06-4081-cr(Lead), 06-5165(con), 06-4087-cr(con)
USA v. Elgindy

                 UNITED STATES COURT OF APPEALS

                        FOR THE SECOND CIRCUIT

                             -------------

                           August Term, 2008

(Argued: September 3, 2008              Decided: December 17, 2008)

   Docket Nos. 06-4081-cr(Lead), 06-5165(con), 06-4087-cr(con)

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UNITED STATES OF AMERICA,

               Appellee,

          - against -

JEFFREY ROYER and AMR I ELGINDY, also known as ANTHONY PACIFIC,
also known as ANTHONY ELGINDY, also known as HERBERT MANNY
VELASCO, also known as HERIBERTO MANNY VELAZCO, also known as
TONY ELGINDY,

               Defendants-Appellants.

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Before:   SACK and KATZMANN, Circuit Judges, and
          RAKOFF, District Judge.*

     Amr Elgindy and Jeffrey Royer appeal from their criminal
convictions in the Eastern District of New York (Dearie, J.),
raising, as their principal points, challenges to venue, to the
Government’s theories of securities and wire fraud, to the
admission of certain evidence relating to “9/11,” and to the
calculation of their sentences. We affirm.



     *
       The Honorable Jed S. Rakoff, United States District Judge
for the Southern District of New York, sitting by designation.

                                  -1-
                    JOSHUA L. DRATEL (Meredith Heller, on the
                         brief), Law Office of Joshua L. Dratel,
                         New York, NY, for Defendant-Appellant
                         Elgindy.

                    LAWRENCE D. GERZOG, New York, NY, for
                         Defendant-Appellant Royer.

                    JOHN A. NATHANSON, Assistant United States
                    Attorney (David C. James and Michael J.
                    Goldberger, Assistant United States
                    Attorneys, on the brief) for Roslynn R.
                    Mauskopf, United States Attorney for the
                    Eastern District of New York, Brooklyn, NY,
                    for Appellee.

RAKOFF, District Judge:

     Amr I. Elgindy and Jeffrey Royer appeal from judgments of

conviction entered in the United States District Court for the

Eastern District of New York (Dearie, J.) following a twelve-week

jury trial.

     Elgindy was convicted by the jury of racketeering conspiracy

in violation of 18 U.S.C. § 1962(c), securities fraud conspiracy

in violation of 18 U.S.C. § 371, five substantive counts of

securities fraud in violation of 15 U.S.C. §§ 78j(b) and 78ff,

one count of conspiracy to commit extortion and one substantive

count of extortion, both in violation of 18 U.S.C. § 1951(a), and

two counts of wire fraud in violation of 18 U.S.C. § 1343.1   In

addition, Elgindy pleaded guilty to a separate indictment


     1
       The jury acquitted Elgindy of eight substantive counts of
securities fraud, one count of extortion, one count of conspiracy
to obstruct justice, one count of obstruction of justice, and
seven counts of wire fraud.

                               -2-
(combined with the jury verdict for purposes of sentencing and

entry of the judgment here appealed), which charged him with

making false statements to representatives of the Transportation

Safety Authority in violation of 18 U.S.C. § 1001 and with

committing an offense while on pretrial release in violation of

18 U.S.C. § 3147.   Elgindy was sentenced principally to a term of

135 months’ imprisonment.

     Royer was convicted by the jury of racketeering conspiracy

in violation of 18 U.S.C. § 1962(c), securities fraud conspiracy

in violation of 18 U.S.C. § 371, four substantive counts of

securities fraud in violation of 15 U.S.C. §§ 78j(b) and 78ff,

conspiracy to obstruct justice in violation of 18 U.S.C. § 371,

obstruction of justice in violation of 18 U.S.C. § 1503, and

witness tampering in violation of 18 U.S.C. § 1512(b)(3).2    Royer

was sentenced principally to a term of 72 months’ imprisonment.

     On appeal, Elgindy and Royer jointly and severally raise a

host of issues, but the only ones that merit discussion relate to

venue, the adequacy of the jury instructions and legal theories

underlying the securities fraud and wire fraud counts, the

admission of evidence related to the events of September 11, 2001

(“9/11"), and the calculation of the sentences.   We construe the

facts most favorably to the Government.


     2
       The jury acquitted Royer of ten substantive counts of
securities fraud, two counts of extortion, one count of
conspiracy to commit extortion, and ten counts of wire fraud.

                                -3-
     In 1998, Elgindy founded a company called Pacific Equity

Investigations that administered two websites, one that was

publicly accessible with the address “www.InsideTruth.com” (“the

InsideTruth site”) and one that was available only to paying

subscribers with the address “www.AnthonyPacific.com” (“the AP

site”).3    The InsideTruth site presented itself as a research

tool that sought to uncover and reveal negative information about

publicly-traded companies.    The AP site sought to profit from

these revelations by providing its subscribers with

recommendations about which stocks to “short.”4

     In 2000, through a co-conspirator named Derrick Cleveland

(who testified for the Government at trial), Elgindy began

receiving misappropriated information from co-defendant Jeffrey

Royer, who was then a Special Agent of the Federal Bureau of

Investigation (“FBI”) in Oklahoma City.    In the early summer of

2000, Royer informed Cleveland of the existence of an ongoing

government investigation of a company called Broadband Wireless

(“BBAN”).    Cleveland passed the information on to Elgindy, who

then profited by shorting shares of BBAN.    As a result of this


     3
       Subscribers paid between $200 and $600 per month for
membership.
     4
       In “short-selling,” or “shorting,” the seller typically
sells at the prevailing market price stock that he does not yet
own but has arranged to purchase later at the subsequent market
price, so that, if the price drops in the interim, he realizes a
profit. Put another way, a short-seller is betting on a short-
term decline in the market price of a given security.

                                 -4-
success, Elgindy solicited Cleveland to relay further such

confidential law enforcement information from Royer.    Eventually,

Royer began passing information directly to Elgindy, as well as

passing information through Cleveland.

     As the scheme evolved, Royer, who was assigned to the FBI’s

“white collar crime” unit, would obtain confidential information

by performing searches in the FBI’s Automated Case Support

computer database and in the criminal history database maintained

by the National Crime Information Center, as well as by

contacting personnel of the Securities and Exchange Commission

(“SEC”) and asking them to perform searches in the SEC’s

confidential Name Relationship Search Index database.   Royer

would convey the misappropriated information to Elgindy, who

would in turn convey the gist of it to subscribers to the AP site

and instruct the AP site members to short the stock but not yet

release the information to the public.   Then, when Elgindy gave

the signal, the AP site members would use the InsideTruth site

and other media to disseminate the misappropriated information to

the general public, and thereby profit from the resulting drop in

the stock’s price.   Elgindy kept close control over his AP site

subscribers and even threatened to exclude them from the site if

they failed to follow his trading instructions.

