United States v. Sudeen

                                                                                United States Court of Appeals
                                                                                         Fifth Circuit
                                                                                        F I L E D
                                                                                      December 23, 2005
                                               In the
                        United States Court of Appeals                             Charles R. Fulbruge III
                                                                                           Clerk
                                     for the Fifth Circuit
                                          _______________

                                            m 04-30067
                                          _______________




                                 UNITED STATES OF AMERICA,

                                                             Plaintiff-Appellee,

                                              VERSUS

                  MOTILLAL L. SUDEEN, ALSO KNOWN AS MOTI SUDEEN,

                                                             Defendant-Appellant.


                                   _________________________

                            Appeal from the United States District Court
                               for the Eastern District of Louisiana

                               ______________________________




Before JOLLY, SMITH, and DEMOSS,                     co-defendant; (2) in admitting evidence of an
  Circuit Judges.                                    uncharged investment scheme and statements
                                                     he alleges to be hearsay; (3) in the application
JERRY E. SMITH, Circuit Judge:                       of the sentencing guidelines; and (4) by finding
                                                     certain facts in contravention of United States
   Motilall Sudeen was convicted of wire             v. Booker, 543 U.S. ___, 125 S. Ct. 738
fraud, travel fraud, money laundering and            (2005). We find Booker error with respect to
conspiracy offenses and sentenced to 220             the district court’s use of the 2002, rather than
months’ imprisonment. He appeals, contend-           the 2000, guidelines. As to all other claims
ing that the district court committed reversible     pertaining to conviction or punishment, we
error (1) in severing his trial from that of his     find no reversible error. We therefore affirm
the conviction and vacate the sentence and                 posed to little or no risk; that the high yield
remand for resentencing.                                   programs involved marquee banks, including
                                                           the World Bank and the IMF; and that the
                       I.                                  trading programs were monitored by the fed-
   Sudeen sought to build a large urea pro-                eral government. Sudeen periodically molli-
cessing plant in Poplarville, Mississippi, where           fied investors by returning “dividends” from
he ultimately consolidated all his business                the programs;3 by encouraging investors to roll
dealings.1 He formed a corporation, MS                     over their investments instead of seeking im-
Carbamate (“Carbamate”), and acquired land                 mediate returns; and by reassuring investors
on which to build the plant. He contends that              that their money had been safely invested and
he was “financing” the plant using a variety of            that they would be paid soon.4 Sudeen and his
investment devices.                                        co-conspirators used the funds to make “lull-
                                                           ing” payments to encourage further investment
   The plant was never built, because of al-               in the “programs” and for Sudeen's personal
leged regulatory difficulties. As a result, Su-            and business expenses.5
deen breached contracts with investors.
                                                               Sudeen and Freeman continued to maintain
   The investment programs Sudeen alleged                  the appearance of safety by issuing investors
he was using to finance the plant were, in ac-             bogus “Private Placement Agreements” and
tuality, constituent frauds in a fairly elaborate          “Joint Venture Agreements.” They also told
Ponzi scheme. Sudeen and his co-conspirators               investors that Sudeen’s personal wealth guar-
represented to potential investors that their              anteed their investment. Investors were told
money would be placed in “high yield                       to purchase Certificates of Deposit from vari-
investment programs” that would generate                   ous banks to allow Sudeen to use the credit for
profits for them at greater-than-market rates of           loans, the proceeds of which would also be in-
return.2                                                   vested. When a given investor demanded pro-
                                                           ceeds, Sudeen and Freeman would claim that
  Sudeen told investors that their principal               the investor was ineligible because he had
would remain safely in banks and would be ex-              failed to comply with fictitious requirements,


   1                                                          3
     Sudeen characterizes his efforts to acquire the            Sudeen also lied about the composition of the
necessary funds for the plant as “legitimate ar-           banks taking part in the financing. Sudeen and an
rangement[s] made with sophisticated investors.”           accomplice, Jerry Freeman, sought to make the
He states that he signed agreements with investors         trading programs appear legitimate and safe.
to use their money in “projects” that centered on
                                                              4
the plant.                                                      More than fifty people participated in the
                                                           high-yield trading program, and the victims spent
   2
      Sudeen sought to finance Carbamate with the          more than $ 17 million.
high-yield investment program and what he de-
                                                              5
scribed to investors as a “private placement se-                 Sudeen used the funds, in addition to making
cured trading programs.” Sudeen told investors             lulling payments, to pay Freeman’s salary, to re-
that these programs would yield 20-50% per month           model Sudeen’s house, support Sudeen’s wife and
and that he would return their principal on the            children, purchase property including luxury
expiration of the investment terms.                        goods, and to make credit card payments.

