                   UNITED STATES COURT OF APPEALS
                        FOR THE FIFTH CIRCUIT

              _________________________________________

                             No. 92-7306
              _________________________________________


                        UNITED STATES OF AMERICA,

                                                       Plaintiff-Appellee,


                                  VERSUS


                         JOSEPH T. COVENEY and
                           FRANCIS M. COVENEY,

                                                  Defendants-Appellants.

_________________________________________________________________

            Appeals from the United States District Court
                  for the Southern District of Texas

_________________________________________________________________
                          (July 6, 1993)

Before POLITZ, Chief Judge, REAVLEY, and BARKSDALE, Circuit Judges.

BARKSDALE, Circuit Judge:

     This tax fraud appeal turns on a fairly routine, straight-

forward and simple issue, sufficiency of the evidence; but, it is

complicated greatly by the Government's failure to carry the day on

its global theory for conviction, by the concomitant difficulty of

instead reviewing its proof on a count-by-count basis, and by the

incomplete state of the record on appeal, due to the Government's

failure to include the exhibits.         Also in issue is the possible

prejudice    suffered    by   Joseph   and   Francis   Coveney   when   the

Government called two of their former attorneys to testify, one

invoking the attorney-client privilege 20 times.              Each of the
Coveneys was convicted of aiding and assisting in the preparation

of 29 false income tax returns, and conspiracy to commit those

offenses.      Finding the evidence on conspiracy and 16 of the aiding

and assisting counts sufficient, and no reversible error arising

out of    the    attorneys'      testimony,   we    AFFIRM    on      those   counts.

However, because the evidence, as contained in the incomplete

record    on    appeal,   is   insufficient    for    13   of    the    aiding   and

assisting counts, we REVERSE those convictions, and REMAND for

resentencing.

                                         I.

     In     1983,     brothers     Francis    and    Joseph        Coveney    formed

Temperature Technology, Inc. (TTI), a Houston-based company which

installed energy management systems (EMS) in commercial buildings.

(An EMS is an energy control unit which is connected to an item of

equipment and is designed to reduce energy use by causing the item

to cycle on and off.)             TTI became a recommended installation

company for the OEC Leasing Corporation (OEC), as part of its

promotion of a tax shelter program.           OEC purchased EMS units from

Franklin New Energy Corporation (FNEC).              (The EMS was driven by a

microprocessing panel manufactured by Eckard Engineering.)                       OEC

leased the EMS units to investors, who in turn contracted with an

installation company to install and service the systems.                         The

installation company was responsible for locating an "end-user" for

each system -- a commercial building where the unit would be

installed.      If the EMS saved energy costs, those savings would be

shared    by    the   end-user,    the   investor,     and      the    installation


                                         2
company.1   In addition to these shared savings, the installation

company received an installation fee from the investor, the end-

user reaped the benefits from a unit it was not required to

purchase or maintain, and the investor was entitled on his income

tax return to an investment tax credit and deductions for, among

other things, depreciation and installation.

     Almost immediately, TTI began to experience technical problems

with the OEC units, which were apparently caused by the FNEC/Eckard

microprocessors.   TTI attempted to correct the problem, and, in

May, hired John Millar as national service manager.         Millar's

technical staff made a number of changes in the microprocessing

chips and eventually resolved the problem.

     At approximately the same time, Francis Coveney directed

Millar to begin developing a solar-powered EMS. Millar immediately

developed a prototype using the FNEC/Eckard unit.     Also working

with a National Enco brand EMS, which he considered superior, he

converted the National Enco eight and 16-channel units to solar

power, but was unable to do so with the 24-channel unit.2   This 24-

channel unit had a remote monitoring capability, which allowed the

1
     The end-user retained 50% of the savings. It was billed by
the installation company for the other 50%.    The testimony was
inconsistent on the further division of the savings.         Some
witnesses testified that the installation company kept 15% of the
savings and forwarded the remaining 35% to the investor; others,
that the installation company kept only 15% of the amount it
received from the end-user, leaving 85% of that amount for the
investor.
2
     Each channel represents an individual switching device which
will control one piece of equipment. An eight-channel unit, for
example, can control eight different pieces of equipment within a
building.

                                3
unit   to   be   accessed   and   programmed   through   telephone   lines.

Without such remote monitoring, the unit must be serviced on site.

Although the eight and 16-channel National Enco units did not have

remote monitoring, the FNEC/Eckard units did.             But, Millar was

never able to convert those units to solar power while maintaining

the remote monitoring feature.

       Francis Coveney had directed development of a solar-powered

EMS with an eye toward a new venture.          In August 1984, he formed

Enersolex, a San Antonio-based company which marketed a tax shelter

similar to that offered by OEC. In the Enersolex program, however,

investors purchased, rather than leased, their EMS units, and the

units were to be solar, rather than electrically, powered.            There

was no added benefit for the installation company or the end-user;

but, because the unit was solar powered, the investor was entitled

to a 15% energy tax credit, in addition to the investment tax

credit and deductions available to an OEC investor.

       While Millar was still developing the prototypes, financial

planners expressed an interest in marketing the solar-powered EMS.

TTI retained Raymond Merry, an energy consultant, to analyze the

feasibility of such a system.3            He prepared a report on the

capabilities of the proposed EMS, but noted carefully that it had

not yet been assembled. And, Enersolex retained Craig Welscher, an

attorney, to prepare a tax opinion on the proposed solar unit.


3
     Merry testified that he wasn't sure who intended to use his
report. He was retained by TTI and conducted the evaluation at its
offices, but he understood that the device was being manufactured
by Enersolex.

                                      4
Moreover, Francis Coveney retained CPA John Pearl to prepare an

analysis of the estimated tax write-off and cash benefits of the

Enersolex system.           The documents became part of the Enersolex

promotional package, which was distributed to financial planners.

A videotape featuring the National Enco prototype was prepared, as

well       as   a    slideshow        featuring        the     FNEC/Eckard      model.

Representatives of both Enersolex and TTI visited a number of

cities, promoting and demonstrating the solar-powered EMS.                        TTI,

still installing and servicing OEC units, was also a recommended

installation company for the new Enersolex program.

       Meanwhile, a New Jersey-based Internal Revenue Service task

force, investigating potentially abusive tax shelters, had heard of

the Enersolex promotion. In October 1984, two IRS agents travelled

to   San    Antonio       and   met   with   Francis     Coveney,    his   attorney,

accountant, and the Enersolex marketing director.                   Francis Coveney

demonstrated        the    Enersolex    unit     and   asked    whether    he   should

continue to sell it.            The agents explained that they were not then

in a position to answer that question, but would advise him if they

determined that the tax shelter was abusive. The investigation was

transferred to Texas before that determination was made.

