                     UNITED STATES COURT OF APPEALS

                          FOR THE FIFTH CIRCUIT

                           __________________

                              No. 96-10464
                           __________________


     UNITED STATES OF AMERICA,
                                              Plaintiff-Appellee,

                                   versus

     STEVEN P. MOSER; LAVOYD WAYNE DOLLAR;
     FRANKLIN ROLLIN JOHNSTON; BILLY MACK O'NEILL;
     JERRY LYNN WILKINS; THOMAS D. GANDY,

                                              Defendants-Appellants.


            _____________________________________________

      Appeals from the United States District Court for the
                    Northern District of Texas
          ______________________________________________

                        September 18, 1997
Before GARWOOD, BENAVIDES, and STEWART, Circuit Judges.

BENAVIDES, Circuit Judge:

     This   direct   criminal     appeal    involves   six   appellants    who

challenge, among other things, the sufficiency of the evidence to

support their convictions, the jury instructions, the legality of

the search, and the district court's denial of their motion to

sever the trial.     Finding no error, we affirm.

I.   FACTS AND PROCEDURAL HISTORY

     In   February   of   1986,   Appellant    Franklin      Rollin   Johnston

(Johnston) was engaged in the real estate business and suffered

severe financial losses.     Johnston attributed those losses on the

downturn of the real estate market, oil business, and ultimately,

the failure of the banks.         After attending various seminars and
conducting research, he became convinced that the Federal Reserve

Act was illegal inasmuch as banks were creating money out of thin

air and lending only their "credit."

     After having met Appellant Billy Mack O'Neill (O'Neill) in

March of 1993, Johnston happened to meet O'Neill at a meeting

involving the subjects of banking and money in May of 1993.

O'Neill gave Johnston a packet of materials generated by the

"Family Farm Preservation" entity of Tigerton, Wisconsin.               The

packet   contained   several   court    cases,   blank   "certified   money

orders" (CMOs), and articles explaining that banks legally cannot

loan credit.   The CMOs provided that they were payable:

           on demand, money of account of the United
           States, as required by law in Sect. 20 of
           Coinage Act of 1792 from the time of official
           determination of the substance of said money:
           or, in U.C.C. 1-201(24) Credit Money.

The money order further provided that it was redeemable at full

face value when presented to L.A. Pethahiah in Tigerton, Wisconsin.

If a financial institution presented the money order to Pethahiah,

the institution would then receive a certified banker's check (CBC)

in the same amount as the CMO.         The CBC also contained the above

limiting language.

     Johnston gave the packet of materials to Appellant Jerry Lynn

Wilkins (Wilkins), an attorney who Johnston had previously retained

to do some work.     Wilkins examined the materials and then advised

Johnston, who in turn advised O'Neill, that he agreed with the

information in the packet.

     Johnston then formed USA First, an unincorporated business


                                   2
organization in Waxahachie, Texas.    Appellant Lavoyd Wayne Dollar

(Dollar), a businessman and long time friend of Johnston, owned

office space in Waxahachie and rented a suite of offices to

Johnston for USA First.    O'Neill worked for USA First, and Wilkins

moved his law office to the offices of USA First.     Johnston paid

Wilkins $500 each week for the work he did for USA First.   Each of

those four men used CMOs from the Tigerton packet in an attempt to

pay off debts with various lenders.

     Shortly thereafter, Johnston put together a packet almost

identical to the Wisconsin packet and began to sell it out of the

offices of USA First for $300.   The packet instructed that the user

could fill out the six enclosed CMOs in any amount to pay off

particular debts.    Like the Wisconsin CMOs, these CMOs contained

the above-quoted limiting language. The packet instructed the user

to include 2-3 months extra interest and to ask for return of any

overpayment.   The institution to which a CMO was sent by certified

mail was instructed to forward the CMO for redemption to O.M.B.-

W.D. McCall at a post office box in Waxahachie.1    The institution

would then receive in return an item entitled "certified banker’s

check" (CBC) in the same amount as the CMO.        The CBC would be

signed by O'Neill.    The institution was instructed to credit the

CBC to the debtor's account.      When the CBC was returned to USA

First, O'Neill would stamp it "paid in full."    There was no money

behind the CMOs or CBCs.   The packet itself referred to the CMOs as

     1
          The "O.M.B." designation was Billy Mack O'Neill's
initials reversed. The post office box was controlled by USA
First.

                                  3
"pretend money."

     The Texas Department of Banking sent a cease and desist letter

to O.M.B.-W.D. McCall, admonishing that it had information that the

business was violating state law regarding the unlicensed sale of

payment instruments.    The letter explained that such a violation

was a third degree felony.      The warning in the letter was ignored,

and USA First continued to sell the packets containing the CMOs.2

     In December of 1993, the offices of USA First were searched

and records were seized. Shortly thereafter, Leo Hoad (Hoad) began

working for USA First.         Apparently, O'Neill and Hoad had some

differences, and as a result, O'Neill left USA First.

     Meanwhile,    Appellant    Steven   P.   Moser   (Moser),   who   owned

several pieces of mortgaged real property in Pennsylvania, was

experiencing financial difficulties and, through a friend, heard of

USA First in Texas.    Moser subsequently talked with Johnston and

purchased a packet.    He used several of the CMOs in an effort to

discharge his debt.

     Appellant Thomas D. Gandy (Gandy) learned of USA First through

a trust company employee in Kansas.       Gandy purchased a packet, and

used the CMOs as payments for existing loans.          All six appellants

attempted to use the CMOs.      Ultimately, over 800 CMOs were issued

by O.M.B.-W.D. McCall with a purported face value of over $61

million.

     A grand jury charged the six appellants with one count of

     2
          In fact, the cease and desist letter was placed on the
bulletin board at USA First as an object of disdain.


                                    4
conspiracy to commit mail fraud and several substantive counts of

mail fraud in violation of 18 U.S.C. §§ 371, 1341, and 2.              The jury

found Wilkins, Johnston, Dollar, and O'Neill guilty as charged.

The jury acquitted both Moser and Gandy of conspiracy but found

Moser guilty of one substantive count of mail fraud and found Gandy

guilty of two substantive counts of mail fraud.

