                                                                                                                           Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


6-10-2004

USA v. Rennert
Precedential or Non-Precedential: Precedential

Docket No. 03-1511




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                  PRECEDENTIAL              (D.C. Crim. No. 96-cr-00051)
                                      District Judge: Hon. Clarence C.
   UNITED STATES COURT OF             Newcomer
APPEALS FOR THE THIRD CIRCUIT

                                             Argued December 5, 2003
            NO. 03-1511
                                        Before: SLOVITER, ALITO, Circuit
                                      Judges and OBERDORFER * , District
  UNITED STATES OF AMERICA            Judge

                 v.                            (Filed: June 10, 2004)

    PHILIP ANDRE RENNERT,
               Appellant              James H. Feldman, Jr. (Argued)
                                      Law Offices of Alan Ellis
                                      Ardmore, PA 19003-2276
            NO. 03-1518
                                            Attorney for Appellant,
                                            Philip Andre Rennert
  UNITED STATES OF AMERICA
                                      Peter Goldberger
                 v.                   Law Office of Peter Goldberger
                                      Ardmore, PA 19003-2276
  GEORGE RAYMOND JENSEN,
            Appellant                       Attorney for Appellant,
                                            George Raymond Jensen

            NO. 03-1519               Christopher D. Warren (Argued)
                                      Philadelphia, PA 19103

  UNITED STATES OF AMERICA                  Attorney for Appellant,
                                            Michael Lewis Miller
                 v.

                                      *
    MICHAEL LEWIS MILLER,             Hon. Louis F. Oberdorfer, United States
              Appellant               District Court for the District of
                                      Columbia, sitting by designation.

  On Appeal from the United States
        District Court for the
   Eastern District of Pennsylvania
Patrick L. Meehan                                           In essence, Teale represented the
       United States Attorney                       worthless leased stocks as valuable assets
Laurie Magid                                        that could be liquidated to pay claims
       Deputy United States Attorney                pursuant to reinsurance contracts entered
       for Policy and Appeals                       into with World Life and Health Insurance
Robert A. Zauzmer                                   Company (“World Life”), a Pennsylvania
       Assistant United States Attorney             insurance company that was already in
       Senior Appellate Counsel                     financial difficulty. When World Life
Andrea G. Foulkes(Argued)                           attempted to liquidate these assets to pay
       Assistant United States Attorney             its outstanding medical reinsurance claims,
Office of United States Attorney                    the stocks were found to be worthless.
Philadelphia, PA 19106
                                                           World Life became insolvent at
                                                    some point during or before 1988, but did
       Attorneys for Appellee
                                                    not reveal its financial difficulty to
                                                    regulators or to its insureds. In 1989 and
                                                    1990, World Life issued four group
       OPINION OF THE COURT
                                                    medical policies.      Teale entered into
                                                    contracts reinsuring World Life’s policies
SLOVITER, Circuit Judge.
                                                    from November 1989 to November 1990.
                     I.                             Pursuant to these agreements, Teale
                                                    assumed 100 percent of the liability
        Appellants Michael Miller and
                                                    associated with World Life’s four group
Philip Rennert were convicted by a jury of
                                                    medical insurance policies in exchange for
conspiracy, wire fraud, and securities
                                                    receipt of 92 percent of the premiums paid
fraud; Appellant George Jensen was
                                                    by World Life’s insureds on those policies.
convicted by a jury of securities fraud.
                                                    Appellants supplied Teale with stocks
Their convictions resulted from their
                                                    from offshore companies that Teale could
involvement in a complex scheme under
                                                    list as putatively valuable collateral
which they leased the worthless stocks of
                                                    backing the company, though the stocks
several public companies to the Teale
                                                    were essentially worthless. Yeaman, 194
Network (“Teale”), a fraudulent network
                                                    F.3d at 447.
of offshore and domestic companies. The
details of the operation of the Teale                       In 1990, Rennert created Forum
Network, through its principal Alan Teale,          Rothmore to serve as an intermediary
are set forth in our earlier opinion in             between Teale and the publicly traded
United States v. Yeaman, 194 F.3d 442               corporations that desired to lease their
(3d Cir. 1999), and we repeat only such             stock to Teale. This arrangement created
details as are necessary to decide the issues       the appearance of legitimacy in two ways.
before us in this appeal.                           First, Forum Rothmore helped the Teale
                                                    Network comply with Pennsylvania