       By the end of 1984, approximately 115 Enersolex units had been

sold, most in the last two weeks of December.4                   A majority of the

Enersolex investors selected TTI as their installation company.

Each investor received a letter from Joseph Coveney, thanking them


4
     Testimony regarding the purchase price ranged from $32,500 to
$52,000.

                                             5
for selecting TTI and telling them that information about their

end-user location would be forthcoming.        A second letter told them

when and   where   their   unit   had   been   installed;   most   included

photographs of the unit and/or the end-user site.

     Although TTI had represented that it had secured numerous end-

user locations for the Enersolex units, this was apparently not the

case.   Because most investors intended to file their income tax

returns on April 15, see infra at 7 and note 20, the pressure was

on to install these units in the first few months of 1985.              By

letter in February 1985, TTI informed OEC investors for whom it was

an installer that it would no longer service units through the OEC

program, explaining that it was becoming increasingly difficult to

obtain parts for repair and maintenance of those units. Therefore,

the units would be removed, and each OEC investor was to inform TTI

where his unit should be sent.      Within days of that notice to OEC

investors, Enersolex investors began to receive letters from TTI

about their end-user sites.        Many of the Enersolex units were

installed in the same locations from which OEC units had been

removed. There was extensive testimony at trial regarding specific

locations. In some cases, the OEC unit was physically removed, and

an Enersolex unit installed in its place.        In most cases, however,

the OEC unit was simply converted to solar power.5            Among other

5
     TTI was responsible for locating end-users, and Joseph Coveney
testified that he believed the locations belonged to TTI. Not so
for the units installed there. The service agreement between TTI
and the OEC lessees stated that "[t]he lessee shall retain full
legal possession of the system notwithstanding delivery of the
service company". Indeed, Joseph Coveney admitted that the "EMS
unit on the wall ... was the OEC lessee['s]. That was his."

                                    6
things, internal wiring was changed, and the unit was connected to

solar panels which were installed on the roof.        The brown OEC units

were painted blue and an Enersolex sticker added.         Each Enersolex

investor was notified of his unit's installation; and, on their

1984 tax returns, most claimed a 15% energy tax credit, a 10%

investment   tax   credit,   and   deductions   for    depreciation    and

installation (tax benefits).

     Picking up on the earlier investigation, IRS agents in Texas

met with representatives of Enersolex, including Francis and Joseph

Coveney, on April 3 and 22, 1985.       That July, they referred the

case to the Criminal Investigation Division of the IRS.               First

indicted in April 1991, Francis and Joseph Coveney, Enersolex

accountant John Pearl, and Gerald Ramsey, TTI's vice-president of

operations, were charged in a superseding indictment in October

1991 with conspiracy to aid and assist in the preparation of false

income tax returns (count 1).       Pearl and the Coveneys were also

charged in 30 counts with aiding and assisting in the preparation

of false income tax returns (counts 2-31).      And, Ramsey was charged

in two additional substantive counts (counts 32 and 33).

     In presenting its evidence, the Government called two of the

defendants' former attorneys as witnesses, as discussed in part

II.A. The defendants unsuccessfully moved for a mistrial, premised

on the repeated invocation of the attorney-client privilege. Their

motions for judgments of acquittal upon the completion of the

Government's case-in-chief were taken under advisement, re-urged at

the close of all the evidence, and ultimately denied.


                                    7
      Before the case went to the jury, the Government dismissed one

substantive      count    against       the    Coveneys       and   Pearl   (count    4).

Francis and Joseph Coveney were each found guilty on the conspiracy

count and the remaining 29 substantive counts against them; Pearl

was acquitted; and Ramsey was found guilty of conspiracy, but

acquitted on his two substantive counts.                  On the conspiracy count,

Francis Coveney was fined $3,500 and Joseph Coveney, $2,750; and

each was    sentenced         to   30   concurrent       prison     terms   --    Francis

Coveney's being 18 months each, and Joseph Coveney's, 16 months

each.    Only the Coveneys are before us on appeal.

                                             II.

      The Coveneys challenge the denial of a mistrial and the

sufficiency of the evidence.6

                                              A.

      The grant or denial of a mistrial is, of course, a matter left

to the discretion of the district court.                  We review only for abuse

of that discretion, United States v. Burke, 496 F.2d 373 (5th

Cir.), cert. denied, 419 U.S. 966 (1974), and, as explained below,

find none here.

      After the Government subpoenaed three of the defendants'

former   attorneys       to    testify,       the     defendants    moved    to   quash,

asserting the attorney-client privilege. The district court denied

the   motions,    but    conducted       a     voir    dire    of   the   witnesses    to



6
     Francis and Joseph Coveney filed virtually identical briefs.
Therefore, we analyze their cases individually only when
considering the sufficiency of the evidence against them.

                                              8
establish the acceptable boundaries for their testimony.     Two of

the three, Robert Fee and Craig Welscher, were called to testify.

     Fee was called as the Government's first witness.     After he

twice invoked the attorney-client privilege, the defendants moved

for a mistrial.   The motion was denied, but the jury was given a

limiting instruction.7   When Fee invoked the privilege a third

time, the defendants unsuccessfully re-urged their motion.

     After a three-day weekend, the trial resumed; and Welscher was

called as the third witness that day.   During his testimony, the




7
     The district court instructed the jury as follows:

          You have heard this attorney do what is called
          invoking a privilege, an attorney-client privilege
          in terms of him not testifying about things that he
          may have been told or discussed or saw or heard or
          observed having to do with his representation of
          one or more of the defendants in this case. Please
          understand that that is a completely acceptable
          practice in the law. Any time anyone goes to an
          attorney to discuss anything, no matter how
          frivolous, they are entitled to assume that that is
          going to be held in confidence, and any attorney
          who receives such information may not divulge it to
          third persons even in open court without the
          express permission of his client. There is nothing
          sinister nor inappropriate nor illegal nor evil
          about invoking the attorney-client privilege. It
          is simply, simply put from our childhood, "I told
          you a secret and I expect you to keep it," nothing
          more than that.

               Please, do not engage in any speculation or
          conjecture as to what communications, if any, might
          have transpired. Do not engage in any imagination
          as to what questions or answers might have flown
          from any answer but the one that counsel gave in
          regard to that specific question.

