United States v. Dukes

UNPUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 05-5266

UNITED STATES OF AMERICA,

Plaintiff - Appellee,

versus

MARCUS D. DUKES,

Defendant - Appellant.

Appeal from the United States District Court for the District of
Maryland, at Greenbelt. Roger W. Titus, District Judge. (CR-03-
133)

Argued: March 13, 2007 Decided: July 3, 2007

Before WILLIAMS, Chief Judge, MOTZ, Circuit Judge, and HAMILTON,
Senior Circuit Judge.

Affirmed in part, vacated in part, and remanded by unpublished
opinion. Chief Judge Williams wrote the majority opinion, in which
Judge Motz concurred. Senior Judge Hamilton wrote a separate
dissenting opinion

ARGUED: Sherri Lee Keene, OFFICE OF THE FEDERAL PUBLIC DEFENDER,
Greenbelt, Maryland, for Appellant. Bryan Edwin Foreman, Assistant
United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY,
Greenbelt, Maryland, for Appellee. ON BRIEF: James Wyda, Federal
Public Defender, Daniel W. Stiller, Assistant Federal Public
Defender, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Greenbelt,
Maryland, for Appellant. Rod J. Rosenstein, United States
Attorney, Baltimore, Maryland, Steven M. Dunne, Assistant United
States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Greenbelt,
Maryland, for Appellee.

Unpublished opinions are not binding precedent in this circuit.

2
WILLIAMS, Chief Judge:

A jury convicted Marcus Dukes of mail fraud, 18 U.S.C.A. §

1341 (West 2000 & Supp. 2006); interstate transportation of

property obtained by fraud, 18 U.S.C.A. § 2314 (West 2000 & Supp.

2006); and money laundering, 18 U.S.C.A. § 1957(a) (West 2000 &

Supp. 2006). These convictions relate to Dukes’s leadership in a

fraudulent investment scheme that targeted the African-American

church community. Dukes appeals his convictions on numerous

evidentiary grounds and, alternatively, contends that the district

court erred in applying certain U.S. Sentencing Guidelines

enhancements to his sentence. We affirm Dukes’s convictions,

finding no reversible error. We nevertheless vacate Dukes’s

sentence and remand for resentencing because we conclude that the

district court erred in applying the guideline enhancement for

“aggravating role” to Dukes’s sentence.

I.

A.

In 2000, Dukes and his business partner, Teresa Hodge, founded

Financial Warfare Club (FWC), a Maryland nonprofit corporation.1

They marketed FWC as a “synergistic financial network created

specifically for the body of Christ.” (J.A. at 500.)2 Dukes and

1
FWC listed its principal office as 12138 Central Avenue,
Suite 233, Mitchellville, Maryland, 20721, which was the address
for a mailbox at a Mailboxes, Etc. location.
2
Citations to the “J.A.” refer to the Joint Appendix filed
with this appeal.

3
Hodge, who are both African-American, claimed that FWC was created

to generate wealth within the African-American community by

promoting investment literacy among those who typically lacked

knowledge of financial markets and by providing investment

opportunities in companies that would purportedly generate revenue

that would stay within the African-American community.

To that end, Dukes and Hodge primarily sought to grow FWC

through presentations to African-American clergy and church groups.

Invitations to FWC presentations were typically distributed during

church services, and the pastor of the hosting church would usually

introduce Dukes and Hodge to the attendees. Dukes littered FWC

presentations with biblical references, often underscoring FWC’s

purported goal of community financial empowerment by referencing

the biblical passage Hosea 4:6, which states, “My people are

destroyed for a lack of knowledge.”

FWC offered three membership levels. The top level, known as

the “Founders Level,” required an initial payment of $2,550 and

entitled the member to three financial literacy courses; 2,000

shares of stock in Global Com InterNetworks, Inc. (“GCI”),

Integrated Solutions International, Inc. (“ISI”), and Genex, Inc.,

three “infrastructure” companies that Dukes and Hodge purportedly

were developing; and the opportunity to buy additional shares of

stock in the companies at preferred prices before their initial

public offerings (IPOs). The intermediate level, known as the

“Warriors” level, required an initial payment of $1,050 and
4
entitled the member to two financial literacy courses, 500 shares

of stock in each of the three companies, and the same opportunity

to purchase more shares at preferred prices. The least expensive

level, known as the “Believers” level, required an initial payment

of $550 and entitled the member to one financial literacy course,

250 shares of stock in each of the three companies, and the

opportunity to buy more shares at pre-IPO prices.

B.

Dukes and Hodge initially marketed FWC to smaller African-

American Pentecostal churches. Their first church presentation was

on September 27, 2000, at the Victorious Church of Jesus Christ in

Camp Springs, Maryland. Dukes later hired Sam Hairston, the

church’s pastor, to assist with marketing FWC in the greater church

community.3

Dukes and Hodge presented FWC at churches around six or seven

more times before the end of 2000. At the beginning of 2001, Dukes

took FWC on the road, giving presentations at numerous churches

throughout Georgia, Michigan, Ohio, New York, New Jersey, and

Alabama.

Aside from appealing to potential investors’ religious

feelings, Dukes and those who introduced him also told potential

investors about his considerable investment experience, including

3
As a pastoral liaison, Hairston reached out to other clergy
and church communities to generate interest in FWC and schedule
presentations for Dukes and Hodge.
5
experience at a Wall Street brokerage firm. Dukes told investors

that he had extensive experience taking companies public, the most

notable of which was a retail clothing store called Today’s Man.

Dukes often noted in presentations that he had given financial

advice to a church in Washington, D.C. and that, as a result, the

church made $50,000 and two church members bought matching Porsche

automobiles with their profits. To further assuage potential

investors’ concerns, both Dukes and Hodge told investors that they

personally invested a large amount of money -- approximately

$1,000,000 -- in FWC. They also offered a money-back guarantee on

any investment in FWC up to the time of the infrastructure

companies’ IPOs.

FWC flyers and handouts explained to potential investors that

the company was seeking 10,000 members. Dukes initially told

potential investors that FWC would take GCI public sixty days after

it had sold 5,000 FWC memberships, ISI public ninety days later,

and Genex public ninety days after that. In later presentations,

however, Dukes changed the projected timing of GCI’s IPO.4 Dukes

also stated on multiple occasions that ISI was obtaining banking

licenses with the assistance of a former Washington, D.C. banking

commissioner, that ISI officials had talked to fifty top state

4
For example, in October 2000, Dukes told potential investors
that GCI would go public before the end of the year, but then, only
a few weeks later during another presentation, he told another
group of prospective FWC investors that GCI would go public in four
to six months.
6
banking regulators, and that ISI would soon be operating a national

African-American owned bank. Dukes and Hodge told FWC members that

financial literacy courses would start within a few months of their

investments.

C.

When it became apparent that FWC’s promised benefits

(financial literacy courses and IPO profits) were not forthcoming,

a number of FWC members requested a refund of their investments.

Only a handful of members actually received a refund. When Dukes

failed to respond timely to some FWC members’ complaints, some of

those members contacted the Maryland Attorney General’s office. On

March 5, 2001, the Maryland Securities Commissioner issued a cease-

and-desist order against Dukes and Hodge, ordering them to stop

offering or selling unregistered securities, including memberships

in FWC, and to stop violating the anti-fraud provision of the

Maryland Securities Act, Md. Code Ann., Corps. & Ass’ns §§ 11-101

tp 11-805 (LexisNexis 2005).5 Dukes was served with a copy of the

order on March 7, 2001. On the same day, and after he had received

notice of the order, Dukes presented FWC at a large church in Perth

Amboy, New Jersey, collecting approximately $200,000 in membership

fees. Dukes returned the membership applications and fees to FWC’s

office in Maryland.