     In addition, Elgindy himself traded on the misappropriated

information, sometimes even in advance of when he released it to


                                -5-
the AP members or when he directed them to trade on its basis (a

practice called “front running”).     Elgindy and Royer also

manipulated prices in the relevant securities by orchestrating

trades by AP site subscribers in thinly traded stocks.

     In January 2002, both Royer and Cleveland began working for

Elgindy at his San Diego office.    Even though Royer had now left

the FBI, he continued to unlawfully obtain confidential law

enforcement information from his girlfriend, Lynn Wingate, who

still worked for the FBI, and from a friend named Michael

Mitchell, who was a police officer in Gallup, New Mexico.

     Elgindy also used the unlawfully obtained information for

the purpose of extortion.   Specifically, after Royer provided

Elgindy with information that Paul Brown, the CEO of a company

called Nuclear Solutions (“NSOL”), had previously been convicted

of a felony drug charge but that the conviction had been

expunged, Elgindy posted the information on the AP site,

describing Brown, inaccurately, as a “three time felon.”       Elgindy

and the AP site members then heavily shorted NSOL stock, causing

its price to decline.   Thereupon, Elgindy informed Brown that he

and the AP site members would leave Brown alone only on the

condition that Brown give Elgindy a discounted block of NSOL

stock to cover their short positions.     Brown signed an agreement

with Troy Peters (one of Elgindy’s accomplices who pled guilty to

participation in the extortion conspiracy), pursuant to which


                                -6-
Peters’ company would purportedly provide investment banking

services to NSOL in exchange for stock in the company.     No such

services were ever provided, however, and the agreement merely

served as a cover to transfer shares to Elgindy and others.5

     Elgindy further used his connection with Royer to learn

whether he himself was under investigation.     On several occasions

prior to September 11, 2001, Elgindy requested, both directly and

through Cleveland, that Royer find out whether Elgindy was the

target of any ongoing investigation.     Thereafter, in late

September 2001, Royer learned that Elgindy was a subject of a

government investigation in the Eastern District of New York into

individuals who had made significant securities trades

immediately prior to 9/11.     Elgindy drew the investigators’

attention because he had made contributions to a charity called

“Mercy USA” that the investigators believed had links to

terrorist organizations and because, on September 10, 2001, he

had attempted to liquidate his children’s investment accounts.

Royer passed at least some of this information on to Elgindy.

         The government also introduced evidence that Elgindy

subsequently traveled to Lebanon without the permission of his




     5
       Elgindy was acquitted of another extortion charge
involving a company called Flor Decor (“FLOR”) and its CEO, A.J.
Nassar. Royer was acquitted of all extortion counts.

                                  -7-
probation officer in November 2001,6 arranged to buy an apartment

there, and transferred money to a Lebanese bank account.     He also

asked Royer to write a letter to the District Court of the

Northern District of Texas recommending that Elgindy’s term of

supervised release be terminated early.

     Shortly before Royer left the FBI in late 2001, he was

interviewed about Elgindy.   In the course of this interview, he

falsely stated that, although Elgindy had offered him a job, he

did not plan to work for Elgindy until the FBI investigation had

been concluded.   He also falsely stated that he had never

provided confidential law enforcement information to Elgindy.

     As mentioned, Royer, after leaving the FBI, continued to

obtain confidential information from, among others, Michael

Mitchell, whom Royer asked to run searches in law enforcement

databases.   Royer falsely told Mitchell that the searches were

relevant to work on continuing FBI investigations.   After Royer

was arrested, he contacted Mitchell and told him repeatedly that

he had told the FBI that he had only asked Mitchell to run one

search.   Mitchell understood Royer to be asking him to lie to the

FBI if he was interviewed about the multiple searches he had

performed for Royer.




     6
       In 2000, Elgindy, after completing a term of imprisonment
on unrelated federal charges, had begun serving a term of
supervised release.

                                -8-
     A grand jury in the Eastern District of New York returned an

indictment against Elgindy, Royer, and others in May 2002, and a

second superseding indictment in September 2004.   On April 17,

2004, after he had been arrested and released on bail, Elgindy

went to MacArthur Airport on Long Island and tried to board a

plane with false identification.   He was traveling under the name

“Herbert Manny Velasco” and had with him several pieces of

identification bearing variants of that fictitious name, as well

as approximately $25,000 in cash, more than $30,000 worth of

jewelry, blank checks for a bank account belonging to his mother,

and blank checks for an account created in his own name and

listing his country of residence as Lebanon.   Elgindy falsely

told the arresting authorities that his name was Manny Velasco,

that he was a jewelry dealer, and that Amr Elgindy, whose name

appeared on several documents and prescriptions in his

possession, was his lawyer.   He finally admitted his true

identity when the officers found his California driver’s license.

     Against this background, we turn to the principal points

raised by defendants on this appeal.



Venue



     As to each count of which one or both defendants was

convicted at trial, the jury found, by a preponderance of the

evidence, that venue was proper in the Eastern District of New

                                -9-
York.        Both defendants challenge the sufficiency of the evidence

supporting these findings.7

       Venue raises both constitutional and statutory concerns.

Article III of the Constitution states that "[t]he Trial of all

Crimes . . . shall be held in the State where the said Crimes

shall have been committed."          U.S. Const. art. III, § 2, cl. 3.

The Sixth Amendment declares that "[i]n all criminal

prosecutions, the accused shall enjoy the right to a speedy and

public trial, by an impartial jury of the State and district

wherein the crime shall have been committed, which district shall

have been previously ascertained by law."          U.S. Const. amend.

VI.8        In the Second Circuit,

       there is no single defined policy or mechanical test to
       determine constitutional venue. Rather, the test is best
       described as a substantial contacts rule that takes into
       account a number of factors -- the site of the defendant’s
       acts, the elements and nature of the crime, the locus of the
       effect of the criminal conduct, and the suitability of each
       district for accurate factfinding . . . .

United States v. Reed, 773 F.2d 477, 481 (2d Cir. 1985).