                                9
attorney-client privilege was invoked 20 times, either by him or

one of the defendants.8

     The Coveneys contend that the Government knew Fee and Welscher

would   assert   the   attorney-client   privilege,   and   committed

reversible error by calling them to testify.     They maintain that

continued invocation of the privilege, highlighted by the district

court's "ineffective" limiting instructions,9 cast suspicion on

them and caused the jury to believe that they were "keeping

secrets".

8
     When the Government asked Welscher what materials he relied on
in preparing his tax opinion, the defense objected, and the court
gave the following instruction to Welscher and the jury:

            [W]hen you answer this question, I want you to feel
            free to refer to any treatises, law, or other
            generally recognized publications that you would of
            necessity rely on in formulating any such opinion.
            They are clearly within the public domain and don't
            refer to these defendants. To the extent that they
            gave    you   any    documentation,    information,
            representation, or other information that you
            relied on to formulate the report that indeed you
            incorporated into the report which was subsequently
            published, you may, of course, reveal all of that
            as well and of necessity must.

                 Anything that was revealed to you that is not
            made a part of the report clearly falls within the
            attorney-client privilege, and I do not want that
            waived inadvertently. So I'm asking you to give a
            complete answer based on the limitations I have
            expressed.

                 Ladies and gentlemen, by admonishing this
            witness along those lines, please understand that I
            am not suggesting to you that there is any secret
            information out there or anything along those
            lines.   I am simply requiring this lawyer to do
            that which he must, which is to observe the
            attorney-client privilege, and that's all.
9
     See notes 7 and 8, supra.

                                 10
     Both the Supreme Court, see Namet v. United States, 373 U.S.

179 (1963), and our court, see San Fratello v. United States, 340

F.2d 560 (5th Cir. 1965), have recognized that forced invocation of

a testimonial privilege might, in some cases, so prejudice the

defendant as to warrant reversal. Having reviewed the testimony of

both attorneys, we are convinced that this is not such a case.

     In San Fratello, this court found reversible error where the

Government called the defendant's wife to testify after she had

made it known to the court that she would refuse on the ground that

her testimony might incriminate her.     When called, she answered

questions about her name and address, but, invoking the privilege,

refused to answer further.   The district court instructed the jury

that "[t]he reluctance of a witness to incriminate herself may not

be used to incriminate others", San Fratello, 340 F.2d at 563-64,

and emphasized that no unfavorable inferences could be drawn

against the defendant because of his wife's refusal to testify.

This court concluded, however, that "[t]he prosecution could have

had no purpose in calling this witness and requiring her to claim

her privilege in the presence of the jury other than to use her

conduct as an incriminating circumstance against her husband". 340

F.2d at 567.   Even the limiting instruction did not cure the error,

because it was "more than reasonably probable" that the wife's

refusal to testify prejudiced her husband.    Id.

     The case before us, however, is much more closely analogous to

Namet.   Unlike the wife who refused to testify in San Fratello, Fee

and Welscher "possessed nonprivileged information that could be


                                 11
used to corroborate the Government's case".       Namet, 373 U.S. at

188.    Fee's testimony was very brief.    He testified that he had

been retained by TTI in early 1984, but refused to elaborate.10

Both of the questions he refused to answer11 were quite similar to

questions he had answered at voir dire.12     They did not touch on

sensitive areas or critical issues in the case.    His testimony was

of no particular import to the Government's case; but, on the other

hand, his refusal to answer could not have raised any suspicion

that he was "keeping a secret" for the Coveneys.

       Conversely, Welscher was an important substantive witness. As

author of the tax opinion used in the Enersolex promotion, his

testimony was critical to the Government's case.        Although he

claimed the privilege 20 times, this number must be viewed in the

context of his entire testimony and the substance of the questions.

First, his testimony was significantly longer than that of any

other witness in the 12-day trial.     As in Namet, "[t]he effect of

these questions was minimized by [Welscher's] lengthy nonprivileged

testimony".    373 U.S. at 189.    Second, the privilege was often


10
     The Coveneys contend that Fee was called only to establish
that they refused to follow his legal advice. At his voir dire,
the Government did explain that it wished to call him for that
purpose. The court made it clear, however, that such testimony
would not be allowed; and the Government did not inquire about the
substance of his legal advice.
11
     As noted, Fee invoked the attorney-client privilege three
times, but twice it was in response to the same question.
12
     For example, at voir dire, Fee was asked, "You were hired ...
in 1984 to syndicate a tax opinion, weren't you?", to which he
answered "Yes". When asked if he was hired because he was a tax
specialist, he asserted the privilege.

                                  12
asserted in response to questions which were not even slightly

incriminating,    and   which   were    ultimately   answered   by   other

witnesses.13   Some of the questions were inappropriate and intruded

into privileged territory; but "[w]e cannot find that these few

lapses, when viewed in the context of the entire trial, amounted to

planned or deliberate attempts by the Government to make capital

out of witnesses' refusals to testify."        Namet, 373 U.S. at 189.

       Moreover, any error was cured by the district court's limiting

instructions. Although the instructions made reference to secrets,

they also made it clear that a lawyer is duty-bound to invoke the

privilege, and that its invocation should not be perceived as an

effort to hide information from the jury.

                                   B.

     The Coveneys also contend that the evidence was insufficient to

convict them for aiding and assisting in the preparation of false

income tax returns, and conspiracy to do so.14 We view the evidence

13
     Welscher asserted the privilege in response to questions
about, inter alia, the nature of TTI's business, what TTI did
before it began to install EMS units, and whether anyone had
explained to him how an EMS worked.
14
     The record on appeal reflects numerous acts by the Coveneys
that are shabby business practices at best; criminal violations at
worst. For example, the Enersolex promotional brochure touted the
creation of a defense fund, through which Craig Welscher was to
serve as counsel to any investor whose claims were challenged by
the IRS. Welscher testified that no such fund existed. As another
example, when IRS agents were scheduled to visit the Enersolex
offices in San Antonio in October 1984 to see the solar-powered
units, the Enersolex warehouse was empty. Therefore, approximately
200 boxes, for OEC units, were moved from TTI's Houston warehouse,
and "Enersolex" was stenciled on them. Steve Halliburton testified
that most of the boxes were empty -- only about ten contained OEC
EMS units.


                                   13
supporting criminal convictions in the light most favorable to the

verdict, and affirm if "any rational trier of fact could have found

the essential elements of the offense beyond a reasonable doubt".

United States v. Chaney, 964 F.2d 437, 448 (5th Cir. 1992).

