U.S. v. Loney

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_______________

No. 91-1340
_______________

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

VERSUS

ANDREW J. LONEY,

Defendant-Appellant.

_________________________

Appeal from the United States District Court
for the Northern District of Texas
_________________________

Before WISDOM, JONES, and SMITH, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

Andrew Loney participated in a scheme with an employee of

American Airlines to add bogus mileage to frequent flyer accounts

and to issue award coupons based upon that mileage. He now

challenges his conviction of six counts of wire fraud and one count

of conspiracy to commit wire fraud. Finding no error, we affirm.
 I.

This case involves American Airlines's frequent flyer program,

the AAdvantageTM program.1 Members of the program receive credit for

miles traveled on American Airlines, and they may use that credit

to obtain awards, including coupons that can be exchanged for free

or reduced-fare tickets on American and certain other airlines.

Sonja Jefferson was employed as an AAdvantage customer service

representative; her duties included making mileage credit entries

to AAdvantage members' accounts via her computer terminal.

Jefferson devised a scheme to add thousands of unearned miles to

the accounts of friends and relatives, enabling them to receive

flight coupons based upon the bogus mileage.

Jefferson's and Loney's families had been longtime friends.

At the request of Loney, Jefferson located dormant accounts and

replaced the names and addresses on those accounts with names and

addresses supplied by Loney. She then would add large numbers of

miles to these accounts and issue coupons for airline tickets,

based upon the bogus mileage, to the names provided by Loney. In

a kickback arrangement, Loney sold the coupons to the persons in

whose name they had been issued and remitted part of the money to

Jefferson. Another American Airlines employee uncovered the scheme

when a customer, whose account had been altered, complained.

Loney was charged with twelve counts of wire fraud and aiding

and abetting wire fraud, in violation of 18 U.S.C. §§ 2 and 1343,

1
We view the facts in the light most favorable to the government.
United States v. Contreras, 950 F.2d 232, 235 n.1 (5th Cir. 1991).

2
and one count of conspiracy to commit wire fraud, in violation of

18 U.S.C. § 371.2 He was convicted on six of the substantive wire

fraud counts and on the conspiracy count. Loney filed a motion for

new trial and, at the district court's suggestion, a proffer of

evidence. The court denied the motion without an evidentiary

hearing.

II.

The federal wire fraud statute punishes "[w]hoever, having

devised or intending to devise any scheme or artifice to defraud,

or for obtaining money or property by means of false or fraudulent

pretenses, representations, or promises," uses interstate communi-

cation "for the purpose of executing such scheme or artifice."

Section 1343.3 Loney contends that there is insufficient evidence

to sustain his conviction on the six substantive wire fraud counts.

Although he phrases his argument as a sufficiency-of-the-evidence

challenge, the crux of his contention is that he could not be

convicted of wire fraud as a matter of law because he did not

defraud American Airlines of any "property" as required by the

statute. We review this issue of law de novo. United States v.

Siciliano, 953 F.2d 939, 942 (5th Cir. 1992).

2
Jefferson previously had pleaded guilty to two counts of wire fraud.
3
Since the events at issue in this case, Congress amended the statute
to increase the penalties for schemes that "affect[] a financial institution."
See 18 U.S.C. § 1343 (West Supp. 1992). The change is not applicable to this
case.

3
 A.

Loney's focus on property stems from McNally v. United States,

483 U.S. 350 (1987). There, the defendants were convicted of mail

fraud4 for their involvement in a scheme in which one defendant, a

public official,5 used his influence to channel state insurance

business to an insurance agency that then shared the commissions

generated with other insurance agencies, including one in which the

defendants had an undisclosed interest. The prosecution's

principal theory was that the defendants participated "in a self-

dealing patronage scheme [that] defrauded the citizens and

government of Kentucky of certain `intangible rights,' such as the

right to have the Commonwealth's affairs conducted honestly." Id.

at 352.

After surveying the legislative history and purpose behind the

fraud statute, the McNally Court concluded that it did not cover

deprivations of the right to honest governmental services but

instead was "limited in scope to the protection of property

rights." Id. at 360.6 The Court thus reversed the defendants'

4
Although McNally involved the federal mail fraud statute, 18 U.S.C. §
1341, the Supreme Court has held that the federal mail and wire fraud statutes
"share the same language in relevant part" and accordingly are governed by the
"same analysis." See Carpenter v. United States, 484 U.S. 19, 25 n.6 (1987).
5
The Court assumed the defendant was a public official. 483 U.S. at
360.
6
The Court noted that "[i]f Congress desires to go further" than
covering deprivations of property rights, "it must speak more clearly than it
has." Id. Congress responded on November 18, 1988, when it amended the
federal fraud statutes to define "scheme or artifice to defraud" to "include[]
a scheme or artifice to deprive another of the intangible right of honest
services." 18 U.S.C. § 1346. Because the conduct in question in this case
took place prior to the amendment, we do not apply it. See United States v.
Little, 889 F.2d 1367, 1369 (5th Cir. 1989) (implicitly holding that McNally,
not § 1343, applies to pre-§ 1343 case), cert. denied, 495 U.S. 933 (1990).
See also United States v. Bush, 888 F.2d 1145, 1146 (7th Cir. 1989) ("The new

4
convictions on the ground that the jury "was not required to find

that the Commonwealth itself was defrauded of any money or

property." Id.

