United States v. Maxwell

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
AUGUST 19, 2009
No. 07-11301 THOMAS K. KAHN
________________________ CLERK

D. C. Docket No. 05-20571-CR-PAS

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

DEWITT JACKSON MAXWELL,
a.k.a. JACK,
Defendant-Appellant.

________________________

Appeal from the United States District Court
for the Southern District of Florida
_________________________
(August 19, 2009)

Before BIRCH and MARCUS, Circuit Judges, and FORRESTER,* District Judge.

MARCUS, Circuit Judge:

*
Honorable J. Owen Forrester, United States District Judge for the Northern District of
Georgia, sitting by designation.
 As a result of his participation in a fraudulent scheme to obtain construction

contracts set aside for socially and economically disadvantaged companies at

Miami International Airport (“MIA”), Dewitt Jackson Maxwell was convicted by

a jury in the United States District Court for the Southern District of Florida of

mail fraud, wire fraud, conspiracy to commit mail and wire fraud, money

laundering, and conspiracy to commit money laundering in violation of 18 U.S.C.

§§ 2, 1341, 1343, 1349, 1956, and 1957. He was subsequently sentenced to a term

of imprisonment of sixty months followed by twenty-four months of supervised

release.

Maxwell appeals both his convictions and the resulting sentence. He argues

broadly that his convictions must be overturned on three grounds: (1) his right to

cross-examination was wrongfully limited by the district court in violation of the

Sixth Amendment; (2) the convictions were not supported by sufficient evidence;

and (3) the rejection of his proffered jury instructions on a “good faith” defense

amounted to clear error. Maxwell also says that his sentence must be reversed,

because the district court clearly erred in calculating the amount of loss

enhancement applicable to his sentence under § 2B1.1 of the Sentencing

Guidelines. After thorough review, we affirm the convictions and the sentence.

2
 I.

Maxwell was indicted by a grand jury in the Southern District of Florida on

twenty-four counts of mail and wire fraud, money laundering, and related

conspiracies,1 arising out of his involvement with six electrical subcontracts at

MIA while he was Vice President, and the executive in charge, of Fisk Electrical

Corporation’s South Florida office (“Fisk”).

A. The Trial

The essential facts taken in a light most favorable to the jury’s verdict are

these. Of the six MIA contracts involved in this case, five were funded by Miami-

Dade County (the “County”) and required compliance with the County’s

Community Small Business Enterprise (“CSBE”) program.2 This program sets

aside a certain percentage of the County’s construction work to be performed by

1
Specifically, Count 1 charged conspiracy to commit mail and wire fraud in violation of
18 U.S.C. § 1349; Counts 2 and 3 charged wire fraud in violation of 18 U.S.C. §§ 1343 and 2;
Counts 4-13 charged mail fraud in violation of 18 U.S.C. §§ 1341 and 2; Count 14 charged
conspiracy to commit promotional and concealment money laundering in violation of 18 U.S.C.
§ 1956(h); Count 15 charged conspiracy to commit money laundering in violation of 18 U.S.C. §
1956(h); Counts 16-20 charged money laundering in violation of 18 U.S.C. §§ 1956(a)(1)(A)(i)
and 2; and Counts 21-24 charged money laundering in violation of 18 U.S.C. §§ 1957 and 2.
2
The CSBE program is a County program set forth in County Ordinance 97-52 codified
at § 1033.02 of the Miami-Dade County Code and Administrative Order 3-22. A CSBE is “a
construction related enterprise . . . which has an actual place of business in Miami-Dade County”
and has an average gross revenue below a specified amount. Under the CSBE program, a
specified percentage of any covered County construction project must be completed by a CSBE.
This quota is satisfied only if the CSBE performs a “commercially useful function.”

3
qualifying small, local businesses. The sixth MIA contract was federally funded

and required compliance with the Disadvantaged Business Enterprises (“DBE”)

program.3 To obtain and maintain a contract under these programs, a CSBE or

DBE must perform a commercially useful function in the completion of the

contract. A commercially useful function occurs when the CSBE or DBE actually

performs, manages, and supervises the work involved. County Ordinance 97-52;

49 C.F.R. § 26.55(c)(1). “A DBE does not perform a commercially useful

function if its role is limited to that of an extra participant in a transaction,

contract, or project through which funds are passed in order to obtain the

appearance of DBE participation.” 49 C.F.R. § 26.55(c)(2).

Because Fisk is a large Texas-based electrical contracting corporation with

offices nationwide, it is not eligible for CSBE or DBE contracts. However, the

superseding indictment alleged that Fisk, through the conduct of Maxwell and his

co-conspirators, obtained funds set aside for CSBE and DBE electrical contractors

by representing to the County and the United States that a CSBE or DBE was

completing the work and receiving the payments on the CSBE or DBE contract

3
The DBE program is a federal program codified in 49 C.F.R. § 26. A DBE is a for-
profit small business that is at least fifty-one percent owned by one or more socially and
economically disadvantaged individuals, and whose management and daily business operations
are controlled by at least one of those individuals. Id. at § 26.5. A DBE must be certified by the
state in which it operates and must perform a commercially useful function.

4
when, in fact, Fisk was doing the work and the CSBE or DBE was passing the

payments on to Fisk.

Of the six MIA contracts, three involved the North Terminal (Contracts

737A, 737G, and 739F), two involved the South Terminal (Contracts B313A and

B315A), and one involved the improvement of airport-wide security (Contract

F034F). The five contracts involving the North and South Terminals were funded

by the County and required compliance with the CSBE program. The sixth

contract was federally financed, thus requiring compliance with the DBE program.

To be eligible for the non-CSBE or non-DBE portion of several of these electrical

contracts, Fisk had to submit, as part of its bid package, a “Letter of Intent” and

“Schedule of Participation” identifying the CSBE or DBE subcontractor and

specifying the percentage of the job that subcontractor would perform. Once the

bid is awarded, compliance with the CSBE program is monitored through the

submission of Monthly Utilization Reports (“MURs”)4 that certify the type and

quantity of work being performed by the CSBE. The County also performs

random audits of the CSBEs to ensure they are performing a commercially useful

4
A MUR is “a report completed by the successful bidder on a contract that is set-aside”
as a CSBE contract. It is “submitted monthly, listing all work performed in the past month by the
CSBE identified on the Schedule of Participation and all expenditures paid to date to the
identified CSBE.” Administrative Order 3-22, as amended.

5
function. Similarly, the Miami-Dade Aviation Department’s Office of Minority

Affairs monitors all federally-funded contracts to ensure compliance with the DBE

program.

At trial, the Government presented evidence that, through Maxwell’s

efforts, Fisk was able to obtain contracts at MIA and the funds generated by them,

based on a series of false claims that a qualified CSBE or DBE was performing a

commercially useful function, when, in truth and in fact, the CSBE or DBE would

do little or no work on the contracts. Instead, Fisk would complete the CSBE or

DBE portion of the contract, and the CSBE or DBE would turn over its payments

from the County or the United States to Fisk.

Maxwell’s co-conspirators in this scheme were Norman “Pat” Clyne and

Hector Paultre. Clyne was the operations manager at Fisk, having had previously

worked for Maxwell at another electrical contractor in Miami. He became

employed at Fisk when Maxwell opened the firm’s office in January 1998 and

Maxwell was his direct supervisor. Clyne described Maxwell as a “micro

manager” who wanted to know everything that happened in the office, received

copies of all correspondence, regularly visited job sites, and had weekly meetings

with project managers.

Paultre was a former Fisk purchasing agent and material expediter who was

6
introduced to Clyne by Maxwell in 1998 as the owner of FLP Enterprises (“FLP”).

Maxwell told Clyne that certified CSBE and DBE electrical contractor FLP “was

going to be our small business and disadvantaged partner as [Fisk] started to bid

for future work.” All licensed electrical contractors are required to designate a

“qualifier” who holds the license, signs the permits, and is responsible for the

work and the financial status of the company. Because Paultre was not a licensed

electrician, FLP’s qualifier was always a Fisk employee. Eventually, Maxwell

tapped Michael Malone, his relation by marriage, to be FLP’s qualifier and

Paultre’s business partner.