       Of course, when multiple defendants are tried on a multi-count

indictment, as here, the analysis is a lengthy one.           We must review

each count separately as to each defendant.              Our review in this

case, however, is atypical. Neither the evidence at trial, nor the

briefs on appeal, have been presented in such a fashion.               Rather,

the Government's theory has been a global one:            Enersolex marketed

a solar-powered energy management system and promoted its potential

tax benefits; Enersolex never created the system it marketed;

therefore, investor/taxpayers who claimed the tax benefits which

the defendants represented they were entitled to, filed returns

which were, by definition, false; and, because the defendants knew

that   the   investor/taxpayers     were     not   entitled   to   those    tax

benefits,    they   aided   and   assisted   in    the   preparation   of   the

investors' false returns. Under such a theory, the Government need

only prove that the investors filed tax returns claiming tax

benefits for a system which did not exist, and that the defendants

assisted them in doing so.        Having reviewed the record on appeal,

however, we must conclude, for the reasons that follow, that a

reasonable jury could not have found these defendants guilty beyond


     Notwithstanding the repugnance of such activities, it must be
kept in mind that the only charges before us are aiding and
assisting in the preparation of false income tax returns, and
conspiracy to do so. That is what the Government was required to
prove beyond a reasonable doubt.

                                     14
a reasonable doubt on the global theory asserted by the Government.

     In addition to the difficulty of trying to piece the evidence

together on a count-by-count basis, our task in analyzing its

sufficiency is complicated greatly by the incomplete state of the

record on appeal.    After trial, hundreds of exhibits were released

to the Government "for safekeeping until the time for appeal has

run".     After the Coveneys filed their notices of appeal, each

ordered transcripts of his initial appearance, arraignment, trial

and sentencing.     They made no further designation of the record.

In short, they did not request inclusion of the exhibits.                Nor did

the Government supplement the record. Therefore, the record before

us consists only of the papers filed in the district court and the

transcripts   ordered   by    the   appellants.       We   do   not   have    the

exhibits.

     It is well-settled, of course, that the appellant bears the

burden of creating the record on appeal.             Fed. R. App. P. 11(a).

If the record does not establish a basis for reversal, we will

affirm.     Here, however, the record provided by the appellants,

albeit incomplete, shows that the evidence was insufficient to

support the Government's global theory.          We must then look to more

specific evidence     for    whether    each   tax   return     listed   in   the

indictment was false, and whether the defendants willfully assisted

in its preparation.         In some instances, those elements can be

established from the trial testimony.          In others, they cannot.        It

may well be that the documentary evidence, to which we are not

privy, would establish the essential elements on those counts. The


                                       15
dilemma before us, then, is which party bears the burden of placing

such evidence into the appellate record.          If the burden is with the

appellants, we must affirm as to those counts.           See United States

v. O'Brien, 898 F.2d 983, 985 (5th Cir. 1990).          But, if the burden

is with the Government, we must reverse the convictions as to the

applicable counts.

       We hold that, given the specific facts of this case, the

burden of establishing a record which might provide sufficient

evidence of an alternative basis for affirmance must be with the

Government.     Though the appellants must initially designate the

record, the appellee always has the opportunity to supplement it.

Here, the appellants needed only the record, as they ordered it, to

show    that   there   was   insufficient    evidence     to   support    the

Government's    global   theory.15        Thus,   we   must    consider   the

alternative basis for affirmance through a count-by-count review;

and the Government must bear responsibility for providing us

adequate information with which to do so.

       Moreover, the Government must realize that the potentially

critical documents are not in the record before us.               They were

released to it at the close of the trial, and there are repeated

references to them in the Government's brief.            There are no such




15
     The record does contain the trial exhibit list. While we
recognize the generality of that list, it appears that the
documentary evidence would not have provided the necessary
additional support to prove, beyond a reasonable doubt, the
Government's contention that no solar-powered EMS unit ever
existed.

                                     16
references in the appellants' briefs.   From this, we must conclude

that the exhibits are still in the Government's possession.

     We have recognized, in the civil context, that the appellee

bears some responsibility for creating a complete record on appeal.

See Soley v. Star & Herald Co., 390 F.2d 364 (5th Cir. 1968).

Soley was decided before the Federal Rules of Appellate Procedure

became effective, so it relies upon rules of civil procedure which

have since been usurped by the appellate rules.       However, the

rationale behind that decision is unchanged.   There, the district

court dismissed an action for failure to state a claim.       In so

doing, it apparently referred to evidence outside the pleadings.

Acknowledging that the motion had been treated as one for summary

judgment, our court concluded that it was unable to review that

judgment, because the record did not include the evidence to which

the district court had referred.   The appellees asserted that they

were entitled to affirmance by default: because the record did not

include the necessary information, there were no grounds upon which

to reverse. Our court disagreed, concluding that the appellees had

notice of the appellant's allegation of error, and were "not devoid

of responsibility to inform" the appellate court.   Soley, 390 F.2d

at 367.   "That responsibility increases when such appellees seek

our stamp of approval on an unarticulated summary judgment for

which no justification can be found in the record."   Id. at 368.

     Likewise, that responsibility must also increase when we are

asked by the Government to conclude, pursuant to its global theory,

that the jury had sufficient evidence upon which to convict.     If


                                17
the Government has nonetheless proven guilt beyond a reasonable

doubt on some other theory, it bears the burden of showing us how.

Obviously, this includes providing a sufficient and complete record

on appeal.

                                      1.

      We look first to the 29 substantive counts of aiding and

assisting in the preparation of false income tax returns, in

violation of 26 U.S.C. § 7206(2).16 Proof for such a violation must

establish    that    (1)   the   defendant   advised   or   assisted   in   the

preparation of a tax return, (2) the return was false or fraudulent

as to a material matter, and (3) the defendant acted willfully in

doing so.    See United States v. Salerno, 902 F.2d 1429 (9th Cir.




16
     The statute reads, in pertinent part:

            Any person who --

                                     * * *

                    (2) Aid or assistance.--Willfully aids
                    or assists in, or procures, counsels, or
                    advises the preparation or presentation
                    under, or in connection with any matter
                    arising under, the internal revenue laws,
                    of a return, affidavit, claim, or other
                    document, which is fraudulent or is false
                    as to any material matter, whether or not
                    such falsity or fraud is with the
                    knowledge or consent of the person
                    authorized or required to present such
                    return, affidavit, claim, or document ...

                                     * * *

            shall be guilty of a felony....