        7
       Elgindy also argues that, under his reading of Apprendi v.
New Jersey, 530 U.S. 466 (2000), and various other cases, the
Government was required to prove venue by proof beyond a
reasonable doubt. This argument is foreclosed in this Circuit.
See, e.g., United States v. Rommy, 506 F.3d 108, 119 (2d Cir.
2007); United States v. Chen, 378 F.3d 151, 159 (2d Cir. 2004);
United States v. Svoboda, 347 F.3d 471, 485 (2d Cir. 2003).
        8
       Technically, Article III specifies “venue” and the Sixth
Amendment specifies “vicinage,” but that refined distinction is
no longer of practical importance. See 2 Charles Alan Wright,
Federal Practice and Procedure § 301 (3d ed. 2000); see also
Brian C. Kalt, Essay, The Perfect Crime, 93 Geo. L. J. 675 (2005)
(discussing perhaps the only circumstance in which the
distinction between venue and vicinage might bear any
significance).

                                      -10-
     By rule, venue lies “in a district where the offense was

committed.”   Fed. R. Crim. P. 18.    Congress, however, has

provided that, absent an express statutory provision to the

contrary, “any offense against the United States begun in one

district and completed in another, or committed in more than one

district, may be inquired of and prosecuted in any district in

which such offense was begun, continued, or completed.”    18

U.S.C. § 3237(a).   See United States v. Johnson, 323 U.S. 273,

275 (1944) (noting that venue for the prosecution of “continuing

offenses” is proper in any district “through which force

propelled by an offender operates”).    This statute has particular

applicability where, as here, the use of modern communications

facilities to execute a sophisticated criminal scheme inherently

contemplates activities throughout many parts of the country.

See United States v. Rowe, 414 F.3d 271, 279 (2d Cir. 2005)

(“Section 3237(a)’s language is broad, and Rowe’s act of

publishing an internet advertisement to trade child pornography

can readily be described as an ‘offense involving . . .

transportation in interstate . . . commerce.’”).

     Where multiple crimes are charged in a single indictment,

the Second Circuit has held that “venue must be laid in a

district where all the counts may be tried.”    United States v.

Saavedra, 223 F.3d 85, 89 (2d Cir. 2000).    Accordingly, we must

consider the appropriateness of venue with regard to each of the

counts of which the defendants were convicted.



                               -11-
     We begin with the counts of substantive securities fraud.

The Securities Exchange Act of 1934 provides that “[a]ny criminal

proceeding may be brought in the district wherein any act or

transaction constituting the violation occurred.”       15 U.S.C. §

78aa.       See United States v. Geibel, 369 F.3d 682, 696 (2d Cir.

2004).       To justify venue in the Eastern District of New York, the

Government relies, first, on evidence that seven of the limited

number of subscribers to the AP site were located in the Eastern

District of New York and that Elgindy sent hundreds of messages

to AP site subscribers conveying the information misappropriated

by Royer, including information relating to the specific stocks

involved in the securities fraud counts of which defendants were

convicted.       In addition, trades in the securities affected by the

defendants’ manipulative activities were made during the relevant

time frame by investors residing in the Eastern District of New

York, and market makers who made markets in many of those stocks

were located in the Eastern District of New York.9




        9
       There were also certain venue-related events that
pertained to individual securities fraud counts. For example,
Research Frontiers (“REFR”), one of the companies about which
Royer misappropriated and disseminated confidential information,
was located in the Eastern District of New York. A co-
conspirator of Elgindy who posted material on the AP site
arranged to have a picture taken of REFR’s headquarters on Long
Island. Also, an AP site subscriber with the screen name
“WhoLovesYa,” who resided in the Eastern District of New York,
participated in preparing a report for Elgindy’s InsideTruth
website on Seaview Underwater Research (“SEVU”), one of the
companies named in a securities fraud, which report was intended
to drive down the price of SEVU stock.

                                   -12-
     We have stated that “venue is proper in a district where (1)

the defendant intentionally or knowingly causes an act in

furtherance of the charged offense to occur in the district of

venue or (2) it is foreseeable that such an act would occur in

the district of venue [and it does].”    United States v. Svoboda,

347 F.3d 471, 483 (2d Cir. 2003).     In the instant case, no fewer

than seven AP site subscribers resided in the Eastern District of

New York during the period of the various securities fraud

schemes of which the defendants were convicted, and all but one

was an AP subscriber throughout this period.    Although no direct

evidence of their trades was presented to the jury, that is of no

moment to our analysis.   Venue need only be proved by a

preponderance of the evidence, and the jury could reasonably

infer that it was more likely than not that one or more of these

subscribers traded in the applicable securities, since there were

at most some 300 AP subscribers in total, such trading was the

very purpose of subscribing (at a price) to the AP site, and

Elgindy exercised tight control over the AP site subscribers.

     Moreover, quite aside from any trading, a jury could

reasonably infer that it was more likely than not that, with

respect to each security, one or more of the subscribers, in

accordance with Elgindy’s strict instructions, disseminated

Royer’s misappropriated information so as to put artificial

downward pressure on the market.    This manipulation, in turn,

impacted not only the documented purchases of relevant securities



                               -13-
made by non-AP investors resident in the Eastern District of New

York but also the market makers in these stocks, whose role

depended on the market operating free of manipulation.

     Here, by contrast with such cases as United States v.

Geibel, 369 F.3d 682 (2d Cir. 2004) (holding venue improper where

actions taken in the Southern District of New York were “anterior

and remote to” the criminal conduct), the actions of the AP site

subscribers, the market makers, and the investors were crucial to

the success of the scheme.   And at a minimum, the jury could

infer by a preponderance that the subscribers in the Eastern

District of New York received information about these stocks from

Elgindy.   Receipt of electronic transmissions in a district is

sufficient to establish venue activity there.    See, e.g., Rowe,

414 F.3d at 279 (holding venue in Southern District of New York

proper for conviction of advertising to receive, exchange or

distribute child pornography when defendant posted an

advertisement on the Internet, which a law enforcement official

viewed in the district).

     As noted, in this Circuit, venue must not only involve some

activity in the situs district but also satisfy the “substantial

contacts” test of Reed, which requires consideration of such

factors as “the site of the defendant’s acts, the elements and

nature of the crime, the locus of the effect of the criminal

conduct, and the suitability of the [venue] for accurate

factfinding.”   Reed, 773 F.2d at 481.   But here, as discussed


                               -14-
above, the first three factors are plainly satisfied, for the

defendants orchestrated activity in the Eastern District of New

York that was intended to, and did, effectuate their scheme.

