United States v. Goodson

• Court: Court of Appeals for the Fifth Circuit
• Decided: August 6, 1999
• Docket: 98-30471
• Status: Published

Opinion

REVISED - August 5, 1999

IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT ________________________

No. 97-31057 ________________________

UNITED STATES OF AMERICA,

Plaintiff-Appellee-Cross-Appellant,

v.

LARRY S. BANKSTON; MARIA F. GOODSON,

Defendants-Appellants-Cross-Appellees

CARL W. CLEVELAND; FRED H. GOODSON,

Defendants-Appellants.

_________________________________________________________________ ________________________

No. 98-30471 ________________________

Plaintiff-Appellee,

MARIA F. GOODSON,

Defendant-Appellant.

ALEXANDROS F. GOODSON; TRUCK STOP GAMING LTD.,

Intervenors-Appellants.

_________________________________________________________________

Appeals from the United States District Court for the Eastern District of Louisiana _________________________________________________________________ July 21, 1999 Before KING, Chief Judge, and REAVLEY and BENAVIDES, Circuit Judges.

BENAVIDES, Circuit Judge:

Larry Bankston (“Bankston”), Fred Goodson, Maria

Goodson, and Carl Cleveland (“Cleveland”) appeal from their June

27, 1997, convictions and October 15, 1997, sentences for various

offenses related to criminal activity in the Louisiana video

poker industry. Fred Goodson and Cleveland, along with Alex

Goodson, Maria Goodson, and Truck Stop Gaming, Inc. (“TSG,

Inc.”), additionally appeal the district court’s judgment of

forfeiture of Truck Stop Gaming, Ltd. (“TSG, Ltd.”) and TSG, Inc.

as part of the RICO enterprise. The Government cross-appeals,

challenging the district court’s calculation of both Bankston’s

and Maria Goodson’s sentences. For the reasons set forth below,

we affirm the Appellants’ convictions and sentences and the

forfeiture of TSG, Ltd. and TSG, Inc.

I. BACKGROUND

Fred Goodson and his family had been in the truck stop

business in Slidell, Louisiana for 20 years. In early 1992, the

Goodson family formed TSG, Ltd. and its corporate partner, TSG,

Inc., in order to participate in the video poker business at

their Slidell truck stop. Fred Goodson and Carl Cleveland’s law

firm, Cleveland, Barrios, Kingsdorf & Casteix (“CBK&C”), loaned

Goodson’s adult children, Alex and Maria, the start-up capital

for TSG, Ltd.1 With the legal assistance of CBK&C, a

1 Those loans were secured by promissory notes, payable on demand, with 10% annual interest. partnership in commendam was established. Alex and Maria each

owned 49% of TSG, Ltd. as limited partners.2 TSG, Inc. owned the

remaining 2% as general partner.3 Fred Goodson managed TSG, Ltd.

CBK&C also helped the Goodsons prepare and submit to the

Louisiana State Police applications for an owner/operator’s

gaming license for TSG, Ltd. The gaming applications required

partnerships seeking a license to identify their partners, to

submit personal financial statements for all partners, and to

affirm that the listed partners were the sole beneficial owners,

that no partner had an arrangement to hold his interest as “an

agent, nominee or otherwise,” or a present intention to transfer

any interest in the partnership at a future time. The initial

application submitted on behalf of TSG, Ltd. identified Maria and

Alex Goodson as the limited partners and TSG, Inc. as the general

partner. The application listed no other persons or entities as

having any ownership interest in TSG, Ltd. The initial license

application did disclose, however, that Fred Goodson and CBK&C

had loaned Maria and Alex all initial capital. That same

application also identified Fred Goodson as general manager of

the business. TSG, Ltd. submitted renewal applications in 1993,

1994, and 1995, which also listed no additional ownership

interests.4

2 TSG, Ltd.’s Agreement of Partnership was signed by Alex and Maria and filed with the Louisiana Secretary of State. 3 Alex and Maria owned equal shares of TSG, Inc. 4 In August 1994, Maria Goodson executed a “Sale of Partnership Interest and Pledge

3 In 1994, as a part of an unrelated federal investigation of

alleged corruption involving Louisiana legislators, the F.B.I.

obtained court authorization to conduct electronic surveillance

of the office of Louisiana State Senator Larry Bankston. The

authorization was based on a series of consensually recorded

conversations that took place in September and October 1994

between Bankston and Robert Miller, a cooperating witness.

According to the FBI, the Bankston-Miller conversations indicated

that Bankston was engaged in a scheme to extort an interest in a

casino proposed by the Jena Choctaw tribe, in exchange for his

influence in ensuring government approval of the casino.

During the course of its electronic surveillance--limited to

the interception of communications concerning the alleged Jena

Choctaw scheme--the FBI recorded a conversation between Bankston

and Fred Goodson. In that conversation, the two men discussed,

in detail, Goodson’s truck stop business. Neither man mentioned

the Jena Choctaw scheme. Approximately 20 minutes into their

discussion, Goodson broached the subject that would form the

basis for the present multi-party, multi-count indictment. Armed

with the recording of Bankston and Goodson’s 44-minute

conversation, the FBI obtained court authorization for electronic

surveillance on Goodson’s home and businesses.

On October 4, 1996, the Government charged now former

Louisiana State Senators Benjamin “Sixty” Rayburn and Larry

Agreement,” which conveyed to Benny Rayburn, the adult son of co-defendant Benjamin “Sixty” Rayburn, a 4.99% interest in TSG, Ltd. Rayburn’s 4.99% interest was not disclosed in any renewal application. 4 Bankston; video poker entrepreneur Fred Goodson; his daughter,

Maria Goodson; family attorney, Carl Cleveland; and the family’s

accountant, Joe Morgan, with a combination of racketeering,

racketeering conspiracy, mail fraud, conducting an illegal

gambling business, money laundering, tax conspiracy, false

declaration under penalty of perjury, aiding and abetting a false

declaration under penalty of perjury, and interstate

communications in aid of racketeering.5 Most of the charges

against the Goodsons, Cleveland, and Joe Morgan related to the

establishment, licensing, and operation of TSG, Ltd. The

Government alleged that the defendants had schemed to defraud

state regulators in obtaining video poker licenses for TSG, Ltd.,

and to obtain favorable legislation affecting Louisiana’s video

poker industry. Specifically, the Government alleged that the

defendants obtained a gaming license for TSG, Ltd. in 1992 and

renewed in 1993, 1994, and 1995, by fraudulently concealing the

identity of the true owners of the company, Fred Goodson and Carl

Cleveland.6 According to the Government, Goodson and Cleveland

concealed their ownership in order to avoid the probing inquiry

of the State’s suitability assessment.

5 The Government did not indict Fred Goodson’s son, Alex Goodson, but subsequently named him an unindicted co-conspirator. Alex Goodson joins the instant action as an intervenor in the forfeiture proceedings. 6 Alex and Maria Goodson were from inception and remain the record owners of TSG, Ltd. and its corporate general partner, TSG, Inc.

5 Trial commenced on May 12, 1997, and lasted six weeks.

Following more than seven days of deliberation, the jury returned

a mixed verdict, finding four of the defendants--Carl Cleveland,

Fred Goodson, Maria Goodson, and Larry Bankston--guilty of

certain counts.7 The jury acquitted the remaining two

defendants--Senator Rayburn and Joe Morgan--on all counts.

On October 15, 1997, The district court sentenced the four

convicted defendants. Both Cleveland and Fred Goodson received

terms of imprisonment of 121 months. Maria Goodson received a

six-month term of imprisonment to be followed by six months of

home detention. Bankston received a 41-month term of

imprisonment and a fine of $20,000.

The defendants filed timely notices of appeal as to their

convictions and sentences. On November 14, 1997, the Government

filed a notice of cross-appeal relating to the sentences of

Bankston and Maria Goodson.