          The   district   court   sentenced   the   appellants   as   follows:

Johnston and Wilkins, 96 months; Dollar and Moser, 21 months;

O'Neill, 70 months; Gandy, 4 months and 16 days.

II.       ANALYSIS

          A.    SUFFICIENCY OF THE EVIDENCE

          All the appellants argue that the evidence is insufficient to

sustain their convictions.3           Johnston, Wilkins, and Dollar were

convicted of one count of conspiracy to commit mail fraud in

violation of 18 U.S.C. § 371 and substantive counts of mail fraud

in violation of 18 U.S.C. § 1341 (Johnston, two counts; Wilkins,

seven counts; and Dollar, five counts).                Gandy and Moser were

acquitted of the conspiracy count but convicted of mail fraud

(Gandy, two counts; Moser, one count).

          When reviewing the sufficiency of the evidence, this Court

views all evidence, whether circumstantial or direct, in the light

most favorable to the Government with all reasonable inferences to

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

      3
          O'Neill attempts to adopt by reference Gandy's arguments
that the evidence is insufficient to sustain his convictions.
Because these are fact-specific challenges, O'Neill will not be
permitted to adopt these arguments by reference. United States v.
Alix, 86 F.3d 429, 434 n.2 (5th Cir. 1996).

                                        5
Salazar, 958 F.2d 1285, 1290-91 (5th Cir.), cert. denied, 506 U.S.

863, 113 S.Ct. 185 (1992).   The evidence is sufficient to support

a 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.    United

States v. Faulkner, 17 F.3d 745, 768 (5th Cir.), cert. denied, 513

U.S. 870, 115 S.Ct. 193 (1994).

     To prove a violation of the mail fraud statute, 18 U.S.C. §

1341, the Government must prove beyond a reasonable doubt that

there was (1) a scheme or artifice to defraud, (2) specific intent

to commit fraud, and (3) use of the mails for the purpose of

executing the scheme to defraud.      United States v. Shively, 927

F.2d 804, 813-14 (5th Cir.), cert. denied, 501 U.S. 1209, 111 S.Ct.

2806 (1991). "Intent to defraud requires an intent to (1) deceive,

and (2) cause some harm to result from the deceit."     Jimenez, 77

F.3d at 97 (citation omitted).        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."     Id.

     A conviction for conspiracy under 18 U.S.C. § 371 requires the

Government to prove beyond a reasonable doubt (1) an agreement

between two or more persons, (2) to commit a crime against the

United States, and (3) an overt act in furtherance of the agreement


                                  6
committed by one of the conspirators.   United States v. Krenning,

93 F.3d 1257, 1262 (5th Cir. 1996).

     1.   Johnston

     Johnston argues that his offer of payment in kind is an

accepted banking practice and that the CMO and the CBC "could be

valid if they had been accepted by the financial institution."   He

contends that if the bank had accepted the offer of payment he

would not have been guilty of mail fraud.   He then reasons that as

a matter of law he cannot be guilty of conspiracy to commit mail

fraud and mail fraud simply because the bank decided not to accept

his offer of payment.   This argument is specious.   The evidence at

trial clearly established that the CMOs and CBCs underlying his

convictions are worthless.    His convictions do not rest on the

bank's decision to reject his offer of payment because that is not

an element of the offenses.   He does not otherwise challenge the

sufficiency of the evidence to support his convictions.        This

argument is without merit.

     2.   Dollar

     Dollar challenges the evidence to support his convictions for

conspiracy and mail fraud, arguing that the Government failed to

prove that he had the intent to defraud.     He contends that the

principals of USA First did not inform the users of the packet that

they were engaging in a fraudulent act and that it was not manifest

from the packet itself. He concedes that the materials advised the

user not to tell the bank that he was using pretend money just like




                                 7
the banks were using pretend money,4 but he nonetheless asserts

that this statement in itself does not reveal that the use of the

CMOs was fraudulent. He further asserts that the "statement was in

accord with USA First's theory that banks were unlawfully lending

their credit; therefore, their debtors could respond in kind."

(emphasis added).         Dollar's argument proves too much.             In other

words, if the debtor is responding in kind to the bank's illegal

conduct, the         packet   is   at   least    implicitly    stating   that   the

debtor's conduct also is illegal.

       In any event, viewing the evidence in the light most favorable

to the verdict, the evidence is sufficient to show the requisite

intent.        In addition to the statement regarding the "pretend

money," the jury could infer knowledge from the fact that Dollar

paid $300 for a packet of materials that included money orders that

could be filled out for any amount of money.                   Moreover, Dollar

ignores that, after his CMOs were rejected, he filed a $49 million

lien       against   a   bank's    employee.5       Finally,    although   Dollar

testified that he had no intent to defraud, the jury obviously

found his testimony incredible.                 The evidence is sufficient to


       4
          The packet advised the user that "just like in the
children's story about the Emperor's new clothes, do not mention
that your current credit money, the negotiable instrument, is
pretend money, only speak of the bank's negotiable instruments as
being pretend money or only promises while yours are according to
U.C.C. law."

       5
          Dollar testified that the $49 million figure was "[j]ust
a number that we came up with."     It was "just a figure that I
pulled out of the air."


                                          8
support Dollar's convictions.

     3.   Gandy

     Gandy challenges both the sufficiency of the evidence to show

(1) that he had specific intent to defraud and (2) that the mailing

was in furtherance of the scheme to defraud.      In regard to his

first challenge, Gandy states that his defense at trial was that he

himself was a victim of the scam perpetrated by USA First and that

he never intended to defraud anyone.    Specifically, Gandy asserts

that he believed in good faith that he was simply refinancing his

home at a lower interest rate through W.D. McCall.

     At trial, Gandy called Jay Newland, who worked for Continental

Trust Company in Wichita, as a witness.   Newland testified that he

had informed Gandy that USA First was providing low interest loans

and sent off for a packet that Gandy ultimately purchased.    Gandy

believed the CMOs could work because a mutual acquaintance, Lonnie

Canon, had used the CMOs to successfully discharge a debt.

