                  IN THE UNITED STATES COURT OF APPEALS

                          FOR THE FIFTH CIRCUIT




                               No. 91-5568


UNITED STATES OF AMERICA,
                                                 Plaintiff-Appellee,

                                    versus

DAVID M. SAKS,
                                                 Defendant-Appellant,



                               No. 91-5572


UNITED STATES OF AMERICA,
                                                 Plaintiff-Appellee,

                                    versus

JAMES DOYLE SPRUILL,
                                                 Defendant-Appellant.



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

                           (June 23, 1992)


Before WILLIAMS, JOLLY, and HIGGINBOTHAM, Circuit Judges.

HIGGINBOTHAM, Circuit Judge:

     A jury convicted Doyle Spruill and David Saks on one count of

conspiracy to defraud the United States, 18 U.S.C. § 371, and five

counts of bank fraud, 18 U.S.C. § 1344.          Spruill and Saks challenge

the jury instructions and the sufficiency of the evidence.                Saks

also argues that the court erred in admitting testimony of Spruill

given   in    a   deposition   in    a   civil    suit,   contrary   to   the
Confrontation Clause of the Sixth Amendment.             Both defendants also

contend that their convictions on the bank fraud counts were

multiplicitous.      We find that the evidence was sufficient and that

any error in the jury instructions was harmless beyond a reasonable

doubt.      We   also   find   that   Spruill's    testimony    given   in   the

deposition was properly admitted.            Finally, we find the bank fraud

counts multiplicitous under the rule set forth in United States v.

Lemons, 941 F.2d 309 (5th Cir. 1991), and remand with instructions

to vacate these convictions and resentence on one of them.

                                       I.

       Spruill and Saks were business partners in Omni Interests,

Inc., a commercial real estate development company, based in San

Antonio.    Omni specialized in the development of office buildings,

shopping centers, and apartment projects in different locations

throughout Texas.        In 1983, Spruill and Saks formed a limited

partnership, Omni/Corpus Christi Limited, to acquire and develop a

large tract of land in Corpus Christi.           They purchased the property

for $3 million in 1984 as a location for a large shopping center.

They had the property rezoned and began negotiations with major

mall   developers.       By    year   end,    however,   Omni   had   financial

problems.    Spruill and Saks needing cash for the company's short

term financial obligations, decided to borrow, with the Corpus

Christi property as collateral.

       They approached Peoples Savings & Loan Association, where

officials informed them that they would need about $14 million to

pay existing debt on the property and keep their company afloat.


                                        2
Peoples could not handle a loan of that size, and referred them to

Security Savings Association. That was a fateful day. In December

of 1984, Spruill and Saks met with Cliff Brannon and Don Jones, co-

chairmen of the board of Security and owners of a controlling

interest in it.       They asked Brannon and Jones for a loan of $14

million.    They had obtained an appraisal valuing the property at

$24 million, based on its potential as a site for a regional

shopping mall. Brannon and Jones listened and promised to let them

know   soon.    The    prospective    lender,   it   seems,   saw   in     this

prospective loan a solution to its own unrelated but serious

problem.

       The year before, Security had loaned Ray Stockman about $20

million to develop Chaucer Village, a condominium project in

Dallas.    When Saks and Spruill walked in, Chaucer Village had

failed.     Officials    of   the   Federal   Home   Loan   Bank   Board    had

determined that the Chaucer Village loan had been "overfunded" by

about $5 million.      The Board had directed Brannon and Jones either

to write down the loan, that is, to establish a loss reserve

against the overfunded amount, or cover it with new capital.

Without an infusion of funds from some outside source, Brannon and

Jones would effectively be out of business or under supervisory

control, since Security's net worth would fall below the minimum

regulatory requirements.       They did not have the money.

       Brannon and Jones explained to Stockman that Spruill and Saks

had requested a $14 million loan, but that by lending $19 million,

with Stockman as a business partner, Saks and Spruill could pay


                                      3
Stockman $5 million of the loan proceeds. Stockman would then pass

the $5 million to Security for the troubled Chaucer Village loan.

Stockman's name would not appear on any loan documents, hiding from

federal regulators the tied transactions.              In short, the proposal

was a shuffle of the $5 million debt from Stockman and the Chaucer

Village project, in which the regulators were keenly interested, to

Spruill and Saks and the Corpus Christi project, where there was no

apparent impropriety.     There would be no real infusion of capital,

since the source of the funds to cover the Chaucer Village loan

would originate with Security itself. The transaction would create

the appearance of such an infusion, however, so as to placate the

FHLBB.

      Brannon and Jones persuaded Stockman with the suggestion that

he would receive no further funding absent his help.                     The two

bankers then told Spruill and Saks that the loan came with Stockman

as a partner and the $5 million added would never leave the bank

but would flow through Stockman to Security.                They explained the

Chaucer Village loan and why Stockman could not appear on any of

the paper work. Spruill and Saks objected at first, but succumbed.

Spruill later said that he felt that their backs were against the

wall and they would lose everything they had if they did not agree

to the deal.

      So then, on January 14th of 1985, Omni/Corpus Christi borrowed

$19   million   from   Security   and       two   closely   affiliated      banks,

Meridian   Savings     Association      and       Peoples   Savings   and     Loan




                                        4
Association.1    The   Corpus   Christi    property   was   pledged   as

collateral. Spruill and Saks signed a loan agreement reciting that

the loan was for the sole benefit of the lender and borrower and

was not for the benefit of any third party.       Stockman's name was

not on any of the closing documents.         Robert Brown, Meridian's

attorney and the preparer of the closing documents, later said that

he was completely unaware of Stockman's role.            The same day,

Spruill, Saks, and Stockman formed Crosstown Joint Venture to

develop the Corpus Christi property.      At the insistence of Spruill

and Saks, Stockman also signed a separate guaranty of the $19

million that Omni/Corpus Christi had borrowed.

