FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee, No. 09-10109
v. D.C. No.
2:06-cr-00464-
RANDY W. JENKINS, SRB-2
Defendant-Appellant.
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 09-10110
D.C. No.
IRA W. GENTRY, Jr., AKA Ira
Willie Gentry, AKA Donald Isaac 2:06-cr-00464-
Williams, AKA Don Williams, SRB-1
AKA Fred Koone, AKA Don OPINION
Brown,
Defendant-Appellant.
Appeal from the United States District Court
for the District of Arizona
Susan R. Bolton, District Judge, Presiding
Argued and Submitted
September 9, 2010—San Francisco, California
Filed January 25, 2011
Before: Betty B. Fletcher, Richard C. Tallman and
Johnnie B. Rawlinson, Circuit Judges.
Opinion by Judge B. Fletcher
1581
1586 UNITED STATES v. JENKINS
COUNSEL
Phillip Edward Hantel, Phoenix, Arizona, for defendant-
appellant Randy Jenkins.
UNITED STATES v. JENKINS 1587
Daniel Robert Drake, Drake Law PLC, Phoenix, Arizona, for
defendant-appellant Ira W. Gentry.
Frank Phillip Cihlar, Michael Vasiliadis, and Elissa Hart-
Mahan, United States Department of Justice, Tax Division,
Washington, D.C.; Frank T. Galati and Reid Charles Pixler,
Office of the United States Attorney, Phoenix, Arizona, for
the plaintiff-appellee.
OPINION
B. FLETCHER, Circuit Judge:
INTRODUCTION
This case arises out of a “pump and dump” scheme during
which Randy Jenkins and Ira Gentry conspired to secretly
acquire millions of shares of UniDyn Corporation stock, arti-
ficially inflate its value, sell it for significant profit, and laun-
der the proceeds. After a sixteen-day trial, a jury convicted
Jenkins and Gentry (“Appellants”) of multiple counts of
securities fraud (15 U.S.C. §§ 78ff, 78j(b)1); wire fraud (18
U.S.C. § 1343); international concealment money laundering
(18 U.S.C. § 1956(a)(2)(B)(i)); concealment money launder-
ing (18 U.S.C. § 1956(a)(1)(B)(i)); and transactional money
laundering (18 U.S.C. § 1957(a)). The jury also convicted
each appellant of one count of tax evasion (26 U.S.C. § 7201)
and for conspiracy to defraud the United States and commit
wire fraud, securities fraud, and mail fraud (18 U.S.C. § 371).
The district court sentenced Jenkins to 90-months impris-
onment, and Gentry to 180-months imprisonment. In addition,
the district court ordered appellants to forfeit approximately
$9 million in ill-gotten gains to the government. In a related
1
Unless otherwise noted, all citations are to the 2006 edition of the
United States Code.
1588 UNITED STATES v. JENKINS
civil action, the government sought forfeiture of Gentry’s res-
idence.
Appellants timely appeal both their convictions and sen-
tences. The district court had jurisdiction under 18 U.S.C.
§ 3231. We have jurisdiction under 28 U.S.C. § 1291 and 18
U.S.C. § 3742(a), and we now affirm.
The principal legal issue we face is whether 18 U.S.C.
§ 3292 suspended the running of the statute of limitations for
all counts. Section 3292 permits the district court to suspend
the statute upon finding that the government reasonably
believes evidence of a crime under investigation by a grand
jury is in a foreign country and has requested that evidence.
Subject to defined outer limits, the suspension period lasts
until the foreign government has taken “final action” on the
official request.
Appellants argue that an application to suspend the running
of the statute of limitations must be supported by a sworn affi-
davit or other material of evidentiary value and that § 3292
does not permit the district court to suspend the statute of lim-
itations if the government applies after the statute has expired.
The fact that the government submitted its official request for
evidence to a foreign government before the expiration of the
statute is irrelevant, they argue. Consequently, they contend
that even though the government submitted a sworn affidavit
in support of its § 3292 application on June 20, 2005, the dis-
trict court could not suspend any of the pertinent statutes of
limitation that expired before that date. Finally, appellants
argue that Canada took “final action” on or before July 5,
2005, ending the suspension period and rendering several
counts of the indictment untimely. We agree only with appel-
lants’ first contention and conclude that the statute of limita-
tions had not expired on any counts before the grand jury
returned its indictment.
In addition, both appellants contend (1) there was insuffi-
cient evidence to support conviction on many counts; (2) the
UNITED STATES v. JENKINS 1589
jury’s instructions on money laundering were reversible error;
and, (3) the district court erred at sentencing in calculating the
amount of loss and number of victims. Jenkins also argues
that his sentence was substantively unreasonable. Gentry
argues that the district court wrongly denied his motion to
sever his trial from Jenkins’s, and that the district court erred
in denying his motion for additional cross examination of a
government witness. We reject each of these claims and
affirm the convictions and sentences.
BACKGROUND
In the early 1990s, Gentry formed Universal Dynamics, a
“vibration testing” company that analyzed the quality of cir-
cuit boards using shaking machines. Gentry was the president
and owner of Universal Dynamics. Universal Dynamics also
produced a line of hardware and software products which
controlled the shakers and analyzed results. In 1996, Gentry
learned of attempts to use infrared cameras to identify flaws
in circuit boards. The concept was created by Irene Murphy,
a student at General Motors Institute, but her research
revealed that the technology was not viable for mass produc-
tion. Gentry claimed to have invented the technology, called
it the “Sterling concept,” and proclaimed that it would revolu-
tionize the industry.
In December 1997, Universal Dynamics merged with a
shell corporation and became UniDyn Corporation. At the
time it was created, UniDyn issued nearly fifteen million
shares of stock to a Bahamian corporation called UniDyn, Inc.
(UniDyn-Bahamas). UniDyn-Bahamas was created by Jen-
kins, a disbarred attorney and friend of Gentry’s with exper-
tise in setting up offshore corporations. UniDyn-Bahamas was
a nominee entity with no independent business. Its registered
agent and director were figureheads chosen to conceal Gentry
and Jenkins’s control. It later changed its name to Mearns
Acceptance Corporation.
1590 UNITED STATES v. JENKINS
At its creation, UniDyn also issued approximately eight
million shares to Universal Dynamics. Though the corporate
tax returns and SEC filings for Universal Dynamics indicated
that Gentry was only a minority shareholder, the other alleged
shareholders included aliases for Gentry and Jenkins and the
names of acquaintances who did not, in fact, own stock and
were not aware appellants were using their names. In actual-
ity, Gentry was the sole owner and president of Universal
Dynamics.
UniDyn was publicly traded on the Over the Counter Elec-
tronic Bulletin Board. Because of its low share price (under
$5 per share), it was called a “penny stock.” As a publicly
traded company, UniDyn was required to file annual and
quarterly SEC reports. The reports were required to disclose
any shareholders owning or controlling a 5% or greater inter-
est in the company and to announce any significant events in
the company. SEC filings did not reflect Gentry and Jenkins’s
beneficial ownership of either Universal Dynamics or Mearns.