     Gandy further asserts that the evidence shows that even when

he experienced problems with the CMOs, he still believed he could

obtain refinancing through USA First. He attributes this belief to

the representations of Hoad, who led Gandy, among others, to

believe that W.D. McCall was going to establish its own bank in

Panama.   As late as April of 1994, Hoad sent a letter to Gandy

indicating that he had been preliminarily approved for a loan of up

to $200,000. Hoad kept asserting that refinancing was right around

the corner.   Gandy also relies on the fact that he paid off all his

loans prior to the prosecution of this case.


                                  9
     The Government responds that Gandy knowingly used the CMOs to

erase a debt that had bought him a valuable asset and then insisted

that the lender was obligated to accept the bogus payment, accusing

the lender of criminal fraud and threatening “non judicial remedies

through the Uniform Commercial Code” against the institution's

lawyer personally.   The jury certainly could have found that this

evidence contradicted Gandy's defense of good faith and supported

a finding of his intent to defraud.

     Further, as discussed above, the packet6 contained language

referring to the CMOs as "pretend money" and warned the user not to

refer to the CMOs as pretend money.          Additionally, the record

reveals that in December of 1993, after learning there was a

problem with the CMO he submitted to Union National Bank, Gandy

represented to a loan officer that "he had used [W.D. McCall]

several times in the past [and] had not had any problems with them

. . . and that he had paid good money for [those] checks. . . ."

Contrary   to   Gandy's    representation,   the   evidence   at   trial

demonstrated that Gandy had indeed been put on notice in November

of 1993 that a CMO he submitted to Mulvane State Bank was not being

accepted as payment.      Thus, viewed in the light most favorable to

the verdict, the evidence demonstrates that Gandy had the specific

intent to defraud.

     Gandy next argues that there is insufficient evidence to

establish that the mailings were used for the purpose of executing


     6
           Gandy's exhibit 1A.


                                   10
the scheme to defraud because the mailings alleged in counts 15 and

16 occurred after the alleged scheme had come to fruition, which he

defines as occurring when the loan was deemed paid in full.

     On November 12, 1993, Gandy submitted a CMO for $66,750 to

Wichita Federal Savings & Loan.           On November 15, 1993, Wichita

Federal Savings & Loan released Gandy from any obligation on his

loans and notified him they were paid in full.          Count 15 alleged

that on December 6, 1993, a CBC in the amount of $66,750 was mailed

by W.D. McCall to Wichita Federal Savings & Loan.        Count 16 alleged

that on January 11, 1994, a letter was mailed to Wichita Federal

Savings in connection with the scheme.

     We reject Gandy's premise that the scheme came to fruition

when the savings & loan initially notified him that his loan was

paid in full on November 15, 1993.         As the evidence at trial made

abundantly clear, that was not the end of Gandy's efforts to make

the scheme succeed.     Although the receipt of the bogus CMO by the

savings & loan caused it to send the release of the loan, the

subsequent mailings of the CBC and the letter were "incident to an

essential part of the scheme."       Schmuck v. United States, 489 U.S.

705, 109 S.Ct. 1443, 1448 (1989).         We therefore conclude that the

evidence was sufficient to support the substantive counts of mail

fraud.

     4.      Moser

     Moser     argues   that   the   letter   that   underlies   his   sole

conviction for mail fraud does not further the alleged scheme to

defraud.     The letter was from O'Neill to Wayne Paul (Paul), an


                                     11
officer of Woodlands Bank.     Paul testified that Moser had five

loans at Woodlands Bank.    In November 1993, Moser was behind in

making payments, and the bank received a mailing from Moser with a

letter stating that the enclosed CMO constituted:

          payment in full, on demand of the United
          States, as required by law at USC 371, from
          the time of official determination, as
          required by law at USC 371, from the time of
          official determination of the substance of
          said money, or in U.C.C. 1-202(24) credit
          money. . . . This certified money order is
          with a Private concern and must be mailed to
          O.M.B. W.D. McCall, P.O. Box 954, Waxahachie,
          Texas 75165.

     Paul testified that the money order looked suspicious and that

he did not understand the letter.     The bank then sent the CMO to

the Waxahachie address, enclosing a letter questioning the validity

of the CMO.

     In response, O'Neill sent the letter that is the mailing that

is alleged in count 14.    That letter provided in part that:

          I truly can understand your concern --
          especially when your own regulatory laws
          require you to act within 24 hours or "before
          midnight" and seventy-two hours then changing
          from default to unlawful conversion.     Also,
          the fact that millions of people have learned
          about the fraud perpetrated by the Federal
          Reserve System (a private corporation) through
          you and your "bank."      Primarily, they are
          angry that you made "loans of credit" with no
          lawful consideration from you from the
          beginning.

          You created-from-thin-air-credit-loan of bad-
          check-loan of credit was bad enough, but you
          socked it to them with Usury when you had
          nothing of intrinsic value to charge interest
          on.   wow! what a deal!

          You will find enclosed a Certified Bankers
          Check in the amount of $227,400.00 and your

                                 12
            accommodating signature will suffice to cancel
            the Certified Money Order now in your
            possession. You shall credit your customer,
            Steve Moser, with this amount and give him
            clear title to whatever you have a lien
            against that he is tendering payment on.

     Moser argues that the tenor and language of the letter does

not attempt to lull the victim into a false sense of security.     He

contends that "[t]he letter did not help the plan succeed; instead

it created a risk of exposing the alleged scheme."      (emphasis in

brief).    Moser makes much of the fact that Paul testified that he

was not "impressed" with the letter.     We have rejected a similar

claim.    In United States v. Shively, this Court explained that the

failure of the letter to in fact lull the institution does not

relieve a defendant of criminal liability.          927 F.2d at 815.

Additionally, we stated that viewed in the light most favorable to

the verdict, a reasonable juror could have concluded that the

letter was intended to lull the bank.   Any delay as a result of the

letter would allow the scheme to continue.    Id.

     Likewise, in the instant case, any delay caused in foreclosure

proceedings, or the like, would allow the scheme to continue.

Moreover, although we understand Moser's argument, it would be

absurd to conclude that the letter, which expressly directs the

bank to credit Moser's account, was not sent for the purpose of

executing the scheme.