                                                       2
that the profits were “tied up” by the federal       lines range of 210-262 months’ imprisonment.
government, or that the returns could not be         The court sentenced Sudeen to 220 months.
liquidated from overseas assets.
                                                                           II.
   1.   Sudeen was a principal in another               Sudeen argues that because his and Free-
        Ponzi scheme involving insulin (the          man’s counsel had prepared their defenses
        “insulin scheme”), for which he and          jointly, Sudeen was prejudiced by a severance.
        Freeman were not indicted. Sudeen            We disagree.
        co-mingled funds involved in the two
        schemes, making lulling payments                                   A.
        using resources of one to the other.            We review a grant or denial of severance
        On this issue the government cites to        for abuse of discretion. See United States v.
        the record extensively, whereas              Ramirez, 954 F.2d 1035, 1037-38 (5th Cir.
        Sudeen does nothing more than ad-            1992). A severance is reversible only on a
        vance speculation.                           showing of specific compelling prejudice. See
                                                     United States v. Barnett, 197 F.3d 138, 144
   In February 2002 Sudeen and Freeman               (5th Cir. 1999).6
were indicted on one count of conspiracy un-
der 18 U.S.C. § 371, fourteen counts of wire                                 B.
fraud under 18 U.S.C. § 1343, two counts of              Although it is generally true that “defen-
travel fraud under 18 U.S.C. § 2314, and             dants who are indicted together should be tried
twenty-one counts of money laundering under          together,” see United States v. Piaget, 915
18 U.S.C. § 1957. Trial was originally set for       F.2d 138, 142 (5th Cir. 1990), that gener-
May 2002. The district court granted several         alization says nothing of the legal circum-
of the defendants’ motions for continuance.          stances that justify deviating from it. Sudeen
                                                     cites no authority for the standard he advances
    In December 2002, Sudeen’s cardiologist          as the criteria for such deviation: “[W]hether
informed the court that Sudeen was healthy           the Government articulated a specific risk that
enough to go to trial in January. In January         could be averted only through severance, and
2003 Sudeen and Freeman again moved for              it must further query whether alternative
continuance because Freeman’s attorney had a         means less prejudicial to Sudeen existed to
conflict with a case previously scheduled for        remedy that risk.” Sudeen seems to be fabri-
trial in North Carolina. The government op-
posed the motion and moved to sever the trials
                                                        6
and proceed with Sudeen’s. The district court             Under our caselaw, to demonstrate an abuse of
granted Freeman a continuance, denied a con-         discretion as it relates to severance, Sudeen must
tinuance to Sudeen, and granted the govern-          show “specific and compelling prejudice.” United
ment's motion to sever, thus forcing Sudeen to       States v. Mitchell, 777 F.2d 248, 260 (5th Cir.
proceed to trial on January 13.                      1995). The Mitchell standard requires that we
                                                     determine abuse of discretion by reference to
                                                     whether the severance caused Sudeen clear and
   The jury found Sudeen guilty on
                                                     compelling prejudice, not whether the district court
thirty-eight of the counts. Applying the 2002
                                                     adequately identified evidence in the record show-
sentencing guidelines, the court calculated an       ing that Sudeen would have been prejudiced by
offense level of 37, which produced a guide-         joinder.

