United States v. Mmahat

              IN THE UNITED STATES COURT OF APPEALS

                         FOR THE FIFTH CIRCUIT
                            _______________

                              No. 95-30154
                            _______________



                       UNITED STATES OF AMERICA,

                                                   Plaintiff-Appellee,

                                VERSUS

            JOHN A. MMAHAT and JOSEPH C. MMAHAT, JR.,

                                                   Defendants-Appellants.


                       _________________________

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

                           February 7, 1997

Before HIGGINBOTHAM, SMITH, and BARKSDALE, Circuit Judges.

JERRY E. SMITH, Circuit Judge:



     John Mmahat and Joseph Mmahat, Jr., have brought appeals from

their convictions for misapplying bank funds, making false entries

in bank records, making false statements to influence a federal

agency, and conspiracy to commit each of the same.       We affirm John

Mmahat’s conviction and affirm in part and vacate in part Joseph

Mmahat’s conviction.



                                  I.
     John and Joseph Mmahat, who are brothers, were chairman and

president, respectively, of Gulf Federal Savings Bank (“Gulf”), a

federally insured financial institution in Metairie, Louisiana. In

April 1983, an audit by the Federal Home Loan Bank Board (“FHLBB”)

showed that Gulf was essentially insolvent and that some of its

commercial   loans      were   unlikely     to   be   paid    back.       The   FHLBB

commenced a follow-up audit of Gulf in November 1984.

     The audit placed the Mmahats in a precarious position.                       If

Gulf were to close, they would lose their considerable investments

in the thrift; John Mmahat additionally would lose the substantial

stream of income his law firm received from work associated with

Gulf’s loan closings, and Joseph Mmahat his six-figure salary. The

Mmahats thus undertook to have Gulf make sham loans to shell

corporations and loan swaps with other banks so as to conceal its

weak financial position.

     The effect of these transactions was temporarily to decrease

Gulf’s delinquent loan balance and inflate its income on its 1984

financial statement.       Ultimately, however, the scheme failed, and

Gulf went into receivership in November 1986.

     The   first   of    the   sham   loans      stemmed     from   a   transaction

involving CPA Associates (“CPA”), an investment partnership that

previously had acquired a set of town homes in Gretna, Louisiana,

known as Cypress Park, with the intention of converting them into

condominiums.      Gulf had financed this original purchase with a

$2,069,000   loan.       By    late   1984,      however,    CPA    was   seriously

                                        2
delinquent    on       this    original      loan,         and    Gulf      was     considering

foreclosure.        Instead         of   having       Gulf       foreclose,       the   Mmahats

arranged for Cypress Park to be purchased by K & K Financial

Services    (“K    &    K”),    a    company         owned       by    codefendant      William

Mulderig.    Thus on December 28, 1994, K & K bought Cypress Park

from CPA Associates for $2,069,000, and Gulf loaned K & K slightly

more than that amount.

     The second loan was similar.                     In the early 1980's, Gulf had

financed the purchase by Ronald Frank of an apartment complex

called Nel Place.        A downturn in the real estate market made Frank

unable to meet his monthly loan payments, and Gulf determined that

the value of the apartments did not support the loans.                              Rather than

foreclose, however, Gulf persuaded Mulderig to purchase Nel Place

and replaced       the    failing        loan       with   one        to   Dermul    Management

(“Dermul”), one of his companies.                   On December 28, 1984, Frank sold

Nel Place to Dermul for $1,632,730, and Gulf loaned Dermul that

amount plus a substantial amount of excess cash, secured by a deed

of trust for property Mulderig owned in Goshen, New York.

     The gravamen of most of the charges against the Mmahats is

that the K & K and Dermul loans were closed in haste in order to

deceive FHLBB regulators and that Gulf’s lending policies and

procedures were violated.                Specifically, the K & K loan was never

authorized by Gulf’s loan committee; no mortgage was ever obtained

on the property in Goshen that was to secure the excess on the

Dermul Management loan; the documentation on the Dermul management

                                                3
loan was substantially incomplete at the time it was executed; and

nobody involved in the Dermul or K & K loans had individual

authority to make them.

      Further to bolster Gulf’s apparent financial position, John

Mmahat also orchestrated an exchange of questionable loans with

First Progressive Bank (“First Progressive”).               On December 20,

1984, Gulf’s loan committee considered six prospective loan par-

ticipations    with   First   Progressive   and    approved     only   one,   a

$200,000 loan to Philip Capitano.           On December 28, 1984, John

Mmahat asked two of Gulf’s employees to deliver documents relating

to the Cypress Park loan to First Progressive.                   One of the

employees, David Lichtenstein, returned to Gulf with participation

certificates not only for the loan that had been approved but also

for one of the ones that had not, a $250,000 participation to Jack

Parker.