     Moser further asserts that the letter could not have aided in

the execution of the scheme in that it was more likely to cause

detection and deter any use of the CMO or CBC.      The Supreme Court

has rejected this view, holding that "[t]he relevant question at

                                  13
all times is whether the mailing is part of the execution of the

scheme to defraud as conceived by the perpetrator at the time,

regardless of whether the mailings later, through hindsight, may

prove to have been counterproductive and return to haunt the

perpetrator of the fraud." Schmuck v. United States, 489 U.S. 705,

109 S.Ct. 1443, 1449-50 (1989).

       Moser next asserts that there is no evidence that he was aware

of the letter sent by O'Neill until he received a copy of the

government's exhibits in September of 1995.         "This court has held

that when an individual does an act with the knowledge that the use

of the mails will follow in the ordinary course of business, or

when such use can reasonably be foreseen, even though not actually

intended, then he/she causes the mails to be used."          Shively, 927

F.2d   at   815   (internal   quotation   marks   omitted)   (emphasis   in

opinion).    Here, it was reasonably foreseeable to Moser when he

sent the CMO that the use of the mails would follow in the ordinary

course of business at USA First.          Moser's claim of insufficient

evidence is without merit.

       5.    Wilkins

       Wilkins continues to argue that the CMOs were not fraudulent

instruments because it was credit for credit. The evidence clearly

demonstrated that the CMOs submitted were worthless and that the

users submitted those CMOs in an attempt to discharge real debts

and keep valuable assets.       Wilkins also argues that the evidence

shows that he was simply a legal advisor.            Wilkins ignores the

evidence that he used a CMO in the amount of $137,700 in an attempt


                                    14
to pay off his home mortgage.   Wilkins is not entitled to relief on

this claim.

     B.   MOTION TO SUPPRESS

     This Court reviews de novo the determination whether a search

or seizure was reasonable under the Fourth Amendment.        United

States v. Seals, 987 F.2d 1102, 1106 (5th Cir.), cert. denied, 510

U.S. 853, 114 S.Ct. 155 (1993).   The evidence must be reviewed most

favorably to the prevailing party.     United States v. Shabazz, 993

F.2d 431, 434 (5th Cir. 1993).

     Johnston and Wilkins argue that the district court erred in

failing to suppress the evidence seized from the business premises

of USA First because the search warrant was a "general warrant,"

which gave the agents discretion to determine which items were to

be seized.    "A warrant must particularly describe the place to be

searched and the person or things to be seized."    United States v.

Kimbrough, 69 F.3d 723, 727 (5th Cir. 1995), cert. denied, 116

S.Ct. 1547 (1996).     To determine whether the description of the

items to be seized is sufficient, "a court must inquire whether an

executing officer reading the description in the warrant would

reasonably know what items are to be seized."    Id.

     In the present case, the items to be seized were described in

exhibit B, which was attached to the search warrant:

     Records relating to the production, advertising,
     ordering, sale, mailing and shipment of material involved
     in the use of "Certified Money Orders" by U.S.A. First
     and O.M.B., W.D. McCall.       Such records, files and
     promotional material include but are not limited to
     promotional material advertising the money orders,
     printed material sold to those responding to the offer,
     listing of individuals purchasing the material, records

                                  15
     concerning the receipt of payment and shipment of orders,
     financial records including but not limited to all
     original canceled checks, and other items such as
     printing and reproduction equipment, all concerning the
     operation of U.S.A. First, which is property constituting
     evidence of the commission of a criminal offense; the
     fruits of the crimes; and property designated and
     intended for use and which is and has been used as a
     means of committing an offense concerning a violation of
     Title 18, United States Code, Section 1341.

     Contrary to the appellants' contentions, the search warrant

meets    the   particularity   requirement.   The   above   language

sufficiently limited the agents' discretion by instructing them

what items were to be seized. Kimbrough, 69 F.3d at 727.7

     Wilkins next claims that the search was unreasonable because

the agents executing the warrant violated the "knock and announce"

rule contained in the Fourth Amendment and 18 U.S.C. § 3109.8

"Under both the Fourth Amendment and the `knock and announce'

statute, defendants bear the initial burden of establishing that an


     7
          Johnston asserts that the affidavit was not attached to
the warrant during the search and that the warrant did not
expressly reference the affidavit. See United States v. Layne, 43
F.3d 127, 132 (5th Cir.) (recognizing that the test for
particularity may be satisfied with supporting affidavits if
warrant refers to affidavits), cert. denied, 514 U.S. 1077, 115
S.Ct. 1722 (1995).     The warrant does, however, refer to the
affidavit as establishing probable cause.       More importantly,
exhibit B (not the affidavit) was the document that limited the
agents' discretion by describing with sufficient particularity the
types of items to be seized, and exhibit B was attached to (and
expressly referenced by) the search warrant.
     8
           Section 3109 provides:

          The officer may break open any outer or inner door
     or window of a house, or any part of a house, or anything
     therein, to execute a search warrant, if, after notice of
     his authority and purpose, he is refused admittance or
     when necessary to liberate himself or a person aiding him
     in the execution of the warrant.

                                  16
unannounced entry actually occurred."              United States v. Fike, 82

F.3d 1315, 1323 (5th Cir.), cert. denied, 117 S.Ct. 241 (1996).

Wilkins acknowledges that this claim was not raised in the district

court. Wilkins cannot show plain error in regard to this obviously

fact-based claim. See United States v. Calverley, 37 F.3d 160 (5th

Cir. 1994), cert. denied, 513 U.S. 1196, 115 S.Ct. 1266 (1995);

United States v. McCaskey, 9 F.3d 368, 376 (5th Cir. 1993), cert.

denied, 511 U.S. 1042, 114 S.Ct. 1565 (1994).

     C.   ADMISSION OF EVIDENCE

     This Court reviews the admission of evidence for abuse of

discretion.     United States v. Coleman, 997 F.2d 1101, 1104 (5th

Cir. 1993), cert. denied, 510 U.S. 1062, 114 S.Ct. 735 (1994).

Moser and Gandy argue that the district court erred in admitting

evidence that Allan Kramer (Kramer), an unindicted coconspirator,

used an O.M.B.-W.D. McCall CMO to purchase a residence from Mark

Fetzer.       They   argue   that    the       evidence   was   irrelevant   and

prejudicial.     This conduct was alleged in the indictment as an

overt act under the heading of "Thomas Gandy."                   At trial, the

Government stated that this act should not have been under Gandy’s

name in the indictment.

