United States v. Olson

UNITED STATES COURT OF APPEALS
Filed 12/15/95
TENTH CIRCUIT

UNITED STATES OF AMERICA, )
)
Plaintiff-Appellant, )
) Nos. 95-8006
v. ) and 95-8019
) (D.C. No. 94CR-31)
DELTON OWEN OLSON, ) (D. Wyoming)
)
Defendant-Appellee )

ORDER AND JUDGMENT *

Before BALDOCK, McWILLIAMS, REAVLEY **, Circuit Judges.

Delton Owen Olson was convicted by a jury of conspiracy to

launder money. He was acquitted of wire fraud. Because of
Olson’s minimal participation in the investment scheme, the

district court granted his motion for downward departure and
sentenced him to 51 months imprisonment. We affirm.

*
This order and judgment is not binding precedent, except
under the doctrines of law of the case, res judicata, and
collateral estoppel. The court generally disfavors the citation
of orders and judgments; nevertheless, an order and judgment may
be cited under the terms and conditions of the court's General
Order filed November 29, 1993. 151 F.R.D. 470.
**
The Honorable Thomas M. Reavley, United States Court of
Appeals, Fifth Circuit, sitting by designation.
 Olson was charged in a multi-count indictment with Grady

Hand1 and the Cross brothers -- Stewart and Stephen. The

investment scheme undertaken by the conspirators involved

NorthStar Investment Trust, its successor company SLM, and Cross

& Associates. Olson and Stephen Cross were the manager and

trustee, respectively, for NorthStar.

In March of 1993, Olson and Stephen began marketing a “roll

program” through NorthStar to investors. This program was said

to provide small investors with the opportunity to invest or
“piggyback” into the larger “roll program” being conducted by

Cross & Associates, a company comprised of Hand and Stewart. The
investors were informed that Hand and Stewart were purchasing

prime bank notes in the amount of 100 to 300 million dollars or

more. Cross & Associates, through its trader, was supposed to

purchase the notes at a discount from only the world’s largest

100 banks. Cross & Associates would then contract with an
institution in the secondary market to purchase these notes.

This secondary market was described as pension funds, insurance

companies, and large corporations. The actual “roll” or

“tranche” was supposed to occur when Cross & Associates purchased

the note from the bank with cash and then sold the note to the

secondary market. The difference between the purchase and sale

of these instruments was to result in a substantial profit to
Cross & Associates and their investors. The investors were

1
Grady Lewis Hand has filed a related opinion, No. 95-
8007.
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informed that because of bank and federal regulations the two

parties were not able to deal directly with the other, thus

creating the need for Cross & Associates. There was, in fact, no

roll program.

Olson brought in the first investors, a divorced couple who

still invested together, in March of 1993. The couple invested

$500,000 each. Investors were paid the two to 4 per cent per

month return from their investment principal. The four

conspirators looted much of the remaining money. In October of
1993 the investment scheme was ended by federal officials. In

the end, Olson had personally taken a total of $326,000 of the
investors’ 3.3 million dollars.

I. Sufficiency of the Evidence

Olson challenges the sufficiency of the evidence to support

his conviction. He argues that the evidence does not establish

that there was an agreement between the alleged co-conspirators
to launder money or that money laundering occurred. We review

the evidence in the light most favorable to the government to
determine whether any rational trier of fact could find Olson

guilty beyond a reasonable doubt. United States v. Hanson , 41
F.3d 580, 582 (10th Cir. 1994).

Olson was charged with conspiracy to violate 18 U.S.C. §

1956(a)(1)(A)(i) and 1956(a)(1)(B)(i). Those sections provide:

(a)(1) Whoever, knowing that the property involved in a
financial transaction represents the proceeds of some form
of unlawful activity, conducts or attempts to conduct such a
financial transaction which in fact involves the proceeds of
specified unlawful activity--

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 (A)(i) with the intent to promote the carrying on of
specified unlawful activity; or
* * *
(B) knowing that the transaction is designed in whole
or in part--
(i) to conceal or disguise the nature, the
location, the source, the ownership, or the
control of the proceeds of specified unlawful
activity . . .
shall be sentenced to a fine of not more than $500,000 or
twice the value of the property involved in the transaction,
whichever is greater, or imprisonment for not more than
twenty years, or both.

