                     UNITED STATES COURT OF APPEALS
                              FIFTH CIRCUIT

                              ______________

                                No. 92-1545
                              ______________


                  UNITED STATES OF AMERICA,

                                          Plaintiff-Appellee,

                                  VERSUS

                  ROY W. CHARROUX and HARRY J. JAMES,

                                          Defendants-Appellants.

           __________________________________________________

              Appeal from the United States District Court
                   For the Northern District of Texas
           __________________________________________________
                          (September 23, 1993)

Before EMILIO M. GARZA and DEMOSS, Circuit Judges, and ZAGEL,
District Judge.*

EMILIO M. GARZA, Circuit Judge:

        Defendants, Roy W. Charroux and Harry J. James ("Charroux and

James" or "defendants"), were convicted of conspiracy, attempted

tax evasion, and signing a false tax return.        They now appeal their

convictions and sentences, and we affirm.

                                     I

        James, Charroux, Susan Petr, and James McClain were all in the

real estate business in Dallas.1         James was the president and co-

owner of Texas Land Holding Corporation ("Texas Land").           Charroux



     *
            District Judge for the Northern District of Illinois, sitting by
designation.
    1
             We present the facts in the light most favorable to the jury's
verdict.   All dollar amounts are approximate.
was the other co-owner and vice president of Texas Land.              Petr and

McClain each owned half of Petr-Avery Development Corporation

("Petr-Avery"), of which Petr was president.

           After Petr met James and Charroux at a bar, they introduced

her to the concept of land flips, a type of transaction where a

buyer agrees to purchase a tract of land at an inflated price, in

return for a share of the seller's profits on the sale.                   James

explained to Petr that a lot of money, which he described as

profits, could be made on land flips.

           Thereafter, James, Charroux, McClain, and Petr engaged in

several land flip transactions together. First they formed a joint

venture to purchase a tract of land in Carrollton, Texas.                   The

joint venture agreement provided that all interests, including

profits, in the sale of the Carrollton property would be divided as

follows: 23.33% each to James, Charroux, and Petr; 30% to McClain.

Petr-Avery       then   purchased    the   property   from   Sweden   &   Smith

Investment Brokers for $3.1 million and resold it on the same day

to Texas Land for $4.5 million.            Texas Land financed its purchase

of the Carrollton acreage with a $5.2 million loan, of which the

lending institution disbursed roughly $4.8 million to Dallas Title

Co.2        Dallas Title, which oversaw the sale to Texas Land, then

disbursed the $4.8 million as instructed by Petr:            $3.1 million to

Sweden & Smith; $315,000 each to James, Charroux, and Petr-Avery;

and $418,000 to McClain.            Before the end of the year, James and


       2
            Most of the remainder of the loan was retained by the lender in
payment of interest due.

                                        -2-
Charroux were released from their liability on the $5.2 million

loan.

        A     land   flip    involving    acreage   in   Coppell,    Texas   was

accomplished in a similar manner.                The defendants, Petr, and

McClain formed a joint venture to purchase the property, with the

profits from the sale of the land to be divided between James,

Charroux, Petr, and McClain.             Thereafter Petr-Avery purchased the

Coppell tract from James Fuller for $2.8 million and resold it on

the same day to Texas Land for $4.2 million.             Texas Land then sold

the land to the joint venture for $4.2 million.             The joint venture

financed these transactions by borrowing $5 million, out of which

the lender disbursed $4.5 million to Dallas Title.                  Dallas Title

then distributed those funds according to Petr's instructions.

James Fuller received $2.8 million for the property, and Petr-

Avery's profits on the sale to Texas Land were divided among the

joint venturers.            James and Charroux each received $276,000.        By

the end of the year, neither defendant was liable on the joint

venture's $5 million loan.

        The    third   land    flip   involved   property   in   Plano,   Texas.

McClain, Petr, and the defendants formed CPH Joint Venture ("CPH"),

of which one half was owned by Texas Land and the other half was

owned by First American Capital Corporation.3 Petr-Avery purchased

the Plano land for $16 million and resold it the same day to CPH

for $18 million.        CPH financed this deal by borrowing $25 million.

As instructed by Petr, the lender disbursed $18 million to Petr-

    3
               First American Capital was controlled by James McClain.

                                          -3-
Avery.    Petr-Avery's $2 million in profits were divided among

McClain, Petr-Avery, James, and Charroux.              Each of the defendants

received $441,000. Before the end of the year, Texas Land withdrew

from CPH Joint Venture, and James and Charroux were no longer

liable on the $25 million loan.

       Texas Land's withdrawal from CPH Joint Venture occurred when

McClain purchased Texas Land's interest in the venture for $5

million ("the CPH buyout").                 From the $5 million, Texas Land

distributed $1.23 million to each defendant and $1.25 million each

to McClain and Petr.

       The foregoing transactions were reviewed by a number of tax

advisers who were retained by James and Charroux.                However, it was

revealed at trial that the defendants did not disclose to their tax

advisers the agreements between themselves, Petr, and McClain to

divide    the    profits       from   the    land   transactions.         The     tax

professionals also did not see the checks which James and Charroux

received as a result of those transactions, which indicated that

the    funds    paid    were    for   proceeds      from   the   sale   of      land.