                                                 3
cating that standard entirely.                             evidence was extrinsic, we must determine
                                                           whether the court erred by failing to exclude
   Sudeen’s primary argument attempting to                 the evidence under other evidence rules. We
show such prejudice involves the short period              terminate our inquiry at the first stage by find-
in which his attorney had to prepare for trial             ing that the court did not abuse its discretion in
after the severance. Sudeen does not allege                treating the evidence as intrinsic.
prejudice with any specificity. His counsel was
ready for trial anyway, because Sudeen would                                        A.
have been deemed the principal had the two                     We review admission of evidence for abuse
defendants been tried jointly, and Sudeen’s and            of discretion. See United States v. Hicks, 389
Freeman’s attorneys had been working on a                  F.3d 514, 522 (5th Cir. 2004). That Sudeen
joint defense for many months. Moreover, Su-               commingled funds between the two sub-
deen’s attorney was, by all accounts, well                 schemes is not a contested fact. Intrinsic evi-
prepared for trial.7                                       dence is generally admissible to allow the jury
                                                           to “evaluate all the circumstances under which
                      III.                                 the defendant acted.”9 Evidence is considered
    Sudeen actually orchestrated another fraud-            intrinsic if it is “inexorably intertwined” with
ulent venture involving insulin contracts. He              evidence used to prove the crime charged. See
does not deny that the funds from those in-                Navarro, 169 F.3d at 233. Where evidence is
vesting in the insulin contracts were used as              intrinsic, it qualifies without reference to rule
lulling payments to investors in the fertilizer            404(b), which states generally that “evidence
plant and vice versa.8 The district court there-           of other crimes, wrongs, or acts is not admissi-
fore found that the funds from the two ven-                ble to prove the character of a person in order
tures were commingled and that the evidence                to show action in conformity therewith.” See
regarding the insulin venture was “intrinsic.”             id.10 Citing superior authority and referencing
                                                           the record far better than Sudeen does, the
   Sudeen argues that the insulin evidence was             government overwhelmingly establishes the
extrinsic and should have been excluded under              two propositions necessary for it to prevail on
Federal Rules of Evidence 403 and 404(b).                  this argument: (1) Funds for the insulin scheme
First, we must decide whether the district
court reversibly erred in finding the insulin
evidence intrinsic. Second, if we that the                    9
                                                                United States v. Navarro, 169 F.3d 228, 233
                                                           (5th Cir. 1999); see also United States v. Wil-
                                                           liams, 900 F.2d 823, 825 (5th Cir. 1990) (stating
   7
     In fact, the greatest possibility for prejudice       that evidence qualifies as “intrinsic” “when the evi-
appears to have been that to the detriment of the          dence of the other act and the evidence of the other
government, if the district court had allowed de-          crime charged are ‘inextricably intertwined’ or
fendants to proceed jointly. The trial had been            both acts are part of a ‘single criminal episode’ or
pushed back four times already, and Sudeen’s               other acts were ‘necessary preliminaries’ to the
health problems posed a significant potential for          crime charged”) (internal citations omitted).
further delay.
                                                              10
                                                                See 1 STEVEN A. SALTZBURG, MICHAEL M.
   8
    In oral argument on appeal, Sudeen’s counsel           MARTIN & DANIEL J. CAPRA, FEDERAL RULES OF
expressly admitted to the co-mingling of funds             EVIDENCE MANUAL § 404.02[11] (LexisNexis 8th
between the two schemes.                                   ed. 2002).

                                                       4
were commingled with funds from the fertilizer                  The district court noted that if it considered
scheme, and initial investments in each were                 evidence of the insulin scheme to be intrinsic,
used to make lulling payments to investors in                it would not exclude that material on the
the other;11 and (2) such commingling of funds               ground that it is prejudicial under rule 403.14
qualifies the insulin scheme as intrinsic                    This holding is consistent with language in our
evidence.12                                                  circuit stating that rule 403 should generally
                                                             not be used to exclude intrinsic evidence,
                        B.                                   because intrinsic inculpatory evidence is by its
    Rule 403 states that: “Although relevant,                very nature prejudicial.15 The insulin evidence
evidence may be excluded if its probative value              proves both the source of the lulling payments
is substantially outweighed by the danger of                 made to Poplarville investors and the destina-
unfair prejudice, confusion of the issues, or                tion of funds paid in by those investors. It is
misleading the jury, or by considerations of                 highly probative of the existence of a Ponzi
undue delay, waste of time, or needless                      scheme, and it is prejudicial only to the extent
presentation of cumulative evidence.”13 The                  that it establishes elements of the offense.16
insulin evidence must pass the rule 403 bar
without respect to whether the district court                                    IV.
admitted it as intrinsic evidence.                              Sudeen further contends that the district
                                                             court abused its discretion in admitting the
                                                             out-of-court statements of Earl Gamble and
                                                             Walter Lauren under Federal Rule of Evidence
   11
      Even if each direction were not specifically
proven (i.e., the state specifically identified only a
                                                                14
particular transaction where money flowed from                     Specifically, the court stated: “It’s not con-
one scheme to another, and not vice versa), the co-          fusing if it’s the same, if it’s advancing one, it’s not
mingling of funds obviously justifies the inference          misleading, it’s not prejudicial any more than the
that money actually flowed both ways.                        indictment[,] charge or something [that] is pre-
                                                             judicial in the sense that it’s offensive but it’s part
   12
      The district court alternatively ruled, in an in       of the crime.”
limine hear ing, that the insulin evidence was ad-
                                                                15
missible under rule 404(b), which states that prior                See United States v. Powers, 168 F.3d 741,
(or other) wrongs or acts are admissible as “proof           749 (5th Cir. 1999) (“all probative evidence is by
of motive, opportunity, intent, preparation, plan,           its very nature prejudicial”) (internal citations
knowledge, identity, or absence of mistake or ac-            omitted); United States v. Leahy, 82 F.3d 624, 637
cident.” See United States v. Dula, 989 F.2d 772,            (5th Cir. 1996) (stating that rule 403 should be
777 (5th Cir. 1993) (“Evidence of an uncharged               used sparingly and only where the prejudicial effect
offense arising out of the same transaction or series        substantially outweighs the evidence’s probative
of transactions as the charged offense is not an             value).
‘extrinsic’ offense within the meaning of [rule]
                                                                16
404(b) and is therefore not barred by this rule.”)                 Sudeen contends that the court inappropri-
We do not reach this issue.                                  ately failed to give a limiting instruction as to the
                                                             purposes of the insulin evidence. First, we see no
   13
      FED. R. EVID. 403; see also 1 SALTZBURG ET             reason why such an instruction is necessary if we
AL., supra, § 403.02[16], at 403-37 (stating that            deem the evidence intrinsic. Second, the record
rule 403 “is one of exclusion of otherwise admiss-           indicates that the jury instructions quite candidly
ible evidence”).                                             addressed the limited character of “similar acts.”