5
As of the date of the cease-and-desist order, FWC had fewer
than 1,000 investors.
7
 On March 13, 2001, Dukes incorporated a new FWC entity in

Washington, D.C. Around the same time, Dukes moved FWC out of its

Maryland office.

On April 10, 2002, Dukes and Hodge entered into a consent

decree with the Maryland Securities Commission. Pursuant to the

terms of the decree, Dukes admitted to the Commission’s findings of

fact. The decree also contained the Securities Commission’s legal

conclusions that Dukes and Hodge had committed securities and

investment fraud under the Maryland Securities Act, which Dukes

neither admitted nor denied. In the decree, the Commission also

repeated its orders to Dukes and Hodge to cease and desist from

engaging in fraudulent investment activities.6

D.

On December 22, 2003, a grand jury sitting in the District of

Maryland returned a fifteen-count superseding indictment against

Dukes and Hodge, charging them with mail fraud, illegally

6
One of the Commission’s legal conclusions was that Dukes and
Hodge “made material misrepresentations or omissions in connection
with the offer or sale of securities.” (J.A. at 1917.) The
Commission ordered that Dukes and Hodge “permanently cease and
desist from misrepresentation or omission of material facts that
would constitute fraud” and “permanently cease and desist from
engaging in fraudulent investment advisory activities.” (J.A. at
1917.)
8
transporting property obtained by fraud, and money laundering.7

Dukes’s trial began on May 24, 2005.8

On June 8, 2005, the jury found Dukes guilty on all counts.

Over numerous objections by Dukes to the presentence report (PSR),

the district court sentenced Dukes to 120 months’ imprisonment,

followed by 36 months’ supervised release, and ordered Dukes to pay

$1,173,518 in restitution. Dukes timely appealed his convictions

and sentence. We have jurisdiction over this appeal pursuant to 28

U.S.C.A. § 1291 (West 2006) (providing for appellate jurisdiction

over "final decisions" of the district court) and 18 U.S.C.A. §

3742(a) (West 2000) (providing for appellate jurisdiction over a

"final sentence" entered by the district court).

II.

On appeal, Dukes raises a number of evidentiary challenges to

his convictions. “We typically review for abuse of discretion a

district court’s evidentiary rulings.” United States v. Perkins.

470 F.3d 150, 155 (4th Cir. 2006). If the challenging party failed

to object below to admission of the evidence, however, we review

only for plain error. United States v. Chin, 83 F.3d 83, 87 (4th

Cir. 1996). We address each of Dukes’s arguments in turn.

7
On the Government’s motion, the district court dismissed
three of the counts against Dukes.
8
The district court severed Hodge’s trial.
9
 A.

Dukes’s first argument focuses on the district court’s

admission of paragraph 14 of the consent decree between him and

Hodge and the Maryland Securities Commission. The Government’s

theory at trial was that FWC was a vehicle for fraud from its

inception and that Dukes never intended to offer financial literacy

courses or take the three infrastructure companies public. Dukes’s

defense was that he never had an intent to defraud and acted in

good faith. During its case-in-chief, the Government asked a

witness who had invested in FWC whether Dukes had ever told him

that “none of the three infrastructure companies has any prospect

for going public.” (J.A. at 748.) Dukes immediately objected to

this question on the ground that there was no evidence that the

companies had no chance of going public. In response, the

Government sought to introduce paragraph 14 of the consent decree

between Dukes and the Maryland Securities Commission. The

paragraph states: “None of the three infrastructure companies has

ever had any employees, contracts or revenues. None has any

prospect for going public. Financial Warfare has no prospect for

capturing 5% of the minority market.” (J.A. at 1915.)

Dukes objected again, this time on the ground that Dukes’s

forward-looking statement in April 2002 was irrelevant to his

earlier state of mind and improper to put before the jury. The

Government informed the district court that Dukes had consented to

the findings of fact in the decree. The court instructed the
10
Government that it could ask its question but also instructed the

Government to refrain from referencing the Securities Commission’s

legal conclusions in the decree. Obviously reading from paragraph

14, the Government then asked the witness whether Dukes had ever

told him that none of the three infrastructure companies has any

prospects for going public, to which the witness replied, “No he

did not.” (J.A. a 752.)

Dukes argues that his April 2002 admission that the three

infrastructure companies had no prospects of going public at that

time is irrelevant to determining his state of mind about the

companies’ IPO prospects before issuance of the cease-and-desist

order. He contends that admission of the paragraph was improper

under Federal Rule of Evidence 403 because it likely misled or

confused jurors into believing that his forward-looking statement

in April 2002 reflected his belief about the companies’ viability

before he received notice of the cease-and-desist order. The

parties argue over whether Dukes preserved this argument through

objection at trial, but the record plainly shows that he did.

Nevertheless, we conclude that the district court did not err in

admitting the factual findings contained in paragraph 14 of the

decree.

Rule 403 provides that relevant evidence “may be excluded if

its probative value is substantially outweighed by the danger of

unfair prejudice, confusion of the issues, or misleading the jury.”

Fed. R. Evid. 403. Because Dukes “expressly consented,” (J.A. at

11
758), to the findings of facts in paragraph 14, they constitute

adoptive admissions under Federal Rule of Evidence 801(d)(2)(B),

which classifies as “not hearsay” a “statement of which the party

has manifested an adoption or belief in its truth.”

These findings of fact were undoubtedly relevant to the

Government’s case against Dukes. Although the probative value of

Dukes’s admissions may be somewhat diminished by their timing, the

only prejudice that flowed from their introduction at trial is the

kind of prejudice inherent in all relevant evidence. See United

States v. Williams, 445 F.3d 724, 730 (4th Cir. 2006) (“It is worth

remembering that the touchstone for excluding evidence under Rule

403 is not prejudice, but ‘unfair’ prejudice.” (internal quotation

marks omitted)); United States v. Russell, 919 F.2d 795, 798 (1st

Cir. 1990) (“Much of the Government’s evidence in a criminal case

is damaging to the defendant; that is why it is offered. Evidence

should be precluded only where it is unfairly prejudicial.”); 1

Stephen A. Saltzburg, Michael M. Martin & Daniel J. Capra, Federal

Rules of Evidence Manual 403-9 (9th ed. 2006) (“Evidence is not

‘prejudicial’ merely because it is harmful to the adversary. After

all, if it didn’t harm the adversary, it wouldn’t be relevant in

the first place.”). Dukes’s argument discounts the jury’s ability

to consider evidence in context and evaluate evidence based on all

of its characteristics, including its timing. We reject Dukes’s

contention.

12
 B.

Next, Dukes argues that the district court erred in allowing

the Government to ask guilt-assuming hypothetical questions.

Because Dukes objected at trial,9 we review the district court’s

admission of this testimony for abuse of discretion. United States

v. Jackson, 327 F.3d 273, 298 (4th Cir. 2003).

As noted above, once the district court overruled Dukes’s

objection to the Government’s admission of the findings of fact

contained in paragraph 14 of the consent decree, the Government

asked a FWC investor the following questions:

Government: “Did Mr. Dukes ever tell you . . . that
none of the three infrastructure companies has any
prospect for going public?”

Witness: “No, he did not.”

Government: “And if he had told you that, would that
have affected your decision to invest in Financial
Warfare Club?”

Witness: “Yes, it would have.”

(J.A. at 752.)