Furthermore, according to accountant Kemble White, who analyzed the

land flip transactions, the closing binders did not show payments

to James and Charroux as a result of the land sales.                After White

noticed the amounts received from the land flips in the defendants'

bank   records,    he    inquired      about    them   and   was   told      by   the

defendants' in-house accountant Samuel Buggs, on behalf of James

and Charroux, that the funds were excess loan proceeds.




                                        -4-
      As a result of the foregoing transactions and the defendants'

failure to report the proceeds on their income tax returns, the

defendants were indicted for conspiring to defraud the United

States, pursuant to 18 U.S.C. § 371 (1988), attempting to evade

income   taxes,      in   violation      of       26   U.S.C.   §    7201    (1988),        and

subscribing     to   false      tax   returns,         in   violation       of    26   U.S.C.

§ 7206(1) (1988).         A jury convicted the defendants on all counts,

and the district court sentenced them to 33 months in prison.

James    and   Charroux        appeal,   contending         that     (a)    the    evidence

presented at trial was insufficient to sustain their convictions,

as it was not proved that they acted willfully; (b) the district

court erred by permitting the government's summary witness to

testify that the payments which they received were kickbacks;

(c) the district court violated Fed. R. Crim. P. 32(c)(3)(D) by

failing to make explicit findings of fact at sentencing concerning

the defendants' objections to the presentence report; (d) the

district court       increased        their       sentences     on   the     basis     of    an

erroneous finding that they used sophisticated means to conceal

their offense; and (e) the district court erroneously increased

their sentences by miscalculating the tax loss which resulted from

their offenses.

                                          II

                                              A

      James and Charroux argue that the evidence presented at trial

was   insufficient        to    sustain       their     convictions,         because        the




                                          -5-
government     failed    to   prove   that    they   acted    willfully.4       "In

deciding the sufficiency of the evidence, we determine whether,

viewing the evidence and the inferences that may be drawn from it

in the light most favorable to the verdict, a rational jury could

have   found   the   essential     elements     of   the     offenses    beyond   a

reasonable doubt."5       United States v. Pruneda-Gonzalez, 953 F.2d

190, 193 (5th Cir.), cert. denied, ___ U.S. ___, 112 S.Ct. 2952,

119 L. Ed. 2d 575 (1992).         "It is not necessary that the evidence

exclude   every    rational      hypothesis    of    innocence    or    be   wholly

inconsistent      with   every    conclusion    except       guilt,    provided   a

reasonable trier of fact could find the evidence establishes guilt

beyond a reasonable doubt."            Id.      "We accept all credibility

choices that tend to support the jury's verdict." United States v.

Anderson, 933 F.2d 1261, 1274 (5th Cir. 1991).                 Moreover, juries

are "free to choose among all reasonable constructions of the

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

1992).




    4
            Willful conduct is an element of each of the substantive tax offenses
of which the defendants stand convicted. See 26 U.S.C. §§ 7201, 7206 (1988).
Also, "in order to sustain a judgment of conviction on a charge of conspiracy to
violate a federal statute, the Government must prove at least the degree of
criminal intent necessary for the substantive offense itself." United States v.
Feola, 420 U.S. 671, 686, 95 S. Ct. 1255, 1265, 43 L. Ed. 2d 541 (1975); see also
United States v. Buford, 889 F.2d 1406, 1409 n.5 (5th Cir. 1989) ("To sustain a
conviction for conspiracy under [18 U.S.C. § 371] the government must prove `the
requisite intent to commit the substantive offense.'").
    5
            We apply this standard of review because Charroux and James preserved
their sufficiency claims by moving for a judgment of acquittal at trial. The
"manifest miscarriage of justice" standard is applied where the defendant fails
to preserve his or her sufficiency claim. See United States v. Galvan, 949 F.2d
777, 782-83 (5th Cir. 1991) (applying manifest miscarriage of justice standard
because defendant failed to move for directed verdict or for judgment of
acquittal).