     A few days later, Spruill took $5 million of the loan proceeds

and made out a cashier's check to Stockman for this amount,

ostensibly for his services as an "advisor" in Crosstown Joint

Venture.   Stockman rendered no such services.        Spruill gave the

check to Jones, who met with Stockman, gave him the check, and had

him purchase a certficate of deposit in the name of his company,

Condo Homes Corporation.    Condo Homes then wired the money to

Security to pay down the Chaucer Village loan.        Security informed

federal regulators that a purchaser had been found to take over

Chaucer Village and pay off the loan, but did not disclose the true

source of the funds.   With the shuffle complete, Omni was left to

carry a $19 million debt, over 25% of which it had never received.



     1
          The principals at Security, Meridian, and Peoples were
involved in a web of personal loans to each other and often acted
in concert in financial transactions.

                                  5
     In 1986, Meridian sued for foreclosure on the Corpus Christi

property.      Spruill   and   Saks   counterclaimed   against   Meridian,

Security, and Peoples, asserting that the loan was usurious.          They

argued that part of the loan transaction was a sham, since $5

million was not in fact loaned to Omni/Corpus Christi but was

diverted to Security for Stockman's debt.       Crosstown Joint Venture

was merely an artifice conceived by Security to hide the true

nature of the relationship between Spruill, Saks, and Omni/Corpus

Christi on the one hand, and Stockman on the other.          Spruill and

Saks signed pleadings detailing the fraudulent nature of the loan

arrangement, and Spruill testified at length about the transaction

in depositions.2    Spruill and Saks ultimately won a settlement in

this lawsuit dissolving the Omni note and requiring the banks to

pay them approximately $2 million.

     In 1990, the government indicted Saks and Spruill on charges

of conspiracy to defraud the United States and aiding and abetting

bank fraud.3    There were two theories:     first, that they defrauded

federal regulators by concealing Stockman's involvement in the loan

transaction, and second, that they defrauded the banks of their

money.   Saks testified in his defense at trial.         Spruill did not

but the court admitted Spruill's deposition testimony from the

civil suit into evidence. The jury found both defendants guilty on


     2
          Saks was present during at least part of these
depositions.
     3
          Brannon, Jones, and Ron Hertlein, the President of
Security, were also indicted. They all pled guilty. We are not
aware whether Stockman was prosecuted.

                                      6
five counts of bank fraud, 18 U.S.C. §§ 2, 1344, and one count of

conspiracy to defraud the United States, 18 U.S.C. § 371.

                                           II.

      Spruill     and    Saks      were   convicted      under      §   1344(1),   which

punishes the knowing execution or attempted execution of "a scheme

or artifice to defraud a federally chartered or insured financial

institution."      18 U.S.C. § 1344(1).               The term "scheme to defraud"

is not readily defined, see United States v. Goldblatt, 813 F.2d

619, 624 (3rd Cir. 1987), but it includes any false or fraudulent

pretenses or representations intended to deceive others in order to

obtain something of value, such as money, from the institution to

be deceived.      United States v. Lemons, 941 F.2d 309, 314-15 (5th

Cir. 1991); United States v. Church, 888 F.2d 20, 23 (5th Cir.

1989).    The requisite intent to defraud is established if the

defendant acted knowingly and with the specific intent to deceive,

ordinarily for the purpose of causing some financial loss to

another or bringing about some financial gain to himself.                          United

States v. Gunter, 876 F.2d 1113, 1120 (5th Cir. 1989); United

States v. St. Gelais, 952 F.2d 90, 96 (5th Cir. 1992) (wire fraud).

      Spruill and Saks argue that there was insufficient evidence of

their specific intent to defraud the banks.                    They contend that it

is   undisputed       that   all    parties      to    the   loan   transaction,      the

putative victims as well as those accused, knew of Stockman's role;

that there was no effort to conceal Stockman from bank officers.

Indeed, it      was     Brannon     and   Jones,       officers     and   directors    of

Security, who insisted that Stockman be left off of the closing


                                            7
documents.   In defendants' view, the evidence established at most

that they intended to defraud federal regulators, because the banks

were not victims but participants.

     We are not persuaded.    It is the financial institution itself-

-not its officers or agents--that is the victim of the fraud the

statute proscribes.     United States v. Briggs, 939 F.2d 222, 225

(5th Cir. 1991);   United States v. Blackmon, 839 F.2d 900, 904-06

(2d Cir. 1988); S. Rep. No. 225, 98th Cong., 2nd Sess. 377 (1983),

reprinted in 1984 U.S. Code Cong. & Admin. News 3182, 3517 (§ 1344

was "designed to provide an effective vehicle for the prosecution

of frauds in which the victims are financial institutions that are

federally created, controlled, or insured.").     Thus bank officers

with authority to bind their banks to others can nevertheless

defraud the institutions they serve.     See, e.g., United States v.

Lemons, 941 F.2d 309, 317 (5th Cir. 1991); United States v. Hooten,

933 F.2d 293, 295 (5th Cir. 1991) (upholding convictions of bank

officers under § 1344 for fraudulent conduct).      It follows that

bank customers who collude with bank officers to defraud banks may

also be held criminally accountable either as principals or as

aiders and abettors.4     Section 1344 was intended to reach a wide

range of fraudulent activity that undermines the integrity of the

federal banking system.    See S. Rep. No. 225, supra.



     4
          Spruill and Saks were charged under 18 U.S.C. § 2,
which punishes those who aid or abet criminal offenses as
principals. If Brannon and Jones wre guilty of bank fraud, Saks
and Spruill could be punished for aiding and abetting them in
this offense.

