UNITED STATES COURT OF APPEALS FIFTH CIRCUIT

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No. 91-8206 ______________________________

UNITED STATES OF AMERICA, Plaintiff-Appellee, versus

BARBARA CHANEY, Defendant-Appellant.

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Appeal from the United States District Court for the Western District of Texas ___________________________________________________

(June 19, 1992) Before BROWN, GARWOOD, and EMILIO M. GARZA, Circuit Judges. EMILIO M. GARZA, Circuit Judge:

This case involves "sham loans" allegedly made by Barbara Chaney during the years 1983-1985 in her capacity as president and chief executive officer of Western Bank in El Paso, Texas. Specifically, Chaney allegedly made loans to individuals with "related interests" that were actually made for the benefit of those individuals' businesses. Following trial, a jury found Chaney guilty of conspiracy to make false entries in Western Bank books with the intent to deceive examiners of the Texas Department of Banking (TDB) and the Federal Deposit Insurance Corporation (FDIC), a violation of 18 U.S.C. §§ 371, 1005 (Count One), and making false entries in Western Bank records in violation of 18 U.S.C. § 1005 (Count Six). The district court sentenced Chaney to concurrent five-year terms of imprisonment for each of these counts, suspended execution of the term of imprisonment for Count One, and ordered Chaney jointly and severally liable for restitution to the FDIC in the amount of $1,141,285.00. Chaney appeals, asserting that: (i) the district court erred in refusing her requested good faith instruction, (ii) Count One of the indictment is fundamentally defective because it fails to allege an object of the conspiracy charged, (iii) there is insufficient evidence of a conspiracy to commit an offense, and (iv) restitution is improper because the loss suffered was not the result of the offenses of conviction. Finding no error, we affirm.

I

The indictment alleges that Chaney conspired with businessmen Richard T. Cassidy, Chris Cummings, Lawrence Bower, and George Wallace to disguise both the purpose and relatedness of loans she made to these individuals--loans that violated both the legal lending limit established by the TDB and the policy instituted by Western Bank to comply with the TDB's regulations.^[1] This Western Bank lending policy--a written 26-page lending policy that explicitly warned against concentration of credit to related interests2--was instituted in 1983 after bank examiners

["Record on Appeal"]. According to Lebo, if examiners determine that a loan is unsatisfactory (for example, in instances where the legal lending limit is exceeded), they assign it an unsatisfactory loan classification and include it in their examination report. All loans classified unsatisfactory during a bank examination are checked again during the next examination. Id. at 81.

from the TDB adversely classified $847,000 of Western Bank's assets and urged the bank's management to "expedite its formulation and implementation of written loan policy guidelines as the substantial increase in severity of loan classification presents cause for concern."3

A

During 1983-1985, Chaney authorized numerous loans in the names of Bower, Cassidy, Cummings, Wallace, CCG Investment ("CCG"), C.O.R., Incorporated ("COR"), and ResortAmerica Corporation ("RAC"). The record establishes that the interests of these individuals and entities clearly overlapped: (i) Cummings and Wallace were in business together in CCG, RAC, COR, and other entities;4 (ii) Bower was associated with Cummings and

(iii) evaluate back-up sources of repayment; and (iv) find that the purpose, plan of repayment, and collateral were acceptable, reasonable, practical, and accomplishable within the normal framework in which the borrower operated, and document any undesirable features. Id. at Parts XIV-XV (entitled "Basic Credit Policies" and "Loan Review").