                                                2
reinsurance regulations that require                           Teale. Although Ecotech’s shares were
u n l i c e n s e d o f f s h o r e r e i n s u r a n ce       virtually wo rthless, A ppellants
companies, such as Teale, to deposit in                        fraudulently over-valued Ecotech’s shares
escrow accounts collateral (in the form of                     on the company’s financial statements.
corporate stocks) equal to the liability                       Members of the conspiracy manipulated
associated with its reinsurance contacts.                      the market for Ecotech and other
Second, Forum Rothmore entered into                            corporations’ stock in order to maintain
“surplus contribution agreements” with                         the inflated trading prices.
Teale, which gave Teale the appearance of
                                                                       Miller, a lawyer, was corporate
b e i n g b a c k e d b y in d e p e n d e n t
                                                               counsel for Forum Rothmore and a
stockholdings. Id.
                                                               shareholder in Ecotech. The Ecotech
        Teale and Rennert first met and                        stock at issue was not tradeable and carried
discussed this fraudulent scheme in August                     a restrictive legend to that effect. Miller
1990 and executed the first of their surplus                   issued opinion letters stating that Forum
contribution agreements on September 1,                        Rothmore could remove that legend from
1990.      Under the terms of these                            stock certificates so that it falsely appeared
agreements, public shell corporations                          that the stock could be freely traded and
leased their stock to Teale and authorized                     leased to Teale.          The Government
the sale of the stock, if necessary, to pay                    submitted evidence that Miller was paid
claims under insurance policies that Teale                     $130,208 for representing the company
had reinsured. Teale then listed these                         and $104,000 from leasing Ecotech stock
shares at inflated values on the financial                     to Teale.
statements presented to World Life. After
                                                                      In 1991, the Pennsylvania Insurance
receiving insurance premiums from World
                                                               Department discovered W orld Life’s
Life, Teale paid monthly leasing fees to
                                                               insolvency and ordered its liquidation.
Forum Rothmore, which in turn split the
                                                               Because Teale had been paying insurance
fees with the stock providers. Id. The
                                                               claims with recently-received premiums
Teale Network was Forum Rothmore’s
                                                               and had no other significant assets to draw
sole client, and Forum Rothmore was the
                                                               upon, this liquidation deprived Teale of the
Teale Network’s only consistent source of
                                                               ability to pay further insurance claims.
assets.
                                                               World Life’s policyholders thus were
       In particular, Forum Rothmore                           unable to receive insurance payments as
entered into surplus c ontribu tion                            needed.
agreements with Ecotech Corporation
                                                                     Following World Life’s liquidation,
(“Ecotech”). Jensen was at various times
                                                               the Pennsylvania Life and H ealth
in control of and president of Ecotech. On
                                                               Insurance Guarantee Fund, a state fund
December 15, 1990, Jensen manipulated
                                                               through which Pennsylvania insurance
Ecotech’s stock price and then leased one
                                                               companies pay the outstanding liabilities
million dollars worth of Ecotech’s stock to

                                                           3
o f i n s o l v e n t c a r r ie r s , p r o v i d ed       Court had erred in finding that there was
approximately $6.4 million for group                        no loss caused by the fraud, in failing to
medical reinsurance claims left unpaid as                   increase Miller’s offense level because he
a result of the fraud.                                      had used special (legal) skills in
                                                            furtherance of the conspiracy, and in
                        II.
                                                            failing to increase all Appellants’ offense
       Appellants were indicted on                          levels for causing a substantial effect on a
February 6, 1996 and were convicted by a                    financial institution.
jury on April 16, 1997. At the sentencing
                                                                   In Miller, we rejected Miller’s
hearing held January 22, 1998, the District
                                                            argument that he acted “only as an
Court assigned each Appellant a one-point
                                                            attorney.” Instead, we held that Miller’s
upward departure for loss of confidence in
                                                            involvement went “beyond the role of
an important institution, but found no
                                                            legal representation” and could not “be
mon etary loss attributable to the
                                                            categorized as simple legal advice,”
Appellants because World Life was
                                                            especially given Miller’s ownership of
insolvent at the time it entered into
                                                            Ecotech stock and his letters regarding
reinsurance contracts with Teale. The
                                                            removal of restrictive legends. Miller, slip
District Court also rejected the application
                                                            op. at 6. In Rennert and Jensen, we also
of additional sentencing enhancements for
                                                            upheld Rennert and Jensen’s convictions
use of special skills and substantially
                                                            and affirmed the imposition of a one-point
jeopardizing a financial institution.
                                                            upward departure based on loss of
       Appellants appealed their individual                 confidence to an important institution.
verdicts and sentencing calculations to this                However, we remanded all three cases for
court in 1998 and we set out the full                       re-sentencing to consider 1) whether there
factual and procedural history of their                     was a causal connection between the
cases in prior unpublished opinions. See                    Appellants’ misrepresentations and the
United States v. Rennert, Nos. 98-1145 &                    fraud loss caused by Teale’s collection of
98-1101, slip op. (3d Cir. Oct. 15, 1999);                  premiums, and 2) in Miller’s case, whether
United States v. Jensen, Nos. 98-1148 &                     an enhancement would be appropriate for
98-1104, slip op. (3d Cir. Oct. 15, 1999);                  Miller’s use of special (legal) skills. With
and United States v. Miller, Nos. 98-1147                   respect to fraud loss, we clarified that the
& 98-1103, slip op. (3d Cir. Oct. 15,                       fraud loss calculation should be based on
1999). Appellants challenged the District                   the dates of Appellants’ agreement to the
Court’s instructions to the jury, the                       conspiracy, rather than the dates of their
sufficiency of the evidence supporting                      misrepresentations. Also, in a related case,
their convictions, and the upward                           we suggested that the loss calculation
adjustment for loss of confidence in an                     might be based on the net gain to Teale or
important institution. The Government                       the balance of unpaid claims.            See
cross-appealed, arguing that the District                   Yeaman, 194 F.3d at 458-59 (involving


