United States v. Jobe

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

_______________________

No. 94-50646
_______________________

United States of America,

Plaintiffs-Appellee,

versus

Billie Mac Jobe, Stephen Taylor, Philip Mark Sutton, Stanley
Pruet Jobe, and Fernando Novoa,

Defendants-Appellants.

_________________________________________________________________

Appeals from the United States District Court
for the Western District of Texas
_________________________________________________________________

March 8, 1996

Before JONES, STEWART, and PARKER,* Circuit Judges.

EDITH H. JONES, Circuit Judge:

Appellants Billie Mac Jobe (“Billie Mac”), Stanley Pruet

Jobe (“Stanley”), Stephen Taylor, Philip Mark Sutton and Fernando

Novoa were convicted by a jury of various offenses undertaken to

organize, conduct, and maintain an elaborate and expanded check-

kiting scheme through El Paso banks for over a year and a half. On

appeal, they pose numerous challenges to their convictions and

sentences. After carefully considering these challenges and the

underlying record, this court AFFIRMS the conviction as charged in

*
After oral argument, Judge Parker recused himself from
any further participation in this matter. This opinion reflects
only that of Judges Jones and Stewart.
Count 2 for all of the appellants, VACATES Stanley’s managerial or

supervisory sentencing enhancement, and REMANDS Stanley's case for

resentencing.

FACTUAL BACKGROUND1

The appellants were indicted for bank fraud, in violation

of 18 U.S.C. § 1344 and 2, and for conspiracy to commit bank fraud,

to make false entries in bank records, and to obtain loans via

false statements in loan applications, contravening 18 U.S.C. §

371. In addition, the indictment charged that some or all of the

appellants had made false statements on loan applications,2 false

bank entries, reports, and transactions,3 laundered funds,4 or aided

and abetted such activities.5 The indictment requested a criminal

forfeiture of property.6

The district court bifurcated the criminal trial and the

request for criminal forfeiture. After nearly two weeks of trial

on the criminal charges, the jury returned the following verdicts:

all defendants were convicted of conspiracy to commit bank fraud

(“Count 1"); Billie Mac was convicted of bank fraud, while Stanley,

1
Our review of the record was much more difficult
because the parties frequently either furnished incorrect record
citations or no citation at all.
2
18 U.S.C. § 1014.
3
18 U.S.C. § 1005.
4
18 U.S.C. § 1956(a)(1)(A)(I).
5
18 U.S.C. § 2.
6
See 18 U.S.C. §§ 1982(a)(1)-(a)(2)(A), 982(b)(1)(A)-
(B).

2
Taylor, Sutton, and Novoa were convicted of aiding and abetting

this bank fraud (“Count 2"); Taylor and Sutton were convicted of

making false bank entries in violation of 18 U.S.C. §§ 1005 and 2

(collectively, Counts 4, 6, and 16); and Stanley was convicted both

of aiding and abetting Sutton to make a false bank entry (Count 6)

and of making false statements on a bank loan application (Count

5).7

Although each appellant was convicted by the jury of

various offenses undertaken to organize, conduct, and maintain an

elaborate check kiting scheme, at the sentencing hearing, the

district court found no evidence of monetary loss to any of the

financial institutions involved. In part for this reason, the

appellants received light concurrent sentences: Billie Mac was

sentenced to eighteen months incarceration and fined $30,000;

Stanley received five months incarceration, five months of

community confinement in a residential facility or half-way house,

and a $15,000 fine; Taylor, ten months incarceration; Sutton, ten

months incarceration; and Novoa, five months incarceration and five

months of community confinement in a residential facility or half-

way house; the appellants were also ordered to serve three-year

terms of supervised release.

A discussion of some of the voluminous evidence

concerning the appellants' relationships to the involved financial

7
The district court, after a separate forfeiture
proceeding, entered a judgment of acquittal on those allegations.

3
institutions and the crucial transactions involved in the

prosecution is necessary to understand this opinion's analysis.

Billie Mac was a 1/3 owner, officer and director of Jobe

Concrete Products, Inc., in El Paso, Texas. He also owned the Jobe

Bar Track Ranch and was a part owner, officer and director of Cal-

Tex Spice Co. He and his son, Stanley, owned a 40% share of First

Park National Bank (“FPNB”) of Livingston, Montana, a federally

insured financial institution. Billie Mac maintained checking

accounts at FPNB as well as at El Paso State Bank (“EPSB”), a

federally insured, state chartered bank in El Paso; Jobe Concrete

Products and Cal-Tex Spice had checking accounts at EPSB. Billie

Mac was a shareholder of EPSB.

Stanley, Billie Mac’s son, was president and a 1/3 owner

of Jobe Concrete Products, Inc., a partial owner and director of

Cal-Tex Spice Co. and a shareholder and director of EPSB. At FPNB

in Montana, Stanley maintained a checking account and sat on the

board of directors.

The remaining appellants are employees of some of the

financial institutions involved. Taylor was the president of EPSB.

Novoa, as a cashier and officer of EPSB, approved significant wire

transfer transactions involving Billie Mac. After leaving his

employment with EPSB, Novoa became president of Cal-Tex Spice and

performed various financial and administrative work for Jobe

Concrete Products. Sutton was the president of another federally

insured bank used in the kite, Continental National Bank (“CNB”).

4
 The scope of the expanded check kite was uncovered

essentially by FBI special agent Randy Wolverton (“Wolverton”),

whose analysis of the activity in several Jobe checking accounts

from December of 1989 through July of 1991, revealed that a large

kite was underway involving Billie Mac and Stanley and their

checking accounts at CNB, TCB, FNPB, and EPSB.

In order to manipulate and maximize the float, or lag

time between transactions in the banking system, Billie Mac and his

cohorts inflated his account balances artificially by making

countless wire transfers based on uncollected funds, by writing

checks against uncollected or nonexistent funds, and by

consummating fraudulent loans that were camouflaged by false

entries or statements in bank records. As a result of these

machinations, very large checks were routinely paid in full despite

the actual insufficiency of funds to cover them. Billie Mac’s

check kite was remarkably efficient; unlike the vast majority of

check kites, this one not only stayed constantly ahead of the lag

but never did self-destruct. Evidence at trial demonstrated that

none of the checks written by Billie Mac was ever dishonored or

returned for insufficient funds, and all of the loans used to

commence the kiting scheme were paid in full and with interest to

the lenders.

Further evidence of the "success" of the check-kiting is

revealed by the vast sums of money floated. Wolverton testified

that bank records for December 1, 1989 through March 12, 1990,

created the impression that $150,000,000 had been deposited into

5
the Jobe accounts, although less than 15% of that figure, or

approximately $20,000,000, was actually present in these accounts.

Similarly, from April through June of 1991, Wolverton explained

that although bank records indicated that $58,000,000 was deposited

into these accounts, “77% of those, or about $44,000,000 worth of

those deposits, were nothing more than checks and wire transfers

being exchanged with each other through these accounts, thereby

artificially inflating the accounts.” Only $13,000,000 was

actually deposited into the accounts.