Dukes contends that this line of questioning ran afoul of the

well-settled rule prohibiting the use of guilt-assuming

hypothetical questions. See, e.g., United States v. Siers, 873

9
Specifically, Dukes objected to the Government’s questions on
the grounds of their “irrelevance” and “impropriety.” (J.A. at
751.) It is clear from the context that Dukes’s objection was on
the ground that the questions, being irrelevant, might mislead or
confuse the jury.

13
F.2d 747, 749 (4th Cir. 1989) (“[P]utting to [the witness] a

hypothetical fact situation corresponding to the crime for which

[the defendant] was being tried, is error, and, again, we neither

condone nor excuse the same.”); United States v. Smith, 354 F.3d

390, 396 n.5 (5th Cir. 2003)(“A common vice is for the examiner to

couch a question so that it assumes as true matters to which the

witness has not testified . . . . Whether the witness is friendly

or hostile, the answer can be misleading.” (internal quotations

marks and alterations omitted)). Dukes’s argument, however, misses

the mark. The Government’s first question -- “Did Mr. Dukes ever

tell you . . . that none of the three infrastructure companies has

any prospect for going public?” -- was not “hypothetical” at all.

The Government was merely asking the witness for historical

information, i.e., whether Dukes had ever expressed doubts to the

witness about the infrastructure companies’ financial futures.

The Government’s follow-up question, which asked the witness

whether his investment choice would have been different if Dukes

had altogether discounted the infrastructure companies’ IPO

chances, was hypothetical, but the question did not assume Dukes’s

guilt of the charged crimes. Instead, it focused on the

materiality of Dukes’s representations about the infrastructure

companies’ financial prospects. In this regard, the question was

qualitatively different than the guilt-assuming hypothetical

questions proscribed by courts, which assume the defendant’s guilt

of the very crime(s) with which he is charged and most often are

14
asked during cross-examination on the heels of testimony about the

defendant’s good character or reputation. Cf. United States v.

Mason, 993 F.2d 406, 409 (4th Cir. 1993)(in a drug distribution

case, it was error for government to ask character witness on

cross-examination whether his opinion of the defendant would change

if he knew that the defendant had “distributed drugs”), United

States v. Barta, 888 F.2d 1220, 1224 (8th Cir. 1989) (in tax

evasion case, holding that it was error for district court to allow

prosecutor to ask character witness if his opinion of the defendant

“would change if, if the facts showed that he had, in fact, lied on

his income tax return”); United States v. Williams, 738 F.2d 172,

177 (7th Cir. 1984) (in fraud case, holding it was error for

Government to ask character witnesses on cross-examination if their

opinions would change if they knew that the defendant had committed

the charged fraud). Here, the Government did not ask the fact

witness to assume that Dukes committed “fraud.” Dukes’s argument

is therefore unavailing.

C.

Dukes also challenges the district court’s admission of the

entire consent decree into evidence. Although the Government

introduced the consent decree into evidence only for the purpose of

getting the findings of fact in paragraph 14 before the jury, the

district court, for reasons unclear from the record, admitted the

entire consent decree into evidence, despite its earlier

instruction to the Government not to reference the Commission’s

15
legal conclusions contained in the decree. Later, during closing

argument, the Government urged the jurors to review the consent

decree during deliberations. Specifically, the Government

counseled the jury in the following way: “If you want to look at

[the consent decree] back in the jury room, that’s the exhibit

number. This is the one that [defense counsel] almost jumped out

of his shoes when I first tried to read from it - you may recall

that - a week or so ago.” (J.A. at 1619.)

Dukes’s challenge to the admission of the consent decree in

toto is a layered one. He first contends that the district court

erred under Federal Rule of Evidence 408 in admitting the entire

decree because the decree was offered to prove Dukes’s criminal

liability.10 Alternatively, he argues that the consent decree was

inadmissible under Rule 403 because it contained the Maryland

Securities Commission’s legal conclusions, neither admitted nor

denied by Dukes. He contends that the danger of unfair prejudice

to Dukes substantially outweighed the consent decree’s probative

10
At the time of Dukes’s trial, Rule 408 provided in pertinent
part:

Evidence of (1) furnishing or offering or promising to
furnish, or (2) accepting or offering or promising to
accept, a valuable consideration in compromising or
attempting to compromise a claim which was disputed as to
either validity or amount, is not admissible to prove
liability for or invalidity of the claim or its amount.
Evidence of conduct or statements made in compromise
negotiations is likewise not admissible.

Fed. R. Evid. 408 (2005).

16
value because it contained an administrative body’s conclusions of

guilt and because it incorporated many of the accusatory statements

from the cease-and-desist order, statements that the district court

excluded precisely because of their danger of unfair prejudice to

Dukes.

The Government responds that Rule 408 is inapposite here

because the consent decree was not offered to prove Duke’s

liability under the Maryland securities laws, on which the decree

focused. The Government also contends that we must review Dukes’s

challenge to the admission of the consent decree for plain error

because Dukes failed to object at trial to its admission in toto.

We agree with the Government that plain error review is

warranted because Dukes did not object below on Rule 403 or Rule

408 grounds. The Government introduced the consent decree into

evidence as “Exhibit 2," without objection from Dukes, and began

reading part of the decree into the record. After the Government

had read nearly three full paragraphs of the decree into evidence,

Dukes made the following objection: “Your Honor, in that document,

aside from those specific findings of fact that my client expressly

consented to, everything else in that document is the

commissioner’s hearsay that has no place before this jury.” (J.A.

at 758.) In response, the Government stated that it would “go

right to the findings [of fact],” and the district court instructed

the Government that it could read into evidence the findings of

fact but not the Commission’s legal conclusions. (J.A. at 758.)

17
Despite this instruction, the court allowed the entire decree to be

published to the jury.

Federal Rule of Evidence 103 provides that an “[e]rror may not

be predicated upon a ruling which admits . . . evidence unless a

substantial right of the party is affected and . . . a timely

objection . . . appears of record, stating the specific ground for

the objection, if the specific ground was not apparent from the

context.” Fed. R. Evid. 103(a)(1); see also United States v.

Parodi, 703 F.2d 768, 783 (4th Cir. 1983) ("[T]he objecting party

[must] object with that reasonable degree of specificity which

would have adequately apprised the trial court of the true basis

for his objection ....")(internal quotation marks omitted)). Here,

Dukes did not object until after the district court had admitted

the consent decree and permitted the Government to begin reading

from it, and even then, Dukes’s lone objection was that “everything

in that document [besides the factual findings] is the

commissioner’s hearsay.” (J.A. at 758.) At no point did Dukes

object on the grounds that the decree was inadmissible under Rules

403 and 408. It is well-established that a specific objection made

on one ground will not preserve appellate review of a different

ground. See Exxon Corp. V. Amoco Oil Co., 875 F.2d 1085, 1090 (4th

Cir. 1989)(citing Wright & Miller for the rule that “a party may

not state one ground for objection and attempt to rely on a

different ground for appeal”); Udemba v. Nicoli, 237 F.3d 8, 14-15

(1st Cir. 2001)(“It is a bedrock rule that a party who

18
unsuccessfully objects to the introduction of evidence on one

ground cannot switch horses in midstream and raise an entirely new

ground of objection on appeal without forfeiting the usual standard

of review.”); 1 Saltzburg, et. al., Federal Rules of Evidence

Manual 103-18 (“It is axiomatic that a specific objection made on

one ground will not preserve an objection to the same evidence on

different grounds.”); United States v. Wilson, 966 F.2d 243, 246

(7th Cir. 1992)(holding that an objection on relevance grounds did

not preserve objection that evidence is unduly prejudicial under

Rule 403). Because Dukes did not object below on Rule 408 or Rule

403 grounds, plain error review is in order.