                                       -6-
      James and Charroux contend that the government failed to prove

willfulness6    because    they   relied    on   the   advice   of   hired   tax

professionals in filing their tax returns.7                "[R]eliance on a

qualified tax preparer is an affirmative defense to a charge of

willful filing of a false tax return."            United States v. Wilson,

887 F.2d 69, 73 (5th Cir. 1989).           However, "[t]o avail himself of

the defense, a defendant must demonstrate that he provided full

information to the preparer and then filed the return without



     6
            Willfulness is defined as "a voluntary, intentional violation of a
known legal duty." United States v. Pomponio, 429 U.S. 10, 12, 97 S. Ct. 22, 23,
50 L. Ed. 2d 12 (1976) (26 U.S.C. § 7206); Cheek v. United States, 498 U.S. 192,
___, 111 S. Ct. 604, 610, 112 L. Ed. 2d 617 (1991) (26 U.S.C. § 7201).
      7
          Samuel Buggs, the defendants' in-house accountant, had
access to all of their bank records and ledgers, as well as the
closing binders for the three land flips and the CPH buyout. When
Buggs began preparing income tax returns for the defendants, he was
uncertain about how to treat the four amounts received by each of
the defendants))$315,000, $276,000, $441,000, and $1.23 million.
As a result, Buggs sought assistance from a lawyer and accountant
named Kemble White. Buggs provided White and his associate, Gary
Moore, with the defendants' bank records, ledgers, and closing
binders.
     White determined that no taxable income arose from the
Carrollton, Coppell, and Plano transactions. He further concluded
that the proceeds of the CPH buyout should be reported as corporate
income of Texas Land. The defendants thereafter filed individual
income tax returns which failed to report any income from the four
aforementioned transactions. Pursuant to the advice of William
Bailey, of the accounting firm of Bailey, Vaught, Robertson & Co.,
the defendants later filed amended individual income tax returns
which reported the $1.23 million from the CPH buyout as income.
The amended returns did not, however, report any income from the
Plano, Coppell, or Carrollton transactions.
     All   of   the   tax   professionals    who   reviewed   these
transactions))Buggs, White, Moore, William Bailey, and his
associates, Joel Landau and Ronald Miller))testified that the
defendants never denied them any information regarding these
transactions. Several of these individuals testified either that
they had all the information needed to prepare an accurate tax
return, or that they had no reason to believe that any information
was concealed from them regarding these transactions.

                                      -7-
having reason to believe it was incorrect."              Id.; see also United

States v. Masat, 948 F.2d 923, 930 (5th Cir. 1991) (stating that

defendant must show "(i) he relied in good faith on a professional

and (ii) he made complete disclosure of all the relevant facts"),

cert. denied, ___ U.S. ___, 113 S. Ct. 108, 121 L. Ed. 2d 66

(1992).

      According to James and Charroux, the "uncontroverted testimony

that [the     defendants]    .   .   .    fully   disclose[d]   all   necessary

information to their tax experts" establishes that they relied in

good faith on those experts and therefore did not willfully violate

the tax laws.        We disagree.8          On the basis of the evidence


    8
            The defendants' sufficiency argument is unpersuasive partly because
it relies upon mischaracterizations of the evidence. According to James and
Charroux, accountant Kemble White testified that, in preparing the defendants'
tax returns, "he had all of the relevant information `at his disposal.'" Brief
for James and Charroux at 17; see also Reply Brief for James and Charroux at 3
(referring to "the unchallenged testimony of accountants from McDaniel & White
that they had all the necessary information `at [their] disposal.'"). This is,
at best, a questionable characterization of the record. The testimony to which
the defendants refer is as follows:

      Q. [Mr. Zachry, counsel for James] All right, sir. So everything
      you determined in the course of your analysis as to the taxability
      of these now four amounts, including the sale of the interest, this
      1.2 million dollars, you had at your disposal, correct?
      A. [White] I'd say so. . . . [T]here was nothing that I asked for
      that I didn't get.
Record on Appeal, vol. 9, at 68-69. White did not testify either that he had at
his disposal all of the relevant information, or that he had all of the necessary
information.
      The defendants also mischaracterize the testimony of their summary witness,
Jerry Stamps. According to James and Charroux, Stamps "concluded [that] the tax
preparers in this case had all the necessary information from which to prepare
an accurate tax return." Brief for James and Charroux at 20. In fact Stamps
testified as follows:
      Q. [Mr. Belcher, counsel for the government] You agree that based
      on the evidence Mr. James and Mr. Charroux never told the return
      preparers, specifically Mr. White, or Mr. Landau, or Mr. Bailey, or
      Mr. Miller, about the 276,000, 441,000, 315,000 at the time that the
      returns were being prepared based on the opinion letters, correct?
      A. [Stamps, summary witness]       Those people had the))based on the

                                         -8-
presented at trial, the jury could have reasonably concluded that

James and Charroux believed the disputed funds to be taxable

income,    and    that   they      withheld    information   from    their     tax

professionals which was relevant to the taxability of those funds.

      The record supports the conclusion that the funds which the

defendants received from the land flips were taxable profits, and

that the defendants regarded them as such.             Susan Petr testified

that James introduced her to the idea of land flips and told her a

lot of money, which he described as profits, could be made on them.

Petr further testified that she engaged in land flip transactions

with James, Charroux, and James McClain, involving the Carrollton,

Coppell, and Plano tracts, and that the profits derived from those

transactions were split up between them. McClain further testified

that he, Petr, James and Charroux split up the profits from the

land flip transactions.            McClain also testified that James and

Charroux told him they had five to seven million dollars of taxable

income    for    the   year   in   question.     According   to     McClain,   he

discussed with James and Charroux whether they might use tax

credits from an oil company McClain owned to offset some of their

tax liability.




      evidence that's been introduced during this trial and testimony,
      they had the documentation which would have told them that had they
      looked at it.

Record on Appeal, vol. 10, at 161. It is incorrect to describe this testimony
as concluding that the tax professionals "had all the necessary information from
which to prepare an accurate tax return." Stamps merely stated that the tax
professionals were put on notice of the three dollar amounts mentioned, and not
that they were provided with information which revealed the taxable nature of
those payments.

                                        -9-
       The documentary evidence included an agreement between James,

Charroux, and Petr-Avery Development, which provided that James and

Charroux each were to receive 25% of the profits from the Plano

transaction. Similar agreements relating to the other transactions

were in evidence as well.       Furthermore, the checks which James and

Charroux received from the Carrollton transaction stated that the

payments were "proceeds on sale of 26.7716 acres."

