United States v. Piperi

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

No. 95-20115
_____________________

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

RONALD A PIPERI,

Defendant-Appellant.

_________________________________________________________________

Appeal from the United States District Court
for the Southern District of Texas
(CR-H-93-0134-02)
_________________________________________________________________
October 17, 1996
Before KING, SMITH, and WIENER, Circuit Judges.

PER CURIAM:*

Ronald A. Piperi appeals his conviction by a jury of three

counts of bank bribery and one count of misapplication of funds.

Finding no reversible error, we affirm.

I. BACKGROUND

A. FACTS

In the light most favorable to the verdict, the facts are as

follows. In 1983, Ronald A. Piperi (“Piperi”) acquired a

*
Pursuant to Local Rule 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in Local Rule 47.5.4.
controlling interest in First Savings Association of Orange,

Texas (“Orange Savings”). From 1983 to 1987, Piperi was

responsible for all major decisions of Orange Savings and was

involved in its commercial lending. Ronald Drew Piperi (“Drew

Piperi”), Piperi’s son, began working at Orange Savings in 1983

as an assistant vice president and loan officer. Joseph E. Russo

(“Russo”) owned a real estate company called the Russo Companies,

as well as a controlling interest in Ameriway Savings

Association, Houston, Texas (“Ameriway Savings”) and Ameriway

Bank/Woodway, National Association, Houston, Texas (“Ameriway

Bank”) (collectively, “the Ameriway Institutions”).

2
 1. Orange Savings loans $1.5 million to Russo

In July 1985, Steve Raab, vice president in charge of real

estate lending at Orange Savings, met Russo, and they discussed

forming a working relationship. In November 1985, Raab sent a

letter to Michael Liss, a Wall Street investment banker, stating

that Orange Savings would lend the Russo Companies $20 million to

acquire a company called UPI. Although Piperi characterizes this

letter as a commitment letter, the government contends that Raab

intended it only as an expression of interest in the transaction

and that Russo did not rely on the letter as a firm commitment.

Two banking experts testified at trial that the letter was not a

binding commitment letter.

3
 Orange Savings loaned $1.5 million to the Russo Companies on

June 9, 1986. Joanne Pizzigno, the loan administrator at Orange

Savings, did not learn about this loan until she saw a voucher

reflecting the wire transfer of the proceeds after the date the

loan was funded, although her job responsibilities included

initialing such vouchers. The loan file indicated that Drew

Piperi was the loan officer and contained a loan committee

submission sheet dated June 6, 1986 and initialed by Piperi,

which indicated that the loan committee had approved the loan.

However, Pizzigno did not remember the loan committee discussing

this loan, nor did the loan committee meeting minutes reflect

such a discussion. Raab signed the loan committee submission

sheet without reviewing relevant information about the Russo

Companies because either the loan had already been made or he

knew that Piperi had decided to fund it. The loan file also

included a certification by Drew Piperi that certain documents

were in the file before the loan was funded; however, many of

these documents were dated after June 9, 1986, including the

Russo Companies’s corporate resolution authorizing the loan, the

Dunn & Bradstreet report and the payment analysis report on the

Russo Companies, and Russo’s personal credit report.

The loan file contained two loan applications. The first

was dated June 2, 1986 and listed the Russo Companies as borrower

and guarantor and Russo as the principal of the borrower. It

described an unsecured loan for $1.5 million, payable in a single

4
payment at the end of a six-month term at 10.5% interest. It

identified the loan as an unsecured line of credit, of the type

used by commercial entities to meet daily operational expenses.

The second loan application listed the purpose of the loan as to

purchase corporate stock and listed cash flow from operations as

the source of repayment. Although Russo was listed as guarantor,

the loan file did not contain a duly executed guaranty agreement.

The proceeds of the loan to the Russo Companies were used to

purchase stock, in Russo’s name, in a company coming out of

bankruptcy called New UPI.

Although Orange Savings had no written loan policies at the

time this loan was funded, Pizzigno was in the process of

preparing a policy manual, which was approved in 1987. This

policy manual considered an unsecured loan to be a high-risk loan

and required personal guarantees of individuals for such loans to

be made to a commercial entity.

A June 2, 1986 letter from Drew Piperi to Russo discusses

the Orange Savings loan to the Russo Companies and the Ameriway

Institutions loan to Drew Piperi, guaranteed by Piperi. In the

letter, Drew Piperi stated: “Once the dust settles, I believe

prudent lending dictates that we each offer sufficient collateral

securitizing these loans in an attempt to escape criticism for

[sic] our respective examiners.”