                                                        4
another co-defendant in the conspiracy              a representative from the Liquidations and
who is not a party to the instant appeal).1         Rehabilitation Section of the Pennsylvania
                                                    Department of Insurance and a general
        On February 3, 2003, the District
                                                    counsel to a third-party administrator.
Court held a re-sentencing hearing for
                                                    They stated that, had their organizations
Miller, Jensen, and Rennert.          Miller
                                                    known that Appellants’ assets were
attempted to present testimony and
                                                    worthless, they would have halted the flow
documents in support of his argument that
                                                    of premiums months earlier and forced
the scope of his involvement in the
                                                    World Life to obtain a solvent reinsurer.
conspiracy was less than that of his co-
conspirators and that the extent of the total              On February 13, 2003, the District
loss caused by the fraud was not                    Court issued a sentencing opinion
foreseeable to him. In particular, Miller           concluding that Miller, Rennert, and
attempted to contest the Government’s               Jensen entered into an agreement
arguments that he was present at the                conspiring to defraud World Life and its
August 1990 Teale-Rennert meeting, that             policyholders no later than August 30,
he prepared opinion letters in support of           1990. The District Court held that the total
the conspiracy, that he received payments           fraud loss caused by the Appellants was
for services as a stock provider, and that he       approximately $3.2 million: the difference
falsified records bearing the date of               between the total premiums paid to Teale
Ecotech’s merger with a gold mine to                minus the claims paid by Teale to World
create additional stock shares for Teale.           Life’s policyholders. The District Court
The District Court declined to permit               further found that there was “a causal
Miller to submit additional evidence that           connection between the misrepresentations
was not already presented at trial because          of the Defendants and the continued
the issue was “subsumed” by the jury’s              payment of premiums to World Life . . .
verdict and was therefore immaterial to             and the Defendants.” App. at 12-13.
sentencing. See App. at 350-53 (finding             Finally, the District Court increased
Miller’s factual allegations were “matters          Miller’s sentence based on his use of
of defense for the trial, not for                   special skills and more than minimal
sentencing”).                                       planning. The Appellants also received
                                                    upward departures for causing the loss of
      On the issue of fraud loss causation,
                                                    confidence in an important institution (the
the Government presented two witnesses,
                                                    stock market).      The District Court
                                                    sentenced Miller to 51 months, Rennert to
                                                    63 months, and Jensen to 30 months of
   1
     Yeaman again appealed to this court            imprisonment.
in United States v. Yeaman, 248 F.3d 223
                                                           All three Appellants contest the
(3d Cir. 2001), and we remanded for re-
                                                    District Court’s factual finding of a causal
sentencing. He was re-sentenced on
                                                    connection           between         their
February 5, 2003 and did not appeal.