Profits from the scheme were used to finance business

ventures for Billie Mac and Stanley. For example, in late 1989,

Jobe Concrete Products purchased a spice plant from the Baltimore

Spice Co. for nearly $3,500,000 and Cal-Tex Spice Co. Austin Hale

(“Hale”), the credit manager and eventually vice-president of Jobe

Concrete Products, testified that neither Jobe Concrete Products

nor Billie Mac had enough liquidity to fund these purchases. Hale

further testified that Stanley concurred and expressed his concern

to Hale that the company needed cash not only to finance its

investment and business activities, but also so that his father,

who was “overly stressed about the situation”, would not need to

work as hard.

Billie Mac commenced the kite by opening a checking

account for the Jobe Bar Track Ranch at CNB. Before it was

officially opened, Billie Mac wrote himself a check from the new

account or starter booklet for $990,000, endorsed this check, and

deposited it at EPSB. The opening balance of the CNB checking

6
account was, however, only $1,000. Sutton was the account officer

at CNB supervising the Jobe Bar Track Ranch checking account.

After the CNB check was deposited at EPSB, EPSB issued a

cashier’s check for $3,536,347 to Billie Mac signed by Taylor, the

bank president. Although standard banking practice would require

EPSB to post an entry in its books or records indicating that the

cashier's check had been issued, no such entry was made in EPSB

records that day; in fact, no entry was made into EPSB records

until several days later on January 4, 1990. Nearly a week

earlier, on the same afternoon that he obtained the EPSB check,

Billie Mac used this cashier’s check to purchase the spice plant.

When the original $990,000 CNB check was presented for

payment at that bank, Martha Karlsruher (“Karlsruher”), a senior

vice president and bank cashier, noticed that this large check had

been written on the Jobe Bar Track Ranch account before it had

opened and that the balance in the account was merely $1,000. She

immediately advised Sutton of her findings, but he authorized

forced payment of the check nonetheless, explaining that a pending

loan from CNB to Billie Mac would provide the necessary funds.

As Sutton had explained, CNB did lend Billie Mac

$925,000, its legal lending limit, on January 8, 1990 and back-

dated this loan to January 5. The loan's stated purpose was to

“[r]eplenish personal liquidity utilized in the purchase of

Baltimore Spice of Texas.” However, the loan did not replenish

Billie Mac’s personal liquidity, but was rather deposited directly

into the Jobe Bar Track Ranch checking account, so that the

7
$990,000 check that had been presented for payment could clear.

Karlsruher further explained that because the bank’s management and

loan committee were “in a hurry to fund the loan [and] disburse the

monies to the customer,” they did not review Billie Mac’s loan

application before approving it.

This type of suspicious activity continued in the Jobe

Bar Track Ranch account and in other accounts including the Jobe

Concrete Products checking account at Texas Commerce Bank (“TCB”).

In February or March of 1990, Hale, Jobe Concrete’s credit manager,

learned that Billie Mac was signing checks on the Jobe Concrete

Products account but failing to list either a payee or amount on

the company’s check log. Hale began to be “suspicious of a check

kite.” As these suspicions grew, he “started looking for another

job” and eventually quit in November of 1991.

The check kiting activity also became more obvious to

employees in the banks used in the kite. For instance, from

January through July of 1990, Karlsruher, who had already noticed

unusual activity in the Jobe Bar Track Ranch account at CNB and had

discussed this with Sutton, warned Sutton repeatedly that she

suspected kiting by Billie Mac and that any further loans to him

would exceed CNB’s legal limit. Sutton assured her that “it was a

normal business practice for certain companies to operate this

way,” but Karlsruher disagreed and had not observed such practice

in her experience as a banker.

Sutton’s actions began to breach standard banking

practice or policy. He occasionally extended CNB’s closing

8
deadline in order to give Billie Mac sufficient time to deposit or

wire funds to cover overdrafts.8 Karlsruher testified that Billie

Mac was virtually the only customer who received such specialized

treatment.9 Further, despite express warnings from Karlsruher that

kiting was going on and that a criminal referral should be filed

regarding Billie Mac’s activities, Sutton continued to approve

forced payment of countless checks written by Billie Mac far in

excess of the balance in the Jobe Bar Track Ranch account at CNB.

Although Karlsruher could have filed a criminal referral regarding

the activity, she explained that she did not do so because she was

“provided a copy of a board resolution that ordered management not

to file this referral.”

Others associated and employed by CNB, who could not help

but notice that Sutton was approving numerous forced payments on

checks written by Billie Mac, came to share Karlsruher’s concerns

about the check kite. Patrick Kennedy (“Kennedy”), CNB’s attorney,

reviewed some of Billie Mac’s activities in the Jobe Bar Track

Ranch account and suggested that CNB file a criminal referral.

Although Kennedy repeatedly attempted to discuss this suggestion

with Sutton and to obtain additional information from him, Sutton

was unresponsive. Patricia McLean (“McLean”), CNB’s loan review

8
The closing deadline at CNB was normally 2:00 p.m.. If
the bank could not settle its funds by that time, these funds
were not available for overnight investment and the bank risked
losing the corresponding overnight interest.
9
As Karlsruher explained, “[t]he only [other customer]
that comes to mind, but that was a few years later, that [sic]
would have been El Paso Auction.”

9
officer, not only suggested that a criminal referral be filed, but

also expressed concerns to Sutton that if CNB continued to lend to

Billie Mac or any affiliated entity, the bank might exceed its

legal lending limits. Yet again, these warnings went unheeded.

Indeed, loan activity at CNB involving the Jobes

continued. On May 21, 1990, with Sutton acting as the bank’s loan

officer, CNB funded a $750,000 loan to Deer Creek Spice Co.,

guaranteed by Stanley. In a loan presentation form, an internal

document prepared by bank employees, the purpose of the Deer Creek

Spice loan was described as acquisition of inventory, and the loan

principals were listed as Stanley and Frank Owen IV. Although the

size of the Deer Creek Spice loan mandated review by CNB’s

management loan committee, no such review occurred.

On the very day that the Deer Creek Spice loan was

authorized, Stanley endorsed the check for the proceeds and turned

it over to Billie Mac who, in turn, deposited it into the cashier’s

checking account at EPSB. The proceeds of the Deer Creek Spice

loan were used to pay for cashier’s checks that Billie Mac had

obtained from EPSB earlier in the day. These cashier’s checks had

been deposited at CNB to allow a $750,000 check written against the

Jobe Bar Track Ranch account to clear; not surprisingly, the

$750,000 check had been written by Billie Mac and was payable to

him.

Eventually, Sutton, Karlsruher, and McLean were asked to

meet with Kennedy, John Wright, the chairman of the board of CNB,

and Jack Cardwell, a board member, to discuss Billie Mac's

10
relations with the bank. After the meeting, Karlsruher testified

that Sutton ordered her not to contact either bank directors or

bank attorneys without his preclearance; he threatened to fire her

or any other employee who filed a criminal referral on Billie Mac

and promised her a promotion and raise for her cooperation. Sutton

stressed to her that a criminal referral on Billie Mac “would cause

[the Jobes] serious financial harm and set-backs and that the other

banks they were dealing with may call their loans . . . once an

investigation ensued.” Finally, however, after a CNB board meeting

in June of 1990, the Jobe Bar Track Ranch checking account was

closed and Billie Mac paid CNB for his use of uncollected funds an

amount equal to what the bank would have earned in an overnight

investment of those funds at the federal funds rate. Of course, as

Karlsruher explained, the federal funds rate is lower than the

commercial loan rate.