     The witness who related this evidence testified on cross-

examination     that   he    did    not     know   either   Moser   or   Gandy.

Additionally, at trial, the Government conceded that it had no

evidence that Kramer knew Gandy, Moser, or Dollar.

     Both Moser and Gandy were charged with conspiracy to commit

mail fraud.      It appears that the only way this evidence was


                                          17
relevant to Moser or Gandy was to the extent that it was evidence

of the conspiracy.    Assuming arguendo that the evidence was not

relevant, Moser and Gandy cannot show prejudice because both were

acquitted of the conspiracy count.

     Moser and Gandy also argue that the district court erred in

allowing Donelle Smith to testify regarding a CBC (Government’s

exhibit 28) that Ted Schalesky used to pay off a note in the amount

of $232,234.62.   Smith’s testimony was introduced in connection

with count 17 of the indictment, which charged O'Neill with a

substantive count of mail fraud.

     The Government argues that there was no objection to Smith’s

testimony and thus this claim should be reviewed for plain error.

Moser correctly asserts that previously, in connection with another

witness’s testimony, an objection was made that the Government’s

Exhibit 28 “was not relevant to the case being tried."         That

objection was overruled and the exhibit was admitted into evidence.

However, as the Government states, there was no such objection to

Smith’s testimony.   Even assuming for purposes of this appeal that

the earlier objection preserved this claim, Moser and Gandy cannot

establish error, much less harmful error, in that Smith’s testimony

was introduced in support of count 17, a count that charged

O’Neill, not Moser or Gandy.

     Moser next argues that the district court erred in admitting

three documents that were used by the Government to impeach him

during his cross examination.      Moser describes the documents as

"common law court pleading[s] seeking to keep Woodlands [Bank] from


                                18
foreclosing on the collateral that the bank had on the loans that

were the subject matter of the criminal litigation."

      Moser   contends     that    the   evidence          and   cross    examination

regarding "these extrinsic offenses had little probative value on

the   charges   in   the   indictment         and    the    probative       value   was

substantially    outweighed       by   the    danger       of    unfair   prejudice."

Moser's contention that these documents are evidence of extrinsic

offenses is puzzling.           These documents were relevant in that

Moser's loan from Woodlands Bank was the subject of count 14 (which

charged Moser with a substantive count of mail fraud), and Moser's

loan from Williamsport National Bank is listed as an overt act in

the indictment.

      Moser repeatedly testified on direct examination that he used

the CMOs believing that he would in turn owe USA First the money it

sent in the form of a CBC to his other creditors.                    The jury could

have inferred from these exhibits that Moser did not intend to pay

his debts but instead sought to stop the bank's litigation by

invoking the jurisdiction of a bogus court.                       Additionally, the

district court found that packets used by USA First contained

information     similar    to     statements        made    in    the     Government's

exhibits, and thus the exhibits were relevant to the determination

whether Moser was involved in the conspiracy.                    Moser has failed to

show that the district court abused its discretion in admitting

these exhibits.      This issue is without merit.9

      9
          Wilkins also claims that the court improperly excluded
evidence regarding his "credit for credit" defense. The record
reveals that this defense was propounded at length, and the

                                         19
      D.     JURY INSTRUCTIONS

             (1) Deliberate Ignorance Instruction

      The district court charged the jury that: "While knowledge on

the   part    of    a     Defendant        cannot   be     established      merely     by

demonstrating       that    he     was     negligent,      careless,      or   foolish,

knowledge can be inferred if he deliberately blinded himself to the

existence of a fact." Gandy contends that this instruction was not

warranted by the evidence.

      "A   district       court     has    broad    discretion      in    framing     the

instructions to the jury and this Court will not reverse unless the

instructions taken as a whole do not correctly reflect the issues

and law."     United States v. McKinney, 53 F.3d 664, 676 (5th Cir.)

(citation and internal quotation omitted), cert. denied, 116 S.Ct.

261 (1995).     "The purpose of the deliberate ignorance instruction

is to inform the jury that it may consider evidence of the

defendant's charade of ignorance as circumstantial proof of guilty

knowledge."     Id.      (citation and internal quotation omitted).                   "It

should only be given when a defendant claims a lack of guilty

knowledge    and    the     proof     at    trial   supports       an    inference     of

deliberate indifference."             Id. at 676-77.          In the instant case,

both of those requirements were met.

      At   trial,       Gandy    claimed     a   lack    of   guilty     knowledge:    he

believed that he was simply refinancing his loans through the use

of the CMOs and CBCs.             In regard to an inference of deliberate



district court          properly     excluded       some      of   the    evidence     as
cumulative.

                                            20
indifference, the evidence from the USA First packet established

that Gandy was subjectively aware of a high probability of illegal

conduct.     The packet described the CMOs as "pretend" money and

advised that they could be used to satisfy actual debts. Materials

in the packet further advised threatening and harassing anyone who

questioned    the   CMOs   validity.    Despite   this   overwhelmingly

suspicious scheme, Gandy made no further inquiry as to the CMOs

validity, thus supporting an inference of deliberate indifference

on Gandy's part.    The district court did not abuse its discretion

in giving the deliberate indifference charge.

     (2) Mail Fraud Instruction

     In regard to the mail fraud instruction, the district court

charged the jury that, to find a defendant guilty, the Government

must prove beyond a reasonable doubt that:

           First: That the Defendant knowingly created
           or participated in a scheme to defraud, as
           alleged in the Indictment which is hereby
           referenced;

           Second:   That the Defendant acted        with   a
           specific intent to commit fraud.

           Third: That the Defendant mailed something or
           caused another person to mail something for
           the purpose of carrying out or attempting to
           carry out the scheme.


The court further instructed the jury that "[a] `scheme to defraud'

includes any scheme to deprive another of money, property, or of

the intangible right to honest services by means of false or

fraudulent pretenses, representations, or promises" and that "[a]

representation may be `false' when it constitutes a half truth, or


                                   21
effectively conceals a material fact, provided it is made with the

intent to defraud."

