United States v. Adkinson

United States Court of Appeals,

Eleventh Circuit.

Nos. 92-2872, 95-2061.

UNITED STATES of America, Plaintiff-Appellee, Cross-Appellant,

v.

William Michael ADKINSON, Ann Powell Minks, f.k.a. Ann Powell, et al., Defendants-
Appellants, Cross-Appellees.

UNITED STATES of America, Plaintiff-Appellee,

v.

Ronald D. PEEK, Ann Powell Minks, et al., Defendants-Appellants.

Oct. 26, 1998.

Appeals from the United States District Court for the Northern District of Florida. (No. 91-03052-
RV), Roger Vinson, Judge.

Before DUBINA, Circuit Judge, and HILL and GIBSON*, Senior Circuit Judges.

HILL, Senior Circuit Judge:

Following a jury trial, defendants were convicted of various offenses, including conspiracy,

bank, mail and wire fraud, and interstate transportation of stolen property. They appealed these

convictions. In United States v. Adkinson, 135 F.3d 1363 (11th Cir.1998) (Adkinson I ), we vacated

all convictions on Count I, holding that the inclusion in the indictment, and last-minute dismissal,

of allegations that the government knew did not state a crime under governing Eleventh Circuit

precedent rendered defendants' trial on that count "fundamentally unfair." We also vacated all

*
Honorable John R. Gibson, Senior U.S. Circuit Judge for the Eighth Circuit, sitting by
designation.
convictions on Counts II, III, VI, VIII, and IX for failure of the redacted indictment to adequately

allege the scheme—an essential element—underlying the offenses charged in these counts.

Defendants also claimed, however, that there was insufficient evidence on all of these counts

to support their convictions. As its response, the government recited the elements of the various

offenses, and then asserted:

The evidence adduced during the course of this trial clearly established that the
defendants participated in a massive scheme to defeat the lawful function of the Internal
Revenue Service, and to commit bank fraud with respect to Vision Banc, a savings and loan
association out of Redhill, Pennsylvania. During the course of that conspiracy, as set forth
in the statement of facts, the defendants used the mail and interstate wire services to
effectuate and further the scheme to defraud. Finally, during the course of the proceeding
stolen property or property taken by fraud, was transported interstate. That being true, the
conviction must sustain.

There was, however, not one citation to the record evidence supporting this assertion.

Furthermore, in the portion of the government's brief reciting the facts which it believes it

established at trial, there were repeated references to certain record volumes at "passim" which

directs us to entire volumes of testimony. We were both unable and unwilling to "sift through these

pages by ourselves, unguided by an advocate"... "looking for what we believe the government

proffers as supporting evidence on the fact issue being discussed." Adkinson I, 135 F.3d at 1379.

Therefore, we directed the government to submit a supplemental brief which would readdress the

issue of the sufficiency of the evidence and conform to Eleventh Circuit Rule 28-2(l) which requires

the parties to support their assertions regarding matters in the record with references to the volume

or document number and page number of the original record.1 Defendants were permitted to reply.2

1
The government's supplemental brief again fails to cite correctly to the record.
2
Even though we vacated all convictions, we resolve the issue of the sufficiency of the
evidence prior to remand so that further jeopardy is avoided if the government's proof was

2
 All supplemental briefing having now concluded, we turn to the final issue before

us—whether there was sufficient evidence supporting these convictions to permit retrials.3 See

Burks v. United States, 437 U.S. 1, 11, 98 S.Ct. 2141, 57 L.Ed.2d 1 (1978) (double jeopardy clause

forbids a second trial for the purpose of affording the prosecution another opportunity to supply

evidence which it failed to muster in the first proceeding). In reviewing the sufficiency of the

evidence, we view it de novo, but in the light most favorable to the government, and accepting all

reasonable inferences which support the verdict in order to determine if there was substantial

evidence from which a reasonable trier of fact could have concluded that the defendants were guilty

beyond a reasonable doubt. United States v. Newton, 44 F.3d 913, 922 (11th Cir.1994).

I.

Count I of the original indictment in this case charged a massive bank fraud conspiracy in

which the huge proceeds of two allegedly fraudulently obtained bank loans were diverted for

personal use.4 At the close of the government's case, the district court dismissed these allegations

because they did not state a crime under the then-prevailing law of this circuit. See Adkinson I, 135

F.3d at 1370.

After dismissal of the bank fraud allegations, the sole remaining purpose of the conspiracy

charged in Count I was to defraud the United States by impeding the lawful functions of the Internal

Revenue Service (IRS). The indictment alleged that:

insufficient the first time around. See Adkinson I, 135 F.3d at 1379 n. 48. See also Yates v.
United States, 354 U.S. 298, 327, 77 S.Ct. 1064, 1 L.Ed.2d 1356 (1957).
3
Of course, the government would first have to cure the deficiencies in the indictment which
led us to vacate these convictions—failure to allege the scheme underlying these bank, wire and
mail fraud counts.
4
See Adkinson I, 135 F.3d at 1363-67, for a summary of the facts of this case.

3
 [T]he purpose of the conspiracy to impede and impair the Internal Revenue Service was to
defraud the United States (a) by concealing and causing to be concealed income generated
from the proceeds of certain false and fraudulent loan transactions which proceeds were
purportedly applied to real estate transactions but were in actuality diverted and distributed
among a number of persons and entities and which proceeds constituted taxable income to
the one or more persons or entities receiving and possessing said proceeds, and (b) by either
failing to file federal income tax returns which if truthfully filed would have disclosed the
existence of said income or by filing false tax returns that failed to report income derived
from the proceeds of the false and fraudulent loans....

Defendants Michael Adkinson, Robert Collins, Robert Alligood, Benjamin Koshkin and

Ronald Peek were convicted on Count I.5 In ruling on their motions for judgment of acquittal, the

district court commented:

[T]here's been some serious doubt in my mind as to what really has been established
by the government in connection with the stated purpose of the remaining portion of the
conspiracy. In truth, there really has not been much evidence that there was a conspiracy to
conspire or frustrate the IRS function in this case....

Part of the problem is that the government has attempted to turn a bank fraud case
into a case that includes an income tax case and a mail fraud case, and everything else, and
the pieces simply don't fit together very well.

See Adkinson I, 135 F.3d at 1378 n. 44. Despite its misgivings, the district court denied defendants'

motions.

In its brief filed in response to our request that it cite specifically to the record evidence

supporting the tax conspiracy convictions, on page one the government characterizes Count I as a

"Conspiracy to Defeat the Lawful Functioning of the IRS." In the remaining sixty-eight pages of the

brief, however, the government does not again refer to the IRS, nor to the function which defendants

5
The indictment alleged that in 1986, neither Adkinson nor Koshkin filed federal income tax
returns, that Koshkin lied to an IRS agent regarding his tax return, and that both Alligood and
Collins filed false returns. There were no tax allegations regarding Peek.

4
are alleged to have defeated. Nor is there any mention of the statutory elements of a Section 371

tax conspiracy or any discussion whatsoever of the government's proof of these elements.

