                                                                                                                           Opinions of the United
2000 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


3-14-2000

United States v Helbling
Precedential or Non-Precedential:

Docket 99-5051




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Filed March 14, 2000

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 99-5051

UNITED STATES OF AMERICA

v.

WILLIAM F. HELBLING,
       Appellant

On Appeal from the United States District Court
for the District of New Jersey
(D.C. Criminal No. 96-cr-00740)
District Judge: Honorable William G. Bassler

Argued September 9, 1999

Before: BECKER, Chief Judge, ROTH, and RENDELL,
Circuit Judges

(Filed: March 14, 2000)

       Tonianne J. Bongiovanni, Esq.
        (ARGUED)
       Office of Federal Public Defender
       972 Broad Street
       Newark, NJ 07102
        Counsel for Appellant




       George S. Leone, Esq.
       Elizabeth S. Ferguson, Esq.
        (ARGUED)
       Office of United States Attorney
       970 Broad Street, Room 700
       Newark, NJ 07102
        Counsel for Appellee

OPINION OF THE COURT

RENDELL, Circuit Judge.

William F. Helbling appeals from his conviction and
sentence. A jury found that Helbling embezzled funds from
a profit sharing plan covered by the Employee Retirement
Income Security Act ("ERISA") to pay the operating
expenses of three failing companies he owned, and engaged
two lawyers to help him by creating false documents
indicating that the withdrawals had been part of a lawful
Employee Stock Ownership Plan ("ESOP") conversion.
Helbling's appeal raises numerous issues relating to the
timeliness of his indictment, the sufficiency of the evidence
presented at trial, and the calculation of his sentence.1 We
will affirm his conviction and sentence in all aspects. An
understanding of the facts of the case is a necessary
foundation for a discussion of the issues he raises.

I.

On December 18, 1996, a federal grand jury returned a
thirty-five count indictment against Helbling. The
indictment included: (1) one count of conspiracy to
embezzle employee pension plan funds and falsify ERISA
documents (18 U.S.C. S 371); (2) four counts of
_________________________________________________________________

1. We have jurisdiction over Helbling's appeal over his conviction under
28 U.S.C. S 1291 and his sentence under 18 U.S.C. S 3742. We gave
Helbling leave to file a supplemental pro se brief and a reply brief and
leave to the government to respond. We have considered both his
counseled and pro se submissions. We have denied Helbling's motions to
file further supplemental briefs and appendices.

                               2


embezzlement of employee pension plan funds from an
ERISA covered plan (18 U.S.C. S 664); (3) eighteen counts of
falsifying documents required by ERISA (18 U.S.C.S 1027);
(4) six counts of wire fraud (18 U.S.C. S 1343); and (5) six
counts of mail fraud (18 U.S.C. S 1341). The mail fraud
counts were dismissed during trial.2 The jury convicted
Helbling of twenty-seven of the remaining twenty-nine
counts.

Before trial, Helbling filed a motion to dismiss the
indictment on the basis that the indictment was not timely.
On July 22, 1996, Helbling had signed an agreement
waiving his statute of limitations defense. However, Helbling
argued to the District Court that the waiver was invalid
because he had been coerced into signing it by fraud and
misconduct. Helbling also argued that the government had
failed to investigate allegations he had made about third
parties to a degree Helbling says he believed the waiver
agreement required. The waiver agreement specifically
allowed Helbling "to present for investigation" his
allegations which included claims that a number of
individuals purposely injured his companies. After an
evidentiary hearing, the District Court denied the motion in
part by finding that the government had fulfilled its part of
the bargain. The Court found that on October 15, 1996,
government agents met with Helbling and accepted from
him documents he believed supported his claims. Before
ceasing their investigative activities, the agents reviewed the
documents and spoke with another agent who had
previously investigated related complaints.

Trial commenced on May 13, 1998. At trial, the
government offered proof that Helbling illegally withdrew
money from the profit sharing plan covered by ERISA, used
the funds to pay the operating costs of three companies he
owned, and had two lawyers help him withdraw the money
and legitimize the withdrawals by creating backdated
documents to reflect that the plan had been lawfully
converted into an ESOP. Helbling did not contest many of
_________________________________________________________________

2. The District Court granted Helbling's motion to exclude the documents
charged in the indictment. The United States filed a superseding
indictment on May 20, 1998.

                               3


the background facts presented at trial including his
control of the three companies, his administration of the
plan, or the financial transactions themselves. Helbling
instead argued that the government failed to establish that
he had acted with the requisite criminal intent, and that
the government witnesses were lying. In his pro se brief,
Helbling explains that he acted on the advice of counsel
who told him that he could withdraw funds from the plan
and document the ESOP conversion later as long as he had
secured the consent of the company's board of directors.

To prove its case, the United States presented numerous
documents and several witnesses. The witnesses included
Helbling's alleged co-conspirators, the two lawyers, Gerald
S. Susman and Stephen Sokolic, who testified to the false
ESOP conversion, Laura Scurko, who testified about the
financial transactions and explained that ERISA covered
the plan, Barry Penn, Susan Kramer and Donald Mayle,
who testified to the forgery of two important documents,
and John Grikis and Barry Katz who managed the plan
investments at NatWest Bank and Oppenheimer & Co.
Several of the plan participants also testified.

The witnesses explained that Helbling was the president,
chief executive officer, and sole shareholder of three
companies, Micro-Technology Co. (and its subsidiary Micro-
Products Engineering Co.), Scranton Electronics, Inc., and
Yardley Group, Inc., which Helbling ran as one company,
and the administrator of Micro-Products Engineering
Company Profit Sharing Retirement Plan. The plan was
funded exclusively by Micro-Products. Ed Wisniewski, a
plan participant and long-time employee, testified that the
plan was established by a previous owner in 1965 to
provide retirement income as an incentive to salaried
employees to remain with the company. Laura Scurko, an
attorney who was appointed trustee of the plan in a civil
suit brought by the plan participants, testified as a lay
witness and explained that the plan was covered by ERISA.
She pointed out that the plan documents stated that the
plan was amended and restated in 1976 to comply with the
Employee Retirement Income Security Act of 1974. As of
March 1991, the plan had assets of approximately
$625,000 and covered ten salaried employees. The plan's

                               4


assets were held by NatWest Bank which also acted as
trustee to the plan.

Helbling's companies were manufacturing companies that
relied heavily upon military contracts. In May 1990, at
Helbling's direction, the companies filed for Chapter 11
reorganization. In February 1992, the Bankruptcy court
converted the Chapter 11 bankruptcy proceedings into a
Chapter 7 liquidation because the companies failed to
provide the Court with the required monthly filings. The
companies subsequently ceased business. While in
bankruptcy, the companies continued to struggle because
they lacked sufficient cash flow and were unable to procure
new military contracts.

In February 1991, Helbling directed John Grikis, then a
trust officer at NatWest, to transfer the plan's assets to
Oppenheimer & Co. Helbling's companies had been
contacted by Barry Katz, an Oppenheimer fund manager, in
late 1990. The funds were transferred on March 13, 1991
after Grikis received a letter sent by Katz indicating that
Oppenheimer would assume responsibility for the funds.
The day after the transfer to Oppenheimer, Helbling moved
$125,000 to an account at Farmers & Mechanics Bank and
used it to pay operating expenses. In July, after
conversations with Katz during which Helbling explained
that he wanted to remove more money, Helbling converted
the account to a margin account and borrowed $350,000
against the plan's assets. Katz approved the conversion
after receiving a fax supposedly signed by Barry Penn, a
lawyer, indicating that Micro-Product's plan permitted the
company to borrow against the plan's assets. The money
was again used to pay operating expenses. At trial, Penn
and his secretary, testified that the letter was a forgery.
They explained that Helbling, who had been Penn's client,
twice asked Penn to write the opinion letter, first in person
and later by fax, but that Penn refused because he was not
familiar with pension law or the profit sharing plan.
Subsequently, Helbling instructed Katz to close the account
and sent Katz a letter, dated August 29, 1991, which
confirmed that the plan had been converted into an ESOP.
Helbling subsequently withdrew money from the account in
the form of a check for $55,300 on September 6, 1991, and

                                5


a wire transfer for $29,700 on September 16, 1991.
Helbling withdrew a final amount of $3,500 on January 3,
1992.

Attorneys Gerald Susman and Stephen Sokolic were the
government's two key witnesses. Both testified pursuant to
plea agreements. Susman testified first. He explained that
he first spoke with Helbling in the early part of 1990 after
Helbling had been referred to him by Arnold Kaminer, who
provided health insurance for Helbling's companies, to help
Helbling establish a trust to hold his life insurance. During
the summer of 1990, Susman completed some estate
planning work for Helbling. Kaminer confirmed that he
referred Helbling to Susman for estate planning, and also
testified that he mentioned the possibility of an ESOP in a
conversation with Helbling in February of 1991.

Susman testified that Helbling called him again in March,
and July, of 1991. During the conversation in March,
Helbling asked Susman if he knew of any sources of
financing because his companies were having financial
trouble. During the conversation in July, Helbling asked
Susman about withdrawing money from a profit sharing
plan. Sometime around August, 20, Helbling called Susman
again. This time, according to Susman, Helbling told him
that he had made the large March and July withdrawals
from the Micro-Products plan.