Wallace from 1983-85 as a real estate broker, and, as of 1985, described himself as a "partner" with Cummings and Wallace in CCG, RAC, and other entities;5 (iii) Cummings, Wallace, and Bower often borrowed money under their own names for the benefit of

A My two partners are Chris A. Cummings and George B. Wallace. Q How long have you been in business with Chris Cummings and George Wallace? A Since 1983 as a broker with them and then I became a partner in their entities in January and April of 1985. Q What entities are we talking about? A CCG, ResortAmerica and then subsequent to that, other entities that were created.

their businesses, and Chaney was aware that they did so;6 and (iv) Cassidy was a shareholder in RAC until 1982.7

In October 1983, Chaney and Bower negotiated the first of these loans--a $125,000 loan to CCG. Chaney knew that CCG was a partnership owned by Wallace and Cummings.^[8] In June 1984, Chaney and Bower negotiated another loan for CCG in the amount of $50,000. The following month, Bower negotiated a third loan, this one for $200,000, which paid off the existing $125,000 and $50,000 notes and enhanced CCG's debt by $25,000. Although this $200,000 loan was made in CCG's name, according to Bower, the funds from the loan went to RAC and CCG "because the assets that the two entities owned were intermingled."9

The upgrade of loans continued, and the overall amount of liability grew. Western Bank made three loans to the related borrowing entities on December 28, 1984: (i) a $550,000 loan was made to RAC; (ii) COR received a $600,000 loan, authorized by Chaney, which was used to pay off a $600,000 loan in CCG's name; and (iii) Wallace negotiated a $600,000 loan for working capital for a condominium project in Ruidoso, Mexico (the Tierra Condominium) involving Cummings, Wallace, and Bower. All three notes were due on March 29, 1985. On that day, Bower made it clear that the borrowers were not ready to pay the outstanding principal, and the three loans were renewed until June 27, 1985.

B

During the spring of 1985, a bank examination appeared imminent. Although the legal lending limit for related borrowers at Western Bank was $665,000,10 the three related loans and interest owed to Western Bank by Cummings, Wallace, and Bower-- all of which were due to expire on June 27, 1985--totalled $1,750,000-2,000,000. When Bower approached Chaney about renewing the loans at their expiration in June 1985, Chaney agreed but decided that the loans had to be "restructured"--that is, Chaney wanted the loans to be under the names of individuals.

Bower agreed to restructure and assumed one of the loans; Cummings took another, and Wallace was already on the third. According to Bower's testimony, Chaney said Cummings would not be acceptable and suggested that Cassidy's name be used on the renewal of the $550,000 RAC note. When Bower approached Cassidy, he agreed to allow his name to be used and did not ask for any of the loan proceeds.^[11] This loan was renewed, RAC's name was replaced with Cassidy's, and the loan amount was increased from $550,000 to $645,000.12 Chaney also renewed the $600,000 COR loan, changing the borrower to Bower and extending the loan amount to $650,000,13 as well as the Wallace loan, which was increased from $600,000 to $648,000.14

In November 1985, Chaney authorized another $440,000 loan to Bower. This loan was made when Bower told Chaney that he had a $187,000 loan due at another bank which he was unable to repay. Chaney chose to loan Bower $440,000 so that he could use $224,000 of the loan for a down payment on other real estate.^[15] Nevertheless, the loan presentation, initialed by Chaney, states that the loan's purpose was to "payoff Montwood National Bank"; there is no indication in the loan presentation or in the spread sheets that the loan would be used for investment in other real estate. When this loan was renewed in 1986, the bank's work sheet and Bower's renewal request stated that the original purpose of the loan had been investment in real estate, and the "related debt" section of the spread sheet was blank.