Maxwell and his co-conspirators fraudulently induced the award of the six

MIA contracts to Fisk and FLP by falsely representing in their bids that FLP

would perform a commercially useful function on those contracts as the required

CSBE or DBE. When Clyne prepared Fisk’s bids for these contracts, he included

a percentage of the work that would be performed by FLP, but he never conferred

with FLP about the scope or cost of the job. Clyne was able to do this because

Paultre, on behalf of FLP, had pre-signed blank Letters of Intent for Fisk

employees to fill out as needed to complete the bids.

Maxwell, Clyne, and Paultre agreed that Fisk would pay FLP a fee equal to

either three or five percent of the value of the CSBE or DBE portion of the

7
contract; the rest of the payments made under the CSBE or DBE portion of the

contract would be passed on to Fisk. Later, when Maxwell learned that Paultre

had complained that FLP was not making any money on the MIA contracts, he

told his project manager “to tell that son of a bitch that he was getting his five

percent and just do what he was told.” Once these contracts were awarded,

Maxwell and his co-conspirators created the illusion that FLP was performing a

commercially useful function when, in fact, Fisk performed virtually all of the

work on the contracts. They also took measures to conceal this fraud from County

auditors.

Contract 737A, in particular, called for the relocation of underground

utilities in the North Terminal. The primary contractor was Central Florida

Equipment Rental of Dade County (“Central Florida”), which, in turn, hired

subcontractors to comply with the CSBE program. When the initial CSBE

electrical subcontractor left the job, FLP was awarded the job after submitting to

the County a Letter of Intent certifying that it would perform the CSBE-designated

work on the contract. However, at Maxwell’s direction, Fisk performed the CSBE

work on Contract 737A. Specifically, Maxwell directed Clyne to open a job

number within Fisk’s accounting system for the contract and to obtain the permit.

Fisk purchased all of the materials and supplied all of the labor, which was

8
supervised by a Fisk foreperson. Neither Paultre nor Malone were involved in

supervising or managing the project. When the job was completed, Central

Florida paid FLP with a $90,000 check; Paultre, in turn, endorsed the entire check

to Fisk and it was deposited in a Fisk bank account. After County auditors asked

Paultre to explain why FLP had turned over the entire $90,000 to Fisk, Clyne,

Paultre, and Malone, with Maxwell’s approval, prepared and submitted to the

County falsified back-dated letters between FLP and Fisk to give the appearance

that FLP was repaying a loan made by Fisk.

Contract 737G was a three-year project to install the main infrastructure for

telephone and switch gear rooms and required fifteen percent of the electrical

work to be performed by a CSBE. Contract 739F was earmarked for the

installation of interior electrical work and required that nineteen percent of the

work be done by a CSBE. Fisk submitted bids on both contracts, representing that

the requisite percentages of CSBE work would be subcontracted to FLP. Paultre

and Malone were not consulted about FLP’s participation in these bids. Fisk was

awarded both contracts and it was agreed that Fisk would receive all the proceeds

from the CSBE portion of the contract except for a three percent fee that was to be

paid to FLP. To create the illusion that FLP actually was working on these job

sites, Fisk foremen transferred Fisk employees to FLP’s payroll; the fax sent by

9
the Fisk project manager to Maxwell confirming the transfer noted that “we need

to show an FLP presence on our projects.” Neither Paultre nor Malone were

consulted or involved in the employee transfer. After this transfer, the employees

continued to earn the same pay, complete the same tasks, were supervised by Fisk

foremen, and used Fisk equipment.

Moreover, Fisk, with Maxwell’s knowledge, reimbursed FLP for all of its

labor costs for the transferred workers. Maxwell also directed that the Fisk trailer

on the job site be replaced by an FLP trailer, for which Fisk paid. Notably, neither

Paultre nor Malone supervised any workers, attended weekly planning meetings,

purchased materials, or otherwise participated in the completion of these two

contracts. Indeed, all Malone did was “ma[k]e sure they didn’t have any Fisk

stickers on their hard-hats and ma[k]e sure they realized they were working for

FLP Enterprises and not Fisk Electric.”

Generally, Fisk personnel delivered paychecks to the FLP employees. Fisk

wrote two-party checks, which listed both Fisk and FLP as payors, to vendors to

give the appearance that FLP was purchasing materials; however Clyne and other

Fisk employees negotiated, ordered, and paid for all the materials. Finally, and

with Maxwell’s knowledge, Fisk submitted MURs to the County falsely claiming

that FLP completed the requisite CSBE percentage on the two contracts. Indeed, a

10
Fisk employee told Maxwell and Clyne that he “was concerned with the fact that

[he] was filling out [MURs] for our minority participation, but we did not have

minority participation on the project at that time.” Maxwell told the employee: “it

would be taken care of and not to worry about it.”

Contract F034F, still another of the relevant contracts, was for the

construction of security rooms and the installation of a fiber-optic infrastructure

throughout the airport. Because the contract was a federally-funded project,

sixteen percent of the work had to be completed by a DBE. Fisk was awarded the

electrical portion of the contract after representing in its bid that FLP would

perform the required DBE portion of the electrical work. Again, the bid or scope

of the project was never discussed with Paultre or Malone; the only discussion was

whether to give FLP a two percent or a three percent cut of the DBE contract.

Maxwell and Clyne instructed a Fisk employee to “break out a section of the

overall contract to give to FLP,” preferably one that involved only the purchase of

materials and not the performance of labor. That employee expressed concern that

Fisk had no subcontract with FLP, but, again, was told not to worry about it.

Fisk then purchased materials in FLP’s name; Clyne did all of the

negotiations and FLP’s only involvement was the appearance of its name on the

two-party check used to pay the supplier. Fisk also transferred some of its workers

11
to FLP’s payroll and advanced money to FLP to pay those workers; they continued

to do the same work they had performed previously as Fisk employees, and they

continued to be supervised by Fisk personnel. Maxwell instructed Clyne to make

sure that Paultre attended weekly project meetings in order to give the appearance

of FLP involvement. Malone attended only one or two of the thirty meetings and

visited the job site only a couple of times. Fisk also submitted MURs falsely

representing that FLP had performed the DBE required portion of the contract.

Contracts B313A and B315A also required CSBE participation, however,

the primary contractor structured the contracts so that Fisk and FLP each had

separate subcontracts directly with the primary contractor, as opposed to making

Fisk a subcontractor of the primary contractor, and making FLP a subcontractor of

Fisk. Although FLP had its own contracts, which required the performance of

work different from the work specified in Fisk’s contracts, Fisk actually performed

the work on all four contracts. Maxwell and Clyne instructed their managers to

split the work on the projects between Fisk and FLP even though Fisk would lose

money doing this. When Fisk’s labor superintendent asked Maxwell “what kind

of money Fisk Electric stands to lose,” Maxwell replied, “this is what we have to

do to stay in business.” As FLP’s Project Manager, Malone explained that he

“basically didn’t do anything,” because Fisk ran both Fisk’s and FLP’s contracts.

12
 Malone and Paultre rarely attended construction meetings and did not

supervise the workers. Fisk workers and forepeople were transferred to the FLP

payroll during the completion of these contracts and Fisk prepared all of the

necessary correspondence between FLP and the primary contractor. Fisk also

prepared the daily progress reports documenting the work performed by both Fisk

and FLP employees and prepared FLP’s pay applications. In fact, Fisk project

manager Gary Sargent testified, this was the first time in his twenty-nine year

career that he had been asked to prepare daily reports, correspondence, and pay

applications on behalf of another subcontractor. Paultre also purchased the Fisk

van that Fisk and FLP had been using to travel to the job site, and placed FLP

stickers on the van again in order to give the appearance of FLP’s presence.