Under plain error review, Dukes must show that (1) the

district court committed an error; (2) the error was plain; and (3)

the error affected his substantial rights, i.e., that the error

affected the outcome of his trial. United States v. Olano, 507

U.S. 725, 732-34 (1993); United States v. Hughes, 401 F.3d. 540,

547-48 (4th Cir. 2005). If Dukes makes this showing, we should

only notice the error if the error “seriously affect[s] the

fairness, integrity or public reputation of judicial proceedings.”

Hughes, 401 F.3d at 555 (internal quotation marks and citation

omitted).

Even if we assume that the district court plainly erred under

Rule 403 in admitting the entire consent decree, however, Dukes has

not shown that the error affected the outcome of his trial.

Evidence at trial showed that many of Dukes’s representations about

19
his investment experience, FWC, and the three infrastructure

companies were false. A number of FWC investors testified that

they invested in FWC because of Dukes’s representations about his

investment and IPO experience, particularly his experience taking

Today’s Man public. The Government introduced, without objection,

Dukes’s sworn testimony before the Securities and Exchange

Commission (SEC) in which he admitted that he did not help any of

his Wall Street clients with IPOs and did not participate “in any

form or fashion” in taking Today’s Man public. (J.A. at 771).

Contrary to what he had told investors, Dukes also testified before

the SEC that the former Washington, D.C. banking commissioner he

mentioned in presentations was not actively working with Dukes to

develop ISI, that ISI officials had not spoken to fifty state

banking regulators, and that ISI had not taken any steps toward

securing a banking license.11

The Government also elicited testimony that contradicted

Dukes’s claim that his investment advice had resulted in

substantial profits for a Washington, D.C. church and two of its

members. James E. Jordan, Jr., a long-time pastor of the church,

testified that he had never heard of Dukes, Hodge, or FWC before

being contacted by the U.S. Attorney’s Office about the case and

11
At trial, Dukes implicitly blamed divine inspiration for his
“misstatement” about ISI. After acknowledging that ISI had not
taken any of the steps that he claimed, Dukes defended, “Again, to
understand, this is ministry. So as you get inspired, that may be
a misstatement on my part . . . .” (J.A. at 371.)
20
that the church had not invested in the stock market at all during

the time period in question.

The Government introduced extensive testimony describing FWC’s

“money trail” that contradicted Dukes’s claim that he had invested

much of his own money in FWC. Kevin DeLacey, a staff accountant in

the SEC’s enforcement division, testified that there was no

evidence that Dukes and Hodge had made large cash investments in

FWC amounting to anywhere near $1 million, although FWC financial

records showed that between July 2000 and October 2001 Dukes and

Hodge collected in excess of $1.3 million from FWC investors.12

During that same period, Dukes received $136,805 in salary from FWC

and a related entity; paid $4,295.93 in expenses with FWC funds;

and withdrew around $85,917 from FWC accounts. Dukes and Hodge

spent in excess of $121,000 on travel expenses during the same

period.

Given the cumulative evidence of Dukes’s misrepresentations to

potential FWC investors and members, and taking into account any

error in the admission of the consent decree, we conclude that

Dukes has not shown how admission of the consent decree affected

12
In fact, Dukes’s testimony before the Maryland Securities
Commission, the SEC, and at trial produced three different amounts
for his personal investment in FWC. Acknowledging that he had told
investors that he and Hodge had invested approximately $1,000,000
to $1,500,000 of their own money in FWC, Dukes testified at trial
that he had personally invested $600,000 to $700,000; testified
before the Maryland Securities Commission that he had invested
$100,000 of his own money; and testified before the SEC that he had
invested only $75,000 of his own money.
21
his substantial rights because we are assured “that the judgment

was not substantially swayed by [any possible] error.” Kotteakos

v. United States, 328 U.S. 750, 765 (1946).

D.

Dukes’s final evidentiary challenge relates to the district

court’s admission of financial summary charts that were used by the

Government at trial. Several weeks prior to trial, the Government

advised Dukes that it planned to call DeLacey, an SEC accountant,

as a fact witness to present summary charts of FWC’s bank records.

On April 26, 2005, at a pretrial hearing, Dukes requested that the

summary charts be made available to him immediately. On April 28,

2005, the district court ordered that “any summary charts, together

with the enumeration of the documents upon which they were based,

must be disclosed to the Defendants no later than May 10, 2005.”

(J.A. at 60.) The Government made the summary charts available to

Dukes on May 19, 2005, nine days after it was supposed to have

provided them to Dukes and only five days before trial. Dukes

raised the issue of the Government’s untimely production to the

district court, but the court overruled his objection.

Two weeks into the trial, Dukes discovered that the Government

had failed to make exhibit GX4 available to him before trial. The

exhibit was a more detailed version of exhibit GX3, which was

provided to Dukes before trial. Instead of excluding exhibit GX4,

the district court advised Dukes’s counsel that he could take extra

time to review the exhibit before its admission.

22
 Dukes argues that the district court erred under Federal Rule

of Evidence 1006 in admitting the summary charts because the

Government did not provide the charts to Dukes until five days

before trial, and, in the case of summary chart GX4, until after the

trial had begun. The Government responds that Rule 1006 only

requires that the documents underlying the summary charts, and not

the summary charts themselves, be “made available” to the opposing

party at a reasonable time and place. Dukes concedes that the

Government made the underlying documents available at a reasonable

time and place.

Rule 1006 provides:

The contents of voluminous writings, recordings, or
photographs which cannot conveniently be examined in
court may be presented in the form of a chart, summary,
or calculation. The originals, or duplicates, shall be
made available for examination or copying, or both, by
other parties at reasonable time and place. The court may
order that they be produced in court.

Fed. R. Evid. 1006.

The plain language of the rule favors the Government. It

requires only that the summarized documents, and not the summaries

themselves, be made available to the opposing party at a “reasonable

time and place.” In United States v. Foley, 598 F.2d 1323 (4th Cir.

1979), the defendant argued that the trial court should have

excluded the Government’s summary exhibits because, although the

Government made the underlying documents available to the defendant

well before the trial, the Government provided the charts themselves

23
to the defendant the weekend before the trial. Id. at 1338.

Focusing on the plain language of Rule 1006, we rejected the

defendant’s argument, stating that Rule 1006 “refers to making

available the original documents, not the charts themselves.” Id.;

see also Fid. Nat’l Title Ins. Co. of N.Y. v. Intercounty Nat’l

Title Ins. Co., 412 F.3d 745, 753 (7th Cir. 2005)(“[Rule 1006] does

not say when the summaries must be made available to the party – for

that matter, it nowhere states that the summaries must be made

available to the opposing party.”).