5
 2. Ameriway Institutions loans $750,000 to the Piperis

Ameriway Bank and Ameriway Savings jointly loaned $750,000

to Drew Piperi, with Piperi as guarantor, also on June 9, 1986,

the same day as the Orange Savings loan to Russo. On that day,

Russo, Piperi, Drew Piperi, Mike Ballases (chairman and president

of Ameriway Savings), and Kathy Gamel (senior vice president of

Ameriway Bank), met in Ballases’s office to discuss a loan to

Drew Piperi for the purchase of an unidentified savings and loan

institution. However, various documents related to the loan

listed its purpose as personal investment, personal business

needs, or corporate purposes and operations. The Piperis wanted

the loan funded that day, although they had no collateral; they

promised to deliver sufficient real property as collateral within

30 days. Russo decided to fund the loan, with $300,000 being

provided by Ameriway Bank and $450,000 being provided by Ameriway

Savings. The only information relied upon in funding the loan

was Piperi’s personal credit report.

Gamel penned and Russo approved a memo authorizing funding

of a $300,000 loan from Ameriway Bank to Drew Piperi with Piperi

as guarantor for a twelve-month term at 10.5% interest. Russo,

as well as the Ameriway Bank loan committee, had authority to

approve loans up to the bank’s lending limits; Gamel testified

that Russo had never before used his individual authority to

approve a loan. Additionally, the loan to Drew Piperi violated

6
Ameriway Bank’s written policy that accommodation loans to poor

credit risks on the strength of a guarantor were undesirable.

Ballases authorized a $450,000 loan from Ameriway Savings to

the Piperis. The next day, June 10, 1986, Ballases wrote a memo

to the Ameriway Savings loan committee advising that the loan was

made on Russo’s recommendation, and that it was without

collateral but would be fully collateralized within 30 days.

Additionally, the memo indicated that the source of loan

repayment would be Drew Piperi’s “personal cash flow,” described

as in excess of $2 million annually. However, Drew Piperi’s

personal financial statement, dated June 2, 1986, listed his

annual income as $50,000.

The $750,000 loan proceeds from the Ameriway Institutions

were used to pay Piperi’s overdraft caused by payments to

brokerage firms to acquire stock, including Flexible Computer

stock, on May 30 and June 2, 1986. At the end of July, Piperi

provided Ameriway Bank with 40,000 shares of Flexible Computer

stock, worth $9 per share, as collateral for the loan.

3. The Submission of False Financial Information

Piperi, Drew Piperi, and Russo made false presentations of

their financial situations in acquiring these loans. Piperi’s

financial statement in support of the Ameriway Institutions loan

listed his net worth, cash on hand, and assets. The financial

statement explicitly stated that it showed all of Piperi’s

7
liabilities. However, Piperi omitted numerous liabilities from

his financial statement and overvalued many of his assets. Russo

similarly overstated the value of assets and underestimated and

omitted liabilities on his personal financial statements as well

as the financial statements regarding the Russo Companies.

State regulations governing Orange Savings and Ameriway

Savings required current and complete financial information on a

borrower to be on file before a savings and loan could fund a

loan. The required documentation included: an application

identifying the borrower; if the borrower is a corporation, a

corporate resolution authorizing the loan; the purpose of the

loan; security for the loan; the source of repayment; and current

financial statements of the borrower and guarantors. The

documentation provided by the Piperis and Russo did not satisfy

these regulations.

4. Conflict of Interest

In 1986, the Texas Savings and Loan Department required

institutions to disclose all loans outstanding to officers,

directors and principal stockholders of other financial

institutions in order to detect potential conflicts of interest.

Additionally, Ameriway Bank had an ethics policy requiring all

officers and employees to avoid investments that could interfere

with their independent exercise of judgment in the best interest

of the bank, and to disclose any interest presenting a potential

8
conflict. However, at the meeting discussing the Ameriway

Institutions’ loan to the Piperis, Russo did not disclose that he

was receiving a $1.5 million loan from Orange Savings, an

institution owned by Piperi. Similarly, the loan from the

Ameriway Institutions to the Piperis was not disclosed at the

time the loan from Orange Savings to Russo was authorized.

5. Mutual Reduction of Interest and Renewal of the Loans

On January 5, 1987, Drew Piperi wrote to Russo requesting a

reduction in the interest rate on the Ameriway Institutions loan.