C

Western Bank was examined by the TDB and the FDIC in June 1986, and the Chaney-Bower negotiated loans caught the examiners' attention.^[16] In September 1990, Chaney, Cummings, Bower, and Wallace were indicted for misapplication of Western Bank funds and making false entries in the bank's books.^[17] Cummings, Bower, of Banking and the Federal Deposit Insurance Corporation ("FDIC"), in violation of 18 U.S.C. § 1005, such conspiracy being a violation of 18 U.S.C. § 371; Count Two. Aided and abetted by Richard Cassidy (a named, unindicted co-conspirator), knowingly made or caused to be made a false entry in a book, report or statement of Western Bank in connection with a nominee loan in the amount of $645,000 made in Cassidy's name, in violation of 18 U.S.C. §§ 2, 1005; Count Three. Aided and abetted by Cassidy, misapplied monies, funds, and credits entrusted to the care of Western Bank in violation of 18 U.S.C. §§ 2, 656 by funding a $645,000 nominee loan in Cassidy's name when she knew that the true borrower and recipient of $565,453.46 of the loan was ResortAmerica Corporation, and when she knew that to extend credit to ResortAmerica Corporation would exceed and violate Western Bank's legal lending limit,; Count Four. Aided and abetted by Lawrence Bower (a co- defendant who plead guilty), made a false entry in a book, report, and statement of Western Bank in connection with a nominee loan in the amount of $440,000 to Bower, when she made the records of the bank reflect that Bower was the borrower, although she knew that the true borrower and recipient of the proceeds were Chris A. Cummings and ResortAmerican Corporation--a violation of 18 U.S.C. §§ 2, 1005; Count Five. Aided and abetted by Bower, misapplied and caused to be misapplied monies, funds, and credits entrusted to the care of Western Bank, in violation of 18 U.S.C. §§ 2, 656, by funding a nominee loan in the amount of $440,000 in the name of Bower, when she knew that the proceeds of the loan would go to benefit, among others, ResortAmerica Corporation, and she knew that to extend credit on that date to ResortAmerica Corporation would exceed and violate Western Bank's legal lending limit; and Count Six. Made and caused to be made a false entry in a book, report, and statement of Western Bank, with the intent to injure and defraud Western Bank and to deceive the examiners and agents of the FDIC and the Texas Department of Banking; falsely stated in an Officer's Questionnaire that since the last bank examination she had made no extensions of credit for the accommodation of others than those whose name appeared on the bank's records or on credit instruments in connection with such extensions, when she in fact knew that she had extended credit for the accommodation of Cummings and ResortAmerica Corporation, and the names Cummings and ResortAmerica Corporation did not and Wallace were also charged with offenses related to the submission of false financial statements to Western Bank in violation of 18 U.S.C. § 1014. Chaney's co-defendants pled guilty to submitting false financial statements, and Chaney went to trial.

The district court granted Chaney's pre-verdict motion for judgment of acquittal as to the conspiracy to misapply funds count (part of Count One) and the substantive misapplication of funds counts (Counts Three and Five). However, the jury found Chaney guilty as to the false entry conspiracy charge (a portion of Count One) and as to the substantive false entry charge concerning a Western Bank Officer's Questionnaire (Count Six),18 but acquitted her on the remaining counts (Counts Two and Four).19 Chaney moved for judgment of acquittal notwithstanding the verdict as to Count One, and that motion was denied. Chaney appeals.

II

Chaney raises the following contentions:

(a) the district court erred in refusing her requested instruction that good faith belief in the truth of her statements is a complete defense to the charge of making a false entry in Western Bank's books;

(b) Count One of the indictment is fundamentally defective because it fails to allege an object of the conspiracy charged;

(c) the district court erred in refusing to grant Chaney's motions for judgment of acquittal as to Count One on the grounds that there is insufficient evidence of a conspiracy to commit an offense; and

(d) the district court erred in imposing restitution because the loss suffered was not the result of the offenses of conviction.

A

Chaney contends that her conviction on Count Six--the substantive false entry charge concerning her response to a question on the Officer's Questionnaire--should be reversed because the district court refused to give her proposed good faith instruction.^[20] We disagree.

We afford the district court substantial latitude in formulating its instructions, and we review a district court's refusal to include a defendant's proposed jury instruction for abuse of discretion. See United States v. Sellers, 926 F.2d 410, 414 (5th Cir. 1991); United States v. Rochester, 898 F.2d 971, 978 (5th Cir. 1990). In applying this abuse-of-discretion standard, we read the district court's instruction as a whole to determine whether that instruction fairly and accurately reflects the law and covers the issues presented in the case. See United States v. Daniel, 957 F.2d 162, 169-70 (5th Cir. 1991) (viewing jury instruction as a whole and holding that lack of good faith instruction and inclusion of instruction on deliberate ignorance does not constitute reversible error); United States v. Hagmann, 950 F.2d 175, 180 (5th Cir. 1992) ("When a charge is challenged on appeal, we evaluate it in its entirety, looking to see whether the charge as a whole was correct."). Specifically, where the contention is that the district court has refused to give an instruction, we determine whether the requested instruction: (1) is a correct statement of the law; (2) was substantially given in the charge as a whole; and (3) concerns an important point in the trial, the omission of which seriously impaired the defendant's ability to present a given defense effectively. See United States v. Marcello, 876 F.2d 1147, 1151 (5th Cir. 1989); United States v. Rubio, 834 F.2d 442, 447 (5th Cir. 1987), quoting United States v. Grissom, 645 F.2d 461, 464 (5th Cir. 1981).