      John Mmahat hastily closed the Parker participation himself

and   warned   Lichtenstein   to   keep   the    exchange   a   secret.       On

January 3, 1985, Lichtenstein resubmitted the Parker and Capitano

participations to Gulf’s loan committee under more favorable terms

than those of the original proposal.            The committee, despite the

fact that the participations had already been funded and the loans

closed, approved the two transactions.          None of the Gulf personnel

involved in these transactions had individual authority to make the

loans.

      The sham transactions thus having been completed, it remained

                                     4
only for the individuals involved to cover them up.       In 1985,

Lichtenstein and Michael Farley, one of Gulf’s consumer loan

officers, approached David Resha, a member of Gulf’s loan committee

who had not been present at the December 27, 1984, meeting.

Lichtenstein and Farley induced Resha to sign a backdated and

incomplete approval for the Dermul loan, which had already closed.

The approval sheet was also signed by both of the Mmahats.



                               II.

     The result of this series of events was a lengthy indictment

charging both Mmahats with conspiracy to misapply bank funds

(18 U.S.C. § 657), to make false entries in bank records (18 U.S.C.

§ 1006), and to make false statements to influence a federal agency

(18 U.S.C. § 1008) (collectively, count one); substantive misappli-

cation of bank funds (18 U.S.C. § 657) (counts three and five); and

substantive making of false entries in bank records (18 U.S.C.

§ 1006) (count four).    John Mmahat was also charged with five

additional counts of misapplication of bank funds (counts six

through ten).

     The defendants were convicted of all the above offenses; John

Mmahat was sentenced to 21 years’ imprisonment and ordered to pay

$2,032,000 in restitution; Joseph Mmahat was sentenced to 29

months’ imprisonment and ordered to pay $46,000 in restitution.

During the pendency of this appeal, Joseph Mmahat died.        His

counsel subsequently moved to vacate Joseph’s indictment, convic-

                                5
tion, and sentence, or in the alternative to pursue his appeal on

behalf of his heirs.    Because the death potentially moots some of

the substantive arguments before the court, we first consider its

effect on the appeal.




                                    III.

     Normally,   the   death   of   a       criminal   defendant   during   the

pendency of his appeal abates the entire proceeding ab initio.

United States v. Asset, 990 F.2d 208, 210 (5th Cir. 1993); United

States v. Schuster, 778 F.2d 1132, 1133 (5th Cir. 1985); United

States v. Pauline, 625 F.2d 684, 684-85 (5th Cir. 1980).            In Asset,

however, we held that a conviction that results in a sentence of

restitution presents a special circumstance, for the abatement

principle is premised on the fact that criminal proceedings are

penal.   Asset, 990 F.2d at 211.            After thoroughly analyzing the

issue, we concluded that restitution has “both compensatory and

penal aspects” and that the nature of any specific restitution

order depends “on the purpose for which the obligation is imposed.”

Id. at 213.

     When restitution is ordered simply to punish the defendant, it

is penal and abates with the rest of his conviction.               When it is

designed to make his victims whole, however, it is compensatory and

survives his death.     Id. at 213-14.           In such a case, only the


                                        6
portion of the proceedings unrelated to the restitution order is

abated. See, e.g., United States v. Dudley, 739 F.2d 175, 179 (4th

Cir. 1984).

     We conclude that the purpose of the restitution ordered

against Joseph Mmahat was to compensate the entities that he

damaged.   The payments ordered were $45,000 to the Federal Savings

and Loan Insurance Corporation (“FSLIC”) and $1,000 to Ronald

Frank.     Although the district court did not make any specific

findings as to the losses Joseph Mmahat caused to the FSLIC and

Frank, we think it self-evident, in light of the nature of his

crimes, that these entities sustained losses and that the purpose

of the restitution was to compensate them.

     This in turn means that only the portion of Joseph Mmahat’s

criminal proceeding wholly unrelated to the restitution order may

be abated.    Because the restitution order survives, however, we

grant the motion for his heirs to continue the appeal in his stead.

Furthermore, as Joseph Mmahat’s substantive arguments potentially

could result in a reversal of his conviction and sentence, we give

them full consideration hereinbelow.



                                IV.

     The Mmahats contend that the government violated Brady v.