On January 16, 1987, Russo sent Drew Piperi a renewal note on his

loan and told him that the interest rate would be reduced

“effective the same date our note is effective.” The Russo

Companies’s loan, which was in arrears, was renewed at a reduced

interest rate in February 1987. In late February and early

March, the Ameriway Institutions reduced the interest rates on

the Piperis’ loan at Russo’s request. In June 1987, the Ameriway

Institutions agreed to renew the loan to the Piperis, although

the value of the collateral for the loan, the Flexible Computer

stock, had decreased dramatically. At the time of renewal,

Piperi agreed to put up additional collateral within 90 days;

however, he later refused to do so, claiming that no collateral

was required on the original loan.

B. PROCEDURE

9
 Piperi was charged by indictment with conspiring with Russo

and Drew Piperi to commit bank fraud, bank bribery,

misapplication of bank funds and to defraud the United States

(count 1; 18 U.S.C. § 371); with bank fraud (counts 2, 3, and 4;

18 U.S.C. § 1344); with bank bribery (counts 5, 6, and 7; 18

U.S.C. § 215); and with misapplication of bank funds (counts 8,

9, and 10; 18 U.S.C. §§ 656-57).

The government’s theory was that Piperi committed bank

fraud1 by intentionally deceiving the Ameriway Institutions and

Orange Savings about his financial status, the reciprocal nature

of the loans, the purpose of the loans, and the accuracy of the

documentation supporting the loans in order to receive a loan

from the Ameriway Institutions. The government asserted that

Piperi committed the crime of bank bribery2 because Piperi, as an

officer of Orange Savings, corruptly solicited a loan from the

Ameriway Institutions by providing false financial information,

1
Bank fraud requires two basic elements: “(1) the
defendant executed or attempted to execute a scheme or artifice
to defraud or obtain money or funds from a financial institution
by false or fraudulent pretenses; and (2) the defendant knowingly
and willfully committed the action or actions necessary to
perpetrate that fraud.” United States v. Farmigoni, 934 F.2d 63,
66 (5th Cir. 1991), cert. denied, 502 U.S. 1090 (1992).
2
To establish bank bribery, the government must prove
that: (1) the defendant is an officer, director, employee, agent
or attorney of a financial institution; (2) he corruptly
solicited or demanded for the benefit of any person; (3) a thing
of value (exceeding $100) from any person; (4) intending to be
influenced or rewarded in connection with any business or
transaction of such institution. United States v. Brunson, 882
F.2d 151, 154 (5th Cir. 1989).

10
misrepresenting the true purpose of the loan and the status of

the loan documentation, and failing to disclose that the loan was

made in exchange for a reciprocal loan to Russo. The

government’s misapplication3 theory was that Piperi misapplied

Orange Savings’s funds by causing it to loan money to Russo

without due diligence when Russo’s credit was very risky and

without disclosing Piperi’s intent in making the loan to secure a

reciprocal loan from the Ameriway Institutions.

Piperi was convicted by a jury on the three counts of bank

bribery (counts 5, 6, and 7) and one count of misapplication of

funds (count 9); he was acquitted on the other two misapplication

charges (counts 8 and 10). The jury failed to reach a verdict

regarding the conspiracy and bank fraud charges (counts 1, 2, 3,

and 4). Piperi was sentenced to 41 months imprisonment and 2

years of supervised release and was ordered to pay $200 in

special assessments, a $10,000 fine, and $323,992.90 in

restitution.

Piperi filed a timely notice of appeal from his conviction

and sentence. On appeal, Piperi raises seven points of error,

3
To establish misapplication of funds, the government must
prove that: (1) the savings and loan institution was authorized
under United States law; (2) the accused was an officer,
director, or employee of the institution; (3) the accused
knowingly and willfully misapplied the funds of the institution;
and (4) the accused acted with intent to injure or defraud the
institution. United States v. Parks, 68 F.3d 860, 863 (5th Cir.
1995), cert. denied, 116 S. Ct. 825, and cert. denied, 116 S. Ct.
1028 (1996).

11
arguing insufficient evidence to support his convictions, error

in admission of certain pieces of evidence, prosecutorial

misconduct during closing argument, improper jury instructions,

and improper sentencing because of misapplication of the United

States Sentencing Guidelines.

II. DISCUSSION

A. EVIDENTIARY POINTS

1. Standard of Review

We review the district court’s evidentiary rulings for abuse

of discretion. Parks, 68 F.3d at 867. This standard includes

evidentiary rulings regarding the admission of expert testimony,

United States v. Willey, 57 F.3d 1374, 1389 (5th Cir.), cert.

denied, 116 S. Ct. 675 (1995), and extraneous conduct, United

States v. Coleman, 78 F.3d 154, 156 (5th Cir. 1996), cert.

denied, 1996 WL 426696 (U.S. Oct. 7, 1996) (No. 96-5304).