Nor, as to the fourth factor, is the Eastern District any less

suitable for accurate factfinding than any other district

involved in the scheme’s implementation.   Indeed, the defendants,

having concocted a scheme that relied so heavily on the actions

of the AP site subscribers for its success and that defrauded

investors throughout the country, can hardly complain that their

very modus operandi subjected them to prosecution in numerous

districts, including the Eastern District of New York.

     Elgindy also challenges the jury’s finding that venue was

proper with respect to the substantive extortion count and

extortion conspiracy count of which he was convicted.    He argues

once again that the Government has failed to show that he or, in

the case of the conspiracy charge, a co-conspirator took an

action in furtherance of the extortion scheme in the Eastern

District of New York.   The Government, in turn, makes a similar

argument to the one it made about the securities fraud counts:

that Elgindy’s extortionate acts were dependent on the

communication of information to AP site subscribers and the

control exercised over their further dissemination of that

information and that the presence of seven of the subscribers in

the Eastern District establishes sufficient contacts for venue




                               -15-
purposes.10   They also point to specific evidence documenting

that “WhoLovesYa,” a resident of the Eastern District, was an

active participant in communications concerning Paul Brown, CEO

of NSOL, who was the target of the extortion scheme of which

Elgindy was ultimately convicted.

     It is useful on this point to recall the nature of the

extortion scheme in which Elgindy was engaged.     After

misappropriating, with Royer’s help, information about the

publicly expunged criminal record of Brown, Elgindy informed the

AP site subscribers that Brown was a “three time felon” and

directed them to short NSOL stock.     This downward pressure on

NSOL’s stock price, in turn, provided Elgindy with the ammunition

to extort Brown into transferring a block of NSOL stock to

Elgindy, and it had the intended effect.     In other words, a

critical component of creating the requisite fear in Brown so

that the extortion would succeed was the concerted trading

activity of the AP site subscribers, led by Elgindy.

     The record below documents that WhoLovesYa, who resided in

the Eastern District of New York, was an active participant in

these events.   In one chat session, after Elgindy gave his

subscribers the go-ahead to short NSOL stock (apparently because



     10
        The fact that the AP site subscribers were not expressly
named as co-conspirators is irrelevant. Their actions were
either caused by Elgindy and Royer or, at a minimum, were a
foreseeable result of the defendants’ actions. Svoboda, 347 F.3d
at 483.

                                -16-
Brown was not providing the demanded block of stock rapidly

enough), WhoLovesYa commented “Brown[’]s gone, all bets are off.”

“Anthony” -- Elgindy’s screen name -- then wrote, “NSOL e short

15% at $1.15.   Don’t forget the CEO is now worm food and they

have no product or revenues.”   WhoLovesYa also offered to

investigate whether Brown possessed a license to carry concealed

weapons so as to independently verify the information Royer had

obtained about his criminal record and discussed having placed a

phone call to an Idaho weapons agency to this end.

     It is thus evident that venue for the substantive extortion

count and the extortion conspiracy count properly lay in the

Eastern District of New York.

     Although defendants also challenge venue with respect to the

securities fraud conspiracy and the RICO conspiracy counts, their

challenge need not long detain us.     In a conspiracy prosecution,

venue is proper in any district in which “an overt act in

furtherance of the conspiracy was committed.”    United States v.

Naranjo, 14 F.3d 145, 147 (2d Cir. 1994).    This includes not just

acts by co-conspirators but also acts that the conspirators

caused others to take that materially furthered the ends of the

conspiracy.   See Svoboda, 347 F.3d at 483 (stating that venue is

proper in a district where the defendant intentionally or

knowingly causes an act in furtherance of the charged offense to

occur).   The defendants’ transmission of confidential information

to the AP site subscribers in the Eastern District of New York,

                                -17-
as well as the acts that a reasonable jury could find were more

likely than not taken by the AP site subscribers in the Eastern

District of New York, are sufficient in themselves to meet this

standard for both the securities fraud and RICO conspiracies (as

were the acts of WhoLovesYa for the extortion conspiracy).

     Moreover, Royer’s obstruction of justice conviction also

connects the securities fraud conspiracy to the Eastern District

of New York.   Royer alerted Elgindy to the fact that he was under

investigation after September 11, 2001, and he continued to

monitor the progress of that investigation and to pass on the

information he obtained to Cleveland and Elgindy.   Shortly before

leaving the FBI, he also falsely told FBI investigators that he

had never provided confidential law enforcement information to

Elgindy.   These actions were taken in furtherance of the

securities fraud conspiracy: their purpose was to allow the

scheme to continue by protecting Elgindy from law enforcement

authorities and to conceal the fact of the information-sharing

arrangement among Royer, Cleveland, and Elgindy.    Because these

actions were taken to impede a grand jury investigation in the

Eastern District of New York, they establish the requisite

contacts with that district for the securities fraud conspiracy

charge as well.

     The RICO conspiracy does not call for a fundamentally

different analysis.   To be sure, we expressed some concern in

Saavedra that RICO, given its breadth, not be interpreted to

                               -18-
permit venue to lie automatically in every district where a

member of the enterprise has conducted some criminal activity.

223 F.3d at 93-94.   But we also explained in Saavedra that the

application of the Reed factors in every case will ensure that

venue is only found where there are enough substantial contacts

to ensure that prosecution is fair to the defendant.   Id. at 94.

     In this case, Elgindy was convicted under 18 U.S.C. §

1962(c), which makes it “unlawful for any person employed by or

associated with any enterprise engaged in . . . interstate or

foreign commerce, to conduct or participate, directly or

indirectly, in the conduct of such enterprise’s affairs through a

pattern of racketeering activity.”    Among the acts that make up

the pattern of racketeering activity are Elgindy’s direction of

communications to the AP site subscribers located in the Eastern

District and Royer’s obstruction of the grand jury investigation

in the Eastern District.   The former establishes substantial

contacts in light of Reed’s directive to consider the elements

and nature of the crime, as the communications were central to

the fraudulent scheme that gave the enterprise its primary

purpose.   The latter establishes substantial contacts when viewed

in light of Reed’s directive to consider the place where the

effect of the criminal conduct occurs, as the repercussions of

Royer’s actions were felt by the Eastern District grand jury

whose investigation he impeded.



                               -19-
     We have considered defendants’ other arguments regarding

venue and find them to be without merit.



Securities Fraud and Wire Fraud



     The defendants challenge their securities fraud and wire

fraud convictions on numerous grounds, the most colorable of

which are here addressed.   The securities fraud counts went to

the jury on two alternative theories: first, that the defendants

unlawfully traded in various securities on the basis of material

confidential information that Royer had misappropriated and then

shared with Elgindy for the purpose of securities trading, see

United States v. O’Hagan, 521 U.S. 642, 651-52 (1997), and,

second, a market manipulation theory involving the defendants’

orchestration of trading by themselves and the AP site members in

order to artificially affect the market prices of various thinly

traded securities, see Gurary v. Winehouse, 190 F.3d 37, 44-46

(2d Cir. 1999).