Susman testified that he "was flabbergasted" when
Helbling told him in August of the large withdrawals.
Susman had thought that Helbling had been asking about
removing money from his own personal stake in a plan
when he answered Helbling's questions in July. Susman
immediately told Helbling that he could not remove funds
from the plan unless he had an ESOP and explained that
to have an ESOP, Helbling needed a valid resolution of the
board of directors that predated the distribution, and an
appraisal of the stock. Susman testified further that he
explained that since the companies were in bankruptcy, the
stock was worthless. When Helbling asked if Susman would
prepare the required resolution, Susman refused. When
Helbling asked if they could still go ahead with the ESOP,
Susman said that he would look into the matter and get
back to him. Helbling and Susman met the next day, and

                                6
Helbling provided Susman with several documents
including a copy of the plan.

Susman subsequently sought advice from Stephen
Sokolic, an attorney with more experience with ERISA, to
find out whether they could document what had been done
as an ESOP. Susman testified that after talking with
Sokolic, he felt that the documentation could legitimately
be completed. Subsequently, Susman reviewed Helbling's
August 29, 1991 letter to Katz that said that the ESOP had
been converted into an ESOP under Susman's direction.
The letter also authorized the liquidation of the account.

Both Susman and Sokolic testified that they reviewed the
documents Helbling gave them and met with Helbling on
September 11, 1991. During that meeting, Susman and
Sokolic explained to Helbling that the withdrawals were
prohibited transactions under ERISA. However, after the
meeting, Susman and Sokolic prepared a retainer
agreement which Helbling later signed. The retainer
agreement stated explicitly that the loan Helbling took from
the plan was prohibited by ERISA, and that there could be
a subsequent Department of Labor investigation and
possibly fines because the transactions might violate
Department of Labor regulations. However, on cross-
examination both Susman and Sokolic testified that while
they told Helbling the withdrawals had been prohibited
transactions under ERISA, they did not tell Helbling that
the withdrawals or the creation of the backdated ESOP
could be the basis for criminal prosecution.

Susman and Sokolic testified that on October 14, 1991
they met again with Helbling who was accompanied by
Donald Mayle, an employee of Helbling's companies. In
preparation for this meeting, Susman and Sokolic drafted
most of the documents needed to achieve the ESOP
conversion. At the meeting, Helbling signed the employee
stock ownership plan and the ESOP trust agreement. Both
documents were backdated to July 25, 1991. He also
signed the stock purchase agreement, which purported to
transfer 12.5% of the stock to the plan for $500,000, which
was backdated to March 1, 1991.3 Mayle witnessed
_________________________________________________________________

3. The ESOP conversion was limited to $500,000 to avoid the need for
filing with the SEC.

                                7


Helbling's signatures. A promissory note for $85,000,
representing the additional funds withdrawn from the
Oppenheimer account in September, was signed by

Helbling in November, and backdated to September 8,
1991. The conversion was made dependent upon a later
appraisal of the companies validating the stock price.

Both Susman and Sokolic testified that they were
originally unwilling to backdate the ESOP plan document
and the trust agreement, but gave in to Helbling's demand
during the meeting. Sokolic, however, testified that he
backdated the stock purchase agreement and the stock
certificates to coincide with Helbling's withdrawals before
the meeting. In response to questions from Helbling's
bankruptcy attorneys in December of 1991, Susman and
Sokolic drafted an opinion letter with Helbling's input that
Susman and Sokolic testified was misleading and false.
Ronald Santora, Helbling's bankruptcy attorney,
subsequently presented the letter to the Bankruptcy Court.

When asked why he agreed to create the documents,
Susman testified that "he wanted the fee." On cross-
examination, Susman testified that he did not intend to
steal from the plan participants and did not conspire with
Helbling to steal money. Susman testified that after he first
met with Sokolic he thought the ESOP conversion could be
completed legally, and that he first understood that he had
committed a crime in November of 1991. He did, however,
admit that earlier, in August, he had committed a crime
because he had participated in Helbling's illegal activities
by reviewing a draft of Helbling's August 29 letter to Katz
which confirmed that the plan had been converted into an
ESOP and authorized the liquidation of the Oppenheimer
account.

Sokolic corroborated much of Susman's testimony,
particularly the meetings with Helbling, the retainer
agreement, and the backdating of documents. Sokolic
testified that he realized that he had committed a crime in
"hindsight," explaining that he originally believed that he
was serving his client to the best of his ability by
documenting the ESOP, and that it was not until November
and December of 1991 that he first began to reconsider the
legality of his acts. Sokolic, however, also conceded

                               8


repeatedly that his actions were illegal because he created
false or misleading documents that were required by
ERISA. Sokolic explained his initial view by saying that he
had understood that Helbling intended to create the ESOP
in March of 1991, as indicated by the board of directors'
consent dated March 8, 1991, and that he had felt he was
simply documenting that transaction.
Sokolic said that he first saw the consent sometime
between the September and October meetings with
Helbling. At trial, Donald Mayle, who along with Helbling
supposedly signed the consent, testified that his signature
was forged. Susman testified that Helbling brought the
consent to the October 14 meeting. Susman also testified
that Helbling had asked him to create a board of directors'
consent during the first August conversation.

The government also presented witnesses who testified
that Helbling gave them specific directions on how to refer
to the infusions of cash in reports to the Bankruptcy Court
and in certain letters. Donald Mayle testified that Helbling
directed him to record the money as receipts and inventory
in reports filed with the Bankruptcy Court. Thomas Taylor,
former sales manager and later vice-president of sales at
Scranton Electronics, testified that Helbling directed him to
sign two letters intended to help Helbling's companies
obtain a Certificate of Competence from the Small Business
Association stating that Helbling had personally injected
$350,000 into the companies. Obtaining a certificate would
have made it easier for Helbling's companies to procure
military contracts.

Throughout the period, the plan participants requested
information from Helbling about the plan. After the money
was moved from NatWest, NatWest stopped providing the
plan participants with monthly statements. Helblingfirst
told the participants about the conversion in October. After
two meetings during which plan participants protested the
conversion, they filed a lawsuit. The record from the
sentencing hearing reflects that Helbling had sent the
participants letters blaming them for the companies'
difficulties and threatening them with unemployment,
sought to file retaliatory and harassing civil suits against
them, falsely informed the state of New Jersey that they

                               9


were responsible for approximately $240,000 in back taxes
due to the ESOP conversion, and refused to comply with
the order entered at the end of the civil proceedings. As a
consequence of the civil lawsuit, Lauren Scurko was
appointed trustee. In her role as trustee, Scurko recovered
less than $24,000 of the original amount.

At the end of the government's case, Helbling offered no
witnesses on his behalf. Helbling moved to dismiss the
conspiracy count arguing that the government failed to
establish that either Susman or Sokolic entered into an
agreement with Helbling. The District Court denied the
motion. After closing arguments were heard, Helbling
moved for a new trial based upon alleged misconduct of the
prosecutor for making impermissible statements in the
opening and closing arguments, and for reconsideration of
his statute of limitations argument. The District Court also
denied both motions.

Helbling was sentenced on January 25, 1999. The
District Court increased Helbling's offense level under
S 3B1.1 of the Sentencing Guidelines for Helbling's role in
the offense and under S 3C1.1 for obstruction of justice
based on Helbling's efforts to pressure Susman, Sokolic
and Mayle to lie during the investigation. The District Court
also departed upwards under S 5K2.3 for extreme
psychological damage to the victims of Helbling's
embezzlement.

Helbling now appeals the District Court's sentencing
decisions. He also seeks a new trial based on statements
made in the prosecutor's opening and closing statements,
the insufficiency of the evidence presented at trial,
allegations of prosecutorial misconduct, and the District
Court's decision on the validity of the statute of limitations
waiver. We will address all of these issues beginning with
the statute of limitations waiver.

II.

Helbling argues that the District Court erred by
upholding the validity of his waiver of the statute of
limitations. His primary contention is that the waiver must
be invalidated because the government failed to fulfill its

                               10


part of the bargain, which required the government to allow
Helbling "to present for investigation" charges he had
leveled against individuals he felt sabotaged his companies.4
He urges that the government was obligated to complete a
full and thorough investigation of his allegations. He alleges
that the District Court erred in rejecting this contention
because it failed to inquire into what Helbling reasonably
understood the waiver to mean. We will affirm the District
Court's decision because, even if Helbling is correct to
assert that we must compare the government's actions to
what Helbling "reasonably understood" it had promised to
do,5 we cannot conclude, on the basis of the language of the
waiver or the record in front of us, that Helbling reasonably
understood the waiver to require an investigation any
broader than he actually received.
_________________________________________________________________

4. The relevant portion of the agreement, with the added rider, stated:
         In order to allow ample time for me to confer with representatives
of
         the U.S. Attorney's Office,* I hereby knowingly, voluntarily and
         expressly waive the right of defense provided by any statute of
         limitations with regard to the above criminal statutes of the
United

         States Code based upon the failure of the U.S. Attorney's Office to
         obtain an indictment for violations of those during the period from
         July 22, 1996 through December 31, 1996.

         * and to present for investigation by the FBI and the Department of
         Labor those allegations which I have set forth in my letter to the
         U.S. Attorneys Office dated July 13, 1996, specifically paragraph
#3.