As for each of these two contracts, FLP received progress payments directly

from the primary contractor. Maxwell believed that any payments FLP received

belonged to Fisk, and that FLP was entitled only to its usual three or five percent

cut. Once FLP accumulated approximately $1 million in progress payments,

Maxwell began asking Clyne daily how they were going to recover the money,

voicing concern that Paultre might flee with it to Haiti. Maxwell directed Clyne to

inform the primary contractor not to make further payments to FLP until Maxwell

could “figure out how to get the extra cash” FLP had been receiving for Fisk’s

13
work. Maxwell and Clyne monitored FLP’s cash flow and Maxwell demanded

copies of all of the checks issued by the primary contractor to FLP. Indeed,

Maxwell wrote a note to Clyne asking him “where are we on the half million

dollars,” referring to the progress payments that FLP had accumulated. Because

the County had begun auditing FLP, Fisk devised a scheme to recoup the progress

payments by having FLP pay Fisk’s invoices on other MIA contracts. To do this,

Clyne, with Maxwell’s approval, created and sent false invoices to FLP for

payment. Thus, for example, Clyne asked a supplier to void the invoices it had

issued to Fisk and reissue new invoices directing those charges to FLP. Clyne also

altered some invoices himself using white-out to create the illusion that the debts

belonged to FLP and not to Fisk.

An Internal Revenue Services Special Agent audited the financial and

contractual records admitted into evidence and calculated that FLP was paid a

total of $7,974,647 by the County and the United States for its completion of the

CSBE and DBE work on the six MIA contracts.

In cross-examining government witness and co-conspirator Clyne, Maxwell

attempted to question him about work done by FLP on contracts other than the six

MIA contracts. The additional contracts were not discussed during Clyne’s direct

examination. The district court informed Maxwell that he could not cross-

14
examine Clyne on those other contracts, instructing him that “[y]ou need to call

Mr. Clyne in your case” if he wanted to discuss them since they fell outside the

scope of direct examination. (Oct. 26, 2006 Transcript at 48). The district court

explained its ruling this way:

We have six contracts here. We have a complex system. Let’s keep it
focused on the charges with the contracts that are in issue. I’m not here
to hear anything about what he may have done on any other place.
That’s not relevant.
....
You can call Mr. Clyne in your case if you want to get into other areas
as part of your defense.

(Id. at 49) (emphasis added).

At other times during the trial, the defendant attempted to reference

agreements other than the six MIA contracts; the district court again explained that

Maxwell could explore the larger relationship between FLP and Fisk while

presenting his own case, but would not be permitted to address the matter during

the cross-examination of the Government witnesses. (Oct. 23, 2006 Transcript at

125).

Maxwell’s defense included testimony about local industry standards. In

particular, his witnesses said that it was common in the electrical industry for

electricians to be shifted between employers on the job site, and for larger

companies to mentor and help smaller companies by advancing funds for their

15
labor and supplies. A labor attorney for the Miami chapter of the International

Brotherhood of Electrical Workers testified that, pursuant to an unwritten

“interpretation” of the collective bargaining agreement, workers could be

reassigned from a prime contractor to a CSBE or DBE subcontractor on the same

job without requiring that worker to go through the union hall for reassignment.

A general contractor and personal friend of Maxwell also testified that it

was “very common” in the construction industry for big contractors to mentor,

train, and help smaller businesses, sometimes by advancing funds to pay for labor

and material and using two-party checks. He explained that in the performance of

work at MIA, where security clearance is a real concern, it was not uncommon for

a larger contractor to share employees with a CSBE on the same job. The witness,

however, admitted that the CSBE program’s goal of training and mentoring would

not be advanced by the mentor company merely adding the CSBE’s name to two-

party checks or having the CSBE act as a labor pool. He also testified that CSBEs

and DBEs are supposed to bid on their own jobs, manage and supervise the jobs

they perform, order their own materials, submit their own pay applications, and

pay their own employees. He concluded that it would not be a “normal practice,”

and it would not be permissible for a general contractor to pay a fee for the use of

a CSBE’s certification.

16
 The Government concluded its case by presenting two rebuttal witnesses

who owned certified CSBE electrical companies. They testified that they prepared

their own bids for County projects; general contractors had never transferred

workers to their payrolls; they negotiated and made the purchases of their own

materials; their own forepeople and project managers attended construction

meetings and supervised their workers; and the CSBEs prepared their own pay

applications.

Prior to trial, the district court instructed Maxwell that he could not mention

a Pre-Trial Diversion Agreement reached between Fisk and the Government.

(Oct. 17, 2006 Transcript at 38; Oct. 18, 2006 Transcript at 101-105). Under the

terms of the agreement, Fisk was required to fire Maxwell, discontinue paying for

his defense, and aid the Government’s prosecution of the defendant by providing

information through witnesses, evidence, and testimony. In exchange for this

cooperation, Fisk would avoid being prosecuted and could continue participating

in County and United States funded contracts.

In prohibiting the discussion of this agreement, the district court explained

that the Pre-Trial Diversion Agreement would be relevant for impeachment

purposes only if the witness was the attorney who drafted the agreement, the Fisk

signatory to the agreement, or the corporation itself. (Oct. 18, 2006 Transcript at

17
101). It continued that the Pre-Trial Diversion Agreement would not be relevant

for impeachment purposes of a witness who is merely a Fisk employee, because

being an employee does not mean that the witness had any personal, first-hand

knowledge of the circumstances surrounding the agreement. (Id.). The district

court also explained that the Pre-Trial Diversion Agreement would mislead the

jury because Fisk was not a defendant in the case. (Id. at 114).

At the conclusion of the four week trial, the jury convicted Maxwell on

twenty-three counts.5 Thereafter, the district court denied both Maxwell’s Motion

for Judgment of Acquittal and his Motion for a New Trial, finding that his

conviction was supported by sufficient evidence; that the court had not abused its

discretion in prohibiting Maxwell from cross-examining the Government’s

witnesses about CSBE and DBE work done by FLP outside of the six MIA

contracts; that there was no abuse of discretion in prohibiting Maxwell from

introducing evidence of the Pre-Trial Diversion Agreement; that it did not abuse

its discretion in excluding evidence of payments from the County to Fisk and new

contracts at MIA awarded to Fisk; that there was not an improper variance

between the superseding indictment and the proof at trial; that it did not abuse its

discretion in rejecting Maxwell’s proposed jury instruction; and, finally, that it

5
The Government had dismissed Count 5 on October 6, 2006.

18
could discern no prosecutorial misconduct.

B. The Sentence

In Maxwell’s Presentence Investigation Report (“PSI”), he was assigned a

base offense level of seven under § 2S1.1(a)(1) of the Sentencing Guidelines. The

PSI then applied the Government Benefits Provision of the Application Notes of §

2B1.1 of the Sentencing Guidelines in order to find the appropriate amount of loss

in the case, which it found was the entire sum of the CSBE and DBE payments

received by FLP from the six MIA contracts. Because that loss amount was in

excess of $7 million, Maxwell’s offense level was increased by twenty levels.

Additionally, the PSI recommended increasing his offense level by two levels

pursuant to § 2B1.1(b)(9)(C), because the defendant utilized sophisticated means

to effect the fraud, and two additional levels pursuant to § 2S1.1(b)(2)(B), because

Maxwell was convicted of violating 18 U.S.C. § 1956. Finally, Maxwell’s offense

level was enhanced by four levels -- bringing his final offense level to thirty-five -

- pursuant to § 3B1.1(a) because of his leadership role.

Maxwell objected to the PSI, arguing that he should not be held accountable

for a loss amount greater than $7 million because he was not personally awarded

the contracts, he did not benefit from the contracts, and Fisk made only a small

profit on the contracts. Alternatively, he argued that no loss was actually incurred

19
because the contracts were fulfilled in accordance with local practice; no loss

existed for restitution purposes because the County and United States received the

electrical work called for under the contracts; the CSBE and DBE programs were

not Government Benefits programs under the Sentencing Guidelines; and he did

not play a leadership role or use sophisticated means.