Following Fred Goodson’s and Carl Cleveland’s convictions

for RICO and RICO conspiracy, the Government sought forfeiture

of, inter alia, their alleged interests in TSG, Ltd. and TSG,

7 Cleveland was convicted on one count of RICO, one count of RICO conspiracy, two counts of mail fraud (in connection with the 1994 and 1995 TSG, Ltd. gaming license renewal applications), four counts of money laundering, one count of tax conspiracy, and one count of aiding and abetting the filing of a false tax return. Like Cleveland, Fred Goodson was convicted of one count of RICO, one count of RICO conspiracy, and two counts of mail fraud (in connection with the 1994 and 1995 TSG, Ltd. gaming license renewal applications). The jury additionally convicted Goodson of five counts of money laundering and three counts of the use of interstate communications in aid of state bribery. His daughter, Maria, was found guilty of one count of mail fraud in connection with TSG, Ltd.’s 1995 license renewal application. Former Senator Bankston was found guilty of two counts of committing and/or aiding and abetting interstate communications in aid of racketeering. 6 Inc. On August 26, 1997, the district court entered a judgment

ordering the forfeiture of TSG, Ltd. and TSG, Inc. The district

court noted that the jury’s verdict and the evidence in the

criminal trial record proved beyond a reasonable doubt that

Goodson and Cleveland had an interest in TSG, Ltd. and TSG, Inc.

and that those entities were part of the RICO enterprise. On

October 21, 1997, The district court entered the final order of

forfeiture.

On October 31, 1997, Alex and Maria Goodson, as record

owners of TSG, Ltd. and TSG, Inc., filed separate petitions of

intervention in the forfeiture proceedings, asserting their

ownership interests in the two companies. On February 4, 1998,

the district court conducted an evidentiary hearing on their

petitions, and on April 15, 1998, the district court denied their

claims. The district court ruled that Fred Goodson and Carl

Cleveland were the “true owners” of TSG, Ltd. and TSG, Inc. and

that their ownership interests had been properly forfeited to the

Government. Alex and Maria Goodson and TSG, Inc. appeal from

that ruling.

II. DISCUSSION

A. Wiretap Evidence

1. Application Omissions

Fred Goodson and Larry Bankston argue that the district

court erred in refusing to suppress the evidence obtained from

the Bankston wiretap. Both appellants additionally argue that

the district court erred in denying their request for an

7 evidentiary hearing pursuant to Franks v. Delaware, 438 U.S. 154,

98 S. Ct. 2674 (1978).

Before trial, Bankston filed a motion to suppress the

wiretap evidence. Fred Goodson, Maria Goodson, and Carl

Cleveland joined the motion.8 Bankston contended that the

November 25, 1994, affidavit completed by Agent Jones in support

of the wiretap application contained fatal omissions and

misrepresentations. His motion described an “exculpatory”

conversation between Bankston and Miller that had been omitted

from the wiretap application and claimed that the FBI told Miller

to stop recording after that conversation. Bankston asserted

that the false statements and/or omissions were deliberately or

recklessly made. He accompanied his motion with an offer of

proof including affidavits and sworn testimony.

The district court, after hearing arguments by counsel and

reviewing submissions, denied Bankston’s request for a Franks

evidentiary hearing. The court found that Bankston had failed to

make the requisite showing that the affiant, Agent Jones, had

intentionally misled the District Court and tricked the Court

into issuing the wiretap authorization and that the omissions

were material such that they negated probable cause.

8 On appeal, Maria Goodson and Carl Cleveland cross-incorporate Fred Goodson and Bankston’s suppression arguments. However, neither Maria nor Cleveland meets our standing requirements as articulated in United States v. Scasino, 513 F.2d 47 (5th Cir. 1975). Because we conclude that the district court did not err in admitting the wiretap evidence, we need not consider Cleveland’s argument that he has standing despite Scasino. 8 We review de novo the denial of a Franks v. Delaware

evidentiary hearing. See United States v. Dickey, 102 F.3d 157,

162 (5th Cir. 1996) (reviewing the denial of a Franks hearing in

the context of a search warrant); United States v. Guerra-Marez,

928 F.2d 665, 671 (5th Cir. 1991) (applying the Franks standard

and reviewing de novo the decision of the district court to

validate a wiretap order). In Franks v. Delaware, the Supreme

Court held that a defendant is entitled to an evidentiary hearing

to contest the validity of a search warrant if he makes a

substantial preliminary showing that (1) allegations in a

supporting affidavit were a deliberate falsehood or made with a

reckless disregard for the truth and (2) the remaining portion of

the affidavit is not sufficient to support a finding of probable

cause. See Franks, 438 U.S. 154, 171, 98 S. Ct. 2674, 2684

(1978). We have explained that "even if the defendant makes a

showing of deliberate falsity or reckless disregard for the truth

by law enforcement officers, he is not entitled to a hearing if,

when material that is the subject of the alleged falsity or

reckless disregard is set to one side, there remains sufficient

content in the warrant affidavit to support a finding of probable

cause.” United States v. Privette, 947 F.2d 1259, 1261 (5th Cir.

1991) (quoting Franks, 438 U.S. at 171-72, 98 S. Ct. at

2684-85)).

We have applied Franks to instances of omission where, as

here, an affidavit falls squarely within the dictates of 18

U.S.C. § 2518. United States v. Tomblin, 46 F.3d 1369, 1377 (5th

9 Cir. 1995) (noting that “[o]missions or misrepresentations can

constitute improper government behavior”). In such cases of

omitted information, the logic of Privette holds firm: a

defendant is not entitled to an evidentiary hearing if a wiretap

authorization would lawfully have issued after correcting the

supporting affidavit by supplying any material omissions.

Therefore, in determining whether Fred Goodson and Bankston were

improperly denied an evidentiary hearing on their motion to

suppress, we need only consider Agent Jones’s affidavit--

corrected to contain the allegedly exculpatory conversation--and

determine whether that reconstructed affidavit satisfies the

wiretap requirements contained in 18 U.S.C. § 2518.

If the Jones affidavit were revised to include the omitted

information, the affidavit would describe conversations

suggesting that between September 19 and October 31, 1994, the

cooperating witness, Miller, and Bankston had discussed a scheme

to exchange Bankston’s influence for an ownership interest in the

Jena Choctaw casino. In particular, the affidavit would reveal

that Bankston had met with Jena Choctaw Chief Jackson several

times, had agreed to provide the Jena Choctaw tribe with

“political cover,” and had been telephoned frequently by Chief

Jackson. The affidavit would also state that, in a sixth

conversation with Miller on October 31, 1994, Bankston had

declared that he was “fini” and that his present intention was

“to stay away from . . . this entire thing.” The affidavit would

additionally include statements made by Bankston to Miller at the

10 conclusion of that October 31, 1994, conversation expressing

Bankston’s “willing[ness] to proceed” with the project if

“something could be worked out to his satisfaction.”

a. Probable Cause

An application for a wiretap must demonstrate probable cause

to believe that the target has committed, is committing, or will

commit a crime, as well as “probable cause for belief that

particular communications concerning that offense will be

obtained through such interception.” 18 U.S.C. § 2518(3)(a)-(b).

We evaluate probable cause utilizing a totality-of-the-

circumstances test. See Dickey, 102 F.3d at 162. In light of

Miller’s multiple statements to the FBI that Bankston was

negotiating a deal in which he would extort an undisclosed

interest in the Jena Choctaw casino, the multiple taped

conversations containing statements that corroborated this tip

from Miller, and the ambiguity of any exculpatory statements in

the October 31 conversation, we find that the reconstructed

affidavit would establish sufficient probable cause to authorize

electronic surveillance on November 25.9

b. Necessity

9 Our finding of probable cause includes a finding that “particular communications” concerning that offense would have been “obtained through such interception.” See 18 U.S.C. § 2518(3)(b). The October 31, 1994, conversation between Miller and Bankston in no way undermines probable cause to believe that Bankston would have committed the Jena Choctaw scheme and that particular communications concerning the scheme would occur either in Bankston’s office or on his phone.