Undaunted, Billie Mac and his cohorts continued their

expanded check kite even after the CNB account closed. Loans from

other banks were used to float the kite, and unconventional wire

transfer procedures both inflated checking account balances

artificially and concealed insufficient funds or overdrafts.

Unlike checks, wire transfers experience no float or lag time.

When a normal electronic wire transfer occurs, funds are

simultaneously deducted from the transferring institution’s account

at the Federal Reserve and credited to the recipient’s bank

account.

11
 But Billie Mac’s multiple wire transfers were not

conventional ones. Taylor, the president of EPSB, and Novoa, the

bank’s cashier and senior officer in charge of accounting and of

the wire transfer room, authorized wire transfer personnel to

credit Billie Mac’s checks immediately and to make wire transfers

for him without waiting for the necessary funds to be collected.10

Diana Vincent, an internal auditor with EPSB, testified that the

countless wire transfers completed for Billie Mac on uncollected

funds violated standard EPSB policy that all wires be paid for with

collected funds. Vincent also testified that had Billie Mac been

forced to comply with bank policy and deposit sufficient funds

before conducting a wire transfer, his insufficient accounts would

have appeared on the bank’s uncollected funds or overdraft reports.

Billie Mac’s accounts escaped these reports because Novoa was

initialing most of Billie Mac’s checks and approving them for

immediate credit.11 According to Laura Avila an employee in the

EPSB wire transfer room, both Novoa and Taylor would initial the

checks to authorize immediate credit.

Because of the specialized treatment that Billie Mac

received from Taylor and Novoa at EPSB, he made the bank’s wire

transfer department a second home, visiting several times daily

10
Although this practice is unconventional, the
government concedes that it is not necessarily illegal. Banks
enjoy some discretion to extend immediate or “next day” credit on
uncollected funds.
11
Although Vincent explained that, in most instances,
Novoa’s initials appeared on the checks, she admitted that
occasionally other officers or authorized personnel would initial
them.

12
from January through September of 1990 and sending hundreds of wire

transfers during that time. At trial, the testimony of Avila and

Maria Reyes Novoa’s administrative assistant who supervised the

wire transfer room, indicated that Billie Mac’s transfers began at

around $50,000 a day, but quickly grew to $500,000 and then to a

combined daily total of $1,000,000.

These frantic and unconventional wire transfers led other

employees at EPSB to suspect kiting. For instance, Reyes grew

concerned about the fact that Billie Mac was allowed to conduct

wire transfers when his accounts were insufficient to pay for these

transfers. Reyes recounted that once, after she had verified that

the account against which Billie Mac had intended to pay for the

transfer had insufficient funds, she took the check to Novoa and,

although she did not expressly inform him of the insufficiency, he

ordered her to proceed with the wire transfer. As this transfer

activity continued, Reyes eventually spoke with Taylor, but to no

avail. She explained, “[s]ince I was concerned, I went and asked

[Taylor], you know, if he was aware that the checks were, you know,

going through. And he told me that he was going to check into it

and that he would get back to me. But he never got back to me.”

Yvonne Pearson, an employee in the proof department at

EPSB, testified that since Billie Mac was allowed to conduct

transfers on uncollected funds, proof department employees were

allowed to override the proof machine’s time consuming

determination of the float for a check. To circumvent the proof

machine, Billie Mac’s checks were deposited using special deposit

13
slips initialed by bank officers to allow for next-day

availability; most of these deposit slips were initialed by her

boss, Novoa. Furthermore, when Billie Mac would present such a

deposit slip, a special transaction code would be entered into the

bank’s records that would prevent the checks from appearing on the

bank’s uncollected funds report. Because of these suspicious

activities and practices, Pearson concluded that she “knew” that

Billie Mac was kiting checks.

Vincent, EPSB’s internal auditor, warned Taylor in a

memorandum that Billie Mac was kiting checks “to the tune of

$790,000 to $1,760,000 a day, and this amount is steadily

increasing,” as well as conducting wire transfers on uncollected

funds. Moreover, she explained that Taylor's and Novoa’s decision

to extend Billie Mac next day availability on checks made it

difficult to ascertain the full extent of the ongoing kite. Taylor

delayed responding to Vincent for nearly three weeks before asking

her “to track the activity for a few days and report back to him.”

Vincent did exactly that. After tracking Billie Mac’s

accounts for two days, she sent Taylor another memorandum detailing

transactions in which Billie Mac was given more than $3,200,000 in

immediate credit to pay for wire transfers from EPSB. After Taylor

received this memo, Vincent testified that to her knowledge, Taylor

did not take any remedial action and did not speak with her about

either the memo or the activity which had been tracked.

Even Billie Mac’s own employees began to question the

deposit and wire transfer activity at EPSB. Hale, the vice

14
president of Jobe Concrete Products, testified that he had a

conversation with Billie Mac regarding this activity. According to

Hale, Billie Mac explained that Novoa had developed a system by

which he could receive immediate credit for deposits merely by

using special deposit slips.12 Eventually, Novoa resigned his

position at EPSB and went to work for his esteemed customer, Billie

Mac, as president of Cal-Tex Spice and at Jobe Concrete Products.

Upon Novoa’s departure from EPSB, Barbara Baker

(“Baker”), the acting cashier for the bank, learned about the

practice of allowing Billie Mac to conduct wire transfers on

uncollected funds. She testified that this practice did not leave

a good audit trail and impeded the bank’s ability to analyze float

and collectability of Billie Mac’s checks. Baker then sent Taylor

a memo reiterating these conclusions and suggesting that funds be

collected from Billie Mac before he be allowed to conduct a wire

transfer.

After sending the memo to Taylor, Baker met with him.

She testified that during this meeting, Taylor appeared shocked by

the activity in Billie Mac’s accounts; as Baker recalled, “[Taylor]

had the memo in his hand and he just kind of shook his head a

little bit and said, ‘Billie Mac is kiting. How long did he think

he could get away with this?’” Taylor then gathered the copies of

Baker’s memo and “threw them in the trash and he said he wanted all

the copies out of circulation. He didn’t want any copies of the

12
On appeal, Novoa objects to this portion of Hale’s
testimony under Bruton v. United States, 391 U.S. 123, 88 S. Ct.
1620 (1968). The objection will be discussed infra.

15
memo in the bank.” However, even after receiving memoranda from

both Baker and Vincent, Taylor still approved wire transfers for

Billie Mac on uncollected funds.

Perhaps exhausted by his daily trips to the wire room at

EPSB, Billie Mac began wiring funds from CNB where he no longer had

an account. Much as Taylor and Novoa had ordered at EPSB, Sutton

authorized Billie Mac to conduct wire transfers on uncollected

funds, even though no other customer was regularly extended such a

privilege. However, these transactions, unlike the transfers at

EPSB, were appearing regularly on the bank’s “deficit available

balance report” as suffering from a large, uncollected balance.

Sutton approached Karlsruher with a proposal to give Billie Mac’s

checks a special transaction code which would camouflage them from

the bank’s reporting system. She refused to participate in such a

scheme.