In pronouncing sentence, the district court noted that the trial testimony

showed that FLP had received a total of $7,974,674 in CSBE and DBE funds on

the six MIA contracts, and explained that it sought to punish fraud by focusing on

the profit obtained by the proponents of the fraud. Thus, the trial court determined

that the amount of loss for purposes of calculating Maxwell’s offense level under

§ 2B1.1 was some $474,000. It reached this figure by taking six percent of the

total amount of $7,974,674 paid to FLP for the six MIA contracts, which the

district court found to be the profit margin earned by Fisk and FLP. This loss

amount yielded an offense level increase of fourteen, rather than an increase by

twenty levels. Moreover, the district court increased Maxwell’s offense level by

three for his role in the offense, yielding a total adjusted offense level of twenty-

six or a range of sixty-three to seventy-eight months.

After considering Maxwell’s mitigation arguments, the 18 U.S.C. § 3553

factors, and the advisory Sentencing Guidelines range, the district court varied

20
three months below the range recommended by the Sentencing Guidelines,

imposing a sentence of sixty months of imprisonment, twenty-four months of

supervised release, and a $12,500 fine.

This timely appeal followed.

II.

Maxwell raises three challenges to his conviction and one to the sentence.

Specifically, he claims (1) that the district court abused its discretion in

prohibiting him from cross-examining Clyne and other prosecution witnesses

about the Pre-Trial Diversion Agreement, about Clyne’s request for a sentence

reduction in light of his cooperation, and about the CSBE or DBE contracts held

by FLP other than the six MIA contracts; (2) that the evidence was insufficient to

establish a scheme to defraud or the requisite intent; (3) that the district court

abused its discretion in rejecting his proposed “good faith” defense jury

instructions; and, finally, (4) that the district court clearly erred in calculating the

amount of loss under the Sentencing Guidelines.

A. Limitation of Cross-Examination

We review Maxwell’s claim that the district court improperly limited the

scope of his cross-examination for a clear abuse of discretion. United States v.

Matthews, 168 F.3d 1234, 1244, amended on other grounds, United States v.

21
Moore, 181 F.3d 1205 (11th Cir. 1999); United States v. Guzman, 167 F.3d 1350,

1352 (11th Cir. 1999) (“A district court has wide discretion to control the cross-

examination of witnesses.”). While the district court has “discretionary authority

to rule on the admissibility of evidence, including the power to limit cross-

examination,” this discretion is limited by the guarantee of the Sixth Amendment’s

Confrontation Clause that a criminal defendant has the right to cross-examine

prosecutorial witnesses. United States v. Garcia, 13 F.3d 1464, 1468 (11th Cir.

1994). In particular, “[c]ross-examination of a government ‘star’ witness is

important, and a presumption favors free cross-examination on possible bias,

motive, ability to perceive and remember, and general character for truthfulness.”

United States v. Phelps, 733 F.2d 1464, 1472 (11th Cir. 1984) (citation omitted).

However, “the mere fact that [a defendant] sought to explore bias on the

part of a prosecution witness does not automatically void the court’s ability to

limit cross-examination.” United States v. Diaz, 26 F.3d 1533, 1540 (11th Cir.

1994). This is so because the defendant “is entitled only to an opportunity for

effective cross-examination, not cross-examination that is effective in whatever

way, and to whatever extent, the defendant might wish.” United States v.

Baptista-Rodriguez, 17 F.3d 1354, 1366 (11th Cir. 1994) (quoting Kentucky v.

Stincer, 482 U.S. 730, 739 (1986)) (quotation marks omitted). Thus, a defendant

22
can only cross-examine a prosecution witness if “the information sought to be

elicited [is] relevant.” Diaz, 26 F.3d at 1540 (quoting Haber v. Wainwright, 756

F.2d 1520, 1522 (11th Cir. 1985)); see also Phelps, 733 F.3d at 1472 (noting that

cross-examination regarding potential bias “must be relevant”). Additionally,

“[o]nce there is sufficient cross-examination to satisfy the Sixth Amendment’s

Confrontation Clause, further questioning is within the district court’s discretion,”

Garcia, 13 F.3d at 1468. And the district court enjoys “wide latitude” to impose

“reasonable limits” on cross-examination based on, among other things,

“confusion of the issues” and “interrogation that is repetitive or only marginally

relevant.” Delaware v. Van Arsdall, 475 U.S. 673, 679 (1986).

Additionally, “the Sixth Amendment does not require unlimited inquiry into

the potential bias of a witness.” United States v. De Parias, 805 F.2d 1447, 1452

(11th Cir. 1986), overruled on other grounds by United States v. Kaplan, 171 F.3d

1351 (11th Cir. 1999). Thus, “[t]he test for the Confrontation Clause is whether a

reasonable jury would have received a significantly different impression of the

witness’ credibility had counsel pursued the proposed line of cross-examination.”

Garcia, 13 F.3d at 1469; Baptista-Rodriguez, 17 F.3d at 1371 (“A defendant’s

confrontation rights are satisfied when the cross-examination permitted exposes

the jury to facts sufficient to evaluate the credibility of the witness and enables

23
defense counsel to establish a record from which he properly can argue why the

witness is less than reliable.”). Put another way:

[A] defendant’s sixth amendment rights are not infringed where cross-
examination of a prosecution witness is limited by the trial judge, as
long as two conditions are met. First, the jury, through the cross-
examination that is permitted, must be exposed to facts sufficient for it
to draw inferences relating to the reliability of that witness. And second,
the cross-examination conducted by defense counsel must enable him to
make a record from which he could argue why the witness might have
been biased.

United States v. Van Dorn, 925 F.2d 1331, 1335 (11th Cir. 1991) (internal

citations omitted). When measured against these broad standards, we are satisfied

that the district court acted within its considerable discretion.

First, we need not decide whether Fisk’s Pre-Trial Diversion Agreement

was in the broadest sense relevant, because, even if it was, the district court did

not abuse its discretion in prohibiting its discussion. Maxwell’s cross-examination

of the current Fisk employees, particularly Clyne, exposed facts that were more

than sufficient to allow the jury to draw inferences about their reliability and to

allow Maxwell to fully argue that they were indeed biased.

Thus, for example, during the direct and cross-examination of Clyne, at

least the following pertinent information bearing on bias was amply presented by

able trial counsel: (1) Clyne is currently a Fisk employee who is receiving a salary

24
and hoped to receive a bonus; (2) Fisk continues to work on electrical contracts

throughout the County and elsewhere; (3) Clyne began cooperating with the

Government before he was offered a plea agreement; (4) he reached a plea

agreement with the Government pursuant to which he plead guilty to mail fraud,

wire fraud, and money laundering; (5) in exchange for his plea agreement, he

agreed to continue cooperating with the Government; (6) Clyne met with the

Government on ten to fifteen occasions in order to discuss his testimony; (7) as a

result of his guilty plea, Clyne has been adjudicated a convicted felon; (8) since

his conviction, Clyne has been promoted by Fisk to take over Maxwell’s job; (9)

Clyne was permitted to postpone the surrender date for his sentence of five years

of imprisonment; (10) Clyne believed there was a possibility that his sentence

would be reduced after Maxwell’s trial and he hoped it would be; (11) Clyne was

permitted to go on a fishing trip to Canada after his conviction and sentence were

entered; and (12) Clyne admitted to previously lying under oath during the

execution of the fraudulent scheme at the center of this case. (Oct. 25, 2006

Transcript at 15-20, 183-84, 189, 191-95; Oct. 26, 2006 Transcript at 9-17).

Indeed, the district court offered the following instruction to the jury as

Clyne began his testimony:

In this case the government has called Mr. Clyne as a witness, he is

25
 named as a defendant in a related case, and the government has entered
into a Plea Agreement with Mr. Clyne that provides for the possibility
of a lesser sentence than he would otherwise be exposed to . . . . So,
while a witness of this kind may be entirely truthful when testifying, you
should consider such testimony with more caution than the testimony of
other witnesses.