Engineers at UniDyn and its subsidiaries tested Sterling
between 1998 and 1999, and concluded that the technology
was not commercially viable. Yet, in SEC filings and press
releases, Gentry continued to falsely promote the company’s
prospects. Between 1997 and 2001, among other misrepresen-
tations, Gentry claimed that Sterling was 100% effective at
estimating the life span of circuit boards; UniDyn was pursu-
ing a patent for Sterling; UniDyn had a commitment from
Technet, a Japanese corporation owned by Hiroshi Tsuriya, to
purchase $200 million in Sterling units; Sterling had been
successfully tested by IBM; UniDyn had constructed a Ster-
ling unit ready to be placed with a customer; and UniDyn had
entered into a $900,000 licensing deal for Sterling. In addi-
tion, both Gentry and Jenkins posted messages on Raging
Bull, an online investors’s message board, touting UniDyn’s
potential, announcing lucrative deals, and attempting to
assuage concerns about the identities of its largest sharehold-
ers, including those in Mearns.
UNITED STATES v. JENKINS 1591
Having “pumped” the value of UniDyn stock, appellants
proceeded to “dump” their holdings. See United States v. Lau-
rienti, 611 F.3d 530, 534 (9th Cir. 2010) (describing a “pump
and dump” scheme). In early 2000, Gentry and Jenkins
opened accounts for a number of nominee corporations and
individual aliases at Thomson Kernaghan and Union Securi-
ties brokerage houses in Canada. Over the next few months,
they transferred millions of UniDyn-shares held by UniDyn-
Bahamas and Universal Dynamics to these accounts. Between
March 7 and March 15, 2000, Jenkins and Gentry sold almost
900,000 shares from Universal Dynamics’ Union Securities
brokerage account in Canada, netting proceeds of $1.8 mil-
lion. Between March and June 2001, they sold millions of
shares of stock from accounts at Thomson Kernaghan, with
net proceeds of over $6 million. Jenkins and Gentry continued
to sell UniDyn stock from the Canadian accounts in the latter
half of 2001 and in 2002.
Jenkins and Gentry wired funds from the Canadian broker-
age accounts to a variety of bank accounts in the United
States and abroad. The bulk of the funds were used for per-
sonal purchases and investments, including $300,000 in gold
and silver coins and $70,000 in silver bullion in Jenkins’s
name at Monex Deposit Company, a $1.5 million home in
Scottsdale for Gentry, several vehicles, and $30,000 worth of
jewelry. In addition, appellants used approximately $2 million
to make UniDyn appear profitable: $900,000 was used to fund
a purported licensing deal of Sterling’s technology, and $1
million was used to fund a “longtime shareholder’s” invest-
ment in UniDyn. Neither Gentry nor Jenkins disclosed on
their 2000 tax returns any income or profits from their nomi-
nees’ sales of UniDyn stock.
The scheme began to unravel in April 2001, when Hiroshi
Tsuriya, the president of Technet, informed a UniDyn subsid-
iary that he had never entered into an agreement to purchase
over $200 million of Sterling units. Shortly after this informa-
tion was conveyed to UniDyn’s corporate counsel and board
1592 UNITED STATES v. JENKINS
of directors, Gentry resigned as CEO. In a May 2001 SEC fil-
ing, UniDyn’s board of directors announced Gentry’s resigna-
tion and stated recent evaluations of Sterling had revealed the
product would have to be delayed and might not be viable.
The price of UniDyn’s stock and volume of shares traded
dropped precipitously.
In 2001, the IRS began investigating Gentry and Jenkins
for tax fraud and, pursuant to a tax treaty, obtained documents
from Canada implicating appellants in securities, mail, and
wire fraud. Pursuant to the terms of the treaty with Canada,
however, the IRS could use those documents only for tax
investigation purposes. On March 16, 2005, the government
sent a request to Canada under the Treaty on Mutual Legal
Assistance in Criminal Matters (“MLAT”), U.S.-Can., March
18, 1985, 24 I.L.M. 1092 (1985), requesting the records of
Union Securities and Thomson Kernaghan accounts linked to
Gentry, Jenkins, and aliases and nominee corporations associ-
ated with both.
On March 22, 2005, the government applied ex parte to the
district court seeking suspension of the statute of limitations
pursuant to 18 U.S.C. § 3292. The application included an
unverified copy of the MLAT request and an unsworn memo-
randum. On March 23, 2005, the court issued an order sus-
pending the statute of limitations, effective as of March 16,
2005. On June 20, 2005, the government submitted a “supple-
mental application” including a sworn declaration from IRS
Agent Linda Wallace detailing why the government believed
there was relevant evidence in Canada. The court issued a
revised order on June 29, again suspending the statute of limi-
tations as of March 16, 2005.
On May 3, 2006, a federal grand jury returned a fifty-nine
count indictment charging Gentry and Jenkins with tax eva-
sion, concealment money laundering, international conceal-
ment money laundering, securities fraud, wire fraud, and
UNITED STATES v. JENKINS 1593
conspiracy. Several counts of the indictment were voluntarily
dismissed by the prosecution before trial.
After a sixteen-day trial, the jury convicted Jenkins of one
count of conspiracy, two counts of securities fraud, one count
of wire fraud, one count of tax evasion, eleven counts of inter-
national concealment money laundering, three counts of con-
cealment money laundering, and three counts of transactional
money laundering. Jenkins was acquitted of three counts of
transactional money laundering and one count of wire fraud.
The jury convicted Gentry of one count of conspiracy, nine
counts of securities fraud, six counts of wire fraud, one count
of tax evasion, eleven counts of international concealment
money laundering, three counts of concealment money laun-
dering, and four counts of transactional money laundering.
Gentry was acquitted of two counts of transactional money
laundering and one count of wire fraud.
The district court held a sentencing hearing on March 2,
2009. The district court applied a twenty-level upward adjust-
ment for the amount of loss and a four-level upward adjust-
ment because there were more than fifty victims. For Gentry,
the district court additionally applied a three-level upward
adjustment because Gentry acted as a manager and two addi-
tional levels because he abused a position of public or private
trust. The Sentencing Guidelines recommended life in prison
for Gentry and between 324 and 405 months for Jenkins.
After weighing the factors enumerated in 18 U.S.C.
§ 3553(a), the district court sentenced Gentry to 180 months
and Jenkins to 90 months of imprisonment.
DISCUSSION
I. The District Court Did Not Err in Suspending the
Running of the Statute of Limitations Under 18 U.S.C.
§ 3292 from March 16, 2005 to April 12, 2006.
[1] The statute of limitations for the non-capital federal
offenses involved here is five years. 18 U.S.C. § 3282(a).
1594 UNITED STATES v. JENKINS
Nevertheless, 18 U.S.C. § 3292 extends the limitations period
if evidence of an offense being investigated by a grand jury
is in a foreign country. Section 3292 provides:
(a)(1) Upon application of the United States, filed
before return of an indictment, indicating that evi-
dence of an offense is in a foreign country, the dis-
trict court before which a grand jury is impaneled to
investigate the offense shall suspend the running of
the statute of limitations for the offense if the court
finds by a preponderance of the evidence that an
official request has been made for such evidence and
that it reasonably appears, or reasonably appeared at
the time the request was made, that such evidence is,
or was, in such foreign country.