26 U.S.C. § 7206.

                                      18
1990); United States v. Sassak, 881 F.2d 276 (6th Cir. 1989);

United States v. Hooks, 848 F.2d 785 (7th Cir. 1988).

       The evidence was sufficient to show that Francis and Joseph

Coveney advised or assisted in the preparation of the tax returns

of all Enersolex investors.      A person need not actually sign or

prepare a tax return to aid in its preparation.      See United States

v. Williams, 809 F.2d 1072 (5th Cir.), as corrected, 828 F.2d 1

(5th Cir.), cert. denied, 484 U.S. 896 (1987).           It is sufficient

that    the   Coveneys   knowingly   participated   in     the   sale   and

installation of EMS units and provided information about the

transaction "with the expectation", id. at 1095 (emphasis in

original), that the investors would use that information to file

their tax returns.

       The Coveneys hired Ray Merry to prepare a report on the

technical feasibility of the solar-powered EMS.            They retained

Craig Welscher to prepare an opinion letter on the tax implications

of purchasing the system and John Pearl to prepare an analysis of

the estimated tax write-off.     They included all three documents in

a promotional brochure which was provided to potential investors

and financial advisors.      The jury could have concluded that the

Enersolex project was marketed through financial advisors because

the Coveneys knew that its tax advantages were among its strongest

selling points.     Finally, Joseph Coveney provided each Enersolex

investor who chose TTI as its installation company with photographs

of their unit and information about the date of installation.            In

short, the jury could reasonably have found that the Coveneys


                                     19
marketed the units and provided the tax opinions and installation

dates with the expectation that investors would rely on that

material in filing their income tax returns.

     The more difficult question is whether the evidence was

sufficient as to the Coveneys willfully providing information which

they knew would lead to the preparation of tax returns which were

false as to a material matter.         If they had told investors that

they had purchased a solar-powered EMS and that the EMS had been

installed, when, in fact, no solar-powered EMS existed, then

certainly the elements of willfulness and falsity would also be

established.    As noted, however, the record does not support that

global theory.

     The Government put on extensive evidence that Enersolex often

demonstrated    a   National   Enco   prototype,    but   actually   sold   a

modified FNEC/Eckard unit; that there were problems with the

FNEC/Eckard    microprocessing    chips;   that    Millar   considered   the

National Enco model a superior one; and that the Enersolex EMS

could not simultaneously operate on solar power and retain its

remote monitoring capability.         However, none of these facts, or

even all of them considered together, could lead a reasonable trier

of fact to conclude that no solar-powered EMS was ever developed.

In fact, many of the Government's own witnesses testified to the

contrary.

     Welscher testified that he saw the Enersolex unit work at

least twice.     Welscher was unsure whether the units he saw were

developed from National Enco or FNEC/Eckard models, but Millar


                                      20
testified that he was able almost immediately to convert the

FNEC/Eckard EMS unit to solar power.17             Jack Teschemacher, the

Enersolex marketing director, testified that changes were made in

the   FNEC/Eckard   units   to     "bring   them   up   to    the   Enersolex

standards".18   Michael Munroe, whose company sold solar panels for

use with the Enersolex units, testified that solar power seemed an

expensive way to operate the EMS, but solar panels were capable of

powering the unit. Kent Maerki, head of Spectra Financial Network,

through which numerous Enersolex units were sold, and one of his

sales   representatives     also     testified     that      they   witnessed

17
     Millar did testify that the unit could not simultaneously
operate on solar power and retain remote monitoring capability.
Units which were not solar powered, of course, could not qualify
for the energy credit. But, there was no evidence, nor was the
jury instructed, that a unit must have remote monitoring ability in
order to qualify for an investment tax credit or energy credit.
Certainly, TTI would prefer to access its units by telephone in
order to avoid on-site maintenance calls.

     From this obvious preference, the Government builds its
argument that technicians were instructed to disable the solar
power in order to maintain the remote monitoring. But, while there
is evidence that, on one occasion, Francis Coveney instructed
technicians to install solar panels on the roof but not connect
them to the EMS unit, there is no evidence that this was standard
procedure. It may well be that any tax returns filed in relation
to that transaction were false, and that the Coveneys aided and
assisted in their preparation.       Obviously, such evidence is
insufficient to establish that all tax returns claiming Enersolex-
related deductions and credits are false. This is particularly so
in light of the testimony that, in many cases, solar panels were
installed and connected to the EMS unit.
18
     Teschemacher also testified that at least two of the National
Enco prototypes were installed at Enersolex end-user locations.
There was no evidence to the contrary. Even if the FNEC/Eckard
unit never worked with solar power, installation of solar-powered
National Enco models (which the Government seems to concede would
qualify for the claimed credits and deductions) would militate
against the global conclusion that all Enersolex investors filed
false tax returns.

                                     21
demonstrations      of   the   Enersolex   units,   which    appeared       to    be

functioning properly.

       Defense witnesses also testified that the Enersolex units

worked.    John Pearl testified that he witnessed demonstrations of

both the National Enco and FNEC/Eckard prototypes.              George Reneer,

an end-user whose EMS was either replaced with a solar-powered

unit, or converted to solar power, as discussed infra concerning

count 3, testified that he saved money as a result of the unit

installed at his business, and that he continued to do so with a

solar-powered unit.

       The Government emphasizes that many witnesses testified that

they simply couldn't tell whether the EMS unit was working, or

whether it was being powered by solar panels.               Indeed, they did;

but obviously, much more is required for a guilty verdict.                       The

Government must prove guilt beyond a reasonable doubt.                  In sum,

testimony which merely calls the investment (and, as a result, its

tax advantages) into question, is not sufficient, standing alone,

to   support   a   conviction.      Therefore,      we   must   look   to    each

substantive count of the indictment and determine whether either of

the Coveneys aided and assisted in the preparation of the tax

return claimed to be false.        In 16 instances, counts 6-8, 12, 13,

15, and 22-31, we conclude that they did.

       Count 6.    Douglas Devore purchased an eight-channel Enersolex

EMS.    He selected TTI to install it, and received notice that his

unit, serial number 8437, had been installed at the Ione Top Value




                                      22
Market in Ione, California,19 on April 23, 1985.20         Devore testified

that he spoke with an employee at the Ione Top Value and asked him

to check the serial number on the EMS unit installed there.           Though

Devore never testified to the number the employee read to him, he

said that he became "concerned because of information [he] had

now".    A photograph taken of the unit at the Ione Top Value

reflected a serial number which did not match the one assigned to

Devore. Devore received a subsequent letter from TTI informing him

that the unit had been removed from Ione and installed at the Del

Sol Food Market in Houston, Texas.        But, a photograph of the unit

at the Del Sol revealed that it was a 16-channel unit, not an

eight-channel, as Devore had purchased.