                                                5
misrepresentations and the fraud loss to                 premiums to Teale Network if it had
the victims of $3.2 million.       Miller                known Appellants were over-valuing
challenges the District Court’s order                    stock, Rennert only should have been held
barring him from submitting additional                   liable for the approximately $1.3 million in
testimony and documents to demonstrate                   losses that occurred on or after December
the “limited” scope of his involvement in                29, 1990, rather than counting losses
the conspiracy. We will affirm.                          beginning in September 1990. Because
                                                         this lower fraud loss amount would have
                      III.
                                                         reduced Rennert’s sentence, he argues that
       The District Court had jurisdiction               a remand for re-sentencing is required.
under 18 U.S.C. § 3231 and this court has
                                                         1.     Rela tio n s h i p B e t w e en
jurisdiction over the appeal pursuant to 28
                                                                A p p e l l a n t s ’
U.S.C. § 1291 and 18 U.S.C. § 3742. We
                                                                Misrepresentation of Stock
review the District Court’s factual findings
                                                                Values and World Life’s
for clear error. United States v. Weaver,
                                                                Continued Paymen t of
267 F.3d 231, 235 (3d Cir. 2001). We
                                                                Premiums
review the District Court’s decision to
admit or deny evidence for abuse of                             Appellants contend that the victim,
discretion. United States v. Serafini, 233               World Life, did not rely on their
F.3d 758, 768 n.14 (3d Cir. 2000).                       misrepresentations of stock assets as
                                                         valua ble a n d t h e r e fo r e t h eir
A.      Fraud Loss Causation
                                                         misrepresentations did not cause the fraud
        Appellants assert two primary                    loss. Moreover, they contend that it was
challenges to the District Court’s finding               World Life’s own obstruction of the
that their conspiracy caused approximately               investigation by the Pennsylvania
$3.2 million in fraud loss. First, all                   Department of Insurance – not their
Appellants argue that the District Court                 misrepresentations – that prevented the
erroneously found that their                             Department from discovering the fraud
misrepresentations of stock values actually              and immediately halting the flow of
caused Teale to continue receiving                       premiums to Teale. Appellants thus argue
premiums from World Life policyholders                   that the District Court committed clear
b y p r e v e n t in g t h e P e n n s yl v a n ia       error. The Government responds that
Department of Insurance from discovering                 World Life and its policyholders paid
the fraud and halting the flow of                        Teale millions of dollars for reinsurance in
premiums. This is one of the issues we                   reliance on the Appellants’ fraudulent
directed the District Court to consider on               representations that their stocks were
remand. Second, Rennert contends that                    valuable and redeemable as assets, as they
even if the District Court were correct that             purported.
the Pennsylvania Department of Insurance
                                                                We have addressed the issue of
would have stopped the flow of insurance

                                                     6
fraud loss causation in connection with the              policies had not been issued,
Teale conspiracy in Yeaman, where we                     th e em p lo ye rs w ho
stated, “[w]ithout the assets of the                     purchased the policies from
defendants and the resulting appearance of               World Life would have
solvency, the most reasonable inference is               obtained group medical
that World Life would have ceased paying                 coverage from another
premiums to Teale long before it                         source and all claims of the
eventually did.” Yeaman, 194 F.3d at 458.                beneficiaries would have
We explained the causality analysis as                   been paid in full. In either
follows:                                                 event . . . there would have
                                                         been a causal nexus between
       Teale could not have
                                                         the fraud and all unpaid
       entered and remained in the
                                                         claims.
       business of reinsuring
       World Life but for its                     Id. at 459. In short, we found that the
       f r a u d u l e n t                        most reasonable inference is that World
       m i s r e p re s e n t a ti o n s.         L i f e relie d on the A ppella nts ’
       Although the District Court                misrepresentations about the value of their
       made no finding on the issue               stock assets when it paid Teale additional
       [before], the record would                 premiums.
       also appear to us to support
                                                          On remand, the District Court
       the proposition that World
                                                  concluded that there was “a causal
       Life was not capable of
                                                  connection between the misrepresentations
       insuring any of the four
                                                  of the Defendants and the continued
       group medical policies
                                                  payment of premiums to World Life, and
       without having received a
                                                  . . . Teale and the Defendants.” App. at
       commitment for 100%
                                                  12, 34. In particular, the District Court
       reinsurance. It follows that
                                                  made the following findings:
       if the Teale fraudulent
       reinsurance contracts had                         -Had the true value of the
       not been available, World                         Defendants’ stocks been
       Life would either have                            known, at the very least, the
       secured other reinsurance or                      Pennsylvania Department of
       would not have issued the                         Insurance would have
       group policies involved. If                       stopped the payment of
       reinsurance from a solvent                        premiums to the Teale
       reinsurer had been obtained,                      Network.
       all claims under the policies
       would have been paid to the
       reinsurer; if the group                           -In addition, because World