11 Bankston and Goodson also argue that the application failed

to meet the dictates of 18 U.S.C. § 2518(3)(c), which requires

the Government to show and the issuing judge to find that “normal

investigative procedures have been tried and have failed or

reasonably appear to be unlikely to succeed if tried or to be too

dangerous.” 18 U.S.C. § 2518(3)(c). The Government “need not

prove exhaustion of every conceivable option before a wiretap

order may issue.” Guerra-Marez, 928 F.2d at 671.

Here, the FBI included in its 21-page wiretap application a

detailed account of the investigative techniques it had employed

in making its case against Bankston. Agent Jones stated in his

November 25, 1994, affidavit that the use of electronic

surveillance was necessary because Bankston had made it clear to

Miller that he would not include him in any potentially

incriminating conversations with third parties.10

We have affirmed wiretap orders based upon similar

affidavits. See, e.g., United States v. Krout, 66 F.3d 1420,

1425 (5th Cir. 1995) (explaining that the informants or

undercover agents could not infiltrate the conspiracy at high

enough levels); United States v. Collins, 972 F.2d 1385, 1412

(5th Cir. 1992) (noting that consensual monitoring would be

impossible, as it was unlikely that the informant would be

present during the illegal activity). Agent Jones’s affidavit

10 In his talks with Miller, Bankston had alluded to conversations that he would be having with his stockholder nominee as well as other people in Louisiana whom he had to satisfy out of his five-percent hidden ownership interest in the Jena Choctaw casino.

12 provides sufficient information to meet the requirements of

§ 2518(3)(c). The omission of the October 31 conversation does

not impact our finding of “necessity,” nor does the fact that the

FBI failed to inform the issuing court that Miller had been told

to cease recording his conversations with Bankston. Regardless

of whether Miller continued to record his conversations with

Bankston, Miller was unlikely to be present during the talks

between Bankston and his Louisiana contacts. Therefore, a need

for electronic surveillance existed.

2. Minimization

Bankston and Fred Goodson contest the district court’s

factual finding that the FBI properly minimized the interception

of communications outside the scope of the wiretap order. In

particular, Bankston and Goodson dispute the interception of

their December 1994 conversation, which included no mention of

the Jena Choctaw tribe casino scheme and did not broach the

subject of criminal activity until approximately twenty minutes

into the conversation. We review determinations of the

reasonableness of minimization efforts for clear error. See

United States v. Wilson, 77 F.3d 105, 112 (5th Cir. 1996).

Section 2518 implements “the constitutional mandate . . .

that wiretapping must be conducted with particularity,” United

States v. Daly, 535 F.2d 434, 440 (8th Cir. 1976) (citation

omitted), by requiring electronic surveillance to “be conducted

in such a way as to minimize the interception of communications

not otherwise subject to interception.” 18 U.S.C. § 2518(5).

13 The Government’s efforts to minimize nonrelevant conversations

must be “objectively reasonable” in light of the circumstances

confronting the interceptor. Scott v. United States, 436 U.S.

128, 136-143, 98 S. Ct. 1717, 1723-27 (1978); see also United

States v. Hyde, 574 F.2d 856, 869 (5th Cir. 1978) (explaining

that the minimization standard applies a test of reasonableness

to the particular facts of each case) (citing Daly, 535 F.2d at

441). Neither the Fourth Amendment nor 18 U.S.C. § 2515,

however, requires government agents to avoid intercepting all

nonrelevant conversations when conducting a wiretap

investigation. See Scott, 436 U.S. at 137-140, 98 S. Ct. 1723-

24.

We consider three factors in deciding the objective

reasonableness of efforts to minimize: (1) the “nature and scope

of the criminal enterprise under investigation;” (2) the

“Government’s reasonable inferences of the character of a

conversation from the parties to it;” and (3) the “extent of

judicial supervision.” Hyde, 574 F.2d at 869. Here, consistent

with our precedent, the district court found that the FBI’s

efforts to minimize were reasonable in light of the fact that (1)

the criminal investigation involved “a potentially wide-ranging

conspiracy in which the coconspirators had not been identified;”

(2) Goodson reported to Bankston “specific details of Goodson’s

truck stop business that one would not normally provide to one

who was not a participant in the endeavor;” and (3) the issuing

court had determined, based on regularly submitted ten-day

14 reports, including the results of interceptions, that the

Government was acting in a proper manner.

Bankston reurges statistical analyses he presented to the

district court to question the Government’s minimization efforts.

Bankston’s reliance on statistics is unpersuasive. First, the

district court rightly pointed out that Bankston’s statistics,

even if taken as accurate, showed minimization efforts that were

reasonable. Second, the Supreme Court has discouraged the use of

statistics, explaining that “blind reliance on the percentage of

nonpertinent calls intercepted is not a sure guide to the correct

answer.” Scott, 436 U.S. at 140, 98 S. Ct. at 1724.

Goodson argues that the criminal nature of the December 1994

conversation could not have been immediately apparent because the

subject of criminal activity was not broached until approximately

twenty minutes into the conversation and that, by this point,

agents should have already ceased monitoring the conversation.

Goodson analogizes an agent’s monitoring of communications

concerning crimes not the subject of a wiretap order to an

officer’s seizure of contraband pursuant to the plain view

doctrine. Goodson cites United States v. Johnson, 539 F.2d 181

(D.C. Cir. 1976), in support of his novel plain view analogy. In

particular, Goodson points to the following language from

Johnson: “Like an officer who sees contraband in plain view from

a vantage point where he has a right to be, one properly

overhearing unexpected villainy need not ignore such evidence.”

See id. at 188. Goodson then attempts to graft onto the Scott

15 objective reasonableness inquiry the plain view doctrine’s

probable cause requirement. He urges us to find that an agent

monitoring “windfall” communications must, at the time of the

monitoring, have probable cause to believe that the communication

concerns criminal activity.

Caselaw does not support such a probable cause requirement.

We are unaware of any case in which an appellate court employed a

probable cause analysis to determine whether to suppress non-

minimized, “other criminal activity” communications. Moreover,

requiring probable cause that a windfall communication itself

concerns criminal activity is inconsistent with the objective

reasonableness inquiry. Adding a probable cause analysis would

require that monitoring agents be more than reasonable in their

efforts to minimize. Goodson’s approach would require that

agents be gifted with “prescience” and the ability to “‘know in

advance what direction the conversation will take.’” United

States v. Cox, 462 F.2d 1293, 1301 (8th Cir. 1972) (quoting

United States v. LaGorga, 336 F.Supp. 190, 196 (W.D. Penn.

1971)). Consistent with Scott, we conclude that the district

court did not commit clear error in determining that the FBI’s

minimization efforts were objectively reasonable.

B. Choice of Counsel

Fred Goodson argues that the district court erred in

denying, on grounds of conflict, his motion to associate Michael

16 Fawer as additional counsel.11 Goodson complains that the

district court’s ruling constitutes error in light of both his

and Rayburn’s knowing waiver of any conflict of interest and the

sworn statements averring unawareness of any actual or potential

conflict of interest submitted by Michele Fournet (counsel for

Goodson), Michael Fawer, and Arthur Lemann.

We review a district court’s finding of a conflict of

interest for abuse of discretion. See United States v. Sotelo,

97 F.3d 782, 791 (5th Cir. 1996). Although a district court must

“recognize a presumption in favor of petitioner’s counsel of

choice,” “that presumption may be overcome not only by a

demonstration of actual conflict but by a showing of a serious

potential for conflict.” Wheat v. United States, 486 U.S. 153,

164, 108 S. Ct. 1692, 1700 (1988). This is true even where a

defendant expresses a desire to waive the potential conflict.