(Oct. 25, 2006 Transcript at 21). This record more than allowed Maxwell to

vigorously argue (as he did) that Clyne was biased. In addition, a reduction of a

jail sentence in fact offers a more powerful motive to provide testimony favorable

to the Government than any potential financial benefit to one’s employer would.

Similarly, during the examination of Fisk labor supervisor Robert Brown, Fisk

general foreman Mario Maresca, and Fisk project manager Pat Nugent, the jury

learned that they are all current Fisk employees, and that Brown and Nugent

received immunity letters from the Government. (Nov. 2, 2006 Transcript at 43-

46, 83; Nov. 6, 2006 Transcript at 186-88; Nov. 7, 2006 Transcript at 25).

Moreover, the Pre-Trial Diversion Agreement between the Government and

the corporate entity Fisk did not directly benefit any Fisk employee who served as

a witness for the Government. At most, the benefit to the testifying Fisk

employees was that their employer would be able to continue to bid on contracts

with the County and the United States, and Maxwell offered no suggestion that if

Fisk were deprived of the opportunity to work on government contracts that would

26
affect the company’s employees. Finally, the court learned during a proffer out of

the jury’s presence that Clyne actually had no personal knowledge of the Pre-Trial

Diversion Agreement or its contents, and, indeed, had pled guilty some six months

before the Pre-Trial Diversion Agreement was struck.

On this record, we are satisfied that the Pre-Trial Diversion Agreement was

of no palpable impeachment value to Maxwell, and that the district court judge

was well within her discretion in prohibiting Maxwell from cross-examining the

prosecution witnesses, in general, and Clyne, in particular, about it.

The second evidentiary mistake cited by the defendant is that he should

have been permitted to cross-examine Clyne about the observations in Clyne’s

sentencing brief that he was the Government’s “star witness,” and that his

“cooperation with his own company . . . as well as his cooperation with the

government, should be taken into account by this Court in determining an

appropriate sentence reduction.” The problem with this argument is that, at the

time he testified, Clyne had not yet requested a sentence reduction. In fact,

Clyne’s motion for a sentence reduction was not filed with the district court until

after Maxwell had filed his Notice of Appeal in this case. Thus, the contents of

the sentencing brief could not have been the subject of cross-examination at trial.

We add, again, that Maxwell did vigorously cross-examine Clyne about his plea

27
agreement, his hopes for a reduced sentence, and the leniency with which the

Government had already treated him. On this record, there can be no question that

the jury heard ample evidence about Clyne’s possible bias and motives for

testifying against the defendant.

Third, and finally, Maxwell argues that the district court abused its

discretion by prohibiting him from cross-examining Clyne about CSBE and DBE

contracts that FPL worked on other than the six MIA contracts at issue. Any

CSBE contracts awarded to FLP outside of the six MIA contracts were beyond the

scope of Clyne’s direct examination, and therefore Maxwell was not entitled to

claim as of right the opportunity to raise the issue on cross-examination, as

opposed to presenting it in his own case. Fed. R. Evid. 611(b) (“Cross-

examination should be limited to the subject matter of the direct examination and

matters affecting the credibility of the witness.”).

Maxwell argues nevertheless that the district court should have allowed him

to cross-examine Clyne about FLP’s participation in other CSBE contracts with

Fisk, because the Government had attempted to paint FLP as a sham company, not

capable of providing a commercially useful function. But, as the district court

explained, the focal point of the Government’s case-in-chief was on the six MIA

contracts and any associated misrepresentations. The Government never argued

28
that FLP was a “front” or “sham” company, nor that it could never perform a

commercially useful function. Again, perhaps most importantly, the district court

allowed Maxwell to present this evidence in his own case. Indeed, during Clyne’s

cross-examination, the district court told Maxwell that if he wanted to discuss

contracts other than the six MIA contracts, then he “need[ed] to call Mr. Clyne in

[his] case.” (Oct. 26, 2006 Transcript at 48). Maxwell declined to do so,

obviously making the tactical decision not to call Clyne as his own witness.

Finally, we add that even if the district court had erred in limiting

Maxwell’s cross-examination on any of these grounds, any error would be

harmless beyond a reasonable doubt. Todd, 108 F.3d at 1334 (explaining that if

the district court does err in limiting cross-examination, then “we must next

determine whether the error was harmless beyond a reasonable doubt”) (internal

quotation marks omitted). We have explained that

[i]n making this determination, a host of factors are to be considered,
including the importance of the witness’ testimony in the prosecution’s
case, whether the testimony was cumulative, the presence or absence of
evidence corroborating or contradicting the testimony of the witness on
material points, the extent of cross-examination otherwise permitted,
and, of course, the overall strength of the prosecution’s case.

United States v. Lankford, 955 F.2d 1545, 1552 (11th Cir. 1992) (internal

quotation marks omitted). Where “the excluded testimony [is] related to the

29
determinative issue of intent, we cannot say that the error was harmless.” United

States v. Gaskell, 985 F.2d 1056, 1063 (11th Cir. 1993). Here, the excluded

evidence did not go directly to Maxwell’s criminal intent; in fact, the proffered

evidence was, at best, of limited relevance to the case, was cumulative, or

otherwise could have been presented at a later stage in the trial.

In short, we can discern no abuse of discretion in the trial court’s

evidentiary decisions.

B. Sufficiency of the Evidence

Whether there is sufficient evidence in the record to support a jury’s verdict

in a criminal trial is reviewed de novo, taking the evidence in the light most

favorable to the Government. United States v. Futrell, 209 F.3d 1286, 1288 (11th

Cir. 2000). Accordingly, we are obliged to resolve any conflicts in favor of the

Government, draw all reasonable inferences that tend to support the prosecution’s

case, and assume that the jury made all credibility choices in support of the

verdict. United States v. Thompson, 473 F.3d 1137, 1142 (11th Cir. 2006); United

States v. Ward, 197 F.3d 1076, 1079 (11th Cir. 1999). Evidence is sufficient to

support a conviction if “a reasonable trier of fact could find that the evidence

established guilt beyond a reasonable doubt.” United States v. Calhoon, 97 F.3d

518, 523 (11th Cir. 1996). In rebutting the Government’s evidence, “[i]t is not

30
enough for a defendant to put forth a reasonable hypothesis of innocence, because

the issue is not whether a jury reasonably could have acquitted but whether it

reasonably could not have found guilt beyond a reasonable doubt.” Thompson,

473 F.3d at 1142. Measured against this standard, we hold that there was

sufficient evidence to show that Maxwell actively participated in the scheme to

defraud and had the requisite criminal intent.

Maxwell was convicted of twenty-three counts of substantive and

conspiratorial criminal conduct primarily based on mail and wire fraud. The

elements of mail and wire fraud are: (1) intentional participation in a scheme to

defraud, and, (2) the use of the interstate mails or wires in furtherance of that

scheme. See United States v. Hasson, 333 F.3d 1264, 1270 and n.7 (11th Cir.

2003); United States v. Ellington, 348 F.3d 984, 990 (11th Cir. 2003). To sustain

the related conspiracy convictions the Government was required to prove that

Maxwell knew of and willfully joined in the unlawful scheme to defraud;

circumstantial evidence can supply proof of knowledge of the scheme. Ellington,

348 F.3d at 989-90.

A scheme to defraud requires proof of a material misrepresentation, or the

omission or concealment of a material fact, calculated to deceive another out of

money or property. United States v. Svete, 556 F.3d 1157, 1161, 1169 (11th Cir.

31
2009) (en banc). A misrepresentation is material if it has “a natural tendency to

influence, or [is] capable of influencing, the decision maker to whom it is

addressed.” Hasson, 333 F.3d at 1271.

The evidence, taken in a light most favorable to the Government, reveals

that Fisk employees, with Maxwell’s knowledge and approval, submitted bids and

MURs to the County and to the United States that materially and repeatedly

misrepresented that FLP performed a commercially useful function on each of the

six MIA contracts when in truth it did not.