2. Expert Testimony

An expert witness’s opinion is admissible if it would be

helpful to the jury. FED. R. EVID. 702. Rule 702 “allows experts

to suggest an appropriate inference to be drawn from the facts in

evidence if the expert’s specialized knowledge is helpful in

understanding the facts.” Willey, 57 F.3d at 1389. Furthermore,

an expert’s opinion is not inadmissible just because it addresses

an ultimate issue to be decided by the jury. FED. R. EVID.

704(a); United States v. Moore, 997 F.2d 55, 57 (5th Cir. 1993).

12
 There are two limitations on the rule that expert opinions

on an ultimate issue are admissible. First an expert may not

express an opinion that amounts to a legal conclusion. United

States v. Lueben, 812 F.2d 179, 184 (5th Cir. 1987). Second, an

expert may not state an opinion as to a criminal defendant’s

mental state. FED. R. EVID. 704(b). We have held that “Rule

704(b) is not strictly construed and prohibits only a direct

statement of the defendant’s intent.” United States v. Speer, 30

F.3d 605, 610 (5th Cir.)(emphasis added), cert. denied, 115 S.

Ct. 603 (1994), and cert. denied, 115 S. Ct. 768 (1995).

Piperi argues that the district court violated these rules

by allowing into evidence the opinion of the government’s banking

practices expert, Margaret Keene, that the Orange Savings loan to

Russo and the Ameriway Institutions loan to the Piperis were

linked. The government offered this evidence on the

misapplication charge to allow the jury to infer that Piperi took

the loan from the Ameriway Institutions intending to be

influenced to make a similar loan to Russo.

Keene worked for nearly nine years as a lending officer and

since 1982 has been doing consulting and training work for banks.

She testified that, in her opinion, the loans were linked. She

based this opinion on several factors. First, the structure of

the loans was abnormal in that neither Russo’s nor Piperi’s

financial condition would have withstood close scrutiny by a

13
lender, the loans were implemented outside of each institutions’

typical procedures, and the loans were funded without sufficient

supporting documentation. Second, although each of the loans was

presented to the relevant loan committee with a stated acceptable

purpose, that purpose was not the actual purpose for which the

loan proceeds were used. Third, Keene looked at timing issues,

noting that both loans were initially made on the same day and

that there were mutual renewals and reductions in interest in

1987. Finally, Keene pointed to Drew Piperi’s June 2 letter

apparently discussing both loans.

Piperi objected to this testimony, contending that it

conveyed a legal conclusion and an opinion about Piperi’s mental

state—i.e., that Keene’s testifying that the loans were “linked”

was equivalent to testifying that Piperi “intended to be

influenced” by the loan to him to fund a loan for Russo. Piperi

relies on the Second Circuit’s decision in United States v. Scop,

846 F.2d 135, 139 (2d Cir. 1988). In that case, the court held

inadmissible as a legal conclusion the government’s securities

expert’s opinion that the defendants were active and material

participants in a fraudulent scheme to manipulate stock. Id. at

138. The court relied heavily on the expert’s “repeated use of

statutory and regulatory language indicating guilt,” and his

failure to “couch the opinion testimony at issue in even

conclusory factual statements.” Id. at 140, 142. By contrast,

14
Keene’s testimony is factually based and is not framed by the

statutory language at issue. She never actually testified that

Piperi intended to be influenced by the Ameriway Institution’s

loans to him. Her opinion is more similar to an “ultimate

factual conclusion[] that [is] dispositive of particular issues

if believed,” which Scop states would be admissible, than to

inadmissible “inadequately explored legal criteria.” Id. at 142.

We are not convinced that Scop is sufficiently on point to be

persuasive in this case.

Furthermore, the district court was careful to limit the

boundaries of Keene’s testimony and sustained several objections,

along with instructions to the jury to disregard, where Keene

crossed the line into testifying as to Piperi’s mental state. At

best, Keene testified indirectly as to Piperi’s mental state,

which does not violate Rule 704(b). See Speer, 30 F.3d at 610.

Therefore, the district court did not abuse its discretion in

allowing Keene to express her opinion that the loans were linked.

See Lueben, 812 F.2d at 184 (holding admissible an expert opinion

as to whether certain false statements would “have the capacity

to influence” a loan officer, and comparing that opinion to an

inadmissible opinion as to whether the false statements were

“material”).