     With regard to the first theory, the defendants argue that

even if Royer improperly obtained the law enforcement information

here at issue from confidential law enforcement reports, much of

the information reflected in those reports was also publicly

available and therefore any related trading was not trading on

“nonpublic” confidential information.   See SEC v. Mayhew, 121

F.3d 44, 50 (2d Cir. 1997).   The Government does not dispute that

                               -20-
someone who knew where to look could have lawfully discovered

some of the information that Royer obtained improperly from

nonpublic law enforcement reports, but it argues that, as the

district court instructed the jury, the fact that information may

be found publicly if one knows where to look does not make the

information “public” for securities trading purposes unless it is

readily available, broadly disseminated, or the like.

     In so concluding, the district court relied on the Supreme

Court’s decision in United States Department of Justice v.

Reporters Committee for Freedom of the Press, 489 U.S. 749, 751

(1989), in which the Court considered whether the disclosure of

criminal histories compiled by the FBI could reasonably be

expected to constitute an unwarranted invasion of personal

privacy within the meaning of the “privacy” exemption from

disclosure under the Freedom of Information Act.   In upholding

the application of that exemption, the Court distinguished

criminal history information that a member of the public could

obtain only with difficulty from information that was “freely

available.”

     The very fact that federal funds have been spent to prepare,
     index, and maintain these criminal-history files
     demonstrates that the individual items of information in the
     summaries would not otherwise be “freely available” either
     to the officials who have access to the underlying files or
     to the general public. Indeed, if the summaries were
     “freely available,” there would be no reason to invoke the
     FOIA to obtain access to the information they contain.

Id. at 764.   Although the Supreme Court’s interpretation of FOIA


                               -21-
is not directly applicable to the issue presented in the instant

case, its logic is highly instructive.   The law enforcement

reports that Royer misappropriated were not themselves public in

any practical sense, even if some of the sources from which they

were compiled could be accessed by the public.   Moreover, the

manner in which law enforcement information was combined in the

reports was itself nonpublic and helped inform its relevance for

trading purposes.   See United States v. Winans, 612 F. Supp. 827,

832 (S.D.N.Y. 1985) (although all the information in reporter’s

published columns was public, the “timing, subject and tenor” of

the misappropriated columns was not public prior to publication),

aff’d in relevant part sub nom. United States v. Carpenter, 791

F.2d 1024, 1031-32 (2d Cir. 1986), aff’d, 484 U.S. 19 (1987) .

While the trial court’s instruction here given might not be

universally appropriate, in the factual context of this case it

correctly stated the relevant principles the jury needed to

apply.11


     11
       Although Royer also objects to the district court’s
instruction that “[t]o constitute non-public information,
information must be specific and more private than general
rumor,” the language the district court used was drawn almost
verbatim from our decision in United States v. Mylett. See 97
F.3d 663, 666 (2d Cir. 1996) (“To constitute non-public
information under the act, information must be specific and more
private than general rumor.”). Contrary to defendants’
assertions, the evidence presented to the jury readily
established that the information obtained by Royer with regard to
each of the securities here in question was obtained from
confidential reports that combined information that could be
obtained publicly, albeit with difficulty, and information that
was entirely private.

                               -22-
     Alternatively, defendants argue that their actions cannot be

the basis of a securities fraud conviction because they disclosed

both the information and its source to the AP site subscribers.

However, as the district court correctly instructed the jury,

when someone misappropriates material nonpublic information, he

     is obligated, under the law, either to disclose the
     information to make it public, or to abstain from trading.
          When an investor with such information chooses to
     disclose it, the non-public information remains non-public
     for purposes of the insider trading laws until it has been
     disseminated in a manner sufficient to insure its
     availability to the investing public or to insure that the
     market has had an opportunity to “absorb” the disclosed
     information such that the company’s stock price has already
     adjusted to reflect that information.

Tr. at 8839.   See Mayhew, 121 F.3d at 50.   Elgindy’s disclosure

of the confidential law enforcement information he obtained from

Royer to the AP site subscribers did not accomplish the necessary

public dissemination.

     Finally, defendants also argue that it was error to instruct

the jury that it could convict the defendants if the defendants

traded while in “knowing possession” of nonpublic information

material to those trades, as oppposed to requiring proof that the

defendants “used” such information in making the trades.   But we

previously resolved this issue in favor of the “knowing

possession” standard in United States v. Teicher, 987 F.2d 112,

119-21 (2d Cir. 1993) and while this resolution was arguably

dictum, it was the product of sustained and detailed

consideration as set forth in the opinion.   Nothing that has


                               -23-
developed since persuades us of any different resolution.   On the

contrary, the SEC subsequently enacted Rule 10b5-1, adopting a

knowing possession standard, and that determination is itself

entitled to deference.   See Chevron U.S.A., Inc. v. Natural Res.

Def. Council, Inc., 467 U.S. 837, 843-44 (1984); Roth ex rel.

Beacon Power Corp. v. Perseus L.L.C., 522 F.3d 242, 249 (2d Cir.

2008) (holding that SEC rules are entitled to Chevron deference).

We consequently adhere to the knowing possession standard

articulated in Teicher.12

     With respect to the Government’s alternative theory of

liability -- market manipulation -- the district court instructed

the jury as follows:

     The essential element of manipulation is the deception of
     investors into believing that prices at which they purchase
     and sell securities are determined by the natural interplay




     12
       Moreover, the jury instruction actually given by the
district court here was, if anything, more favorable to the
defendants than a “knowing possession” standard requires. The
district court’s instruction read:

     A purchase or sale of a security is “on the basis of”
     material non-public information about that security, if the
     person making the purchase or sale was aware of the material
     non-public information when the person made the purchase or
     sale, and the information in some way informed the
     investment decision.

Tr. at 8841-42 (emphasis supplied). The emphasized language
appears to require more of a causal connection between the
possession of the information and the trade in the security
concerned than would be demanded under a knowing possession
standard.