       However, the defendants did not make the foregoing information

available to their tax professionals.          The documents which the

accountants received were bank statements, ledgers, and the closing

binders from the transactions. The bank statements showed that the

disputed amounts were received and deposited by the defendants, but

those documents revealed nothing about taxability:         Samuel Buggs,

the    defendants'   in-house    accountant,   admitted   that   the   bank

statements did not reveal whether a given deposit was income or

not.    Furthermore, Buggs testified that the disputed amounts were

not referred to on the general ledgers which he prepared, and which

were then provided to the other tax preparers.        Accountant Kemble

White testified that the closing binders "did not show proceeds

going out to Mr. James and Mr. Charroux" on any of the three land

sales, and that he did not see the disbursement sheets which

indicated payments to James and Charroux from those transactions.

       Furthermore, Buggs testified that James and Charroux never

told him that the amounts they received on land sales))$276,000,

$315,000, and $441,000))were shares of the profits which Petr-Avery

derived from those transactions.       According to White, at the time


                                    -10-
he prepared tax returns for James and Charroux he was not made

aware of any agreements entitling the defendants to shares of Petr-

Avery's profits from land transactions. White testified that, when

he first became aware of the payments, he suspected that they

constituted excess loan proceeds.             White contacted Buggs, who

confirmed that the payments were in fact excess loan proceeds.

According to Buggs, James and Charroux told him the funds were loan

proceeds, and he conveyed that information to White.9                     Buggs

admitted on cross-examination that, if the defendants believed the

money was "revenue associated," they would have misled him by

telling him that the funds were excess loan proceeds.

      In light of all of the foregoing evidence, it is hardly

undisputed))as the defendants contend))that they provided to their

tax professionals all the information necessary for the preparation

of accurate tax returns.       The jury could reasonably have concluded

that James and Charroux, knowing that the land flip revenues were

taxable income, led their tax advisers to believe that those funds

were nontaxable loan proceeds and withheld from their advisers the

information which would have revealed the taxable character of the




    9
            James and Charroux contend that it is irrelevant to their defense of
reliance on tax professionals whether they led Kemble White to believe that the
funds were excess loan proceeds. They argue that White regarded the funds as
non-taxable because they were partnership funds rather than individual funds, and
therefore the defendants' representation that the funds were loan proceeds did
not affect White's determination of taxability. We disagree. It is undisputed
that loan proceeds, i.e. borrowed money for which a taxpayer is liable, is not
taxable, whereas profits are taxable.       Therefore, regardless whether the
defendants' representation affected White's view of the taxability of the funds,
the jury was entitled to conclude that James and Charroux mischaracterized those
funds, and therefore neither relied in good faith upon the advice of their tax
professionals nor fully informed them of all relevant facts.

                                     -11-
money.10   Consequently, the defendants' attack on the sufficiency

of the evidence is without merit.

                                       B

      James and Charroux also contend that the district court erred

by   permitting   the    government's      expert   summary   witness,   James

Whitfield, to testify that the payments received by the defendants

from the three land flips were "kickbacks."            The decision whether

to admit expert testimony is entrusted to the sound discretion of

the district court and will be reversed only for an abuse of that

discretion.    See United States v. Bryan, 896 F.2d 68, 72 (5th Cir.)

cert. denied, 498 U.S. 847, 111 S. Ct. 133, 112 L. Ed. 2d 101

(1990); United States v. Masat, 896 F.2d 88, 94 (5th Cir. 1990);

United States v. Newman, 849 F.2d 156, 165 (5th Cir. 1988).

      At trial Whitfield gave the following testimony:

      Q.   [Mr. Belcher, counsel for the government]      Mr.
      Whitfield, let me ask you first about the first three
      transactions, what have been referred to here by Mr.
      McClain and Ms. Petr as land flips. Did the monies that
      Mr. James and Mr. Charroux each receive[d] out of those
      three land flips in the amount of [$]315,000[,]
      [$]276,000 and $441,000 apiece, constitute income for
      Federal income tax purposes?

      A.   [Whitfield]     To them, yes.

      Q. How would you classify them for Federal income tax
      purposes based on the evidence that's been presented here
      in Court?


     10
            Counsel for James and Charroux assert that James Whitfield, the
government's summary expert witness, "acknowledged that he found no attempt by
[the defendants] to conceal the transactions and monies at issue in the tax
returns." Again counsel for the defendants mischaracterize the testimony given
at trial. Whitfield was not asked whether he found any attempt by the defendants
to conceal the land flips. He was merely asked whether depositing the disputed
funds into accounts bearing Harry James' social security number was "somehow an
effort to secret these funds," and he responded in the negative. See Record on
Appeal, vol. 8, at 49-50.

                                     -12-
      A.   As kickbacks.

Record on Appeal, vol. 8, at 22.              The defendants objected to this

testimony,       and   the    district    court     overruled    the     objection.

Whitfield    referred        to   kickbacks     several   more   times    over   the

defendants' objections.

      James and Charroux contend that Whitfield was improperly

permitted to testify about their intent, in violation of Fed. R.