3. Civil Regulatory Violations

15
 “Evidence of violations of civil banking regulations cannot

be used to establish criminal conduct.” Parks, 68 F.3d at 866;

United States v. Christo, 614 F.2d 486, 492 (5th Cir. 1980).

However, evidence of such violations is admissible “for the

limited purpose of showing the defendants’ motive or intent to

commit the crime charged.” Parks, 68 F.3d at 866; United States

v. Stefan, 784 F.2d 1093, 1098 (11th Cir.), cert. denied, 479

U.S. 855, and cert. denied, 479 U.S. 1009 (1986) (cited with

approval in United States v. Saks, 964 F.2d 1514, 1523 (5th Cir.

1992)).

Piperi argues that the district court erred in admitting

evidence of civil conflict of interest regulations.

Specifically, Piperi contends that Keene’s testimony that under

civil conflict of interest regulations, Piperi should have

disclosed to the Orange Savings loan committee that he was an

Ameriway Institutions borrower, should not have been admitted.

Piperi contends that admission of this evidence was harmful error

because the government relied heavily on it, arguing that

Piperi’s failure to disclose the loan in violation of the

regulations made the reciprocal lending arrangement equivalent to

bank bribery and misapplication of funds. Piperi claims the this

error was so prejudicial that even the court’s admonishments to

the jury did not cure the error.

16
 In this case, the government contends that it introduced

evidence of violations of civil regulations merely to show that

Piperi acted knowingly and with the intent to defraud in making

the reciprocal lending arrangements. The government argued that

the fact that Piperi failed to disclose his loan to the Orange

Savings lending committee, along with several other facts—i.e.,

that Drew Piperi falsely certified that certain documents were in

the loan file when the loan was funded, that Piperi failed to

conduct due diligence on the loan, that Piperi made material

omissions and false statements on his financial

statements—demonstrated his intent in arranging the reciprocal

loans. This evidence allowed the jury to infer that Piperi acted

with intent to defraud Orange Savings and the Ameriway

Institutions (as per the bank fraud and misapplication counts)

and that he corruptly solicited a loan with the intent to be

influenced to make a loan to Russo (as per the bank bribery

counts).

The district court instructed the jury, both during trial

(at least five times) and in its final instructions, that

violation of an internal policy or a civil regulation is not a

crime and that evidence of such violations could be considered

only as evidence of Piperi’s intent. We have “recognized the

value of limiting instructions in attenuating any improper effect

of such evidence when used for a permissible purpose.” United

17
States v. Brechtel, 997 F.2d 1108, 1115 (5th Cir.), cert. denied,

510 U.S. 1013 (1993). Piperi has presented no reason why these

limiting instructions were ineffective in this case. Therefore,

the district court did not abuse its discretion in admitting

evidence that Piperi violated civil regulations and internal

banking policies.

4. Other Wrongful Acts

The government sought to prove that Piperi omitted

liabilities from his personal financial statements presented to

the Ameriway Institutions. The government put on several

witnesses to detail the liabilities omitted. The government

claims that it offered the circumstances of the debts to prove

that their omission from the financial statements was not an

oversight or mistake but was made intentionally in order to

defraud the Ameriway Institutions. Piperi offered to stipulate

to the existence of the debts and their repayment status, but the

government refused the stipulation because it did not go far

enough, i.e., Piperi would not stipulate to intent to defraud,

which is the purpose for which the government offered the

evidence. Piperi argues that the government used the testimony

establishing these liabilities to paint Piperi as a man of a

generally dishonest character, in contravention of Rule 404(b).4

4
Federal Rule of Evidence 404(b) provides:

Other crimes, wrongs, or acts. Evidence of other

18
Piperi further contends that even if the government offered the

evidence for another purpose, the evidence is still inadmissible

because the government did not give Piperi pretrial notice.