....
(b) Except as provided in subsection (c) of this sec-
tion, a period of suspension under this section shall
begin on the date on which the official request is
made and end on the date on which the foreign court
or authority takes final action on the request.
(c) The total of all periods of suspension under this
section with respect to an offense —
(1) shall not exceed three years; and
(2) shall not extend a period within which a criminal
case must be initiated for more than six months if all
foreign authorities take final action before such a
period would expire without regard to this section.
Appellants first contend that the district court erred in sus-
pending the running of the statute of limitations based on the
government’s March 22, 2005, application, because the appli-
cation did not satisfy the evidentiary requirements of subsec-
UNITED STATES v. JENKINS 1595
tion (a)(1). Second, appellants argue that the district court
erred in concluding that the government’s June 20, 2005 “sup-
plement” to the March application cured any error and sus-
pended the running of the statute of limitations on nine
counts, the limitations period of which had expired between
the March 16 MLAT request and the June 20 application.
Third, appellants contend that Canada’s July 5, 2005 response
constituted a “final action” ending the suspension period
under subsection (b), and that the statute of limitations on six
counts thus ran before the indictment on May 3, 2006.
We review de novo a district court’s denial of a motion to
dismiss an indictment because of the statute of limitations.
United States v. DeGeorge, 380 F.3d 1203, 1213 (9th Cir.
2004). Any factual findings underlying the denial are
reviewed for clear error. Id.
A. Evidence Necessary to Support an Application Under
§ 3292.
[2] Before suspending the running of the statute of limita-
tions, the district court must find by a preponderance of the
evidence that (1) an official request has been made for the
evidence and (2) it reasonably appears or appeared at the time
the request was made that the evidence of the crime is or was
in a foreign country. 18 U.S.C. § 3292(a)(1). “[T]he govern-
ment has some burden to establish, as opposed to being able
to merely assert without support, that the foreign evidence it
seeks meets the section’s requirements.” DeGeorge v. U.S.
Dist. Ct. for Cent. Dist. of Cal., 219 F.3d 930, 937 (9th Cir.
2000); see also United States v. DeGeorge, 380 F.3d at 1215
(stating that district courts should not “simply rubber-stamp
the government’s request” but should “hold the government
to its burden.”).
[3] The Ninth Circuit has never addressed the issue of
whether a § 3292 application must be supported by evidence
of particular value. However, the Eleventh Circuit squarely
1596 UNITED STATES v. JENKINS
confronted this question in United States v. Trainor, 376 F.3d
1325, 1330-35 (11th Cir. 2004). In Trainor, the court held that
a § 3292 application must be supported by materials that “in-
clude or [are] accompanied by some indicia of reliability.” Id
at 1331. The court concluded that because § 3292 extends the
limitations period (itself designed to ensure the reliability of
evidence) and an application under § 3292 is made ex parte,
the government must meet a “minimum evidentiary burden.”
Id. at 1332.
According to Trainor, the § 3292 preponderance standard
is quite broad. Id. at 1332-33. The government can satisfy its
burden of proof under § 3292(a)(1) “by including a sworn or
verified application containing the necessary factual informa-
tion, testimony by Government officials, affidavits, declara-
tions, exhibits, or other materials of evidentiary value,” even
including hearsay evidence. Id. Nevertheless, a “mere summa-
rization of the evidence in the Government’s possession . . .
standing alone, does not satisfy the Government’s burden.”
Id. at 1333; see also United States v. Wilson, 322 F.3d 353,
363 (5th Cir. 2003) (holding that the government did not meet
its § 3292(a)(1) burden when it presented “circumstantial evi-
dence of questionable origin” and the testimony of a witness
“wholly without personal knowledge” of the issues).
[4] Trainor is consistent with § 3292 and this circuit’s pre-
cedent. See United States v. DeGeorge, 380 F.3d at 1215;
DeGeorge v. U.S. Dist. Ct., 219 F.3d at 937. Accordingly, we
hold that when the government moves to suspend the statute
of limitations under § 3292, it must present “something with
evidentiary value . . . tending to prove it is reasonably likely
that evidence of the charged offenses is in a foreign country”
— not merely unsupported assertions. See Trainor, 376 F.3d
at 1332-34.
[5] The government contends that the MLAT request sub-
mitted with the March 16, 2005 application contained the nec-
essary indicia of reliability, as it was (1) sixteen pages long
UNITED STATES v. JENKINS 1597
and included significant detail on the facts of the investigation
and (2) prepared pursuant to the United States’s treaty obliga-
tions with Canada. We need not decide that question. Whether
or not the March 22, 2005 application was sufficient, the gov-
ernment’s June 20, 2005 “supplemental application” clearly
was adequate. The June 20 application included the sworn
declaration of IRS Agent Linda Wallace, who described the
IRS’s investigation, the grand jury investigation and the evi-
dence already recovered from Canada tending to indicate that
further evidence of the offenses was abroad. Agent Wallace’s
declaration bore the necessary indicia of reliability and sup-
ported the district court’s finding, by a preponderance of the
evidence, that the government reasonably believed evidence
of appellants’ crimes was in Canada.
[6] We hold that the district court did not err on June 29,
2005, in issuing an order suspending the statute of limitations.
Because § 3292 clearly states that the suspension period
begins on the date the official request to the foreign govern-
ment is made, the district court did not err in ordering the sus-
pension period to begin on March 16, 2005, when the
government submitted its MLAT request to Canada. See 18
U.S.C. § 3292(b); United States v. Bischel, 61 F.3d 1429,
1434 (9th Cir. 1995).
B. Timing of a § 3292 Application
Appellants next contend that the district court erred in sus-
pending the statute of limitations on counts two, four, twelve,
twenty-four, twenty-six, thirty-five to thirty-seven, fifty-three
and fifty-four, because the statute of limitations for those
counts expired before the government applied for suspension
under § 3292. Appellants argue that § 3292 does not authorize
a district court to “revive” an already expired statute of limita-
tions, regardless of whether the government makes its official
request for evidence from the foreign country before the stat-
ute expires. Our ruling in Bischel, 61 F.3d at 1434, forecloses
appellants’ argument.
1598 UNITED STATES v. JENKINS
In Bischel, defendant was indicted in 1992 for criminal
conduct occurring before 1985. 61 F.3d at 1431-32. As here,
the district court issued an order suspending the running of the
statute of limitations under § 3292, effective from the date of
the government’s official request for the evidence. Id. Bischel
“contend[ed] that the district court erred in holding that the
statute of limitations was suspended as of July 27, 1989, when
the letters rogatory were issued, instead of November 20,
1989, when the order suspending the statute was entered, on
the ground that a § 3292 order cannot revive or extend a
period of limitations.” Id. at 1434. The court disagreed, stat-
ing “the statute plainly contemplates that the starting point for
tolling the limitations period is the official request for evi-
dence, not the date the § 3292 motion is made or granted.” Id.