The very day that bank examiners arrived at CNB to

analyze the transfer activity, Billie Mac stopped making wire

transfers from that bank. As the bank examiners analyzed accounts

at CNB and at EPSB, they began to discover the vast extent of

Billie Mac’s kiting scheme. For instance, while EPSB was lending

Billie Mac and Stanley over $1,000,000 each year, the bank’s

average collected balances were negative.

While the bank examiners continued to investigate, Taylor

spoke to Tom Burress (“Burress”), one of the examiners analyzing

loans and accounts at EPSB. Taylor wanted to explain the cashier’s

check for over $3,500,000 that Billie Mac had been given on

16
December 29, 1989, without any confirmation that he had sufficient

funds to pay for it. Taylor told Burress “[t]hat Fernando Novoa

presented the check for him to sign. Taylor signed the check

without verifying that there [sic] collected funds in the account

sufficient to pay for the check. His stated reason was that he had

faith in the cashier that that [sic] was okay.” Taylor also told

Burress that he believed that Novoa had held some checks written by

Billie Mac in his desk until January 4, 1990, the date on which the

cashier’s check was actually purchased. The next day, however,

Taylor changed his story, suggesting that “he was wrong in accusing

[Novoa] of holding the checks in his drawer. And prior to this

occurrence, he had no reason to fault [Novoa’s] work.”13

As the involvement of bank examiners and federal agents

intensified, Billie Mac’s expanded check kite came to a crashing

halt. At trial, there was substantial disagreement over the loss,

if any, that the banks involved in this kite had suffered. All of

the loans and checks had been paid and honored. From this fact,

Rene Pena (“Pena”), a certified public accountant who testified as

a defense expert, concluded that the banks had suffered no loss.

Although Pena recognized that the various Jobe accounts were

frequently in overdraft, he noted that this overdraft was usually

corrected quickly. According to Pena, Billie Mac was merely

“actively utilizing the loans in a constant cash management . . .

of running the [Jobe] entities as a whole.”

13
Novoa challenges the admission of Taylor’s statements
through Burress under Bruton. This issue will be discussed
infra.

17
 DISCUSSION

I. Appellants’ Common Challenges to their Convictions

A. Juror Misconduct

Billie Mac, Stanley, Sutton, and Novoa appeal the

district court’s denial of an evidentiary hearing to investigate

allegations of juror misconduct and its denial of their motions for

a new trial based partially on this alleged misconduct.

Appellants complain that during the trial, John A.

Shamaley (“Shamaley”), one of the jurors, was told by a relative

that Billie Mac had “previously been convicted in another bank

fraud case.” In an affidavit submitted to the district court,

Shamaley explained that at some time during the trial, he told

David Carnes a relative, that Carnes’s employer, Jack Cardwell had

been mentioned during the trial; Cardwell was a member of the board

of directors of CNB. Carnes told Shamaley that Billie Mac had

previously been convicted of bank fraud and suggested to Shamaley

that because of this prior conviction, “he would not be at all

surprised to find that something improper was going on here.”

However, Shamaley acknowledged in his affidavit that

[t]here was no evidence presented at the trial
that Billie Mac Jobe had any previous arrests
or convictions. I did not relay this
information to any of the other jurors on this
case, but I was aware after the conversation
with David Carnes that Mr. Jobe had previously
been convicted of the same offense that he was
charged with in this case.14

14
In fact, the information that Carnes relayed to
Shamaley was technically incorrect. In 1979, Billie Mac had
pleaded guilty to one count of mail fraud. At a pretrial
hearing, the district court indicated that this prior conviction

18
(emphasis added).

This court reviews the district court’s denial of a

motion for new trial for abuse of discretion. United States v.

Sanchez-Sotelo, 8 F.3d 202, 212 (5th Cir. 1993), cert. denied, ___

U.S. ___, 114 S. Ct. 1410 (1994). Likewise, “[t]he procedures used

to investigate allegations of juror misconduct and the decision as

to whether to hold an evidentiary hearing are matters which rest

solely within the sound discretion of the district court.” United

States v. Roberts, 913 F.2d 211, 216 (5th Cir. 1990), cert. denied

sub nom., Preston v. United States, 500 U.S. 955, 111 S. Ct. 2264

(1991).

Recently, this court reiterated the principle that in any

trial there is an initial presumption of jury impartiality. United

States v. Ruggiero, 56 F.3d 647, 652 (5th Cir. 1995), cert. denied,

___ U.S. ___, ___ S. Ct. ___ (1995). This presumption may be

defeated, however, through evidence that the extrinsic factual

matter actually tainted the jury’s deliberations. Id. (citing

United States v. O’Keefe, 722 F.2d 1175, 1179 (5th Cir. 1983)).

A district court must investigate the asserted impropriety only

when a colorable showing of extrinsic influence is made. Id.

Ruggiero not only examined when a district court must

investigate alleged juror misconduct, but also explained

. . . that a defendant is entitled to a new
trial when extrinsic evidence is introduced
into the jury room unless there is no
reasonable possibility that the jury’s verdict

would be admissible at trial for impeachment purposes only if
Billie Mac testified; he did not.

19
 was influenced by the material that improperly
came before it.

Id. (citations omitted). Hence, when extrinsic evidence is

introduced into the jury room, the defendant enjoys a rebuttable

presumption of prejudice and “the government has the burden of

proving the harmlessness of the breach.” Id. (citations omitted).

When the district court considers whether the government has

carried this burden, it should examine “the content of the

extrinsic material, the manner in which it came to the jury’s

attention, and the weight of the evidence against the defendant.”

Id. at 652-53 (citations omitted).

In the instant case, the district court investigated the

alleged impropriety when it considered Shamaley’s affidavit.

Through this affidavit and through the evidence at trial, the court

was able to conduct the inquiry mandated in Ruggiero. Having done

so, the court concluded that there was no reasonable possibility

that the extrinsic information had prejudiced the appellants. When

discussing Billie Mac, the court reasoned that

The circumstances fail to indicate that
Defendant Billie Mac Jobe was prejudiced by
the incident. Juror Shamaley obviously
attributed no significance to the incident,
because he did not report it to the Court or
to any other juror. Furthermore, the record
shows that Billie Mac Jobe was named as a
defendant in six counts that were submitted to
the jury for a verdict, and the jury found
Jobe not guilty as to four of those counts . .
. . Under the facts of this case, the Court is
unable to find a reasonable possibility that
the extrinsic information communicated to one
juror prejudiced the Defendant.

20
 Because the information relayed to Shamaley did not taint

his deliberations, the information was not relayed to any other

jurors, and the evidence against Billie Mac on the counts of

conviction was overwhelming, the district court did not abuse its

discretion when it denied the appellants’ request for a new trial

without first ordering an evidentiary hearing.15 It is unnecessary

to apply the Ruggiero factors separately to each of the other

defendants, as there is no likelihood that they were prejudiced in

any way by the tainted report of Billie Mac's prior criminal

conduct.