5. The parties do not direct us to any controlling authority where we
have actually considered whether the government had breached a
statute of limitations waiver in a criminal case. Helbling argues that we
should use the same standard here as we use to determine whether a
plea agreement has been complied with. See, e.g., United States v. Nolan-
Cooper, 155 F.3d 221, 236 (3d Cir. 1998) (considering "whether the
government's conduct is inconsistent with what was reasonably
understood by the defendant when entering the plea of guilty."); see also
United States v. Levine, 658 F.2d 113, 124, 124 n.17 (3d Cir. 1981)
(noting that waivers of statutes of limitations have been viewed as being
similar to guilty pleas). We decide neither that this standard is
necessarily applicable to waivers, nor that defendants who sign waiver
agreements should always receive the same protections as those who
sign plea agreements. Rather, even assuming the standard does apply,
Helbling cannot succeed.

                                 11


The District Court addressed this specific contention,
along with others, in a written opinion, after holding an
evidentiary hearing into the circumstances surrounding the
signing of the waiver agreement. Finding the government's
witnesses credible, the District Court addressed each of
Helbling's allegations as to why the waiver was fraudulently
coerced and rejected each of them.6 Importantly for this
discussion, the District Court found that Helbling knew and
understood the implications of waiving the statute of
limitations, was not unduly pressured into signing the
waiver since he engaged in extensive negotiations regarding
the waiver provision, and was repeatedly advised to retain,
or request, counsel.

Addressing whether the government fulfilled its bargain,
the District Court noted that the provision itself did not
clearly describe the extent of investigation required, and
stated that Helbling had not introduced any evidence
showing that a particular meaning had been agreed upon.
The District Court proceeded on the basis that the
agreement imposed a duty on the government to investigate
and found that the government had done enough to satisfy
_________________________________________________________________

6. Considering Helbling's allegations that he was coerced into signing the
waiver by threats and by misrepresentations, and that he was not
represented during the negotiations, the District Court determined that
the government was ready to indict Helbling when the waiver was signed
so it did not coerce him into signing the waiver by falsely threatening
immediate indictment, and that Helbling realized, or should have
realized, that the waiver would provide the government more time to
investigate, as well as provide him more time to prepare, and, therefore,
the government did not misrepresent the effect of the waiver.

In his pro se brief, Helbling alleges that the prosecutor conspired with
Susman's lawyer to coerce Helbling to sign the waiver, and states that
Department of Labor investigator Daphne Rich testified that Susman and
Sokolic had agreed to cooperate with the government before Helbling
signed his statute of limitations waiver. However, Susman's lawyer's
testified at the hearing, and the District Court rejected Helbling's
argument that he was coerced by him. The District Court also found that
Susman's plea agreement came months after Helbling signed the waiver.
The Court's factual findings are not clearly erroneous, and we agree with
its legal conclusions. Therefore, to the extent that Helbling asserts
these

arguments as separate grounds to invalidate the waiver, we reject them.
We find no evidence in the record to support Helbling's other allegations.

                               12


its obligation and, therefore, the waiver was valid. We apply
the clearly erroneous standard of review to the District
Court's finding of facts and review the District Court's legal
conclusion that the government fulfilled the terms of the
agreement under the plenary standard of review. See United
States v. Moscahlaidis, 868 F.2d 1357, 1360 (3d Cir. 1989)
(reviewing a district court's determination that the
government did not breach a plea agreement).

The difficulty with Helbling's argument on appeal is that
his assertion -- that the government promised to engage in
a full scale investigation -- cannot be squared with the
record evidence, or the language of the waiver itself.
Helbling argues in effect that he reasonably understood
that the government would complete a full scale
investigation because he would not have agreed to the
waiver without such a promise. However, even if we were to
step beyond the language of the provision which only
requires the government to allow him to "present for
investigation" -- a promise the government clearly fulfilled
-- we cannot find support for his assertion because at the
pre-trial hearing a government agent testified that she told
Helbling that the government would not agree to more than
a promise to evaluate Helbling's evidence.

Helbling signed the waiver agreement on July 22, 1996.
According to testimony presented at the hearing, and which
the District Court found credible, SA Donald Wadsworth
had spoken to Helbling on July 19, and Helbling advised
him that he wanted Wadsworth to perform an expansive
investigation and include Helbling's allegations against
others in his review. When Helbling, thereafter, told
Department of Labor investigator Daphne Rich that
Wadsworth had promised him that if he signed the waiver,
the government would investigate his charges, Rich said
that the government would only evaluate the evidence he
gave to Wadsworth and Rich. Thereafter, that day, Helbling
signed the waiver in the presence of two other FBI agents.
Therefore, we conclude that Helbling's belief that the waiver
required the government to fully investigate his claims was
unreasonable.

Furthermore, we note that the government did indeed do
more than permit Helbling to "present" his allegations.

                               13


Reviewing the evidence, the District Court found that,
before the government ceased its investigation into
Helbling's allegations, government agents met with Helbling
and discussed his allegations, reviewed the documents
Helbling gave them, and culled out those which the
government already had, those that were new and those
that were related to a prior investigation. The agents also
spoke to Robert Connolly, the Chief of the Antitrust
Division of the Department of Justice in Philadelphia, who
had already investigated allegations related to many of
Helbling's complaints of sabotage in a protracted
investigation from 1989-1992, and reviewed the documents
with him.

Accordingly, we find the waiver to have been valid.

III.

Next, Helbling challenges the sufficiency of the evidence
supporting all the counts of his conviction. Helbling argues
that the government failed: (1) to establish an agreement
necessary for a conspiracy; (2) to establish a scheme to
defraud required by the wire fraud convictions; or (3) to
establish that ERISA covered the Micro-Products plan, as
required by the embezzlement and false documents
convictions.7 Our standard of review is highly deferential.
"We determine whether there is substantial evidence that,
when viewed in the light most favorable to the government,
would allow a rational trier of fact to convict." Government
of the Virgin Islands v. Charles, 72 F.3d 401, 410 (3d Cir.
_________________________________________________________________

7. We note at the outset of this discussion that Helbling also alleges in
his pro se brief that the government withheld exculpatory evidence and
suborned false testimony in return for plea agreements. Since these
arguments were not raised to the District Court, we review for plain
error. To the extent that Helbling's argument rests on United States v.
Singleton, 144 F.3d 1343 (10th Cir. 1998), rev'd en banc, 165 F.3d 1297
(10th Cir.), cert. denied, 119 S. Ct. 2371 (1999), we note that this Court
has now rejected the holding of the first Singleton decision in United
States v. Hunte, 193 F.3d 173, 174 (3d Cir. 1999), decided after briefing.
Furthermore, Helbling had the opportunity to cross-examine the
witnesses at trial, and we find no factual support for his other
allegations.

                               14


1995). We find that substantial evidence did support the
verdicts and we will affirm all the convictions on all counts.

Helbling first argues that the government failed to
establish that he conspired with either Susman or Sokolic.8
To establish a conspiracy, the government must show: (1)
a unity of purpose between two or more persons; (2) an
intent to achieve a common goal; and (3) an agreement to
work together. See United States v. Carr, 25 F.3d 1194,
1201 (3d Cir. 1994). Circumstantial evidence may be used
to establish a conspiracy although if the government relies
entirely on circumstantial evidence "the inferences drawn
must have a logical and convincing connection to the facts
established." Id. (quoting United States v. Casper, 956 F.2d
416, 422 (3d Cir. 1992)) (internal quotations omitted). The
indictment charges Helbling with conspiracy (1) to defraud
the plan and participants, or (2) to put false information in
documents required by ERISA. We must affirm the jury
verdict if the government adduced sufficient evidence of
either object of the conspiracy. See id. at 1201-02 (citing
Griffin v. United States, 502 U.S. 46 (1991)).

Helbling argues that the government failed to show that
he entered into an agreement with either Susman or
Sokolic because both testified that they did not intend to
commit unlawful acts and that they came to understand
the illegality of their actions only by hindsight. However,
their testimony was replete with statements from which the
jury could reasonably have inferred that Sokolic and
Susman had the necessary intent and knowledge regardless
of their statements to the contrary. For example, both
testified that they acted illegally, and that they agreed to
complete work for Helbling after explaining to him that the
withdrawals were prohibited transactions.

Contesting his wire fraud convictions, Helbling argues
that the government failed to establish that Helbling
participated in a scheme with the specific intent to defraud.
See 18 U.S.C. S 1343; United States v. Veksler, 62 F.3d
544, 551-52 (3d Cir. 1995). Helbling argues that the
government failed to prove this element of the crime
_________________________________________________________________

8. Helbling raised this issue at trial as a Rule 29 motion to dismiss. The
District Court denied the motion.

                               15


because he relied upon the expertise of Susman and
Sokolic, and because both testified that they did not intend
to defraud the participants.

Clearly, sufficient evidence existed to establish that
Susman and Sokolic had the requisite intent. However,
even if Helbling's contention about Susman's and Sokolic's
intent had merit, their intent is irrelevant to Helbling's
conviction since a wire fraud conviction is not dependent
upon the existence of an agreement. See United States v.
Nelson, 54 F.3d 1540, 1546 (10th Cir. 1995). Susman and
Sokolic testified that Helbling directed them to construct
the ESOP and backdate the documents. Testimony also
supports the conclusion that Helbling forged Barry Penn's
letter to Oppenheimer before engaging the services of
Susman or Sokolic, and that he alone forged the consent of
the directors sometime after engaging their help. These acts
are clearly probative of Helbling's intent.