                                              7
                  Life was insolvent,                                 Appellants next challenge the
                  had the reinsurance                          sufficiency of the evidence supporting the
                  contracts been                               District Court’s finding that the flow of
                  termin ated, the                             insurance premiums would have been
                  company would have                           halted but for their misrepresentations. At
                  been liquidated much                         the Appellants’ re-sentencing hearing, two
                  sooner than it was,                          Government witnesses testified that but for
                  and the policyholders                        Appellants’ misrepresentations about the
                  would have never                             value of the stock assets Teale claimed as
                  made those premium                           collateral, World Life would not have
                  payments at all.                             continued paying its policyholders’
                                                               premiums to Teale – that is, the
App. at 13, 35.
                                                               Department of Insurance or various
         Although Appellants argue that the                    policyholders would have halted the flow
District Court’s findings do not answer the                    of premiums if they had known the true
question             of    whether their                       value of Appellants’ stocks. One witness,
misrepresentations caused the fraud loss, it                   the Director of Liquidations and
is apparent that the Department of                             Rehabilitation for the Pennsylvania
Insurance did not intercede because it did                     Department of Insurance, testified that the
not know “the true value of the                                Department could have halted the flow of
[Appellants’] stocks.” App. at 13. That                        insurance payments had it known that
lack of knowledge was the result of                            Appellants’ assets were worthless.3
Appellants’ misrepresentations of the
value of those stocks. This, in turn, caused
the Department of Insurance to permit                          because their reinsurance contract did not
World Life’s continued operation and                           provide for termination based on Teale’s
caused World Life to continue providing                        insolvency.     We do not accept this
Teale insurance premiums in reliance on                        argument. If Teale were insolvent, it no
A p p e l l a n t s ’ m i s r e p re s e n t a ti o n s.       longer could meet its contractual
Appellants’ attempt to sever the                               obligations to provide reinsurance to
connection              between                their           World Life. Because Appellants have
misrepresentations and the Department of                       identified no contract provision requiring
Insurance’s delayed intervention is                            World Life to continue providing
unpersuasive.2                                                 premiums after Teale has materially
                                                               breached their contract, we have no reason
                                                               to assume that World Life would be bound
                                                               to continue honoring a contract that Teale
    2
       Ap pella nts suggest that Teale’s                       had breached.
insolvency would not have provided
                                                                    3
World Life with automatic grounds to                                    Appellants emphasize that the
terminate its relationship with Teale                          Insurance Director stated that the

                                                           8
B e c a u s e A p p e l l a n t s f raud ulentl y       testified that he recommended that World
misrepresented their assets’ value and                  Life partner with Teale based, in part, on
made it appear that Teale was solvent,                  Appellants’ misrepresentations of the
however, the Department was not                         value of their assets based on the
authorized to intervene.4                               manipulated market prices. The general
                                                        counsel analyzed the A ppella nts’
       Similarly, the general counsel to a
                                                        fraudulent market valuations of their assets
third-p arty insura nce a dm inistrato r
                                                        and inferred that the Teale Network was a
                                                        legitimate, solvent business based on those
                                                        representations. He further testified that if
Department “could . . . have acted months               he had known that the stocks backing
sooner . . . to stop the flow of premiums,”             Teale were worthless, he would have
App. at 386-87, but did not state that it               removed his company’s group policies and
would have done so. The District Court                  reinvested them with a solvent carrier.
did not clearly err in concluding that the
Department would have acted if it had                           We come then to Appellants’
known the true value of the assets                      argument that it was World Life’s failure
Appellants misrepresented, given its later              to cooperate with the Pennsylvania
investigation and liquidation of World                  Department of Insurance – not Appellants’
Life. We also reject Appellants’ argument               misrepresentations – that delayed the
that the Department could not have                      discovery of Teale’s fraud. But the fraud
stopped World Life from continuing to                   victim’s negligence or lack of diligence in
provide Teale with premiums “months                     uncovering the fraud is not a defense.
sooner” based on administrative hurdles to              United States v. Coyle, 63 F.3d 1239, 1244
the investigatory and liquidation processes.            (3d Cir. 1995) (“The negligence of the
The District Court did not err in crediting             victim in failing to discover a fraudulent
the Director’s statement that it could have             scheme is not a defense to criminal
mobilized its administration to act quickly.            conduct.”) (citations omitted); see also
                                                        United States v. Bennett, 9 F.Supp. 2d
        4
              Appellants suggest that the               513, 523 (E.D. Pa. 1998) (“Taking
Department of Insurance did not begin                   advantage of a victim’s self-interest does
investigating World Life until January                  not mitigate the seriousness of fraudulent
1 9 9 1 a n d t h er e f o r e Ap pellan ts’            conduct.”) (quotations and citations
misrepresentations had no effect prior to               omitted). Nor do the Appellants cite any
that date. This argument assumes that the               case law suggesting that courts may not
Department would not have begun                         find fraud loss causation where the victim
investigating World Life if it were known               has not immed iately assisted the
that its reinsurer, Teale, lacked collateral            authorities in investigating the fraud.
assets as of 1990. This argument is
                                                               In addition, the Government
without support and is directly contrary to
                                                        properly notes that even assuming that
the Director’s testimony.