Loney argues that award coupons are not "property" for

purposes of the federal wire fraud statute, citing TransWorld

Airlines v. American Coupon Exch., 913 F.2d 676 (9th Cir. 1990)

(TWA). There, the court concluded that frequent flyer award

coupons represent "contract rights" instead of "property rights."

Id. at 686-88. TWA is distinguishable, however, in that the court

was characterizing award coupons for purposes of the "public policy

against restraints on alienation of property." Id. at 685. The

case involved a restriction that TWA had placed on the use of award

coupons that prohibited the frequent flyer member from assigning

awards to anyone other than a relative or legal dependent.7 The

court upheld the restriction as a valid restraint on the

assignability of a contract, noting that "the public policy against

§ 1346 could not be applied retroactively, given the Ex Post Facto Clause of
the Constitution.").
7
Specifically, TWA involved several changes in the tariffs governing
TWA's frequent flyer program. At the inception of the program, TWA allowed a
program member to designate any person of his choice to use an award coupon
that he had earned. TWA then amended its tariffs to require that the travel
awards be issued in the name of the member, prohibiting their transfer.
Finally, TWA changed its tariffs again, this time easing the prohibition by
allowing a member to designate a relative to use the award. 913 F.2d at 678.
The American Coupon Exchange (ACE) bought frequent flyer coupons
(including those issued by TWA) and sold them to other travelers at a dis-
count. Although TWA allegedly "did not publicly condone or support coupon
brokering, TWA accepted it as `a fact of life' and frequently `looked the
other way' with its most valued customers by allowing them to sell their
certificates or by willingly issuing certificates to spurious `relatives' of
these favored patrons." Id. at 679. TWA ultimately decided to sue ACE for
fraud and intentional interference with business relations. Id. ACE asserted
a number of affirmative defenses, including "that TWA's tariffs are unenforce-
able because they are unreasonable restrictions upon the transfer of `travel
rights' and are therefore contrary to the public policy against restraints on
alienation of property." Id.

5
restraints on the alienation of property is no impediment to the

enforcement of TWA's" restriction. Id. at 686.

The court went on to note, however, that airline tickets could

be construed as "property" for other purposes:

There is, to be sure, language in some cases that tends
to support the argument that tickets are `property,' but
we believe most of these passing references have occurred
in circumstances where `property' was equated with
`things of value.'. . . [T]he same principle would seem
to underlie those decisions holding tickets to be
`property' embraced by theft statutes . . . .

Id. at 688 (emphasis added) (citations omitted).

This "things of value" definition was utilized by the McNally

Court, which suggested that the words "to defraud" in the federal

fraud statutes "commonly refer `to wronging one in his property

rights by dishonest methods or schemes,' and `usually signify the

deprivation of something of value by trick, deceit, chicane or

overreaching.'" 483 U.S. at 358 (citing Hammerschmidt v. United

States, 265 U.S. 182, 188 (1924)) (emphasis added). There is no

question that a flight award coupon is "something of value," for it

can be used to obtain free flight tickets.8 Moreover, we construe

"property" in a broad sense for purposes of the federal fraud

statutes. McNally, 483 U.S. at 356. Consequently, the rule of

lenity does not apply. We therefore reject Loney's argument that

award coupons are not "property" under McNally.9

8
If such coupons did not represent something of value, one wonders why
Loney went to such trouble to obtain and sell them.
9
Loney also contends that the bogus mileage that Jefferson placed in
the computer is not property. This was addressed in United States v.
Schreier, 908 F.2d 645 (10th Cir. 1990), cert. denied, 111 S. Ct. 787 (1991),
in which one of the defendants had access to American Airlines's computer
reservation system. The defendant used the system to replace the names of