                                                         5
801(d)(2)(D) and/or 801(d)(2)(E). Rule 801-                 mission of out-of-court statements under rule
(d)(2)(D) deems non-hearsay a statement of-                 801(d)(2)(D) and (E).18          There was
fered against a party made by “the party’s                  corroborating material (evidence other than
agent or servant concerning a matter within                 the statements themselves) demonstrating that
the scope of the agency or employment, made                 Lauren’s and Gamble’s statements were
during the existence of the relationship.”                  admissible under either subsection.

   Similarly, rule 801(d)(2)(E) provides that a                                   B.
statement is not hearsay if it is offered against              Lauren received significant commissions for
a party and is “a statement by a co-conspirator             recruiting investors. At least one investor
of a party during the course and in furtherance             described him as an “associate” of Sudeen’s.
of the conspiracy. The contents of the state-               Lauren received reports from investors who
ment shall be considered but are not alone                  were recruiting other investors in the high-
sufficient to establish the declarant’s author-             yield trading program. An employee of MS
ity[.]”                                                     Carbamate testified that Lauren worked for
                                                            Sudeen. In light of this corroborating testi-
   Sudeen contends that the district court’s                mony, the district court did not abuse its dis-
finding that Gamble and Lauren were agents or               cretion in admitting Lauren’s statements.
co-conspirators was not supported by sub-
stantial evidence.17 He correctly notes that the               Some of the investors testified that they
statements themselves are not sufficient evi-               thought Gamble and Sudeen were business
dence of the relationship to render them ad-                partners. Gamble introduced several potential
missible. He then asserts that the government               investors in the high-yield trading program to
offered no additional proof of Gamble’s and                 Sudeen. Another investor described Gamble
Lauren’s roles as co-conspirators or agents of              as an “associate” of Sudeen’s.
Sudeen. He characterizes them as owners of
investment companies who dealt at arm’s                        Sudeen told one potential investor that
length with Sudeen and the potential investors.             Gamble would be her “agent” if she decided to
                                                            participate in the high-yield program. That
                    A.                                      same investor wrote a check to Gamble for
   We review for abuse of discretion the ad-                investment in the program, and that check was
                                                            later deposited in one of Sudeen’s business ac-
                                                            counts. Sudeen informed that investor that
   17
     There is some discrepancy between the briefs           Gamble would receive a commission of one
as to which of the two subsections applies to               percent of her investment principal. When in-
Gamble and which to Lauren. The government                  vestors inquired as to why they were not re-
asserts that Gamble’s statements were admitted              ceiving the promised returns, Gamble provided
under the agency exception of subsection (d)(2)(D)
and that Lauren’s were admitted under either (D)
                                                               18
or (E). Whether the relationship among these three               See United States v. Solis, 299 F.3d 420, 443
men is one of agency or co-conspiracy, however,             (5th Cir. 2002) (stating standard with respect to
need not be decided for us to rule on this issue. For       FED. R. EVID. 801(d)(2)(E); United States v. Cent.
a general discussion of agent versus co-conspirator         Gulf Lines, Inc., 974 F.2d 621 (5th Cir. 1992)
admissions, see 4 SALTZBURG ET AL., supra, §                (same with respect to F ED . R. E VID.
801.02[6] [f]-[g].                                          801(d)(2)(D)).