See Sotelo, 97 F.3d at 791.

The crux of Goodson’s argument is that the district court’s

veto of his choice of counsel without finding any “special

circumstances” beyond the fact of multiple representation amounts

to a per se rule that multiple representation would never be

permissible. Goodson contends that such a per se rule

11 Michael Fawer represented Goodson’s co-defendant, former Louisiana State Senator Rayburn, through the investigative stage of this case. Fawer assisted Rayburn in responding to three grand jury subpoenas, had discussions with the Government regarding the nature of the charges being considered against Rayburn, and appeared in court on behalf of Rayburn at the initial appearance, as well as later to argue motions. On November 5, 1996, Fawer withdrew as counsel for Rayburn, and Arthur A. Lemann, III replaced Fawer as counsel for Rayburn. On February 24, 1997, Goodson moved the district court to associate Fawer as additional counsel for him. 17 contravenes Supreme Court and Fifth Circuit precedent that has

recognized the advantages of common defenses. Goodson

additionally argues that the four potential areas of conflict

elucidated by the district court exist in every case of multiple

representation and that appellate courts have regularly found

that conflicts do not arise in those contexts.12

Goodson’s argument is flawed. First, the district court in

no way established a per se rule against joint representation.

The district court applied the Sixth Amendment and the Supreme

Court’s Wheat analysis to the facts developed at the hearing

before the magistrate judge. On the basis of those facts, The

district court concluded that institutional interests and

interests of the defendant warranted a denial of Goodson’s motion

to associate Fawer. Second, neither the Supreme Court nor this

Circuit has adopted a “special circumstances” test for

determinations of conflict in joint representation. Although the

Supreme Court’s 1980 Cuyler decision does include “special

circumstances” language, it does so only in discussing when a

state court, sua sponte, needs to “initiate inquiries into the

propriety of multiple representation.” Cuyler v. Sullivan, 446

U.S. 335, 346, 100 S. Ct. 1708, 1717 (1980). Third, the cases

upon which Goodson relies to show that joint representation is

12 The district court outlined four areas of potential conflict: (1) because a plea by Goodson would be adverse to Rayburn’s interests, Fawer would have a conflict in advising Goodson regarding plea negotiations; (2) evidence could develop at trial that pitted one defendant’s interest against the other’s; (3) Goodson’s and Rayburn’s interests could diverge at sentencing, over issues such as their respective roles in the offense; and (4) because Fawer received confidences from Rayburn, Fawer’s cross-examination of Rayburn would be problematic. 18 permissible despite possible conflicts of interest involve claims

of ineffective assistance of counsel. In those cases, the courts

employed a retrospective, record-based inquiry in order to

determine whether an attorney was operating under a conflict of

interest. Their findings of “no conflict” are of limited

usefulness here, where the district court predicated its denial

of the motion to associate counsel on a finding of serious

potential conflict. Goodson fails to appreciate the distinction

between a retrospective inquiry of actual conflict and a

prospective inquiry into serious potential conflict.

The evaluation of the facts and circumstances of each case

under the Wheat standard “must be left primarily to the informed

judgment of the trial court.” Wheat, 486 U.S. at 164, 108 S. Ct.

at 1700. The district court made specific findings as to four

potential areas of serious conflict. We find that the district

court did not abuse its discretion in denying Goodson’s motion to

associate Fawer.

C. Louisiana Video Poker License as “Property”

Maria Goodson and Attorney Cleveland assert that a Louisiana

video poker license is not “property” for purposes of the mail

fraud statute, 18 U.S.C. § 1341. Less than two years ago, we

reached a contrary conclusion in United States v. Salvatore, 110

F.3d 1131 (5th Cir. 1997). Bound by our prior decision, we do

not revisit this issue.

D. Fair Notice

19 Maria Goodson and Cleveland argue that, at the time of their

mail fraud offenses, they did not have fair notice that the acts

charged were crimes. They claim that they did not have notice

(1) that unissued video poker licenses constituted property under

the mail fraud statute, and (2) that certain information needed

to be reported to the Louisiana State Police on the video poker

license applications. We find these arguments devoid of merit.

“The test of whether a statute is unconstitutionally vague

so as to deprive fair notice is whether it provides a person of

ordinary intelligence a reasonable opportunity to know what is

proscribed.” United States v. Brewer, 835 F.2d 550, 553 (5th

Cir. 1987). With regard to the first claim, we note that, at the

time of the charged conduct, a circuit split existed as to

whether or not unissued licenses constituted property for

purposes of the mail fraud statute. Although we had not yet

ruled on the issue, at least two circuits had found that unissued

licenses are property for mail fraud purposes. Accordingly, we

conclude that, assuming each to be of ordinary intelligence,

Maria Goodson and Cleveland had reasonable opportunity to know

that their conduct could be proscribed by the mail fraud statute.

Cf. United States v. Brumley, 116 F.3d 728, 732 (5th Cir. 1997)

(en banc) (“Constructions of a statute announced by the Supreme

Court or lower courts can give citizens fair warning, even if the

cases are not fundamentally similar.” (quotation marks omitted)).

We are equally unpersuaded by Maria Goodson and Cleveland’s

claim that they did not have fair notice that the Louisiana State

20 Police required disclosure of indefinite and contingent plans to

acquire an equity interest in a video poker licensee at some

unspecified time in the future, or an ownership or other interest

in a licensee of less than five percent. The “Affidavit of Full

Disclosure” that accompanied the initial and renewal applications

explicitly required that video poker applicants be the “sole

beneficial owner of any direct or indirect interest in or to a

licensed gaming operation . . . except such as having been

reported in writing to the Louisiana State Police.” The

affidavit required that applicants attest that they had (1) “no

agreements or understandings with any other person and no present

intent to hold as agent, nominee, associate, third party or

otherwise any direct or indirect interest whatsoever in or to the

licensed gaming operation” and (2) “no agreements or

understandings with any other person and no present intent to

transfer at any future time any interest whatsoever . . . .” We

find that this language provided a person of ordinary

intelligence adequate notice that ownership interests in any

amount must be disclosed to the Louisiana State Police.

Similarly, we find the “agreement or understanding” language

sufficiently broad to include indefinite and contingent plans to

acquire equity interests at some unspecified future time. We

therefore conclude that Maria Goodson and Cleveland had fair

notice.

E. State Law “Ownership” Jury Instructions

21 Cleveland, Fred Goodson, and Maria Goodson claim that the

district court erred in refusing to charge the jury concerning

certain state-law concepts of ownership. The district court

refused to give the requested instructions because, inter alia,

the state-law concepts did “not go to the guilt or innocence of

the defendants.” We review a district court’s refusal to provide

a requested instruction for abuse of discretion. See United

States v. Pennington, 20 F.3d 593, 599 (5th Cir. 1994). Although

we have recognized the importance of instructing on legal

concepts significant to a theory of defense, see, e.g., United

States v. Cavin, 39 F.3d 1299, 1310 (5th Cir. 1994) (reversing a

conviction because the court failed to instruct on state ethical

rules relevant to an attorney’s theory of defense), we have never

required that a district court instruct a jury on peripheral

concepts that do not directly implicate an essential element of

the charged offense.

Cleveland argues that the ownership instructions were

directly relevant to both his guilt or innocence and that of Fred

and Maria Goodson. According to Cleveland, the critical issue to

be decided by the jury was whether TSG, Ltd.’s license

applications contained “fraudulent representations or omissions,”

that is, whether in keeping with the Government’s theory of the

case, the mailed video poker license applications failed to

disclose hidden interests of Fred Goodson and Carl Cleveland in

22 TSG, Ltd., as owners, option holders, or pledge recipients.13

Cleveland contends that the jury could not fairly decide who

owned TSG, Ltd. without knowing whether Goodson or Cleveland had

enforceable ownership interests under state law.