                                  8
     Spruill and Saks defrauded the banks by falsely representing

on loan documents who the true recipients of the Corpus Christi

loan were and for what purposes the funds would be used.             They

concealed Stockman's involvement from the financial institutions.

Brannon and Jones were aware of the fraud, indeed it was their

idea, but this does not mean that the banks were not defrauded.

Courts have on several occasions concluded that if a borrower

obtains funds at the insistence of and for the benefit of a bank

officer, without disclosing the officer's interest on the loan

documents, thereby knowingly flouting banking rules and regulations

designed to protect the financial integrity of the bank, a jury can

conclude that both borrower and officer acted with intent to

defraud the bank.    See United States v. Castiglia, 894 F.2d 533,

536-38 (2d Cir. 1990); United States v. Walker, 871 F.2d 1298,

1306-07 (6th Cir. 1989); United States v. Shively, 715 F.2d 260

(7th Cir. 1983).5   This case is similar in its essentials.       Spruill

and Saks   knowingly   assisted   Brannon   and   Jones   in   flouting   a

directive of the FHLBB designed to protect the financial integrity

of the bank.   By helping Brannon and Jones evade the write down of

the Chaucer Village loan, they perpetuated the very financial risk

the Board sought to prevent.           They not only put Security in

jeopardy of a loss, but also brought about their own financial gain

by obtaining a loan that they otherwise could not have obtained.

     5
          Although these cases for the most part involve
misapplication of bank funds under 18 U.S.C. § 656, both § 656
and § 1344 require proof that the defendant intended to defraud
or injure a bank, see Walker, 871 F.2d at 1305 n.6, which is the
element at issue here.

                                   9
This constitutes       an   intent   to   defraud     within    the    meaning    of

§ 1344(1).

     Defendants also contend that they could not have committed

bank fraud because the loan they obtained was amply secured, and

they assumed a legal obligation to repay it.                 They maintain that

under these circumstances, any omissions concerning Stockman's

involvement were simply not material. We disagree. The fraudulent

loan transaction plainly exposed Security and the other lenders to

a risk of loss, which is all that is required under § 1344.

Lemons, 941 F.2d at 316 n.3; United States v. Solomonson, 908 F.2d

358, 363-64 (8th Cir. 1990).          Even if we were to assume that the

Corpus Christi property was worth its appraised value of $24

million   because   of      its   potential   use   as   a   shopping     mall,    a

proposition disputed by the government at trial, this does not mean

that banks would generally be willing to loan this amount up front

with undeveloped land as the sole security.              The jury was entitled

to conclude that this refinancing of undeveloped property based on

speculative future development entailed high risk.                     Indeed, the

fact that Spruill and Saks had to go along with Brannon and Jones'

scheme is a strong indication that the risk involved in the Corpus

Christi loan was not one that most banks would have accepted.                     If

it were, Spruill and Saks could have shopped the property to other

lenders. Instead, they had their backs against the wall and agreed

to take on $5 million of additional debt to obtain the funds they

needed.      Spruill     conceded    as   much   in    his     civil    deposition

testimony.    The jury could reasonably conclude that the quid pro


                                       10
quo for agreeing to participate in the fraud was the lenders' ready

accession to a suspect loan request, no questions asked.          Whereas

before the transaction Security had a $5 million troubled loan

outstanding, afterwards they had a dubious $8.3 million loan, and

Meridian and Peoples also had loans totaling more than $10 million.

Saks and Spruill helped Brannon and Jones dig Security deeper into

a financial hole, and they were taking Meridian and Peoples with

them.     The misrepresentations and omissions were then material;

they were the driving force behind the entire transaction.

     Defendants also argue that their convictions must be reversed

because they relied in good faith on the advice of counsel in

agreeing to the loan transaction.       This argument is without merit.

The district court properly instructed the jury on the advice of

counsel defense, see Williamson v. United States, 207 U.S. 425, 453

(1908).     Defendants   cannot   insulate   themselves   from   criminal

prosecution by the presence of a lawyer, even if he knows what is

going on.

                                  III.

     The district court instructed the jury that the government had

to prove beyond a reasonable doubt that defendants knowingly

devised and executed or attempted to execute a scheme or artifice

to defraud a federally chartered or insured financial institution

to convict under § 1344.      It explained that the term scheme or

artifice to defraud includes any plan or course of action intended

"to deceive others in order to obtain something of value such as

money from the institution to be deceived" or "to deprive a


                                   11
federally insured financial institution of the intangible right to

honest services."     Spruill and Saks argue it was error to instruct

on intangible rights because when they borrowed the $19 million,

§ 1344 applied only to frauds involving money or property, not

those involving an intangible right to honest services.

       In McNally v. United States, 483 U.S. 350 (1987), the Supreme

Court held that the mail fraud statute, 18 U.S.C. § 1341, reached

only   fraudulent    schemes   involving   property     rights,   not   those

involving intangible rights to good government.            This holding has

been applied retroactively to reverse convictions under the mail

and wire fraud statutes that were based on an intangible rights

theory.    United States v. Marcello, 876 F.2d 1147, 1153 (5th Cir.

1989); United States v. Huls, 841 F.2d 109, 111-12 (5th Cir. 1988).

In 1988, Congress responded to the McNally decision by enacting

§   1346, which     provides   that   "scheme    or   artifice   to   defraud"

includes a scheme to deprive another of the intangible right of

honest services.      18 U.S.C. § 1346.         This statute is not to be

applied retroactively.     United States v. Loney, (No. 91-1340) (5th

Cir. Slip Op. April 23, 1992) at 4281 n.6; United States v. Little,

889 F.2d 1367, 1369 (5th Cir. 1989).        Thus for conduct before the

enactment of § 1346, defendants cannot be convicted of mail fraud

on the theory that they deprived someone of an intangible right to

honest services.