The word "tax," in fact, appears only once in the government's brief. On page 48, the

government asserts that the "cover-up" phase of the charged bank fraud scheme included the "tax

related activities of the defendants, (as explained by cooperating witnesses)."6 There is no further

explanation of these activities.

The only references to any evidence which could remotely relate to Count I which we can

find in the government's supplemental brief are several assertions that certain defendants received

various sums of money which were "later reported as loans." The record citations are to testimony,

primarily that of Richard Maniscalco, the comptroller for Development Group, Inc. (DGI), one of

Adkinson's corporations, who testified that these payments were not reported to the IRS by way of

Tax Form 1099 which informs the IRS of individuals' receipt of income. This testimony is also cited

as support for the government's assertion that Adkinson "instructed all involved how to report the

money."7

We assume that the government means to assert that these defendants were obligated to but

did not report this income to the IRS.8 This is apparently the government's theory of the tax

conspiracy. The supporting evidence is the payments by DGI to the defendants which were

"reported as loans." No tax returns are cited as proof.

6
There is no record citation.
7
There is, however, no support for this "fact" at the record citation.
8
The government also alleges that Adkinson's corporations failed to file or falsely filed their
income tax forms.

5
 In assessing the adequacy of this proof, we note several problems. First, of the five

defendants convicted on Count I, two—Collins and Peek—are not included by the government in

this group of putative income tax evaders.9 There is no citation at all to record evidence supporting

the Count I convictions of defendants Collins and Peek. In fact, even in the section where the

government details each of the "Defendants' Roles" in this case, there is no mention whatsoever of

any "tax related activities" on the part of these defendants. Although the connection of these

defendants to the alleged tax conspiracy need only be "slight," United States v. Toler, 144 F.3d 1423,

1427(11th Cir.1998), the government must have demonstrated with substantial proof that there was,

in fact, some connection.10 Id. at 1426-28. As the record is apparently devoid of such evidence as

to Peek,11 we will reverse his conviction on Count I.12 Burks, 437 U.S. at 11, 98 S.Ct. 2141.

9
Of the six people the government asserts received money which was "later reported as a
loan," three were never defendants in this case, and one was not convicted on Count I.
10
The government asserts that there is a "split" among the panels in this circuit over what level
of proof is required to support a defendant's conviction for conspiracy, arguing that only "slight"
evidence is required. We take this opportunity to reaffirm that the Constitution requires
substantial evidence to support any criminal conviction. United States v. Malatesta, 590 F.2d
1379, 1382 (5th Cir.1979) (en banc). The oft-repeated phrase that "[o]nce the existence of a
conspiracy is established, only slight evidence is necessary to connect a particular defendant to
the conspiracy" refers to the extent of the defendant's connection to the conspiracy, not to the
quantum of evidence required to prove that connection. See Toler, 144 F.3d at 1427. See also
United States v. Fleishman, 684 F.2d 1329, 1340-41 (9th Cir.1982). Thus, the threshold which
the evidence must cross in order to establish the defendant as a conspirator is not "minimal" as
the government suggests, but remains "substantial." Toler, id.
11
With respect to Peek, we can find no specific allegations regarding the tax conspiracy, either
in the indictment, or in the government's initial or supplemental brief. In both its initial and
supplemental briefs where Peek's "role" in this case is outlined, the government does not refer to
any "tax related activities"on his part at all, nor allege that he had any knowledge of a tax
conspiracy. Peek did not testify.
12
Although the government has not assisted us in evaluating the evidence against Collins, we
note that Collins testified in his own behalf. He testified he received a $600,000 loan from
Adkinson and described how he repaid the loan by performing legal services which offset the

6
 Second, we have had a very real problem in evaluating the sufficiency of the government's

evidence against these defendants because the record contains much evidence which it should not.

As we noted in Adkinson I:

In permitting the government to try the case for four months as a bank fraud conspiracy, the
district court allowed the introduction of an enormous amount of evidence under the rules
applicable only to conspiracies. The court made four months of evidentiary rulings based
upon the government's assurances that all the 17,500 pages of testimony and 1447
documents were inextricably intertwined because of the far-flung conspiracy to defraud the
banks.

135 F.3d at 1372.

Although the district court attempted to proceed as if the motion to dismiss the allegations

of a bank fraud conspiracy had been granted, our review of the record leaves us firmly convinced

that government counsel did little to assist the court in this endeavor and ultimately the court was

persuaded that any evidence the government offered was "inextricably intertwined" with the vast

expanse of allegations in the original indictment, virtually all of which was redacted away at the end

of trial.

At best, highly prejudicial and irrelevant evidence was admitted; at worst, much hearsay

(co-defendants' statements pursuant to the bank fraud) was admitted and attributed by the jury to all

defendants.13 If the conspiracy count had been limited to allegations of a tax conspiracy, the

principal. He did not report it as income on his 1986 return. Although this evidence comes from
the defendant's own mouth, it may be considered against him as some evidence of his "tax
related activities." United States v. Belt, 574 F.2d 1234, 1236-37 (5th Cir.1978) (a defendant
who "presents the testimony of himself or of others and asks the jury to evaluate his credibility
[and that of his witnesses] against the government's case, [ ] cannot insulate himself from the risk
that the evidence will be favorable to the government.").
13
We noted in our original opinion that the district court attempted to limit the admissibility of
any coconspirator statements to those defendants charged in the tax conspiracy. Upon objection,
this practice was discontinued and all "coconspirator" statements came in without instruction by

7
government would have had to present substantial independent evidence of the existence of such a

conspiracy prior to the admission of any coconspirator statements. United States v. Horton, 646

F.2d 181, 185 (5th Cir.1981); United States v. Fleishman, 684 F.2d 1329, 1337(9th Cir.1982). All

evidence asserted to be "inextricably intertwined" with the conspiracy would have had to be

intertwined with the tax conspiracy. At this point, it is virtually impossible to say what such a record

would have looked like. Of one thing we are sure; it would not look like this record.

Justice Jackson's stern admonition to the courts and government prosecutors, uttered long

ago but strikingly apropos in this case, that:

[E]ven when appropriately invoked, the looseness and pliability of the [conspiracy] doctrine
present inherent dangers which should be in the background of judicial thought wherever it
is sought to extend the doctrine to meet the exigencies of a particular case.... [A court should
not strain] to uphold any conspiracy conviction where prosecution for the substantive offense
is adequate and the purpose served by adding the conspiracy charge seems chiefly to get
procedural advantages to ease the way to conviction.

Krulewitch v. United States, 336 U.S. 440, 449, 457, 69 S.Ct. 716, 93 L.Ed. 790 (1949) (Jackson,

J. concurring).

Our review of the evidence, then, is made more difficult by all of this. Nevertheless, four

defendants remain convicted on Count I—Adkinson, Collins, Alligood, and Koshkin—and we have

undertaken to attempt to determine whether the evidence of their "tax related activities" was

sufficient to establish that they were members of a tax conspiracy.