                                                    9
World Life could be held to be                              In his separate appeal, Miller
contributorily negligent, such an argument           asserts that the District Court erroneously
ignores our prior finding that the fraud             conflated the jury’s “general” conspiracy
victims also included Wo rld Life                    conviction with the court’s conclusion that
policyholders, wh o cou ld not be                    Miller should be held liable for all losses
reimbursed for their medical costs until the         related to the conspiracy under the relevant
Commonwealth’s bail-out. Yeaman, 194                 conduct provision of the United States
F.3d at 458. Nothing in the record                   Sentencing Guidelines, U.S.S.G. § 1B1.3.
suggests that the policyholders acted                Miller contends that even if a defendant
negligently or that they should have been            has been convicted of a conspiracy charge,
expected to be suspicious of the true value          the trial court must make particularized
of its reinsurance agent’s assets.                   findings as to the scope of each
                                                     conspirator’s involvement in order to
        In light of the evidence from the
                                                     increase the conspirator’s sentence under
trial as well as the re-sentencing hearing,
                                                     Section 1B1.3.
the District Court did not clearly err in
finding a causal connection between the                     Under the Sentencing Guidelines, a
Appellants’ misrepresentations and the               defendant’s offense level is subject to
losses incurred by World Life and its                increase depending on the amount of loss
policyholders.                                       caused by the fraud. Section 1B1.3(a)
                                                     provides that the district court should
2.     Rennert’s Sentence and the
                                                     adjust the specific offense level by taking
       Beginning Date of the Fraud
                                                     into account all conduct relevant to the
        Rennert also argues that the District        offense. U.S.S.G. § 1B1.3(a). This
Court should have calculated the fraud loss          includes “all reasonably foreseeable acts
for the period after December 1990                   and omissions of others in furtherance of
because the Department of Insurance                  [a] jointly undertaken criminal activity.”
Director stated that had it known of the             U.S.S.G. § 1B1.3(a)(1)(B).
true value of Appellants’ stocks in
                                                            Miller asserts that United States v.
December 1990, it would have halted the
                                                     Collado, 975 F.2d 985 (3d Cir. 1992),
flow of premiums. Rennert did not assert
                                                     requires that we remand this case in light
this alternative loss calculation during the
                                                     of the District Court’s lack of findings as
District Court’s sentencing hearing and,
                                                     to the precise scope and timing of his
thus, has waived the argument. See United
                                                     agreement to join the conspiracy. 5 In
States v. Bethancourt, 65 F.3d 1074, 1082
(3d Cir. 1995).
B. Miller’s Claim Regarding the Scope of                 5
                                                            Miller also cites United States v.
His Involvement
                                                     Studley, 47 F.3d 569 (2d Cir. 1995).
1.     Relevant Conduct                              However, Studley is not a binding
                                                     precedent on this court and we have made