Dukes correctly points out, however, that “no federal rule is

needed . . . to empower a district judge to prevent a party from

springing summaries of thousands of documents on the opposing party

so late in the day that the party can’t check their accuracy against

the summarized documents before trial.” Fid. Nat’l, 412 F.3d at

753. Indeed, one prominent treatise has noted that Rule 1006's

purpose is thwarted if the summaries themselves are not provided to

the opposing party at a reasonable time “because, without notice of

the summaries’ contents, adverse parties cannot know what to look

for in the source material to determine if the summaries are

accurate.” 31 Charles Alan Wright & Victor James Gold, Federal

Practice and Procedure § 8045, at 549 (2000); see also United States

v. Janati, 374 F.3d 263, 273 (4th Cir. 2004)(“The obvious import of

[Rule 1006] is to afford a process to test the accuracy of the

chart’s summarization.”). Nevertheless, our review of the record

reveals that the district court was keenly aware of the importance

24
of preserving Dukes’s ability to have meaningful cross-examination

of the Government’s summary witnesses about the exhibits and that

Dukes’s ability to do so was preserved. For example, with respect

to summary exhibit GX4, the exhibit provided to Dukes after his

trial had begun, the district court carefully considered the

possibility of prejudice to Dukes by its late production and ensured

that Dukes had ample time to review the exhibit before cross-

examination, even requiring the Government to introduce the exhibit

out of sequence so that the court and Dukes would have more time to

review it. (See, e.g., J.A. at 1074 (regarding summary exhibit GX4:

“[I]f he needs additional time to review it, then I can give him

that. I don’t want to necessarily keep [the exhibit] out, but I

want to make certain that Mr. Stiller [Dukes’s counsel] is armed and

dangerous when the time comes to cross examine with enough knowledge

of [the exhibit].”).) Given the district court’s sensitivity to

preserving Dukes’s opportunity to cross-examine rigorously the

Government’s witness about the summary charts, we cannot say that

the district court abused its discretion in admitting the charts,

particularly in light of our having sanctioned similar practice on

very similar facts in Foley.

25
 III.

Dukes also raises a number of challenges to the district

court’s application of the Guidelines during sentencing. "In

assessing a challenge to a sentencing court's application of the

Guidelines, we review the court's factual findings for clear error

and its legal conclusions de novo.” United States v. Allen, 446

F.3d 522, 527 (4th Cir. 2006).

A.

We begin with Dukes’s challenge to the district court’s

application of Guideline § 2F1.1(b)(6)(a), which provides for a two-

level enhancement to a defendant’s offense level if “the defendant

relocated, or participated in relocating, a fraudulent scheme to

another jurisdiction to evade law enforcement or regulatory

officials.” U.S. Sentencing Guidelines Manual § 2F1.1(b)(6)(A)

(2000).

Dukes first argues that application of the “relocation”

enhancement to his sentence resulted in impermissible double-

counting because the conduct justifying application of the

enhancement -- Dukes’s relocation and reincorporation of FWC outside

of Maryland to circumvent the Maryland Securities Commission cease-

and-desist order -- was already taken into account by the district

court in its application of Guideline § 2F1.1(b)(4)(C), the

enhancement for “violation of any prior, specific judicial or

administrative order, injunction, decree, or process nor address

26
elsewhere in the guidelines,” U.S. Sentencing Guidelines Manual §

2F1.1(b)(4)(C) (2000). In support of his argument, Dukes points to

the commentary to § 2F1.1(b)(4)(C), which states that “[t]his

enhancement does not apply if the same conduct resulted in an

enhancement pursuant to a provision found elsewhere in the

guidelines.” U.S. Sentencing Guidelines Manual § 2F1.1(b)(4)(C)

cmt. n.6 (2000).

Dukes’s double-counting argument fails, as it is clear that the

district court relied on different conduct in applying the

respective enhancements. In applying § 2F1.1(b)(4)(C), the district

court relied on Dukes’s March 7, 2001 presentation of FWC to a group

of potential investors in New Jersey and his request for the

presentation materials (which still listed Maryland as FWC’s mailing

address) to be sent to Maryland, after he learned the same day of

the Commission’s cease-and-desist order, which ordered Dukes and

Hodge to cease and desist from offering, presenting, or otherwise

promoting FWC memberships “in or from” Maryland. In applying the

§ 2F1.1(b)(6)(A) enhancement, the court relied on Dukes’s re-

incorporation of FWC in Washington D.C. and his movement of FWC’s

offices to Washington, D.C. Dukes’s double-counting argument is

thus without merit.

Alternatively, Dukes contends that the district court erred in

applying § 2F1.1(b)(6)(A) because (1) FWC was still doing business

in Maryland at the same time that the court deemed Dukes to have

27
relocated FWC to Washington, D.C. and (2) Dukes did not conceal his

relocation of FWC. This argument also fails.

First, Dukes concedes that he and Hodge physically moved FWC’s

offices to Washington D.C. and re-incorporated FWC there after being

served with the cease-and-desist order in Maryland. That FWC

continued limited operations in Maryland while Dukes and Hodge both

legally and physically moved the locus of the enterprise to another

jurisdiction does not render the enhancement inapplicable.

Guideline § 2F1.1(b)(6)(A) applies “[i]f the defendant relocated,

or participated in relocating, a fraudulent scheme to another

jurisdiction to evade law enforcement or regulatory officials,” id.,

and we cannot say that the district court erred in finding that

Dukes had relocated the scheme to Washington, D.C.

Second, with respect to Dukes’s argument that § 2F1.1(b)(6)(A)

is inapplicable if the defendant did not conceal his relocation

activity, there is no language in § 2F1.1(b)(6)(A) that supports

such a “concealment” requirement. Although evidence that Dukes

concealed his identity or activities would no doubt be relevant to

a showing that the relocation was for the purpose of evading the

Maryland Securities Commission’s cease-and-desist order, §

2F1.1(b)(6)(A) contains no requirement of concealment, other than

the relocation itself. See United States v. Paredes, 461 F.3d 1190,

1193 (10th Cir. 2006)(interpreting Guideline § 2B1.1(b)((A), the

amended version of § 2F1.1(b)(6)(A), and holding that the

enhancement “contains no requirement of concealment, other than the
28
relocation itself”). The district court therefore did not err in

applying § 2F1.1(b)(6)(A) to Dukes’s sentence because Dukes’s

relocation of FWC was enough by itself to evidence evasion of the

Maryland Securities Commission.

B.

Dukes also argues that the district court erred in enhancing

his sentence pursuant to § 3B1.3 for abusing a “position of trust.”

Guideline § 3B1.3 calls for a two-level increase to a defendant’s

offense level if “the defendant abused a position of public or

private trust, or used a special skill, in a manner that

significantly facilitated the commission or concealment of the

offense.” U.S. Sentencing Guidelines Manual § 3B1.3 (2000).

“Determining what constitutes a position of trust for the

purposes of § 3B1.3 is not a simple task,” United States v.

Caplinger, 339 F.3d 226, 236 (4th Cir. 2003)(internal quotation

marks and alteration omitted), because the “enhancement was not

designed to turn on formalistic definitions of job type,” United

States v. Gordon, 61 F.3d 263, 269 (4th Cir. 1995). “[F]raud alone

does not justify the enhancement,” United States v. Bollin, 264 F.3d

391, 415 (4th Cir. 2001), nor does a “mere showing that the victim

had confidence in the defendant,” Caplinger, 339 F.3d at 237

(internal quotation marks omitted). “Something more akin to a

fiduciary function is required.” Id. (internal quotation marks

omitted). “Overall, the question of whether a defendant held a

29
position of trust must be approached from the perspective of the

victim.” Gordon, 61 F.3d at 269. And “[b]ecause the [position of

trust] inquiry requires a ‘sophisticated factual determination,’ a

trial court’s finding will be reversed only if clearly erroneous.”

Id.

In applying the § 3B1.3 enhancement to Dukes’s sentence, the

district court largely focused on Dukes’s marketing of FWC in the

church community. In fact, the court stated that Dukes “wouldn’t

be where he is today if he hadn’t gone near a church where trust was

placed in him.” (J.A. at 1870.) Dukes, however, contends that the

religious context of many of his presentations did not

“automatically elevate his relationship with the investors to that

of a position of trust.” (Appellant’s Br. at 53.)

If the district court had applied the “abuse of trust”

enhancement based solely on the religious context of Dukes’s fraud,

then we would have little trouble concluding that the court erred.