     All six appellants argue that "materiality" is an essential

element of the mail fraud statute, and therefore the district court

erred in failing to submit the question of materiality to the jury.

Appellants   argue   that   although      materiality   is   not   expressly

mentioned in the mail fraud statute, 18 U.S.C. § 1341, such an

element should be implied.10

     They rely on the Supreme Court's holding in United States v.

Gaudin, 515 U.S. 506, 115 S.Ct. 2310 (1995), that if materiality is

an element of the offense, the question must be submitted to the

jury along with the other essential elements.11          In Gaudin, which

involved the offense of making a false statement in violation of 18

U.S.C.    section   1001,   the   Supreme   Court   simply   assumed    that

materiality was an element of the crime because the issue was

uncontested.


    10
          They are vague, however, as to how materiality relates to
the elements of mail fraud. Some of the appellants seem to imply
that each mailing must contain a material misrepresentation. We
disagree. Our precedent makes clear that each mailing does not
even have to be fraudulent in itself. United States v. Shively,
927 F.2d 804 (5th Cir. 1991).     Therefore, if materiality is an
element, the question would be whether the scheme to defraud
involved material misrepresentations or omissions.      Cf. United
States v. Cochran, 109 F.3d 660, 667-68 n.3 (10th Cir. 1997)
(explaining that although materiality is not an independent element
of wire fraud prosecution, “fraud has always required that
misrepresentations or omissions be material to be actionable”).
     11
          A material statement was defined as having "`a natural
tendency to influence, or [be] capable of influencing, the decision
of the decisionmaking body to which it was addressed.'"     Gaudin,
115 S.Ct. at 2313 (brackets in opinion) (quoting Kungys v. United
States, 485 U.S. 759, 770, 108 S.Ct. 1537, 1546 (1988)).

                                     22
     Prior to Gaudin, in the context of a civil RICO claim, this

Court explained that materiality was not an element of the offense

of mail fraud.    Abell v. Potomac Insurance Co, 858 F.2d 1104, 1129

(5th Cir. 1988), vacated on other grounds, 492 U.S. 914, 109 S.Ct.

3236 (1989).     Since Gaudin, in the context of determining whether

the evidence was sufficient to sustain a mail fraud offense, this

Court has assumed without deciding that materiality was an element

of the offense of mail fraud.     United States v. Manges, 110 F.3d

1162, 1174 (5th Cir.), petition for cert. filed, (No. 97-315) (Aug.

19, 1997).

     Acknowledging that there was no objection to the instruction,12

the appellants argue that the omission constituted plain error.

United States v. Olano, 507 U.S. 725, 113 S.Ct. 1770 (1993).    The

first step in the Olano plain-error analysis is to determine

whether the district court's lack of a materiality instruction

constituted error.

     As this Court did in Manges, we assume for purposes of this

appeal that materiality is an element of mail fraud, and thus, the

district court's failure to submit it to the jury constituted

error, which satisfies the first prong of Olano.

     In regard to the second prong, we must determine whether the

error is "plain."      In Olano, the Supreme Court opined that the

error must be plain "under current law,"        but did not decide

whether that was at the time of trial or on appeal.    Recently, the

    12
          In his brief, although Johnston correctly states that he
adopted the objections of his codefendants to the court's charge,
none of his codefendants made this objection.

                                  23
Supreme Court clarified that "where the law at the time of trial

was settled and clearly contrary to the law at the time of appeal--

it is enough that an error be `plain' at the time of appellate

consideration."    Johnson v. United States, 117 S.Ct. 1544, 1549

(1997).

     As set forth above, prior to Gaudin, this Court opined that

materiality is not an element of mail fraud.             Abell; see also

United States v. Faulhaber, 929 F.2d 16, 18 (1st Cir. 1991)

(rejecting argument that jury should have received materiality

instruction because the only issue is whether there is a scheme or

artifice intended to defraud).      More importantly, subsequent to

Gaudin, this Court has yet to hold that materiality is an element

of the mail fraud statute.   It is clear to us that the error is not

"plain" under current law, that is, at the time of appellate

consideration.     See Johnson, 117 S.Ct. at 1549.         As such, the

appellants   are   constrained   from   showing   that   the   mail   fraud

instruction constituted plain error.



     E.   DISMISSAL OF JUROR

     During the instant trial, Wilkins' wife was arrested as she

attempted to carry a loaded handgun through a security checkpoint

at the courthouse.    Based on this incident, a motion for mistrial

was filed.    The district court held a hearing and thereafter

dismissed one juror who had been observed in the vicinity of the

security checkpoint around the time Mrs. Wilkins was stopped.

     Gandy, Wilkins, Moser, and O’Neill contend that the district


                                   24
court erred in failing to question either the dismissed juror or

the remaining jurors to determine whether any other juror had

witnessed the incident.   We are not persuaded.     The appellants'

assertion that another juror might have witnessed the incident is

pure conjecture.

     During the hearing, one of the defense attorneys testified

that when Wilkins' wife was stopped at the checkpoint it seemed

like the normal every-day search procedure, and he surmised that

the jurors did not know what was going on either.   As stated by the

district court, "[a] board-certified criminal defense attorney with

over twenty years in trial experience did not know what was

happening until he `squeezed it out of the security guards.'"

After listening to the evidence, the district court concluded that

the safest course of action was to dismiss the one juror who had

been identified without questioning other jurors and risking undue

emphasis on the matter. The court's final instructions to the jury

provided that anything seen or heard outside the courtroom was not

evidence and must be entirely disregarded.13   We conclude that the

district court did not abuse its discretion in its handling of the

allegation of outside influence on the jury.   See United States v.

Ramos, 71 F.3d 1150, 1153-54 (5th Cir. 1995), cert. denied, 116

S.Ct. 1864 (1996).

     F.   JOINDER AND SEVERANCE

          1.   JOINDER


     13
          Additionally, the court instructed the jury throughout
the trial not to partake of any media coverage of the trial.