We disagree. The jury was instructed to find whether the

video poker license applications were fraudulent in so far as

affidavits submitted by Maria and Alex Goodson failed to mention

any (1) agreements or understandings with any other persons to

hold their interests as a nominee, agent or otherwise, and/or

(2) agreements or understandings with any other person and a

present intent to transfer at any future time any interest

whatsoever in TSG, Ltd. Whether the “agreements or

understandings” were enforceable under state law is not relevant

to the question of whether Maria and Alex Goodson failed to

disclose such arrangements to the Louisiana State Police.

Accordingly, we find that the district court did not abuse its

discretion in refusing to charge the jury as requested by

Appellants. See Pennington, 20 F.3d at 600 (explaining that

reversal is warranted only if the requested instruction (1) was a

substantially correct statement of the law, (2) was not

substantially covered in the charge as a whole, and (3) concerned

an important issue in the trial).

13 The district court instructed the jury that an essential element of mail fraud—distinct from specific intent—is that a defendant knowingly created a scheme to defraud. Such a scheme, according to the district court’s instructions, must involve false or fraudulent representations or omission reasonably calculated to deceive persons of ordinary prudence and comprehension. 23 Fred Goodson, Maria Goodson, and Cleveland also challenge

the district court’s supplemental instruction to the jury. In

particular, they contend that the district court erred in giving

a supplemental instruction that ignored state-law ownership

principles and embraced the Government’s theory that ownership

could be determined simply from informal discussions.

After deliberations began, the jury sought clarification of

three issues: (1) the legal definition of a partnership in

commendam, (2) how much control is given up by partners, and (3)

who appoints a general manager. In response, the district court

provided the jury a general description of a partnership in

commendam and the authority of the general and limited partners.

The court concluded its supplemental instruction by charging the

jury, over defense objections: “It is for you to determine based

on all the evidence in the case what the parties’ arrangements

were as to control, ownership and management of Truck Stop

Gaming, Ltd.”

We find no reversible error.

A trial judge enjoys wide latitude in deciding how to respond to a question from the jury. “When evaluating the adequacy of supplemental jury instructions, we ask whether the court’s answer was reasonably responsive to the jury’s question and whether the original and supplemental instructions as a whole allowed the jury to understand the issue presented to it.”

United States v. Mann, 161 F.3d 840, 864 (5th Cir. 1998)

(footnotes omitted) (quoting United States v. Stevens, 38 F.3d

167, 170 (5th Cir. 1994)). In this case, the court’s

supplemental instruction was reasonably responsive to the jury’s

24 questions. Moreover, as mentioned above, satisfaction of state

law requirements for ownership transfers was not a critical issue

to be decided by the jury.

F. Travel Act Jury Instructions

Bankston was convicted on two Travel Act counts, which

incorporated Louisiana’s public bribery statute. He argues that

his conviction ought to be reversed because the district court

abused its discretion in failing to submit to the jury proposed

charges on gift, attempted bribery, and circumstantial evidence.

First, Bankston asserts that he was entitled to an

instruction that it is legal for a legislator to receive a gift.

Such an instruction, however, was unnecessary given the district

court’s charge that the Government had to prove beyond a

reasonable doubt that Bankston, as the receiver of the bribe,

acted “with the specific intent to be influenced in his

conduct . . . as a Louisiana senator.” Whether Bankston could

lawfully receive a gift was wholly irrelevant to the jury’s

inquiry. Because the district court’s Travel Act instruction was

clear, detailed, and substantially covered the charge suggested

by Bankston, the court’s refusal to instruct on gift does not

amount to error.

Second, Bankston, complains that the district court refused

to instruct the jury on the lesser included offense of attempted

bribery under Louisiana law. He argues that, in Louisiana, such

an instruction is not discretionary and that, had the jury found

only attempted bribery, the elements of the Travel Act charge

25 would not have been met. In federal prosecutions for violations

of the Travel Act, we have never required that district courts

instruct on lesser included offenses. Accordingly, we find

Bankston’s argument to be devoid of merit.

Third, Bankston argues that the district court committed

reversible error by failing to instruct on Louisiana’s

“circumstantial evidence rule.” Because we have squarely

rejected efforts to graft non-substantive points of state law

into RICO charges, Bankston’s claim fails. See, e.g., United

States v. Brown, 555 F.2d 407, 418 n.22 (5th Cir. 1977)

(explaining that "’the reference to state law in the federal

statute is for the purpose of defining the conduct prohibited’

and is not meant to incorporate the state statute of limitations

or procedural rules” (quoting United States v. Revel, 493 F.2d 1,

3 (5th Cir. 1974))).

G. Witness Testimony

Cleveland, Fred Goodson, and Maria Goodson claim that the

Government elicited improper witness testimony from two law

enforcement officials, FBI Special Agent Gross and State Police

Lieutenant Blackwelder. They launch four attacks on Gross and

Blackwelder’s testimony: (1) that both witnesses testified to

legal conclusions, (2) that both witnesses gave testimony in the

form of opinion, (3) that both witnesses testified as to

“ultimate issue[s] of fact,” and (4) that Gross’s testimony

exceeded his limited “summary” capacity. Evidentiary rulings

26 are reviewed for abuse of discretion. See General Electric Co.

v. Joiner, ___ U.S. ___, ___, 118 S. Ct. 512, 517 (1997).

We find that the district court did not abuse its disretion

in permitting the challenged testimony. Because neither Gross

nor Blackwelder was designated as an expert witness, most of the

caselaw that Cleveland cites for the proposition that a witness

cannot testify in the form of an opinion is inapplicable. Unlike

expert witnesses, lay persons are allowed more leeway under the

Federal Rules in testifying in the form of opinions. See Fed. R.

Evid. 701. Lay persons are explicitly allowed to testify in the

form of opinion or inference on “ultimate issue[s] to be decided

by the trier of fact.” Fed. R. Evid. 704. Additionally,

witnesses can testify in more than one capacity. See United

States v. Castillo, 77 F.3d 1480, 1499 (5th Cir. 1996) (noting

that a summary witness could testify in multiple capacities).

Accordingly, Special Agent Gross could have testified as a lay

fact witness as well as a summary witness. Having reviewed both

Agent Gross’s and Lieutenant Blackwelder’s testimony, we find no

reversible error.

H. Magazine Article Admission

Fred Goodson, Carl Cleveland, and Bankston challenge the

district court’s admission of a magazine article titled “Lies,

Bribes and Videotape,” found in the FBI’s search of Fred

Goodson’s office. The district court admitted the article during

redirect examination of FBI Special Agent Gross and instructed

the jury that the article was being admitted not for the truth of

27 the matter asserted, but solely on the issue of the state of mind

of Fred Goodson, i.e., to contradict his assertions that he

lacked knowledge and sophistication about politics and the types

of transactions at issue. Evidentiary rulings are accorded

considerable deference on appeal; “error may not be predicated

upon a ruling which admits or excludes evidence unless a

substantial right of the party is affected.” Fed. R. Evid.

103(a); see United States v. Brito, 136 F.3d 397, 412 (5th Cir.

1998).

Fred Goodson and Cleveland contest the admissibility of the

article both as to relevance and as to prejudicial effect. Even

were the article both irrelevant and prejudicial, however, its

admission did not affect a substantial right of either Goodson,

Cleveland, or Bankston. First, the district court did not allow

introduction of the article by the Government until redirect

examination. Second, the district court permitted only “narrow

clarifying” references to the article in light of the defense’s

introduction, on cross examination, of other documents etc. that

had been found in the same folder as the “Lies, Bribes and Video

Tape” article. Third, the Government’s redirect regarding the

disputed article constituted less than four pages of transcript.