6
 B.

But even if we assume arguendo that award coupons are not

property, Loney's conviction still stands. His scheme was designed

to defraud American of its lawful revenues, which is actionable

under the statute. See United States v. Patterson, 528 F.2d 1037,

1041 (5th Cir.) (citing Scott v. United States, 448 F.2d 581 (5th

Cir. 1971), cert. denied, 405 U.S. 921 (1972)), cert. denied, 429

U.S. 942 (1976).10 Indeed, the statute criminalizes deprivations

of "money or property," not just property.11

The scheme in this case is quite similar to that involved in

Patterson. There, the defendant devised a plan to defraud the

telephone companies of their lawful revenues by marketing "blue

passengers who had taken particular flights with names of fictitious persons
whom the defendant had enrolled in the AAdvantage program. The actual
passengers had not requested that the mileage be credited to their AAdvantage
accounts.
The court held that the scheme "involved the accumulation of mileage for
which American would not otherwise be liable because it was not claimed by the
passengers who actually flew." Id. at 647. As such, "the creation of a
liability on the part of a corporation is no less the misappropriation of
property than would be the theft of an asset worth an equal amount." Id.
Loney argues that Schreier was wrongly decided. Since we find that award
coupons are property, we do not need to reach the bogus mileage question.
10
This pre-McNally holding is still viable. As we noted in United
States v. Herron, 825 F.2d 50, 51 (5th Cir. 1987), there were two distinct
types of pre-McNally fraud cases. One category "included schemes which intend
the deprivation of tangible economic interests, i.e., money or property." Id.
(citations omitted). The second category "concerned schemes to deprive an
individual or entity of intangible rights or interests, otherwise known as
'fiduciary fraud' or `intangible rights' fraud." Id. (citations omitted). We
noted in Herron that after McNally, "the `intangible rights' line of cases are
of dubious precedential value unless there was a direct deprivation of money
or property." Id. at 54-55. We then listed a number of cases, including
Patterson, "only to emphasize that their language must now be understood as
limited by McNally." Id. at 55 n.6. We do not see how Patterson's holding
that the statute reaches schemes to deprive victims of their lawful revenues
is affected by the McNally holding, as deprivations of "money" are plainly
within the purview of the statute.
11
Some courts have treated "money" as a form of property. See, e.g.,
United States v. Wellman, 830 F.2d 1453, 1463 (7th Cir. 1987) (in scheme in
which defendant sold tanks as meeting federal standards but which in fact did
not, deprivation of "property" could be the money that the victim spent on
purchasing the tanks).

7
boxes," which enable a person to bypass the regular electronic

circuitry used for recording calls. The "blue boxes" allow persons

to make calls without being charged for them. The defendant in

Patterson was caught when he attempted to sell one of the devices

to a phone company employee who was posing as a booking agent for

a musical group.

The Patterson defendant devised a way to get something SQ

phone calls SQ for nothing. Similarly, Loney devised a way to get

award coupons based upon bogus mileage. And like the Patterson

defendant, Loney wanted to make money on the scheme. Thus, he sold

the coupons to others, remitting some of the money to Jefferson and

keeping some for himself. That money should have gone to American

Airlines.12

Loney appears to anticipate these arguments, for he maintains

that the government failed to show that American Airlines actually

suffered financial loss.13 But such a showing is not necessary.

12
Moreover, the AAdvantage program increases American Airlines's
revenues because oftentimes AAdvantage members continue to select that airline
as their preferred carrier but do not actually claim awards. As Jayne Metz, a
systems administrator for American, testified,
Q: How is [the AAdvantage program] successful if it doesn't make you
any money?
A: Not everyone claims an award. I mean we have a lot of members
that fly and don't actually claim awards, redeem their miles, so
we are still getting revenue for the passengers that fly.
Jefferson manipulated accounts that had remained dormant for a
substantial period of time SQ accounts of customers who had not used their
mileage. Presumably, these miles would not have been redeemed but for the
scheme. Thus, the scheme created an obligation for American SQ the obligation
to issue free tickets to passengers based upon award coupons SQ that otherwise
would not have existed. See Schreier, 908 F.2d at 647.
13
Specifically, Loney contends that (1) the government presented
evidence at trial showing that there were tickets issued and used for only two
of the six substantive wire fraud counts; (2) there was no showing that the
persons who flew on the tickets issued on the certificates would have
purchased fare tickets from American for the travel indicated; and (3) the

8
A wire fraud offense requires proof of (1) a scheme to defraud and

(2) the use of, or causing the use of, wire communications in

furtherance of the scheme. United States v. St. Gelais, 952 F.2d

90, 95 (5th Cir. 1992); United States v. Shively, 927 F.2d 804, 813

(5th Cir.), cert. denied, 111 S. Ct. 2806 (1991). In addition, the

government must prove a specific intent to defraud, which requires

a showing that the defendant intended for some harm to result from

his deceit. St. Gelais, 952 F.2d at 95. The government does not

need to prove that the harm actually came about, however.

As the Second Circuit has noted, "[i]t need not be shown that

the intended victim of the fraud was actually harmed; it is enough

to show defendants contemplated doing actual harm, that is,

something more than merely deceiving the victim." United States v.