The “specified unlawful activity” alleged in the indictment was

mail or wire fraud in violation of 18 U.S.C. §§ 1341 and 1343.
A. The Conspiracy

The government proceeded under the basic theory that Olson
and others conspired to violate § 1956(a)(1)(A)(i) or (B)(i). 18

U.S.C. § 1956(h). To prove a conspiracy, the government must

prove: (1) the existence of an agreement; (2) to break the law;

(3) an overt act; (4) in furtherance of the conspiracy’s object;

and (5) that a defendant willfully entered the conspiracy.
Hanson, 41 F.3d at 582; 18 U.S.C. § 371. “While all five of

these elements must be present, the essence of any conspiracy is

‘the agreement or confederation to commit a crime.’” Id. (quoting

United States v. Bayer , 331 U.S. 532, 542, 67 S.Ct. 1394, 1399,
91 L.Ed. 1654 (1947)). “The agreement need not be shown to have

been explicit. It can instead be inferred from the facts and

circumstances of the case.” Iannelli v. United States , 420 U.S.

770, 777, n. 10, 95 S.Ct. 1284, 1289-90, n. 10, 43 L.Ed.2d 616

(1975)

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 Olson’s defense and his contention on appeal is that he was

unaware of the fraud being perpetrated by Cross & Associates. He

insists that there is no evidence of any agreement between him

and any of the other co-conspirators. The government relied on

circumstantial evidence to establish the agreement between the

conspirators. In support of his argument, Olson notes that

Stewart Cross never informed him that the “roll program” did not

exist, that he received false reports concerning investor profits

in the “roll program,” that he did not have access to or control
over investor funds at any time, and that he did everything in

his power to assure investor monies were secure. Our inquiry is
not whether the Cross brothers knew Olson was aware of the object

of the conspiracy, but whether Olson knew of the object of the

conspiracy and voluntarily chose to participate in it. See
United States v. Evans , 970 F.2d 663, 669 (10th Cir. 1992), cert.
denied, 113 S.Ct. 1288 (1993) (“A defendant may be convicted of
conspiracy only if the government proves that the defendant had

knowledge of the conspiracy and voluntarily participated
therein.”); United States v. Metropolitan Enters. , 728 F.2d 444,

451 (10th Cir. 1984) (“A co-conspirator need not know of the
existence or identity of the other members of the conspiracy or

the full extent of the conspiracy.”) Olson’s actions and

statements to others indicate that Olson knew the roll program

did not exist and chose to participate in the overall objective

of the conspiracy.

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 Olson began marketing the fictitious “roll program” in March

of 1993. In that month he received the program’s first

investment of 1 million dollars, $500,000 each from the divorced

couple. In April of 1993 the couple received their first

interest check of 3½ per cent or $17,500 each. Also in April the

Securities and Exchange Commission inquired of Olson about

NorthStar’s securities activities. In an effort to avoid

detection, Olson and Stephen Cross created a new entity called

SLM. To further eliminate NorthStar’s existence, Olson
replicated NorthStar’s investor management agreements with SLM as

the new investment company. Olson created and sent a new
agreement to each investor. The new agreements were signed by

Olson using a rubber stamp of Stephen Cross’s signature. The

investors were then asked to sign the “new” agreements and return

the old NorthStar agreements. One could easily surmise this last

request was to eliminate any trace of NorthStar.
Olson met with an attorney in April to discuss the S.E.C.

letter. As a result of this meeting, Olson responded to the
S.E.C. in June of 1993. In that letter Olson specifically stated

that “[t]here is not now nor has there been any agreement between

the trust and any entity for the promotion and sale of any

investment program, including a roll program.” The letter also

noted that all NorthStar activity had ceased. It noted, “[t]here

will be no further activity in this area by the trust and the
trust has had no other contact with any other potential

participant for the purchase and sale of prime bank obligations.”

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Further, Olson related to the S.E.C. that “[a]t no time has there

ever been any person or persons that have invested in

[NorthStar].” Contrary to his letter to the S.E.C., Olson was

still marketing a “roll program” through SLM. In a letter to an

investor in September of 1993, Olson wrote, “I am pleased to

inform you that we have further strengthened our piggybacking

program with Cross & Associates. To simplify the mechanics and

to insure our longevity with Cross & Associates, we’re now

piggybacking on Cross’ large trading account at Paine-Webber.”
Olson also made numerous false representations to investors

concerning the program. Olson represented that he had seen
several accounts during his time at Anovest, the brokerage

company that controlled investor funds through Paine-Webber, in

excess of three million dollars. He assured investors that he

had personally seen trading confirmations. When one investor

questioned Olson about possible S.E.C. implications, Olson
replied that “[w]e have a ruling, you know, from an attorney or

an opinion from an attorney stating that this does not fall
within the realm of the S.E.C.; therefore, it does not need to be

regulated through the S.E.C.”

During the month of April, Olson was aware that investors

were receiving interest checks for their investment through

NorthStar. Olson’s attorney testified that Olson informed him in

April there was no roll program in existence. Contrary to this
knowledge that the program did not exist, Olson continued to

promote, profit, and participate in the scheme during and after

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the month of April. A rational jury could conclude from this

evidence that Olson had joined the conspiracy and had agreed to

continue to market the nonexistent “roll program.”