Fourth, on recross, the defense had the opportunity to question

Agent Gross in detail about the subject matter of the article and

elicited from him representations that the investigation

described in the article in no way involved “anybody in this

room.”

28 For these reasons, we find that the admission of the “Lies,

Bribes and Video Tape” article did not affect a substantial right

of any appellant.

I. Prosecutor’s Closing Remarks

All appellants claim that in his rebuttal argument the

prosecutor made improper and inflammatory remarks, inviting the

jury to convict the defendants in order to “make a change” and to

“start taking back [their] state.” Appellants argue that the

district court’s subsequent instruction failed to cure the taint

of the improper closing and that reversal is therefore

required.14

A criminal defendant bears a substantial burden when

attempting to demonstrate that improper prosecutorial comments

constitute reversible error. "’A criminal conviction is not to

be lightly overturned on the basis of a prosecutor's comments

standing alone.’" United States v. Lowenberg, 853 F.2d 295, 302

(5th Cir. 1988) (quoting United States v. Young, 470 U.S. 1, 11,

105 S. Ct. 1038, 1044 (1985)). Improper prosecutorial comments

require reversal only if the comments substantially affected the

defendant's right to a fair trial. See United States v. Murrah,

14 The district court, both at trial and in its opinion on defendants’ motions for new trial, recognized the impropriety of the prosecutor’s “make a change” closing. At the conclusion of the prosecutor’s argument, the court instructed the jury to disregard the prosecutor’s improper remarks: I would like to instruct you again that this case is not about the general conditions in the state of Louisiana. To the extent that Mr. Manger made reference to that in his closing argument, you are instructed to disregard the comments about the general condition of Louisiana state government as it relates to education or other issues.

29 888 F.2d 24, 27 (5th Cir. 1989). In evaluating the extent to

which prosecutorial comments affected a defendant's right to a

fair trial, three factors are considered: the magnitude of the

prejudicial effect of the remarks, the efficacy of any cautionary

instruction, and the strength of the evidence of the defendant's

guilt. See United States v. Casel, 995 F.2d 1299, 1308 (5th Cir.

1993).

Here, the inflammatory remarks, to which defense counsel

objected at trial, came at the end of the prosecutor’s rebuttal

argument. The improper prosecutorial comments responded to

improper arguments made by counsel for Rayburn. Any prejudicial

effect inhering to the Goodsons, Bankston, and/or Cleveland, it

seems, would have been substantially less than that attaching to

Rayburn. Rayburn’s acquittal therefore suggests that the jury

was not influenced by the improper comments.15

With regard to the efficacy of the district court’s

instruction, the court more than once instructed the jury to

disregard the improper arguments. The language the court adopted

when instructing the jury for the second time was in part

borrowed from the words of Bankston’s attorney. We find

sufficiently curative both the district court’s repeated

instruction to disregard the improper argument as well as its

caution to the jury that lawyer argument was not evidence.

15 Appellants argue that Rayburn’s “sympathy” acquittal is of little significance because he was 80 years old at the time of the trial. Rayburn, however, was not the only defendant acquitted of charges. The fact that each appellant was found not guilty on some counts suggests that the jury reached its verdict free of the taint of the prosecutor’s improper remarks. 30 Finally, as to the strength of the evidence of guilt, our

review of the trial record in its entirety reveals that the

evidence presented by the Government was sufficient to support

each of the convictions against each of the appellants. Thus, we

conclude that the prosecutorial comments did not substantially

affect the Goodsons’, Cleveland’s, or Bankston’s respective

rights to a fair trial.

J. Sufficiency of the Evidence

Fred Goodson, Maria Goodson, and Larry Bankston contest the

sufficiency of the evidence to support their respective

convictions. In evaluating the sufficiency of the evidence on

appeal, we consider the evidence in the light most favorable to

the Government, drawing all reasonable inferences in support of

the jury's verdict. See United States v. Lopez, 74 F.3d 575, 577

(5th Cir. 1996). The evidence is sufficient if a rational trier

of fact could have found the essential elements of the crime

beyond a reasonable doubt. See Jackson v. Virginia, 443 U.S.

307, 319, 99 S. Ct. 2781, 2789, 61 L.Ed.2d 560 (1979); United

States v. Gaytan, 74 F.3d 545, 555 (5th Cir. 1996). The evidence

need not exclude every reasonable hypothesis of innocence or be

wholly inconsistent with every conclusion except that of guilt,

and the jury is free to choose among reasonable constructions of

the evidence. See Lopez, 74 F.3d at 577.

We address the arguments raised by each appellant in turn.

1. Fred Goodson

31 Fred Goodson argues that the evidence is insufficient to

support his two-count conviction for mail fraud because it fails

to establish that he had the specific intent to commit fraud.

To establish a mail fraud violation under 18 U.S.C. § 1341,

the Government must demonstrate (1) a scheme to defraud, (2) the

use of mails to execute that scheme, and (3) the defendant's

specific intent to commit fraud. See United States v. Tencer,

107 F.3d 1120, 1125 (5th Cir. 1997). "Intent to defraud requires

an intent to (1) deceive, and (2) cause some harm to result from

the deceit." United States v. Jimenez, 77 F.3d 95, 97 (5th Cir.

1996). A defendant has the intent to defraud if he acts

knowingly with the specific intent to deceive for the purpose of

causing pecuniary "loss to another or bringing about some

financial gain to himself." United States v. Blocker, 104 F.3d

720, 732 (5th Cir. 1997).

According to Goodson, the mail fraud charges rested on two

premises: that he and Cleveland were the “true owners” of Truck

Stop Gaming, and that they hid that fact from regulators in order

to avoid a suitability investigation of their finances. Goodson,

on appeal, contests the sufficiency of the evidence only as it

relates to the second premise--Goodson and Cleveland’s avoidance

of a suitability investigation.

This second premise, however, does not constitute an

essential element of mail fraud. Instead, the desire to avoid a

suitability investigation relates merely to motive, representing

the Government’s theory as to why Cleveland and Goodson committed

32 the fraud. Because we have never required the Government to

prove nor the jury to find motive beyond a reasonable doubt, Fred

Goodson’s argument fails.

2. Maria Goodson

Maria Goodson challenges the sufficiency of the evidence for

her mail fraud conviction. She claims that the Government failed

to establish that she knowingly, and with specific intent to

defraud, participated in a scheme to hide either (1) the true

ownership interests of her father and Carl Cleveland in TSG, Ltd.

or (2) the 4.99% ownership interest held by Benny Rayburn, Jr.

Because the jury need only have found Maria Goodson guilty

beyond a reasonable doubt on one of the two potential schemes

underlying her mail fraud conviction, we address only the

evidence concerning Maria Goodson’s specific intent to conceal

the 4.99% ownership interest transferred to Benny Rayburn. The

Government presented the jury with a document dated August 1,

1994, signed by Maria Goodson in which she agreed to “assign,

sell, convey and deliver unto Benjamin B. Rayburn, Jr. a 4.99%

interest out of a 100% interest in the Truck Stop Gaming, Ltd.

partnership.” Evidence showed that the transfer of this interest

was not reported to the State Police in TSG, Ltd.’s 1995 license

renewal application, even though such minority purchases were

required to be reported.

Maria Goodson’s awareness of the transfer of ownership is

indicated by two pieces of evidence. First, she signed the

conveyance itself. Second, in a recorded conversation between

33 Maria Goodson and family accountant Joe Morgan, she described

BAJ, LLC, the limited liability company to which Rayburn

ultimately transferred his 4.99% interest, as having become a

4.9% partner. Accordingly, we find that the jury had sufficient

evidence to convict Maria Goodson for mail fraud.