Maxwell made the following material misrepresentations and undertook the

following conduct in support of the misrepresentations. He directed that Fisk

prepare, negotiate, and review bids containing explicit representations that FLP

was going to perform the required CSBE and DBE percentage of the work, despite

knowing those representations were false. Indeed, Fisk prepared bids on behalf of

FLP without consulting or discussing the bid with FLP, and without regard for

whether FLP was able or willing to undertake the work. Maxwell and FLP entered

into an agreement whereby Fisk would pay FLP only three percent or five percent

of the value of the CSBE or DBE portion of the contract and would retain the rest

of the payments as compensation for actually completing the work required by the

contract. When Paultre complained that FLP was not making any money on these

32
contracts, it was Maxwell who ordered his project manager “to tell that son of a

bitch that he was getting his [five] percent and just do what he was told.”

The evidence established that FLP did not perform a “commercially useful

function” on any of the six MIA contracts. Notably, Fisk, not FLP, performed and

supervised all of the CSBE and DBE work. But, to give the appearance of FLP

involvement, Maxwell directed Paultre occasionally to attend weekly progress

meetings; Maxwell transferred Fisk employees to FLP’s payroll even though those

employees continued to be supervised by Fisk’s supervisors, earned the same pay,

and performed the same tasks while using Fisk equipment; Maxwell reimbursed

FLP for all of the labor costs incurred by Fisk employees who were put on FLP’s

payroll; Maxwell caused an FLP trailer to be placed on certain job sites; and

Maxwell used two-party checks with FLP’s name to purchase materials for which

Fisk negotiated, ordered and paid. Neither Malone nor Paultre, the two heads of

FLP, supervised any workers or ordered or paid for any materials on the six MIA

contracts.

Maxwell’s conduct on Contract 737A is particularly striking. While FLP

received the CSBE electrical subcontract on that project, Fisk was not awarded

any part of the contract. But, Fisk performed all of the CSBE required work for

FLP anyway. It obtained the permits, purchased the materials, supplied the labor,

33
and provided the supervision. Maxwell directed Clyne to open a Fisk job number

for the contract and Paultre signed over to Fisk the entire $90,000 payment that

FLP had received under the CSBE subcontract. And, when County auditors

subsequently asked Paultre to explain why FLP turned over the entire payment to

Fisk, Maxwell’s co-conspirators, with his knowledge and approval, prepared and

submitted falsified back-dated letters between Fisk and FLP in order to give the

appearance that FLP was simply repaying a loan to Fisk.

As for Contracts B313A and B315A, Fisk and FLP were awarded separate

bids, requiring them to complete separate tasks. However, Fisk performed the

work for both companies, despite Maxwell’s knowledge that this would cause Fisk

to lose money. A Fisk project manager prepared all of the correspondence

between FLP and the primary contractor, as well as FLP’s daily progress reports,

and FLP’s pay applications. Indeed, he testified that this was the first and only

time in his twenty-nine year career that he had been asked to do this. Because FLP

was paid separately by the primary contractor in installments for these two

contracts, Maxwell asked Clyne on a daily basis how they were going to recover

the money from FLP, and, at one point, directed Clyne to ask the primary

contractor not to make any additional payments to FLP until Maxwell could begin

recovering the money. In order to deceive County auditors, Fisk altered its

34
invoices to give the appearance that they were billed to FLP and then had FLP use

the proceeds of Contracts B313A and B315A to pay Fisk’s bills.

Maxwell also directed that the MURs be filled out falsely, representing that

FLP was performing a commercially useful function on all six MIA contracts

when, in fact, Fisk, and not FLP, was managing, supervising, and performing the

necessary work. As for Contracts 737G and 730F, a Fisk project manager alerted

Maxwell that he “was concerned with the fact that [he] was filling out [MURs] for

our minority participation, but we did not have minority participation on the

project at the time.” Maxwell simply told him that “it would be taken care of and

not to worry about it.”

Based on this body of evidence, we think a reasonable jury could find

beyond a reasonable doubt that FLP did not perform a “commercially useful

function” on the six MIA contracts, and that Maxwell knew FLP would not

perform a commercially useful function. These misrepresentations were material.

Without them FLP would not have been awarded the six MIA contracts and would

not have been allowed to continue to participate in them.

Maxwell counters that the Government did not present sufficient evidence

of a scheme to defraud, because he presented three witnesses who testified that

many of the actions undertaken by Fisk and FLP were consistent with local

35
industry standards. These witnesses claimed, among other things, that the shifting

of employees between a CSBE or DBE certified subcontractor and its primary

contractor, supplying of supervisors by the primary contractor for the CSBE or

DBE subcontractor, purchasing of materials for the CSBE or DBE contractor by

the primary contractor, funding of the CSBE or DBE payroll by the primary

contractor, and use of two-party checks to purchase materials for CSBE and DBE

subcontractors were consistent with local industry practices. The problem with the

argument is that the jury was free to disregard the testimony (as it obviously did)

and, instead, to credit the contrary evidence presented by the Government’s

witnesses, including the two it called on rebuttal. Ellington, 348 F.3d at 990-91;

United States v. Calderon, 127 F.3d 1314, 1325 (11th Cir. 1997) (stating that

credibility determinations are the sole province of the jury).

The Government also presented sufficient evidence to establish that

Maxwell possessed the requisite intent to defraud. An intent to defraud may be

found when the defendant believed that he could deceive the person to whom he

made the material misrepresentation out “of money or property of some value.”

United States v. Cooper, 132 F.3d 1400, 1405 (11th Cir. 1998); United States v.

Pendergraft, 297 F.3d 1198, 1209 (11th Cir. 2002) (explaining that an intent to

defraud is not present if the defendant knew that he could not deceive the recipient

36
of his statements). A jury may infer an intent to defraud from the defendant’s

conduct. See United States v. Hawkins, 905 F.2d 1489, 1496 (11th Cir. 1990)

(explaining that the Government need not produce direct proof of scienter in a

fraud case, but, instead, can rely on circumstantial evidence of criminal intent);

Ellington, 348 F.3d at 990 (explaining that specific intent to commit mail fraud

can be inferred by a jury from the defendant’s conduct).

As we have detailed already, the Government presented ample evidence that

Maxwell knowingly made material misrepresentations. Maxwell says, however,

that the evidence is insufficient, because his witnesses claimed that some of his

conduct was consistent with local industry practices. Again, while Maxwell was

free to argue that these local practices were consistent with a lack of fraudulent

intent, the jury was equally free to reject this testimony.

Maxwell also argues that he did not have an intent to defraud, because he

was confused about the meaning of the CSBE and DBE regulations. This

argument is unconvincing as well. First, and most importantly, the specific intent

required under the mail and wire fraud statutes is the intent to defraud, not the

intent to violate a particular statute or regulation. United States v. Paradies, 98

F.3d 1266, 1285 (11th Cir. 1996). What is most relevant is that Maxwell knew

that the bids and MURs were submitted to the government falsely claiming that

37
FLP would actually perform and was performing a certain percentage of the

contracted work.

While Maxwell is correct that when “the truth or falsity of a statement

centers on an interpretive question of law, the government bears the burden of

proving beyond a reasonable doubt that the defendant’s statement is not true under

a reasonable interpretation of the law,” United States v. Whiteside, 285 F.3d 1345,

1351 (11th Cir. 2002), that maxim is of little help here. In this case, the jury could

readily find beyond a reasonable doubt that the statements that FLP would and did

perform the CSBE or DBE portion of the six MIA contracts were false even under

the plain language of the pertinent regulations. Both the County and federal

regulations explicitly say that a CSBE or DBE is required to perform a

commercially useful function. Both regulatory schemes define a commercially

useful function as being responsible for the execution of the contract and actually

performing, managing, and supervising the work involved. And the DBE

regulations make clear that a DBE does not perform a commercially useful

function if its role is limited to that of an extra participant in a transaction,

contract, or project through which funds are passed in order to obtain the

appearance of DBE participation. 49 C.F.R. § 26.55(c)(2). There is no obvious

ambiguity about whether a CSBE or DBE subcontractor performs a commercially

38
useful function when the job is managed by the primary contractor, the work is

performed by the employees of the primary contractor, the primary contractor does

all of the negotiations, evaluations, and payments for the necessary materials, and

the subcontractor does nothing more than provide a minimal amount of labor and

serve as a signatory on two-party checks. In short, no matter how these

regulations are read, the jury could conclude that what FLP did was not the

performance of a “commercially useful function.”