II.

In order to sustain a conviction under 18 U.S.C. § 371, the government must prove (1) the

existence of an agreement to achieve an unlawful objective; (2) the defendants' knowing and

the court.

8
voluntary participation in the agreement; and (3) the commission of an act in furtherance of the

agreement. United States v. Cure, 804 F.2d 625, 628-630 (11th Cir.1986).14 The government must

prove an agreement between at least two conspirators to pursue jointly an illegal objective. United

States v. Krasovich, 819 F.2d 253 (9th Cir.1987); United States v. Mulherin, 710 F.2d 731, 737

(11th Cir.1983). The government must also prove beyond a reasonable doubt that each defendant

had a "deliberate, knowing, specific intent to join the conspiracy." United States v. Cole, 755 F.2d

748, 755 (11th Cir.1985) (quoting United States v. DeSimone, 660 F.2d 532 537 (5th Cir. Unit B

1981)).

Because the essential nature of conspiracy is secrecy, a conspiracy conviction may be based

upon circumstantial evidence. Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 86 L.Ed. 680

(1942); Cole, 755 F.2d at 755; United States v. Browning, 723 F.2d 1544, 1546 (11th Cir.1984);

United States v. Enstam, 622 F.2d 857, 863-64 (5th Cir.1980). The government, however, must

show circumstances from which a jury could infer beyond a reasonable doubt that there was a

"meeting of the minds to commit an unlawful act." United States v. Parker, 839 F.2d 1473, 1478

(11th Cir.1988); Browning, 723 F.2d at 1546.

A Section 371 conspiracy where the victim is the IRS and the objective is to defeat its lawful

functioning is known as a Klein conspiracy. United States v. Klein, 247 F.2d 908 (2d Cir.1957).

While the alleged failure to properly report income can constitute the requisite act in furtherance of

14
18 U.S.C. § 371 provides:

If two or more persons conspire either 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, and one or more of such persons do any act to effect
the object of the conspiracy each [shall be guilty of a crime].

9
a Klein conspiracy, the government must still allege and prove there was an agreement whose

purpose was to impede the IRS (the conspiracy), and that each defendant knowingly participated in

that conspiracy. United States v. Pritchett, 908 F.2d 816, 821 (11th Cir.1990); United States v.

Vogt, 910 F.2d 1184, 1203 (4th Cir.1990); Krasovich, 819 F.2d at 255; Mulherin, 710 F.2d at 737.

In this case, the government charged the defendants with a conspiracy to impede the IRS

by concealing income from the bank loans and by failing to file or filing false tax returns. The

government, however, was unable to point to one conversation between these defendants regarding

taxes, much less demonstrating an intent to avoid them. Because there was no direct evidence of

an agreement by all for each to evade his income taxes,15 the government was forced to rely on

circumstantial proof.

The circumstantial evidence was the "loans" and their treatment in the various defendants'

tax returns. Taking this evidence in the light most favorable to the government, the facts which the

jury could have found were: (1) Adkinson, Koshkin, Alligood and Collins received payments out

of the proceeds of the allegedly fraudulent bank loans; (2) DGI did not report these payments to the

IRS; and (3) the defendants either reported these payments as loans, or they did not report them at

all to the IRS. Since there is no other evidence that these defendants agreed to impede the IRS, the

issue is whether these facts permit an inference that they did so.

A. The Agreement

The failure to disclose income is, without more, generally insufficient to establish a Klein

conspiracy. Klein, 247 F.2d at 916. In Klein itself, for example, the defendants participated in a

massive scheme to import and sell whiskey in the United States in a fashion calculated to minimize

15
Each defendant convicted on Count I was alleged to have failed to file or filed false returns.

10
the amount of United States income tax they would have to pay. The evidence of agreement among

the defendants consisted in part of income tax returns which failed to disclose some of this income.

The defendants claimed that this evidence, at most, showed separate purposes to evade taxes and

was insufficient to establish the common design necessary to constitute a tax conspiracy. Id. at 919.

The Second Circuit agreed that the "[m]ere failure to disclose income would not be sufficient

to show a Section 371 conspiracy to defraud the United States." Id. at 916. To be sufficient, the

evidence must establish an agreement among the conspirators with the intent to "obstruct the

government's knowledge and collection of revenue due." Id. at 918. When the government relies

upon circumstantial evidence to establish a tax conspiracy, the circumstances must be such as to

warrant a jury's finding that the alleged conspirators had some "common design with unity of

purpose" to impede the IRS. Id.16

We have reversed conspiracy convictions where there was no direct proof of an agreement,

and the circumstantial evidence of agreement was insufficient to support such an inference. In

United States v. Awan, 966 F.2d 1415, 1434-35 (11th Cir.1992), we reversed a defendant's

conspiracy conviction because the facts proved by the government at trial were insufficient to show

that he "agreed to participate in unlawful activity." Similarly, in United States v. Parker, 839 F.2d

1473, 1478 (11th Cir.1988), we reversed the defendants' convictions because the government's proof

of an agreement was based upon mere speculation that they had motive to join the conspiracy. We

said then:

The appellants certainly directed their efforts toward the common goal of making money for
themselves [ ]. But to support a conspiracy conviction, the evidence must establish a

16
In Klein, the Second Circuit found other additional acts of concealment and the totality of
the circumstances were sufficient to establish an agreement. 247 F.2d at 908.

11
 common agreement to violate the law. While the evidence clearly shows that the law was
violated, there is insufficient evidence of a common agreement. Without evidence showing
or tending to show a meeting of the minds to commit an unlawful act, the convictions cannot
stand.

Id.

The government argues that the circumstantial evidence in this case—the DGI records

showing that various payments to the defendants were not reported to the IRS and the defendants'

tax returns failing to disclose the alleged income—permit the jury to infer the requisite agreement

to impede the IRS. This evidence, however, at most implies separate purposes to evade taxes; it

does not support an inference that each alleged tax evader even knew of the others' tax evasion,

much less that they agreed to do so. See United States v. Gurary, 860 F.2d 521, 524 (2nd Cir.1988)

(the government must present evidence from which the jury may infer that defendants knew their

scheme would result in the filing of false corporate and individual tax returns); Although each

defendant does not have to know every act taken in furtherance of the conspiracy, each defendant

convicted must know that there is a conspiracy and demonstrate a specific intent to joint it. Cole,

755 F.2d at 755.

The government may not rest upon proof that a defendant acted in a way that would have

furthered the goals of a conspiracy if there had been one. United States v. Brown, 954 F.2d 1563,

1571 (11th Cir.1992). Without some independent evidence that these defendants knew there was

a tax conspiracy in progress and that they voluntarily and knowingly joined this conspiracy, the

proof of the requisite agreement to impede the IRS is insufficient. Id.