Specifically, Piperi challenges the following: (1) Frank

Roberts’s testimony that documents related to a real estate loan

on property which Roberts acquired as trustee for Piperi were

signed in his name without his permission, which Piperi contends

is an allegation that Piperi forged the documents; (2) Roberts’s

and Cyd West’s testimony that Piperi moved large sums of money

into Roberts’s and Piperi’s joint escrow account, purchased

cashier’s checks out of the account, and used the cashier’s

checks to make payment on loans; (3) James Boyle’s testimony that

Piperi was guarantor on a loan related to the sale of a Houston

motel, that the debt was in default and was never repaid, and

that Piperi filed for bankruptcy and his debt to Boyle was listed

on his bankruptcy schedule; and (4) Kathryn Patton’s testimony

relating the existence of one of Piperi’s loans by showing the

crimes, wrongs, or acts is not admissible to prove the
character of a person in order to show action in
conformity therewith. It may, however, be admissible
for other purposes, such as proof of motive,
opportunity, intent, preparation, plan, knowledge,
identity, or absence of mistake or accident, provided
that upon request by the accused, the prosecution in a
criminal case shall provide reasonable notice in
advance of trial, or during trial if the court excuses
pretrial notice on good cause shown, of the general
nature of any such evidence it intends to introduce at
trial.

19
debt and its repayment history as it appeared on Piperi’s

bankruptcy schedule.

The trial court apparently admitted this evidence of the

omissions from Piperi’s financial statements on the theory that

it was intrinsic to the charged crimes of bank fraud and bank

bribery and thus did not implicate Rule 404(b). We agree with

the trial court. While use of evidence of extrinsic bad acts

triggers the provisions of Rule 404(b), evidence of intrinsic

other acts is admissible without reference to Rule 404(b).

Coleman, 78 F.3d at 156; United States v. Dula, 989 F.2d 772, 777

(5th Cir.), cert. denied, 510 U.S. 859 (1993). Evidence of other

acts is intrinsic “when the evidence of the other act and

evidence of the crime are inextricably intertwined or both acts

are part of a single criminal episode or the other acts were

necessary preliminaries to the crime charged.” Coleman, 78 F.3d

at 156 (internal quotations omitted); United States v. Williams,

900 F.2d 823, 825 (5th Cir. 1990) (internal quotations omitted).

The details of the omissions from Piperi’s financial

statements were inextricably intertwined with the manner in which

Piperi was charged with committing the crimes of bank fraud and

bank bribery. The evidence allowed the jury to infer that Piperi

omitted the information from his financial statement not by

mistake or oversight but to defraud the Ameriway Institutions in

order to receive a loan he would not otherwise be able to

20
receive. The prosecution was entitled to “offer all of the

surrounding circumstances that were relevant” in developing proof

of this intent. Dula, 989 F.2d at 777. The details of the

omitted material were merely the circumstances surrounding the

crime, and thus the district court did not err in admitting this

evidence. See also United States v. Campbell, 64 F.3d 967, 978

n.16 (5th Cir. 1995) (noting the evidence of defendant’s

financial difficulties was properly admitted as relevant to

intent to deceive in a false entry count).

B. CLOSING ARGUMENT

Piperi argues that the prosecutor engaged in three separate

acts of misconduct in his closing argument. First, Piperi argues

that the prosecutor’s comments that “you don’t look at banks as

personal piggy banks,” implying that “the taxpayers” will pay,

and that the regulators “screw[ed] up” by allowing real estate

developers to “play[] fast and loose with other people’s money,”

were improper because they were calculated to inflame the

prejudices of the jurors and because there was no evidence in the

record that taxpayers bore the loss caused by the transaction at

issue. Piperi claims that the taxpayer remark is especially

prejudicial because of the concern expressed by the jurors during

voir dire about the taxpayer bailout of the savings and loan

industry. Second, Piperi contends that the prosecutor’s

reference to his failure to plead guilty undermined the

21
presumption of innocence and was not cured by the district

court’s curative instruction given the next day as part of the

final jury charge. Third, Piperi contends that the prosecutor’s

statement that Piperi “snooker[ed]” Iona Norred out of her

inheritance was improper and was not cured by the district

court’s instruction to disregard the prosecutor’s use of the word

snookered. Piperi argues that evidence related to the Norred

transaction was admitted only to show that Piperi’s debt to

Norred was omitted from his financial statements and that whether

the debt was eventually paid is irrelevant for this purpose.

Piperi contends that these three improper arguments, considered

cumulatively, constituted prejudicial and reversible error.

In reviewing a claim of prosecutorial misconduct to which

the defendant objected at trial, we first determine whether the

prosecutor’s remarks were improper and then whether they

prejudicially affected the substantial rights of the defendant.

United States v. Fields, 72 F.3d 1200, 1207 (5th Cir.), cert.

denied, 64 U.S.L.W. 3709 (U.S. Oct. 7, 1996) (No. 95-1639), and

cert. denied, 1996 WL 375773 (U.S. Oct. 7, 1996) (No. 95-9441).