The court did not, however, focus only on the religious context of

Dukes’s fraud but also noted that investors had placed trust in

Dukes partly because of “his representations about his skills,”

(J.A. at 1870), including noting that Dukes had highlighted for

investors his Wall Street experience and his alleged experience

taking Today’s Man public. In fact, the court specifically

referenced Application Note 2(A) to § 3B1.3, which states that the

enhancement applies to a defendant who “perpetrates a financial

fraud by leading an investor to believe the defendant is a
30
legitimate investment broker.” U.S. Sentencing Guidelines Manual

§ 3B1.3 cmt. n.2 (2000). As noted earlier, a number of FWC

investors testified that they invested in FWC because of Dukes’s

investment experience, and one investor in particular testified that

his investment decision was greatly influenced by Dukes’s

representation that he was a “legitimate stockbroker.” (J.A. at

319.)

Given its attention to Dukes’s representations about his

investment experience, we cannot say that the district court clearly

erred in its application of § 3B1.3 to Dukes’s sentence. From the

perspective of the FWC investor, Dukes’s representations about his

time on Wall Street, his experience taking companies public, and his

previous clients’ investment successes would have been key

components in the overall decision to invest and created

“[s]omething more akin to a fiduciary duty” owing from Dukes to the

FWC investors. Caplinger, 339 F.3d at 237. (J.A. at 319.) We

therefore reject Dukes’s argument.

C.

Finally, Dukes argues that the district court erred in

enhancing his sentence pursuant to Guideline § 3B1.1(c), the

enhancement for “aggravating role,” because the court erroneously

concluded that § 3B1.1(c) does not require that the defendant

organize, lead, manage, or supervise at least one other participant

in the crime. The Government responds that under § 3B1.1(c) a

31
defendant need not organize, lead, manage, or supervise another

participant so long as the defendant exercises significant

management responsibility over the criminal organization’s property

and assets. Alternatively, the Government argues that even if the

enhancement does require management of at least one other criminal

participant, the district court found that Dukes had exercised such

leadership over Hodge.

Dukes has the better of the argument. Guideline §

3B1.1(c) provides for a two-level increase if “the defendant was an

organizer, leader, manager, or supervisor in any criminal activity.”

U.S. Sentencing Guidelines Manual § 3B1.1(c) (2000). Application

Note 2 to § 3B1.1 makes clear that

[t]o qualify for an adjustment under this section, the
defendant must have been the organizer, leader, manager,
or supervisor of one or more other participants. An
upward departure may be warranted, however, in the case
if a defendant who did not organize, lead, manage, or
supervise another participant, but who nevertheless
exercised management responsibility over the property,
assets, or activities of a criminal organization.

U.S. Sentencing Guidelines Manual § 3B1.1 cmt. n.2 (emphasis added).

“Participant” is defined as “a person who is criminally responsible

for the commission of the offense, but need not have been

convicted.” Id. cmt n.1. There is a clear distinction between an

adjustment under § 3B1.1, which requires that a defendant have been

the organizer, leader, manager, or supervisor of one or more other

participants, and an upward departure under § 3B1.1, which can be

based solely on the defendant’s exercise of “management

32
responsibility over the property, assets, or activities of a

criminal organization.” Thus, the plain language of the commentary

makes clear that for enhancement purposes the defendant must have

organized, led, managed, or supervised at least one other criminal

participant. See United States v. Sayles, 296 F.3d 219, 226 (4th

Cir. 2002) (stating that § 3B1.1(c) only applies when the defendant

was an “organizer, leader, manager or supervisor of people”

(emphasis in original)); United States v. Capers, 61 F.3d 1100, 1109

(4th Cir. 1995)(noting the same).

Contrary to the Government’s contention, the district court did

not base its application of the enhancement on Dukes’s control of

Hodge. Instead, the court applied § 3B1.1(c) because it concluded

that the enhancement does not require that the defendant control

another criminal participant. The district court reasoned as

follows:

3B1.1(a) talks about an organizer or leader of an
activity involving five or more participants. And
[3B1.1(c)] simply comes back to being an organizer,
leader, manager or supervisor in any criminal activity
and does not use the term participant at all. It is
clear that Mr. Dukes was an organizer of the vehicle that
used to carry out these crimes, the Financial Warfare
Club, and I, therefore, conclude that this aggravating
role adjustment is appropriate.

(J.A. at 1868-69.)

The court’s legal conclusion that the enhancement under § 3B1.1(c)

does not require control of at least one other participant in the

crime is clearly erroneous in light of the commentary to § 3B1.1 and

33
our decisions in Sayles and Capers. We therefore remand to the

district court for resentencing.13

IV.

In sum, we affirm Dukes’s convictions, but we remand this case

to the district court for resentencing because the court erred in

its application of the “aggravating role” enhancement.

AFFIRMED IN PART,
VACATED IN PART,
AND REMANDED

13
Of course, on remand, the district court is free to enhance
Dukes’s sentence under § 3B1.1(c) if the court finds that Dukes
organized, led, managed, or supervised at least one other criminal
participant. We express no opinion on this issue.
34
HAMILTON, Senior Circuit Judge, dissenting:

By far, the most critical and hotly contested issue at Dukes’

trial was whether Dukes intended that the Financial Warfare Club

constitute a scheme to defraud investors of their money or whether

he actually believed that the Financial Warfare Club presented them

with a legitimate investment opportunity. Yet, the jury was

erroneously permitted to read the Conclusions of Law portion of the

“CONSENT ORDER”1, (J.A. 1911), which portion set forth the

Securities Commissioner of Maryland’s conclusion that, with respect

to Dukes’ activities in promoting the Financial Warfare Club, Dukes

“made material misrepresentations or omissions in connection with

the offer or sale of securities in Maryland and in dealing with

investment advisory clients, in violation of Sections 11-301 and 11-

302 of the [Maryland Securities] Act.” (J.A. 1917). The jury was

also erroneously permitted to consider the Injunction portion of the

Consent Order, which portion ordered Dukes to “permanently cease and

desist from misrepresentation or omission of material facts or other

activities that would constitute fraud in connection with the offer

or sale of securities in violation of Section 11-301 of the Act; and

. . . permanently cease and desist from engaging in fraudulent

investment advisory activities with respect to the offer and sale

1
The majority opinion refers to this document as the consent
decree. I will refer to it as “the Consent Order.”
35
of securities in violation of Section 11-302 of the Act . . . .”

(J.A. 1917).2

All of this information undoubtedly left the jury with the

impression that a high-ranking Maryland official, with likely far

more expertise in the field of securities than any individual juror

in the case, had already found Dukes guilty of the same fraudulent

activities for which the government sought to convict Dukes in his

federal criminal trial. That any probative value of such

information was substantially outweighed by the danger of unfair

prejudice is obvious. It is human nature to rely upon the opinion

of one exceedingly more knowledgeable than us in a given field. It

is also human nature to rely upon an opinion carrying the imprimatur

of an entire state. With all measure of certainty, these two

circumstances combined to create the inevitable danger that the jury

would rely upon the Commissioner’s conclusion that Dukes committed

fraud in promoting the Financial Warfare Club and her related fraud-

terminology-laden orders to cease and desist to find Dukes guilty

of mail fraud in connection with his activities in promoting the

Financial Warfare Club. The mail fraud counts also supplied

predicate offenses for the counts charging Dukes with interstate

transportation of property obtained by fraud and money laundering.