                                  25
      Relying   on    Rule    8(b)     of    the   Federal    Rules    of    Criminal

Procedure, Gandy argues that he was misjoined for trial with the

other defendants because the allegations in the indictment and the

evidence at trial demonstrated not one single conspiracy, but

rather two or more separate and distinct conspiracies.                          At a

minimum, Gandy argues, there were two conspiracies: the first

involving the issuance of CMOs and CBCs by Leonard Peth, operating

as L.A. Pethahiah/Family Farm Preservation, in Tigerton, Wisconsin;

and the second involving the issuance of CMOs and CBCs by Johnston

and O’Neill, operating as O.M.B.-W.D. McCall, in Waxahachie, Texas.

      “To    determine       whether    an       indictment    charges       separate

conspiracies or a single conspiracy, we consider whether the

alleged     facts    reveal     a    substantial        identity      of    facts   or

participants. A single conspiracy can be found when the indictment

adequately shows a singular conspiratorial objective . . . .”

United States v. Lindell, 881 F.2d 1313, 1318 (5th Cir. 1989),

cert. denied, 493 U.S. 1087, 110 S.Ct. 1152 (1990).                 Simply because

the   indictment     does     not    charge      each   defendant     “with    active

participation in each phase of the conspiracy does not constitute

misjoinder.”    Id.

      In the instant case, the indictment alleged the following

scheme:

                 The defendants would issue or cause to be
            issued worthless certified money orders made
            payable to private citizens, banks, mortgage
            companies, and other financial institutions
            and creditors. The worthless certified money
            orders would be used to pay off personal and
            consumer debts, forestall foreclosure of
            property, and acquire real and personal

                                            26
           property, or title thereto, free and clear of
           any encumbrances.

                The defendants would direct the creditor
           to forward the worthless certified money order
           to the issuer to be redeemed at full face
           value.

                The issuer, upon receiving the worthless
           certified money order from the creditor, would
           issue a worthless certified banker’s check in
           the same amount as the worthless certified
           money order and send the worthless certified
           banker’s check back to the creditor.      L.A.
           Pethahiah and O.M.B., W.D. McCall were
           fictitious names used by the issuers.

                The defendants would demand that the
           creditor “zero balance” their accounts and
           threaten legal action, including filing liens
           against    the    creditors    and    criminal
           prosecution, if the worthies certified money
           orders or banker’s checks were not accepted as
           full payment of the debt and would file liens
           against and sue creditors, their employees,
           government officials and others to intimidate
           and harass them and cloud the title to
           properties.

      Although the scheme set forth in the indictment and the

evidence at trial did involve the issuance of CMOs and CBCs from

both L.A. Pethahiah and O.M.B.-W.D. McCall, we are satisfied that

there was only one conspiracy charged and proved.              The Government

did not attempt to prove that the defendants conspired with the

persons   involved    in   the   scheme    in   Wisconsin.      The    evidence

established that O’Neill obtained the information and materials

from the Wisconsin operation and gave them to Johnston, who had

Wilkins examine them.      Johnston then constructed a packet based on

the information from the Wisconsin materials.           The packet sent out

by   Johnston   referenced   Family    Farm     Preservation    in    Tigerton,

Wisconsin.      The   evidence    indicates     that   the   materials     from

                                      27
Wisconsin were used to launch this scheme and thereafter were

duplicated.     In short, the evidence supports the Government’s

theory of a single, overarching conspiracy, rendering joinder

appropriate.    Lindell, 881 F.2d at 1318.

     2.   SEVERANCE

     Johnston, Wilkins, Dollar, Gandy, and Moser argue that the

district court erred in refusing to hold separate trials.     Under

Rule 8(b) of the Federal Rules of Criminal Procedure, the initial

joinder of the appellants for trial was legitimate because they

were charged with having conspired with each other.14 United States

v. Elam, 678 F.2d 1234, 1250 (5th Cir. 1982).   The district court's

decision of whether to grant a severance under Rule 14 because of

prejudice is reviewable only for an abuse of discretion. United

States v. Stotts, 792 F.2d 1318, 1321 (5th Cir. 1986); see also

United States v. Salomon, 609 F.2d 1172, 1175 (5th Cir. 1980) (to

establish an abuse of discretion of the district court, a defendant

must show that he received an unfair trial and suffered compelling

prejudice against which the trial court was unable to afford

protection). An appellant must demonstrate something more than the

fact that a separate trial might offer him a better chance of

acquittal.     United States v. Berkowitz, 662 F.2d 1127, 1132 (5th

Cir. 1981).

          (a)    Dollar

     The district court denied the severance motion, opining that

     14
          As discussed above, we reject Gandy’s argument that he
was improperly joined with the other defendants because there were
two separate conspiracies.

                                  28
the defendants' defenses were not mutually antagonistic.     Dollar

concedes that this was true to a certain extent "because each

defendant, to some degree, contended that he believed in the USA

First material and did not possess an intent to defraud."        He

claims, however, that the defenses presented by the six appellants

fell into two distinct categories.    Dollar asserts that, besides

offering the defense of lack of intent, he argued to the jury that

he had been duped by Wilkins, Johnston, and O'Neill "into believing

that the USA First program would work."   Dollar argues that he was

prejudiced because "if the jury disbelieved the principals with

respect to their protestations that they believed in the USA First

program and possessed no intent to defraud, the jury would also

convict [him], disregarding his further defense that he was duped

into using the program by O'Neill, Johnston, and Wilkins."       We

disagree for two reasons.   First, the jury could have rejected the

defense of O’Neill, Johnston, and Wilkins and still believed that

Dollar was duped by them.   Second, and perhaps more importantly, on

cross examination, Dollar testified that Johnston was enthusiastic

about and believed in the validity of using the CMOs.      Dollar's

testimony also indicated that he thought Wilkins believed the CMOs

were legal.   Under those circumstances, Dollar’s defense is not in

conflict with the other defendants.

          (b)   Moser

     Moser argues that the district court erred because there were

two groups of defendants, the principals (Johnston, O'Neill, and

Wilkins), and the group in which he fell, users of the packets.