(emphasis added). Indeed, “[t]he statute itself specifies the
only relevant time the application must be made: ‘before
return of an indictment.’ ” Id. (quoting United States v. Miller,
830 F.2d 1073, 1076 (9th Cir. 1987)).
[7] Under Bischel, the only temporal requirements of a
§ 3292 application are (1) that the official request for evi-
dence in a foreign country be made before the statute of limi-
tations expires and (2) that the application for suspension be
submitted to the district court before the indictment is filed.
61 F.3d at 1434; see also United States v. Daniels, No. C 09-
00862 MHP, 2010 WL 2680649, at *5-6 (N.D. Cal. July 6,
2010) (analyzing the holding of Bischel). We recognize that
there is disagreement among the circuits on this issue. Com-
pare United States v. Kozeny, 541 F.3d 166, 174 (2nd Cir.
2008) (“The fact that the statute requires a retroactive starting
date for the suspension period does not speak to whether
applications for suspension must be filed before the statute of
limitations has otherwise run.”), with United States v. Hof-
fecker, 530 F.3d 137, 163 n.4 (3rd Cir. 2008) (stating that a
majority of the panel believed “there is no reason why a case
seemingly barred by the statute of limitations cannot be
revived by a § 3292 application made before the Government
has received all of the requested foreign evidence”), cert.
UNITED STATES v. JENKINS 1599
denied Hoffecker v. United States, 129 S. Ct. 652 (2008).
Nevertheless, Bischel remains binding in this circuit.2
[8] Because the March 16 MLAT request was submitted
before the statutes of limitations had run on any counts, the
government’s June 20 application revived any statutes of limi-
tations that had expired in the period between the MLAT
request and the application to suspend. The district court thus
did not err in suspending the statute of limitations, effective
March 16, 2005, for all counts.
C. Final Action Under § 3292.
[9] Section 3292(b) provides that, subject to the outer lim-
its provided in subsection (c), the period of suspension shall
end on the date on which the foreign authority from whom
evidence is requested “takes final action on the request.” Final
action is a dispositive response to each item set out in the offi-
cial request, including a request for certification. United
States v. Hagege, 437 F.3d 943, 955-56 (9th Cir. 2006);
United States v. DeGeorge, 380 F.3d at 1215.
2
Appellants argue Stogner v. California, 539 U.S. 607 (2003) overruled
Bischel. In Stogner, the Court held that “a law enacted after expiration of
a previously applicable limitations period violates the Ex Post Facto
Clause when it is applied to revive a previously time-barred prosecution.”
Id. at 632-33. Stogner likely overruled the portions of Bischel concluding
that enactment of a law extending the statute of limitations does not vio-
late the Ex Post Facto clause when applied to crimes committed before the
law was enacted. See Bischel, 651 F.3d at 1435-36. However, Stogner’s
holding does not affect the portions of Bischel relevant to this case. See
Marks v. United States, 430 U.S. 188, 191 (1977) (“The Ex Post Facto
Clause is a limitation upon the powers of the Legislature, and does not of
its own force apply to the Judicial Branch of government.”) (citation omit-
ted); Bischel, 651 F.3d at 1434 (“Here, however, it isn’t a new statute that
is the culprit, but its judicial application.”). Because 18 U.S.C. § 3292 was
enacted in 1984 — long before appellants committed their crimes — Bis-
chel remains good law as applied to this case. See Act of Oct. 12, 1984,
Pub. L. No. 98-473, § 1218(a), 98 Stat. 1837.
1600 UNITED STATES v. JENKINS
Appellants argue that Canada took “final action” on the
request on or before July 5, 2005. If that is true, the suspen-
sion period would have lasted 111 days and accordingly, the
statutes of limitations on six counts would have run by Janu-
ary 15, 2006, months prior to indictment. The government
however contends that final action did not occur until April
12, 2006. If the government is correct, the suspension period
was 492 days, and all counts of the indictment were timely.
We agree with the government.
The March 16, 2005 MLAT letter requested certified cop-
ies of all records created or obtained by Thomson Kernaghan
and Union Securities between September 1, 1999 and July 1,
2000, relating to “any and all accounts held or controlled” by
Gentry, Jenkins and several aliases and nominee corporations.
Canada first responded in a letter dated June 27, 2005,
informing the government that Thomson Kernaghan’s bank-
ruptcy trustee had located accounts for the listed corporations
but was unable to locate accounts for Gentry, Jenkins or any
of their aliases. The letter then instructed the United States to
submit a supplemental request for the corporate records, with-
out reference to accounts held or controlled by Gentry or Jen-
kins. It closed: “Please advise how you wish us to proceed.”
On July 5, 2005, the Canadian government sent another
response, this time informing the United States that it had
located copies of the Union Securities accounts for Universal
Dynamics, but had not located accounts for Gentry, Jenkins,
their aliases, and one nominee corporation. The response
included authenticated copies of the located Union Securities
records.
On September 1, 2005, in response to the June 27, 2005 let-
ter, the government sent a supplemental request for assistance,
specifying its desire to obtain certified copies of the Thomson
Kernaghan records associated with appellants’ nominee cor-
porations and omitting any mention of the individual
UNITED STATES v. JENKINS 1601
accounts. Canada responded to that request on April 12, 2006,
when it provided certified copies of the Thomson Kernaghan
account records for appellants’ nominee corporations.
We find that the June 27 and July 5 responses were interim
communications that did not constitute final action for the
purposes of § 3292. The facts of this case are strikingly simi-
lar to those in Hagege, 437 F.3d at 955-56. In Hagege, the
Israeli government responded to a request for certified records
with uncertified records and a letter stating “in the future,
should you need certified copies . . . please let me know.” Id.
at 956. This response, Hagege held, did not constitute a final
action because the Israeli government had not provided a cer-
tificate of authenticity, nor had it indicated it would not com-
ply with the request for certification. Id.
Similarly, the July 5 response was not a final action
because it did not provide a dispositive response on every
item requested — it only provided the certified records from
Union Securities, not Thomson Kernaghan. The June 27 letter
did not provide the requested records for corporations associ-
ated with Gentry and Jenkins; it also did not indicate that the
Canadian government would not provide those records.
Rather, the June 27, 2005 response specified further steps
needed to acquire the certified records sought from Thomson
Kernaghan. The government took those steps, and final action
in this case occurred on April 12, 2006, when Canada pro-
vided certified copies of the corporate records at Thomson
Kernaghan. Until that date, the United States did not have a
dispositive response on every item initially requested.
[10] In sum, we hold that the government’s June 20, 2005
application was sufficient to suspend the statute of limitations
for all counts, effective March 16, 2005. The suspension
period lasted until Canada took final action on April 12, 2006;
no counts of the indictment were time barred.
1602 UNITED STATES v. JENKINS
II. There Was Sufficient Evidence To Support Each
Conviction.