Schwartz, 924 F.2d 410, 420 (2d Cir. 1991). See also Patterson,

528 F.2d at 1041 ("[t]here is no necessity for the government to

prove actual financial loss").14 Indeed, the plain language of the

government did not prove "that the persons who flew with these tickets
displaced other, potential fare-paying passengers, . . . [or] that the airline
incurred any additional costs in flying these passengers."
14
Again, we do not see how McNally, as discussed in Herron, in any way
limits Patterson's holding that the government need not show actual harm. In
fact, the McNally Court expressly addressed the statute's disjunctive
terminology, which "criminalize[s] schemes or artifices 'to defraud' or 'for
obtaining money or property by means of false or fraudulent
pretenses . . . .'" 483 U.S. at 358 (emphasis added). The Court concluded
that Congress added the "for obtaining money or property" phrase "simply [to]
ma[k]e it unmistakable that the statute reached false promises and
misrepresentations as to the future as well as other frauds involving money or
property." Id. at 359 (emphasis added). Thus, we assume from this that
Congress meant the statute to criminalize the use of wire communications to
further schemes that would culminate at some time in the future. See also
United States v. Johnson, 700 F.2d 163, 177 (5th Cir.), aff'd in part and
rev'd in part on other grounds, 718 F.2d 1317 (5th Cir. 1983) ("The scheme to
defraud need not be successful to create a violation of the wire fraud
statute."); United States v. Dynalectric Co., 859 F.2d 1559, 1556 (11th Cir.
1988) ("success of the scheme [is] irrelevant" (citing cases)), cert. denied,
490 U.S. 1006 (1989); Donna M. Maus, Comment, License Procurement and the
Federal Mail Fraud Statute, 58 U. Chi. L. Rev. 1125, 1140 n.90 (1991) ("The
fraud may remain inchoate" (citing cases)).

9
statute does not criminalize causing actual harm to the victim;

rather, it proscribes the use of a wire communication in

furtherance of a "scheme or artifice to defraud" that one has

devised.15

C.

Since we have resolved in the affirmative the question of

whether Loney's scheme, if proven, fell within the purview of the

statute, the only remaining issue is whether the government met its

burden of proof. Viewing the evidence in the light most favorable

to the government, see United States v. Contreras, 950 F.2d 232,

235 n.1 (5th Cir. 1991), we find that there is ample evidence,

including Jefferson's testimony, that Loney schemed to defraud

American Airlines of its lawful revenues and property and used the

15
Loney cites United States v. Evans, 844 F.2d 36, 39 (2d Cir. 1988)
(emphasis added), which states that
as we read McNally, the Supreme Court did not focus on whether the
person deceived also had to lose money or property. Nonetheless,
this may be the correct view of the statute. If a scheme to
defraud must involve the deceptive obtaining of property, the
conclusion seems logical that the deceived party must lose some
money or property.
The Evans court went on to note that "the case before us today does not
require us to decide this general question." Id. at 40.
As an initial matter, we note that the Evans court's remarks as to
actual loss were, by the court's own admission, dicta. We also observe that
although the Schwartz panel discussed Evans extensively, see Schwartz, 924
F.2d at 417, it did not point out any inconsistency between the Evans dicta
and its statement that "[i]t need not be shown that the intended victim of the
fraud was actually harmed." Id. at 420. We therefore agree with the Eleventh
Circuit that Evans and other decisions "whose language might be interpreted to
require proof of actual loss" do not
address the distinction between a successful and an unsuccessful
scheme to defraud the victim of money or property. These cases do
not address the issue of whether a mail fraud conviction can stand
where there is sufficient evidence that the defendants schemed and
intended to defraud the victims of money or property, but failed
to cause the victims any financial loss. Thus none of these cases
[is] apposite.
Dynalectric, 859 F.2d at 1577 n.22.

10
wires to further that scheme.16 We therefore conclude that there

is sufficient evidence to sustain Loney's conviction on the

substantive wire fraud counts.

III.

Loney also challenges his conspiracy conviction. Although he

phrases his argument in terms of a challenge to the sufficiency of

the evidence, the essence of his argument is that he could not have

been convicted for conspiracy because the United States was not the

"target" of the conspiracy. Again, we apply a de novo standard of

review.

Loney's conviction for conspiracy to commit wire fraud rests

on 18 U.S.C. § 371, which criminalizes a conspiracy "to commit any

offense against the United States, or to defraud the United States,

or any agency thereof in any manner or for any purpose . . . . "

Thus, section 371 punishes two distinct types of conspiracies:

those "to commit any offense against the United States" and those

"to defraud the United States." United States v. Haga, 821 F.2d

1036, 1039 (5th Cir. 1987) ("Cases construing section 371 have made

it plain that the `commit any offense' clause and the `defraud the

United States' clause describe different criminal

offenses . . . ."). Loney was indicted and convicted of an

"offense"-type conspiracy.

16
Loney does not challenge the sufficiency of the government's proof
as to the remaining elements of wire fraud (intent and the use of wire
communications). We therefore do not address the sufficiency of the evidence
as to these elements.

