has shown no basis for reversal of his convictions.      See

United States v. Prati, 861 F.2d 82, 87 (5th Cir. 1988).

                          CONCLUSION

     Accordingly, Jensen's convictions are AFFIRMED.

    12
       See United States v. Coleman, 997 F.2d 1101, 1106 (5th Cir.
1993) (trial court may remove a juror when convinced that the
juror's abilities to perform his duties have become impaired),
cert. denied, __ U.S. __, 114 S. Ct. 893 (1994); United States v.
Dumas, 658 F.2d 411, 413 (5th Cir. 1981), cert. denied, 455 U.S.
990, 102 S. Ct. 1615 (1982).

                                -27-