                                                        6
explanations for the delays and reassurances                                        B.
that their money was safe. The district court                    Sudeen relies on United States v. Echevar-
did not abuse its discretion in admitting                    ria, 33 F.3d 175 (2d Cir. 1994), for the propo-
Gamble’ testimony.                                           sition that the district court may enhance a
                                                             sentence pursuant to § 3B1.3 only where the
                        V.                                   defendant legitimately occupied a position of
    Sudeen contends the court improperly en-                 trust. Sudeen makes no arguments beyond
hanced his sentence for abuse of a position of               analogy to that case.
private trust, arguing that he was not a legiti-
mate trader or investment broker. Section                       A subsequent Second Circuit case, United
3B1.3 of the United States Sentencing Guide-                 States v. Hussey, 254 F.3d 428, 433 (2d Cir.
lines provides for a two-level increase in of-               2001), repudiates the reasoning of (but stops
fense level if “the defendant abused a position              short of overruling) Echevarria. That court
of public or private trust, . . . in a manner that           noted that two other courts of appeals have
significantly facilitated the commission or                  rejected or criticized Echevarria;20 it also ex-
concealment of the offense.”                                 plains that, by adding an application note,21 the

                       A.
   Even after Booker, we review a district                      19
                                                                  (...continued)
court’s interpretation and application of the                   fendant “abused a position of public or private
guidelines de novo. See United States v. Vil-                   trust, or used a special skill, in a manner that
legas, 404 F.3d 355, 359 (5th Cir.2005) (per                    significantly facilitated the commission or con-
curiam). We thus proceed to review the appli-                   cealment of the offense.” U.S.S.G. § 3B1.3
cation of guideline § 3B1.3 here without def-                   (1998). Whether a defendant occupies a “posi-
erence to the district court’s interpretation.19                tion of trust” within the meaning of this pro-
                                                                vision is viewed from the perspective of the
                                                                victim, and is a question of law, which we re-
                                                                view de novo. See United States v. Wright,
   19
       The government cites United States v.                    160 F.3d 905, 910 (2d Cir.1998). Whether a
Reeves, 255 F.3d 208, 212 (5th Cir. 2001), for the              defendant abused a position of trust in a manner
proposition that the panel “review[s] the appli-                that “significantly facilitated the commission or
cation of the guideline to the facts for clear error.”          concealment of the offense” is a question of
This reasoning should be distinguished from our                 fact, which we review for clear error. See
more recent holding in Villegas. The apparent dis-              United States v. Hirsch, 239 F.3d 221, 227 (2d
crepancy is nonetheless something we feel com-                  Cir.2001).
pelled to address, even though the standard-of-
review issue makes little difference in the ultimate         United States v. Hussey, 254 F.3d 428, 431 (2d
outcome here, because Sudeen’s challenge would               Cir. 2001). We endorse this distinction.
fail even under our de novo scrutiny.
                                                                20
                                                                  See Hussey, 254 F.3d at 432 n.3; see, e.g.,
   We assess this issue much as did the Second               United States v. Gill, 99 F.3d 484, 489 (1st Cir.
Circuit:                                                     1996); United States v. Barnes, 125 F.3d 1287,
                                                             1292 (9th Cir. 1997).
      Section 3B1.3 of the Sentencing Guidelines
                                                                21
   provides for a two-level enhancement if the de-                   Application note 2 to U.S.S.G. § 3B1.3 now
                                   (continued...)                                                  (continued...)

                                                         7
United States Sentencing Commission rejected               Booker and an ex post facto violation. It is
Echevarria’s reasoning in November 1998.                   evident from oral argument and from briefing
See id. at 433 n.3. Most importantly, Reeves,              that neither the government nor Sudeen is en-
255 F.3d at 212, affirmed an abuse-of-trust                tirely sure how the two sets of precedent in-
enhancement where the defendants had posed                 teract. We conclude that the district court’s
as financial planners and advised their clients            application of the 2002 edition of the guide-
to invest in a company owned by a co-                      lines—as opposed to the 2000 edition of the
defendant. There is no meaningful way to                   same—is reversible error for the reasons set
distinguish the facts in that case from the ones           forth below and in the companion opinion is-
here. Therefore, the district court did not err            sued contemporaneously herewith, United
in its application of § 3B1.3.                             States v. Freeman, No. 04-30037.