Maryland, 373 U.S. 83 (1963), by failing specifically to point the

defense to a pair of allegedly exculpatory bank board resolutions.


                                 7
In order to establish a Brady violation, the Mmahats must show that

the information allegedly withheld from them was not available

through due diligence. United States v. Aubin, 87 F.3d 141, 148-49

(5th Cir. 1996), petition for cert. filed, 65 U.S.L.W. 3507 (U.S.

Jan. 2, 1997) (No. 96-1081); United States v. Brown, 628 F.2d 471,

473 (5th Cir. 1980).

     The facts surrounding this claim are unfortunate. Some months

before trial, the government gave the defense access to a 500,000-

page cache of documents relating to the case, the most important

portions of which were indexed.       The Mmahats’ theory of the case

was that they actually had had the authority to make the Cypress

Park and Nel Place loans, and they searched the cache for evidence

in support of this.    It was not until after the trial was over,

however, that counsel for one of their codefendants found what they

were looking forSSa pair of board resolutions that ostensibly gave

the Mmahats general authority to negotiate and approve loans on

whatever terms they saw fit. The Mmahats claim that the government

should have alerted them specifically to these resolutions in

response to their Brady requests.

     At a subsequent post-trial motion hearing, the government

conceded that it had been aware of these resolutions but argued

that it had met its Brady obligation by disclosing them in the

500,000-page cache.    The district court eventually found that,

although the resolutions were material and might have affected the


                                  8
jury’s verdict had they been introduced at trial, the defendants’

lack of due diligence foreclosed the possibility of relief.                          We

agree.

       The    Mmahats    do   not    dispute      that   they   had    both    personal

knowledge of the resolutions and access to them before trial.                      Due

diligence in failing to locate exculpatory material is a necessary

element of a successful Brady claim, Aubin, 87 F.3d at 148-49, and

we cannot see how the Mmahats meet this standard.                     As the district

court correctly noted, there is no authority for the proposition

that the government’s Brady obligations require it to point the

defense to specific documents within a larger mass of material that

it has already turned over.



                                            V.

       The Mmahats also contend that they were unfairly prejudiced by

the government’s nine-year delay in bringing an indictment.                       This

circuit’s test for prejudicial pre-indictment delay was recently

clarified in United States v. Crouch, 84 F.3d 1497 (5th Cir. 1996)

(en    banc),    cert.   denied,      117    S.    Ct.   736,   and    cert.    denied,

117 S. Ct. 736 (1997).              In Crouch, we held that pre-indictment

delay entitles the accused to a dismissal only when                     he shows (1)

that the delay “was intentionally brought about by the government

for the purpose of gaining some tactical advantage over the accused

in    the    contemplated     prosecution         or   for   some   other   bad   faith


                                            9
purpose”   and   (2)   that   the    delay    “caused   actual,   substantial

prejudice to his defense.”          Crouch, 84 F.3d at 1523.

     Prior to trial, John Mmahat moved that the indictment be

dismissed for excessive delay, arguing that he was prejudiced by

the faded memories and unavailability of potential witnesses,

changed perceptions of the culpability of his conduct, and the

intervening conviction of one of the other individuals involved in

arranging the loans.     The district court denied his motion on the

ground that he had not established actual prejudice.

     That ruling was correct.         By “actual, substantial prejudice,”

the Crouch court meant to exclude just this sort of claim.             Indeed,

as a panel of this court held two years before Crouch was decided,

“[v]ague assertions of lost witnesses, faded memories, or misplaced

documents are insufficient.”          United States v. Beszborn, 21 F.3d

62, 67 (5th Cir.), cert. denied, 115 S. Ct. 330 (1994).

     The Mmahats also specifically claim that they have been

prejudiced in their inability to present testimony from Mulderig’s

accountant, who died before trial. This argument is largely belied

by the fact that the earlier civil suits against them required the

Mmahats to assemble essentially the same documents and witnesses as

did the    criminal    prosecution.         Moreover,   they   have   not   even

attempted to show the bad faith delay required under Crouch.



                                      VI.


                                       10
     The Mmahats next challenge three aspects of the jury instruc-

tions, which we address seriatim.



                                       A.

     The    Mmahats   assert    that    the   district   court   improperly

prevented   the   jury   from   considering     the   materiality   of   the

statements charged in counts one and four, conspiracy to make a

false entry in bank records in violation of 18 U.S.C. § 371 (count

one), and the substantive charge of having done the same in

violation of 18 U.S.C. § 1006 (count four).           At trial, the Mmahats

requested an instruction that paralleled this circuit’s pattern

jury instruction on 18 U.S.C. § 1005, the bank fraud statute.