Jenkins and Gentry allege insufficient evidence to support
conviction on eight counts of securities fraud, six counts of
wire fraud, twenty-four counts of money laundering, and one
count of tax evasion. A court reviewing for sufficiency of the
evidence must first “view[ ] the evidence in the light most
favorable to the prosecution” and then determine whether
“this evidence, so viewed, is adequate to allow any rational
trier of fact to find the essential elements of the crime beyond
a reasonable doubt.” United States v. Nevils, 598 F.3d 1158,
1163-64 (9th Cir. 2010) (en banc) (alteration and citation
omitted).
When “faced with a record of historical facts that supports
conflicting inferences” a reviewing court “must presume —
even if it does not affirmatively appear in the record — that
the trier of fact resolved any such conflicts in favor of the
prosecution, and must defer to that resolution.” Jackson v.
Virginia, 443 U.S. 307, 326 (1979). Reversal is warranted
when the evidence so construed “may still be so supportive of
innocence that no rational juror could conclude that the gov-
ernment proved its case beyond a reasonable doubt” or is “in-
sufficient to establish every element of the crime.” Nevils, 598
F.3d at 1167. Applying these standards to the facts of this
case, we conclude there was sufficient evidence to support
conviction on all counts.
A. Materiality in Securities Fraud
[11] Appellants argue there was insufficient evidence that
the statements at issue in the securities fraud counts were
material. Under 15 U.S.C. § 78j(b), any person who uses or
employs a manipulative or deceptive device in connection
with the sale of any security commits securities fraud. SEC
Rule 10b-5, implementing the statute, forbids the making of
“any untrue statement of a material fact.” 17 C.F.R.
UNITED STATES v. JENKINS 1603
§ 240.10b-5(b). Materiality is an element of securities fraud.
In re Cutera Secs. Litig., 610 F.3d 1103, 1108 (9th Cir. 2010)
(“Central to a 10b-5 claim is the requirement that a misrepre-
sentation or omission of fact must be material.”)
For purposes of securities fraud, “materiality depends on
the significance the reasonable investor would place on the
withheld or misrepresented information.” Basic Inc. v. Levin-
son, 485 U.S. 224, 240 (1988). A statement is material if “a
reasonable investor would have considered it useful or signifi-
cant.” United States v. Smith, 155 F.3d 1051, 1064 (9th Cir.
1998). The standard of materiality is an objective one. United
States v. Reyes, 577 F.3d 1069, 1076 (9th Cir. 2009).
Appellants first contend that the government failed to prove
that their misrepresentations had any effect on UniDyn’s
stock prices or the behavior of independent investors. They
argue instead that UniDyn’s stock rose due to external market
forces, namely, the dot-com bubble. This argument fails.
Materiality in securities fraud does not depend on demonstra-
tion of a market reaction to the misstatements. No. 84 Empl’r-
Teamster Joint Council Pension Trust Fund v. Am. West
Holding Corp., 320 F.3d 920, 934-35 (9th Cir. 2003). Nor is
the reliance of individual investors required to find a 10b-5
violation by misrepresentation. See S.E.C. v. Rana Research,
Inc., 8 F.3d 1358, 1364 (9th Cir. 1993).3
[12] The evidence at trial proved that appellants made false
3
Appellants also argue that because the government failed to conclu-
sively prove that any investors were influenced by false press releases to
purchase UniDyn stock, the press releases were not material for wire fraud
purposes. Materiality is an element of wire fraud. See Neder v. United
States, 527 U.S. 1, 20 (1999). But a statement is material for wire fraud
purposes only if it has the “natural tendency to influence or be capable of
influencing [the person to whom] it was addressed.” United States v.
Gaudin, 515 U.S. 506, 509 (1995) (internal quotation marks omitted).
There is no requirement that the statements actually influence those to
whom they are addressed.
1604 UNITED STATES v. JENKINS
statements about the viability of UniDyn’s products, its trans-
actions and business dealings, and the identity of its share-
holders. “[I]nformation regarding a company’s financial
condition is material to investment.” Reyes, 577 F.3d at 1076;
see also Warshaw v. Xoma Corp., 74 F.3d 955, 959-60 (9th
Cir. 1996) (statements failing to disclose concerns regarding
the safety of a product were material). A reasonable investor
would have wanted to know that UniDyn’s allegedly lucrative
transactions were shams, that Gentry and Jenkins controlled
millions of shares of UniDyn stock, and that Sterling’s release
was not imminent. We conclude that the SEC filings were
false and material.
Jenkins contends that Raging Bull message board posts giv-
ing rise to two counts of securities fraud were not material
because “vague” posts on an internet message board would
not be important to a reasonable investor. Jenkins’s posts to
Raging Bull clearly concerned material information. See
Basic Inc., 485 U.S. at 240; Reyes 577 F.3d at 1075. We are
not persuaded by Jenkins’s argument that posts on an internet
message board, regardless of their content, can never be
important to a reasonable investor. At trial, the government
introduced evidence that Gentry closely monitored posts on
Raging Bull and instructed employees to post positive com-
ments and counteract negative ones. It also introduced evi-
dence that one of UniDyn’s board members and shareholders
read Raging Bull to keep apprised of information about the
company. This was sufficient to allow the jury to conclude
that the Raging Bull posts were material. Cf. United States v.
Phillip Morris USA, Inc., 566 F.3d 1095, 1122-23 (D.C. Cir.
2009) (holding that tobacco company’s continuous denials of
the link between cancer and smoking indicates that such
information was material, regardless of the fact that denials
were contrary to all available scientific evidence).
B. Variance Between Indictment and Evidence on Count
Seventeen.
[13] Gentry argues that the evidence was insufficient to
support his conviction on count seventeen (securities fraud)
UNITED STATES v. JENKINS 1605
because the indictment referred to false and misleading state-
ments made on Form 10-Q filed with the SEC on April 2,
2001, but the evidence introduced at trial related to a fraudu-
lent form 10-K filed on the same date. Because Gentry did not
raise this argument below, we review for plain error. United
States v. Olano, 507 U.S. 725, 732 (1993). To prevail, appel-
lants “must show (1) that there was error, (2) that the error
was plain and (3) that the error affected [ ] substantial rights.”
United States v. Alghazouli, 517 F.3d 1179, 1188 (9th Cir.
2008), cert. denied Alghazouli v. United States, 129 S. Ct. 237
(2008). Even if appellants make all three of these showings,
we should reverse “only if the error seriously affects the fair-
ness, integrity, or public reputation of judicial proceedings.”
Id. at 1188.
[14] The primary difference between a form 10-K and a
form 10-Q is the time it is filed: a 10-K is filed yearly and a
10-Q is filed quarterly. However, both the 10-K and the 10-Q
require the company to disclose information about its finan-
cial condition, operations, and the owners of its securities.