                               -24-
     of supply and demand.13 Consequently, any conduct that is
     designed to deceive or defraud investors by controlling or
     artificially affecting the price of securities is
     prohibited. Congress intended that Section 10(b) prevent
     fraud, whether it is a garden variety fraud, or a unique,
     novel or atypical form of deception.
          Market manipulation may be accomplished through a
     variety of means or ways undertaken either alone or in
     combination. The government alleges that the defendants
     engaged in a variety of conduct designed to impact
     artificially the price of stocks, including by making
     materially false and misleading public statements on the
     InsideTruth.com website and on the Internet and by
     coordinating their trading of the stocks of certain
     companies for the purpose of impacting the price of the
     stock. I instruct you, however, that group trading by
     itself without the intent to deceive and defraud is not
     market manipulation. Similarly, the dissemination of
     truthful information, negative or not, into the marketplace
     by itself is not market manipulation.

Tr. at 8844-45 (emphases supplied).   Defendants argue that this

instruction was erroneous because it arguably allowed for

conviction without a finding that the defendants disseminated

false information to the marketplace.   However, the statute here

in issue, § 10(b) of the Securities Exchange Act of 1934, simply

prohibits the use of “any manipulative or deceptive device or

contrivance” in contravention of SEC rule.   15 U.S.C. § 78j(b).

This broad language, on its face, extends to manipulation of all

kinds, whether by making false statements or otherwise.   Rule

10b-5, in turn, prohibits not only conventional frauds brought

about by making materially false or misleading statements, see

Chiarella v. United States, 445 U.S. 222, 227-28 (1980), but also



     13
       The language of this first sentence is drawn directly
from our decision in Gurary, 190 F.3d at 45.

                              -25-
so-called “constructive frauds,” i.e., other forms of misconduct

that have the same practical effect as a conventional fraud.

Specifically, the third alternative prong of Rule 10b-5 prohibits

any person from “engag[ing] in any act, practice, or course of

business which operates or would operate as a fraud or deceit

upon any person.”   17 CFR § 240.10b-5(c).   As the Supreme Court

recently confirmed, “[c]onduct itself can be deceptive,” and so

liability under § 10(b) and Rule 10b-5 does not require “a

specific oral or written statement.”   Stoneridge Inv. Partners,

LLC v. Scientific-Atlanta, Inc., 552 U.S. _, 128 S. Ct. 761, 769

(2008); see United States v. Finnerty, 533 F.3d 143, 148 (2d Cir.

2008).

     Accordingly, in United States v. Regan, 937 F.2d 823, 829

(2d Cir. 1991), we sustained a conviction under Rule 10b-5 of the

underwriter of a convertible bond offering who attempted to

depress the stock price of the issuer by arranging for artificial

short sales to a broker-dealer.   Similarly, in Crane Co. v.

Westinghouse Air Brake Co., 419 F.2d 787, 792-98 (2d Cir. 1969),

we held that Rule 10b-5 was violated when the defendant sought to

thwart a tender offer by purchasing the target company’s stock on

the open market at increasingly higher prices while

simultaneously secretly selling the stock in off-market sales.

In the present case, the defendants sought to artificially affect

the prices of various securities by directing the AP site

subscribers to trade and to disclose the negative information at

                               -26-
times and in manners orchestrated by the defendants that were

dictated not by market forces, but by defendants’ desire to

manipulate the market for their own benefit.    It would be hard to

imagine conduct that more squarely meets the ordinary meaning of

“manipulation.”

     Defendant Elgindy also challenges the legal basis of the two

wire fraud counts of which he was convicted.    These counts

concern Elgindy’s practices of trading against his advice to his

AP site subscribers and his related practice of “front running,”

i.e., making his own trades before advising the site subscribers

to trade in a security and thus guaranteeing himself increased

profits.   Both of these alleged practices were presented to the

jury as violations of the prong of the wire fraud statute that

prohibits use of interstate or international wire communications

in execution of a scheme “to deprive another of the intangible

right of honest services.”    18 U.S.C. §§ 1343, 1346.

Specifically, the Government alleged that Elgindy, by trading

against his advice to the AP site subscribers and trading in

advance of the trades he directed them to make, cheated his AP

site subscribers of the honest services he owed them.    Elgindy,

however, contends that no such duty was owed.

     We have explained that

     the term “scheme or artifice to deprive another of the
     intangible right to honest services” in section 1346, when
     applied to private actors, means a scheme or artifice to use
     the mails or wires to enable an officer or employee of a
     private entity (or a person in a relationship that gives

                                -27-
     rise to a duty of loyalty comparable to that owed by
     employees to employers) purporting to act for and in the
     interests of his or her employer (or of the other person to
     whom the duty of loyalty is owed) secretly to act in his or
     her or the defendant's own interests instead, accompanied by
     a material misrepresentation made or omission of information
     disclosed to the employer or other person.

United States v. Rybicki, 354 F.3d 124, 141-42 (2d Cir. 2003) (en

banc) (footnote omitted).    Applying this standard to the facts of

this case, we find that Elgindy owed the requisite duty of honest

services to the AP site subscribers.    Elgindy charged his

subscribers fees of $200 to $600 per month; he specifically

warranted on his website that he would not front run or trade

against advice; and he not only offered investment advice to his

subscribers, he specifically directed their trading activities

and threatened to remove them from the site if they did not

follow his instructions.    While an investment advisor does not

automatically owe a duty of honest services to those who rely on

her advice, in this case Elgindy took numerous affirmative steps

to create a relationship in which, for a price, his subscribers

agreed to let him, in effect, dictate their trades, secure in his

promise that he would not undercut their trades for his own

benefit.   This was more than enough to create a duty of honest

services, which Elgindy then blatantly breached.14




     14
       Although Elgindy contends that the Government failed to
show any detriment to his subscribers, this is plainly untrue,
since they paid him $200-$600 for his honest services and
received dishonest services instead.

                                -28-
9/11 Evidence



     Elgindy and Royer argue on appeal that evidence admitted by

the district court concerning the FBI’s post-9/11 investigation

of Elgindy’s possible ties to the 9/11 terrorist attacks was

unfairly prejudicial, that the district court abused its

discretion in admitting the evidence, and that as a result they

were denied a fair trial.

     Federal Rule of Evidence 403 allows relevant evidence to be

excluded by the trial court if “its probative value is

substantially outweighed by” such dangers as “unfair prejudice.”

Fed. R. Evid. 403.   On appeal, our review of the district court’s

Rule 403 rulings is tightly limited in recognition of a trial

court’s superior position to assess both the probative value and

the prejudicial potential of evidence presented at trial; those

rulings must stand absent an abuse of discretion.   United States

v. Birney, 686 F.2d 102, 106 (2d Cir. 1982); United States v.