     Devore testified that he filed a 1984 return in which he

claimed benefits as a result of the Enersolex investment.              Given

all of this evidence, a reasonable jury could have concluded that

Devore   never   owned   a   unit   entitling   him   to   those   benefits.

Likewise, because Enersolex (Francis Coveney) and TTI (Joseph


19
     Devore testified he was told initially that his unit would be
installed in Newport Beach, California. This was apparently near
his home, and he told TTI representatives that he intended to see
the unit. Approximately a month later, he was informed that the
unit could not be installed in Newport Beach and would, instead, be
installed in Ione.
20
     All of the returns at issue were for the 1984 tax year. We do
not determine when the units must have been installed to qualify
for 1984 tax benefits, however, because TTI notified the investors
of the installation dates (only one of which was in 1984) and there
are no allegations that those dates were fabricated.            The
Government does not contend that the investors' decisions regarding
the year for which they would claim the benefits of their
investments were the result of any aid or assistance from the
Coveneys.

                                     23
Coveney) gave him information apparently confirming such ownership,

a reasonable jury could have also found that the Coveneys aided and

assisted in the preparation of the false tax return filed as a

result of those representations.

     Counts 7 and 8. Guillermo Bruce purchased an Enersolex EMS on

the recommendation of his financial planner, and was subsequently

informed that his unit, serial number 8434, had been installed at

the Lamplighter Restaurant in North Hollywood, California, on

December 31, 1984.     Millar testified that the installation at the

Lamplighter was not a conversion.           He took an Enersolex unit to

California, but did not activate its solar capacity.                    Francis

Coveney had instructed him to install the solar panels, but not

connect   them   to   the   unit,   in    order   to   maintain   the    remote

monitoring capability.      In short, this unit looked solar powered,

but wasn't.

     Approximately six weeks after receiving notice of the December

installation, Bruce was informed that his unit had been removed

from the Lamplighter because "savings could not be maintained at

the end user location due to the operation of the owner".                   Two

weeks later, he was advised by letter that his unit had been

installed on June 10, 1985, at the Ione Top Value Supermarket.

     Bruce claimed 1984 tax benefits for his Enersolex investment

both personally and through Bruce Investments Company.                    Other

evidence at trial included a photograph taken in 1986 of the EMS

unit at the Ione Top Value.         That unit bore a different serial

number: 8467.    A reasonable jury could have concluded that Bruce


                                     24
never owned the Enersolex unit for which he claimed those benefits.

Accordingly, the returns for Bruce and his company would be false

as to a material matter.        As in the case of Devore, a reasonable

jury could have found that the Coveneys aided and assisted in the

preparation of those returns by giving false information upon which

a taxpayer relied in filing a return.

      Counts 12 and 13. Janet Horner and her husband also purchased

the smallest Enersolex unit, an eight-channel EMS.              She testified

that, as a result of that purchase, they claimed benefits on their

1984 personal and JMH Investment Company returns.              A letter dated

May   1,    1985,   informed   the   Horners   that   their    unit   had    been

installed at Longhorn Foods.

      Richard Barsness, an OEC investor, testified that one of his

units, leased in 1983, was installed at Longhorn Foods.                 Joseph

Coveney confirmed that a 24-channel unit was installed for Barsness

at that location.        Some time later, however, Barsness received

notice that his unit was being removed from that location because

TTI   was    "unable   to   obtain   necessary    repair      parts   from   the

manufacturer and because of economic reasons".21

      Janet Horner testified that she understood the Longhorn Foods

location was being "transferred" to her.          She, however, purchased

an eight-channel EMS.          The unit installed for Barsness had 24

channels.     Joseph Coveney testified that that same unit "is on the

wall now assigned to Janet Horner".            Because Barsness testified


21
     Joseph Coveney testified that these letters were sent to OEC
investors in February 1985.

                                       25
that he did not transfer his unit to anyone and gave no one

permission to use it, a reasonable jury could have concluded that

Enersolex "sold" the Horners a unit which belonged to OEC and was

being leased to Barsness.           The Horners could not, therefore, own

the unit and would not be entitled to the tax advantages for such

ownership.

     Counts 15 and 22 through 31.            Count 22 involves the return of

the Energymisers partnership; counts 15 and 23-31, returns filed by

Energymisers partners.        The partnership invested in several eight-

channel Enersolex units and received notice that one of them was

installed at Ryder Truck Rental in Houston.

     Steve Halliburton, who performed installation work for TTI,

described    the    process    of    converting          an   electrically-powered

FNEC/Eckard EMS to solar power.              He testified that he performed

this transformation at a number of locations, thereby                  converting

an OEC unit to an Enersolex unit.                 One location was Ryder Truck

Rental.   In light of the testimony about Enersolex's difficulty in

locating end-users and the termination of TTI-OEC contracts so that

OEC sites could be used for Enersolex investors, a reasonable jury

could have concluded that the unit at Ryder Truck Rental was the

property of OEC and one of its lessees.                  As was the case with the

Horners, it could not legally have been sold to Energymisers.

     Phillip Rulon, the general partner who prepared 1984 income

tax returns for Energymisers partners, testified that Energymisers

claimed     tax    benefits   because        of    the    Enersolex   investment.

Moreover, those benefits were passed through to the partners and


                                        26
were     reflected     in    their      individual    returns.          Neither     the

partnership nor the partners would be entitled to such benefits if

the EMS was not Enersolex's to sell.

       Evidence regarding counts 2, 3, 5, 9-11, 14, and 16-21 was

admitted at trial.            However, the testimony was insufficient to

prove that the tax returns were false, or that the Coveneys

willfully       provided     the   false   information       rendering      them    so.

Accordingly,      as   hereinafter       discussed,       there   was   insufficient

evidence    from     which    a    reasonable     jury    could    find,    beyond    a

reasonable doubt, that either Francis or Joseph Coveney was guilty

on these counts.

       Count 2. Rena and Clifford Brantner claimed benefits on their

1984 return as a result of purchasing two eight-channel Enersolex

units.     They received letters from Joseph Coveney informing them

that one unit was installed on April 8, 1985, at Patterson Services

in Houston; the other, at Baytown Motors in Baytown, Texas, on

April 11, 1985.          The IRS disallowed the Brantners' depreciation

deduction, and they appealed.              Clifford Brantner testified that

they "did resolve [the matter]" through the appeal process.                        It is

unclear from his testimony whether other credits or deductions were

disallowed, and how the depreciation issue was finally resolved.