For section 1005 purposes, specific intent is the "intent to injure or defraud a bank, . . . or any individual person, or to deceive any officer of such bank, or the Comptroller of the Currency, or the Federal Deposit Insurance Corporation, or any agent or examiner appointed to examine the affairs of such bank . . . ." 18 U.S.C. § 1005; United States v. McCright, 821 F.2d 226, 233 (5th Cir. 1987), cert. denied, 484 U.S. 1005, 108 S. Ct. 697 (1988); United States v. Adamson, 700 F.2d 953, 965 (5th Cir.) (en banc), cert. denied, 464 U.S. 833 (1983). The district court instructed the jury that it was required to find beyond a reasonable doubt that Chaney "made such [false] entry wilfully with knowledge of its falsity," and that she did so "with the intent of defrauding or deceiving the person named in the indictment."21 The district court also instructed the jury that: [a] person acts with intent or intentionally with respect to an act or a result of her conduct if it is her conscious objective or desire to engage in the act or to cause the result. * * * The word knowingly as that term has been used from time to time in these instructions means that the act was done voluntarily and intentionally, not because of mistake or [accident]. The purpose of adding the word knowingly as that term has been used from time to time is to [e]nsure that no one will be convicted for an act done because of a mistake or accident or other innocent reason . . . . Evidence that Barbara Chaney acted or failed to act because of being misinformed of or not knowing applicable Federal regulations is a factor you may consider in determining whether she acted or failed to act with a requisite criminal intent required for conviction. ^[22]

Although this instruction is not the one proposed by Chaney, it is, in essence, a good faith instruction. Moreover, Chaney had an opportunity to argue good faith to the jury, and she substantiated this assertion by testifying that, based on her understanding and knowledge of the loans at the bank and the applicable regulations, it was her good faith belief that she answered the Officer's Questionnaire correctly.^[23] See Rochester, 898 F.2d at 978 ("[F]ailure to instruct on good faith is not fatal when the jury is given a detailed instruction on specific intent and the defendant has the opportunity to argue good faith to the jury."). Accordingly, we find that (1) the instruction given by the district court is a correct statement of the law, (2) a good faith instruction was substantially given in the charge as a whole, and, (3) although the specific intent element of section 1005 of Title 18 concerns an important point in Chaney's trial, the omission of which would have seriously impaired Chaney's ability to present an effective good faith defense, we find that this point was dealt with adequately during Chaney's trial and in the district court's instructions. See Rubio, 834 F.2d at 450 (holding instruction sufficient where defense counsel "had a charge on which to hand his mens rea arguments[,]" his "legal theory was covered in the charge, and his ability to present a defense was not impaired").24 Therefore, we find that the district court's refusal to give the good faith instruction proposed by Chaney does not constitute reversible error.^[25] See Rochester, 898 F.2d at 978, citing United States v. Hunt, 794 F.2d 1095 (5th Cir. 1986) (holding that failure to instruct on good faith is not fatal when jury is given detailed instruction on specific intent and defendant has opportunity to argue good faith to jury); see also United States v. Chenault, 844 F.2d 1124, 1130 (5th Cir. 1988) (holding that omitting good faith instruction is not reversible error where jury is not prevented from considering that defense).

B

Chaney challenges Count One of her indictment, contending that it is fundamentally defective because it fails to allege an object of the conspiracy charged. We disagree.