B. Jury Instructions

All of the appellants contend that the district court

erroneously declined to submit their requested instruction on good

faith to the jury. Furthermore, the appellants argue that the

instruction given to the jury somehow shifted the burden of proof

from the government to the appellants when it failed to inform

jurors that the government carried the burden of negating their

15
Additionally, as Ruggiero explains, a court is limited
in its ability to inquire into jury deliberations. Federal Rule
of Evidence 606(b) forbids a juror from testifying about
deliberations, and this rule also bars juror testimony
regarding
at least four topics: (1) the method or
arguments of the jury’s deliberations, (2)
the effect of any particular thing upon an
outcome in the deliberations, (3) the mindset
or emotions of any juror during deliberation,
and (4) the testifying juror’s own mental
process during the deliberations.
Ruggiero, 56 F.3d at 652. Given these limitations, an
evidentiary hearing would have provided the district court with
virtually nothing but what was already contained in the Shamaley
affidavit.

21
claims of good faith. The appellants also suggest that the

district court erroneously limited their defense of good faith by

failing to extend this defense to the false entry offenses.

Billie Mac urges similar error with respect to his

requested instructions on willfulness and specific intent. He

notes that the district court did not explicitly define either term

and suggests that the court's omission seriously impeded his

ability to present his defense to the jury.

Recognizing that district courts enjoy substantial

latitude in formulating jury instructions, this court reviews the

refusal to provide a requested jury instruction for abuse of

discretion. United States v. Smithson, 49 F.3d 138, 142 (5th Cir.

1995). The district court will not abuse its discretion when it

denies a proffered instruction unless this instruction “(1) was a

correct statement of the law, (2) was not substantially covered in

the charge as a whole, and (3) concerned an important point in the

trial such that the failure to instruct the jury on the issue

seriously impaired the defendant’s ability to present a given

defense.” Id.

In this case, the district court did instruct the jurors

on good faith. The instruction explained that

[i]n determining whether or not any defendant
acted with criminal intent to defraud or
deceive, you may consider whether or not that
defendant had a good faith belief that what he
was doing was legal. If you have a reasonable
doubt as to whether or not a defendant had a
good faith belief that was [sic] he was doing
was legal, you must acquit that defendant or
defendants and say by your verdict ‘not
guilty.’

22
The appellants’ challenges to this instruction are meritless. This

instruction in no way reduces the government’s burden of proof

beyond a reasonable doubt or thrusts a burden on the appellants.

Moreover, the court did not limit its good faith instruction to

certain appellants or defenses; rather, the instruction provides

that the good faith of any appellant may be considered when

adjudicating his criminal intent on any charged offense.

Although Billie Mac contends that the district court

erred when it refused separately to define either willfulness16 or

specific intent, the court clearly defined “knowingly.” Indeed,

its definition of this term came from this circuit's pattern jury

instructions and provided that “[t]he word ‘knowingly’ as that term

is used in these instructions, means that the act was done

voluntarily and intentionally and not because of mistake or

accident.” Though the district court did not explicitly define

specific intent, it correctly charged the jurors on the element of

intent in each offense. Both of Billie Mac's proposed instructions

on specific intent merely reiterate that the government must prove

beyond a reasonable doubt “that the defendants knowingly did an act

which the law forbids . . . .” (emphasis added). The effect of the

proposed instructions is redundant, and they were unnecessary.

16
In its conspiracy instructions, the court instructed
the jury that they must conclude beyond reasonable doubt “[t]hat
the defendant knew the unlawful purpose of the agreement and
joined in it willfully, that is with the intent to further the
unlawful purpose.” Hence, while the instructions may have not
separately defined willfulness, when read as a whole, they did
include such a definition.

23
 In sum, the court’s instructions accurately reflected the

law and substantially covered the appellants’ proffered

instructions without impairing the ability of any of the appellants

to advance a defense.

C. Joint Motion for Severance

Stanley, Taylor, Sutton, and Novoa contend that the

district court abused its discretion when it denied their joint

motion for severance. The joint motion was premised on the belief

that at a separate trial, Billie Mac would provide exculpatory

testimony for the appellants. To support this belief, the

appellants submitted in camera Billie Mac’s affidavit, which stated

that he would testify at a separate trial in which he was not a co-

defendant. The affidavit also asserted that Billie Mac would

testify that, to his knowledge, none of the other appellants had

committed any of the charged offenses.

The district court denied the joint motion for severance

after conducting a hearing. The court reasoned that Billie Mac’s

affidavit “falls far short of demonstrating a basis for severance”.

As the court put it, Billie Mac insisted in his affidavit

that he acted in good faith in connection with
all the financial transactions involved in the
indictment, and that he committed no offense.
The remainder of his affidavit consists of
conclusory statements that his co-Defendants
did not conspire with him to commit any
offense and that they are innocent of any
wrongdoing . . . If he gave the testimony at a
severed trial, it would have little
evidentiary value.

To allege a prima facie case for severance based on the exculpatory

testimony of a co-defendant, a defendant must first show, among

24
other things, that the testimony is truly exculpatory in nature and

effect. United States v. Rocha, 916 F.2d 219, 232 (5th Cir. 1990),

cert. denied, 500 U.S. 934, 111 S. Ct. 2057 (1991) (laying out

detailed criteria for severance based on 26 codefendant testimony).

Billie Mac's affidavit did not fulfill that standard.

The appellants rely on this court’s decision in United

States v. Neal, 27 F.3d 1035 (5th Cir. 1994), cert. denied, ___

U.S. ___, 115 S. Ct. 1165 (1995), to support their claim that

severance was improperly denied. In Neal, this court held that the

district court erred when it denied severance in a drug conspiracy

case in which the “undisputed leader of the conspiracy” gave

extensive, specific, and exculpatory testimony both by affidavit

and in camera and would have so testified in a separate trial on

behalf of the co-defendants. Id. at 1047 & 1047 n.21. Recognizing

that “a defendant might suffer prejudice [from a joint trial] if

essential exculpatory evidence that would be available to a

defendant tried alone were unavailable in a joint trial,” we

vacated the convictions of the co-defendants and remanded for a new

trial. Id. at 1047 (citing Zafiro v. United States, 506 U.S. 534,

113 S. Ct. 933 (1993)) (emphasis added).

The appellants’ reliance on Neal is misplaced. In Neal,

the district court was presented with far more than the conclusory,

non-incriminating affidavit offered by Billie Mac; in that case,

the defendant gave extensive, specific, and detailed exculpatory

testimony. The Neal co-defendants suffered specific and compelling

prejudice because their trial had not been severed and the

25
testimony never heard. Here, the appellants did not suffer

prejudice since the affidavit did not contain any specific

exculpatory testimony. See United States v. Dillman, 15 F.3d 384

(5th Cir.), cert. denied, ___ U.S. ___, 115 S. Ct. 3010 (1992) (no

abuse of discretion in denying severance because of the lack of

candor reflected in Dillman’s affidavit on behalf of his co-

defendants and because the “affidavit was in no sense self-

incriminatory; it was in fact self-serving . . . .”).

Billie Mac’s self-serving, non-incriminating affidavit

offered no evidence that would exculpate the other defendants and,

like that in Dillman, did not justify severance. The district

court did not abuse its discretion when it denied this motion.

D. Gaudin Error

All of the appellants urge that the Supreme Court’s

recent decision in United States v. Gaudin, ___ U.S. ___, 115 S.

Ct. 2310 (1995), requires reversal of their convictions. In

Gaudin, the Supreme Court held that where materiality is an element

of the charged offense, the trial court’s failure to submit the

question of materiality to the jury violates the defendant’s Fifth

and Sixth Amendment rights. Id. at 2320.