                      VI.                                                           A.
    Sudeen claims the district court committed                                      1.
reversible error under Booker, 543 U.S. at                     First, we briefly dispose of Sudeen’s Book-
___, 125 S. Ct. at 738. Specifically, he rea-              er claims involving amount of loss, number of
sons that the court improperly found facts at              victims, and use of specific means. He con-
sentencing relating to (1) the amount of loss;             cedes that he did not preserve a Sixth Amend-
(2) the number of victims; (3) the use of spe-             ment objection to these issues at sentencing,
cific means; and (4) the effective date of the             and we review unpreserved Booker arguments
conspiracy’s end. Sudeen’s brief styles the last           for plain error. See United States v. Mares,
of these items—the only Booker objection we                402 F.3d 511, 520 (5th Cir.), cert. denied, 126
ultimately believe has merit—as a hybrid of a              S. Ct. 43 (2005). The third prong of the plain
                                                           error analysis requires that, to prove reversible
   21
                                                           error, Sudeen “demonstrate a probability
    (...continued)                                         ‘sufficient to undermine confidence in the out-
provides:                                                  come.’” Id. at 521 (quoting United States v.
                                                           Dominguez Benitez, 542 U.S. 74, 124 (2004)).
   Th[e] adjustment . . . also applies in a case in
   which the defendant provides sufficient indicia
                                                           Under Mares, “[t]he pertinent question is
   to the victim that the defendant legitimately           whether [Sudeen] demonstrated that the sen-
   holds a position of private or public trust when,       tencing judge—sentencing under an advisory
   in fact, the defendant does not. For example,           scheme rather than a mandatory one—would
   the adjustment applies in the case of a defen-          have reached a significantly different result.”
   dant who (A) perpetrates a financial fraud by           Id. Even if all three of these preceding condi-
   leading an investor to believe that the defendant       tions are satisfied, we may exercise our discre-
   is a legitimate investment broker; or (B) per-          tion to notice a forfeited error only if that
   petrates a fraud by representing falsely to a           mistake seriously affects “the fairness, integ-
   patient or employer that the defendant is a             rity, or public reputation of judicial proceed-
   licensed physician. In making the misrepresen-          ings.” United States v. Cotton, 533 U.S. 625,
   tation, the defendant assumes a position of             631 (2002).
   trust, relative to the victim, that provides the
   defendant with the same opportunity to commit
                                                                                2.
   a difficult-to-detect crime that the defendant
   would have if the position were held legit-
                                                              Sudeen attempts to carry his burden by do-
   imately.                                                ing nothing more than identifying, for each en-

                                                       8
hancement, the error and pointing out that the              lines instead of the 2000 edition.23 Although
district court sentenced him at the low end of              we discuss this issue as part of our “Booker
the guidelines range. Under the computed                    error” analysis, the objection actually subdi-
range, the district court could have sentenced              vides into two distinct inquiries, only one of
him to a term of 210 to 262 months; it in fact              which Booker technically controls: (1) whether
imposed 220 months. Therefore, Sudeen con-                  the use of the 2002 edition constitutes an
tends, the court, if it had known of its discre-            independent Booker error and (2) whether the
tion to do so, likely would have imposed a                  use of the 2002 edition violated the Ex Post
lesser sentence.                                            Facto Clause (a claim we analyze the same as
                                                            we would have before Booker).
   This logic is unpersuasive. A sentence at
the low end of the range does not show that                                        1.
the error “must have affected the outcome of                    Sudeen asserts that, under Booker, the dis-
the district court proceedings.” United States              trict court cannot constitutionally have made
v. Olano, 507 U.S. 725, 734 (1993). More-                   factual determinations regarding the end-date
over, in denying Sudeen’s request to sentence               of the conspiracy. Sudeen neither admitted
him to the minimum guidelines sentence, the                 that end-date, nor was it found by a jury be-
district court indicated that it considered Su-             yond a reasonable doubt. Nevertheless, that
deen’s offenses to be very serious.22 Sudeen                finding plainly increased his sentencing range.
cannot show a reasonable probability that the
court would have imposed a lower sentence                                         a.
under an advisory guidelines regime, so he                     The government argues that Sudeen did not
cannot prevail under a plain error standard of              preserve his error under Booker. At sentenc-
review.                                                     ing, however, Sudeen’s attorney made the fol-
                                                            lowing remarks:
                     B.
   Sudeen asserts that the district court im-                  And we would suggest that where like Ap-
properly used the 2002 edition of the guide-                   prendi the guidelines have [sic], I don’t
                                                               want to say legal effect, but clearly the
                                                               practical effect of increasing the statutory
                                                               maximum for the continuing offense. By
   22
        Specifically, the district court stated:               having that offense drive a set of numbers
                                                               that are greater than what you can be sen-
   I’ve heard countless stories . . .that people lost          tenced to it [sic] under that offense and
   their whole life savings or their future. And               which apply to the whole case, it[’]s appro-
   they entrusted it to you. They gave you their               priate to begin looking at is that an issue
   life savings.                                               the jury has to decide.