Evid. 704(b).          According to the defendants, "[t]he element of

improper intent . . . is present in both the layman's definition of

the term [kickback] . . . [and] the legal definition accepted in

the Fifth Circuit."11             Therefore, they argue, "[i]n order to

conclude that [the defendants] were engaged in a kickback scheme,

the government witness necessarily would have had to conclude that

the [defendants] had the requisite mental state for engaging in

such illegal activity. . . . To state that a party received a

kickback is thus to testify that he possessed a culpable mental

state."    We disagree.

      As we understand Whitfield's testimony, he did not intend, by

using the term kickback, to suggest anything about the defendants'

intent.    On cross-examination counsel for the defendants elicited

from Whitfield his definition of the term.12                 It was Whitfield's


     11
            See United States v. Porter, 591 F.2d 1048, 1054 (5th Cir. 1979)
(interpreting 42 U.S.C. § 1395nn(b)(1), which prohibited soliciting, offering,
or receiving kickbacks).
      12
            Q.    [Mr. Zachry, counsel for James]           Define kickback for
me.

      A.   [Whitfield]        Kickback?


                                         -13-
understanding that a kickback occurred when money was transferred

from one party to another and some of the money was passed back to

the original possessor.     Whitfield did not define kickbacks as

involving any improper intent, and specifically admitted that he

did not know whether they were illegal.13 Consequently, we disagree


     Q.   Yes, just a general definition.     You've used the
     term, the Government uses it in the Indictment. I'd like
     to know what you mean by it.

     A. In my mind it's))it's the original possessor of the
     funds pays to a successor possessor, and the second one
     passes money back to the original possessor of the funds.

     Q. In other words, if I paid you money, and you pay me
     part of that money back that's a kickback? Is that what
     you're saying? I want closer.

     A. If it is a))if for some reason you purchase))if I
     bought an asset or bought services from this other
     person, and in return for getting that contract or that
     deal, then we agreed that I'm going to pass funds back to
     you, sorry))

     Q.   That's okay.   So there's an agreement there for
     to))you pay me money, okay, and you're going to do
     something for me, right. Is that what you're saying?

     A.   Right.

     Q. Because you're going to do something for me I'm going
     to give you a portion of that money back, right?

     A.   Right.

                               *    *     *

     Q.   All right, sir.   Are all kickbacks illegal?

                               *    *     *

     A. I don't know.
Record on Appeal, vol. 8, at 67-68.
     13
          James and Charroux contend that it is presumed that the
jury, as laypeople, understood the layperson's definition of the
term kickback.    Furthermore, according to the defendants, the

                                   -14-
with the defendants' argument that Whitfield implicitly testified

that they acted with wrongful intent.        Whitfield merely used the

term kickback in a descriptive fashion, to point out how money

changed hands in the land flip transactions.14

     James and Charroux also contend that Whitfield's testimony

should not have been permitted because his conclusion))that the

payments were kickbacks))was not supported by any evidence in the

record. According to the defendants, the evidence showed only that

they received excess loan proceeds for the purpose of developing

the Carrollton, Coppell, and Plano tracts.          This argument is not

supported by the record.     As we have already discussed, see supra

Part II.A., substantial evidence supports the conclusion that the

funds which the defendants received represented profits.               The

testimony   of   James   McClain   reveals   that   James   and   Charroux

purchased land at inflated prices and in return for doing so

received a share of the sellers' profits.      That evidence certainly

supports the conclusion that the payments were kickbacks, as



layperson's definition is found in the American Heritage Dictionary
and describes kickbacks as being "by confidential arrangement or
coercion."   However, the defendants cite no authority for the
proposition that we should presume the jury to have understood
Whitfield's testimony in terms of the American Heritage Dictionary
definition of the term kickback, and we are not inclined to do so
where Whitfield expressly stated that he had a different
understanding of that word.
    14
          James and Charroux also contend that Whitfield testified
to a legal conclusion which was outside his area of expertise, and
that Whitfield invaded the province of the jury as fact finder.
Because it is clear from the defendants' brief that these arguments
are premised on the assumption that Whitfield testified about the
defendants'   intent))a   proposition   which   we   have   already
rejected))they are without merit.

                                   -15-
defined    by   Whitfield.         Furthermore,    the   defendants'   summary

witness, Jerry Stamps, admitted that he had not seen a single

document which stated that excess loan proceeds were disbursed to

James and Charroux.         According to Stamps, it was Samuel Buggs and

Kemble White who characterized the funds as excess loan proceeds,

and the testimony of White and Buggs reveals that they received

that information from James and Charroux.            Finally, James McClain

testified that James and Charroux never used any of the funds for

development purposes, and Susan Petr testified that the defendants

spent the money for clothes and other personal uses.                Whitfield's

testimony was supported by the evidence at trial.                The district

court     therefore   did    not    abuse   its   discretion   by   permitting

Whitfield to testify that the payments received by James and

Charroux were kickbacks.

                                        C

     The    defendants      further    contend    that   the   district   court

violated Fed. R. Crim. P. 32(c)(3)(D) by failing to make specific

findings regarding their objections to factual inaccuracies in

their presentence reports (PSR's).15              James and Charroux filed

written objections to several aspects of their PSR's and raised

     15
             Fed. R. Crim. P. 32(c)(3)(D) provides:

          If the comments of the defendant and the defendant's
     counsel or testimony or other information introduced by
     them allege any factual inaccuracy in the presentence
     investigation report or the summary of the report or part
     thereof, the court shall, as to each matter controverted,
     make (i) a finding as to the allegation, or (ii) a
     determination that no such finding is necessary because
     the matter controverted will not be taken into account in
     sentencing.