In the present case, the district court instructed the

jury on Counts 3, 5, 7, and 10, but not on Count 2, that they “need

not consider whether the false statement was a material false

statement, even though that language is used in the indictment.

This is not a question for the jury to decide.” The appellants

contend that materiality was an element in each of their counts of

26
conviction and that their constitutional rights were violated when

the district court failed to tender to the jury the question of

materiality.

The effect of Gaudin error, if any, on the multiple

verdicts against these defendants is difficult to unravel.

Further, the implications of Gaudin are subject to dispute. Where

materiality is an element of the charged crimes, including bank

fraud and making false statements to a federally insured

institution, Gaudin may cast doubt on the convictions. But as to

all defendants except Billie Mac, our discussion is narrowed and

simplified by the concurrent sentence doctrine, which holds that so

long as a conviction of concurrent crimes can be sustained under

any single court, the court need not address any other count. See,

e.g., United States v. Strickland, 509 F.2d 273 (5th Cir. 1975);

United States v. Rector, 488 F.2d 1079 (5th Cir. 1973).

As to appellants Sutton, Taylor, Novoa and Stanley Jobe,

any Gaudin error is rendered irrelevant by the convictions under

Count 2 of the indictment for aiding and abetting Billie Mac to

commit bank fraud. The government contends, and appellants'

counsel conceded at oral argument, that an aiding and abetting

conviction does not require proof of materiality, even though the

underlying offense of bank fraud requires such proof. To aid and

abet an offense, the appellants must share in the criminal intent

of the principal and assist the principal's perpetration of a

crime. Sutton, Taylor, Novoa and Stanley posit, however, that

under the peculiar facts of this case, a necessary finding of

27
materiality is imbedded in all of their Count 2 convictions. Their

assertion is based on the fact that Count 2 expressly incorporates

paragraph seventeen from Count 117; the Count 2 reference to Count

1 somehow infused it with a materiality requirement for aiding and

abetting Billie Mac's bank fraud. This argument is meritless.

Paragraph seventeen of Count 1 described the expanded check kite

and explained that the kiting scheme was “aided by the occasional

deposit of loan proceeds that were obtained fraudulently and used

in place of an insufficient check deposit.” This language in no

way implied that the remaining appellants had to commit fraud in

order to aid and abet Billie Mac's bank fraud. Not only is

materiality not an issue prerequisite to the Count 2 convictions;

those convictions are otherwise properly pleaded and proved against

the aiders and abettors.

To secure the Count 2 convictions, the government had to

prove “beyond a reasonable doubt that the defendant[s] willingly

associated [themselves] with a criminal venture and participated

therein as something [they] wanted to bring about. Aiding and

abetting means to assist the perpetrator of a crime.” Cloud, 872

F.2d at 850. Furthermore, “an abettor’s criminal intent may be

inferred from the attendant facts and circumstances and need not be

established by direct evidence.” Id.

From all of the evidence and testimony presented to the

jury in this case, a rational trier of fact could have decided that

17
As discussed earlier, Count 1 charged the appellants
with conspiracy to commit bank fraud in violation of 18 U.S.C. §§
1344, 1005, 1014, and 371.

28
the remaining appellants aided and abetted Billie Mac’s bank fraud.

Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789 (1979).

The jury could have rationally concluded that these appellants had

an intent to defraud the banks by facilitating Billie Mac’s bank

fraud. In United States v. Knipp, 963 F.2d 839, 846 (6th Cir.

1992), the Sixth Circuit affirmed the defendant’s aiding and

abetting bank fraud conviction where the defendant

“allowed . . . [the] overdrafts to continue and that he facilitated

the kite to cover them because the overdrafts amounted to huge,

unauthorized loans beyond the single customer legal lending

limits . . . .” The evidence in the instant case demonstrates that

the remaining appellants facilitated Billie Mac’s kite in similar

and, indeed, more extensive ways. See also, United States v. Sims,

895 F.2d 326 (7th Cir. 1990) (finding that the defendant acted with

the intent to defraud was sufficient to sustain his conviction for

aiding and abetting attempts to commit a wire fraud against a

bank). Because the Count 2 convictions must be affirmed against

these appellants without regard to Gaudin error, there is no need

to discuss the other concurrent counts of conviction against them.

Gaudin cannot be wholly avoided as to Billie Mac's Count

2 conviction, however, because his conviction for bank fraud does

require a finding of materiality as an element of that offense.

See, e.g., United States v. Spears, 49 F.3d 1136, 1141 (6th Cir.

1995) (“the determinative factor is the making of the materially

false statement with the intent to influence the lender.”); United

States v. Davis, 989 F.2d 244, 247 (7th Cir. 1993) (“a

29
misrepresentation must be material in order to give rise to

liability under the bank fraud statute.”).

But even this conclusion does not require reversal of

Billie Mac’s conviction under Count 2. Billie Mac did not object

to the district court’s failure to instruct the jury on

materiality. As a result, this court reviews his Gaudin claim for

plain error. See, e.g., United States v. Keys, 67 F.3d 801 (9th

Cir. 1995) (applying plain error analysis and affirming the

conviction). Under plain error review, Billie Mac must pass three

tests before this court can consider reversal: (1) there was an

error; (2) it was clear or obvious; and (3) this error affected the

substantial rights of the petitioner. United States v. Calverley,

37 F.3d 160, 162-64 (5th Cir. 1994) (en banc) (citing United States

v. Olano, ___ U.S. ___, 113 S. Ct. 1770, 1776-79 (1993)), cert.

denied, ___ U.S. ___ 115 S. Ct. 1266 (1995). The Supreme Court

has, however, explained that even if these factors are established,

a court need not exercise its discretion to correct the error

unless it seriously affects the fairness, integrity, or public

reputation of judicial proceedings. Olano, 113 S. Ct. at 1778.

Even if we assume that Gaudin error was plain because it became so

while the case was on appeal, and even if we assume that failure to

instruct the jury was a "structural error" such that Billie Mac is

not required to show prejudice, see Keys, supra, 67 F.2d at 810-11,

we may still exercise discretion not to reverse the conviction.

After carefully considering the record, this court declines to

exercise our discretion to correct the Gaudin error for Billie Mac

30
by authorizing a new trial. The evidence against him was

overwhelming. Billie Mac has not challenged its sufficiency on

appeal. Denying him the formality of a new trial does not effect

a fundamental miscarriage of justice. As a result, Billie Mac’s

conviction and sentence on Count 2 are affirmed. The Gaudin error

does not mandate reversal on a plain error standard in this case.

II. Appellants’ Individual Challenges to their Convictions18

A. Stanley’s Challenges to the Sentence Enhancements

The district court imposed two different sentence

enhancements on Stanley. The first of these is a two-level

enhancement imposed under U.S.S.G. § 3B1.1(c) for Stanley’s

supposed efforts as a manager or supervisor of criminal activity.

Stanley argues that the district court clearly erred when

it imposed this enhancement on him because there was no evidence to

support the requisite finding under § 3B1.1(c) that he managed or

supervised criminal activity. Moreover, the Presentence Report

(“PSR”), on which the district court relied, incorrectly concludes

that his position as a director of two of the banks involved in the

kiting scheme demonstrates that he managed or supervised the

criminal activity.