B. Intent to Impede the IRS

Even if this evidence were sufficient to establish an agreement, the government must also

show that the purpose of the agreement was to interfere with the lawful functions of the IRS in

12
collecting taxes. United States v. Hernandez, 896 F.2d 513 (11th Cir.1990). This tax purpose must

be the object of a Klein conspiracy, and not merely a foreseeable consequence of some other

conspiratorial scheme.17 Dennis v. United States, 384 U.S. 855, 861, 86 S.Ct. 1840, 16 L.Ed.2d 973

(1966). "If impeding the IRS is only a collateral effect of an agreement, rather than one of its

purposes, then a conviction for a Klein conspiracy cannot stand." Vogt, 910 F.2d at 1202. On the

other hand, a conspiracy may have multiple objectives, and "if one of its objectives, even a minor

one, be the evasion of federal taxes, the offense is made out, though the primary objective may be

concealment of another crime." Ingram v. United States, 360 U.S. 672, 679-80, 79 S.Ct. 1314, 3

L.Ed.2d 1503 (1959).

The most troublesome aspect of the conspiracy convictions in this case is the fact that the

indictment alleges and the government argues in both of its briefs that the purpose of the conspiracy

in this case was bank fraud. For example, the government states in its supplemental brief:

What then was the scheme in this case as simply put as possible? Generally, the
scheme was to obtain property and money by the use of the victim's money, which that
victim would not have made available to the defendants, had the victim known the true facts.

Elsewhere, the government asserts that the "victims in this case were Hill Financial and

Vision Banc." The defendants "desired to speculate in land development" but "[t]hey had no

money." In order to get the money, they "intentionally misled Hill with respect to Adkinson's and

his companies' true financial situation."

There is no question that these allegations of a bank fraud conspiracy were the main

conspiracy focus of the original indictment and the trial. The ultimate dismissal of these allegations

17
Were it otherwise, the robbery of a bank by two or more persons who subsequently fail to
report this income on their tax returns would be a tax conspiracy. See United States v. Goldberg,
105 F.3d 770, 773 (1st Cir.1997).

13
at the end of the government's case forced the district court to eliminate them from Count I by

redacting the indictment. Of the forty-eight pages originally describing the scheme in Count I, only

a single paragraph describing a scheme to evade taxes remained. Twenty-nine of the original

thirty-six paragraphs describing the "manner and means" by which the Section 371 conspiracy was

carried out were removed, leaving only seven paragraphs relating to a tax conspiracy. These

paragraphs stated that it was part of the tax conspiracy: "(1) to defeat the lawful function of the IRS

by concealing the $20.4 million obtained from Vision Banc; (2) to arrange the various transactions

to give the appearance they were at arm's-length; (3) to fraudulently distribute the Vision Banc

proceeds; (4) to transmit the Vision Banc proceeds to Imperial Title and then disburse them to

Adkinson, Alligood and Ferguson; (5) to conceal the diversion of Vision Banc proceeds; (6) for

the corporate entities to fail to file, or to file false, tax returns with regard to the Vision Banc

proceeds; and (7) for Adkinson and Koshkin to fail to file, and for Alligood and Collins to file false,

tax returns with regard to the Vision Banc proceeds." See Adkinson I, 135 F.3d at 1376 n. 39.18

The government presented even these "tax related activities," however, as part of the bank

fraud scheme—the object of the conspiracy to defraud Vision Banc was to obtain the loan in order

to satisfy a condition which would permit the Hill loan to close and then to divert the money to the

various defendants disguised as loans. The false tax returns furthered the concealment of this

diversion.

The government's supplemental brief details this "cover-up" phase of the bank fraud scheme:

The final part of the scheme to defraud may be called the "cover-up" phase. This phase
lasted for at least five years after the closing.... This final phase is established by the various

18
We note that objectives 2, 3, 4, and 5 allege acts of bank fraud which, on their face, would
be insufficient to establish a tax conspiracy.

14
 bank transactions, tax related activities of the defendants, (as explained by cooperating
witnesses), and the actual records created by the defendants to frustrate those attempting to
find out what happened.

A Klein conspiracy requires a tax purpose. If these "tax related activities" were merely part

of defendants' efforts to conceal their income from another crime, can they also support an inference

that the defendants intended to impede the IRS?

We have previously wrestled with this question in both Enstam and Browning. In each of

those cases the defendants concocted elaborate money laundering schemes in which drug money was

funneled to offshore banks and then returned in the form of fictitious loans to the defendants' sham

Florida corporations that had been created to receive these loans. See Enstam, 622 F.2d at 860;

Browning, 723 F.2d at 1546. Supporting tax returns were filed. "As a result of this scheme, income

otherwise taxable, albeit illegally obtained, was disguised as the proceeds of a non-taxable loan."

Browning, 723 F.2d at 1547 (quoting Enstam, 622 F.2d at 860).

In both cases, we conceded that the defendants argued "convincingly" that they were not

guilty of a Klein conspiracy because the purpose of their schemes was to conceal the source of their

illegal income, not to evade taxes. Enstam, 622 F.2d at 861-62; Browning, 723 F.2d at 1547. In

both cases, however, we specifically reserved the question whether this sort of money laundering

scheme—without more—constitutes a tax conspiracy because in each of these cases we were able

to find sufficient independent evidence of a tax purpose.

For example, in Enstam, the defendants used the "loans" to the sham corporations to pay

themselves large salaries and fund lavish lifestyles. They deducted corporate expenditures as bogus

business expenses. They also deducted the interest payments on the loans and structured what little

income they reported to minimize their taxes. Undercover agents, posing as potential money

15
launderers, infiltrated the money laundering scheme. At trial, the agents testified to repeated

comments by three of the defendants as to the "foolproof" nature of their "tax dodge" scheme and,

in particular, to Enstams's advice to the others as to how to evade taxes by taking bogus business

deductions and deducting fictitious interest payments. They also testified to numerous comments

by the defendants of their fear of an IRS audit and detection. 622 F.2d at 862.

Although we "recognize[d] that there is some ambiguity" on this record as to whether the

defendants intended only to conceal the source of their drug money, we held that their repeated

comments expressing fear of the IRS as well as their other tax evasion efforts were sufficient for the

jury to find that one of the objects of the conspiracy was to thwart the effective functioning of the

IRS. Id.

In Browning, a virtually indistinguishable money-laundering, tax-avoidance scheme, there

was again extended testimony, including videotapes, of meetings at which the defendants discussed

their scheme to avoid paying taxes on their laundered drug proceeds, including one conspirator's

bragging that he had bribed an IRS agent who was auditing him. There was also evidence of

structuring of bogus consulting fees so as to minimize taxes in a particular year. 723 F.2d at 1547-

48. We held that this independent evidence of an intent to evade taxes permitted the jury to infer

that the defendants had the "complementary objectives" of laundering illegally obtained money in

order to hide the true source of such income, and of impairing the IRS in its lawful functions. Id.

at 1546. See also United States v. Montalvo, 820 F.2d 686, 690 (5th Cir.1987) (open discussions

at which defendant was present regarding avoiding tax laws); United States v. Moran, 759 F.2d 777,

785 (9th Cir.1985) (defendant advocated paying taxes on only a small portion of smuggling proceeds

and structured corporations and bank accounts to "make it as confusing as possible to unravel in this

16
case if the IRS ever had to unravel it."); United States v. Bucey, 876 F.2d 1297, 1313 (7th Cir.1989)

(defendant expressed on several occasions the conspirators' r plot to "stick it back in Uncle Sam's

ear" and to "screw the IRS").