                                       -16-
further objections at the sentencing hearing.16 In overruling those

objections, the district court made the following statements:

          As to the objections to the Pre-Sentence Report, and
     this goes to both Defendants, I'm going to overrule the
     objections. . . .
          I overrule))reject the argument that there's no
     evidence that the tax loss occurred on the last filing.
     True, the amended return lowered the tax loss, but there
     were errors in that return.       And there was still a
     substantial loss to the government on that filing.
          Then third, as to the amount of the tax loss, I
     think the Probation Department has correctly concluded
     that the total loss, 2.9 million approximately, should be
     the basis of the guideline calculation.       There is a
     conspiracy count. There was a conviction on conspiracy,
     and I think it's proper to treat it on that basis. . . .
          [A]s to the sophisticated means, I do overrule that
     objection.    The means are sophisticated within the
     meaning of the guidelines.     I don't have to have an
     offshore tax problem in order to have a sophisticated
     means. And based on the evidence heard at trial, I would
     reject that objection.

                             *    *     *

          As to the objections to paragraph 8, 25, another
     objection to 25, I would overrule those based on the
     reasons that I've stated, and based on the evidence that
     was heard during trial.

                             *    *     *


     16
          The defendants objected to the following matters: (1)
the statement in paragraph 8 of the PSR that "the defendants
concealed income from land flips"; (2) the suggestion in paragraph
18 that the defendants filed amended tax returns only because the
government initiated an investigation of James McClain; (3) the
calculation in paragraph 19 of the amount of money the defendants
received from the three land flips and the CPH buyout; (4)
statements in paragraphs 20 and 25 regarding the amount of income
that the defendants failed to report and the amount of tax loss
that they caused to the United States; and (5) the suggestion in
paragraph 26 that the defendants used sophisticated means in the
course of their offense.    The PSR's of the two defendants are
identical in all respects pertinent to those objections.       The
defendants' remaining objections dealt with legal rather than
factual matters, and therefore are not relevant to the defendants'
Rule 32(c)(3)(D) argument.

                                 -17-
                And then as to James' objections, the government's
           objections were exactly the same; first one accepted, the
           second one rejected.17
                And as to the specific objections to paragraph 8,
           paragraph 18, paragraph 19, paragraph 20, paragraph 25,
           26, 39, those are overruled for the reasons stated here,
           and also based on the evidence presented during trial.

Record on Appeal, vol. 12, at 24-26.

           James and Charroux argue that this explanation of the district

court's ruling was insufficient to satisfy Rule 32(c)(3)(D) because

the district court "cannot simply adopt the findings of the Pre-

Sentence Report in order to support a sentencing decision."                       The

defendants' argument is meritless. In United States v. Garcia, 963

F.2d 693 (5th Cir.), cert. denied, ___ U.S. ___, 113 S. Ct. 388,

121    L.     Ed.   2d   296    (1992),   the    district   court      rejected   the

defendants' objections with less explanation than the district

court provided in this case:

           [T]he information contained in the presentence report,
           paragraphs objected to, paragraphs 15 through 20, and 22,
           is by a preponderance of the evidence correct, and I
           believe it.    I further find that your objections to
           paragraphs 25, 30, 32, along with paragraph 46, and
           paragraph 60 and 61, are not well taken.      That it is
           clear from all the evidence before me, and the
           information furnished, and I find from a preponderance of
           the evidence that the defendant was involved with all
           three of the marijuana loads, and that the guidelines
           were appropriately applied and correct offense level was
           used in calculating the sentence guidelines range.

Id. at 706.         However, we held that "the district court adequately

complied with         Rule     32"   because    the   "adoption   of    the   [PSR's]

findings indicates that the court `at least implicitly, weighed the


      17
          The district court indicated that the government's second
objection was overruled for the reason stated by the probation
department in its response to the government's objections.

                                          -18-
positions   of    [the]   probation    department    and    the   defense   and

credited the probation department's determination of the facts.'"

Id. (quoting United States v. Sherbak, 950 F.2d 1095, 1099 (5th

Cir. 1992)).       No less can be said here.              The district court

specifically referred to each disputed issue and indicated that the

defendants' objections to the factual findings in the PSR were

without merit.      In several instances the district court provided

more detail regarding the factors which it considered in resolving

the factual disputes. This was enough to satisfy Rule 32(c)(3)(D).

As we noted in Garcia, "`Rule 32 does not require a catechismic

regurgitation of each fact determined and each fact rejected when

they are determinable from a [PSR] that the court has adopted by

reference."      Id. at 706-07 (quoting Sherbak).         In light of Garcia,

we are convinced that the defendants' Rule 32 argument is without

merit.   Cf. United States v. Hooten, 942 F.2d 878, 882 (5th Cir.

1991) (remanding for further factual findings where "district court

never addressed the question of who owned the pistol").

                                       D

      The defendants also contend that the district court erred in

sentencing them, by applying a sophisticated means enhancement

under § 2T1.3(b)(2) of the Sentencing Guidelines.                  See United

States Sentencing Commission, Guidelines Manual, § 2T1.3(b)(2)

(Nov. 1992) ("If sophisticated means were used to impede discovery

of the nature or extent of the offense, increase by 2 levels.").