As this court has frequently explained, the decision to

enhance a sentencing guideline will be upheld if it “results from

a legally correct application of the Guidelines to factual findings

that are not clearly erroneous.” United States v. Sherrod, 964

18
Of course, this court will only address those
individual challenges that are relevant to a conviction under
Count 2.

31
F.2d 1501, 1506 (5th Cir. 1992), cert. denied, sub. nom, Cooper v.

United States, ___ U.S. ___, 113 S. Ct. 832 (1992). Also, a PSR

“generally bears sufficient indicia of reliability to be considered

as evidence by the trial judge in making the factual determinations

required by the guidelines.” United States v. Elwood, 999 F.2d

814, 817 (5th Cir. 1993).

Nevertheless, a thorough review of the record lends no

support to the district court’s finding that Stanley somehow

managed or supervised the criminal activity. According to United

States v. Ronning, 47 F.3d 710, 711-12 (5th Cir. 1995), § 3B1.1(c)

requires that a defendant be the organizer or leader of at least

one other participant in the crime and that he assert control or

influence over at least that one participant.19 There is no

evidence that Stanley managed or supervised any of his co-

defendants or any other people in connection with the illegal acts.

Absent such evidence, this court must vacate his sentencing

enhancement under § 3B1.1(c).

The second sentence enhancement imposed on Stanley is not

as problematic. Under that enhancement, the district court

increased Stanley’s offense level two levels because it found that

he had “abused a position of public or private trust, or used a

special skill, in a manner that significantly facilitated the

19
This is the requirement under § 3B1.1(c) for enhancing
Stanley’s sentence. As will be discussed later, however, this
enhancement is also applicable if the defendant exercised
“management responsibility over the property, assets, or
activities of a criminal organization.” See USSG § 3B1.1(c),
comment., n.2.

32
commission or concealment of the offense . . . .” § 3B1.3. This

provision

encompasses two factors: (1) whether the
defendant occupies a position of trust and (2)
whether the defendant abused her position in a
manner that significantly facilitated the
commission or concealment of the offense. To
determine whether the position of trust
“significantly facilitated” the commission of
the offense, the court must decide whether the
defendant occupied a superior position,
relative to all people in a position to commit
the offense, as a result of her job.

United States v. Fisher, 7 F.3d 69, 70-71 (5th Cir. 1993).

Stanley raises a litany of challenges to this

enhancement. For instance, he contends that his ordinary,

commercial relationships with the lenders were not trust

relationships; that, although he did have a position of trust with

two of the banks involved, he did not use this position to further

his father’s activities; that his acquisition of a loan was not an

abuse of trust; that the Deer Creek Spice loan was from CNB where

he occupied no position of trust; and that mere knowledge of his

father’s activities did not constitute an abuse of trust. While

the record is admittedly close on this issue, Stanley’s PSR found

that Stanley was present at an EPSB meeting with bank examiners in

early 1991 and was advised at this meeting of his father’s check

kiting scheme. Also, he was apprised of Billie Mac’s overdrafts

that had been covered by wire transfers on the Jobe Concrete

Products account at FNPB. As discussed earlier, Stanley was on the

board of directors at both EPSB and FNPB. Hence, there is some

evidence to support the district court’s finding that Stanley

33
occupied positions of trust at both banks and used these positions

to facilitate or conceal his father’s check kiting scheme. Given

this evidence, sentence enhancement under § 3B1.3 for abuse of

trust was not clearly erroneous.

B. Novoa’s Separate Challenges

1. Bruton Claims

Novoa contends that the district court improperly denied

his motion to sever, violating his Sixth Amendment right to

confrontation as this right was explained by the Supreme Court in

Bruton v. United States, 391 U.S. 123, 88 S. Ct. 1620 (1968). This

court has interpreted Bruton to provide that a defendant’s Sixth

Amendment right to confrontation is violated when “(1) several co-

defendants are tried jointly, (2) one defendant’s extrajudicial

statement is used to implicate another defendant in the crime, and

(3) the confessor does not take the stand and is thus not subject

to cross-examination.” United States v. Restrepo, 994 F.2d 173,

186 (5th Cir. 1993). Bruton can be violated when a co-defendant’s

statement “directly alludes to the complaining defendant.” United

States v. Beaumont, 972 F.2d 91, 95 (5th Cir. 1992) (quoting United

States v. Webster, 734 F.2d 1048, 1054 n.6 (5th Cir. 1984), cert.

denied, sub. nom, Hoskins v. United States, 469 U.S. 1073, 105 S.

Ct. 565 (1984)). However, severance is proper only in cases where

a “defendant’s statement directly incriminates his or her co-

defendants without reference to other, admissible evidence.” Id.

(emphasis added).

34
 Novoa argues that the admission of certain statements by

Taylor, through bank examiner Burress, and statements by Billie

Mac, through Hale, the credit manager and vice-president of Jobe

Concrete Products, violated his Sixth Amendment right to confront

witnesses.20 Neither Taylor nor Billie Mac testified at trial.

The first statement to which Novoa objects under Bruton

was a statement by Taylor made through bank examiner Burress. At

trial, Burress testified as follows:

Mr. Taylor indicated that on December 29th,
the date that check was issued, the cashier,
Fernando Novoa, presented him with a check . .
. .

That Fernando Novoa presented the check for
him to sign. Mr. Taylor signed the check
without verifying that there [sic] collected
funds in the account sufficient to pay for the
check. His stated reason was that he had
faith in the cashier that that was okay . . .
.

Next, he indicated he asked -- When he was
told that the transaction was illegal, he
asked cashier Fernando . . . Novoa what
happened, what was the reason for this, and he
did not get an answer . . . .

Stephen Taylor indicated that he felt like
Fernando Novoa had some checks in his drawer
that were written by Billie Mac Jobe until
January 4th, the date that the cashier’s check
was paid for.21

Prior to this testimony, Novoa’s counsel objected that the

testimony was not admissible as an exception to the hearsay rule

20
Both of these statements were highlighted and noted in
our earlier discussion of the factual background.
21
As was noted earlier, Taylor retracted this allegation
in a subsequent conversation with Burress.

35
under Fed. R. Evid. 801(d)(2)(E).22 The trial judge then asked

Novoa’s counsel whether he was asking that the statement not be

considered against his client, and Novoa’s counsel responded,

“Absolutely.” The district court then issued a limiting

instruction to the jury that it must consider this testimony only

as to Taylor.

Novoa correctly contends that the district court’s

limiting instruction in this case was powerless to rectify an

actual Bruton error. Cruz v. New York, 481 U.S. 186, 190, 107

S.Ct. 1714, 1717-18 (1987). Hence, if the admission of Taylor’s

statements through Burress violated Bruton, the district court’s

limiting instruction was ineffective.