Figueroa, 618 F.2d 934, 943 (2d Cir. 1980).   While “evidence

linking a defendant to terrorism in a trial in which he is not

charged with terrorism is likely to cause undue prejudice,”

United States v. Elfgeeh, 515 F.3d 100, 127 (2d Cir. 2008), the

potential for prejudice is only part of the equation, see, e.g.,

United States v. Salameh, 152 F.3d 88, 123 (2d Cir. 1998) (per

curiam) (holding that, in the trial of the participants in the

1993 World Trade Center bombing, victim testimony and photographs

                               -29-
of the scene of the bombing were not improperly admitted into

evidence).    Indeed, in Elfgeeh, we held that, despite the fact

that a witness’s testimony had suggested that defendant was

suspected of funding terrorism, defendant was not entitled to a

new trial, in part because the district court gave timely

cautionary instructions, as the district court did here, and thus

reduced the potential for prejudice.    515 F.3d at 127.

     Here, Royer’s illicit efforts to find out whether Elgindy

was under investigation and his discovery, unlawfully conveyed to

Elgindy, that Elgindy was suspected (wrongly, as it turned out)

of having advance knowledge of the 9/11 attacks, was directly

relevant to the obstruction and racketeering charges, among

others.15    Nevertheless, the district court was at pains to limit

the amount and impact of such evidence because of the risk of

prejudice.    Before Cleveland testified about the information that

Royer passed on to him about the investigation into Elgindy’s

supposed 9/11 connections, the court limited the testimony he

could offer, prohibiting, for example, any reference to al Qaeda

and any attempt to elicit testimony suggesting that Elgindy’s

brother, who worked at the Pentagon, left just before the attack.



     15
       The district court observed at one point that “if that
prong of this case were not about 911 and were about some other
conduct . . . the whole case would have come in, not for the
truth, but to tell the jury about the nature, depth and
seriousness of the investigation because it’s directly relevant
to the crime of obstruction. I’ve hamstrung the government, for
good reason, and at [defense counsel’s] urging . . . .”

                                 -30-
Later, after Cleveland testified that Royer had informed him that

Elgindy was under investigation and that the topic of the

investigation was “terrorism,” the district court instructed the

jury that “[t]his case has nothing to do with terrorism.     I want

to make that point very strongly to you.   There are no such

charges in this case . . . and you will not hear any evidence

that Mr. Elgindy or anyone else was involved in or aided the

events of September 11th.   Please understand this.”   The

testimony throughout the rest of the Government’s case included

only a few general references to the fact that Elgindy was under

investigation by the FBI in late 2001 and a handful of specific

statements indicating that the investigation explored possible

ties between Elgindy and 9/11 or terrorism.

     However, when defendant Royer took the stand, he testified

that at various times he had worked first to prevent and then

investigate the 9/11 terrorist attacks, and this was a subject of

cross-examination by the Government, though the scope of the

cross was again limited by the court.   Specifically, in his

direct testimony, Royer portrayed himself as having worked in

cooperation with Elgindy and Cleveland in the wake of 9/11 to try

to track down leads relating to the attacks, dismissed the

suggestion that there was any basis to believe at the time that

Elgindy was involved in 9/11, and denied sharing with Elgindy the

fact that he was under investigation.   The district court

notified the government that, although Royer’s testimony did open

                               -31-
the door to further questioning about the post-9/11 terrorism-

related investigation into Elgindy, it would keep “a very short

tether on this.”   Royer was then cross-examined about the nature

of the investigation and the contents of FBI reports suggesting

that Elgindy may have been involved in terrorism.   The district

court instructed the jury that the statements contained in the

reports were hearsay.

     Finally, a rebuttal witness, Agent James Fitzgerald of the

FBI, testified briefly about the Zacharias Moussaoui case,

testimony that was allowed in order to rebut Royer’s claim that

he had possessed information that could have led to the

interception of the 9/11 hijackers if only his superiors at the

FBI had heeded his urging to act on it.   Additionally, the

Government asked Michael Mitchell to confirm that Royer had told

him that Elgindy was under investigation for terrorism-related

matters involving a Middle Eastern charity.   This testimony was

allowed only after the district court had considered the

Government’s arguments for its necessity and the defense’s

arguments against admitting it; offered to give a limiting

instruction to the jury; and then decided, at the defense’s

request, not to give such an instruction because it would draw

too much attention to the testimony.16


     16
       Additionally, Elgindy’s own counsel put questions to
Royer regarding an alleged link between one of the stocks Elgindy
shorted (Genesisintermedia.com, or “GENI”) and Osama Bin Laden, a
line of questioning that was apparently meant to suggest that

                               -32-
     The record thus demonstrates that, far from abusing its

discretion, the district court engaged in precisely the sort of

“conscientious assessment” that our precedents require.   See

Birney, 686 F.2d at 106; Figueroa, 618 F.2d at 943.   It carefully

weighed the probative value of the 9/11-related evidence the

Government wished to offer, excluded that evidence that was more

potentially prejudicial than probative (such as references to Al

Qaeda), issued limiting instructions to the jury on several

occasions, and continued to keep tight control over the

introduction of such evidence even after defendant Royer’s

testimony explicitly addressed the topic of 9/11.

     It remains only to add that Elgindy was, in the end,

acquitted of the obstruction of justice charges, which were the

charges most directly linked to the 9/11-related evidence.    This

only serves to reconfirm that the district court’s careful

efforts to remove any unfair prejudice from the introduction of

9/11-related evidence were extremely successful.17




Elgindy was a source rather than a target in a 9/11-related FBI
investigation.
     17
       For the same reasons, we reject defendants’ arguments
that the district court abused its discretion in refusing to
sever their trials in light of the potential for prejudice from
9/11-related evidence.
     As for Elgindy’s claim that the district court erred in
failing to question jurors about possible 9/11-related prejudice
during voir dire, the fact is that Elgindy’s counsel expressly
declined to request such questions.

                               -33-
Sentencing



     Both Elgindy and Royer challenge the sentences the district

court imposed on them.

     The central dispute concerning Elgindy’s sentence is the

calculation of the gain amount used to determine both his offense

level under the Guidelines and his forfeiture amount.     The

district court decided, after considering all of the relevant

conduct, that the appropriate provision of the Sentencing

Guidelines to apply in Elgindy’s case was § 2B1.4, the insider

trading provision.   (The Government had urged the court to use §

2B1.1, which applies to market manipulation and specifies a

higher offense level.)   Under § 2B1.4, the base offense level is

8 and points are then added depending on the amount of gain

resulting from the offense according to the scale established in

§ 2B1.1.