We consider the following factors: (1) the magnitude of the

prejudicial effect of the statements, (2) the efficacy of any

curative instruction, and (3) the strength of the evidence of the

defendant’s guilt. Id.; United States v. Levine, 80 F.3d 129,

135 (5th Cir.), cert. denied, 65 U.S.L.W. 3001 (U.S. Oct. 7,

22
1996) (No. 95-2066). “We will reverse a conviction for

prosecutorial misconduct only if the misconduct was so pronounced

and persistent that it casts serious doubts upon the correctness

of the jury’s verdict.” United States v. Bentley-Smith, 2 F.3d

1368, 1378 (5th Cir. 1993).

First, Piperi claims that the prosecutor’s taxpayer comments

were improper because they were outside the record and intended

to inflame the jury. Although “[c]ounsel is not permitted to

make an appeal to passion or prejudice calculated to inflame the

jury,” United States v. Crooks, 83 F.3d 103, 107 n.15 (5th Cir.

1996), the prosecutor’s stray remark about a loss to taxpayers

does not have a strong enough prejudicial effect to constitute

reversible error.

Second, Piperi challenges the prosecutor’s comment on the

failure to plead guilty. This comment was clearly improper. See

United States v. Tomblin, 46 F.3d 1369, 1390 (5th Cir. 1995).

However, the district court gave a curative instruction,

reminding the jury that the defendants are presumed innocent

throughout the trial and ordering them to disregard the

prosecutor’s comment. The jury is presumed to have followed the

court’s instructions. Levine, 80 F.3d at 136. The fact that

this instruction was not given immediately, but the next day as

part of the final jury charge, does not render it ineffective.

See id. (stating that as long as curative instructions are given

23
in time to provide corrective guidance to the jury, they are not

too late to protect the defendant’s rights). Therefore, the

prosecutor’s comments, although improper, do not constitute

reversible error.

Third, Piperi challenges the prosecutor’s statement that

Piperi “snooker[ed]” Norred out of her inheritance. The evidence

relating the circumstances of Norred’s loan to Piperi was offered

by the government only for the purpose of showing that Piperi

intentionally omitted this liability from his financial

statement. The prosecutor should not have argued about the

losses caused by Piperi’s failure to repay that loan, because

such argument treats this evidence as character evidence

prohibited by Rule 404(b). However, these improper comments,

when considered in light of the record as a whole and the

evidence against Piperi, did not prejudice Piperi’s substantial

rights.

The evidence of Piperi’s guilt is substantial. These three

brief statements, given over the course of a two-hour closing

argument, were not so persistent and pronounced as to make us

seriously doubt the correctness of the verdict. See Levine, 80

F.3d at 135; Bentley-Smith, 2 F.3d at 1378. Accordingly, the

prosecutor’s improper remarks during closing argument do not

constitute reversible error.

C. JURY INSTRUCTIONS

24
 Piperi contends that the district court committed plain

error by not instructing the jury that it had to find that Piperi

made material misrepresentations to the financial institutions in

order to find him guilty on the misapplication of funds charge.

He reasons that because count nine of the indictment accused

Piperi of “unlawfully causing the funding of a loan . . . by

misrepresenting material facts to officers and directors of

Orange Savings,” materiality of the misrepresentation is an

element of the crime, and a jury instruction on materiality is

required by United States v. Gaudin, 115 S. Ct. 2310 (1995).

Piperi acknowledges that he did not object to the charge on this

ground, and thus we review for plain error only. See United

States v. Olano, 113 S. Ct. 1770, 1776 (1993); United States v.

Calverley, 37 F.3d 160, 162 (5th Cir. 1994)(en banc), cert.

denied, 115 S. Ct. 1266 (1995).

In Gaudin, the Supreme Court held that “[t]he Constitution

gives a criminal defendant the right to have a jury determine,

beyond a reasonable doubt, his guilt of every element of the

crime with which he is charged.” Gaudin, 115 S. Ct. at 2320. The

Court determined that “where materiality is an element of the

charged offense, the trial court’s failure to submit the question

of materiality to the jury violates the defendant’s Fifth and

Sixth Amendment rights.” United States v. Jobe, 77 F.3d 1461,

25
1474 (5th Cir. 1996), amended on reh’g on other grounds, 90 F.3d

920 (5th Cir. 1996).