But Taylor’s statements did not violate Novoa’s Sixth

Amendment right to confront witnesses as this right was explained

in Bruton. The statements did not directly incriminate Novoa

without reference to other admissible evidence. See Beaumont, 972

F.2d at 95. The only potentially incriminating statement by Taylor

suggested that Novoa kept Billie Mac’s checks in his drawer until

the date on which the cashier’s check was paid.23 At best, this

statement was a tentative opinion by Taylor, one that he later

22
Novoa had, of course, also moved for severance prior to
trial.
23
Although Novoa suggests that Taylor’s statements also
accuse Novoa of having dishonestly orchestrated an ‘illegal’
insufficient cashier's check transaction for Jobe, there is no
support for this in the record. At most, Taylor suggests that
Novoa could not explain why the cashier’s check was not posted on
bank records for several days. This in no way directly
incriminates Novoa.

36
retracted; Burress’ testimony included Taylor’s retraction of his

statement. Taken as a whole, none of Taylor’s statements through

Burress directly incriminated Novoa, so these statements did not

run afoul of Bruton.

Furthermore, because the statements did not directly

incriminate Novoa without reference to other admissible evidence,

the court’s limiting instruction is adequate to protect Novoa from

any potential prejudice. As this court recently explained in

United States v. Leal, ___ F.3d ___, 1996 WL 30673, *5 (5th Cir.

1996),

[t]he Supreme Court has held that the
admission of a nontestifying defendant’s
confession is permissible if the trial court
gives a proper limiting instruction. Marsh v.
Richardson, 481 U.S. 200, 107 S. Ct. 1702
(1987). This Court has held that a Bruton
problem arises only when the statements
clearly implicate the codefendant. United
States v. Kelly, 973 F.2d 1145 (5th Cir.
1992). Furthermore, even if a Bruton
violation occurs, ‘the error may be harmless
if the statement’s impact is insignificant in
light of the weight of other evidence against
the defendant.’

(citation omitted)(emphasis added). In Leal, as in the instant

case, the proffered statements did not clearly implicate the

codefendant and since “[t]here was no direct implication . . . the

limiting instruction was adequate to prevent prejudice.” Id.

Given both the nature of the proffered statements and the court’s

limiting instruction, this court concluded in Leal as we do now,

that “[t]he district court acted well within its discretion in

denying the motion to sever trials.” Id.

37
 The second statement to which Novoa objects was a

statement by Billie Mac through Hale. At trial, Hale testified as

follows:

I’m uncertain as to the time, but I did have a
conversation with Mr. Jobe about deposit slips
at El Paso State Bank . . . .

He told me that he was receiving immediate
credit via deposit slips that have been
encoded to provide that . . . .

[By “encoded”] I believe he was referring to
the micro encoding at the bottom of the
deposit slips . . . .

Fernando Novoa [was the person at El Paso
State Bank who ‘had worked it so that he could
receive immediate credit with the encoding] .
. . .

Careful review of the record demonstrates that Novoa did not object

to this testimony.24

Although this testimony is admittedly incriminating to

Novoa and might raise Bruton concerns, as has been previously

explained, because Novoa failed to object to this testimony, this

court will review for plain error. After carefully considering the

underlying record, this court declines to exercise its discretion

to correct whatever Bruton error this testimony might contain.

Even if this court were to grant Novoa’s objection to the

statements of Billie Mac through Hale and strike these statements

from the record, the evidence is nonetheless more than sufficient

24 Earlier in the testimony, Novoa had objected that the
government’s question inquiring about a period of time, “[b]efore
Fernando Novoa came to work for Mr. Billie Mac Jobe and his
entities,” assumed facts not yet in evidence, but this objection
did not relate to the testimony about which Novoa alleges Bruton
error; no objection was raised to that testimony.

38
to affirm Novoa’s conviction and sentence under Count 2 for aiding

and abetting bank fraud. Given the other, admissible evidence

against Novoa, any Bruton error would be harmless, so this court’s

refusal to rectify it through plain error review does not cause a

miscarriage of justice. See, e.g., U.S. v. Kelly, 973 F.2d 1145

(5th Cir. 1992) (applying harmless error analysis to an alleged

Bruton error); U.S. v. Cartwright, 6 F.3d 294, 300 (5th Cir. 1993)

(holding that no plain Bruton error occurred when the evidence of

guilt was overwhelming).

2. Sentence Enhancements

Novoa contends that the district court erred in applying

a two level enhancement under § 3B1.1(c) discussed above because he

did not manage or supervise any other criminal participant in the

check-kiting scheme. He also argues that the district court was

clearly erroneous when it refused to grant him a reduction in

sentence under § 3B1.2 for his status as a minimal or minor

participant in the check kite.

To support his argument that the § 3B1.1(c) enhancement

was erroneous, Novoa relies on the language in the commentary

accompanying that section that indicates that he must supervise,

manage, or control another co-defendant in order to qualify for the

enhancement. However, as this court explicitly recognized in

Ronning, “[t]he note recognizes an exception to the control

requirement if a defendant exercises management responsibility over

a criminal organization’s property, assets, or activities.”

Ronning, 47 F.3d at 711. Indeed, the note expressly provides that

39
 [a]n upward departure may be warranted,
however, in the case of a defendant who did
not organize, lead, manage, or supervise
another participant, but who nevertheless
exercised management responsibility over the
property, assets, or activities of a criminal
organization.

USSG § 3B1.1(c), comment., n.2.

Because of this exception to the control requirement, the

district court was not clearly erroneous when it imposed a two-

level sentence enhancement on Novoa under § 3B1.1(c). Novoa

exercised management responsibility over the Jobe accounts in both

his capacity as EPSB cashier and as head of the wire transfer room.

Evidence at trial also suggested that Novoa authorized multiple

transfers for Billie Mac on uncollected funds, made it possible for

Billie Mac to receive immediate credit on deposits by using

special, endorsed deposit slips, and circumvented not only the

proof machine’s calculation of the float, but also other bank

records through the use of special transaction codes. Novoa

exercised management responsibility over the Jobe accounts so as to

justify a two-level enhancement under § 3B1.1(c).

Novoa also claims that the district court was clearly

erroneous when it failed to grant him a sentence reduction under §

3B1.2. This section provides that

[b]ased on the defendant’s role in the
offense, decrease the offense level as
follows: (a) If the defendant was a minimal
participant in any criminal activity, decrease
by 4 levels; (b) If the defendant was a minor
participant in any criminal activity, decrease
by 2 levels. In cases falling between (a) and
(b), decrease by 3 levels.

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USSG § 3B1.2. On appeal, Novoa claims that he was entitled to a

two-level downward adjustment as a “minor participant.” The

government counters that Novoa has waived this claim since he

argued at sentencing for a four-level downward adjustment for his

role as a “minimal participant.”

The record supports the government’s claim that Novoa

sought the four-level downward adjustment at sentencing rather than

the two-level reduction given to a “minor participant.” While this

court could conclude that Novoa has waived his claim for treatment

as a “minor participant,” the district court’s denial of this two-

level reduction was nonetheless proper because there was ample

evidence in the record to support the conclusion that Novoa was

more than a minor participant in Billie Mac’s check kiting scheme.

CONCLUSION

For the foregoing reasons, this court AFFIRMS the

convictions of all of the appellants, VACATES Stanley’s managerial

or supervisory sentencing enhancement, and REMANDS Stanley for

resentencing.

CONVICTIONS AFFIRMED AS TO ALL DEFENDANTS; SENTENCE OF

STANLEY JOBE VACATED AND REMANDED.

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