Without objection from the defense, the court instructed the jury:


          For you to find the Defendants guilty of this crime,
     you must be convinced that the Government has proved each
     of the following elements beyond a reasonable doubt:

          First, that the Defendants were officers, agents, or
     employees of, or connected in any capacity with, Gulf
     Federal Savings Bank, or that they were aiders or
     abettors of such people[;]

          Second, that the accounts of Gulf Federal Savings
     Bank were insured by the Federal Savings and Loan
     Insurance Corporation;

          Third, that the Defendants had the intent to deceive
     the examiners of Gulf Federal or any department or agency
     of the United States;

          Fourth, that, with this intent, the Defendants made
     or caused to be made false entries in any book, report,
     or statement of or to Gulf Federal Savings Bank.

     The government incorrectly argues that 18 U.S.C. § 1006's lack

                                       11
of an explicit materiality requirement means that the omission of

materiality from the jury instructions was not error at all.                 As we

held in United States v. Pettigrew, 77 F.3d 1500, 1510-11 (5th Cir.

1996), “materiality is an essential element of the [§ 1006] false

entry offense.”      Although other cases support this proposition as

well, we need look no further, for Pettigrew is binding precedent.1

      It follows that materiality is an element of conspiracy to

violate § 1006, for a conspiracy to make an immaterial false entry

in bank records would lack an unlawful object.2                      Because the

Mmahats did not object to these instructions at the time of trial,

we review for plain error.         FED. R. CRIM. P. 52(b).      In order for us

to reverse under this analysis, we must find that there was (1) an

error; (2) plainness; (3) a prejudicial effect on substantial

rights; and (4) a compromise of the fairness, integrity, or public

reputation of judicial proceedings.                United States v. Olano,

113 S. Ct. 1770, 1776-79 (1993); United States v. Calverley, 37

F.3d 160, 162 (5th Cir. 1994) (en banc), cert. denied, 115 S. Ct.

1266 (1995).        Thus even when an error meets the first three

criteria of the plain error analysis, we still may exercise our


           1
          Cf. United States v. Harvard, 103 F.3d 412, ___ (5th Cir. 1997)
(distinguishing Pettigrew and holding that materiality is not an essential element
under a related bank fraud statute, 18 U.S.C. § 1005).

       2
         Cf. United States v. Feola, 420 U.S. 671, 686 (1975) (“Our decisions
establish that in order to sustain a judgment of conviction on a charge of
conspiracy to violate a federal statute, the Government must prove at least the
degree of criminal intent necessary for the substantive offense itself.”) (citations
omitted); Ingram v. United States, 360 U.S. 672, 678 (1959) (same); United States
v. Buford, 889 F.2d 1406, 1409 n.5 (5th Cir. 1989) (same).

                                        12
discretion not to reverse if the error does not “seriously affect

the fairness, integrity, or public reputation of judicial proceed-

ings.”         Calverley, 37 F.3d at 162 (quoting United States v.

Atkinson, 297 U.S. 157, 160 (1936)).

      The first and second prongs of the Olano testSSthe existence

of a plain errorSShinge in this case on whether plain error is

measured at the time of trial or at the time of appeal.               Notwith-

standing the fact that a recent en banc decision of this court

addressed the issue, see Calverley, 37 F.3d at 162-63, subsequent

panel        decisions   have   left   our   caselaw,   at   best,   confused.3

Fortunately, the discretionary prong of plain error analysis allows

us to avoid both this conflict and the still thornier question of

whether failure to instruct the jury on an element of the offense

inevitably prejudices substantial rights.4

      At trial, the Mmahats never suggested, much less argued, that

their false entries were immaterial.           It would have been virtually

pointless to do so, for the fact that they were made to convince



         3
         Compare Calverley, 37 F.3d at 162-63 (mandating that plain error be
“'clear under current law' at time of trial”) (quoting Olano, 507 U.S. at 734)
with United States v. Jobe, 101 F.3d 1046, 1062 (5th Cir. 1996) (stating that
plain error may be measured at time of appeal).