   It wasn’t for many of them given to you for the
                                                               23
   urea plant, it was given to you to invest in the               The government posits that the court actually
   high interest scheme that you told them about.           used the 2003 version, which was in effect on the
   And there was no such program . . . You just             date of sentencing. The difference is irrelevant,
   used their money, used Peter’s money to pay              because § 2S1.1 is the same in both. Use of the
   Paul . . . And these victims didn’t do anything          2000 version, as urged, would have yielded a sub-
   wrong and you just abused them.                          stantially lower range.

                                                        9
As we have held in the companion case, Free-                 also accurately points to the fact that at sen-
man, this language is enough for us to find a                tencing, the district court made a finding that
mistake preserved for purposes of choosing                   the conspiracy continued past November 1,
between plain and harmless error analysis.24

                       b.                                       25
                                                                  (...continued)
    There is no dispute that if the conspiracy                  and $9,000 was wired to co-conspirator Walter
was proven to extend to a date on or after No-                  Lauren at an account in Switzerland as late as
vember 1, 2001, a set of guidelines later than                  February 27, 2002. Mortgage payments on the
the 2000 version would apply (in an advisory                    Poplarville property using funds from investors
capacity, of course, in the wake of Booker).                    were made until January 15, 2002. In addition,
The indictment states that “[b]eginning in or                   lulling payments of $10,000, $2,000, and
about March 1997, and continuing to the pres-                   $2,500 were made to investors Frank Gunn,
                                                                Kenneth Breaux and Sheran Frickey, respec-
ent [meaning February 28, 2002], . . . the de-
                                                                tively, on December 12, 2001. In November
fendants . . . did knowingly and willfully . . .                2001, Sudeen promised that he would give a
conspire . . . .” The indictment charges the                    bank guarantee to investor Mattias Baumeler.
overt acts under the conspiracy with specifi-                   In February 2002 Baumeler met with Sudeen in
city; the latest such charged act is Sudeen’s                   Switzerland, and Sudeen promised that he
promise to pay a particular investor additional                 would remit all overdue profits within two
money, an act alleged to have occurred “[i]n                    weeks.
or about August 2001.”
                                                                  Moreover, Alice Celestin testified at trial and
   In its brief on appeal, the government, in an                sentencing that every 120 days she and her hus-
effort to avoid use of the 2000 guidelines,                     band “rolled over” their principal and purported
points to proof of several acts occurring on or                 interest payments into a new contract. When
after November 1, 2001.25 The government                        she met with Freeman on July 1, 2001, and
                                                                signed a fifth contract, she advised him that she
                                                                was going to need $54,000 back in November.
                                                                When she didn’t receive the money, she
   24                                                           telephoned Freeman frequently. In December
      Not only does this language resemble that
which we found sufficient for preserving error in               2001 Freeman called her and said that he had
Freeman, but it is more specific than that which we             both good news and bad news: she was getting
held to satisfy the error preservation requirements             money, but it was only $10,000. They met the
in United States v. Akpan, 407 F.3d 360 (5th Cir.               next day and he gave her three separate checks
2005) (“Although [the defendant] never explicitly               totaling $10,000. She testified that at that time
mentioned the Sixth Amendment, Apprendi, or                     she still believed that she had funds invested in
Blakely until his Rule 28(j) letter, we are satisfied           insulin. She continued calling Freeman and
that his objeciton adequately apprised the district             during their last conversation in February 2002
court that he was raising a Sixth Amendment                     he said that her funds had “two more banks to
objection . . . .”).                                            clear.” Freeman’s misrepresentations plainly
                                                                lulled Mrs. Celestin into the continued belief
   25
        According to the government’s brief,                    that her funds were safely invested and that the
                                                                promises made at the time of her initial in-
   Freeman continued to receive biweekly salary                 vestment would be fulfilled.
   payments of $1,450 through January 17, 2002,
                                  (continued...)             (Record citations and footnote omitted.)