                                                10
Collado, we stated that the district court          of the brothers’ involvement in the
must consider whether the loss resulting            conspiracy or in each other’s transactions,
from the actions of co-conspirators was 1)          but instead only adopted the findings of
“in furtherance of the . . . jointly-               the presentence report in attributing to
undertaken . . . activity,” 2) within “the          each of them the drug quantity from the
scope of the defendant’s agreements,” and           conspiracy.      Although we required
3) “reasonably foreseeable in connection            individualized inquiry, we did not impose
with the criminal activity the defendant            an immutable requirement that the district
agreed to undertake.” 975 F.3d at 995               court hold extensive hearings to make
(citing U.S.S.G. § 1B1.3, application note          explicit, particularized findings as to the
1); see also United States v. Duliga, 204           exact date on which each defendant
F.3d 97, 100 (3d Cir. 2000). We held that           committed to the conspiracy or the precise
the relevant conduct provision depends              contours of each conspirator’s agreement.
upon each defendant’s role in the                   We instead employed a more flexible
conspiracy and stated that courts must              approach. We remanded the case to the
conduct “a searching and individualized             district court to determine when the
inquiry into the circumstances surrounding          defendants had joined the larger
each defendant’s involvement in the                 conspiracy because the district court had
conspiracy” in order to “ensure that the            made no finding on the issue and the
defendant’s sentence accurately reflects            record was not clear on this issue.
his or her role” in the conspiracy. Collado,
                                                            Critically, however, we also
975 F.3d at 995. We added that district
                                                    affirmed the district court’s attribution to
courts also should consider other factors,
                                                    one brother the amounts the other brother
such as whether the defendant profited or
                                                    supplied to the conspiracy. We affirmed
assisted others in the conspiracy. Id. at
                                                    this finding based on our review of the
991-94.      We further clarified that a
                                                    record, despite the district court’s lack of
conspiracy conviction does not obviate the
                                                    explicit findings on this issue. Because the
need for analysis under the relevant
                                                    record was clear on its face, the district
conduct provision. Id. at 993, 997.
                                                    court’s lack of particularized findings was
       Collado dealt with the liability of          not dispositive. We instead concluded that
two brothers involved in a larger drug              the district court’s accomplice attribution
conspiracy. The district court had not              conclusion between the brothers was
made any factual findings as to the scope           supported by the record evidence of their
                                                    awareness of and assistance to each other
                                                    in drug transactions. See id. at 997.
clear that the resolution of such issues is
                                                           More recently, in Duliga, we
governed by this Court’s decision in
                                                    reaffirmed the proposition that even absent
Collado. United States v. Duliga, 204 F.3d
                                                    explicit findings on the precise scope of a
97, 101 n.1 (3d Cir. 2000). Accordingly,
                                                    defendant’s involvement, a district court’s
our analysis focuses on Collado.

                                               11
decision may be affirmed if it is adequately          see no reason to remand the case only to
supported by the trial court record. 204              have the district court reach the same
F.3d at 101 n.2. Although the district                sentencing decision.” 204 F.3d at 101 n.2.
court in that case “did not necessarily
                                                      2.     Evidentiary Issues
undertake a searching and individualized
inquiry before attributing the entire                         Miller also contends that the
amount of [fraud] loss . . . to Duliga,” we           District Court abused its discretion by
affirmed without remanding because we                 denying his request to submit additional
were convinced that the attribution of the            evidence that allegedly would have had a
fraud loss was “firmly supported by the               direct bearing on the scope and timing of
record.” Id.                                          his involvement in the conspiracy and his
                                                      inability to foresee the total fraud loss
        Here, the record evidence suffices
                                                      caused by the conspiracy. In particular,
to support the conclusion that Miller had
                                                      Miller attempted to submit evidence to
agreed to the conspiracy by at least August
                                                      dispute 1) his presence at the first meeting
1990 and should be held liable for the full
                                                      between Rennert and Teale in August
amount of loss caused by the conspiracy.
                                                      1990 (the time at which the Government
In contrast to Collado’s under-developed
                                                      suggested that Miller joined th e
record, the record in this case included
                                                      conspiracy); 2) Forum Rothmore’s
Miller’s opinion letters on fraudulent stock
                                                      designation of payments to Miller as legal
transactions, his demand letters to protect
                                                      fees or leasing fees in its financial records;
artificially inflated stock quotes, and his
                                                      and 3) the timing of Miller’s first
letters advising the removal of restrictive
                                                      discussion with the owners of the gold
stock certificate legends so that non-
                                                      mine corporation (with which Ecotech
marketable shares would appear to be
                                                      merged) about receiving Ecotech stock in
tradeable. Miller played a critical role,
                                                      order to bolster Ecotech’s financial
enabling the conspiracy to function and
                                                      statements. Because the District Court
providing it an imprimatur of legitimacy.
                                                      found that the issue of foreseeability was
The record evidence of Miller’s extensive
                                                      subsumed in the jury verdict, it stated that
involvement in the conspiracy supports the
                                                      it would not permit Miller to re-try an
District Court’s application of the relevant
                                                      issue that the jury had already determined.
conduct provision.6 As with Duliga, “we
                                                      We consider each piece of Miller’s
                                                      evidence below.
     6
          Because we rely on the record                      Even assuming Miller was not
evidence of Miller’s agreement and                    present at Rennert and Teale’s August
complicity, we need not reach Miller’s                1990 meeting, several of Miller’s other
claim that the District Court may have                actions evidence his involvement in the
improperly conflated the jury’s conspiracy            conspiracy by August 1990. For example,
verdict with a finding of full liability under        in June 1990, two months before the
the relevant conduct provision.