Finally, Helbling contends that the government failed to
establish that the plan was subject to ERISA. Counts 2
through 5 of the indictment charged Helbling with
embezzlement of plan assets in an "employee benefit plan
subject to any provision of title 1 of [ERISA]" in violation of
18 U.S.C. S 664 and counts 6 through 23 charged Helbling
with violating documents required by title I of ERISA to be
published, kept as records or certified to the administrator
of the plan. See United States v. Furst, 886 F.2d 558, 565
(3d Cir. 1989) (explaining that a conviction underS 664
requires a showing that the plan is covered by ERISA); see
also United States v. Coyle, 63 F.3d 1239, 1245 (3d Cir.
1995) (explaining that a conviction under 18 U.S.C.S 1027
requires a showing that (1) the defendant made a false
statement; (2) knowing it to be false; (3) in a document
required by ERISA). A plan is subject to ERISA if itfits
under 29 U.S.C. S 1003(a), and is not exempted by the 29
U.S.C. S 1003(b). Relevant definitions are provided in 29
U.S.C. S 1002.
Helbling contends that the government failed to introduce
sufficient evidence from which the jury could conclude that
the plan was covered by ERISA, and argues that the plan
was not covered by ERISA as a matter of law.9 Generally,
_________________________________________________________________

9. Helbling's counseled brief argues that the government failed to submit
sufficient evidence. Helbling raised and developed his second theory in

                               16


whether a plan is covered by ERISA is an issue of fact to be
decided by the jury, which we review under the substantial
evidence standard, see Furst, 886 F.2d at 565, though we
exercise plenary review when our review requires the
interpretation and application of legal precepts. See United
States v. Martorano, 767 F.2d 63, 65 (3d Cir. 1985).

At trial, the District Court precluded the testimony of two
experts offered by the government who would have testified
about the nature of the plan because the government failed
to comply fully with discovery requirements.10 The
government therefore relied upon the lay testimony of
Laura Scurko, the court appointed plan trustee, Susman
and Sokolic. Scurko testified that the plan was covered by
ERISA, that the plan was restructured to be an ERISA plan,
and that the plan itself suggested that it was covered by
ERISA. Susman and Sokolic predicated their testimony, as
well as their guilty pleas, on the basis that the plan was
covered by ERISA. The government also introduced
testimony of the plan participants indicating that the plan
had the characteristics of an ERISA covered plan, including
testimony that the plan was established to provide
retirement income to workers who did not receive piece rate
incentives, after they left the company.

Reviewing the factual evidence adduced at trial and the
legal arguments raised in response by the government, we
_________________________________________________________________

his subsequent pro se brief. The government points out that he did not
raise his second argument in front of the District Court. However, we
have explained that since the alleged error directly relates to his
criminal
responsibility, such error would be plain error. See United States v.
Cusumano, 943 F.2d 305, 309 (3d Cir. 1991) (considering whether a
plan was covered by ERISA for the first time on appeal).

10. The government intended to have Debra Golding and Kevin Long
testify, and presented a letter to Helbling outlining the general areas
about which they would testify. Helbling moved to preclude their
testimony, asserting that the government's letter failed to comply with
Federal Rule of Criminal Procedure 16(a)(1)(e) which requires the
government to "describe the witnesses' opinions, the bases and the
reasons for those opinions, and the witnesses' qualifications." Rejecting
the government's contention that Golding and Long were lay witnesses
not covered by 16(a)(1)(e), the District Court granted Helbling's motion.

                                17


conclude that sufficient factual evidence and legal support
existed for the conclusion that the plan was covered by
ERISA. The government convinces us as an initial matter,
with reference to the facts discussed above, that the plan
fell within the general ERISA definitions, particularly 29
U.S.C. S 1002(2)(A). See In re New Valley Corp. v. New
Valley Corp., 89 F.3d 143, 148-49 (3d Cir. 1996) (explaining
that a court must begin first look to see whether the plan
fits under the general provisions of ERISA and then
consider the exceptions). Section 1002(2)(A) extends ERISA
to cover plans established or maintained by an employer to
the extent that it provides retirement income regardless of
the method use to determine contributions, or calculate
and distribute benefits. See 29 U.S.C.S 1002(2)(A). The
government also explains that the plan fits within the
definition of a defined contribution plan, see 29 U.S.C.
S 1002(34), and correctly rebuts Helbling's arguments as to
why the plan was exempt from ERISA coverage in whole or
in part. Finally, the government points out that even if the
plan was exempt from certain provisions of ERISA, for
example, by having the characteristics of a "top hat" plan,
18 U.S.C. S 1027 and 18 U.S.C. S 664 would still apply
because they do not require that the plan in question be
subject to all of ERISA's various provisions. Rather, these
criminal provisions require that the plan be a plan"subject
to any provision of title 1," 18 U.S.C. S 664, or that the
fraudulent statement be contained in a document required
by title 1. See 18 U.S.C. S 1027.

IV.

Helbling next argues that the prosecutor, Assistant
United States Attorney Jayne K. Blumberg, made
prejudicial comments in her opening and closing
statements that require the grant of a new trial. Helbling
argues that her opening statement included impermissible
characterizations and impermissible vouching, and that in
her closing and rebuttal arguments, the prosecutor again
acted impermissibly by characterizing Helbling and his
actions, implying that Helbling committed improprieties in
the past, and by describing the evidence that the letter
supposedly signed by Barry Penn was forged as

                                18
"uncontroverted." Without parsing the prosecutor's
comments, which we have paraphrased in the margin, 11 we
note that, although the government disputes many of
Helbling's contentions of misconduct, the United States
acknowledged in its brief that the prosecutor's opening
statement "overstepped the parameters of an opening
statement" in the manner in which it characterized
Helbling. See Appellee's Br. at 38. We quite agree that Ms.
_________________________________________________________________

11. Early in opening arguments, the prosecutor told the jury that the
defendant had "[u]gly values: Dishonesty, disloyalty, deceit, and above
all, greed. To be sure, ladies and gentlemen, the Defendant, William
Helbling is a thief. He lied to these men, he stole their retirement
moneys

boldly and brazenly." The prosecutor also called Helbling a looter while
pointing a finger in his face, and said, while discussing the companies'
financial problems, that "the one source [of money] was what he called
his `secret fund,' his slush find, his private kitty. And he stole the
money, he stole the retirement money." The prosecutor also called
Susman and Sokolic "unscrupulous," and explained that they assisted
Helbling in "covering up his fraud, his looting of moneys." After a
defense

counsel objection, the prosecutor completed her opening by stating that:
"We believe that you will find the Defendant guilty as charged." The
District Court directed the jury to disregard the comment. During the
prosecutor's opening, the Court sustained a number of defense counsel
objections and brought counsel to side bar where the judge admonished
the prosecutor. At the close of the prosecutor's opening, the judge
reminded the jury, as he had already explained during his preliminary
instructions, that the opening statement was not to be considered as
evidence.

Before closing arguments began, the District Court again reminded the
jurors, as part of the jury instructions, that they must not consider the
opening and closing arguments as evidence. In the early portion of her
closing argument, the prosecutor referred to "a greedy person's plan," the
"Defendant's plunder and thievery," and the Defendant's "track record of
lying, cheating and deceit." The prosecutor also called evidence that the
letter from Barry Penn to Oppenheimer was forged"uncontroverted." In
rebuttal, the prosecutor again referred to the same evidence as
"uncontroverted," and further characterized the defendant as "arrogant"
and "despicable" which the court instructed the jury to disregard. Upon
defense counsel objection to the second reference to uncontroverted
evidence, the District Court told the prosecutor to avoid such references.
Later at side bar, the Court asked defense counsel what counsel wanted
the court to do to neutralize the statement. Counsel asked the Court to
"leave it, please."

                               19
Blumberg's remarks were over the line, and arguably even
out of line. The government will not be sanctioned in this
instance, however, because our case law punishes the
government by granting a new trial in such a situation only
if the defendant was prejudiced by the remarks in question.
Here, we conclude that a new trial is not warranted
because Helbling was not in fact prejudiced. We reach this
conclusion even though we view AUSA Blumberg's remarks
to have been inappropriate, and we urge that the United
States Attorney for New Jersey remind his assistants of the
limits of appropriate advocacy.

"Prosecutorial conduct does not always warrant the
granting of a mistrial." United States v. Zehrbach, 47 F.3d
1252, 1264 (3d Cir. 1995) (en banc). "An appellate court
should not exercise its `supervisory power to reverse a
conviction . . . when the error to which it is addressed is
harmless since, by definition, the conviction would have
been obtained notwithstanding the asserted error.' " Id.
(quoting United States v. Hasting, 461 U.S. 499, 506
(1983)). The harmless error standard requires us to
consider the record as a whole. The standard of review
depends upon whether the error was constitutional or non-
constitutional. If the error is non-constitutional, we will
affirm "when it is highly probable that the error did not
contribute to the judgment." Id. (quoting Government of
Virgin Islands v. Toto, 529 F.2d 278, 284 (3d Cir. 1976)). If
the error is constitutional, we will affirm if wefind that the
error is harmless beyond a reasonable doubt. See United
States v. Molina-Guervara, 96 F.3d 698, 703 (3d Cir. 1996)
(citing Chapman v. California, 386 U.S. 18, 24 (1967)).