Whether an indictment sufficiently alleges the elements of an offense is a question of law which we review do novo. See United States v. Shelton, 937 F.2d 140, 142 (5th Cir. 1991) (citation omitted); United States v. Contris, 592 F.2d 893, 896 (5th Cir. 1979). Although an indictment must be a "plain, concise and definite written statement of the essential facts constituting the offense charged" to satisfy Rule 7(c) of the Federal Rules of Criminal Procedure, this court has held that:

an indictment is sufficient if it [1] contains the elements of the offense charged and [2] fairly informs a defendant of the charge against him[,] and [3] enables him to plead acquittal or conviction in bar of future prosecutions for the same offense. United States v. Hagmann, 950 F.2d 175, 183 (5th Cir. 1991), quoting United States v. Stanley, 765 F.2d 1224, 1239 (5th Cir. 1985). Practical, not technical, considerations govern the validity of an indictment,26 and the test of the validity of an indictment is "not whether the indictment could have been framed in a more satisfactory manner, but whether it conforms to minimal constitutional standards." United States v. Webb, 747 F.2d 278, 284 (5th Cir. 1984) (citation omitted), cert. denied, 469 U.S. 1226, 105 S. Ct. 1222 (1985); see also United States v. De La Rosa, 911 F.2d 985, 988-89 (5th Cir. 1990), cert. denied, 111 S. Ct. 2275 (1991); United States v. Wilson, 884 F.2d 174, 179 (5th Cir. 1989). Because Chaney raises her indictment challenge for the first time on appeal, we review Count One with "maximum liberality"--that is, we will find Count One sufficient "unless it is so defective that it does not, by any reasonable construction, charge an offense for which the defendant was convicted." See Shelton, 937 F.2d at 143 (quotation omitted), cert. denied, 112 S. Ct. 607 (1991); United States v. Wilson, 884 F.2d 174, 179 (5th Cir. 1989); United States v. Rivera, 879 F.2d 1247, 1251 n.3 (5th Cir.) (citation omitted), cert. denied, 493 U.S. 998, 110 S. Ct. 554 (1989).

Excluding introductory allegations and alleged overt acts, Count One of the indictment, which charges that Chaney committed a false entry conspiracy in violation of 18 U.S.C. § 371, reads as follows:

COUNT ONE (18 U.S.C. § 371)

That beginning on or about December 19, 1983, and continuing until on or about March 12, 1987, in the Western District of Texas, and elsewhere, the Defendants, BARBARA R. CHANEY, CHRIS A. CUMMINGS, LAWRENCE M. BOWER, did knowingly and wilfully combine, conspire, confederate and agree with each other, with Richard T. Cassidy, a principal not indicted herein, and others known and unknown to the Grand Jury, [to violate Title 18, United States Code, Section 656; that is to say . . . that Defendants . . . conspired with . . . BARBARA R. CHANEY, President of Western Bank, and with Richard T. Cassidy, a principal not indicted herein, to wilfully misapply monies, funds and credits which had been entrusted to the care of Western Bank,] and further, the said Defendants and unindicted co-conspirator caused to be made false entries in the books of said bank with the intent to deceive the examiners of the Texas Department of Banking and the Federal Deposit Insurance Corporation, in violation of Title 18, United States Code, Section 1005 . . . .27 Chaney claims that Count One charges her only with participating in a conspiracy to misapply bank funds, and that the indictment's false entries language does not refer back to the conspiracy-- that is, Chaney contends that she was not put on notice that the conspiracy for which she was charged included a second alleged objective of making false entries.