                                 29
The first group’s defense was defending the program.          On the other

hand, his defense was that the first group of defendants kept him

in the dark regarding the illegality of the CMOs.             Moser argues

that his defense conflicted with the first group’s defense and that

his    attorney   “specifically   rejected   trying     to    defend    the

allegations the way Mr. Johnston and Mr. Wilkins chose to do, i.e.

defending   the   packet.”   These     defenses   are   not    necessarily

conflicting in that the jury’s rejection of the first group’s

defense does not inexorably lead to a rejection of Moser’s.            Also,

as in Dollar’s case, we are not convinced that Moser actually

attempted at trial to point a finger at the first group.               Upon

inquiry by the court, Moser stated that he did not think that the

people at USA First deceived him or "tried to hide the ball" from

him.    In any event, in light of the fact that the jury acquitted

Moser of the conspiracy count and one substantive count of mail

fraud, Moser cannot show compelling prejudice.



            (c)   Johnston

       Johnston argues that he was prejudiced by certain evidence

that would not have been admissible if a severance had been

granted.    Johnston points to Moser's testimony that USA First

(Johnston's company) did not inform him that the Texas Department

of Banking had issued a cease and desist order and that the CMOs

could be illegal. Johnston ignores that the cease and desist order

would have been admissible against Johnston in a separate trial.

Even assuming arguendo that some of the complained of evidence


                                  30
would not have been admissible in a separate trial, “Severance is

not required merely because the government introduced evidence

admissible against certain defendants.”              United States v. Walters,

87 F.3d 663, 671 (5th Cir.) (internal quotation marks and citation

omitted), cert. denied, 117 S.Ct. 498 (1996). Johnston cannot show

compelling prejudice.          This is especially true in light of the

district court's frequent instructions to the jury to consider the

evidence    as    to   each   defendant        separately    and   individually,15

Johnston    has    failed     to   show   the     district    court   abused   its

discretion in denying his severance motion.

            (d)    Wilkins

       Wilkins generally argues that his defense was different from

the others but does not elaborate.              Thus, he has utterly failed to

show the compelling prejudice required. In any event, as set forth

above, we conclude that the district court’s instructions were

sufficient to cure any possible prejudice.                   Walters, 87 F.3d at

671.

            (e)    Gandy

       Gandy argues that even if his initial joinder with the other

appellants for trial was proper, the district court erred in

denying his motion for severance because he suffered compelling

prejudice from the evidence introduced against his codefendants.

In view of the previously mentioned instructions given by the

       15
          This Court has held that, even when two defendants accuse
each other of the crime for their respective defenses, severance is
not warranted when the court instructs the jury to consider the
evidence as to each defendant separately and individually. United
States v. Walters, 87 F.3d 663, 671 (5th Cir. 1996).

                                          31
district court and the jury's acquittal of Gandy on the conspiracy

count, he has not shown compelling prejudice.      In conclusion, the

district court did not abuse its discretion in denying the motion

for severance.

     G.     SENTENCING

     Dollar and Wilkins argue that the district court erred in

assessing   their   offense   levels.   Under   U.S.S.G.   §   2F1.1,   a

defendant's base offense level is increased according to the amount

of loss caused by his fraud.     A district court's finding of amount

of loss is reviewed for clear error.      United States v. Hill, 42

F.3d 914, 919 (5th Cir.), cert. denied, 116 S.Ct. 130 1995).

     The commentary to § 2F1.1 provides some guidance:

     [I]f an intended loss that the defendant was attempting
     to inflict can be determined, this figure will be used if
     it is greater than the actual loss. . . . For example,
     if the fraud consisted of selling or attempting to sell
     $40,000 in worthless securities, or representing that a
     forged check for $40,000 was genuine, the loss would be
     $40,000.

§ 2F1.1, comment. (n.7).

     Dollar's presentence report (PSR) provided that the loss

intended by Dollar was $704,000, which is the face value of the

worthless CMOs that Dollar had caused to be issued.        Wilkins' PSR

provided that the loss intended by Wilkins was $61 million.        That

figure is the total amount of CMOs issued pursuant to the scheme.

The district court found that amounts attributed to Dollar and

Wilkins in their respective PSRs were accurate.

     Relying on the fact that there was no actual loss in the

instances in which they personally used (or when Wilkins assisted


                                   32
others in using) the CMOs, Dollar and Wilkins argue that there was

insufficient evidence to prove that they did not intend to repay

the loans. "When reviewing the calculation of an intended loss, we

look to actual, not constructive, intent, and distinguish between

cases in which `the intended loss for stolen or fraudulently

obtained property is the face value of that property' and those in

which the intended loss is zero because `the defendant intends to

repay the loan or replace the property.'"   Id.

     The Government asserts that the district court's findings

regarding the amount of intended loss are consistent with the

jury's verdict that the appellants were liable for intentionally

participating in a scheme to defraud creditors by sending creditors

bogus CMOs.   Although we recognize that the appellants ultimately

paid their loans, in view of their previous attempts to coerce the

institutions to accept the bogus money orders, one is not left with

the definite and firm conviction that the district court made a

mistake regarding their intent to defraud.        Thus, the findings

regarding the amount of loss the appellants intended cannot be

deemed clearly erroneous.16

     H.   BIAS

     16
          Wilkins also purports to challenge an upward departure
from the guideline range by the district court.        Wilkins is
mistaken. The district court did not depart from the guideline
range. It appears that Wilkins is challenging the district court's
decision to assess four points (as opposed to the two points
recommended in the PSR) for his role in the offense under U.S.S.G.
section 3B1.1(a).    In light of the evidence adduced at trial,
Wilkins has not shown that the district court clearly erred in
finding that Wilkins was an organizer or leader. United States v.
Barretto, 871 F.2d 511, 512 (5th Cir. 1989).


                                33
      Wilkins asserts that the judge was biased because he felt

threatened by Wilkins.        Immediately prior to sentencing Wilkins,

the   court   advised   him   of   its    concerns   and   gave   Wilkins   an

opportunity to seek a recusal.             Wilkins declined.        As such,

Wilkins's complaint is either waived or untimely.                 Cf. United

States v. York, 888 F.2d 1050 (5th Cir. 1989) (finding untimely a

motion for new trial based on disqualification of judge when

defendant previously aware of circumstances alleged as basis for

disqualification).

      With respect to the remaining arguments of the appellants, we

have considered briefs and arguments of counsel and the pertinent

parts of the record, and conclude there is no error requiring

reversal.

      For the above reasons, the convictions and sentences of

Johnston, Wilkins, O'Neill, Dollar, Moser and Gandy are AFFIRMED.




                                     34