Compare U.S. SEC, Form 10-Q, http://www.sec.gov/about/
forms/form10-q.pdf, with U.S. SEC, Form 10-K, http://
www.sec.gov/about/forms/form10-k.pdf. The evidence at trial
showed the form 10-K was fraudulent for the reasons alleged
in the indictment — it failed to disclose Gentry’s ownership
of millions of shares of UniDyn Stock and falsely represented
that UniDyn had patents pending for Sterling. Furthermore,
the type of form is not an element of the offense. See 15
U.S.C. § 78ff (making it a crime to make or cause to be made
a false or misleading statement in any application, report or
document required to be filed pursuant to the chapter or regu-
lations); 17 C.F.R. § 240.10b-5(b) (applying to any untrue
statement of material fact). Even though the indictment was
erroneous, the error did not relieve the government of proving
every element of the offense, and did not prejudice Gentry.4
See Nevils, 598 F.3d at 1167.
4
For similar reasons, we reject Gentry’s argument that the evidence at
trial constructively amended count seventeen, warranting reversal.
1606 UNITED STATES v. JENKINS
C. Specific Intent To Commit Wire Fraud.
[15] Wire fraud has three elements: (1) a scheme to
defraud; (2) use of wires in furtherance of the scheme; and (3)
a specific intent to deceive or defraud. United States v. Green,
592 F.3d 1057, 1064 (9th Cir. 2010). Jenkins contends that
the government failed to prove an element of wire fraud
because it did not demonstrate that his February 13, 2001 post
on Raging Bull was made with the specific intent to partici-
pate in a scheme to defraud. We disagree.
[16] Specific intent can be established by circumstantial
evidence. United States v. Rogers, 321 F.3d 1226, 1230 (9th
Cir. 1993) (holding that misrepresentations and omissions are
sufficient from which to infer intent to defraud). The scheme
itself may be probative circumstantial evidence of the intent
to defraud. United States v. Sullivan, 522 F.3d 967, 974 (9th
Cir. 2008). Jurors considered evidence that Jenkins helped
create all of the offshore corporations holding UniDyn stock,
helped to sell the stock, and helped to move the various pro-
ceeds to accounts controlled by appellants, and, further, that
his posts on Raging Bull were false and misleading. The jury
convicted Jenkins of conspiracy to (1) commit securities and
wire fraud and (2) defraud the United States government.
From this evidence, a reasonable juror could infer that Jenkins
intended to defraud investors.
D. Tax Evasion
On appeal, Gentry argues for the first time that the there
was insufficient evidence to support his conviction for tax
Although an indictment, once returned by the grand jury, may not thereaf-
ter be broadened, except by the grand jury, minor differences between
indictment and the proof at trial can be dismissed as a mere variance.
United States v. Hartz, 458 F.3d 1011, 1019-20 (9th Cir. 2006). If the vari-
ance does not alter the behavior for which defendant was charged, the con-
viction may stand. Id. at 1021. Because the type of form filed is not a
necessary element of securities fraud, any variance from the charging doc-
ument did not alter the behavior for which Gentry was convicted. There
was no prejudice to Gentry.
UNITED STATES v. JENKINS 1607
evasion under 26 U.S.C. § 7201. Because Gentry did not pre-
serve this issue at the close of trial, we review for plain error.
Olano, 507 U.S. at 732.
[17] The existence of a tax deficiency is an element of tax
evasion under 26 U.S.C. § 7201. Boulware v. United States,
552 U.S. 421, 424 (2008). Gentry argues that Agent Kathleen
Cornelius (the IRS agent who calculated the gain Gentry real-
ized from UniDyn stock sales) gave little explanation of how
she calculated the deficiency and did not consider Gentry’s
testimony about his basis in the shares, which would have off-
set any gains realized by the sales. The record does not com-
pel a conclusion that Agent Cornelius’ calculation was
incorrect.
E. Financial Transactions and Concealment Money
Laundering
Appellants were convicted of “concealment money laun-
dering” under 18 U.S.C. § 1956(a)(1)(B)(i), which makes it a
crime for a person to conduct a financial transaction that
involves use of the proceeds of a specified unlawful activity,
“knowing that the transaction is designed in whole or in part
. . . to conceal or disguise the nature, the location, the source,
the ownership, or the control of the proceeds of specified
unlawful activity . . . .” A “financial transaction” under 18
U.S.C. § 1956(c)(4) must itself affect interstate or foreign
commerce in a way, or use a financial institution that is
engaged in or affects interstate or foreign commerce. Jenkins
argues that there was insufficient evidence from which a rea-
sonable juror could find that the conduct charged in six counts
qualified as “affecting interstate or foreign commerce.”
[18] The six counts involved transfer of funds by wire and
writing checks to fund investments and to purchase vehicles.
These acts affect interstate commerce and certainly are finan-
cial transactions. See 18 U.S.C. § 1956(c)(4)(i) (transfer of
funds by wire is a financial transaction); 18 U.S.C.
1608 UNITED STATES v. JENKINS
§ 1956(c)(4)(ii), (c)(5) (use of monetary instruments, includ-
ing checks, is a financial transaction); 18 U.S.C.
§ 1956(c)(4)(iii) (transactions involving transfer of title to a
vehicle is a financial transaction); United States v. Evans, 272
F.3d 1069, 1080 (8th Cir. 2001) (holding that the purchase of
an automobile from a commercial dealer unquestionably has
an effect on interstate commerce). There was sufficient evi-
dence from which a juror could find that Jenkins engaged in
financial transactions to support conviction on the money
laundering counts.
F. International Concealment Money Laundering
Appellants were also convicted of several counts of interna-
tional concealment money laundering under 18 U.S.C.
§ 1956(a)(2)(B)(i), which applies to transfers of funds into the
United States from a foreign country, or vice-versa. Gentry
contends that there was insufficient evidence that the funds in
counts thirty-five to forty-five actually traveled into or out of
the United States. Gentry argues that while Thomson Kernag-
han was a Canadian brokerage firm, and Global Bank of
Commerce Swiss American Bank Limited was in Antigua, the
debiting banks for the transfers at issue were located in New
York City. Thus, he concludes, the funds themselves never
crossed United States borders, even if the orders to transfer
them came from originating banks abroad.
[19] The only witnesses to testify about the process of
international wire transfers were Agent Cornelius and Gentry.
Agent Cornelius testified that the funds originated wherever
the “originator” bank was located. During her testimony, the
government introduced into evidence two summary exhibits,
pursuant to Federal Rule of Evidence 1006,5 illustrating the
5
Federal Rule of Evidence 1006 permits the contents of voluminous
writings which cannot conveniently be examined in court to be presented
in the form of a chart, summary, or calculation, provided the original writ-
ings are available to the parties. In this case, the charts summarized bank
records and checks introduced into evidence.
UNITED STATES v. JENKINS 1609
flow of funds from Canada to the United States, and from the
United States to Antigua. Though Gentry disputed the accu-
racy of the summary charts and Agent Cornelius’s testimony,
where the evidence supports either of two constructions, we
must assume that the jury resolved this dispute in favor of the
government and defer to that resolution. Jackson, 443 U.S. at
326.