       Our first question is whether McNally's interpretation of the

mail fraud statute extends to the bank fraud statute as well.              It

is well settled that Congress modelled § 1344 on the mail and wire


                                      12
fraud    statutes,     and    that    the    usual       practice   is    to    look    to

precedents under those statutes to determine its scope and proper

interpretation.        See H.R. Rep. No. 901, 98th Cong., 2nd Sess. 2

(1984);   S.    Rep.   No.    225,    98th       Cong.,    1st   Sess.    377    (1983),

reprinted in 1984 U.S. Code Cong. & Admin. News 3182, 3519; United

States v. Stavroulakis, 952 F.2d 686, 694 (2d Cir. 1992); United

States v. Solomonson, 908 F.2d 358, 364 (8th Cir. 1990); United

States v. Bonallo, 858 F.2d 1427, 1432-33 (9th Cir. 1988).                        In the

usual case,     there     would      be    little    question     that    the    Court's

interpretation of § 1341 would also hold true for § 1344.                        Indeed,

the government has conceded that McNally applies here.

       We are not quite so ready to endorse this position as the

parties are, however. This bank fraud statute was enacted in 1984,

at a time when the unanimous view of the mail and wire fraud

statutes in the lower courts was that they encompassed schemes to

defraud others of intangible services as well as property.                             See

McNally, 483 U.S. at 362-63, nn.1-5 (Stevens, J., dissenting)

(citing    cases).        Congress         was    well    aware     of   the     courts'

interpretation of these statutes when it adopted them as its model.

Indeed, the House Judiciary Committee in considering the proposed

bank    fraud   statute      expressly      noted    the    history      of    expansive

interpretations of the meaning of "scheme to defraud" in §§ 1341

and 1343, albeit with some concern.                 It stated that "the current

scope of the wire and mail fraud offenses is clearly greater than

that intended by Congress.                Although the Committee endorses the

current interpretations of the language, it does not anticipate any


                                            13
further expansions." H.R. Rep. No. 901 at 4. When Congress enacted

§ 1344, it anticipated that the provision would be given the same

broad construction that the mail and wire fraud statutes had been

given to that point.      McNally was decided three years later and was

an abrupt reversal of the well entrenched judicial construction of

§ 1341.   Thus there is an argument that we should interpret § 1344

in light of the case law on §§ 1341 and 1343 as it existed in 1984,

rather than considering the turnabout that occurred later.6

     We need not decide this issue here, however, because even if

we assume that McNally does apply to § 1344, and that the court's

instruction was therefore erroneous, we find the error harmless.

This court   and   others    have   considered     McNally   error   on   many

occasions,   and   have    found    the    error   reversible   or   harmless

depending on the facts of the case.         Compare Marcello, 876 F.2d at

1153; Huls, 841 F.2d at 111-12; United States v. Lew, 875 F.2d 219,

221-22 (9th Cir. 1989); United States v. Ochs, 842 F.2d 515, 525-27

(1st Cir. 1988); United States v. Shelton, 848 F.2d 1485, 1496-97

(10th Cir. 1988); United States v. Zauber, 857 F.2d 137, 144-48 (3d

Cir. 1988); United States v. Mandel, 862 F.2d 1067, 1072-74 (4th

Cir. 1988) (reversing on the basis of McNally error) with United

States v. Richerson, 833 F.2d 1147 (5th Cir. 1987); United States

v. Fagan, 821 F.2d 1002, 1010-11 (5th Cir. 1988); United States v.


     6
          As in the case of the mail fraud statute, this problem
only arises with respect to bank fraud that occurred before the
enactment of § 1346 in 1988. For conduct after this point, a
scheme or artifice to defraud a financial institution includes a
scheme involving intangible rights to honest services. United
States v. Hooten, 933 F.2d 293, 296 (5th Cir. 1991).

                                      14
Madeoy, 912 F.2d 1486, 1492-93 (D.C. Cir. 1990); United States v.

Asher, 854 F.2d 1483, 1487-96 (3d Cir. 1988); United States v.

Doherty, 867 F.2d 47, 57-60 (1st Cir. 1989); United States v.

Moore, 865 F.2d 149, 152-54 (7th Cir. 1989); United States v.

Messinger, 872 F.2d 217, 224 (7th Cir. 1989) (finding McNally error

harmless).    The Third Circuit has explained that "[a]lthough the

outcomes in the post-McNally cases . . . vary depending on the

facts, indictments, and jury instructions of the particular case,

a   common   thread   running   through   each   of   these   cases   can   be

discerned. . . . [T]hose cases that have sustained mail fraud

convictions [despite McNally error] have done so where the "bottom

line" of the scheme or artifice had the inevitable result of

effecting monetary or property losses to the employer or to the

state." Asher, 854 F.2d at 1494.         We think this formulation of the

standard is sound.     It reflects the idea expressed more generally

by the First Circuit that "[a]n erroneous instruction on an element

of the offense can be harmless beyond a reasonable doubt, if, given

the factual circumstances of the case, the jury could not have

found the defendant guilty without making the proper factual

finding as to that element."        Doherty, 867 F.2d at 58; see also

Pope v. Illinois, 481 U.S. 497 (1987); Rose v. Clark, 478 U.S. 570

(1986).

      We are persuaded that the scheme or artifice proved at trial

had the inevitable result of defrauding the banks of property

interests.    The only reason Spruill and Saks participated in the

plan was to obtain a loan which they otherwise could not have


                                    15
obtained.   Security was deprived of the honest services of Brannon

and Jones in the process, but this was incidental to the scheme to

procure funds by whatever means necessary.         We cannot conceive of

how the jury could have found that Spruill and Saks intended to

defraud the lenders of the honest services of their officers

without also concluding that they knowingly exposed them to a risk

of financial loss.      This risk inhered not only in the $19 million

Omni loan but also in the fact that the defendants helped Brannon

and Jones evade a write down of the Chaucer Village loan which was

necessary to maintain the financial integrity of the institution.