2
I will explain later why I believe Dukes sufficiently
objected to the admission of the Conclusions of Law and Injunction
portions of the Consent Order to have preserved the issue for
nonplain-error review.
36
 Under these circumstances, the Conclusions of Law and the

Injunction portions of the Consent Order should have been excluded

from the jury’s consideration pursuant to Federal Rule of Evidence

403 (Rule 403), Fed. R. Evid. 403.3 Because I cannot say with fair

assurance that, without stripping the erroneous admission of the

Conclusions of Law and Injunction portions of the Consent Order from

the whole, the jury’s verdict was not substantially swayed by the

error, United States v. Curbelo, 343 F.3d 273, 286 (4th Cir. 2003),

I would vacate Dukes’ convictions and sentence and remand for a new

trial. Accordingly, I dissent.

I.

Before delving further into the actual merits of Dukes’

challenge to the admission of the Conclusions of Law and Injunction

portions of the Consent Order as violative of Rule 403, I will

address the majority’s erroneous holding that our review of such

challenge is limited to the plain-error standard of review set forth

in United States v. Olano, 507 U.S. 725 (1993). To preserve an

evidentiary challenge for appellate review under the most appellant-

friendly standard of review, Federal Rule of Evidence 103(a)(1)

requires “a timely objection or motion to strike . . . stating the

3
Rule 403 provides: “Although relevant, evidence may be
excluded if its probative value is substantially outweighed by the
danger of unfair prejudice, confusion of the issues, or misleading
the jury, or by considerations of undue delay, waste of time, or
needless presentation of cumulative evidence.” Fed. R. Evid. 403.
37
specific ground of the objection, if the specific ground was not

apparent from the context.” (emphasis added). Referring to this

last clause, in Werner v. Upjohn Co., 628 F.2d 848 (4th Cir. 1980),

we explained that Rule 103(a)(1) “requires specific objection only

where the specific ground would not be clear from the context.” Id.

at 853. We went on to hold that the specific ground requirement did

not apply in that case because, although the defendant had only made

a general objection to the admission of the challenged item of

evidence at trial, the defendant had filed a pretrial motion with

supporting memoranda asking that all references to the challenged

item of evidence be suppressed. Id. at 853. Based upon this

situation, we held: “From our examination of the record, we have

no doubt that the ground for objection was clear to everyone.” Id.

Here: (1) Dukes timely objected to the admission of the

Consent Order with the exception of the Findings of Fact portion (to

which he had stipulated); and (2) the ground for his objection was

apparent from the context. With respect to the timely objection

requirement, at the time the government sought to admit the entirety

of the Consent Order and began reading from it, Dukes offered the

following objection after receiving the district court’s permission

to approach for a bench conference: “Your Honor, in that document,

aside from those specific findings of fact that my client expressly

consented to, everything else in that document is the commissioner’s

hearsay that has no place before this jury.” (J.A. 758). The

government immediately responded: “We’ll go right to the findings.

38
We can go right to the findings, Your Honor. I was just sort of

laying the foundation so the jury understands where we’re reading

from.” Id. The district court then told the government: “Tell

them--read them what you did at the bench that admit to these

findings of fact, but they are conclusions of law, if you want to

read in specific, not the whole thing.”4 Id. The government

responded: “No, we’re not going to read the whole thing.” (J.A.

758-59). The district court concluded: “All right.” (J.A. 759).

With respect to the specific ground for his objection being

apparent from the context, the record shows that prior to Dukes’

just quoted objection at trial, Dukes had made and the district

court had granted a motion in limine with respect to the Summary

Order to Cease and Desist (the Cease and Desist Order) issued by the

Securities Commissioner of Maryland. Such order preceded the

Consent Order and alleged that, with respect to his activities in

promoting the Financial Warfare Club, Dukes violated sections 11-301

and 11-302 of the Maryland Securities Act. Additionally, akin to

the Consent Order, the Cease and Desist Order ordered Dukes to

“cease and desist from engaging in material misrepresentations or

4
In the earlier bench conference referenced by the district
court, Dukes objected to the admission of any allegations contained
in the Consent Order and made clear that he believed the only
admissible portion of the Consent Order was the Findings of Fact
portion. At the same bench conference, the government acknowledged
that Dukes did not agree to the legal conclusions contained in the
Consent Order. At the conclusion of this earlier bench conference,
the district court told Dukes and the government that it intended
“to tell the jury there’s no objection to the facts contained in
the” Consent Order. (J.A. 750-51).
39
omissions in connection with the offer or sale of securities in

[Maryland], pending a hearing in this matter or until such time as

this Order is modified or rescinded by the Securities Commissioner,”

(page 12 of the Cease and Desist Order), and to “cease and desist

from engaging in material misrepresentations or omissions in

connection with the offer of investment advice in [Maryland],

pending a hearing in this matter or until such time as this Order

is modified or rescinded by the Securities Commissioner,” (page 13

of the Cease and Desist Order). In his motion in limine, Dukes

expressly argued, inter alia, that the “never-proven allegations set

forth in the Cease and Desist Order are of no probative value but

are extremely prejudicial to Mr. Dukes.” In support of this

argument, Dukes cited Rule 403.

In initially addressing Dukes’ motion in limine, the district

court stated:

This is a motion from Mr. Dukes in limine to preclude the
government from introducing as an exhibit the summary
order to cease and desist issued by the Securities
Commissioner of Maryland. I looked at this one, and it
seems to me -- at least without having the benefit of
hearing what the government’s position is -- that this is
an accusatory order that does not amount to an
adjudication, with some pretty powerfully prejudicial
stuff in it, and it seems to me that the position that
[Dukes] is taking that he does not dispute the actual
order entered[.]”

(J.A. 92) (emphasis added). Following a response by the government

that it expected to call one witness to testify that he delivered

the Cease and Desist Order to Dukes, the district court stated:

40
 [Dukes] has, in effect, proposed a stipulation to
you that the State of Maryland Securities Commissioner
did in fact, on or about March 5, 2001, ordered Mr. Dukes
to cease and desist the activities, which I assume are
described in the order in more detail, but that he
continued to do so in violation of the order.

It seems to me that cleans up all the questions of
the pretty powerful allegations in this order that are
not the result of any adjudicated proceeding but, rather,
solely accusatory.

Would that not solve the problem?

(J.A. 93) (emphasis added).

The government responded: “Your Honor, I think the only issue

would be the question of whether or not we would have to refresh a

witness’ recollection of what they did in terms of . . . .” Id.

The district court interrupted: “You mean somebody from the

Maryland Securities Commission?” Id. The government answered:

There actually will be an investigator from the
Maryland Securities Commission who actually served this
on Mr. Dukes at the time. It’s simply a matter there -–
as I said, we don’t intend to introduce the actual
allegations itself but simply there will be references to
the fact that this was served on Dukes, and that despite
the fact that it was served on him that they continued on
their merry way to present this to individuals in other
states and continued to use the same mailing address in
Maryland.

I think it will probably come up -– I may be just
hedging a little bit. In terms of this witness’
recollections of things, he may actually remember a lot
more than what I’m proposing, and it was simply out of an
abundance of caution.

(J.A. 93-94).

41
 The district court concluded:

What I will do is this. I’m going to grant his
motion with respect to the actual document that’s
attached to his exhibit, but that’s without prejudice to
your right to make inquiry of a witness as to the
existence of a cease and desist order, and it would not
preclude you from showing this document to the witness to
refresh their recollection of the witness if the witness
can’t remember that a cease and desist order was entered,
but that by referring to that exhibit during an
examination of the witness I will make that an exception
to the rule that once it’s been referred to it’s in
evidence. It will not be in evidence. I won’t permit
this, because I think it’s far too accusatory in nature.

So, that will be my ruling on this motion.

(J.A. 94) (emphasis added).