Even under the most stringent harmless error analysis,
we cannot conclude that Helbling was prejudiced."In
determining prejudice, we consider the scope of the
objectionable comments and their relationship to the entire
proceeding, the ameliorative effect of any curative
instructions given, and the strength of the evidence
supporting the defendant's conviction." Zehrbach, 47 F.3d
at 1265. First, the evidence presented by the United States
was overwhelming. See id. at 1267 (finding the evidence at
trial substantial). As discussed above, the government
adduced substantial direct evidence of Helbling's activities,

                               20


and substantial circumstantial evidence of his motivation
and intent. Second, the District Court did give curative
instructions. It repeatedly instructed the jury not to
consider counsel's arguments as evidence, doing so before
the prosecutor's opening, after the prosecutor's opening,
and before her closing argument, and appeared to do so in
a way that conveyed the Court's displeasure with counsel's
tactics. See id. at 1267 (finding characterizations
neutralized in part by instructions not to consider the
opening evidence); United States v. Somers, 496 F.2d 723,
738 (3d Cir. 1974). Furthermore, the Court told the jury to
disregard the vouching in the prosecutor's opening
statement and to disregard the references to "arrogant" and
"despicable" in rebuttal. Lastly, we note that defense
counsel asked the Court not to give a curative instruction
to neutralize reference to "uncontroverted" testimony in a
side bar conference.

Helbling seeks to distinguish this case by arguing that he
was prejudiced because the government's comments
poisoned the jury's mind regarding his intent, a crucial
element in each count of his indictment. Helbling places
considerable reliance on United States v. Mastrangelo, 172
F.3d 288 (3d Cir. 1998), in which we found the defendant
to be prejudiced by the comments of a prosecutor in closing
and rebuttal arguments which inflated a limited stipulation
that the defendant "had the chemical background to know
the ingredients and equipment necessary to make
methamphetamine" into one stating that the defendant
knew how to make methamphetamine. See Mastrangelo,
172 F.3d at 295. We find Mastrangelo to be easily
distinguishable from our case. First, and most importantly,
in Mastrangelo, the prosecutor misstated a stipulation to
make it encompass a fact central to the government's
charges and not otherwise supported by any evidence the
government presented. See id. at 298. Here, the government
introduced overwhelming circumstantial evidence of
Helbling's intent. Second, in Mastrangelo, we explained that
the district court's curative instruction may have served to
exacerbate the problem because the court reaffirmed the
prosecutor's incorrect view of the stipulation. See id. at
296. Here, we view the curative instructions as having
neutralized the possible prejudice.

                               21


We note that Helbling's argument is also weakened by
United States v. Retos, 25 F.3d 1220 (3d Cir. 1994), where
we found that a prosecutor's reference in opening argument
to the defendant's "crooked law practice" was not
misconduct requiring a new trial since the comment was
clearly related to the charges the government had to prove
and was supported by the evidence presented at trial. See
Retos, 25 F.3d at 1226. But see Somers, 496 F.2d at 737-
38 ("Whether or not proofs were ultimately adduced
warranting such characterizations is irrelevant. Such
characterizations add nothing to the legitimate education of
the jury which is not afforded by the proper presentation of
the facts to be proved."). Here, although the prosecutor's
comments may have been a pointed assertion of Helbling's
guilt, the characterizations were related to the charges
contained in the indictment which the evidence presented
later did in fact establish. Accordingly, we find prejudice to
be lacking.

V.

Helbling also appeals the District Court's determination
of his sentence. Helbling contends that the District Court
erred by increasing his offense level four-levels under
U.S.S.G. S 3B1.1(a), "Aggravating Role," by increasing his
offense level two-levels for obstruction of justice, U.S.S.G.
S 3C1.1, and by departing upwards two-levels for
psychological harm. See U.S.S.G. S 5K2.3.

A. S 3B1.1(a), Aggravating Role

Helbling argues that the District Court erred in applying
a four-level enhancement to his offense level pursuant to
S 3B1.1(a) of the Sentencing Guidelines for"Aggravating
Role." Section 3B1.1(a) states in full: "If the defendant was
an organizer or leader of a criminal activity that involved
five or more participants or was otherwise extensive,
increase by 4 levels." U.S.S.G. S 3B1.1(a). Helbling finds
fault with the District Court's view regarding both aspects
of this Guideline, namely that he was an organizer or
leader, and that the activity was "otherwise extensive." Both
Helbling and the government agree that Helbling's criminal
activity did not involve five "participants" as defined by the
commentary to the Guideline.

                                  22


We review a District Court's factual determinations
underlying the application of the sentencing guidelines for
clear error. See United States v. Ortiz, 878 F.2d 125, 126-27
(3d Cir. 1989). Although we give due deference to the
District Court's application of the sentencing guidelines to
those facts, as required by 18 U.S.C. S 3742(e), we exercise
plenary review over legal questions involving the proper
interpretation and application of the sentencing guidelines.
See United States v. Katora, 981 F.2d 1398, 1402 (3d Cir.
1992). We will address the two aspects of the relevant
Guideline section in turn.

       1. Leader or Organizer

Section 3B1.1(a) applies only if a sentencing courtfinds
that "the defendant was an organizer or leader of a criminal
activity." Application Note 4 explains that a court should
consider a number of factors when determining if the
defendant was an organizer or leader, rather than a
manager or supervisor.

       In distinguishing a leadership and organizational role
       from one of mere management or supervision, titles
       such as "kingpin" or "boss" are not controlling. Factors
       the court should consider include the exercise of
       decision making authority, the nature of participation
       in the commission of the offense, the recruitment of
       accomplices, the claimed right to a larger share of the
       fruits of the crime, the degree of participation in
       planning or organizing the offense, the nature and
       scope of the illegal activity, and the degree of control
       and authority exercised over others.

U.S.S.G. S 3B1.1, Application Note 3; United States v. Ortiz,
878 F.2d 125, 127 (3d Cir. 1989). We have explained that
to be considered an organizer or leader, "the defendant
must have exercised some degree of control over others
involved in the commission of the offense." United States v.
Phillips, 959 F.2d 1187, 1191 (3d Cir. 1992) (quoting United
States v. Fuller, 897 F.2d 1217, 1220 (1st Cir. 1990)).

The District Court made specific factual findings, which
are not clearly erroneous, in determining that Helbling
acted as an organizer or leader. The Court found that:

                               23


       Helbling recruited all of the participants mentioned
       above and his attorneys, Sokolic and Susman, to help
       him in his criminal activity. He alone made the
       decision to conceive and implement his conversion
       scheme. The benefits from his scheme went either to
       his personal use or into shoring up companies which
       he was the sole owner. Helbling played the key role in
       structuring the operation to defraud the retirement
       plan and convert its assets. There is no evidence that
       anyone else exercised control over the criminal scheme,
       nor exercised any decision-making authority.

On appeal, Helbling raises two arguments. Helbling
argues first that the evidence failed to show that Helbling
recruited Susman and Sokolic with a criminal purpose or
controlled their activities. Helbling also argues, citing
United States v. Katora, 981 F.2d 1398 (3d Cir. 1992), that
he cannot be a leader or organizer because the other
participants -- Susman and Sokolic -- were equally
responsible for the criminal activity.

Given the guideline provision and the record evidence, we
find the District Court's factual findings to be proper and
its legal conclusion that Helbling was an organizer and
leader unassailable. In so doing, we necessarily reject
Helbling's arguments which are essentially fact based.
Contrary to his urging, the District Court could properly
find that he had a criminal purpose in recruiting Susman,
that he controlled their activities in orchestrating the
scheme through them thereafter, and that he was more
culpable than they were.12 On these facts, Katora does not
dictate a different result.13 Finally, we note that evidence
_________________________________________________________________

12. Helbling's reliance on the terms of Susman's and Sokolic's plea
agreements as proof of their equal culpability is misplaced. The
Guideline clearly contemplates that a defendant may be the leader or
organizer of another criminally responsible individual; the amount of loss
stipulated to in a plea agreement is surely not the only factor that bears
on the relationship between those individuals.

13. Katora is simply not applicable to this case. In Katora, we explained
that a defendant cannot be assessed an offense level enhancement under
S 3B1.1 where the district court determined that the two participants
were equally culpable and did not organize, lead, manage or supervise a
third participant. See Katora, 981 F.2d at 1405. In this case, however,
the District Court determined that Helbling alone organized and led the
criminal activity which involved two other participants.

                                  24


that certain individuals provided expertise or planning does
not necessarily counter evidence that their actions were
controlled by another.