                                                 12
Rennert-Teale meeting, Miller provided                   attempt to submit evidence regarding his
Rennert with an opinion letter to support                presence at the Rennert-Teale meeting.
Forum Rothmore’s practice of leasing
                                                                  Miller also attempted to submit
worthless assets. On July 13, 1990, Miller
                                                         evidence from his personal records and
authored an opinion letter recommending
                                                         journals that he contended showed that he
the re-issue of the restricted Ecotech stock
                                                         was not paid to provide stock to Forum
held by Jensen, Rennert, and Miller
                                                         Rothmore with knowledge of his co-
without a restrictive legend. This made it
                                                         defendants’ fraudulent activities, but only
appear that Forum Rothmore could
                                                         received legal fees and a loan. Miller
provide Teale with millions of marketable
                                                         emphasizes that Forum Rothmore’s faulty
shares. In an August 28, 1990 letter, one
                                                         a c c o u n t in g sys t e m i m p r o p e r l y
week after the Rennert-Teale meeting,
                                                         denominated his payments as stock
Miller wrote to Teale expressing his
                                                         provider fees, rather than traditional
interest and commitment to what he
                                                         payments for legal fees.
termed the “credit enhancement program”
that forms the basis of the fraud charges                        As the Government points out, the
against the defendants, along with a $25                 designation of F orum Rothmore’s
million offer of stocks from Ecotech and                 payments as “leasing fees” or “legal fees”
other corporations. Supp. App. at 638-47.                is inconsequential because the payment
Regardless of whether he was present at                  was made in exchange for M iller’s
the Rennert-Teale meeting, the remainder                 services in advancing a fraudulent scheme.
of Miller’s actions strongly support the                 Because Miller does not contest the
District Court’s conclusion that he had                  District Court’s finding that he used his
joined the conspiracy by or before August                legal skills in furtherance of the fraud, the
1990.                                                    fact of payment for fraudulent services is
                                                         the critical point while the form of his
         Miller responds that he undertook
                                                         payment is irrelevant. Moreover, as we
the aforementioned actions “in good
                                                         noted in Miller, Miller’s services could not
faith.” Miller Reply Br. at 8-9. Yet, the
                                                         “be categorized as simple legal advice.”
c u m u l a t iv e e f f e c t o f M i l l e r ’s
                                                         Miller, slip op. at 7.
aforementioned actions (the June opinion
letter, the July letter recommending re-                        Although Miller responds that he
issue of stock, and the August letter to                 was acting in good faith when he rendered
Teale) suggests that Miller was too central              the legal services for which he received
to the operation to believe naïvely that he              remuneration and was not aware that his
and his associates were all within the                   legal services were being misused for a
bounds of the law. Based on the record                   criminal conspiracy, the record does not
evidence, Miller’s explanation is not                    support his contention. We also note that
credible and the District Court did not                  Miller’s argument that Forum Rothmore
abuse its discretion in rejecting Miller’s               only paid him for good-faith legal services,


                                                    13
rather than fraudulent stock-leasing          permitted to submit his proffered evidence,
activities, goes to whether or not he acted   Miller’s evidence would not have been
in furtherance of the conspiracy. The         sufficient to undermine the basis in the
jury’s verdict shows that it decided that     record for imposing accomplice liability.
issue adversely to Miller. Despite Miller’s   We hold the District Court did not abuse
insistence that his new evidence only         its discretion in denying Miller’s proffer of
pertained to the timing or scope of his       the evidence.
commitment, Miller also attempted to
                                                                  IV.
argue that he was entitled to submit
evidence to attempt to nullify the jury’s            We will affirm the judgment of the
conspiracy connection, especially in his      District Court for the reasons set forth.
earlier pleadings. We emphasize that
Collado does not entitle a defendant to re-
litigate his or her guilt or innocence and
thus, the issue of whether he was paid to
fraudulently provide stock is not the
subject of a Collado analysis.
        Lastly, Miller attempted to submit
evidence to counter the Government’s
allegation that he falsified records to
deceive his accountant and regulatory
authorities regarding the value and
marketability of Ecotech’s assets. In
particular, Miller states that in September
and October of 1991 or earlier, he
discussed providing restricted, non-
marketable Ecotech stock to the gold mine
corporation with which Ecotech merged.
As such, Miller suggests that he should
only be accountable for losses incurred
after fall 1991, but not before.
       Even if Miller did not falsify
records until late 1991, there were still
enough other indicia of his involvement in
1990, discussed above, to support the
conclusion that he already had committed
to the conspiracy in 1990, regardless of
whether he committed additional frauds in
connection with Ecotech’s merger with the
gold mine corporation. In sum, even
assuming that Miller would have been