11
 Loney bases his argument upon Tanner v. United States, 483

U.S. 107 (1987), in which the defendants conspired to defraud a

private corporation that had received federal financial assistance

and thus was subject to federal supervision. The defendants argued

that their convictions under the "defraud" prong of section 371

should be reversed because the corporation was a private entity,

despite its receipt of federal assistance.

The Court agreed, holding that the United States and its

agencies must be the target of a conspiracy "to defraud the United

States." As the Court noted, "[t]he conspiracies criminalized by

§ 371 are defined not only by the nature of the injury intended by

the conspiracy, and the method used to effectuate the conspiracy,

but also SQ and most importantly SQ by the target of the

conspiracy." Id. at 130.

Loney argues that the United States must be the target of a

conspiracy under the "offense" prong as well. He urges that in

order to conspire to commit "any offense against the United

States," the United States must be the victim (or target) of that

conspiracy. The government, on the other hand, argues that the

phrase should be read to reach conspiracies to commit any offense

against the laws of the United States S)Q in other words,

conspiracies to commit a federal offense. This question has

divided the circuits. See United States v. Gibson, 881 F.2d 318

(6th Cir. 1989) (United States need not be the target of an

offense-prong prosecution); United States v. Hope, 861 F.2d 1574

(11th Cir. 1988) (contra: "The holding in Tanner . . . applies

12
with equal force to the `any offense' clause of § 371 as it does to

the `defraud' clause." ).

The Eleventh Circuit, however, may soon change its mind. In

United States v. Falcone, 934 F.2d 1528, 1538 (11th Cir. 1991),

vacated and en banc rehearing granted, 939 F.2d 1455 (11th Cir.

1991), the court applied Hope to the facts before it but questioned

its reasoning. In a special concurrence written by Chief Judge

Tjoflat17 and joined by Judge Kravitch and retired Justice Powell,

the court thoroughly examined the history behind section 371 and

concluded that the statute should not be read to require that the

United States be a target of an "offense" prong conspiracy.

As the Chief Judge noted, the statutory precursor to section

371 punished conspiracies "to commit any offense against the laws

of the United States." Id. at 1548 (Tjoflat, J., specially

concurring) (emphasis added by court). Congress revised and

codified the statute in 1873, omitting the "the laws of" language.

However, "[t]his omission was not . . . intended to change the

substantive meaning of the statute," as the revisors had no

authority to make substantive changes in the law. Id. Thus, when

courts faced the new language in the late nineteenth and early

twentieth centuries, they interpreted the change as nonsubstantive.

Id. at 1548-49 (listing cases). In fact, in 1921 the Supreme Court

stated that section 371's precursor covered conspiracies to violate

17
Chief Judge Tjoflat was also on the Hope panel. Falcone, 934 F.2d
at 1548 (Tjoflat, J., specially concurring).

13
all federal statutes. Id. at 1549 (discussing United States v.

Hutto, 256 U.S. 524, 539 (1921)).

Chief Judge Tjoflat also noted that he did not think "that the

Tanner Court intended to remove from the offense clause of section

371 the wide range of conspiracies to violate laws of the United

States . . . ." Id. He went on to list numerous cases S)Q both

before and after Tanner S)Q in which the government successfully

prosecuted defendants under the "offense" clause where the United

States was not the object of the conspiracy. Id. at 1549-50

(citing cases).

Finally, as Chief Judge Tjoflat pointed out, the "offense

against the United States" language can be found in numerous

provisions of the United States Code. Id. at 1550-51. It is

interesting to note that 18 U.S.C. § 2, under which Loney was

convicted for aiding and abetting, contains such language.18 Loney

does not contend, however, that one cannot "aid and abet" wire

fraud because the target of the wire fraud in this instance was not

the United States.

In light of the Eleventh Circuit's rehearing of Falcone and

the persuasiveness of the Sixth Circuit's rationale, we join the

18
Section 2 reads as follows:
(a) Whoever commits an offense against the United States
or aids, abets, counsels, commands, induces or procures its
commission, is punishable as a principal.
(b) Whoever willfully causes an act to be done which if
directly performed by him or another would be an offense against
the United States, is punishable as a principal. In United States
v. Lennon, 751 F.2d 737, 741 (5th Cir.), cert. denied, 471 U.S.
1100 (1985), we noted that § 2(b) "applies generally to all
federal criminal statutes . . . ."

14
latter in holding that the United States need not be the target of

section 371 "offense" prong conspiracy. While this court has not

directly addressed the issue, it SQ like the Eleventh Circuit SQ has

affirmed numerous convictions (both before and after Tanner) under

the "offense" clause where the United States has not been the

object of the conspiracy.19 We decline to read Tanner in such a way

as to cast doubt on these decisions. Given the history behind

section 371, we believe that the better reading of the statute is

that the "offense" clause criminalizes those conspiracies that

contemplate the commission of an offense that is made illegal by

federal law. Given that there is ample evidence that Loney

conspired to commit wire fraud, we uphold his conviction of

conspiracy.