       2. "Otherwise Extensive"

The second part of S 3B1.1(a)'s analysis requires the
sentencing court to determine whether the "criminal activity
. . . involved five or more participants or was otherwise
extensive." U.S.S.G. S 3B1.1(a). Since the government
acknowledges that Helbling, Susman and Sokolic are the
only "participants," this case requires us to determine when
a criminal activity is "otherwise extensive." See United
States v. Colletti, 984 F.2d 1339, 1346 (3d Cir. 1992)
(holding that the leader or organizer may be included when
determining the number of participants); see also U.S.S.G.
S 3B1.1, Application Note 1 (defining "participant"). This
seemingly simple phrase, which also appears in S 3B1.1(b),
has spawned much discussion, and some disagreement, in
the opinions of several courts of appeals. The courts that
have considered the question agree that the "otherwise
extensive" language makes S 3B1.1(a) applicable when
criminal activity involves the equivalent of five participants,
but disagree as to whether, if fewer than five participants
are involved, the determination of equivalence must focus
upon a headcount of the individuals involved, or may also
rely upon other indices of extensiveness such as the
magnitude of the harm, the complexity of the planning, or
the number of victims. Compare United States v.
Carrozzella, 105 F.3d 796, 802-03 (2d Cir. 1997) (focusing
analysis on the number of individuals involved), with United
States v. Dietz, 950 F.2d 50, 53-54 (1st Cir. 1991)
(permitting consideration of a broad range of indices).

In Carrozzella, the Court of Appeals for the Second
Circuit explained that the analysis of "otherwise extensive"
must focus initially upon the number of participants, and
the knowing or unknowing persons, involved in the
criminal activity, and then a subsequent determination
must be made as to whether the roles and involvement of
all those persons constitute the functional equivalent of five
"participants" as defined by the Application Notes. See
Carrozzella, 105 F.3d at 802-04. This contrasts with the

                               25


rulings of several other courts of appeals that permit a
broader inquiry that examines other characteristics of the
criminal activity as well. See United States v. Brockman,
183 F.3d 891, 900 (8th Cir. 1999), cert. denied , 120 S.Ct.
800 (2000) (permitting consideration of the number of
persons involved and the amount of loss); United States v.
Yarnell, 129 F.3d 1127, 1139 (10th Cir. 1997) (following
Dietz); United States v. Tai, 41 F.3d 1170, 1175 (7th Cir.
1994) (permitting courts to "to examine factors in addition
to a headcount to justify a finding that a given criminal
activity is extensive"). For example, the Court of Appeals for
the First Circuit, in United States v. Dietz, explained that
"the extensiveness of a criminal activity is not necessarily a
function of the precise number of persons, criminally
culpable, or otherwise, engaged in the activity" and upheld
a four-level increase based upon a general conception of
extensiveness which included a finding that the activity
spanned twelve years, crossed seven states and victimized
a number of governmental agencies without an exact
determination of the number of individuals involved. See
Dietz, 950 F.2d at 53-54. In United States v. Rose, 20 F.3d
367, 374 (9th Cir. 1994), the Court of Appeals for the Ninth
Circuit explained that "[w]hether criminal activity is
`otherwise extensive' depends on such factors as (i) the
number of knowing participants and unwitting outsiders;
(ii) the number of victims; and (iii) the amount of money
fraudulently obtained or laundered." Id. at 374 (internal
citations omitted).

In United States v. Bennett, 161 F.3d 171 (3d Cir. 1998),
the only opinion in which we have previously considered
the "otherwise extensive" prong of S 3B1.1(a), we affirmed
the application of S 3B1.1(a) to enhance the offense level of
a defendant convicted of running a large and complex
"Ponzi" scheme which the district court found involved two
participants and at least thirteen non-participants who
assisted Bennett. See id. at 194. Many of these individuals
served Bennett by withholding information from investors
and legitimizing his activities by preparing reports based
upon false information he had provided. See id. Because
the evidence of extensiveness was so clear, due to the
involvement of at least thirteen others, we did not discuss
whether other indices of "extensiveness" could be

                               26


appropriately considered under S 3B1.1.14 We take the
opportunity to decide this issue here.

We will subscribe to the analysis of the Court of Appeals
for the Second Circuit as described in Carrozzella. We
believe that the focus upon the number and roles of the
individuals knowingly, and unknowingly, involved best
comports with the text of S 3B1.1, its application notes and
commentary, as well as the overall structure of the
Sentencing Guidelines. We note that while the Guideline
itself provides no clear guidance as to the meaning of
"otherwise extensive," the application notes and the
commentary strongly indicate that the focus should be
upon the number of persons involved. Although we disagree
with the District Court's decision to count one"non-
participant," we agree with the District Court, which
essentially applied the Carrozzella test, that the
combination of Helbling, Susman and Sokolic -- the
participants -- together with the countable non-
participants, made Helbling's criminal activity"otherwise
extensive" for the purposes of S 3B1.1.

Application Note 3 specifically includes an example of
"otherwise extensive" that is instructive."In assessing
whether an organization is `otherwise extensive,' all persons
involved during the course of the entire offense are to be
considered. Thus, a fraud that involved only three
participants but used the unknowing services of many
outsiders could be considered extensive." U.S.S.G. S 3B1.1,
Application Note 3 (emphasis added). The background
commentary is consistent with a numerical focus:

       This section provides a range of adjustments to
       increase the offense level based upon the size of the
       criminal organization (i.e., the number of participants in
       the offense) and the degree to which the defendant was
_________________________________________________________________

14. Since we did not engage in a broader analysis, we place no
significance upon citations in Bennett to United States v. D'Andrea, 107
F.3d 949, 957 (1st Cir. 1997), and United States v. Dietz, 950 F.2d at 53,
decisions that permit the district court to consider the "width, breadth,
scope, complexity, and duration of the scheme." See Bennett, 161 F.3d
at 194 n.14. These citations were placed in a footnote attached to the
last part of the analysis and are no more than dicta.

                               27


       responsible for committing the offense . . . . The
       Commission's intent is that this adjustment should
       increase with both the size of the organization and the
       degree of the defendant's responsibility.

U.S.S.G. S 3B1.1, Background (emphasis added).

The background commentary also explains why the size
of the criminal activity is important to the purpose of the
provision. It notes that the Sentencing Commission drafted
the Guideline's separate provisions to respond to criminal
organizations whose size and structure increases the
significance of the defendant's role. Compare U.S.S.G.
S 3B1.1(a)-(b), with S 3B1.1(c)."In relatively small criminal
enterprises that are not otherwise to be considered as
extensive in scope or in planning or preparation, the
distinction between organization and leadership, and that
of management or supervision, is of less significance than
in larger enterprises that tend to have clearly delineated
divisions of responsibility." U.S.S.G. S 3B1.1, Background
(emphasis added).

If the Commission intended the courts to utilize a
broader analysis to determine if a criminal activity was
"extensive" it could easily have said so. Instead, the notes
clearly indicate the Commission meant the courts to
consider the role of the defendant and the size of the
criminal organization as its way of determining the relative
responsibility of the defendant, so as to mete a greater
sentence to those who likely received a greater division of
the illegal profit, posed a greater danger to the public, and
are more likely to commit more crimes in the future. See
U.S.S.G. S 3B1.1, Background ("This adjustment is
included primarily because of concerns about relative
responsibility. However, it is also likely that persons who
exercise a supervisory or managerial role in the commission
of an offense tend to profit more from it and present a
greater danger to the public and/or are more likely to
recidivate.").

Furthermore, limiting our construction of "extensiveness"
to a head counting analysis reduces the potential for double
counting certain aspects of criminal activity that are
considered elsewhere in the scheme of the guidelines, thus

                               28
helping to maintain the distinct character of various
guideline sections. See Carrozzella, 105 F.3d at 802-03. For
example, as the court in Carrozzella explained, in a fraud
conviction the base offense level can be increased based on
the amount of loss, the extent of planning, and the number
of victims. See U.S.S.G. S 2F1.1; Carrozzella, 105 F.3d at
802. Further adjustments may be made to account for the
vulnerability of the victims, see U.S.S.G.S 3A1.1, the
defendant's role, see U.S.S.G. S 3B1.2, and abuse of a
position of trust.15 See U.S.S.G. S 3A1.3. If we were to adopt
a broad reading of the phrase "otherwise extensive," so that
some of these possible adjustments could be considered in
that inquiry as well, a defendant would possibly receive two
sentence enhancements for the same attributes of the
crime. We avoid this result by focusing upon the number of
individuals involved.

We disagree with the government that our opinion in
United States v. Wong, 3 F.3d 667, 668 (3d. Cir. 1993),
undercuts this rationale. In Wong, we held that where the
guidelines happen to direct the sentencing court to increase
the defendant's sentence under two separate sections--
which respond to different evils -- based on different
aspects of the same conduct, the district court does not err
by "double counting" those aspects in determining the
sentence. See Wong, 3 F.3d at 668; see also United States
v. Johnstone, 107 F.3d 200, 211-13 (3d Cir. 1997) (rejecting
a double counting argument in accordance with Wong);
United States v. Maurello, 76 F.3d 1304, 1315-16 (3d Cir.
1996) (same). Thus in Wong, we found no error in the
district court's decision to increase the defendant's offense
_________________________________________________________________

15. Similarly, following a broad reading of "otherwise extensive" would
permit a court to consider the amount of drugs sold in both the base
offense level and as an element leading to the determination that the
activity was extensive. See United States v. Rodriquez, 981 F.2d 1199,
1200, 1200 n.3 (11th Cir. 1993) (per curiam) (finding no problem with
considering drug quantities as evidence of extensiveness).

Not surprisingly, courts following a broad test for extensiveness
repeatedly encounter, though they have rejected them, arguments
complaining of double counting relating to the finding of extensiveness in
fraud cases. See, e.g., Brockman , 183 F.3d at 900 n.8 (rejecting
argument based upon double counting by way of S 2F1.1 and S 3B1.1.).