     4
        Compare United States v. Allen, 76 F.3d 1348, 1368 (5th Cir.) (assuming
that failure to instruct on an element is structural error), cert. denied,
117 S. Ct. 121 (1996); United States v. Garza, 42 F.3d 251, 253 (5th Cir. 1994)
(holding that failure to instruct on an essential element is plain error), cert.
denied, 115 S. Ct. 2263 (1995) with United States v. Brown, 616 F.2d 844, 846
(5th Cir. 1980) (stating that failure to instruct on a single element is not
necessarily plain error). The Supreme Court has granted certiorari in a similar
case. See United States v. Johnson, 82 F.3d 429 (11th Cir. 1996) (unpublished),
cert. granted, 117 S. Ct. 451 (Nov. 15, 1996) (No. 96-203).

                                        13
FHLBB regulators to keep the bank open attests to their material-

ity.    Even assuming arguendo that they have demonstrated a plain

error affecting substantial rights, we find that it does not

“seriously affect the fairness, integrity, or public reputation of

judicial proceedings,” Calverley, 37 F.3d at 162 (quoting United

States v. Atkinson, 297 U.S. 157, 160 (1936)), and therefore we

exercise our discretion not to correct it.



                                  B.

       The Mmahats aver that the instructions prevented the jury from

considering authorization to make the loans in question as a

defense to the counts charging misapplication of funds.     Specifi-

cally, the Mmahats take issue with the following sentence:

       I further instruct you that a Board of Directors of a
       savings and loan cannot validate a fraud on the institu-
       tion and, therefore, such authorization is not a defense
       to the crime of misapplication of savings and loan funds
       as charged in the indictment.

Because the Mmahats did not voice this objection at trial, we again

review for plain error.     See FED. R. CRIM. P. 52(b); United States

v. Breque, 964 F.2d 381, 387 (5th Cir. 1992), cert. denied, 507

U.S. 909 (1993).

       As always, we will decline to find error if the charge, viewed

in its entirety, is a correct statement of the law that plainly

instructs jurors on the relevant principles of law, and, assuming

a timely objection, we reverse only if the instructions do not


                                  14
correctly state those principles.     United States v. Allibhai,

939 F.2d 244, 251 (5th Cir. 1991), cert. denied, 502 U.S. 1072

(1992); United States v. Gray, 96 F.3d 769, 775 (5th Cir. 1996).

More importantly in this particular instance, our review always

focuses on the charge as a whole and the context in which it was

given, rather than on any particular isolated statement.    United

States v. Flores, 63 F.3d 1342, 1374 (5th Cir. 1995), cert. denied,

117 S. Ct. 87 (1996).

     The Mmahats’ argument is facially attractive:       They were

charged with having made unauthorized loans, yet the instructions

forbade them from defending themselves by arguing that the loans

were authorized. When considered in context, however, the sentence

of which they complain loses its apparent sting.

     Within the portion of the charge that is at issue, the

district court first instructed the jury that willfulness and

specific intent were required as to each count of the indictment

and that good faith was a complete defense to each of the crimes

charged. It then proceeded to explain the concept of ratification.

The instruction the Mmahats complain of followed immediately after

the explanation of ratification and referred back to it.

     Thus, when the court told the jury that “such authorization”

was not a defense to the misapplication charges, it was referring

to after-the-fact ratification, not before-the-fact authorization.

The jury hardly could have understood the statement otherwise, for


                                15
as the Mmahats correctly point out, a loan that they were expressly

authorized to make simply cannot have been an unauthorized loan.

        When   viewed   in    this   light,   the   instruction    was   plainly

correct. Post-hoc ratification by the loan committee could no more

absolve the Mmahats of misappropriation than can a sincere apology

undo an aggravated assault.5 Ratification was relevant to specific

intent alone, and nothing in the instructions prevented the jury

from considering the “defense”SSreally an attack on the prosecu-

tion’s case-in-chiefSSthat the Mmahats had ex ante authorization to

make the loans.



                                        C.

        In conjunction with the previous argument, the Mmahats contend

that the same instruction’s reference to the Board of Directors

“validat[ing] a fraud on the institution” effectively “[told] the

jury to consider that the defendants had committed fraud” and

apprised it of the Mmahats’ “bad intent.” This, the Mmahats argue,

did them “immeasurable harm” by “supplying the evil intentions not

contained in the facts.”         As with their other arguments regarding

the jury instructions, the Mmahats’ failure to object at trial

requires that they demonstrate plain error.

        Also   as   before,    the   complained-of    phrase    was   not   even


    5
      See United States v. Cauble, 706 F.2d 1322, 1354 (5th Cir. 1983) (“Patently
an entire bank board, acting unanimously, could not without violating the statute
invest bank funds to purchase a boatload of marijuana . . . .”), cert. denied, 474
U.S. 994 (1985).