In this case, the government has pointed to no similar independent proof that these

defendants intended to impede the IRS. In fact, the government has argued just the opposite, that

the purpose of this conspiracy was to defraud the banks and divert the income, and that the "tax

related activities" of the defendants were an effort to conceal the illegal diversion of that income to

themselves.

Therefore, this case is in a similar posture to the money-laundering schemes in Enstam and

Browning. The government asserts that the defendants' corporations illegally obtained money,

laundered it as "loans" to the defendants who then failed to report it to the IRS in an attempt to

conceal the source of the illegally obtained money. Without independent evidence of a tax purpose

to all of this, we are forced to confront the issue we reserved previously—is this a tax conspiracy?

We find some guidance in our analysis in Pritchett, 908 F.2d at 816. In that case, the

defendants—David and Mark—were convicted of a conspiracy to evade Joe's—a drug

dealer—income taxes. The evidence was that David and Mark participated in concealing Joe's

ownership of various assets and that David knew the assets were purchased with drug profits.

Nonetheless, we vacated David and Mark's tax conspiracy convictions for two reasons. First, there

was no independent evidence that they knew of Joe's tax liability. Equally important, however, there

was no independent evidence that Joe's motivation for hiding his income and ownership interests

was to evade income taxes. We observed:

Other than offering evidence that Joe did not file income tax returns in the years that he was
earning money from the drug sales, the government offered no independent proof that Joe

17
 was motivated by a desire to evade income taxes. Therefore, we find the evidence presented
at their trials was insufficient to convict either David or Mark of conspiracy to evade income
taxes because nothing in the evidence indicates that either man knew that Joe was not filing
tax returns and did not intend to pay his federal income taxes.

908 F.2d at 821 (emphasis added).

We distinguished both Browning and Enstam by the presence in those cases of independent

evidence of an intent to evade income taxes:

The government's case against David and Mark contained no similar independent evidence
of an intent to evade income taxes. No statements of co-conspirators manifesting a desire
to avoid taxes were presented. Furthermore, Joe's habit of putting assets he purchased in
someone else's name and his almost exclusive use of cash do not by themselves serve to
disguise the money as non-taxable income. Thus, the present case contains no independent
evidence of a shared intent to avoid Joe's income taxes like that presented in Enstam and
Browning.

Id. at 822.

We vacated the convictions because "[w]hen efforts at concealment are reasonably

explainable in terms other than a motivation to evade taxes, the government must offer independent

proof that those who participated in the concealment intended to [impede the IRS]." 908 F.2d at

821(citing Ingram, 360 U.S. at 679, 79 S.Ct. 1314) (fact that professional gamblers hid their profits

was insufficient to prove a Klein conspiracy because the illegality of their businesses standing alone

was sufficient reason to conceal their incomes). See also United States v. Salerno, 902 F.2d 1429,

1433 (9th Cir.1990) ("The law requires an intent to defraud the IRS and this means that the

government must prove not only that the defendant's conduct affected tax revenue, but that the tax

fraud was an objective.") (applying 18 U.S.C. § 7206 and citing Krasovich, 819 F.2d at 256).

Does Pritchett answer the question we reserved in Enstam and Browning—whether

concealment alone, without independent evidence of an intent to evade income taxes, constitutes a

tax conspiracy? If so, the answer appears to be "maybe." Joe's scheme to hide his drug-money

18
purchases in Pritchettis a money-laundering scheme like those in Enstam and Browning, but the

differences are more than just a matter of degree. The elaborate creation of foreign and domestic

corporations which have no function whatsoever beyond the receipt and transference of money, the

payment of bogus salaries and the deduction of bogus business expenses all bespeak a scheme which

has the "complementary objectives" not only of hiding the source of the income but of evasion of

taxes on that income.19 Even if there is no other evidence of a tax purpose, substantial proof of such

a money-laundering scheme may be sufficient to sustain a tax conspiracy conviction. Whether

concealment alone can establish a tax purpose may depend upon the extent to which a tax purpose

can be inferred from the nature of the scheme itself.20

In Pritchett, however, the money laundering scheme was far narrower and the tax

connections much less obvious. We held that this scheme, alone, was insufficient to support an

inference that David and Mark conspired with Joe to evade taxes. It is not enough for the

government "merely to establish a climate of activity that reeks of something foul." DeSimone, 660

F.2d at 537. On such facts, we require "independent evidence of a shared intent" to evade taxes in

order to sustain a Klein conspiracy conviction. Pritchett, 908 F.2d at 822.

19
Klein itself involved the creation of seventeen foreign corporations to carry on the whiskey
selling business in a manner calculated to minimize taxes. 247 F.2d at 911-12.
20
The First Circuit has adopted a similar view:

The laundering of drug money, for example, normally involves the
deliberate concealment of the money's origin. The primary purpose is almost
always to avoid detection of the underlying crime; but can a jury also find an
implied secondary objective to conceal income from the IRS? We have held, on
specific facts, that a jury could draw such an inference and also find a violation of
section 371. Goldberg, 105 F.3d at 773 (emphasis added).

19
 Similarly, in this case, the scheme itself does not support an inference of intent. The scheme

charged against these defendants was to "defraud Hill and Vision Banc." Their "tax related

activities" were to "conceal the diversion of these bank fraud proceeds." The only evidence of a tax

conspiracy to which the government even obliquely refers in its final effort to muster the evidence

supporting these convictions is the "reporting" of certain payments as loans. Even if the defendants

filed false income tax returns, however, the government has persuaded us that "[t]his is not a case

where efforts at concealment would be reasonably explainable only in terms of motivation to evade

taxation." Here, the alleged "criminality of the enterprise ... provided more than sufficient reason

for the secrecy in which it was conducted." Ingram, 360 U.S. at 679, 79 S.Ct. 1314.

A conspiracy to conceal the source of illegally obtained money is not automatically a Klein

conspiracy, even if it collaterally impedes the IRS in the collection of taxes. Vogt, 910 F.2d at 1202.

Unless concealment is explainable only in terms of a motivation to impede the IRS, no tax

conspiracy may be inferred from that act alone. Ingram, 360 U.S. at 679, 79 S.Ct. 1314. Otherwise,

virtually any financial crime would constitute a tax conspiracy since most have some implications

for false reporting in some tax filings. United States v. Goldberg, 105 F.3d 770, 773 (1st Cir.1997).