The   defendants     argue   that     they   are    not    knowledgeable     or

sophisticated with regard to the tax laws, and furthermore their


                                      -19-
methods were not so sophisticated that the IRS could not have

easily discovered the sources of the disputed funds. We review for

clear   error    the   district    court's    factual   finding    that   the

defendants used sophisticated means to conceal their offenses. See

United States v. Shell, 972 F.2d 548, 550 (5th Cir. 1992) ("For

purposes of the [sentencing] guidelines, the sentencing court's

findings   of   fact    are   reviewed   under   the    `clearly   erroneous

standard.'"); United States v. Becker, 965 F.2d 383, 390 (7th Cir.

1992)   (applying      clearly    erroneous    standard    to   finding   of

sophisticated means), cert. denied, ___ U.S. ___, 113 S. Ct. 1411,

122 L. Ed. 2d 783 (1993).         We will not find a district court's

ruling to be clearly erroneous unless we are left with the definite

and firm conviction that a mistake has been committed.                United

States v. Mitchell, 964 F.2d 454, 457-58 (5th Cir. 1992).

     We find no clear error here.          Although the evidence does not

indicate that either James or Charroux were tax experts, it does

support the conclusion that they structured elaborate transactions

to hide their revenues.        James McClain described one advantage of

land flips, such as the ones he engaged in with James and Charroux,

as follows:     "What happens was you bought a piece of property for

an inflated price and then everybody involved took part of the

proceeds and the closing statement, as well as the documents to the

savings and loan, showed that you paid that much for the piece of

property. Therefore, the regulators didn't realize where the money

was really going, . . . [who] was receiving it, or what you were

using the funds for."         The evidence also supports the conclusion


                                    -20-
that    James     and   Charroux   sought    the   advice   of   various   tax

professionals in order to lend the appearance of legitimacy to

their dealings, while withholding from those professionals the

information which would have permitted them to determine correctly

the taxability of the land flip revenues.          See supra Part II.A.     As

in United States v. Jagim, 978 F.2d 1032 (8th Cir. 1992), cert.

denied, ___ U.S. ___, 113 S. Ct. 2447, 124 L. Ed. 2d 664 (1993),

upon which the defendants rely, this was not merely a case in which

"an individual taxpayer completed his individual 1040 form with

false information to avoid paying some of his federal taxes."              See

id. at 1042.      The district court's finding of sophisticated means

was not clearly erroneous.18

                                       E

       Lastly, James and Charroux argue that they were improperly

sentenced because the district court miscalculated the tax loss

which resulted from their offenses.          The district court arrived at

a figure of $2.9 million by aggregating all tax liability of either

defendant on any funds received from the four transactions at issue

here.       Each defendant was sentenced on the basis of the total tax

loss caused by both defendants.             Based on the tax loss of $2.9


       18
          We are not persuaded by the defendants' reference to
"[t]he ease with which the I.R.S. could have discovered the
allegedly `hidden' income." Agent Whitfield's testimony, on which
the defendants rely, does not support the proposition that the
sources of the funds were easily discoverable. Whitfield merely
testified that he would have asked about the source of the funds if
he had seen the defendants' bank records in the course of an audit.
Furthermore, other evidence supported the conclusion that the
defendants' means were sophisticated, even if they were not fail-
safe.

                                     -21-
million, the district court set the defendants' base offense level

at 16 and sentenced both defendants to 33 months in prison.19        On

appeal the defendants present several arguments contesting the

correctness of the $2.9 million tax loss figure.       None of these has

merit.

     The defendants first argue that the district court erred by

including in the tax loss the tax due on the amounts which they

received   in   connection    with   the     Coppell   and   Carrollton

transactions))$276,000 and $315,000.       They contend that these sums

represented loans for which they were liable, and that the money

therefore was not taxable. Whether these amounts represented loans

to the defendants is a factual question, and the district court's

resolution of that issue is reviewed only for clear error.          See

Shell, 972 F.2d at 550.      As our earlier discussions should make

clear, substantial evidence supports the conclusion that these

payments were not loans but kickbacks.       See supra Parts II.A. & B.

Therefore the district court did not clearly err by including as

tax loss the tax due on the proceeds of the Coppell and Carrollton

transactions.

     19
          The PSR assigned the defendants a base offense level of
16 based on a tax loss of $1,044,643. See United States Sentencing
Commission, Guidelines Manual, § 2T4.1(K) (1988) (providing base
offense level of 16 where tax loss was between $1,000,001 and
$2,000,000). Although the district court later adopted the higher
tax loss figure of $2.9 million, it is apparent that the district
court failed to adopt a higher base offense level, as directed by
the guidelines, see id. § 2T4.1(L) (providing base offense level of
17 in cases where tax loss was between $2,000,000 and $5,000,000),
because the district court stated at the sentencing hearing that
the guideline range for the defendants was 27-33 months, which was
the range arrived at by the PSR on the basis of the $1,044,643 tax
loss figure and the base offense level of 16.