As recently stated by this court, "[a]n indictment's most basic purpose--a fundamental objective that must be realized--is `to fairly inform a defendant of the charge against him.'" Hagmann, 950 F.2d at 182 (emphasis in original) (citation omitted). Therefore, we look to see whether this basic purpose was realized, and we begin with the plain language of the indictment: After alleging that Chaney and others conspired to violate section 656, Count One charges that "the said Defendants and unindicted co-conspirator caused to be made false entries in the books of said bank." Beyond the literal clarity of its language, Count One is written to establish the essential elements of a section 371 conspiracy, which are: (1) an agreement by two or more persons to combine efforts ("Defendants . . . did knowingly and wilfully combine, conspire, confederate and agree with each other");

(2) for an illegal purpose ("to wilfully misapply monies, funds and credits" and "ma[ke] false entries in the books of said bank with the intent to deceive the examiners of the Texas Department of Banking and the Federal Deposit Insurance Corporation"); and

(3) an overt act by one of the members in furtherance of that agreement ("the said Defendants and unindicted co-conspirator caused to be made false entries in the books of said bank"). See United States v. Schmick, 904 F.2d 936, 941 (5th Cir. 1990), cert. denied, 111 S. Ct. 782 (1991); United States v. Yamin, 868 F.2d 130, 133 (5th Cir.), cert. denied, 492 U.S. 924, 109 S. Ct. 3258 (1989); United States v. Gordon, 780 F.2d 1165, 1170 (5th Cir. 1986). This interpretation of the meaning of Count One's actual language is reinforced by the fact that it is explicitly designated a conspiracy count by the citation to 18 U.S.C. § 371 in its heading. See United States v. Boyd, 885 F.2d 246, 249 (5th Cir. 1989) (statutory citation increases indictment's clarity); Wilson, 884 F.2d at 179 (statutory citation reinforces other references within the indictment); United States v. Campos- Asencio, 822 F.2d 506, 508 (5th Cir. 1987). Accordingly, we find that Count One sufficiently informed Chaney that she was charged with participating in a section 371 conspiracy with the dual objectives of misapplying funds and making false entries.

C

Asserting that there is insufficient evidence to support her conviction, Chaney also challenges the district court's refusal to grant her motion for judgment of acquittal for conspiracy to violate 18 U.S.C. § 1005 as charged in Count One.^[28] That Count alleges that Chaney, Bower, and Cummings, along with their unindicted co-conspirator, Richard Cassidy, conspired to make false entries in bank records related to nominee loans with the intent to deceive bank examiners.

It is well-established that juries are "free to choose among all reasonable constructions of the evidence"29--that is, we will affirm a jury's verdict if any rational trier of fact could have found the essential elements of the offense beyond a reasonable doubt. See Jackson v. Virginia, 443 U.S. 307, 319 (1979); Logan, 949 F.2d at 1380 ("The ultimate test for sufficiency of evidence challenges is whether a reasonable jury could find that the evidence establishes guilt beyond a reasonable doubt."); United States v. Nixon, 816 F.2d 1022, 1029 (5th Cir. 1987), cert. denied, 484 U.S. 1026, 108 S. Ct. 749 (1988). In other words, the "rule of reason" governs what a fact finder is permitted to infer from the evidence in a particular case, and fact finders may "use their common sense and evaluate the facts in light of their knowledge of the natural tendencies and inclinations of human beings." United States v. Ayala, 887 F.2d 62, 67 (5th Cir. 1989) (quotation omitted). In applying this rule of reason standard, "this Court is obliged to view the evidence, whether direct or circumstantial, and all inferences reasonably drawn from it, in the light most favorable to the verdict." Molinar- Apodaca, 889 F.2d at 1423; see also Berisha, 925 F.2d at 795; Logan, 949 F.2d at 1380; United States v. Bryant, 770 F.2d 1283, 1288 (5th Cir. 1985) (standard of review is same whether evidence is direct or circumstantial), cert. denied, 475 U.S. 1030, 106 S. Ct. 1235 (1986). To sustain a jury verdict, the evidence certainly need not exclude every reasonable hypothesis of innocence nor be inconsistent with every conclusion except that of guilt. See United States v. Bell, 678 F.2d 547, 549 (5th Cir. 1982) (en banc), aff'd on other grounds, 462 U.S. 356, 103 S. Ct. 2398 (1983).

To establish a substantive violation of section 1005, the government must prove that: (1) an entry made in bank records is false; (2) the defendant made the entry or caused it to be made; (3) the defendant knew the entry was false at the time he or she made it; and (4) the defendant intended that the entry injure or defraud the bank or public officers.^[30] See United States v.