The jury's guilty verdict on the bank fraud count reflects a

reasoned judgment that Spruill and Saks participated in the scheme

with full knowledge not only that bank employees were acting

dishonestly, but also that the scheme had financial consequences

for the banks.

     Defendants did not object to the intangible rights instruction

at trial.      They must demonstrate error "'so obvious that our

failure   to   notice    it   would   seriously   affect   the   fairness,

integrity, or public reputation of the judicial proceedings and

result in a miscarriage of justice."        Richerson, 833 F.2d at 1147

n.26; see also Madeoy, 912 F.2d at 1493.          We cannot find such an

unfairness or miscarriage of justice.         The government presented

substantial evidence of Security's loss of money at trial. Indeed,

defendants were not indicted on the theory that they defrauded

Security and the other banks of the intangible right to the honest

services of their employees.          Nor was this argument pressed at


                                      16
trial.        Rather, "the overriding and predominate theory of the

government's case" on the bank fraud counts involved the lenders'

loss of money.           See Richerson, 833 F.2d at 1157.                    Under these

circumstances,          it   is     less    likely      that   a   single     potentially

erroneous jury instruction had a substantial impact on the jury's

decision.

       Spruill     and       Saks    also    argue      that   the    court     erred    in

instructing the jury on the conspiracy count.7                       The court told the

jury that the government had to prove beyond a reasonable doubt

that two or more persons agreed to defraud the Federal Home Loan

Bank Board or the bank, as charged in the indictment.                          The court

explained the standard elements of a conspiracy.                      Defendants argue

that this instruction did not adequately define what it means to

defraud the Federal Home Loan Bank Board; that the district judge

gave       inadequate    guidance,         and    the   jury   may    have    filled    the

instructional vacuum with an improper definition.

       We are not persuaded.                 Defendants did not object to the

conspiracy instruction at trial, so that we review only for plain

error.       See Richerson, supra.               Furthermore, because defendants'

claim of prejudice is based solely on the failure to give adequate

explanation of the offense--beyond the reading of the statutory

language itself--their burden is especially heavy.                           Henderson v.


       7
          "If two or more persons conspire either to commit any
offense against the United States, or to defraud the United
States, or any agency thereof in any manner or for any purpose,
and one or more of such persons do any act to effect the object
of the conspiracy, each shall be fined not more than $10,000 or
imprisoned not more than five years, or both." 18 U.S.C. § 371.

                                                 17
Kibbe, 431 U.S. 145, 155 (1977).           We are generally not inclined to

reverse on the basis of instructions which accurately state the law

and to which there was no objection simply because the court did

not provide more guidance as to the meaning of the offense.

      Here, the court described the elements of a conspiracy and

properly stated the objects of the conspiracy as either defrauding

the   Federal   Home   Loan   Bank   Board     or   committing   bank   fraud.

Although the court did not explain what it meant to defraud the

Board, it did read the jury the indictment, which explained this

object as "to hamper, hinder, impede, impair and obstruct by craft,

trickery, deceit, and dishonest means, the lawful and legitimate

functions and responsibilities of the Bank Board in regulating,

examining, and supervising the activities of Meridian, Security,

and Peoples."    The government accurately explained the meaning of

this offense at length in closing argument.            We must consider this

surrounding context in determining whether the court's instruction

was likely to have confused the jury.          United States v. Chagra, 807

F.2d 398, 402-03 (5th Cir. 1986).          On this record, we see no danger

of confusion, certainly none that rises to the level of plain

error.

      Spruill and Saks also argue that the district court erred in

failing to give a cautionary instruction concerning a civil banking

regulation that was mentioned at trial.                 A savings and loan

examiner named James Hinman testified at trial about the general

role of examiners in overseeing savings and loans, the problems

that can   arise   with   loans,     how    loan    examiners   evaluate   loan


                                      18
documents, and how they respond to bad or overvalued loans. Hinman

referred to a regulation "that requires that the institution show

the ultimate recipient of all of the loan proceeds."   He mentioned

the regulation a few times in the course of his testimony and

cross-examination. Defendants contend that there was a substantial

danger that the jury based their convictions on violation of this

civil regulation rather than the criminal offenses with which he

was charged.   They rely primarily on United States v. Christo, 614

F.2d 486, 492 (5th Cir. 1980), where we held that a conviction

resulting from the government's attempt to bootstrap violations of

a civil regulation into a criminal offense cannot be allowed to

stand.

     Defendants did not request a cautionary instruction at trial.

If error at all, and we do not suggest that it was, the failure to

instruct the jury on the effect of the civil regulation was not

plain.   Unlike Christo, the government did not base its case on

Spruill and Saks' violations of any banking regulation.     Neither

the indictment nor the court's instructions to the jury referred to

a civil regulation, as they did in Christo.   Nor did the government

argue that violation of a civil regulation was proof of defendants'

guilt.

     This case is closer to United States v. Stefan, 784 F.2d 1093,

1098 (11th Cir. 1986), where the Eleventh Circuit held that if

evidence of civil violations is introduced for purposes other than

to show a criminal violation, and the evidence is not presented in

such a way that the jury's attention is focused on the civil


                                 19
violations rather than the criminal ones, there is no error.                 The

limited references to banking regulations that occurred at trial

served to explain to the jury the role of federal regulators in

overseeing savings and loans. The government would be hard pressed

to prove that defendants defrauded federal regulators without

mention of the regulations these officials are responsible for

enforcing.    It would also be difficult to explain the stakes in a

bank fraud case without some reference to the rules by which these

institutions are governed.         The regulation played at most a minor

role at trial.    We do not think it "impermissibly infected the very

purpose for which the trial was conducted," Christo, 614 F.2d at

492, and hence does not give us cause for reversal.