Moreover, Maxwell’s conduct on Contract 737A undermines his confusion

argument. That bid was awarded only to FLP. Fisk was not given any work under

that contract. However, Fisk completed all of the work assigned to FLP, and FLP,

in turn, signed over to Fisk its entire payment for the job. Maxwell cannot claim

confusion or uncertainty about the regulations when he involved his company in

the performance of a contract that was awarded only to FLP.

Finally, Maxwell claims that he did not deprive the County or the United

States of money or property, because, in the end, the County and the United States

received the electrical work they sought. However, financial loss is not at the core

of these mail and wire frauds. Instead, the penal statutes also seek to punish the

intent to obtain money or property from a victim by means of fraud and deceit.

Regardless of the quality or cost of the work completed by FLP and Fisk, the

39
money used to pay FLP under those contracts was set aside by the County and the

national sovereign to pay only CSBE and DBE electrical subcontractors that were

actually performing commercially useful functions. Fisk is not a CSBE or DBE

certified company and FLP did not perform a commercially useful function. But,

through Maxwell’s scheme, FLP obtained construction contracts and substantial

payments from the County and the United States for which it was not eligible. By

orchestrating an elaborate scheme passing on the CSBE and DBE payments to

Fisk, Maxwell defrauded both sovereigns. The County and the United States were

free to prescribe the rules of this contracting process, and the defendant was not

free to dishonestly circumvent the worthy purpose of the set-aside programs.

C. Proposed Jury Instruction

We review the district court’s refusal to give a proposed jury instruction for

abuse of discretion. United States v. Ndiaye, 434 F.3d 1270, 1280 (11th Cir.

2006). In general,

a refusal to give a requested instruction is an abuse of discretion if: (1)
the instruction is correct; (2) the court did not address the substance of
the instruction in its charge; and (3) the failure to give the instruction
seriously impaired the defendant’s ability to present an effective
defense.

United States v. Sirang, 70 F.3d 588, 593 (11th Cir. 1995). The district court did

not abuse its discretion in denying Maxwell’s proposed jury instructions on his

40
“good faith” defense.

The district court rejected three versions of Maxwell’s proposed

instructions, explaining that “the issue here is not the interpretation of the

regulations,” but is, instead,

whether or not the government has proven that the defendant knowingly
and intentionally knew the way that the CSBE operated and the DBE
program operated, and notwithstanding that knowledge decided to
circumvent that program by submitting what appeared to be a
participation on six contracts by a minority business in which the
minority business would not be doing the work, but Fisk would be doing
the work, and thus attempting to obtain the contract without fulfilling
the obligation of the small business doing what it was supposed to be
doing under the program.

(Nov. 9, 2006 Transcript at 96).

Maxwell’s first proposed instruction said:

Under the law, a course of conduct is not “fraudulent” if reasonable
persons can disagree on regulatory requirements which govern the
conduct charged in the Indictment. You should consider the
complexities of the county ordinances and federal regulations and any
ambiguities contained therein to determine whether the Government
established, beyond a reasonable doubt, the charges in the Indictment.
A Defendant does not “knowingly” engage in a scheme to defraud when
their conduct is consistent with a reasonable interpretation of ambiguous
regulatory guidance.

His second proposed instruction stated:

Where, as in this case, the truth or falsity of a statement, centers upon an
interpretive question of law regarding county ordinances, federal
regulations, administrative rulings or statutes, the government bears the

41
 burden of proving beyond a reasonable doubt that the defendant’s
statement is not true under a reasonable interpretation of the federal
regulations, administrative rulings or statutes. If competing
interpretations are reasonable, the Defendant cannot be convicted.

His third proposed instruction read this way:

To demonstrate that the Defendant’s claims, statements or pattern of
conduct is “known to be false,” the Government must demonstrate that
there were “lies” and not merely regulatory or technical disputes. Proof
of one’s mistakes or inabilities is not evidence that one engaged in a
scheme to defraud. A Defendant does not “knowingly engage in a
scheme to defraud” or engage in a pattern of conduct “known to be
false” when his or her conduct is consistent with a reasonable
interpretation of ambiguous regulatory guidance.

Instead of reading one of these three proffered instructions to the jury, the

district court gave two other instructions about Maxwell’s good faith defense.

First, the district court told the jury that Maxwell had asserted a good faith

defense; that good faith is a complete defense to the charges because good faith is

“inconsistent with intent to defraud or willfulness”; that one who expresses an

honestly held opinion or an honestly formed belief is not chargeable with

fraudulent intent, even if the opinion is erroneous or the belief is mistaken; and

that evidence establishing that a person made a “mistake in judgment or an error in

management, or was careless, does not establish fraudulent intent.”

Second, the district court placed Maxwell’s good faith defense in the

context of the CSBE and DBE regulations and ordinances by instructing the jury

42
that

[i]t is the defendant’s theory of defense that the defendant reasonably
believed that its actions were taken in good faith based upon his
experience and understanding of these regulations, the ordinance and the
administrative order and common industry practice, and that he had no
intent to defraud.

You may consider the regulations, ordinance, administrative order,
along with all other evidence, in determining whether the government
has proved beyond a reasonable doubt that the defendant acted with
specific intent to defraud as charged.

(Nov. 13, 2006 Transcript at 32). As for specific intent, the district court

instructed the jury that “[t]o act with ‘intent to defraud’ means to act knowingly

and with the specific intent to deceive or cheat someone ordinarily for the purpose

of causing some financial loss to another or bringing about some financial gain to

oneself.” (Id. at 15, 18).

The failure to give any of the alternative versions did not seriously impair

Maxwell’s ability to defend himself. The district court properly instructed the jury

that Maxwell was not charged with violating the CSBE or DBE regulations,

correctly explained the elements of conspiracy, mail fraud, wire fraud, and money

laundering, explained that Maxwell must have specifically intended to deceive the

sovereigns out of money or property, and put the burden on the Government to

prove each element beyond a reasonable doubt. The instructions were sufficient to

43
enable Maxwell to argue in closing that he lacked the requisite criminal intent.

See United States v. Silverman, 745 F.2d 1386, 1395-96 (11th Cir. 1984) (“A

district judge is vested with broad discretion in formulating his charge to the jury

so long as it accurately reflects the law and the facts. The charge must define the

offense charged and its elements to enable the jury to apply the law to the facts.”)

(citations omitted).

Furthermore, Maxwell’s proposed jury instructions contain partisan and

argumentative statements of law and fact, and the district court was not obliged to

present them to the jury in that form. See Paradies, 98 F.3d at 1287 (explaining

that the district court does not have to give a requested jury instruction that is

“partisan and that . . . aspired to place the . . . defendants’ desired factual findings

into the mouth of the court”) (quotation marks omitted); United States v. Barham,

595 F.2d 231, 245 (5th Cir. 1979) (affirming the district court’s failure to give a

“theory of the defense” jury instruction when “the requested instruction was more

in the nature of a jury argument than a charge”).6

D. Amount of Loss Calculation

We review a district court’s interpretation of the Sentencing Guidelines

6
The Eleventh Circuit has adopted as precedent all decisions of the former Fifth Circuit
rendered prior to October 1, 1981, and all Fifth Circuit Unit B decisions rendered after October 1,
1981. Bonner v. City of Prichard, 661 F.2d 1206, 1207 (11th Cir. 1981).