                               29


level for both more than minimal planning, see U.S.S.G.
S 2B1.1(b)(5), and aggravating role under U.S.S.G.
S 3B1.1(c) -- the degree of planning and defendant's role
were different attributes of the same conduct. See Wong, 3
F.3d at 668, 669 n.4. Here, the guideline focuses on the
attribute or aspect of the numerosity of the group that the
defendant led or organized. The language of two or more
sections may well require consideration of different
attributes of the same conduct. This is not an untoward
result, but, rather an intended one.16

Having adopted the test that requires us to focus upon
the number and participation of the individuals involved in
the criminal activity, we must address how the district
courts are to apply it to the situations facing them.
Although Application Note 3 supports our mode of analysis,
the guidelines are silent as to how the sentencing court
actually is to decide which non-participants should be
considered, and what combination of participants and
_________________________________________________________________

16. Application Note 4, of S 1B1.1, was amended effective November 1,
1993, to state that "[a]bsent an instruction to the contrary, the
adjustments from different guideline sections are applied cumulatively
(added together). For example, the adjustments fromS 2F1.1(b)(2) (more
than minimal planning) and S 3B1.1 (Aggravating Role) are applied
cumulatively." U.S.S.G. S 1B1.1, Application Note 4 (amended November
1, 1993, Amendment 497). We believe that this amendment, which
followed a few months after our decision in Wong , reinforces the decision
in Wong and our reasoning here. We read the Application Note to explain
that a defendant cannot attack a sentence by arguing that the district
court impermissibly considered evidence of more than minimal planning
when both adjusting under S 2F1.1(b)(2) and when engaged in finding
the defendant to be a leader, organizer, manager or supervisor as
specifically directed by S 3B1.1, Application Note 4. Indeed, prior to the
amendment, the Sixth Circuit Court of Appeals, in United States v.
Romano, 970 F.2d 164 (6th Cir. 1992), found that because it viewed
consideration of more than minimal planning as being required by
S 3B1.1's application notes an enhancement under both provisions was
not permitted. See Romano, 970 F.2d at 167. In United States v.
Cobleigh, 75 F.3d 242 (6th Cir. 1996), the court recognized that Romano
had been effectively overruled by the amendment. See Cobleigh, 75 F.3d
at 251. Nothing about the amendment leads us to believe that it meant
to implicate the breadth of analysis required or permitted under the
second part of S 3B1.1(a) -- the determination of the size of the criminal
activity.

                                30


countable non-participants is the "equivalent" of five
participants. We agree with the court in Carrozzella that
not every individual tangentially involved in the criminal
activity can fairly be considered in the analysis. See
Carrozzella, 105 F.3d at 803. The purpose of the provision
would rarely be achieved by counting the unknowing
services of some actors in a criminal scenario, a taxicab
driver or bank teller, for instance.

The court in Carrozzella developed a three step inquiry to
help determine which individuals should be counted. 17 See
id. at 803-04. This test distinguishes non-participants who
should be considered from those who should not be
considered on the basis of the defendant's intent in
involving them in the criminal activity and the nature of
their role in the offense.18 Under this test, a sentencing
_________________________________________________________________

17. The Second Circuit wrote in full:

       [W]e believe that the following must be determined by the
sentencing

       court:

       (i) the number of knowing participants;

       (ii) the number of unknowing participants whose ac tivities were
       organized or led by the defendant with specific criminal intent;

       (iii) the extent to which the services of the unkn owing
participants
       were peculiar and necessary to the criminal scheme.

Carrozzella, 105 F.3d at 803-04.

18. We note that the Introductory Commentary to Part B, which contains
S 3B1.1, was amended effective November 1, 1990 to state that: "The
determination of a defendant's role in the offense is to be made on the
basis of all conduct within the scope of S 1B1.3(a)(1-4), and not solely
on

the basis of elements and acts cited in the count of conviction." Prior to
the amendment, we held that S 1B1.3 did not apply to the analysis
under 3B1.1. See United States v. Murillo, 933 F.2d 195, 199 (3d Cir.
1991); see also United States v. Pollen, 978 F.2d 78, 89-90(3d Cir. 1992).
In these cases, we focused upon the language of the provision -- the
offense -- to conclude that consideration of who could be considered a
participant must be limited to those involved in the offense charged and
all conduct in furtherance of the offence of conviction. See Murillo, 933
F.2d at 199. In both cases, we noted that our decisions did not address
the effect of the amendment on our analysis. See id. at 198 n.1; see also
Pollen, 978 F.2d at 89 n.24. We do not decide today whether the scope
of S 1B1.3 might affect our analysis.

                               31


court must first separate out the "participants" as defined
by Application Note 1 from other individuals, non-
participants, who were involved in the criminal activity. "A
`participant' is a person who is criminally responsible for
the commission of the offense, but need not have been
convicted." U.S.S.G. S 3B1.1, Application Note 1. The
defendant may be considered as one of the participants.
See Colletti, 984 F.2d at 1346. The court must next
determine whether the defendant used each non-
participants' services with specific criminal intent. See
Carrozzella, 105 F.3d at 804. Third, the court must
determine the extent to which the services of each
individual, non-participant, were peculiar and necessary to
the criminal scheme. See id. at 804. Utilizing this test, the
Court of Appeals for the Second Circuit has upheld the
consideration of individuals used by the defendant to
legitimize, facilitate or hide the criminal activity. See United
States v. Napoli, 179 F.3d 1, 15 (2d Cir. 1999) (applying
Carrozzella and upholding the finding that the criminal
activity was otherwise extensive on the basis of casino
personnel who unwittingly helped the defendant launder
money); United States v. Nolan, 136 F.3d 265, 273 (2d Cir.
1998) (approving the consideration of accountants, bank
officers, and lawyers used to perpetuate embezzlement from
an ERISA covered pension plan including the filing of
incomplete documents). We view this test as helpful in
defining which non-participants should be counted, and
subscribe to it.

After deciding which individuals may be counted, the
court must then consider whether the sum of the
participants and countable non-participants is the
"functional equivalent" of five participants. We note that, at
a minimum, a criminal scheme must involve more than one
participant in order to be found otherwise extensive; there
can be no less than the defendant and one participant the
defendant led or organized. See U.S.S.G.S 3B1.1,
Application Note 2 ("To qualify for an adjustment under this
section, the defendant must have been the organizer,
leader, manager, or supervisor of one or more other
participants."). However, a court's determination as to the
functional equivalence does not lend itself to a mere
numerical analysis, but will necessarily be guided by the

                               32


sentencing court's discretion. In deciding whether the total
is the equivalent to five participants, the sentencing court
may consider other factors, including the nature of the
criminal scheme, to evaluate the relative value of the
various countable non-participants.

We will apply the test we have crafted to the case at
hand. We note that Helbling urged us to adopt the Second
Circuit's test and does not contest the District Court's
determination that Helbling, Susman and Sokolic should be
counted as participants. Therefore, the analysis rests upon
the validity of the court's decision to count six non-
participants -- John Grikis, Arnold Kaminer, Bruce Katz,
Donald Mayle, Ronald Santora and Thomas Taylor -- and
the conclusion that the combination of these three
participants and these six non-participant individuals is the
equivalent of five participants. Helbling disputes the
consideration of each individual. He argues that Katz and
Grikis should not be considered because both merely
transferred funds at Helbling's instruction. Helbling argues
that Mayle, Santora and Taylor should not be considered
because they all acted as part of a bankruptcy fraud which
was not peculiar and necessary to the criminal activities
that supported Helbling's conviction, and, finally, Helbling
argues that Kaminer should not be considered because the
letter Kaminer wrote at Helbling's behest, falsely saying
that they had a conversation about an ESOP conversion,
was never sent. We agree with the District Court's
conclusion in all but Kaminer's case, and find that the
District Court properly concluded that the combination of
participants and countable non-participants makes
Helbling's scheme "otherwise extensive."

In arguing that Katz and Grikis should not be considered,
Helbling unduly narrows the scope of our inquiry. While
our test, which considers both the intent with which the
defendant directed the individual's involvement and the
extent to which the services of the individual were peculiar
and necessary to the criminal scheme, instructs the
sentencing court to disregard individuals who are
essentially functionaries, the activities of Katz and Grikis
are distinguishable from those of other banking employees
who, for example, might have simply moved the money for

                                33


Helbling. See generally Napoli, 179 F.3d at 15 (applying
Carrozzella and upholding the finding that the criminal
activity was otherwise extensive on the basis of casino
personnel who unwittingly helped the defendant launder
money). Helbling used the services of Grikis and Katz to
convert an account held by NatWest as a trustee owing
fiduciary duties, into an account that from which he could
withdraw funds, borrow against and which he could
eventually liquidate.

We also believe that the District Court was correct to
count the activities of Mayle, Santora and Thomas. Each
individual helped Helbling hide his criminal activities. See
Bennett, 161 F.3d at 194 (counting non-participants who
helped hide and legitimize the criminal activity). At the
direction of Helbling, Mayle attested to Helbling's signatures
on the ESOP conversion documents and hid the influx of
$350,000 from the Bankruptcy Court. Similarly, Thomas,
at Helbling's direction, submitted false documents to the
Small Business Association describing the $350,000 as a
personal cash infusion from Helbling. Lastly, at Helbling's
direction, Santora, Helbling's bankruptcy lawyer, submitted
false documents given to him by Helbling to the bankruptcy
court.