       This evidence is insufficient to establish either the falsity

of the return or the Coveneys' willfulness.                 We cannot discern the

precise basis for the IRS's initial disallowance, or how that

matter was ultimately concluded.                Neither are there any questions

raised,    as    there      were   on   some    counts,    about   the     Brantners'


                                           27
ownership of their units, or whether those units were actually

solar powered.   And, the record on appeal is silent about either of

the Brantners' end-user locations.

     Count 3.    Concerning Katheryne and Roger Chassay's return, he

testified that he invested in Enersolex for the 1984 tax year, and

claimed benefits as a result of that investment. Chassay testified

also that he visited Gayla Industries, the installation site for

one of his units, on more than one occasion. During a visit in May

1985, solar panels were visible on the roof; on another occasion,

they were not.

     Reneer,    the   vice-president    of   Gayla,   whose   testimony   is

discussed in part supra, was called as a defense witness, and

testified that TTI installed an EMS there in the early to mid-

eighties, that the unit saved money on electric bills, and that

solar panels were later added to the system.           When Gayla added a

new roof to its building, the panels were removed, but Reneer never

contacted TTI to replace them.     Reneer identified a photograph of

the Enersolex unit installed at Gayla, confirming that it looked as

if a label underneath the one pictured had been torn off.          But, he

testified that "either a sticker or a label was changed or maybe

there was a different panel to start with."           (Emphasis added.)

     This evidence is similar to that which we found sufficient for

counts 15 and 22-31.      It is a close call.         But, because Reneer

testified that the EMS unit may have been replaced, we hold that it

is insufficient to establish the Coveneys' guilt.             A reasonable

jury could not have concluded beyond a reasonable doubt that an OEC


                                   28
unit was initially installed and later converted to solar power.

Therefore, there is insufficient evidence to conclude that the

Chassays did not own the unit.

       A reasonable jury could have concluded that the unit ceased

being solar powered when Gayla re-roofed its building.            However,

there is no proof on when that took place.           In order to establish

falsity in the Chassays' 1984 tax return, the Government had to

prove that the unit was not solar powered during the period covered

by that return.       Nor, concerning the panel removal, was there any

testimony which would establish the Coveneys' willfulness. Indeed,

there was no testimony that the Coveneys knew about, or directed,

removal of the panels.

       In short, this evidence could not have led a reasonable jury

to conclude either that the Chassays' 1984 income tax return was

false,    or   that    the   Coveneys    willfully   provided   information

rendering it so.

       Count 5. For Barbara and Stephen Kucka's 1984 return, Stephen

Kucka testified that, on November 16, 1984, he received a letter

from Joseph Coveney, informing him that his Enersolex unit had not

been installed.       On April 8, 1985, he received notice that his unit

had been assigned serial number 8410, and installed at Chem Central

in Houston on April 1.         In reliance on this information, Kucka

claimed tax benefits, which were disallowed by the IRS.

       Kucka's testimony also described his difficulty in contacting

TTI.    After numerous attempts to do so, he called Chem Central to

confirm installation. He learned that the "unit was not functional


                                        29
and not working". Millar testified that he performed the Enersolex

installation at Chem Central.         He explained that an OEC unit had

previously been placed at that location, but was not converted to

solar power.      Rather, it was replaced with an Enersolex unit.

       This evidence could not lead a reasonable jury to find the

Coveneys guilty beyond a reasonable doubt of aiding and assisting

in the preparation of a false income tax return.                There is no

evidence which      calls    the   Kuckas'   ownership   of   the   unit   into

question.      Steve Kucka testified that the unit did not work, but

this   alone    does   not   establish   the   falsity   of   the   return   or

willfulness on the part of the Coveneys.            The evidence does not

describe the problem, nor is there any evidence that the Coveneys

knew this unit did not work properly, or that it malfunctioned

because of any action by them.

       Count 9.    Concerning the 1984 return for Carol and Stanley

Swartz, there was very little testimony about them; and we conclude

that the evidence was insufficient to support the conviction of

either Francis or Joseph Coveney.

       James Baker, a CPA and Spectra representative, testified that

he sold an Enersolex unit to the Swartzes, and that the unit was

installed on April 1, 1985. Baker also prepared the Swartzes' 1984

return, which included deductions for depreciation and installation

of the Enersolex unit, as well as investment and energy tax

credits.




                                      30
     Our    review    of   the    record     reveals    no    evidence   about    the

Swartzes' end-user location22 or the installation process for that

unit.     In short, a reasonable jury could not have concluded that

the Swartzes' return was false as to a material matter.

     Count 10.       As for the 1984 return of Ann and George Yount,

they purchased three Enersolex units through Baker.                       He also

prepared their 1984 income tax return, claiming the same benefits

as he did on behalf of the Swartzes.             Again, there is insufficient

evidence from which a reasonable jury could conclude that the

Younts were not entitled to those benefits.                   Indeed, what little

testimony    was     offered     on   the    matter    seems    to   support     such

entitlement.

     The Younts were informed that one of their units was installed

at a Ben Franklin store in Houston, another at a Baptist church in

the Houston area, and the last at Texas Western Beef (no location

given).     There was no further identification of the church.                    The

testimony regarding Texas Western Beef and Ben Franklin points to

the legitimacy -- not falsity -- of the return.                  Millar testified

that OEC units previously existed at both locations, but that he

removed them and installed Enersolex units.                  There was no contrary

evidence.       We    conclude,       therefore,       that    the   evidence     was

insufficient to establish the falsity of the return.



22
     Baker did testify that he and the Swartzes once called the
end-user and asked maintenance personnel if the unit was installed
there. He did not name the end-user; and a hearsay objection was
sustained, precluding him from repeating the response to his
installation inquiry.

                                            31
      Counts 11 and 14.       These counts involve the 1984 returns of

Joyce and Roswell Combs (count 11) and Mignon and Eugene Kurtz

(count 14).      The Combses and the Kurtzes each purchased a 16-

channel Enersolex unit through their accountant and tax preparer,

Phillip Rulon.       As discussed, Rulon also arranged the investments

in eight-channel Enersolex units for the Energymisers partnership

and prepared the 1984 individual tax returns for most of its

partners (counts 15 and 22-31).             The same year, he arranged the

purchase of three 16-channel units: one for the Combses, one for

the Kurtzes, and one for himself.