                                 -22-
     The defendants also argue that the district court should not

have counted the tax owed on the $441,000 which each of them

received from the Plano transaction.    According to the defendants,

that tax liability should not be considered because they did not

attempt to evade those taxes.    They contend, as they did at trial,

that their failure to report the $441,000 as income resulted

entirely from the errors of their tax advisors, so that they had no

wrongful intent. Defendants are merely attempting to retry in this

Court the issue of reliance on tax professionals which was decided

against them at trial.     As we have already stated, see supra Part

II.A., ample evidence supports the conclusion that the defendants

did not make full disclosure to their tax advisers, and did not

rely in good faith on their advice.      Consequently, the district

court's inclusion in tax loss of the tax due on the $441,000 was

not clearly erroneous.20

     Lastly, the defendants contend that the district court erred

by holding each of them responsible not only for the tax loss which

he caused, but also for the tax loss which the other caused.   James

and Charroux argue that the definition of "tax loss" contained in


   20
          The defendants raise a similar argument regarding the tax
due on the funds which they derived from the CPH buyout. However,
we need not decide whether any error was committed with respect to
these funds, since any error would be harmless. See Fed. R. Crim.
P. 52(a). Even if the taxes due on the $1.23 million were excluded
from the tax loss amount, that amount would still exceed
$1,000,000. Therefore, the defendants' base offense level would
still be 16, see U.S.S.G. § 2T4.1(K) (Nov. 1988) (providing base
offense level of 16 where tax loss was between $1,000,001 and
$2,000,000), and their sentencing guideline range would still be
27-33 months.    Because any error would have no effect on the
defendants' sentences, it would be harmless.

                                 -23-
U.S.S.G. §       2T1.3))which       refers    to    "the   taxpayer"      and   not    to

multiple tax payers21))demonstrates that the sentencing guidelines

do not contemplate the calculation of tax loss on the basis of co-

conspirators' conduct.22         We are not inclined to extrapolate such

a momentous proposition from the fact that § 2T1.3 refers to the

taxpayer    in    the    singular,       particularly      when   other    guidelines

clearly require the contrary result.

     §    1B1.3     of    the   sentencing         guidelines     provides      that    a

defendant's base offense level is determined on the basis of:

     all acts and omissions committed or aided and abetted by
     the defendant, or for which the defendant would be
     otherwise   accountable,   that   occurred   during   the
     commission of the offense of conviction, in preparation
     for that offense, or in the course of attempting to avoid
     detection or responsibility for that offense, or that
     otherwise were in furtherance of that offense . . . .

United     States        Sentencing        Commission,       Guidelines         Manual,

§ 1B1.3(a)(1) (1988).23         "Conduct `for which the defendant would be

otherwise    accountable'       .    .    .   includes     conduct   of    others      in

furtherance of the execution of [a] jointly-undertaken criminal


     21
          See U.S.S.G. § 2T1.3(a) (1992) ("If the taxpayer is a
corporation, use 34 percent in lieu of 28 percent [in calculating
tax loss].").
     22
          In support of their argument, the defendants cite cases
which support the proposition that a joint venturer owes taxes on
joint venture revenues only to the extent that the revenues are
earned from the portion or percentage of the joint venture which
the joint venturer owns.       See Melbourne Ranches, Inc. v.
Commissioner, T.C. Memo 1971-264, 30 CCH TCM 1132 (1971).     The
defendants' sentences are governed by the sentencing guidelines,
and not by civil tax cases.
     23
          The district court applied this version of § 1B1.3 in
sentencing James and Charroux.   A different version is now in
effect.

                                          -24-
activity   that   was   reasonably    foreseeable   by   the   defendant."

U.S.S.G. § 1B1.3, comment. (n.1).           Because the record clearly

demonstrates that each of the defendants' conduct was reasonably

foreseeable to the other defendant, § 1B1.3 supports the district

court's decision to hold each defendant responsible not only for

the tax loss which he caused, but also for the tax loss caused by

his co-defendant.24

                                     III

     For the foregoing reasons, we AFFIRM.




     24
          We have not previously applied § 1B1.3 to aggregate the
tax losses of co-conspirators.     However, at least one district
court has applied § 1B1.3 to an analogous situation. See United
States v. Kaufman, 800 F. Supp. 648, 652 (N.D.Ind. 1992) ("U.S.S.G.
§ 1B1.3(a) requires the court to consider all unreported income,
regardless of whose pocket into which it went."). Furthermore, §
1B1.3 has been applied to other criminal tax cases as well. Judge
Easterbrook, of the Seventh Circuit, recently wrote that "[t]ax
offenses, like embezzlements and drug crimes, fall within the rule
that relevant conduct includes the whole scheme." United States v.
Harvey, 996 F.2d 919, 922 (7th Cir. 1993) (referring to U.S.S.G. §§
1B1.3, 2T1.3); see also United States v. Meek, 998 F.2d 776, ___
(10th Cir. 1993); United States v. Brimberry, 961 F.2d 1286, 1292
(7th Cir. 1992).     Furthermore, guideline section 2T1.3, which
governed the computation of tax loss in this case, specifically
directs our attention to § 1B1.3. See U.S.S.G. § 2T1.3, comment.
(n.3) ("In determining the total tax loss attributable to the
offense (see § 1B1.3(a)(2)), all conduct violating the tax laws
should be considered as part of the same course of conduct or
common scheme or plan unless the evidence demonstrates that the
conduct is clearly unrelated.").

                                     -25-