When Dukes’ motion in limine with respect to the Cease and

Desist Order is considered in context with the colloquy between the

district court and the parties on such motion and the two bench

conferences concerning the Consent Order, there can be no reasonable

doubt that when Dukes objected to the admission of the entire

Consent Order minus the stipulated Findings of Fact portion, the

ground for his objection was violation of Rule 403. As with the

case of the defendant in Werner, from a full examination of the

record, there is no doubt that “the ground for objection was clear

to everyone.” Id. at 853. Accordingly, Dukes preserved his right

to have his evidentiary challenge to the Conclusions of Law and the

Injunction portions of the Consent Order reviewed under the most

appellant-friendly standard of review.

42
 II.

Having concluded that the admission of the Conclusions of Law

and the Injunction portions of the Consent Order violated Rule 403,

the relevant question becomes one of harmless error under Federal

Rule of Criminal Procedure 52(a), with the government bearing the

burden of proving harmlessness. United States v. White, 405 F.3d

208, 223 (4th Cir. 2005) (government bears burden of proof in

proving harmless error under Federal Rule of Criminal Procedure

52(a)). In United States v. Curbelo, 343 F.3d 273 (4th Cir. 2003),

we gave the following helpful elucidation of Rule 52(a)’s harmless

error standard:

In its landmark decision in Kotteakos, the Supreme
Court explained that when reviewing a nonconstitutional
error under Rule 52(a), an appellate court must determine
if the Government has proved “with fair assurance
. . . that the judgment was not substantially swayed by
the error.” 328 U.S. at 765, 66 S. Ct. 1239. Moreover,
in determining if the Government has met this burden, a
court must not “strip [ ] the erroneous action from the
whole.” Id. Thus, [t]he inquiry cannot be merely
whether there was enough [evidence] to support the
result, apart from the phase affected by the error. It
is rather, even so, whether the error itself had
substantial influence. If so, or if one is left in grave
doubt, the conviction cannot stand. Id. The Court later
explained that “grave doubt” meant “that, in the judge’s
mind, the matter is so evenly balanced that he feels
himself in virtual equipoise as to the harmlessness of
the error.” O’Neal v. McAninch, 513 U.S. 432, 435, 115
S. Ct. 992, 130 L. Ed. 2d 947 (1995).

Id. at 286.

To reiterate, I cannot say with fair assurance that, without

stripping the erroneous admission of the Conclusions of Law and

43
Injunction portions of the Consent Order from the whole, the jury’s

verdict was not substantially swayed by the error. The error went

to the very heart of the government’s case against Dukes. In order

to convict Dukes on the mail fraud counts, the government bore the

burden of proving beyond a reasonable doubt that Dukes “acted with

the specific intent to defraud” the Financial Warfare Club

investors.5 United States v. Goodwin, 272 F.3d 659, 666 (4th Cir.

2001). Even Dukes’ convictions on the remaining counts were all

predicated upon Dukes being convicted of mail fraud. See 18 U.S.C.

§§ 1957, 2314.

Among other witnesses and documentary evidence, the government

presented the testimony of eighteen investor witnesses at trial.

Dukes never disputed the accuracy of the government’s evidence at

trial. For example, Dukes did not dispute that he had told

potential investors information that was untrue. The crux of Dukes’

defense at trial was a good faith defense. Specifically, Dukes

5
The mail fraud statute, 18 U.S.C. § 1341, provides in
relevant part:

Whoever, having devised or intending to devise any
scheme or artifice to defraud, or for obtaining money or
property by means of false or fraudulent pretenses,
representations or promises, . . . for the purpose of
executing such scheme or artifice or attempting so to do,
places in any post office or authorized depository for
mail matter, any matter or thing whatever to be sent or
delivered by the Postal Service, . . . shall be fined
under this title or imprisoned not more than 20 years, or
both.

Id.
44
claimed that he always intended for the Financial Warfare Club to

deliver on his promises to investors, but that circumstances beyond

his control doomed the project. The circumstances allegedly beyond

his control were in the form of growth of the project too fast for

he and his business partner Teresa Hodge to conduct presentations

and meet member demands and the legal problems created by the Cease

and Desist Order. One of the overarching emotional themes of Dukes’

defense was that he was black, and as a black man, he created the

Financial Warfare Club to provide his fellow black community access

to the fruits of the stock market, which blacks had traditionally

been denied. According to Dukes, the Financial Warfare Club was the

product of his hopeful vision not a scheme to defraud. Dukes also

admits that there were times that he, in the enthusiasm of the

moment and due to his passion for the cause, exaggerated information

he told potential investors.

To be sure, the jury heard compelling evidence that Dukes

knowingly misrepresented his credentials to potential investors in

the Financial Warfare Club and significantly improved his lifestyle

(i.e., enjoying fancy dinners and plush hotel rooms) via the money

he received from Financial Warfare Club investors. The jury also

heard evidence of the complete lack of financial success of the

Financial Warfare Club and Dukes’ failure to provide investors with

any financial education seminars as he promised. But, nonetheless,

all of this evidence was only circumstantial evidence of Dukes’

intent to defraud Financial Warfare Club investors of their money.

45
The Conclusions of Law and Injunction portions of the Consent Order

arguably fall into the direct evidence category on the critical

issue of Dukes’ intent, which would naturally be more compelling to

the jury than the circumstantial evidence. For example, the jury

could have easily viewed the Consent Order as a quasi-judicial order

which had already found Dukes guilty of fraud based upon the same

underlying conduct as that charged in the federal criminal

indictment. The temptation for the jury to return a verdict of

guilty in the face of such an item of evidence would have been

overwhelming.

The critical flaw in the majority opinion’s analysis of the

merits question is that it never squarely addresses the actual

impact, one way or the other, of the jury’s ability to consider the

Conclusions of Law and Injunction portions of the Consent Order.

Rather, it merely highlights the circumstantial evidence before the

jury tending to show that Dukes acted with the specific intent to

defraud the Financial Warfare Club investors and then, in conclusory

fashion, states: “Given the cumulative evidence of Dukes’s

misrepresentations to potential FWC investors and members, and

taking into account any error in admission of the consent decree,

we conclude that Dukes has not shown how admission of the consent

decree affected his substantial rights because we are assured ‘that

the judgment was not substantially swayed by [any possible] error.’”

Ante at 20-21 (quoting Kotteakos v. United States, 328 U.S. 750, 765

(1946)).

46
 Notably, the government does not even attempt to argue that

admission of the Conclusions of Law and Injunction portions of the

Consent Order passed Rule 403 balancing in favor of admission.

Rather, the government’s line of defense is to stress that it only

focused on the Findings of Fact portion of the Consent Order at

trial.

This line of defense is a nonstarter for the government,

because the undisputed record shows that the jury, nonetheless, had

the opportunity to read, at the repeated urging of the government

during closing arguments, the entire Consent Order during

deliberations. There is simply no way around the fact that the jury

was urged to consider a powerfully prejudicial item of evidence that

went to the most critical and hotly contested issue in the case.

This is just one of those cases where no matter how persuasive the

other evidence of fraudulent intent was, the erroneously admitted

evidence was so compelling in favor of finding that Dukes acted with

fraudulent intent no reasonable person could say with fair assurance

that the jury here was not substantially swayed by such erroneously

admitted evidence.

III.

To conclude: (1) Dukes sufficiently complied with Rule 103 to

avoid plain-error review; (2) the Conclusions of Law and Injunction

portions of the Consent Order violated Rule 403’s balancing test;

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(3) under the applicable standard of review the government bore the

burden of proving the error was harmless; and (4) the government did

not carry its burden of proving the error was harmless.

Accordingly, I would vacate the criminal judgment in this case and

remand the case for a new trial. I would not reach any other

assignment of error by Dukes.

48