3. Larry Bankston

Larry Bankston contests the sufficiency of the evidence as

to his conviction on two counts of violating the Travel Act, 18

U.S.C. § 1952 (1997). The first count involved an interstate

telephone call on June 20, 1995, from Fred Goodson to Meyer

Realty to set up what was alleged to have been a bribe in the

form of a “sham” rental of Bankston and his wife’s Gulf Shores

condominium. The second involved Fred Goodson’s use of an

interstate commercial carrier on June 22, 1995, to forward a

$1,555.01 check to Meyer Realty as payment for the condominium

rental.

The essential elements for a Travel Act conviction are:

(1) travel or use of the mail or any facility in

interstate or foreign commerce;

(2) with the specific intent to promote, manage,

establish, or carry on--or distribute the proceeds of--

unlawful activity; and

(3) knowing and willful commission of an act in

furtherance of that intent subsequent to the act of

travel or use of the mail or facility of interstate or

foreign commerce.

34 See United States v. Logan, 949 F.2d 1372, 1380-81 (5th Cir.

1991). Under Louisiana law, an elected official is guilty of

public bribery if he accepts anything of apparent present or

prospective value with the specific intent to be influenced in

his employment, position, or duty. See La. Rev. Stat. Ann.

§ 14:118 (West Supp. 1999).

Bankston attacks the sufficiency of the evidence on three

separate grounds: (1) insufficient proof that he had the

requisite intent to be influenced in his official conduct by the

condominium rental; (2) insufficient proof that the condominium

rental amounted to anything more than a legal gift; and (3)

insufficient proof that he committed an overt act in furtherance

of the alleged bribery after the interstate communications at

issue.

The evidence at trial does not support Bankston’s claim.

The evidence showed that in February 1995 Bankston and his wife

discussed establishing an arrangement whereby a proposed “renter”

would pay to use their Alabama condominium despite the renter’s

true intention not to do so. Records from Meyer Realty showed

that Fred Goodson rented the Bankstons’ condominium and paid for

the rental by check. Testimony from FBI agents revealed that the

Bankston family, not Goodson, used the condominium during the

rental week in question. Finally, the jury heard many

intercepted conversations between Bankston and others in which

Bankston indicated that he would use the power of his office to

protect Goodson’s video poker interests during the legislative

35 session. Based upon this evidence, we affirm Bankston’s

conviction on the two Travel Act counts.

K. Sentencing

1. Maria Goodson

a. Section 5K2.7 Upward Departure

Maria Goodson complains that the district court improperly

enhanced her offense level six points for a “significant

disruption of governmental function,” pursuant to U.S. Sentencing

Guideline section 5K2.7.16 She argues that the disruption

identified by the district court is not the type of “significant”

disruption that the Commission contemplated when drafting

section 5K2.7 and that, although the submission to a state agency

of one false application may disrupt the agency’s function, it

only does so in an “ordinary” sense. We disagree.

A district court has “wide discretion” in imposing a

section 5K2.7 upward departure. United States v. Hatch, 926 F.2d

387, 397 (5th Cir. 1991) (explaining that the Fifth Circuit has

repeatedly granted district courts “wide discretion to decide

whether aggravating factors exist to support an upward

16 Section 5K2.7 provides in part: If the defendant's conduct resulted in a significant disruption of a governmental function, the court may increase the sentence above the authorized guideline range to reflect the nature and extent of the disruption and the importance of the governmental function affected. Departure from the guidelines ordinarily would not be justified when the offense of conviction is an offense such as bribery or obstruction of justice; in such cases interference with a governmental function is inherent in the offense, and unless the circumstances are unusual the guidelines will reflect the appropriate punishment for such interference. 36 departure”). The appropriateness of a departure turns on the

importance of the government function impacted, not the degree of

the impact. Cf. Hatch, 926 F.2d 387 (affirming a 5K2.7 upward

departure based on the defendant, a former Louisiana sheriff,

authorizing payments, representing a portion of the sheriff

office’s operating budget, to a purported jail construction

project consultant); United States v. Garcia, 900 F.2d 45 (5th

Cir. 1990) (holding that an upward departure was warranted and

reasonable where postal inspectors recovered 248 first-class

letters from the possession of a defendant postal employee).

Here, when Maria Goodson submitted TSG, Ltd.’s false 1995 renewal

application, failing to disclose any ownership interest held by

Fred Goodson, Carl Cleveland, or Benny Rayburn, she effectively

shielded those men from suitability analysis. In doing so, Maria

Goodson thwarted Louisiana’s video poker regulatory and licensing

scheme designed to investigate the honesty and integrity of

prospective license holders. Based upon the importance of that

regulatory scheme, we find that the district court did not abuse

its discretion in imposing a section 5K2.7 upward departure.

b. Loss Calculation

The Government, in its cross-appeal, contends that the

district court miscalculated Maria Goodson’s offense level.

Maria Goodson was convicted of one count of mail fraud in

connection with TSG, Ltd.’s 1995 license renewal application.

The district court sentenced her in accordance with section 2F1.1

of the Sentencing Guidelines. That section specifies a base

37 offense level of six for fraud and provides for incremental

increases in the offense level depending on, inter alia, the

amount of loss caused by the fraud. See U.S. Sentencing

Guidelines Manual § 2F1.1 (1997). In calculating Maria Goodson’s

offense level, the court found that the State of Louisiana had

suffered no “actual or intended monetizable loss . . . by virtue

of Ms. Goodson’s having fraudulently obtained the license.”

Accordingly, the district court did not increase Ms. Goodson’s

base offense level for any loss.

The Government asserts that the district court erred in

finding that the State of Louisiana suffered no loss and in

failing to use defendant’s gain as an alternative method of

valuation. The Government asserts that, in keeping with

section 2F1.1's Application Note 8, Maria Goodson’s base offense

level should have been increased eleven levels based upon TSG,

Ltd.’s $1.4 million annual gain. See U.S. Sentencing Guidelines

Manual § 2F1.1 App. Note 8 (1997); see also United States v.

Smithson, 49 F.3d 138, 144 (5th Cir. 1995) (recognizing that

under section 2F1.1, Application Note 8, a sentencing court may

utilize the offender’s gain as an alternative valuation method

for assessing the amount of loss when the loss is difficult to

determine).

In its sentencing cross-appeal, the Government urges use of

TSG, Ltd.’s $1.4 million annual revenues as the appropriate

valuation of Maria Goodson’s gain, yet throughout trial and all

subsequent forfeiture proceedings, the Government argued that

38 Maria Goodson, in fact, was not the “true owner” of TSG, Ltd.

The verdict of the jury as well as the district court’s judgment

of forfeiture confirmed the success of the Government’s hidden

ownership theory of prosecution. Accordingly, we consider Fred

Goodson and Carl Cleveland the true owners of TSG, Ltd. and agree

that TSG, Ltd.’s $1.4 million gain could not be attributed to

Maria Goodson, a non-owner. Therefore, the district court did

not err in refusing to use TSG, Ltd.’s $1.4 million annual

revenues as an alternative valuation method for loss pursuant to

section 2F1.1.

2. Bankston

a. Eleven-level Enhancement

Bankston challenges as unsupported by the evidence the

district court’s eleven-level increase in his base offense level

under section 2C1.1(b)(2)(A). This Court examines a district

court's factual findings only for clear error and affords great

deference to the court's application of the Guidelines to those

facts. See United States v. Snell, 152 F.3d 345, 346 (5th Cir.