IV.

Loney next contends the district court erred in admitting the

government's Exhibit #21. We review a district court's admission

of evidence for abuse of discretion. United States v. Moye, 951

F.2d 59, 61 (5th Cir. 1992).

19
See, e.g., United States v. Shively, 927 U.S. 804, 807 (5th Cir.)
(conspiracy to commit arson in violation of 18 U.S.C. § 844(i), cert. denied,
111 S. Ct. 2806 (1991); United States v. Hatch, 926 F.2d 387, 393 (5th Cir.)
(conspiracy to commit mail fraud in violation of 18 U.S.C. § 1341 as part of a
scheme to defraud local sheriff's office of its general fund monies), cert.
denied, 111 S. Ct. 2239 (1991); United States v. Schmick, 904 F.2d 936, 340
(5th Cir. 1990) (conspiracy to violate firearms statute, 26 U.S.C. § 5861),
cert. denied, 111 S. Ct. 782 (1991); United States v. Yamin, 868 F.2d 130, 133
(5th Cir.) (conspiracy to traffic in counterfeit goods in violation of 18
U.S.C. § 2320), cert. denied, 492 U.S. 924 (1989); United States v. Gordon,
780 F.2d 1165, 1169 (5th Cir. 1986) (conspiracy to commit mail and wire fraud
in violation of 18 U.S.C. §§ 1341 and 1343 as part of a scheme to defraud
insurance company); United States v. Franklin, 586 F.2d 560, 564 (5th Cir.
1978) (conspiracy to transport stolen goods in interstate commerce in
violation of 18 U.S.C. § 2314), cert. denied, 440 U.S. 972 (1979).

15
 American Airlines keeps detailed records of its AAdvantage

accounts on a computer database. When the account manipulation

came to its attention, it conducted a computer search of its

records, asking that the computer find accounts in which there had

been a name change, the addition of 50,000 or more bonus miles, and

the issuance of certificates soon after the addition of the bonus.20

The result of the search is what became Exhibit #21 SQ a thirty-

five-page compilation of computer records that provides information

on approximately seventy accounts, including, among other things,

the name under which the account was originally opened, the number

of bonus miles added to the account, the name to which the account

was changed, and the number of the award coupon, the date on which

a ticket was issued in exchange for the coupon, and the value of

the ticket. At trial, the government connected Loney to several of

the manipulated accounts listed in the exhibit.

A.

Loney contends that Exhibit #21 was inadmissible hearsay

because it does not fall under the business records exception of

Fed. R. Evid. 803(6), which permits the admission of "[a]

memorandum, report, record, or data compilation, in any form, of

acts, events, conditions, opinions, or diagnoses, made at or near

the time by . . . a person with knowledge, if kept in the course of

a regularly conducted business activity . . . ." Loney argues that

Exhibit #21 was not "kept in the course of a regularly conducted

20
The listing appears to go back to May 1986.

16
business activity" because it was made "in anticipation of

litigation."

Loney, however, misconstrues the "regularly conducted business

activity" requirement. Rule 803(6) does not require that the

summary of the data be kept in the regular course of business.

Rather, it is the underlying data that must be so kept. And Loney

does not challenge the government's foundation for admitting the

underlying data.21 Once the underlying data is admissible under the

business records exception, a summary of that data can be admitted

under Fed. R. Evid. 1006, which permits the parties to present a

"chart, summary, or calculation" where "[t]he contents of

voluminous writings . . . cannot conveniently be examined in

court." Thus, the district court properly admitted Exhibit #21

under rules 803(6) and 1006.

B.

Loney's real complaint appears to be that Exhibit #21

contained evidence "of numerous transactions, between Jefferson and

persons other than Loney, with which transactions Loney had

absolutely nothing to do." He argues that evidence of these

21
In fact, in his motion for new trial Loney concedes that at least
some of the underlying data would fall under the business records exception.
Specifically, Loney stated that "Government Exhibit #21 invaded the province
of the jury, by impermissibly summarizing the back-up documents which were
properly admitted as business documents and from which the jury should have
drawn its conclusions." The back-up documents to which Loney refers
apparently are the tickets and coupons the government produced in conjunction
with Exhibit #21. Jayne Metz was asked by the prosecutor, "Are you able to
recognize those documents, ma'am?" She replied "Yes, sir." The prosecutor
then asked, "Are those some of the tickets and supporting information that
were used or that were also records of American Airlines that are also
reflected in Government Exhibit #21?" She responded in the affirmative.