44
de novo, and the determination of the amount of loss involved in the offense for

clear error. United States v. Woodard, 459 F.3d 1078, 1087 (11th Cir. 2006).

Clear error will be found only if the court is “left with a definite and firm

conviction that a mistake has been committed.” United States v. Crawford, 407

F.3d 1174, 1177 (11th Cir. 2005) (citation omitted).

Maxwell challenges the district court’s calculation of the loss amount used

to determine his total offense level under § 2B1.1 of the Sentencing Guidelines.

The Government requested a loss amount of $7,974,674, representing the total

amount of CSBE and DBE funds awarded to FLP under the six MIA contracts.

The district court, however, determined that the appropriate loss amount was only

$474,000, a calculation that represented only six percent of the $7,974,674

actually paid on those contracts. The district court reasoned that value was the

appropriate amount of loss after hearing testimony that six percent fell within the

average profit margin made by electrical subcontractors on such government

contracts. Specifically, the district court explained that the six percent profit

margin was appropriate because:

it also seems to be a reasonable estimate, because if I look at, even
taking the low end of the gross profit that the testimony numbers came
up, which was [three] percent, there was also the [three] to [five] percent
that was paid to Mr. Paultre. I am sure that was not part of the stated
loss. It was built somewhere into the contract. And so if you take the

45
 [three] percent for the stated loss, plus another [three] percent that was
hidden in there, that would come up to [six] percent. So based on the
testimony and just simple logic, this was not done to simply operate as
a pass-through. So taking [six] percent loss of the 7.9 [million] just is
right over [fourteen] – I mean it is 400-something; $474,000 in loss,
approximately.

(Mar. 12, 2007 Transcript at 67-68). Thus, the district court concluded that the

loss in the case merited a fourteen level enhancement under § 2B1.1(b)(1)(H) of

the Sentencing Guidelines.

Section 2B1.1 provides the base offense level for defendants convicted of

crimes involving fraud and deceit, and various increases in the offense level

depending on the amount of money at issue.7 In determining the loss attributable

to relevant conduct, the Government bears the burden of proving loss with reliable

and specific evidence. See United States v. Dabbs, 134 F.3d 1071, 1081 (11th Cir.

1998) (interpreting § 2F1.1, which was consolidated with § 2B1.1 on November 1,

2001).8 The Sentencing Guidelines define actual loss as “the reasonably

foreseeable pecuniary harm that resulted from the offense.” U.S.S.G. § 2B1.1 cmt.

7
Specifically, § 2S1.1(a) incorporates § 2B1.1 to determine a defendant’s offense level
according to the attributable loss amount.
8
Much of the case law on this issue was created using pre-2001 Sentencing Guidelines.
However, the consolidation of § 2B1.1 and § 2F1.1 did not materially alter the provisions
pertinent to this analysis. See United States v. Gupta, 463 F.3d 1182, 1199 (11th Cir. 2006)
(noting that § 2F1.1 was deleted by its consolidation with § 2B1.1 in 2001 and “there is no
identifiable difference in our analysis based upon the consolidation”).

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n.3(A)(i).9 Pecuniary harm “means harm that is monetary or that otherwise is

readily measurable in money.” Id. at cmt. n.3(A)(iii). If a loss cannot be

reasonably determined, the Guidelines instruct the courts to “use the gain that

resulted from the offense as an alternative measure of loss.” Id. cmt. n.3(B)

(emphasis added).

However, § 2B1.1 also contains a specific provision that addresses how loss

is to be calculated when the fraud or deceit involves a Government Benefits

program. It reads this way:

In a case involving government benefits (e.g., grants, loans, entitlement
program payments), loss shall be considered to be not less than the value
of the benefits obtained by unintended recipients or diverted to
unintended uses, as the case may be.

U.S.S.G. § 2B1.1 cmt. n.3(F)(ii).

At least two of our sister circuits have held that the DBE program or a

similarly structured municipal program are Government Benefits programs for

purposes of § 2B1.1. See United States v. Leahy, 464 F.3d 773, 790 (7th Cir.

2006) (holding a city minority contracting program was a Government Benefits

program under § 2F1.1 before it was consolidated with § 2B1.1); United States v.

9
The commentary and application notes of the Sentencing Guidelines are authoritative,
unless they are plainly erroneous, inconsistent with the regulation they interpret, or contrary to
the Constitution or federal law. Stinson v. United States, 508 U.S. 36, 45 (1993); United States
v. Torrealba, 339 F.3d 1238, 1242 (11th Cir. 2003).

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Bros. Constr. Co. of Ohio, 219 F.3d 300, 317-18 (4th Cir. 2000) (holding the

fraudulent receipt of DBE funds involved the diversion of Government Benefits

under the Sentencing Guidelines); see also United States v. Tulio, 263 Fed. Appx.

258, 263 (3d Cir. 2008) (holding Government Benefits provision of § 2B1.1

applies to DBE funded contracts). This is so, because DBE and similar programs

are “affirmative action program[s] aimed at giving exclusive opportunities to

certain women and minority businesses,” thus making them entitlement program

payments. Leahy, 464 F.3d at 790; Bros. Constr. Co. of Ohio, 219 F.3d at 317-18;

see also Adarand Constructors, Inc. v. Slater, 528 U.S. 216, 217 (2000)

(“Congress has adopted a policy that favors contracting with small businesses

owned and controlled by the socially and economically disadvantaged.”).

In fact, evidence was presented at Maxwell’s trial that the primary purpose

of the CSBE and DBE programs is to help small minority-owned businesses

develop and grow, creating new jobs and helping to overcome the effects of past

discrimination in the construction industry. Unlike standard construction

contracts, these contracts focus mainly on who is doing the work. We are

persuaded by the well-reasoned opinions of our sister circuits and conclude that

both the CSBE and DBE programs are Government Benefits Programs under §

2B1.1 of the Sentencing Guidelines. Thus, the appropriate amount of loss here

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should have been the entire value of the CSBE and DBE contracts that were

diverted to the unintended recipient.

The entire CSBE and DBE portions of the six MIA contracts were diverted

to unintended recipients, FLP and Fisk. It is of no moment that FLP was a

certified CSBE and DBE contractor; what matters is that FLP did not provide a

commercially useful function on any of them. The proceeds of the six MIA

contracts should have, but did not, go to a certified CSBE or DBE contractor that

completed a commercially useful function.

However, because the Government has not cross-appealed on this issue, a

remand to increase the amount of loss applicable to Maxwell’s Sentencing

Guidelines calculation is unwarranted. Rather, on this procedural posture, we are

called upon only to determine whether the district court clearly erred in

determining that Maxwell’s loss amount was not zero. But, because we believe

the Government Benefits provision of § 2B1.1 applies here, the proper calculation

of loss should have been $7,974,674. It follows then that we cannot find clear

error in the determination that Maxwell’s loss amount was only $474,000.

We add that the district court’s calculation was not clearly erroneous under

the law of this Circuit at the time it was made. We have never before addressed

whether the CSBE and DBE programs are Government Benefits Programs under §

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2B1.1. In Gupta, we stated, in making an amount of loss calculation in a fraud

case that did not involve a Government Benefits Program under § 2F1.1, that

“[f]raud is conjured in numerous variations and that should be considered when

choosing a calculation methodology for the harm intended or caused.” 463 F.3d at

1199. To that end, we explained that this Court has used differing methods to

calculate the amount of loss depending on the nature of the fraud. Id. at 1200. In

particular, we noted that two “more commonly used forms of calculation” for the

loss amount are “(1) the loss to the losing victims method; and (2) the defendant’s

gain or net gain method.” Id. (quotation marks omitted).

The district court used the “defendant’s net gain method” in making a loss

calculation. There is no clear error in finding that the net profit was $474,000.

The record amply supports the conclusion that $7,974,647 was improperly

awarded to FLP on the six MIA contracts and that a profit margin of six percent

was likely earned on those contracts.

In short, we AFFIRM both the convictions and sentence of Maxwell in all

respects.

AFFIRMED.

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