                                                        10
2001. The flaw in the government’s position,                Booker, 125 S. Ct. at 751.
however, is that the procedure it correctly
recounts is the very essence of a Booker viola-                 In short, the indictment charged no specific
tion.                                                       acts after August 2001, and the jury was told
                                                            it could find defendants guilty without finding
   The jury was charged in relevant part as                 any overt acts on or after November 1, 2001.
follows:                                                    There is no basis on which, in the wake of
                                                            Booker, we can infer that any such acts indeed
   It is not essential that the Government                  occurred, i.e., that the jury, if asked, would
   proved that the conspiracy started and end-              have found them beyond a reasonable doubt.27
   ed on those specific dates [i.e., March 1997
   through February 2002]. Indeed it is suffi-                                     c.
   cient if you find that in fact a conspiracy                  Because Sudeen’s sentence was infected
   was formed and that it existed for some                  with Booker error, and he properly preserved
   time within the period set forth in the In-              his objection, we must vacate the sentence and
   dictment and that at least one overt act was             remand for resentencing unless we determine
   committed to further the conspiracy within               that the error was harmless under Federal Rule
   that period of time.                                     of Civil Procedure 52(a). See Mares, 402 F.3d
                                                            at 520 n.9. “Harmless error is ‘any defect,
Accordingly, the fact of conviction does not
necessarily establish that the jury found the
                                                               27
existence of any overt acts on or after Novem-                     It is true that under the law of this circuit,
ber 1, 2001. It was only the district court, and            “[o]rdinarily, a defendant is presumed to continue
not the jury, that found that the conspiracy                involvement in a conspiracy unless that defendant
continued beyond the trigger date for the post-             makes a ‘substantial’ affirmative showing of with-
2000 guidelines.26 This is specifically what                drawal, abandonment, or defeat of the conspira-
Booker prohibits: The                                       torial purpose.” United States v. Puig-Infante, 19
                                                            F.3d 929, 945 (5th Cir. 1994) (citation and internal
                                                            quotation marks omitted). Accord United States v.
   actual sentence . . . was . . . longer than the          Schorovsky, 202 F.3d 727, 729 (5th Cir. 2000).
   Guidelines range supported by the jury ver-              These authorities, although sound, address a
   dict alone. To reach this sentence, the                  situation entirely different from the one presented
   judge found facts beyond those found by                  here; they involve multi-person conspiracies in
   the jury . . . . ‘[T]he jury’s verdict alone             which the defendant claims he tried to withdraw
   does not authorize the sentence. The judge               from the conspiracy that was continued by his co-
   acquires that authority only upon finding                conspirators. Here, there were no acts found by a
   some additional fact’ [quoting Blakely v.                jury after the trigger date, so there is no jury-found
   Washington, 542 U.S. 296, 305 (2004)].                   conspiracy at all that existed on or after that date.

                                                               In other words, those authorities demonstrate
   26
     The government relies entirely on the fact that        that the absence of an overt withdrawal can extend
the district court found that the conspiracy                the operative dates of an alleged withdrawing de-
continued past November 1, 2001. At no point                fendant’s vicarious liability to the end of the con-
does the government even attempt to argue that we           spiracy. Those authorities do not suggest, how-
may infer that the jury made any such finding,              ever, that the absence of an overt withdrawal ex-
much less that it did so beyond a reasonable doubt.         tends the length of the conspiracy itself.

                                                       11
irregularity, or variance that does not affect
substantial rights of the defendant,’ and ‘arises
when the mistake fails to prejudice the
defendant.’”28 Under this standard the govern-
ment must demonstrate, beyond a reasonable
doubt, that the error did not contribute to the
sentence that the defendant received. See
United States v. Olano, 507 U.S. 725, 734
(1993).

    The government does not meet this burden.
It points to nothing that would show beyond a
reasonable doubt that the court would have
imposed the same sentence under an advisory
guidelines regime. See Akpan, 407 F.3d
at 377.

                       2.
   We do not reach Sudeen’s ex post facto
claim. Under Akpan, id. at 360 n.2, we have
the authority to leave to the district court the
discretion to consider this argument as long as
we have already determined there was a re-
versible Booker violation.

   In summary, the judgment of conviction is
AFFIRMED. The judgment of sentence is
VACATED and REMANDED for resentenc-
ing.




   28
      Akpan, 407 F.3d at 376-77 (quoting rule
52(a); United States v. Munoz, 150 F.3d 401, 413
(5th Cir. 1998)).

                                                    12
E. GRADY JOLLY, Circuit Judge, dissenting in part:

  For the reasons stated in my dissent in the companion case,

United   States   v.   Freeman,   I    respectfully   dissent   from   the

majority’s finding of Booker error based on the district court’s

application of the 2002 version of the Guidelines.




                                      13