17
transactions was irrelevant and unduly prejudicial. It does not

appear, however, that Loney objected to the exhibit on relevance

grounds SQ as opposed to hearsay grounds SQ during trial.22 We

therefore are obligated to use a plain error standard of review.

Fed. R. Crim. P. 52(b).

In order to justify a departure from the contemporaneous

objection rule, an error must be of a nature that it would result

in a miscarriage of justice if not remedied. Contreras, 950 F.2d

at 239. Loney cannot make this showing. As discussed more fully

below, the jury carefully scrutinized the evidence and convicted

Loney of only those transactions with which he was associated. We

therefore decline to reverse Loney's conviction on this ground.23

22
Loney's attorney made the following objection after the government
sought to admit Exhibit #21:
Your Honor, we object on the grounds that this is hearsay
evidence. It's not a business record prepared in the normal
course of business but was prepared in anticipation of litigation.
It's not the normal course of business to prepare this sort of
compilation and therefore we object on the grounds of hearsay and
it's also hearsay within hearsay in that the information contained
therein is also hearsay.
It appears that Loney did not raise the relevance/prejudice issue until
his motion for new trial, in which he noted that "Government Exhibit #21 was
extremely prejudicial to defendant LONEY in that it contained accounts of
numerous transactions with which defendant LONEY was not charged and in which
there was no suggestion or evidence that LONEY had participated."
23
Loney also complains that "there was no foundation laid that all of
the documents underlying Government Exhibit #21 had been introduced into
evidence or even made available to the defendant." It is true that rule 1006
requires that "[t]he originals, or duplicates, shall be made available for
examination or copying, or both, by other parties at reasonable time and
place. The court may order that they be produced in court." There is no
indication, however, that Loney ever made this objection to the district
court. Again, we see no way in which Loney possibly could show that a
miscarriage of justice would result from his inability to examine all the
underlying data, assuming that such data was not made available to him.

18
 V.

Loney's fourth ground for error is that there was a fatal

variance between the allegations of conspiracy in the indictment

and the proof adduced at trial. Loney bases his argument on the

fact that the conspiracy count alleges that

[i]t was a part of the conspiracy that ANDREW J. LONEY,
defendant, and Sonja Maria Jefferson would and did
fraudulently cause the issuance of American and Pan Am
tickets of a value of approximately $269,077.42, in
return for the fraudulently issued AAdvantage mileage
credits.

Loney argues that the dollar figure in the indictment reflects the

sum of the fraudulent transactions in which Jefferson was involved

(the sum of the fraudulent transactions in Exhibit #21), including

those that did not involve him. He concludes from this that,

instead of the "grand conspiracy" alleged in the indictment, the

government proved (at most) only a number of smaller conspiracies,

one of which involved Loney.

First, we take issue with Loney's characterization of the

government's theory in the indictment as a "grand conspiracy."

Although the government apparently did use Exhibit #21 for arriving

at an estimate of the value of the award coupons,24 the rest of the

indictment does not attempt to connect Loney with the approximately

seventy transactions listed in Exhibit #21, let alone even mention

them. In addition to the portion quoted above, the conspiracy

count charges as follows:

24
Jayne Metz referred to the estimated total once during her
testimony, and the prosecutor referred to the estimated total twice during his
closing argument.

19
 It was a part of the conspiracy that ANDREW J. LONEY,
defendant, would supply Sonja Maria Jefferson with the
names of persons not authorized to use the AAdvantage
accounts.

It was a part of the conspiracy that Sonja Maria
Jefferson would and did enter name and address changes on
the computer, changing the names and addresses on the
AAdvantage account information listed in American's
computer, for approximately twenty (20) AAdvantage
accounts, removing the name and address of an actual
member and fraudulently substituting a name and address
supplied by ANDREW J. LONEY, of a person not authorized
to use that account. [Emphasis added.]

Thus, although Jefferson may have been in dozens of

transactions, the indictment charged Loney with committing wire

fraud on only twelve occasions and with conspiring with Jefferson

with regard to approximately twenty accounts. Moreover, the

government did not attempt to tie Loney to all the transactions

listed in Exhibit #21 at trial. Instead, the government called the

jury's attention to only fourteen transactions, twelve of which

were alleged in the substantive wire fraud counts.

Even if we assume that there was a variance, however, "the

variance would not be reversible error unless it prejudiced [the

defendant's] substantial rights." United States v. Richerson, 833

F.2d 1147, 1155 (5th Cir. 1987). This Loney has not shown.

Loney argues it is likely that he was prejudiced by the

variance because the jury could have mistakenly attributed all the

transactions listed in Exhibit #21 to him. The jury, however, was

not so confused. It convicted Loney of six counts of wire fraud

and acquitted him of six counts. The six counts on which he was

acquitted involved transactions between Jefferson and Loney's

father, Aston. Aston and Jefferson testified that Loney had

20
nothing to do with these transactions, and the jury obviously

believed that testimony (as Loney himself observes in his brief).