We reject Helbling's argument that Mayle, Santora, and
Thomas ought not be considered because their activities
were related to crimes for which Helbling was not indicted,
and, therefore, their activities were not peculiar and
necessary to Helbling's criminal behavior.19 These activities
aided Helbling's embezzlement activities by concealing
Helbling's withdrawals from the Bankruptcy Court, from
the Small Business Administration, and from the plan
participants.
_________________________________________________________________

19. In the proceedings in front of the District Court and again on appeal,
Helbling considers Mayle, Santora and Thomas together because they
provided services relating to bankruptcy fraud. See Appellant's Br. at 46.
Our review of the trial testimony indicates that thefilings signed by
Taylor were not part of the bankruptcy case. Instead, they were
submitted to the United States Small Business Administration. However,
we consider the three individuals together because Helbling's arguments
why each person should not be considered are identical.

                               34


We agree, however, that the District Court erred in
counting Kaminer. The District Court found that Helbling
directed Kaminer to write a letter in December 1991 stating
falsely that he had a conversation with Helbling about an
ESOP conversion in February 1991. While we disagree with
the Court's factual conclusion, that is not the focal point of
our inquiry.20 As far as can be determined from the record,
Helbling never used the letter, or even placed it in a
situation where it might be used, and, therefore, we cannot
say that Kaminer's conduct, innocuous in itself, was
peculiar and necessary to Helbling's criminal activities.

We will therefore affirm the District Court's decision to
enhance Helbling's sentence under S 3B1.1 on the basis
that he was the organizer or leader of a criminal activity
that was otherwise extensive. Helbling's criminal activity
involved three criminally responsible participants and five
other non-participant individuals whose involvement
Helbling directed and whose actions were peculiar and
necessary to the furtherance of Helbling's efforts. Given the
nature of Helbling's criminal conduct, the combination of
these participants and non-participants was properly held
by the District Court to be the functional equivalent of five
participants.

B. Obstruction of Justice

Helbling contends that the District Court did notfind
that Helbling had the requisite willful intent to obstruct
justice as is required in order to increase Helbling's offense
level under S 3C1.1 of the Guidelines.21 See U.S.S.G.
_________________________________________________________________

20. The District Court found that the letter was false because the
conversation never took place. We find this finding clearly erroneous
because Kaminer testified at trial that the February 1991 conversation
did occur and that the letter merely confirmed that fact. As we find that
Kaminer should not be counted because the letter was never used in
furtherance of Helbling's activities, we need not determine whether
submitting a truthful letter in an effort to support a false conclusion is
the type of involvement that should be counted underS 3B1.1.

21. Section 3C1.1 of the guidelines states:

       If (A) the defendant willfully obstructed or impeded, or attempted
to
       obstruct or impede, the administration of justice during the course

                               35


S 3C1.1; United States v. Belletiere, 971 F.2d 961, 965 (3d
Cir. 1992) ("[T]he government bears the burden of proving
by a preponderance of the evidence that the defendant
willfully obstructed or impeded, or willfully attempted to
instruct or impede, the administration of justice."). We
disagree.

The District Court applied the two-level enhancement on
the basis of two acts by Helbling which it found were "clear-
cut attempts to influence" testimony and which it
concluded were covered under Application Note 4.
Application Note 4 lists as one type of applicable behavior,
"(a) threatening, intimidating, or otherwise unlawfully
influencing a co-defendant, witness, or juror, directly or
indirectly, or attempting to do so." U.S.S.G.S 3C1.1,
Application Note 4(a). The first act relied upon by the
District Court was a letter written by Helbling to his two
attorneys, Susman and Sokolic, in May of 1994. In the
letter Helbling threatened to file malpractice actions against
the lawyers and file complaints with the bar association if
they refused to stand behind the documents they created.
Helbling, however, contends that the letter evidences his
frustration rather than an attempt to intimidate. The
second act was a conversation between Helbling and
Donald Mayle in July of 1996 during which Helbling
pressured Mayle to say his signature on the board of
directors' consent was genuine.22 Helbling argues that the
_________________________________________________________________

       of the investigation, prosecution, or sentencing of the instant
offense
       of conviction, and (B) the obstructive conduct related to (i) the
       defendant's offense of conviction and any relevant conduct; or (ii)
       closely related offense, increase the offense level by 2 levels.

U.S.S.G. S 3C1.1.

22. Two conversations between Helbling and Mayle are reproduced in the
record. The first conversation took place on July 19, 1996. The second
conversation took place on July 20, 1996. The District Court's opinion
does not make it clear whether it is relying upon both conversations or
just one. The opinion quotes from the July 19, 1996 conversation.

Helbling suggests that part of the District Court's error was failing to
consider both conversations. We believe, however, that both
conversations indicate the same desire to influence Mayle. The issue is
therefore moot.

                               36


discussion of Mayle's signature was innocuous and that the
District Court failed to put it in context. We disagree on
both scores. We review the District Court's factualfindings
under the clearly erroneous standard. See United States v.
Boggi, 74 F.3d 470, 478 (3d Cir. 1996) (citing United States
v. Cusumano, 943 F.2d 305, 315 (3d Cir. 1991)).

While we recognize that the Helbling's letter varies in tone
and could be subject to differing interpretations, the letter
demanded that the lawyers stand behind documents found
by the jury to be false, and threatened adverse
consequences if they did not do so. With respect to the
conversations with Mayle, the inference drawn from the
conversations is that Helbling desired Mayle to say that he
signed the board of directors' consent and was urging
Mayle to lie. We conclude that the District Court'sfinding
that these acts represented attempts to influence testimony
was not clearly erroneous.

C. Extreme Psychological Injury to the Victims

Helbling also contends that the District Court abused its
discretion when it departed upward two-levels from the
applicable guideline level on the basis of extreme
psychological damage to the victims because there was
insufficient evidence of psychological harm to justify the
departure. See U.S.S.G. S 5K2.3 (Extreme Psychological
Injury to the Victims) (Policy Statement); Unites States v.
Neadle, 72 F.3d 1104, 1111-12 (3d Cir. 1995); United
States v. Astorri, 923 F.2d 1052, 1058 (3d Cir. 1991).
Section 5K2.3 permits a sentencing court to sentence above
the guideline sentence level "[i]f a victim or victims suffered
psychological injury much more serious than that normally
resulting from commission of the offense . . ." The section
continues to explain that:

       Normally, psychological injury would be sufficiently
       severe to warrant application of this adjustment only
       when there is a substantial impairment of the
       intellectual, psychological, emotional, or behavioral
       functioning of a victim, when the impairment is likely
       to be of an extended or continuous duration, and when
       the impairment manifests itself by physical or
       psychological symptoms or by changes in behavior

                               37


       patterns. The court should consider the extent to
       which such harm was likely, given the nature of the
       defendant's conduct.

U.S.S.G. S 5K2.3. In Astorri, we upheld a departure for
extreme psychological harm when the District Court found,
both through testimony and its own observation, that the
victims' health suffered after they lost their life savings. See
Astorri, 923 F.2d at 1059.

We review a district court's decision to depart from the
guidelines under an abuse of discretion standard. See
United States v. Jacobs, 167 F.3d 792, 798 (3d Cir. 1999)
(citing United States v. Baird, 109 F.3d 856, 862 (3d Cir.
1997)). We have noted that "[i]f there is any place in
sentencing guidelines analysis where a fact-finder is to be
given considerable deference, it is here where the district
court is to be called upon to assess the psychological
impact upon victims." See Astorri, 923 F.2d at 1058.
However, in Jacobs, a case addressing the psychological
effects of an aggravated assault, we explained that a finding
that the victim's psychological injury was "much more
serious than that normally resulting from the commission
of the crime . . . is a prerequisite for a departure under
S 5K2.3." Jacobs, 167 F.3d at 799.

Relying principally on Astorri, a fraud case, the District
Court found that a two level departure was warranted
under S 5K2.3 because of the effects of Helbling's criminal
activities and harassment. Helbling argues that the District
Court's factual findings were insufficient for the departure.
The District Court found:

       [T]he age of Helbling's victims did not facilitate the
       commission of his crimes, it did heighten their impact
       . . . . The Government has convincingly detailed the
       emotional and psychological costs of surviving
       Helbling's crimes and resisting his harassment. These
       costs include the humiliation of being forced to seek
       work at an advanced age and rely on help from family
       members, the trauma that comes from family
       members, the trauma that comes with losing one's
       savings, and the psychological damage resulting from
       resisting slurs, threats, frivolous lawsuits, and

                               38


       pressure from the tax authorities. The evidence fully
       justifies this two level upward departure.

We believe that the District Court's findings are clearly
supported by the record and that the record itself supports
the determination that Helbling caused psychological injury
"much more serious" than would normally result from his
type of fraudulent activity. In fact, as the District Court
recognized, the record, in the form of the Presentence
Report and the testimony of some of the victims at trial,
contains the same type of evidence of individual loss and
resulting medical complications we found sufficient in
Astorri. Accordingly, we find that the District Court did not
abuse its discretion in departing upward under S 5K2.3.

VI.

For the reasons above, we will affirm the judgment of
conviction and sentence.

A True Copy:
Teste:

       Clerk of the United States Court of Appeals
       for the Third Circuit

                               39