      We have considered defendants' other contentions with respect

to the court's jury instructions.           None of these objections were

raised at trial.      Whatever their merit, we do not think they rise

to the level of plain error.

                                      IV.

      Saks   argues   that   the   district    court    erred   in   admitting

Spruill's prior deposition testimony from the civil suit.              Spruill

made incriminating statements about the fraudulent nature of the

Omni loan at several depositions in 1986 in an effort to show that

the loan was usurious.       He did not testify at the criminal trial,

however.     Saks contends that this evidence was hearsay, and that

its   introduction      violated     his    Sixth      Amendment     right   to

confrontation under the rule of Bruton v. United States, 391 U.S.

123 (1968).


                                      20
     The district court considered this objection and concluded

that Spruill's deposition testimony was admissible against Saks

under Federal Rule of Evidence 801(d)(2)(D).       This rule says that

a statement is not hearsay if it is offered against a party and is

"a statement by the party's agent or servant concerning a matter

within the scope of the agency or employment, made during the

existence of the relationship."        The court reasoned that Spruill

and Saks were partners and thus agents for each other.       Spruill's

testimony related to matters within the scope of his agency as

general partner of Omni, and as such was admissible under Rule

801(d)(2)(D).   Because Spruill's deposition testimony was legally

considered an admission by Saks, the court found that Bruton did

not apply.

     First, we must consider whether Spruill was Saks' agent for

the purposes of Rule 801(d)(2)(D).         Because the rule does not

define "agent," we assume Congress intended to refer to general

common law principles of agency when it used the term.       Community

for Creative Non-Violence v. Reid, 109 S.Ct. 2166, 2172-73 (1989);

Boren v. Sable, 887 F.2d 1032, 1039 (10th Cir. 1989).        There was

some ambiguity at common law as to whether a partner is an agent of

his co-partners or of the partnership as an abstract entity.       See

Crane & Bromberg, Partnership 274 (1968).      The Uniform Partnership

Act, adopted in Texas and most other states, has endorsed the

entity view.    See UPA § 9 ("Every partner is an agent of the

partnership for the purpose of its business.").         Regardless of

which is the better characterization, the general rule at common


                                  21
law was that the declarations of one partner made during the

existence of the partnership and in relation to its affairs are

admissible against the other partners even if the declarant is not

a party to the action.   Filesi v. United States, 352 F.2d 339, 342

(4th Cir. 1965).     We have no reason to believe that Congress

departed from this rule when it enacted the Federal Rules of

Evidence in 1975.   Moreover, courts have held that we should not be

hyper-technical in construing the agency relationship of Rule 801.

See United States v. Paxson, 861 F.2d 730, 734 (D.C. Cir. 1988)

(finding the vice president of a corporation to be an agent of the

president for the purposes of 801(d)(2)(D) because the factors

which normally make up an agency relationship were present).

Spruill and Saks were the general partners of Omni/Corpus Christi

Ltd., and they acted in concert in managing its affairs.     We are

confident that they were agents for each other for the purposes of

Rule 801(d)'s agency exception. Cf. Anderson v. United States, 417

U.S. 211, 218 n.6 (1974) (conspiracy exception to hearsay rule is

rooted in the notion that conspirators are "partners in crime" and

hence agents of one another).

     Next we ask whether Spruill's deposition statements concerned

a matter within the scope of his agency as Saks' partner.      They

did. Spruill testified about the circumstances surrounding the $19

million Corpus Christi loan--a financial obligation which he and

Saks had incurred as partners of Omni/Corpus Christi Ltd..     This

matter arose from the business of Spruill and Saks' partnership and

was therefore within the scope of their agency relationship.    The


                                 22
fact that Spruill was noticed for deposition as an individual does

not mean that his statements were not about a partnership matter.

       Finally, we must determine whether Spruill made his statements

during the existence of the agency relationship.          If he did not,

the statements were inadmissible regardless of their substance.

Blanchard v. Peoples Bank, 844 F.2d 264, 267 n.7 (5th Cir. 1988);

United States v. Summers, 598 F.2d 450, 458 (5th Cir. 1979).             As

Saks    has   observed,   Omni/Corpus   Christi    Ltd.   petitioned    for

bankruptcy a few months before Spruill testified at the first

deposition, an act which dissolved the partnership under Texas law.

Texas Uniform Partnership Act § 31(5).            Saks argues that this

precludes a finding of an agency relationship that could support

the admission of Spruill's statements against him.

       The partnership does not terminate on dissolution, however.

It continues during the wind up of partnership affairs.                Texas

Uniform Partnership Act § 30; Woodruff v. Bryant, 558 S.W.2d 535,

539 (Tex. Civ. App. -- Corpus Christi, 1977) ("Generally when the

partnership is dissolved, the partnership continues during the

period of winding up until all preexisting matters are terminated.

. . . It is only upon termination that the final partnership

relationship ceases to exist."); Bader v. Cox, 701 S.W.2d 677, 682

(Tex. App. 5 Dist. 1985).     Texas partnership law dictates moreover

that "[a]fter dissolution a partner can bind the partnership . . .

[b]y any act appropriate for winding up partnership affairs or

completing transactions unfinished at dissolution."         TUPA § 35(a).