Thus, the jury carefully weighed the evidence presented at trial

and convicted Loney only on those transactions in which he was

involved.25

Finally, and most importantly, we held in Richerson that there

can be no substantial prejudice where "the Government proves

multiple conspiracies and a defendant's involvement in at least one

of them . . . ." Id. (quoting United States v. L'Hoste, 609 F.2d

796, 801 (5th Cir.), cert. denied, 449 U.S. 833 (1980)). That is

the case here. Regardless of how many conspiracies were alleged

and proved, there was sufficient evidence to convict Loney of

participating in the conspiracy with Jefferson that was alleged in

the indictment. Loney therefore cannot show that he suffered

substantial prejudice.26

25
In addition, as we noted in Richerson, transference of guilt is
unlikely as a general matter where the defendant is tried alone, as was Loney.
833 F.2d at 1155.
26
Loney cites two additional arguments. Both are without merit.
First, he complains that the district court did not instruct the jury on
multiple conspiracies and that although he did not object, the lack of
instruction constitutes plain error. The record reveals, however, that the
district court did in fact give the pattern jury instruction on multiple
conspiracies.
Loney also argues that the variance prejudices him by leaving him
vulnerable to reprosecution, alleging that "it is unclear exactly for what
conduct [he] has been found guilty . . . ." This argument is untenable. At
most, Loney argues that there is a variance between the number of conspiracies
alleged in the indictment (one) and the number of conspiracies proved at trial
(several). The conduct alleged in the indictment and the conduct adduced at
trial (i.e., a conspiracy between Jefferson and Loney encompassing
"approximately twenty" fraudulent transactions) were identical. Therefore,
the alleged variance stemming from the estimated dollar amount in no way
creates a doubt as to "what conduct" he was convicted for.

21
 VI.

In his last assignment of error, Loney contends the district

court erred in refusing to grant his motion for a new trial, in

which he argued that his trial was fundamentally unfair because the

prosecutor called him a "liar" in his closing argument.27 Loney

testified that he stopped the "transactions" with Jefferson in June

1987, when Jefferson called him and told him that the coupons "were

no longer good." He testified that at that time he "thought . . .

that instead of turning all the money over to American Airlines she

was possibly keeping some of the money . . .." Exhibits showed,

however, that Loney paid Jefferson thousands of dollars after that

time. In his closing argument, the prosecutor drew the jury's

attention to this discrepancy and told the jury that "[h]e's not

being truthful with you."

Loney made no objection to the prosecutor's statements; nor

did he ask to reopen the evidence in an attempt to explain the

inconsistency. Rather, in his motion for new trial he submitted an

affidavit stating that he continued remitting funds to Jefferson

after June 1987 because "he believed certain funds were still due

to American Airlines, and had nothing to do with Jefferson."

There is no indication that the affidavit alleged that there

was "newly discovered" evidence relevant to Loney's trial.28

27
Loney also based his request for a new trial upon the admission of
Exhibit #21.
28
In order to show that a new trial is necessary based upon newly
discovered evidence, a defendant must show, among other things, that the
evidence was "discovered following trial" and that he exercised "due
diligence" in attempting to discover it. Boyd v. Puckett, 905 F.2d 895, 896
n.1 (5th Cir.), cert. denied, 111 S. Ct. 526 (1990).

22
Rather, he was in possession of the "evidence" (the explanation of

the inconsistency) all along but apparently did not realize its

relevancy. In these circumstances, where there is no newly

discovered evidence, the denial of a motion for a new trial is not

appealable per se; rather, the appeal is taken from the final

judgment, and the appellate court examines the ground for error.

Youmans v. Simon, 791 F.2d 341, 349 (5th Cir. 1986). Given Loney's

failure to object to the prosecutor's remarks at trial, we review

for plain error.

This court recently noted in United States v. Webb, 950 F.2d

226, 230 (5th Cir. 1991), that it is well established that a

prosecutor may recite to the jury those inferences and conclusions

he wishes them to draw from the evidence so long as those

inferences are grounded upon the evidence. The prosecutor in this

case drew the jury's attention to the fact that Loney had said one

thing but his actions showed another. Far from causing a

miscarriage of justice, the comments of the prosecutor were

entirely appropriate, given the evidence before the jury. We

therefore conclude that this ground for error is without merit.

VII.

In sum, we find that Loney's arguments regarding Exhibit #21,

variance, and the prosecutor's remarks are without merit. We also

conclude that Loney used interstate wires to further his scheme to

defraud American Airlines of its money and property and therefore

AFFIRM his substantive wire fraud convictions. Finally, we AFFIRM

23
his conviction for conspiracy, concluding that the United States

does not need to be the target of an "offense"-clause conspiracy

under section 371.

24