                                        16
incorrect, much less plainly erroneous.            Intent to defraud was an

element of the misapplication counts. The instruction neither told

the jury that a fraud had occurred nor suggested “bad intent”; it

merely stated that if a fraud had occurred, ratification would not

be a complete defense.        Within the context of proceedings in which

the government had spent weeks trying to convince the jury that the

Mmahats    had    essentially    defrauded      Gulf,   this   was   perfectly

legitimate.



                                      VII.

      The Mmahats also present a wide range of arguments regarding

the sufficiency of the evidence.               John Mmahat challenges his

convictions on counts three and five on the basis that there was

insufficient evidence of lack of approval by Gulf’s loan committee

for   a   reasonable   jury     to   find    misappropriation.       John   also

challenges his convictions on all counts on the basis that the

loans were ratified, that they were interrelated, and, with regard

to count six, that no additional funds were advanced.

      Joseph Mmahat adopts John’s argument with regard to count

three and argues that the government failed sufficiently to connect

him to the omission from Gulf’s records that formed the basis for

count four.      Joseph also challenges his convictions on all counts

on the basis that other individuals were involved in arranging the

loans and that the loans were “normal business transactions.”

      We affirm if a reasonable trier of fact could conclude that

                                       17
the elements of the offense were established beyond a reasonable

doubt, viewing the evidence in the light most favorable to the

jury’s verdict and drawing all reasonable inferences from the

evidence to support the verdict.     The evidence presented at trial

need not exclude every reasonable possibility of innocence. United

States v. Faulkner, 17 F.3d 745, 768 (5th Cir.), cert. denied,

115 S. Ct. 193 (1994).

     Our review of the record reveals that the Mmahats’ sufficiency

arguments are weak, and we therefore will not deal with them at

length. John’s contentions as to counts three and five are refuted

by (1) the ample evidence that the Dermul loan was secured only by

property worth approximately $60,000, and not by a lien on over

$500,000 worth of property, as the loan committee had required;

(2) the absence of an application for, and approval of, the K & K

loan in the committee’s minutes; and (3) the testimony of numerous

witnesses.   His more general arguments as to all the counts are

refuted by (1) the jury’s consideration and rejection of his

ratification defense, which is an incomplete defense to misappro-

priation in any case; (2) the jury’s consideration and rejection of

his argument that the violations relating to subsidiary loans

charged in counts six, seven, and eight were part and parcel of the

violations charged in counts three and five; and (3) caselaw

holding that the government need not show conversion to prove

misapplication of funds, e.g., United States v. Mann, 517 F.2d 259,


                                18
268 (5th Cir. 1975), cert. denied, 423 U.S. 1087 (1976).

       Joseph Mmahat’s argument on count three fails for the same

reason as John’s.     His contentions on count four are refuted by

ample evidence that he knowingly backdated the incomplete Dermul

loan approval sheet.      His blanket arguments on all the counts of

his conviction virtually refute themselves:          The fact that other

bank employees were involved in his activities does not make them

any less criminal, and the contention that these loans were “normal

business transactions” is belied by almost every piece of evidence.



                                   VIII.

       The Mmahats’ final argument is that the district court erred

in ordering them to pay restitution because under United States v.

Coleman, 997 F.2d 1101, 1106-07 (5th Cir. 1993), cert. denied, 510

U.S. 1077 (1994), their prior civil settlement with the government

makes restitution duplicative.      Because this would be a sentence-

reducing factor if true, the Mmahats bear the burden of demonstrat-

ing it.   See United States v. Hughey, 877 F.2d 1256, 1265 (5th Cir.

1989), rev’d on other grounds, 495 U.S. 411 (1990); see also United

States v. Cuellar-Flores, 891 F.2d 92, 93 (5th Cir. 1989).              Aside

from    conclusory   assertions,    however,      neither   defendant     has

attempted   to   adduce   any   evidence   that    the   civil   settlement

overlapped the restitution orderSSindeed, Joseph Mmahat did not

even object to the order.       In Coleman, the defendants presented


                                    19
extensive evidence as to overlap with an earlier civil settlement.

Coleman, 997 F.2d at 1107.      Because the Mmahats did not do so, the

district court did not err in ordering restitution.

                                   IX.

     For    the   foregoing   reasons,   John   Mmahat’s   conviction   is

AFFIRMED.    The proceedings against Joseph Mmahat are AFFIRMED to

the extent that they support the restitution order, and in all

other respects are VACATED.




                                    20