Kington, 875 F.2d 1091, 1104 (5th Cir. 1989); United States v. Jackson, 621 F.2d 216, 219 (5th Cir. 1980). The government need not prove intent to cause the bank injury; all that is required is that the defendant intended to defraud one or more of the bank's officers, auditors, examiners, or agents. See United States v. Tullos, 868 F.2d 689, 695 (5th Cir.), cert. denied, 490 U.S. 1112, 109 S. Ct. 3171 (1989), citing United States v. Stovall, 825 F.2d 817 (5th Cir. 1987). To establish a conspiracy under 18 U.S.C. § 371, the government must prove beyond a reasonable doubt that the defendant entered into an agreement with at least one other person to commit a crime against the United States and that any one of these conspirators committed an overt act in furtherance of that agreement. See United States v. Schmick, 904 F.2d 936, 941 (5th Cir. 1990); United States v. Yamin, 868 F.2d 130, 133 (5th Cir.), cert. denied, 492 U.S. 924, 109 S. Ct. 3258 (1989); see also supra Part II.B. The government must also prove that the defendant knew of the conspiracy and voluntarily became part of it. Yamin, 868 F.2d at 133. The existence of a conspiracy may be proved by circumstantial evidence. Id. The agreement between or among co-conspirators also may be proved by circumstantial evidence. See United States

or defraud . . . the Federal Deposit Insurance Corporation, or any agent or examiner appointed to examine the affairs of such bank . . . Shall be fined not more than $5,000 or imprisoned not more than five years, or both. ^[18] U.S.C. § 1005 (1988). Congress amended section 1005 in 1989 to, among other things, increase the possible penalty to $1,000,000 and twenty years imprisonment. See 18 U.S.C.A. § 1005 (West Supp. 1992).

v. Goff, 847 F.2d 149, 168 (5th Cir.), cert. denied, 488 U.S. 932, 109 S. Ct. 324 (1988).

According to Chaney, because she was acquitted of making false statements in the loan files of the bank as was charged in Count Six,31 there is no overt act to support the charge that she conspired to make a false statement on the Officer's Questionnaire or otherwise conspired to falsify bank records.^[32] Chaney contends that she is not challenging her conspiracy conviction under Count One based upon an inconsistent jury verdict;33 rather, she asserts that her conspiracy acquittals on other counts demonstrate that there is a lack of evidence to support such a conviction under Count One. We disagree.

At trial, Chaney did not dispute that she had approved all the loans at issue. In fact, Chaney admitted knowing that the borrowers and their interests were related,34 and that she had violated her own lending policy by lending more than $600,000 to a related group of borrowers.^[35] It is clear that the loans made to this related group of borrowers grossly exceeding the legal lending limit of Western Bank and the lending policy instituted in 1983 by Western Bank.^[36]

Moreover, the record establishes that Chaney acted to conceal the relatedness of these borrowers and the true nature of the loans at issue.^[37] The transactions underlying Chaney's conviction involve a series of loan upgrades in which the expanding debt and underlying collateral were shifted among a group of individuals with a shared interest in gaining access to Western Bank funds.^[38] Effecting these transactions required the preparation of numerous documents--documents that contain both false entries and factual omissions which disguised the nature of the loans and actual borrowers from Western Bank and the TDB examiners.^[39] Accordingly, we affirm Chaney's conviction for conspiracy to make false entries.