G. Profits v. Proceeds in Money Laundering
As a final basis to challenge their money laundering con-
victions, appellants argue that the government failed to prove
that the funds at issue were the “profits” of specified unlawful
activity, rather than the “proceeds” (meaning gross receipts)
of that activity.6 To establish the “profits” of a specified
unlawful activity, the prosecution “needs to show only that a
single instance of specified unlawful activity was profitable
and gave rise to the money involved in a charged transaction.”
United States v. Santos, 553 U.S. 507, 520 (2008) (Scalia, J.,
joined by Souter, Thomas, & Ginsburg, J.J., a plurality joined
by Stevens, J.). The factfinder need not consider the “profit-
ability of some entire criminal enterprise.” Id. “What counts
is whether the receipts from the . . . unlawful act exceeded the
costs fairly attributable to it.” Id. The government met its bur-
den here.
[20] The evidence at trial established that all of the funds
involved in the money laundering transactions were derived
from the sale of UniDyn stock held in accounts at Thomson
Kernaghan and Union Securities. A reasonable juror could
6
In United States v. Santos, 553 U.S. 507, 509, 523 (2008), a plurality
of the Court held that the rule of lenity demanded that the term “proceeds”
in 18 U.S.C. § 1956(a)(1) be construed to mean profits rather than
receipts. After Santos, Congress amended the money laundering statute to
define proceeds to include the gross receipts of unlawful activity. 18
U.S.C. § 1956 (c)(9). The amendment became effective May 20, 2009.
Because defendants were indicted on May 3, 2006, Santos governs this
case.
1610 UNITED STATES v. JENKINS
have concluded that those funds were the receipts of appel-
lants’ securities fraud and wire fraud.7 There was also suffi-
cient evidence to support the jury’s conclusion that those
receipts exceeded the costs fairly attributable to securities
fraud and wire fraud. Agent Cornelius testified that, for each
account from which funds were laundered, she calculated the
“net proceeds” in the account, meaning the total amount real-
ized from the sales of stock less any commissions paid. No
evidence indicated that any funds in the Canadian accounts
were used to defray the costs of appellants’ securities fraud
and wire fraud (for example, by paying for the costs of wiring
false press releases). The evidence was sufficient to allow a
reasonable juror to conclude that the funds laundered were the
profits of securities fraud and wire fraud.
III. The Money Laundering Instructions Did Not
Prejudice Appellants.
[21] Defendants next contend that the money laundering
instructions were reversible error. In order to convict defen-
dants of international concealment money laundering, the stat-
ute requires the government to prove that defendants’
movement of funds out of or into the United States was
designed to conceal the nature, location, source, or ownership
or control of the profits of specified unlawful activity. 18
U.S.C. § 1956(a)(2)(B)(i) (emphasis added). Similarly, in
order to prove that defendants concealed money as part of a
7
Gentry argues that the money laundered could not be the profits of
unlawful activity, because his securities and wire fraud convictions were
based on acts committed on or after April 17, 2001 and the bulk of the
money laundering transactions occurred on or before April 12, 2001.
However, the Government introduced extensive evidence of misrepresen-
tations in Raging Bull posts, press releases and SEC filings that occurred
between 1997 and April 2001. Those misrepresentations concerned the
very subjects underlying Gentry’s securities fraud convictions: the viabil-
ity of Sterling, the profits of UniDyn, and the identity of its investors. This
was sufficient to allow the jury to conclude the funds were the receipts of
prior, uncharged securities fraud.
UNITED STATES v. JENKINS 1611
money laundering scheme, the government had to prove that
defendants knowingly used the proceeds of a specified unlaw-
ful activity in a financial transaction, knowing that the trans-
action was intended to conceal the nature, location, source,
ownership, or control of the proceeds of specified unlawful
activity. 18 U.S.C. § 1956(a)(1)(B)(i) (emphasis added). The
statutory definition of specified unlawful activity includes
securities fraud and wire fraud. See 18 U.S.C.§ 1956(c)(7)(A)
(incorporating offenses listed in 18 U.S.C. § 1961(1)).
In this case, rather than use the term “specified unlawful
activity,” the jury instructions used the term “prior criminal
activity.” Appellants argue the instructions permitted the jury
to convict them of laundering money that was not the pro-
ceeds of securities fraud or wire fraud. Because appellants did
not object to the jury instructions at trial, we review for plain
error. Alghazouli, 517 F.3d at 1188.
[22] “It is well-established that a trial court errs if it fails
to instruct the jury on an element of a charged offense.” Id.
at 1189 (citing United States v. Gaudin, 515 U.S. 506, 509-11
(1995)). However, we hold that the error did not affect appel-
lants’ substantial rights. For an error to affect substantial
rights, “in most cases it means that the error must have been
prejudicial.” Alghazouli, 517 F.3d at 1190. When determining
prejudice, the court does not examine the jury instructions in
isolation. Id. It may take into account the evidence presented
at trial. See United States v. Nguyen, 565 F.3d 668, 677-78
(9th Cir. 2009) (concluding that plainly erroneous jury
instructions did not affect substantial rights where there was
significant, uncontested evidence of the missing element pres-
ented at trial).
[23] Taking into account the other crimes charged and the
evidence introduced at trial, we cannot conclude that, had the
money laundering instructions included the term “securities
fraud and wire fraud” instead of “prior criminal activity,”
there is a reasonable probability the jury’s verdict would have
1612 UNITED STATES v. JENKINS
been different. Four facts support our conclusion. First, the
jury instructions, while erroneous, clearly required the jury to
find that the money was derived from prior criminal activity.
Cf. Alghazouli, 517 F.3d at 1191 (stressing that the danger of
an instruction for conspiracy to commit money laundering
that failed to mention the element that the funds be derived
from specified unlawful activity is that the jury might be per-
suaded to convict even though the laundered money was
derived from legal activity). Second, appellants do not argue
that the funds at issue were derived from anything other than
the sale of UniDyn stock. Third, the jury convicted Jenkins
and Gentry of multiple counts of securities and wire fraud, so
it was well aware of the nature of the illegal activity from
which the money was derived. See id. at 1191-92. Finally, the
only other crimes charged were tax evasion (for failing to
report income derived from the sales of UniDyn stock) and
conspiracy to commit securities fraud and wire fraud. Thus,
it is virtually impossible that the jury convicted appellants of
money laundering on a finding that the funds involved any-
thing other than the proceeds of securities fraud and wire
fraud.
IV. Gentry Fails to Prove that the Trial Court
Erroneously Denied His Additional Motions
Gentry argues that the district court erroneously denied two
motions made during trial. First, he argues the district court
erroneously denied his motion to sever his trial from Jen-
kins’s, because Jenkins’s trial strategy was to downplay his
culpability in comparison to Gentry’s. A district court’s denial
of a motion to sever is reviewed for abuse of discretion.
United States v. Decoud, 456 F.3d 996, 1008 (9th Cir. 2006).
“The test for abuse of discretion by the district court is
whether a joint trial was so manifestly prejudicial as to require
the trial judge to exercise his discretion in but one way, by
ordering a separate trial.” Id. (internal quotation marks and
citation omitted).