In both Enstam and Browning, we expressed reservations about inferring intent to impede

the IRS from efforts to conceal illegal income, but upheld conspiracy convictions after finding

substantial independent evidence of intent. Enstam, 622 F.2d at 863 & n. 5; Browning, 723 F.2d

at 1548. In this case, there was a total lack of evidence of an agreement and the merest of

circumstantial proof of intent. Even if the evidence established that the defendants defrauded the

two banks and concealed the diversion of the illegal bank fraud proceeds from the IRS, it is not

enough. "Where the government's case is predicated largely, if not solely, on circumstantial

20
evidence, "reasonable inferences and not mere speculation must support the jury's verdict.' " United

States v, Knowles, 66 F.3d 1146, 1154 (11th Cir.1995) (quoting United States v. Perez-Tosta, 36

F.3d 1552, 1557 (11th Cir.1994)). In the absence of substantial evidence that the defendants both

agreed to and intended to impede the IRS, we reverse the Count I convictions of Adkinson,

Alligood, Collins, and Koshkin.

III.

Each defendant convicted21 also challenges the sufficiency of the evidence on Counts II and

III, the substantive bank fraud counts. Count II alleges the defrauding of Hill; Count III of Vision

Banc. To permit retrial upon these counts, the government must have introduced sufficient evidence

that a reasonable juror could have found beyond a reasonable doubt that the defendants (1)

knowingly (2) executed or attempted to execute (3) a scheme or artifice (4) to defraud Hill and

Vision Banc. See United States v. Swearingen, 858 F.2d 1555, 1557 (11th Cir.1988). A scheme is

executed by the movement of money, funds or other assets from the institution, United States v.

Mancuso, 42 F.3d 836, 847 (4th Cir.1994), and this movement of the money from the financial

institution completes the execution of the scheme. United States v. Christo, 129 F.3d 578, 580 (11th

Cir.1997). See also United States v. Smith, 934 F.2d 270, 272 (11th Cir.1991). The bank fraud

statute punishes the execution of the scheme. United States v. Lemons, 941 F.2d 309, 318 (5th

Cir.1991).

21
Defendants convicted upon Count II are Tinsley, Minks, Collins, Koshkin, Peek and
Adkinson. Convicted upon Count III are Tinsley, Minks, Collins, Kistler, Peek, Adkinson, and
Dufilho. We note also that Minks was sentenced on Count I—for which she was
acquitted—rather than Count III, on which she was found guilty. The sentence, however, has
already been vacated.

21
 The government's supplemental brief invites us to revisit the entire scope of the evidence

presented at trial to locate the essential scheme to defraud.22 We decline this invitation. As we

pointed out earlier, a great deal of evidence whose relevancy was tied to the government's

allegations in Count I of a bank fraud conspiracy was admitted. If these legally insufficient

allegations had been dismissed prior to trial, as they should have been, the irrelevancy of much of

this evidence would have been apparent. We will consider, therefore, only that evidence which is

relevant to the essential elements of the substantive offense of bank fraud.

The government describes the scheme to defraud these banks as three-phased. The first

phase was the negotiations to buy the property; the second was the application for and receipt of

the loans from Hill and Vision Banc; the third phase was the cover-up of the fraud and diversion

of funds.

22
The government describes a scheme as a "departure from fundamental honesty, moral
uprightness, or fair play and candid dealings in the general life of the community." United States
v. Goldblatt, 813 F.2d 619, 624 (3d Cir.1987). If the evidence establishes such a scheme, we are
again told that the government needs to come forward with only "slight" evidence to connect any
particular defendant to it.

We have recently rejected the idea that the "federal fraud statutes encompass
almost any situation." United States v. Brown, 79 F.3d 1550, 1556 (11th Cir.1996). Not
just any departure from "fundamental honesty" constitutes bank fraud under Section
1341. United States v. Mueller, 74 F.3d 1152, 1159 (11th Cir.1996) (Goldblatt not
persuasive in defining federal fraud). "[W]e must closely analyze the statutory language
and the facts presented in a particular case" to determine whether a federal fraud has been
committed. Id.

Furthermore, one of the government's many problems in prosecuting this case was
its apparent belief that charging a conspiracy allows the jury to convict upon only slight
proof of any particular defendant's connection to the scheme. For example, at trial the
government contended that "... the law in the Eleventh Circuit is clear one the scheme to
defraud and the conspiracy is established you only need slight evidence to bring a
defendant in to the case." We have pointed out above that no conviction based upon only
"slight" proof can withstand constitutional scrutiny. Toler, 144 F.3d at 1427.

22
 The only phase of this scheme that is relevant to the substantive offense of bank fraud is the

second—the application for and receipt of the loans. Bank fraud consists of the making of material

misrepresentations during that process. Some "before and after" evidence may be necessary in order

to understand the misrepresentations and their materiality—for example, we would need to know

that the property was sold to defendants in order to establish their need for a loan—but we fail to

see how the escrow account with the seller and whether it was properly funded has anything at all

to do with whether defendants defrauded Hill and Vision Banc. St. Joe is not the victim in this case

and unless it has somehow become a chartered bank, it could not be.

Similarly, upon the government's contention that the "cover-up" phase of the bank fraud was

an integral part of the conspiracy in this case, the district court admitted a substantial amount of

evidence of post-execution attempts at concealment. While evidence that the loan proceeds were

subsequently diverted might be relevant to show that the now-completed scheme was fraudulent,

the mountain of evidence regarding the alleged five-year cover-up included clearly irrelevant details

as to how the defendants spent their "ill-gotten" gains.23 Even if the bank fraud had constituted a

conspiracy, the Supreme Court has cautioned us that:

The crucial teaching of Krulewitch and Lutwak [v. United States 344 U.S. 604, 73
S.Ct. 481, 97 L.Ed. 593 (1953) ], is that after the central criminal purposes of a conspiracy
have been attained, a subsidiary conspiracy to conceal may not be implied from
circumstantial evidence showing merely that the conspiracy was kept a secret and that the
conspirators took care to cover up their crime in order to escape detection and punishment.
As was there stated, allowing such a conspiracy to conceal to be inferred or implied from
mere overt acts of concealment would result in a great widening of the scope of conspiracy
prosecutions, since it would extend the life of a conspiracy indefinitely. Acts of covering up,
even though done in the context of a mutually understood need for secrecy, cannot
themselves constitute proof that concealment of the crime after its commission was part of

23
The spending of ill-gotten gains does not constitute part of the scheme, even if the receipt of
diverted funds may be some evidence that there was a scheme.

23
 the initial agreement among the conspirators. For every conspiracy is by its very nature
secret; a case can hardly be supposed where men concert together for crime and advertise
their purpose to the world. And again, every conspiracy will inevitably be followed by
actions taken to cover the conspirators' traces. Sanctioning the Government's theory would
for all practical purposes wipe out the statute of limitations in conspiracy cases, as well as
extend indefinitely the time within which hearsay declarations will bind co-conspirators.

Grunewald v. United States, 353 U.S. 391, 401, 77 S.Ct. 963, 1 L.Ed.2d 931 (1957) (emphasis

added). We have acknowledged that Grunewald "unambiguously" excludes acts of concealment

from the original conspiracy. Knowles, 66 F.3d at 1155.