      Rulon served as the general partner in the Energymisers

partnership, and invested in the eight-channel units, as well.

However, it is unclear from his testimony whether the Government

was   trying    to   prove   that    the    Combses   and    the    Kurtzes    were

Energymisers partners, and therefore held an interest in the eight-

channel units, in addition to ownership of the 16-channel units.

Moreover, when the Government had Rulon identify Energymisers

partners, it did not inquire about the Combses or the Kurtzes.

Because   the    Government    did    not    establish      their    Energymisers

partnership     beyond   a   reasonable      doubt,   we    cannot    affirm   the

convictions on these counts on the same basis as those involving

proven Energymisers partners.23

23
     Of course, we mean only that this was not established in the
record on appeal (testimony).    Examination of the Combses' and
Kurtzes' 1984 returns, had they been included in the record on
appeal, would have shown whether they claimed benefits through the
partnership. In addition, examination of Rulon by the Government
included repeated references to, and introduction of, exhibits,
such as the partnership return and the Schedule K1 and tax returns

                                       32
       Furthermore, there is no testimony about the installation or

end-user sites for the 16-channel units these taxpayers purchased.

Therefore, the record on appeal contains no evidence which could

lead a reasonable jury to conclude that the returns were false, or

that   any   crime   was    committed    by   the   Coveneys    in     aiding   and

assisting in their preparation.

       Count 16.     Patricia and Kip Walker purchased an Enersolex

unit, and claimed benefits in their 1984 return as a result.                    Kip

Walker testified that he received a letter from TTI stating that

his unit had been installed in Austin, Texas, at a business known

as Freshco, on June 3, 1985.       His testimony was preceded by that of

Mike Davis, an OEC investor.        Davis testified that he invested in

OEC in late 1983, and that his OEC unit had also been assigned the

Freshco location.      However, he received a letter from TTI, dated

June 10, 1985, stating that his unit had been removed because

savings could not be maintained.             Davis did not sell his unit or

give anyone permission to move it.

       In light of the testimony about on-site conversions, one

explanation    of    this   situation    might      well   be   that    Enersolex

converted a unit it did not own.              Absent testimony which would

support that theory, however, the jury is not allowed to make such

a logical leap, for it is just as likely that the OEC unit was

indeed removed and replaced with the Enersolex unit. The record is


he prepared for the partners; but, as stated, none are included in
the record on appeal. Our difficulty in reviewing his testimony,
without the exhibits referred to during it, is a classic example of
why the Government should have included them in the record on
appeal.

                                        33
full of testimony about particular locations, and the installations

or   conversions         which    occurred     there.        However,       there    is    no

testimony about the procedure followed at Freshco.

       The   only    other       testimony     about    this       location   came     from

Margaret DePrez, with the IRS Criminal Investigation Division.

DePrez testified that she visited Freshco in 1987 to photograph the

Enersolex unit, but was unable to locate it.                   The absence of a unit

in 1987, without more, does not prove the truth or falsity of the

1984 return.         Accordingly, we conclude that the evidence was

insufficient        to    establish      the       falsity    of    that    return,       and

therefore, insufficient to support the convictions on this count.

       Counts 17 through 21.            Count 17 involves the 1984 partnership

return for Capital Equipment II; counts 18-21, the returns filed by

its partners.        Galyd Perkins testified that he prepared the 1984

partnership     and        partner      returns.        The    partnership          claimed

deductions for depreciation and installation of Enersolex units, as

well as investment and energy tax credits.                           Each of the four

partners in issue claimed the tax benefits which were passed

through from the partnership.

       Testimony revealed that the partnership purchased at least

three Enersolex units. One was installed at Truk Shak (no location

given); the other two in Houston, at Bobby's Supermarket and North

Freeway Porsche-Audi.             A TTI field service technician testified

that   the   Truk        Shak    unit   was    converted      at    the    warehouse      and

transported to the installation site.                    An IRS agent visited the

North Freeway Porsche-Audi location in 1987 and photographed the


                                              34
EMS   unit    installed    there.     This      evidence    could   not    lead     a

reasonable jury to conclude that the partners and partnership were

not entitled to the claimed tax benefits.                 The record on appeal

contains      no   more   testimony    about      these     locations      or     the

installations which occurred there.             Accordingly, we conclude that

the evidence was insufficient to support the convictions on these

counts.

                                      2.

      Although the record on appeal contains insufficient evidence

for   affirmance     on   all   substantive      counts,   it   includes        ample

evidence that Francis and Joseph Coveney conspired to aid and

assist in the preparation of false returns (count 1).               In order to

convict for conspiracy under 18 U.S.C. § 371, the jury must find

(1) an agreement between two or more people to violate the law, and

(2) an overt act by any member of the conspiracy in furtherance of

it. United States v. Bourgeois, 950 F.2d 980, 983 (5th Cir. 1992).

Proof of a specific agreement is not necessary; the jury may infer

an agreement from a concert of action.             Id.

      There    was   substantial    evidence      that    the   Coveneys    worked

together in forming TTI and Enersolex, that they travelled together

promoting the Enersolex program, and that they worked together on

the day to day operation of each company.                Though Francis worked

out of the Enersolex office in San Antonio, and Joseph out of the

TTI office in Houston, several witnesses testified that the two

companies     were   essentially    one    in   the   same.      Moreover,       both

brothers were apparently present at meetings where some of                        the


                                      35
"conversions" were discussed.     An agreement to take an OEC unit,

without the consent of the OEC investor, convert it to solar power

and "sell" it to an Enersolex investor is an agreement to violate

the law, in that, among other things, the sale would aid and assist

in the preparation of false returns, because it was performed with

the expectation that investors would rely on their erroneous belief

of ownership in filing returns.

     Needless to say, there were numerous overt acts in furtherance

of this agreement.    Enersolex units were sold to those investors

previously discussed.     Joseph Coveney wrote letters to many of

them, informing them of the end-user locations and installation

dates.     There was sufficient evidence for the jury to find that

these are all overt acts taken with the expectation that taxpayers

would rely on the false information in preparing and filing their

returns.

                                III.

     Accordingly, the convictions on counts 1, 6, 7, 8, 12, 13, 15,

and 22-31 are AFFIRMED; those on counts 2, 3, 5, 9, 10, 11, 14, and

16-21 are REVERSED; all sentences are VACATED; and the case is

REMANDED for resentencing.

                 AFFIRMED in Part; REVERSED in Part; and REMANDED.




                                  36