UNITED STATES v. JENKINS 1613
[24] Gentry has not met this burden. The possibility of
acquittal in a separate trial is not itself sufficient to require
severance. Id. In addition, because appellants were charged
with conspiracy, a joint trial was particularly appropriate.
Zafiro v. United States, 506 U.S. 534, 536-37 (1993).
Gentry also argues that the district court violated his consti-
tutional right to confrontation when it denied his motion to
conduct additional cross-examination of Hiroshi Tsuriya,
whom Gentry claimed signed a $200 million contract to pur-
chase Sterling. “[A] limitation on cross examination does not
violate the Confrontation Clause unless it limits relevant testi-
mony and prejudices the defendant.” United States v.
Rodriguez-Rodriguez, 393 F.3d 849, 856 (9th Cir. 2005).
[25] Gentry has not demonstrated that the district court
limited relevant testimony. Tsuriya testified during a video
deposition that he never signed a contract and that the signa-
ture on the alleged nineteen-page contract was not his. On
cross examination, Tsuriya admitted that in 1999, he had (at
Gentry’s request) signed a single-page document without
reading it and faxed it to Gentry. Tsuriya testified that he had
not seen the document since. Gentry has not demonstrated
how the document Tsuriya admits to signing (which Gentry
admits is “innocuous”) was relevant or how his inability to
conduct additional cross-examination in respect to it preju-
diced his defense.
V. The District Court Did Not Err at Sentencing
Appellants first argue that the district court committed pro-
cedural error at sentencing by miscalculating the amount of
loss and number of victims. We review a sentencing court’s
application of the Guidelines to the case, including its calcula-
tion of the Guidelines range, for abuse of discretion. United
States v. Carty, 520 F.3d 984, 993 (9th Cir. 2008) (en banc),
cert. denied Zavala v. United States, 553 U.S. 1061 (2008). A
district court’s findings of fact at sentencing must be sup-
1614 UNITED STATES v. JENKINS
ported by a preponderance of the evidence, unless the sen-
tencing factor has an “extremely disproportionate effect on
the sentence relative to the offense of conviction,” in which
case findings of fact must be supported by clear and convinc-
ing evidence. United States v. Dare, 425 F.3d 634, 642 (9th
Cir. 2005). We hold that the district court did not err, either
procedurally or substantively, at sentencing.
A. Amount of Loss
Loss calculation is highly individualized and fact specific;
the same method is not necessarily appropriate in all cases.
United States v. Zolp, 479 F.3d 715, 718 (9th Cir. 2007). The
Sentencing Guidelines offer several possible approaches to
loss calculation. U.S. SENTENCING GUIDELINES MANUAL
§ 2B1.1 cmt. 3(A) (2009). Typically, loss is the greater of
actual loss (“the reasonably foreseeable pecuniary harm that
resulted from the offense”) or intended loss (“the pecuniary
harm that was intended to result”). Zolp, 479 F.3d at 718-19.
The sentencing court uses the gain that resulted from the
offense as an alternative measure of loss “only if there is a
loss but it reasonably cannot be determined.” U.S. SENTENCING
GUIDELINES MANUAL § 2B1.1 cmt. 3(B)(2009).
In this case, because the loss amount increased the base
offense level by twenty, the district court required the Gov-
ernment to provide “clear and convincing” evidence of the
loss amount.8 At sentencing, the district court considered two
options: a loss amount of $26 million (calculated by multiply-
ing the average price of UniDyn stock during the conspiracy
less the residual value of the stock after the scheme ended by
8
The district court was overly cautious in adopting the clear and con-
vincing standard. Sentencing enhancements based entirely on the nature
and extent of the conspiracy, as opposed to acquitted or uncharged con-
duct, typically do not require proof by the clear and convincing standard.
United States v. Armstead, 552 F.3d 769, 777 (9th Cir. 2008); United
States v. Harrison-Philpot, 978 F.2d 1520, 1524 (9th Cir. 1992).
UNITED STATES v. JENKINS 1615
the number of outstanding shares), and a loss amount of $9
million (based on the court’s measure of appellants’ ill-gotten
gains subject to forfeiture). The district court believed that the
evidence of ill-gotten gains was “so clear and convincing”
that it chose to adopt that measure of loss over the “more con-
troversial and disputable” amount based on stock prices.
[26] The sentencing guidelines clearly permitted the dis-
trict court to adopt this method of calculating loss. Further,
the district court’s factual finding that appellants realized
approximately $9 million of ill-gotten gains was made after a
hearing during which the court heard arguments by both par-
ties, considered all of the evidence introduced at trial, and
reviewed evidence not introduced at trial. This factual finding
was not clearly erroneous. The district court did not err in cal-
culating the amount of loss.
B. Number of Victims
[27] Appellants challenge the court’s determination that
there were more than fifty victims of their schemes, arguing
that there was no evidence of any loss to individuals resulting
from their conduct. We disagree. The district court correctly
required proof by a preponderance of the evidence that there
were more than fifty victims. United States v. Showalter, 569
F.3d 1150, 1160 (9th Cir. 2009). The sentencing judge
reviewed approximately sixty victim impact statements, SEC
filings submitted into evidence stating that there were approx-
imately 2500 shareholders of UniDyn stock, and evidence at
trial demonstrating that 17 million shares of UniDyn stock
were held in street names. The court’s factual finding of more
than fifty victims was not clearly erroneous. There was no
error in sentencing.9
9
We reject Gentry’s argument that the district court erred when it made
a two-level upward adjustment for abuse of public trust under U.S. Sen-
tencing Guidelines Manual section 3B1.3 and a three-level upward adjust-
ment for his role as manager under section 3B1.1. The Sentencing
Guidelines specifically provide that an enhancement “based upon an abuse
of a position of trust . . . may be employed in addition to an adjustment
under § 3B1.1. . . .” U.S. Sentencing Guidelines Manual § 3B1.3.
1616 UNITED STATES v. JENKINS
C. Substantive Unreasonableness
Finally, Jenkins contends that his sentence is substantively
unreasonable. Jenkins was sentenced to ninety months in
prison, a term half as long as Gentry’s and significantly below
the Guidelines range of 324 to 405 months. In determining
substantive reasonableness, we must consider the “totality of
the circumstances,” including the degree of variance for a sen-
tence imposed outside of the Guidelines range, giving “due
deference to the district court’s decision that the § 3553(a)
factors, on a whole, justify the extent of the variance.” Carty,
520 F.3d at 993 (quoting Gall v. United States, 552 U.S. 38,
51 (2007)).
[28] In this case, the district court considered that Jenkins
used his expertise and legal training to create a web of ficti-
tious offshore companies to perpetrate fraud, that he had been
involved in illegal schemes to avoid taxes for twenty years
and that he refused to acknowledge those schemes’ illegality.
However, the court considered “most significantly” that Jen-
kins was “less culpable” than Gentry and did not receive large
profits from the fraud. Giving due deference to the sentencing
judge, Jenkins’s ninety-month sentence was substantively rea-
sonable.
CONCLUSION
We AFFIRM appellants’ convictions and sentences.