B. Money Laundering

Olson also contends that the money he gained from the

illegal activity was spent personally, and therefore, does not

constitute money laundering. While he did use some of the money

for himself, that is not the whole story. Much of the money

Olson received from NorthStar was spent to further promote
NorthStar or SLM. In fact, Olson himself testified that some of

the money he received was spent to pay the business expenses of
NorthStar whose only apparent business was to promote the “roll

program.” Additionally, Olson used investor funds to pay other

brokers who brought investors into the program. A total of

$54,920 was paid to these intermediate brokers. 2 The evidence is

sufficient to support a jury’s conclusion that Olson used
investor money obtained illegally through wire fraud to continue

to “promote” the ongoing scheme. See 18 U.S.C. §
1956(a)(1)(A)(i).
C. Acquittal on Wire Fraud

Olson also argues that because the jury found him not guilty

of wire fraud, the evidence is insufficient to support the

conspiracy charge. Even assuming that the verdicts are

2
The evidence indicates that much more money was
supposed to be paid to the other brokers, but, unbeknownst to the
other co-conspirators Olson kept the difference.
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inconsistent, Olson may not challenge the propriety of his

conspiracy conviction with the jury’s action in the wire fraud

count. See United States v. Powell , 469 U.S. 57, 66, 105 S.Ct.

471, 477, 83 L.Ed.2d 461 (1984) (“The fact that the inconsistency

may be the result of lenity, coupled with the Government’s

inability to invoke review, suggests that inconsistent verdicts

should not be reviewable.”); United States v. Abbott Washroom
Systems, Inc., 49 F.3d 619, 622 (10th Cir. 1995) (a corporate

defendant cannot use acquittal of employee co-defendant to
challenge the corporate defendant’s conviction.) 3

II. The Decrease in Olson’s Sentence
The government contends in a cross-appeal that the district

court improperly granted Olson a four-level decrease for “minimal

participation” in his adjusted offense level under the Sentencing
Guidelines. See U.S.S.G. § 3B1.2(a). “A trial court’ findings

concerning a defendant’s role in a particular offense are treated
by an appellate court as factual findings, which are subject to

deferential review under the clearly erroneous standard.” United
States v. Santistevan , 39 F.3d 250, 253 (10th Cir. 1994). The

finding will not be disturbed unless it is without factual
support in the record, or if after reviewing the evidence we are

left with a definite and firm conviction that a mistake has been

made. Santistevan, 39 F.3d at 253-254. Application note one to

3
This does not call into question the limited rule of
consistency that is applied to where all co-conspirators are
acquitted but one. See Abbott Washroom Systems, Inc. , 49 F.3d at
622-623.
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section 3B1.2 states that the mitigating circumstance for minimal

participation

is intended to cover defendants who are plainly among the
least culpable of those involved in the conduct of the
group. Under this provision, the defendant’s lack of
knowledge or understanding of the scope and structure of the
enterprise and of the activities of others is indicative of
a role as a minimal participant.

In determining Olson was only a minimal participant in the

overall conspiracy, the district court noted,

I find that there was a great deal that [Olson] was not
aware of in this matter. And had he been aware, I would be
speculating on what might have happened. We don’t know is
the point. And it seems unfair to me to, in effect, charge
him with things -- with activities that clearly were kept
from him and were not disclosed and were significant in
terms of this operation from the very beginning because it
was within a day or two of the [couple’s investment of one
million dollars] -- around March 31, 1993 of [their]
investment that those funds were slipping away through loan
transactions with [Hand] that [Olson was] not aware of and
through loans, dunning (sic) loans to Stephen and to Cross &
Associates.

The district court’s ruling that Olson was plainly among the
least culpable of the conspirators is not clearly erroneous. The

court’s ruling is supported by the actions of his co-conspirators

in their acquisition of investor funds without Olson’s knowledge

and their apparent attempt to keep much of the details of the
scam from Olson.

In March of 1993, Hand and the Cross brothers decided to
“borrow” $300,000 of the divorced couple’s investment funds from

their brokerage account. The three conspirators agreed to

classify this transaction as a loan. As the months passed more

money would be “borrowed” from investor funds. Investor funds

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were controlled by Cross & Associates in Atlanta, and investor

statements were prepared and mailed from Cross & Associates in

Atlanta. The conspirators in Atlanta perhaps attempted, although

unsuccessfully, to keep Olson from discovering that the “roll

program” was a ruse. Hand and the Cross brothers all misinformed

Olson to further the investment scheme. While Olson was aware

the program was non-existent and participated in its overall

objectives, thus making him a member of the conspiracy, the

district court did not clearly err in determining Olson was a
minimal participant because of the actions of his co-

conspirators.
AFFIRMED.

Entered for the Court

Thomas M. Reavley
Circuit Judge

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