                                   23
     "Winding up" is not defined in the Act, but generally refers

to the process of completing unfinished transactions and settling

partnership affairs after dissolution.     Cates v. International

Telephone & Telegraph, 756 F.2d 1161, 1174 n.22 (5th Cir. 1985);

Childers v. United States, 442 F.2d 1299, 1303 (5th Cir. 1971).   A

leading partnership treatise says that "litigation of claims by and

against partners is a part of winding up."       Crane & Bromberg,

Partnership 460 (1968).     We conclude that under Texas law, the

admissions of a partner made in the course of litigation over pre-

dissolution claims, incident to winding up the partnership affairs,

are admissible in evidence against co-partners.     Compare Filesi,

352 F.2d at 342-43 ("[A] partner has the authority to bind the

other members of the firm by statements made after dissolution of

the partnership only when the statements are made while in the

process of winding up the partnership affairs.").

     Spruill was in the process of settling partnership affairs

when he testified in the deposition about the Corpus Christi loan.

The partnership had been dissolved by the bankruptcy, but a large

debt remained in dispute.   Litigation over repayment of this debt

was part of winding up and closing out a partnership transaction.

Spruill made statements in an effort to forestall repayment of the

loan and reap damages because it was usurious.    These statements

were made as agent for Saks and were binding on him.     They were

therefore admissible against Saks under Rule 801(d)(2)(D).

     Saks also argues that the admission of Spruill's deposition

statements violated his rights under the Confrontation Clause of


                                 24
the Sixth Amendment.     He relies on Bruton, supra, where the Court

established a rule barring the admission in a joint trial of the

incriminating     pre-trial     statements      of     a     non-testifying       co-

defendant.    See also Cruz v. New York, 481 U.S. 186 (1987); United

States v. Schmick, 904 F.2d 936 (5th Cir. 1990).                   Bruton has been

limited, however, to cases where the admission of the incriminating

statements was not within a firmly rooted exception to the hearsay

rule.   In Bourjaily v. United States, 107 S. Ct. 2775 (1987), a

district court admitted the incriminating, out-of-court statements

of a non-testifying co-conspirator against the defendant, reasoning

that the statements fell within the hearsay exception for co-

conspirators    under   Rule    801(d)(2)(E).          The       Court   upheld   the

defendant's     conviction     against     a   Sixth       Amendment     challenge,

reasoning that "no independent inquiry into reliability is required

when the evidence 'falls within a firmly rooted hearsay exception'"

like that for co-conspirators.        107 S. Ct. at 2782-83 (quoting Ohio

v. Roberts, 448 U.S. 56, 66 (1980).            Thus both of the independent

inquiries generally required to satisfy the Sixth Amendment--that

the   declarant    be   unavailable      and    that       the    statements      bear

sufficient indicia of reliability--could be dispatched in cases

where the statements met the requirements of Rule 801(d)(2)(E).

Id.; see also United States v. Inadi, 475 U.S. 387 (1986).                        The

Court has since applied the same reasoning to the "spontaneous

declaration" and "medical examination" exceptions to the hearsay

rule.   White v. Illinois, 112 S. Ct. 736 (1992).




                                      25
       We see no reason to distinguish between Rule 801(d)(2)(D) and

these other hearsay exceptions.                   The agency exception is equally

rooted in our jurisprudence.                 See Hitchman Coal & Coke Co. v.

Mitchell, 245 U.S. 229, 250 (1917) ("[T]he declarations and conduct

of an agent, within the scope and in the course of his agency, are

admissible as original evidence against the principal, just as his

own declarations or conduct would be admissible."); Vicksburg &

Meridian Railroad v. O'Brien, 119 U.S. 99, 104 (1886) (agent's

statements admissible against principal if made contemporaneously

with       acts   that    bind   the     principal).8       Indeed,      agency    theory

underlies the co-conspirator exception.                         See Anderson, supra;

Bourjaily, 107 S. Ct. at 2785 (Brennan, J., dissenting).                          The two

exceptions are hand in hand.               We conclude that if statements meet

the requirements           of    Rule    801(d)(2)(D),      as    they    do   here,   the

Confrontation Clause is satisfied.

                                             V.

       Spruill and Saks also argue that their conviction on several

counts       of    bank    fraud        arising     from    a    single     scheme     was

multiplicitous.           They rely on United States v. Lemons, 941 F.2d

309, 316-18        (5th    Cir.     1991),    where    we   found    multiplicity       in

defendant's        bank     fraud       convictions     because     §     1344    imposes

       8
          Vicksburg's limitation on the admissibility of an
agent's declarations against the principal is not violated here.
Spruill was testifying about past events, but he did so in the
course of fulfilling his duties as partner to wind up the
partnership's extant transactions. Thus he is different from the
engineer in Vicksburg, whose authority did not include the power
to make statements about prior trips and whose statements were
not explanatory of anything in which he was then engaged. 119
U.S. at 105.

                                             26
punishment only for execution of the scheme, not each act in its

furtherance.           The      government     has    conceded     that    defendants'

convictions      were      multiplicitous         under    Lemons,   and    we   agree.

Defendants were impermissibly convicted on several counts for

committing several acts in furtherance of a single scheme to

defraud.

       Defendants argue further that Lemons requires us to reverse

and dismiss          all   of   their   bank      fraud   convictions      because   the

indictment does not allege an offense under § 1344.                       Because each

individual act does not constitute a scheme for the purposes of

this statute, the argument goes, each count that referred to a

specific act failed to charge an offense. This argument is without

merit.      Defendants did not object to the indictment below.                       We

therefore read the indictment liberally to be sufficient "'unless

it is so defective that by any reasonable construction, it fails to

charge an offense.'"             United States v. Salinas, 956 F.2d 80, 82

(5th Cir. 1992) (citation omitted).                  Each count of the indictment

alleged that Saks and Spruill knowingly executed a scheme to

defraud the banks by performing an individual act in execution of

the scheme.          The individual acts were described in each count.

This was multiplicitous, but it was sufficient to charge an offense

under § 1344.