     The district court determined that the gain amount was

$1,568,000.   Elgindy asserts that the calculations made to reach

this figure were improper and that the correct figure is $64,000.

Specifically, Elgindy argues that only the gains made on four of

the stocks as to which he was convicted of securities fraud

involving the public market18 should be included in the



     18
       More precisely, these were the four stocks as to which
Elgindy was convicted of securities fraud on a misappropriation
and/or market manipulation theory. The fifth count of securities
fraud of which he was convicted was for misleading his
subscribers.

                               -34-
calculation (as opposed to gains on all 32 stocks as to which

Elgindy acquired material nonpublic information); that the only

relevant trader for the purpose of calculating profits is himself

(as opposed to including AP site members as well); and that only

gains made within three days from the date on which the inside

information was disseminated should be included in the

calculation (as opposed to gains from all trades made by relevant

traders after the dissemination of the nonpublic information).

The district court ultimately determined that all 32 stocks as to

which Elgindy possessed misappropriated information should be

considered, and that trades made by all AP site members following

the dissemination of material nonpublic information should also

be considered, but that the three-day period advocated by Elgindy

should be applied.

     In making this decision, the district court noted first

that, given the fact that the insider trading scheme was clearly

a joint endeavor among Elgindy and the AP site subscribers, it

was appropriate to take into account the subscribers’ trades.

See U.S. Sentencing Guidelines Manual § 2B1.4 cmt. background

(2007) (“Because the victims [of insider trading] and their

losses are difficult if not impossible to identify, the gain,

i.e., the total increase in value realized through trading in

securities by the defendant and persons acting in concert with

the defendant or to whom the defendant provided inside

information, is employed instead of the victims’ losses.”

(emphasis added)).   Although this meant including gains

                               -35-
associated with stocks with respect to which Elgindy was

acquitted of securities fraud, the district court found that

“clear and convincing” evidence evinced the larger pattern of

trading.   See United States v. Gigante, 94 F.3d 53, 55-57 (2d

Cir. 1996) (holding that acquitted conduct may be considered in

determining the appropriate sentence under the Sentencing

Guidelines when it is established by a preponderance of the

evidence).   These findings of fact were not clearly erroneous.19

     Given its determination that the appropriate gain amount was

$1,568,000, and after taking into account other relevant factors

(obstruction of justice, leadership, and extortion), the district

court arrived at a total offense level of 31, which, given

Elgindy’s criminal history, translated into a Guidelines

sentencing range of 135 to 168 months.   The forfeiture amount of

$1,568,000 (which Elgindy also challenges) was based on the same

calculations, and we similarly find that the district court’s

determination of this amount was not erroneous.




     19
       Elgindy points to several specific points of fact that he
claims were not established by sufficient evidence to be taken
into account by the district court at sentencing. But our review
of the record shows otherwise. Specifically, Elgindy alleges
that trades in the stock of BGI Industries (“BGII”) should not
have been included; but there is testimony in the record that
Cleveland learned through Royer that the company was under
investigation and that the information was disseminated through
the AP site. He also alleges that the trading profits of three
traders were improperly included in the calculation because they
did not receive their information directly from Elgindy; but
there was evidence that they did receive material nonpublic
information that originated with Elgindy and Royer.

                               -36-
     Elgindy also argues that there was an “unwarranted

disparity” between his sentence and that of his co-conspirator,

Peter Daws, who received probation and a $50,000 fine.      The

district court, however, specifically noted that Daws was a

passive recipient of the information obtained by Elgindy and that

Elgindy, unlike Daws, was convicted of extortion and of

committing a crime while on pre-trial release.    In light of these

considerations, we do not find the disparity to be unreasonable.

     Finally, Elgindy challenges the district court’s

determination of his sentence for making false statements to the

Transportation Safety Authority and committing an offense while

on bail, which were the charges contained in the second

indictment (to which he pleaded guilty).    He argues that the

district court failed to adequately explain the basis of its

sentence of 60 months for the two counts of making false

statements and 27 months for the commission of an offense while

released on bail.   However, any error in calculating the 60 month

sentence for the false statement counts was harmless, as that

sentence is to be served concurrently with Elgindy’s 108 month

sentence for his other convictions.    As to the 27-month

consecutive sentence, while the district court did not parse out

the steps through which it arrived at this figure, the sentence

is consistent with U.S.S.G. § 3C1.3.    That section provides that

when 18 U.S.C. § 3147, which stipulates that a sentence for a

crime committed on pretrial release shall be imposed

consecutively to any other sentence imposed, applies in a given

                               -37-
case, the offense level for the underlying offense is increased

by three levels.   The application note explains,

     the court . . . should divide the sentence on the judgment
     form between the sentence attributable to the underlying
     offense and the sentence attributable to the enhancement.
     The court will have to ensure that the “total punishment” .
     . . is in accord with the guideline range for the offense
     committed while on release, as adjusted by the enhancement
     in this section. For example, if the applicable adjusted
     guideline range is 30-37 months and the court determines a
     “total punishment” of 36 months is appropriate, a sentence
     of 30 months for the underlying offense plus 6 months under
     18 U.S.C. § 3147 would satisfy this requirement.

The district court appears to have done just what this note

requires.   Having properly determined that the combined sentence

for all the crimes of which Elgindy was convicted in both

indictments was to be 135 months (the low end of the Guidelines

range), it allocated that sentence between the underlying

offenses and the enhancement under § 3147.   Accordingly, we

decline to vacate any portion of Elgindy’s sentence.

     As for Royer, he challenges his sentence primarily on the

ground that the gain amount applied in his case by the district

court -- which was $1,568,000, the same amount applied in

Elgindy’s case -- was improper.   He contends that this amount

includes losses related to securities fraud counts as to which he

was found not guilty and that it was error to attribute acts

committed by Elgindy to Royer for the purposes of sentencing

because those acts were not reasonably foreseeable by him.     See

United States v. Studley, 47 F.3d 569, 574 (2d Cir. 1995)

(holding that in the case of jointly undertaken criminal

activity, the acts of one participant may be attributed to

                               -38-
another for sentencing purposes   if they were reasonably

foreseeable).   The district court, however, explicitly found that

the nature of Elgindy’s enterprise was evident to Royer from his

earliest involvement in it, and given the facts in the record we

find that this was not clear error.

     We have considered defendants’ numerous other points on

appeal and find them to be entirely without merit.   Accordingly,

defendants’ convictions and sentences are in all respects

AFFIRMED.




                               -39-