After the district court dismissed the bank fraud conspiracy allegations, and for purposes of

sentencing, it was apparent and the district court correctly found as a matter of fact that the

execution of the substantive offenses of bank fraud was completed on June 6, 1986, upon receipt of

the loan funds. See Christo, 129 F.3d at 580; Smith, 934 F.2d at 272. Most of the evidence of

post-execution efforts at concealment was not, therefore, relevant to whether the banks were

defrauded.

What we need to cull from the government's summary of the phase two evidence, then, are

the representations defendants are alleged to have made to Hill and Vision Banc, and the evidence

that these representations were both material and false.

The government describes the bank fraud as a scheme to obtain loans from Hill and Vision

Banc which they would not have made if they had known the "true facts." Although these "true

facts" were never coherently spelled out by the government, we understand the government's theory

to be that Adkinson and his "associates" intentionally misled Hill with respect to Adkinson and his

corporate entities' "true financial situation." In committing to fund the loan, Hill required Adkinson

simultaneously to resell 130 acres of the St. Joe property and to obtain an independent loan for $30

million. Not wanting to lose control over the 130 acres, Adkinson wanted to use another of his

24
corporations to make the required 130 acre purchase but needed additional loan monies in order to

do so. He went to Vision Banc but was unable to secure a loan in his name because he had reached

his loan limits at that bank. Therefore, the loan was taken out by four corporate entities which were

"straw" purchasers for Adkinson. Although Vision Banc had limits on loans to one borrower, these

corporations were able to borrow the money from Vision Banc by misrepresenting that they were

unrelated entities.24 What evidence is there of these allegations, and do they constitute bank fraud?25

We consider Count III—defrauding Vision Banc—first because its resolution is the clearer

of the two counts. Although the interpretation of the evidence was (and is) hotly disputed, there was

sufficient evidence that Vision Banc had limits-to-one-borrower regulations which were

circumvented by the way this loan was structured by defendants and by the representations of

defendants. We are content that the evidence was sufficient to support retrial of this count as to each

defendant convicted thereon.26

24
With the elimination of the bank fraud conspiracy allegations, and the redaction of the bank
fraud scheme from the original indictment, there was no coherent scheme alleged in the
indictment. We vacated defendants' convictions on Counts II and III for this failure to allege an
essential element of the offense of bank fraud. 135 F.3d at 1378. The scheme described by the
government in its supplemental response, therefore, was the government's "theory" at trial.
25
As an initial matter, we note that the government made our evaluation of its evidence more
difficult by cites to the record which either do not directly support the government's claimed
factual assertion, or do not mention the defendant that the evidence is said to incriminate. We
remind the government that these defendants are no longer charged with a bank fraud conspiracy
and, therefore, may not be convicted on a theory of vicarious liability for the acts of others. Cf.
United States v. Griffin, 699 F.2d 1102, 1104 and 1107 (11th Cir.1983)(the basic theory of
conspiracy is vicarious liability, and once a defendant becomes associated with a conspiracy, he
is responsible for all acts of it). The evidence of bank fraud must demonstrate each defendant's
individual culpability, even on an aiding and abetting theory.
26
Kistler correctly points out that the government relies extensively on the testimony of a
co-defendant, Brockman, for evidence in support of Kistler's conviction on Count III and that
this evidence may not be considered in weighing the sufficiency of the evidence against him.
Brockman did not testify until the government's rebuttal. At the close of the government's case,

25
 As to the alleged fraud on Hill, the government's case is troubling. First, with regard to the

alleged misrepresentations of Adkinson's financial status, the government does not cite any

supporting evidence in the record, and we decline to search for it. The government's brief fails

entirely to discuss Adkinson's financial situation, much less point to the record evidence showing

what representations were made regarding Adkinson's financial situation, who made them and how

they were both material and false.

Second, we are not entirely clear as to what other representations were made to Hill upon

which it could have relied and which were false. Hill's demands, as evidenced in its loan

commitment letter, were met. The independent loan for $30 million and the simultaneous sale of

the 130 acres for at least $15 million were accomplished.

The government's theory appears to be that the defendants represented that the $30 million

independent loan was paid out for broker's fees and certain other closing costs, as required by Hill,

when in fact they were not.27 We have some reservations about whether this constitutes bank fraud.

Taking the evidence in the light most favorable to the government, as we must, and resolving all

Kistler moved for a judgment of acquittal. He did not introduce any evidence after so moving.
If a defendant does not introduce evidence after moving for a judgment of acquittal at the close
of the government's case, the court may look only to the evidence adduced during the
government's case in determining the sufficiency of the evidence as to that defendant. United
States v. Magdaniel-Mora, 746 F.2d 715, 720 (11th Cir.1984); United States v. Rhodes, 631
F.2d 43, 44 (5th Cir. Unit B 1980). Since Brockman did not testify during the government's
case, and Kistler did not introduce any evidence after moving for a judgment of acquittal, no
evidence from the testimony of Brockman may be considered in reviewing the sufficiency of the
evidence against Kistler. There was, however, sufficient other evidence in the record regarding
Kistler's involvement in the alleged scheme to defraud Vision Banc to permit his retrial on this
count.
27
Actually, the evidence shows and the government acknowledges that the fees were paid but
in amounts which varied from the representations.

26
inferences in favor of the government, we conclude that there was sufficient evidence that Adkinson,

Minks, Peek28 and Collins made representations regarding brokers' fees, that they were false, and

that Hill could have relied upon them. This evidence could support a jury verdict of guilty as to this

count.

With respect to the remaining defendants, Koshkin and Tinsley, we have reviewed the

government's allegations as to the role of each in the Hill loan. As to Koshkin, there was no

evidence that he made any representations to Hill at all. The government asserts, however, that Hill

required the disclosure of all fees paid by defendants in connection with the loan closing. There was

evidence that the realty fee paid to Alligood's corporation was split between the corporation and

Koshkin. This split was not disclosed to Hill. The total fee was disclosed, however, and the

government points to no evidence in this record that disclosure of such a split is required, nor any

evidence that Koshkin knew of any obligation to disclose this split. As this is the government's sole

contention in its supplemental brief regarding Koshkin's role in the Hill bank fraud, we hold that the

evidence as to him is insufficient to support his conviction on Count II.

Finally, Tinsley, as the government notes in describing his role, was a member of Collins'

law firm and represented the borrowers at both the Vision Banc and the Hill loan closings. The

government asserts that he did not apprise Hill of certain facts which the government argues were

material violations of the Hill commitment requirements. Tinsley is alleged to have sent letters to

Hill which failed to disclose changes in Adkinson's and his corporations' financial condition. We

28
Peek objects that from the evidence of his actions "it appears more like simply carrying out
an assigned administrative task" than criminal intent. Such inferences are the province of the
jury, not the appellate court. Our task is only to make sure the evidence supporting the inference
is there.

27
have considered this evidence in the light most favorable to the government and have resolved all

inferences in its favor. Although it is far from overwhelming, we hold that the evidence was

sufficient to create a jury question as to Tinsley's guilt on Count II.