       We     have     explained     that      "multiplicity       addresses     double

jeopardy; and where the jury is allowed to return convictions on

multiplicitous counts, the remedy is to remand for resentencing,

with    the    government         dismissing       the    counts   that    create    the


                                             27
multiplicity."       United States v. Moody, 923 F.2d 341, 347-48 (5th

Cir.       1991).    We   accordingly    remand      the   case   and   direct   the

government to elect the § 1344 count that it wishes to leave in

effect.        The   court   must   then       vacate   the   convictions   on   the

remaining § 1344 counts and resentence the defendants.

            AFFIRMED in part, VACATED and REMANDED in part.



E.Grady Jolly, dissenting:

       I respectfully dissent.          Although I agree that the evidence

will support a conviction under section 1344,9 it does not support

this conviction under section 1344(1), which makes it unlawful to

defraud a financial institution.               Instead, the evidence supports a

violation of section 1344(2), which makes it unlawful to obtain

monies from a financial institution by means of false pretenses or

representations.

       The bank was defrauded of no monies, see McNally v. United

States, 483 U.S. 350, 358-359 (1987), notwithstanding the strained

efforts of the majority to say that is was.                       Of course, the

officers and owners of the bank were fully aware of the actual


       9
        18 U.S.C. § 1344 provides:

       Whoever knowingly executes, or attempts to execute, a
       scheme or artifice --
       (1) to defraud a financial institution; or
       (2) to obtain any of the moneys, funds, credits,
       assets, securities, or other property owned by, or
       under the custody or control of, a financial
       institution, by means of false or fraudulent pretenses,
       representations or promises;
       shall be fined not more than $1,000,000 or imprisoned
       not more than 30 years, or both.

                                           1
terms and conditions of the loan.     Second, the loan the defendants

actually received, as far as the purposes of this opinion are

concerned, was backed by adequate collateral.     Third, the bank as

an institution was relieved of regulatory problems by the infusion

of $5,000,000.   Finally, the transaction effectively resulted in

the bank obtaining additional guarantors on a delinquent loan.     In

short, it is only in hindsight, with the knowledge that the Saks

and Spruill loan "went bad" later, that we can say that the bank

suffered a loss in the transaction.       The evidence presented is

simply insufficient to support a conviction under section 1344(1);10

or stated another way, section 1344(1) does not reach the conduct

described by the majority.11



     10
      The majority cites United States v. Castiglia, 894 F.2d
533, 536-38 (2d Cir. 1990); United States v. Walker, 871 F.2d
1298, 1306-07 (6th Cir. 1989); and United States v. Shively, 715
F.2d 260 (7th Cir. 1983), to support the proposition that a
borrower may defraud a bank under section 1344(1) by omitting
from a loan application the fact that a beneficiary of the loan
is a bank officer. Slip op., p. 9. These cases, however, are
inapposite. In none of these cases was a borrower charged with
bank fraud under section 1344(1), as opposed to misapplication of
funds or making false statements. See Castiglia, 894 F.2d at 535
(borrowers charged with conspiracy, 18 U.S.C. § 371; with aiding
and abetting a misapplication of funds, 18 U.S.C. §§ 2 and 656;
with making false entries, 18 U.S.C. § 1005; and with perjury, 18
§ 1623); Walker, 894 F.2d at 536 (sole defendant is bank officer;
pinpoint cite is to discussion of officer's liability under 18
U.S.C. § 656 in United States v. Krepps, 605 F.2d 101 (3rd Cir.
1979)(in which a bank officer was the sole defendant)); Shively
715 F.2d at 264 (borrower indicted under 18 U.S.C. §§ 656 and
1014 but convicted only under § 656).
     11
      Whatever happened to the rule that penal statutes are to
be strictly construed?




                                -2-
                                 2
     Saks and Spruill, however, clearly obtained money by falsely

representing in their application the recipients of the loan and

the use of the funds.   Their application represented that Saks and

Spruill would receive a loan of $19.3 million, and that the funds

would be used for the development of the shopping mall on the

Corpus Christi tract, when the defendants actually received only

$14.3 million, with $5 million going through Stockman to pay off

the Chaucer Village loan at Security.

     Indeed, receipt of money from the banks under false pretenses

is exactly the crime for which they were indicted.12 Unfortunately,

however, the jury was only instructed under section 1344(1). Thus,

     12
      The indictment charges, for example:
                      COUNT TWO - BANK FRAUD
                     [18 U.S.C. §§ 1344, 2 ]
          ..... Defendants ... SAKS and SPRUILL knowingly
     executed and attempted to execute, a scheme and
     artifice to defraud Meridian, Security, and Peoples and
     to obtain moneys, funds, and other property owned by or
     under the custody or control of Meridian, Security, and
     Peoples by means of false and fraudulent pretenses,
     representations, and promises by performing the
     following act in execution of the scheme:
          3. Defendants ... SAKS and SPRUILL signed and
     caused to be signed a Loan Agreement which falsely
     represented that the purpose of the $19.3 million loan
     was for business related to Omni and omitted any
     reference to Ray Stockman, when in truth and in fact,
     as the defendants well knew, $5 million of the $19.3
     million in loan proceeds would be channelled through
     Ray Stockman back to Security for payment on the
     Chaucer Village loan, a loan totally unrelated to the
     loan for which the $19.3 million was intended.
     All in violation of Title 18, United States Code,
     Sections 1344 and 2.

     Each count repeated this language in its description of the
crime.




                                -3-
                                 3
although the text of the indictment charged the defendants with

violating section 1344(2), and although the evidence sufficiently

establishes this crime, the jury was given no instruction to

convict them of this crime.   Because I do not think the evidence is

sufficient for them to be convicted of 1344(1), and because the

court failed to instruct the jury on 1344(2), I would apply the

plain error standard and remand for a new trial.




                                 -4-
                                  4