The district court, relying on the Presentence Report

(“PSR”) as well as facts elicited at trial and the forfeiture

proceeding, based Bankston’s offense level enhancement on its

calculation of the “expected benefit to be received by the

individual paying the bribe,” namely Fred Goodson.17 The

17 The Guidelines assign punishment at the greatest of three calculations: (1) the value of the bribe; (2) the value of the benefit to be received; or (3) if the offense involved payment

39 district court found that the benefit to be received by Goodson

in return for the bribe was protection for a two-year period from

legislation that would otherwise interfere with the continued

operation of his video poker business. The district court,

recognizing that evidence at trial supported a finding that

Goodson held a 50% interest in TSG, Ltd., determined that the

expected benefit to be received by Goodson was one-half the

profits to TSG, Ltd. for a two-year period, or $1.4 million. We

find the district court’s “Reasons for Sentencing of Larry S.

Bankston” to be thorough and well-reasoned. Bankston’s assertion

of error is meritless.

b. Expected Benefit

The Government, on cross-appeal, argues that the district

court erroneously reduced the expected benefit to be received for

the bribe to the ownership percentage in TSG, Ltd. of the briber,

Fred Goodson. Specifically, the Government contends that the

district court erred in limiting “benefit” as used in section

2C1.1(b)(2)(A) to “personal benefit,” failing to consider the

actual benefit sought, the continued unfettered operation of the

RICO enterprise. The issue raised by the Government is one of

first impression for this Circuit.

It is well established that sentencing courts are bound by

“commentary in the Guidelines Manual that interprets or explains

a guideline . . . unless it violates the Constitution or a

for the purpose of influencing an elected official, an eight- level increase. See U.S. Sentencing Guidelines Manual § 2C1.1 (1997).

40 federal statute, or is inconsistent with, or [is] a plainly

erroneous reading of, that guideline.” See Stinson v. United

States, 508 U.S. 36, 38, 113 S. Ct. 1913, 1915 (1993). The

Commentary to section 2C1.1 states that for deterrent purposes,

the punishment should be commensurate with the “gain to the payer

or the recipient of the bribe,” whichever is higher. As

contemplated by the Commission, the “gain to the payer” is the

“value of the benefit received or to be received.” Thus, the

expected benefit to be received as referenced in section 2C1.1 is

the benefit to the payer of the bribe.

Resolution of the Government’s cross-appeal, therefore,

turns on the identity of the “payer.” If Fred Goodson, in his

individual capacity, bribed Bankston, then the district court

properly limited “expected benefit” to an amount equivalent to

Goodson’s personal benefit. If, on the other hand, Fred Goodson,

as agent for TSG, Ltd., bribed Bankston, then the Government

would be correct that the expected benefit ought to be measured

by the profits to the RICO enterprise.

The issue of the identity of the payer is a question of fact

best resolved by the district court. Because the evidence

presented at trial could support either the individual-capacity

or RICO-enterprise theory of bribery, we cannot conclude that the

district court committed clear error in determining that the

personal benefit to Goodson was the appropriate valuation of the

expected benefit to be received.

L. RICO Forfeiture

41 A person who violates RICO must forfeit any interest

acquired or maintained in violation of the statute, any

enterprise established or conducted in violation of RICO, and any

property constituting or derived from proceeds obtained in

violation of RICO. See 18 U.S.C. § 1963(a). Here, the

Government sought, and the district court ordered, the forfeiture

of both Fred Goodson’s and Carl Cleveland’s interests in TSG,

Ltd., in an amount equal to the proceeds received by TSG, Ltd.

between July 1994 and August 1995. Fred Goodson,18 Carl

Cleveland, Maria Goodson, Alex Goodson, and TSG, Inc. appeal,

albeit on different grounds, the district court’s judgment of

With regard to Fred Goodson’s and Carl Cleveland’s claim, we

note that the district court ordered that the proceeds of TSG,

Ltd. be forfeited pursuant to 18 U.S.C. § 1963(a)(1) and (a)(2),

as well as (a)(3). Goodson, though, attacks only two of these

three grounds. He raises no error as to the forfeiture of

proceeds under § 1963(a)(3). Given the identity of proceeds

forfeited pursuant to each theory, we affirm the district court’s

August 1997, forfeiture order.

Maria Goodson, Alex Goodson, and TSG, Inc. argue that the

district court erred in failing properly to apply Louisiana law

to the question of ownership of TSG, Ltd. and TSG, Inc. They

assert that no state law exists that would support the district

18 Carl Cleveland incorporates Fred Goodson’s forfeiture arguments.

42 court’s ruling that Fred Goodson and Carl Cleveland were the

“true owners” of TSG, Ltd.

Section 1963(l)(6)(A) provides petitioners the opportunity

to recoup forfeited property if they can establish by a

preponderance of the evidence either (1) that they have a current

legal right, title, or interest in the property and that the

right, title, or interest was vested in them instead of the

defendant at the time of the commission of the RICO offenses; or

(2) that they have a current legal right, title, or interest in

the property and that the right, title, or interest was superior

to the right, title, or interest of the defendant at the time of

the commission of the RICO offenses. See 18 U.S.C.

§ 1963(l)(6)(A). We review the district court's findings of fact

under the clearly erroneous standard of review and the question

of whether those facts constitute legally proper forfeiture de

novo. See United States v. Marmolejo, 89 F.3d 1185, 1197 (5th

Cir. 1996).

Maria and Alex Goodson assert that they are the record

owners of TSG, Ltd. and its corporate general partner, TSG, Inc.

They point to TSG, Ltd.’s Agreement of Partnership, which they

both signed and which was filed with the Louisiana Secretary of

State, as evidence of their current and superior interest in the

forfeited companies. They urge us to find that the district

court improperly disregarded their partnership agreement when it

concluded that Fred Goodson and Carl Cleveland were the true

owners of TSG, Ltd.

43 We agree with the district court’s decision not to allow an

obviously false partnership agreement to be used to provide the

basis for a claim of interest under § 1963(l)(6)(A). As the

district court indicated, the jury’s verdict in the instant case

established that Fred Goodson, Maria Goodson, and Carl Cleveland

perpetrated a fraud on the State of Louisiana. The jury

necessarily found that Fred Goodson and Carl Cleveland were the

true owners of TSG, Ltd. and that Maria Goodson and her brother

Alex were straw people used in the sham to hide the true

ownership of TSG, Ltd.

Testimony at the October 31, 1997 evidentiary hearing to

determine the interests of Alex and Maria Goodson bolsters our

resolve not to allow them to assert ownership in the TSG entities

based upon their “sham” partnership agreement. With regard to

Alex Goodson, the district court found that his hearing testimony

revealed that he did not consider himself to have any real

interest in either TSG, Inc. or TSG, Ltd. Alex described his

involvement with the companies as someone executing an ownership

document as an agent of the company, in the capacity of a

nominee. His testimony revealed that he had no understanding of

the “contribution” that was attributed to him in the partnership

agreement for TSG, Ltd. As to Maria Goodson, the court found

that her testimony likewise “fell short of establishing that she

and her brother . . . were the true owners of the Truck Stop

Gaming entities.” In particular, Maria Goodson told the court

at the forfeiture hearing that at the time the companies were

44 formed and incorporated, she did not associate a company being

“in her name” with ownership. Equally problematic was a

conversation with Carl Cleveland in which she requested 1% of the

net profits of TSG, Ltd. If she had in fact been the owner of

the TSG entities, she would not have needed to ask Carl Cleveland

for an interest in a percentage of the companies’ profits.

In light of the above evidence, the district court properly

disregarded the “sham” partnership agreement. Consistent with

the detailed analysis provided in the district court’s April 1998

order, we conclude that Alex Goodson, Maria Goodson, and TSG,

Inc. failed to demonstrate by a preponderance of the evidence a

legal right, title, or interest in TSG, Ltd. Their appeal of the

district court’s April 1998 judgment of forfeiture, therefore,

fails.

III. CONCLUSION

Appellants raise an abundance of evidentiary, statutory, and

constitutional challenges, none of which warrant reversal. For

the reasons stated above, we affirm each Appellant’s judgment of

conviction and sentence as well as the judgment of forfeiture.

AFFIRMED.

45 46