IV.

The remaining counts upon which defendants were convicted involve allegations of wire

fraud (Count VI), interstate transportation of the proceeds of fraud (Count VIII), and mail fraud

(Count IX).29 The mail and wire fraud counts require the government to prove that the defendants

did the alleged act30 (mailed or wired the proceeds of fraud) in furtherance of the bank fraud scheme.

United States v. Brown, 79 F.3d 1550, 1557 (11th Cir.1996); United States v. Haimowitz, 725 F.2d

1561, 1568-69 (11th Cir.1984) (mail fraud conviction requires proof of a scheme to defraud, the use

of the mails in furtherance of the scheme, and causation of the use of the mails). See also Pereira

v. United States, 347 U.S. 1, 8-9, 74 S.Ct. 358, 98 L.Ed. 435 (1954) (distinguishing between causing

the use of the mails and finding the mailing to be in furtherance of the scheme).

In order for the mailing or wire transmission to be "in furtherance of" the underlying

scheme, they must be "incident to an essential part of the scheme" or "a step in the plot." Schmuck

v. United States, 489 U.S. 705, 710-11, 109 S.Ct. 1443, 103 L.Ed.2d 734 (1989). A mailing furthers

a scheme when "the mails are used prior to, and as one step toward, the receipt of the fruits of the

fraud." Kann v. United States, 323 U.S. 88, 94, 65 S.Ct. 148, 89 L.Ed. 88 (1944) (citation omitted).

29
Defendants convicted on these counts were: Count VI, Minks, Collins, and Adkinson;
Count VIII, Collins, Adkinson; Count IX, Collins and Adkinson.
30
Count VI alleged the wiring of money for title insurance for the St. Joe property. Count
VIII alleged the interstate transportation of a check to pay for a condominium purchased for
Adkinson; and Count IX charged the mailing of a letter regarding the condo.

28
In Kann, the Supreme Court reversed mail fraud convictions where the mailings took place after the

"scheme in each case had reached fruition." Id. See also United States v. Maze, 414 U.S. 395, 402-

03, 94 S.Ct. 645, 38 L.Ed.2d 603 (1974) (mailing of credit card receipts not in furtherance of scheme

since scheme reached fruition earlier); Parr v. United States, 363 U.S. 370, 392-93, 80 S.Ct. 1171,

4 L.Ed.2d 1277 (1960) (invoices sent to school district officials for gas station products improperly

obtained with district's credit card not in furtherance of scheme, which had reached fruition when

the defendants obtained the products).

We have not hesitated to reverse mail fraud convictions where the underlying scheme has

reached fruition prior to the mailing. See United States v. Smith, 934 F.2d 270, 272 (11th Cir.1991)

(mailing does not further a scheme "if a defendant has been able to take possession of the object of

the fraud and if the fraud is then at an end"); Robert Suris General Contractor Corp. v. New

Metropolitan Federal Savings & Loan Ass'n, 873 F.2d 1401, 1405 (11th Cir.1989).

The government does not address either of these two counts in its supplemental brief. There

is no discussion of the elements of these offenses, nor of the evidence the government submitted to

prove these elements. We have already noted, however, that the district court found, as a matter of

fact, that "[t]he bank loans were closed and the funds received by June 6, 1986. The execution of

the scheme to defraud was, therefore, complete." Neither of the acts alleged in support of these

offenses occurred prior to June 6, 1986. As the bank fraud scheme was complete, and the

government points to no evidence which would show that these acts were in furtherance of the

29
scheme, these acts were not "in furtherance" of that scheme and do not support conviction for the

charged offense.31 The convictions on Counts VI and IX will be reversed.

There remain only the convictions of Adkinson and Collins on Count VIII, the interstate

transportation of the proceeds of fraud. Initially, we note that the government does not address this

count in its supplemental brief, neither in its summary of the scheme, nor in its section devoted to

evidence concerning Collins' alleged role in the scheme. Collins, in both his initial brief and his

recent supplement, argues that there was no evidence at trial which would suggest that he caused

or aided and abetted the interstate transportation of such a check. We take the government's silence

on this point as agreement. Collins' conviction on this count is reversed.

The other defendant convicted on this count is Adkinson. Count VIII charged the interstate

transportation of a cashier's check for $525,000, alleged to be the proceeds of the Vision Banc fraud.

The money was a payment toward the purchase of a condominium in Florida. In order to sustain

Adkinson's conviction under 18 U.S.C. § 2314, the record must contain substantial evidence that

Adkinson had (1) knowledge that the money was obtained by fraud; and (2) that he caused it to be

transported in interstate commerce.32 Pereira, 347 U.S. at 9, 74 S.Ct. 358. As we have previously

held that there was sufficient evidence of fraud to create a jury question as to whether Adkinson

defrauded Vison Banc, and there is also evidence that Adkinson caused the interstate transportation

31
We note also that there was absolutely no showing by the government that either of these
two acts—the mailing or the wiring—was in any way material to the bank fraud scheme.
32
Section 2314 requires the government to prove that the proceeds are illegally or fraudulently
obtained, but unlike the mail and wire fraud statutes, does not require that the alleged act of
interstate transportation of those proceeds be "in furtherance" of that scheme. See United States
v. Sheridan, 329 U.S. 379, 67 S.Ct. 332, 91 L.Ed. 359 (1946) (statute punishes schemes which
are complete, but which "utilize the channels of interstate commerce to make a successful get
away").

30
of those proceeds, we hold the evidence on this count sufficient to support the jury's verdict. See

United States v. Hartley, 678 F.2d 961, 968 (11th Cir.1982) ("Once the fraud had been established,

the government need only have supplied evidence to prove the defendant's knowledge of the fraud

and the actual transportation of the checks in interstate commerce.")

V.

We have labored long over this case. It has consumed an enormous amount of judicial

resources. We have done so out of a firm belief that something went awry in the trial of this matter.

The Constitution guarantees each of us fundamental fairness. This means that each of us has the

right to know with what we are charged, to proceed to trial on only those charges, and to have the

evidence marshaled against us carefully weighed as to its relevancy to those charges. Although we

have sought to protect these guarantees in the context of the trial of these specific defendants, we

do so with no opinion as to their ultimate guilt or innocence. We do so to serve the system which

protects us all.

We hold, therefore, that there is insufficient evidence as to each defendant convicted on

Count I and as to Koshkin on Count II. The evidence as to Count III was sufficient to permit retrial

of all defendants convicted thereon. The evidence as to Counts VI and IX is insufficient as to each

defendant convicted thereon. As to Count VIII, we hold the evidence insufficient as to Collins, but

sufficient as to Adkinson.

Accordingly, all convictions on Count I are REVERSED. The conviction of Koshkin on

Count II is REVERSED. All convictions on Counts VI and IX are REVERSED. As to Count VIII,

Collins' conviction is REVERSED. The case is REMANDED for further proceedings consistent

with this opinion.

31
32