The elements of misapplication of funds in violation of 18

U.S.C. § 657 are as follows: (1) the savings and loan institution

was authorized under United States law; (2) the accused was an

officer, director, or employee of the institution; (3) the

accused knowingly and willfully misapplied the funds of the

institution; and (4) the accused acted with intent to injure or

defraud the institution. Parks, 68 F.3d at 863. Material

misrepresentation simply is not an element of misapplication of

funds. The fact that the indictment listed “misrepresenting

material facts” as a part of the manner and means of the

misapplication charge did not transform materiality into an

element of the offense.5 Therefore, the district court did not

plainly err in failing to instruct the jury that it must find

that Piperi made material misrepresentations to Orange Savings in

order to convict him for misapplication of funds.

D. SUFFICIENCY OF THE EVIDENCE

5
Piperi cites United States v. Heath, 970 F.2d 1397 (5th
Cir. 1992), cert. denied, 507 U.S. 1004 (1993) to argue that
materiality is an element of a § 657 violation. Heath involved
alleged violations of § 657 and § 1344. The court analyzed them
together and discussed the materiality of certain statements.
Id. at 1403. However, Heath is not helpful here for two reasons.
First, Heath did not clearly hold, or even imply, that
materiality is an element of § 657. Second, materiality is an
element of § 1344, see United States v. Campbell, 64 F.3d 967,
975 (5th Cir. 1995), and thus the court’s analysis should
properly be construed as applying to the § 1344 claim.

26
 The scope of our review of the sufficiency of evidence after

conviction by a jury is narrow. We must affirm if a reasonable

trier of fact could have found that the evidence established the

essential elements of the crime beyond a reasonable doubt.

United States v. Dobbs, 63 F.3d 391, 394 (5th Cir. 1995). We

must consider the evidence, and all reasonable inferences drawn

therefrom, in the light most favorable to the government. Id.

Piperi argues that the evidence is insufficient to support

two elements necessary to his conviction: (1) that he “accepted

anything of value, particularly of a value exceeding $100” (bank

bribery) and (2) that he acted corruptly or with an intent to

defraud (bank bribery and misapplication of funds). We disagree.

After reviewing the evidence, we have determined that the

evidence is sufficient to allow a reasonable jury to infer that

Piperi and Russo agreed to exchange millions of dollars worth of

loans. Promising to give a loan from the defendant’s bank to

secure a loan from another bank qualifies as “value” under § 215.

United States v. Kelly, 973 F.2d 1145, 1152 (5th Cir. 1992).

Furthermore, the evidence was sufficient to allow a reasonable

jury to infer that Piperi acted corruptly or with intent to

defraud. The government presented evidence that Piperi failed to

conduct due diligence on the loan to Russo, that Drew Piperi

falsely certified that certain documents were in the loan file

when the loan was funded, that Piperi misrepresented the true

27
purpose of the loan he received from the Ameriway Institutions,

that Piperi failed to disclose that his institution was making a

loan to the owner of the institution he borrowed from, that the

dates on certain documents had been tampered with, and that

Piperi provided false and incomplete information on his financial

disclosure. Viewing the evidence in the light most favorable to

the verdict, there was sufficient evidence to support Piperi’s

conviction.

E. SENTENCING

“A district court’s determination that a defendant is a

§ 3B1.1 leader or organizer is a factual finding, which we review

for clear error.” United States v. Ronning, 47 F.3d 710, 711

(5th Cir. 1995). Section 3B1.1(a) of the United States

Sentencing Guidelines (“USSG”) directs the district court to

increase a defendant’s offense level by four levels “[i]f the

defendant was an organizer or leader of a criminal activity that

involved five or more participants or was otherwise extensive.”

USSG § 3B1.1(a).

The Presentence Investigation Report determined that

Piperi’s sentence should be enhanced by four points because he

was the leader of a criminal activity that is “otherwise

extensive” because Piperi directed his son Drew Piperi and the

scheme involved at least Piperi, Drew Piperi, Russo, and many

unknowing participants, such as the employees at Orange Savings.

28
See USSG § 3B1.1 comment. note 3 (“In assessing whether an

organization is ‘otherwise extensive,’ all persons involved

during the course of the entire offense are to be considered.

Thus, a fraud that involved only three participants but used the

unknowing services of many outsiders could be considered

extensive.”).

The district court adopted the findings of the Presentence

Investigation Report. The record clearly shows that the criminal

organization involved at least three participants (Piperi, Drew

Piperi, and Russo) and involved the help of many unknowing

outsiders such as Piperi’s employees. Thus, the district court

did not clearly err in determining that Piperi’s offense level

should be increased by four points under USSG § 3B1.1(a).

III. CONCLUSION

For the foregoing reasons, we AFFIRM.

29