D

Finally, Chaney contends that the district court erred in imposing joint and several liability among Chaney and her co- defendants for restitution in the amount of $1,141,285.40 According to Chaney, no loss flowed from the offenses of conviction--that is, from Chaney's conviction for conspiracy to make false entries (Count One), and from her conviction on the substantive false entry charge relating to the Officer's Questionnaire (Count Six)--and no restitution is appropriate.^[41] Restitution under the Victim and Witness Protect Act (VWPA)42 is limited to losses caused by the specific conduct that is the basis of the offense of conviction, Hughey v. United States, __ U.S. __, __, 110 S. Ct. 1979, 1984 (1990), but we have held that this VWPA restriction is not applicable to cases involving restitution ordered pursuant to the Federal Probation Act, 18 U.S.C. § 3651 (repealed eff. Nov. ^[1], 1986) (FPA). See United States v. Hunt, 940 F.2d 130, 131 (5th Cir. 1991).43 Chaney's offenses were committed while the Probation Act was in effect, and the record is not conclusive as to whether the district court ordered restitution under the Probation Act or under the VWPA. As stated in United States v. Cook, 952 F.2d 1262, 1264 (10th Cir. 1991), "where both statutes authorize restitution, district courts should specify whether the FPA or VWPA governs." When district courts fail to do so, "unless a clear intention appears to the contrary, we will assume restitution orders are made pursuant to the broader provisions of the VWPA." Id., citing United States v. Padgett, 892 F.2d 445, 448 (6th Cir. 1989); see United States v. Kress, 944 F.2d 155, 158 (3d Cir. 1991) ("Where the district court fails to specify whether the FPA or the VWPA authorized its actions, the general rule is that the VWPA controls."), cert. denied, 112 S. Ct. 1163 (1992).

Restitution under the VWPA is a criminal penalty and a component of the defendant's sentence. See United States v. Snider, 957 F.2d 703, 705 (9th Cir. 1992); id. at 1113 ("Because restitution under the VWPA is a criminal penalty, its imposition must comport with the substantive and procedural requirements of due process."). Therefore, when the legality of a restitution award is questioned, we review that award de novo. See United States v. Badaracco, 954 F.2d 928, 942 (3d Cir. 1992) (stating that review of restitution order is bifurcated: plenary review over whether the award is permitted under law is followed by review of the particular award for abuse of discretion); United States v. Cook, 952 F.2d 1262, 1263 (10th Cir. 1991); Snider, 945 F.2d at 1110. If we conclude that the sentence is legal, we then review the restitution award for abuse of discretion. See United States v. Gelais, 952 F.2d 90, 97 (5th Cir. 1992) (finding that the "district court neither abused its discretion in choosing not to articulate its findings nor in determining the amount of restitution"); United States v. Ryan, 874 F.2d 1052, 1054 (5th Cir. 1989) (Where defendant challenged award of restitution pursuant to the VWPA, holding that "[d]istrict courts are accorded broad discretion in ordering restitution.").

The government charged, and the jury found, Chaney guilty of (1) the general, substantive charge of conspiring to make false entries in Western Bank records and (2) making a false statement on the Officer's Questionnaire--that is, Chaney failed to disclose that she had made extensions of credit to benefit those whose names did not appear on bank records in connection with these extensions.^[44] This scheme for which Chaney was convicted is amorphous by nature, but we have found that Count One was defined with enough specificity to sustain Chaney's challenge to its sufficiency.^[45]

Restitution under the VWPA is limited to losses resulting from the specific conduct underlying Chaney's convictions. See Hughey v. United States, __ U. S. __, 110 S. Ct. 1979, 1983-84 (1990). Although there is overlap between the charges within Chaney's indictment,46 Chaney was convicted on the more general Count One--the conspiracy count alleging the overall scheme. We will not be distracted by inconsistencies in the jury's verdict: Hughey holds that "Congress intended restitution to be tied to the loss caused by the offense of conviction[,]"47 and, as in Hughey, our analysis builds upon the conduct for which Chaney was convicted. Accordingly, we reject Chaney's proposal that we turn the Hughey rule inside-out, interpreting it as "Restitution under the Victim and Witness Protect Act is forbidden for losses that may be attributed to conduct that is the basis of charges for which the defendant is acquitted."48 It is well-established that, as a participant in the false entry conspiracy, Chaney is legally liable for all the actions of her co-conspirators in furtherance of this crime. See United States v. Kissel, 218 U.S. 601, 608, 31 S. Ct. 124, 126 (1910) ("[T]he conspiracy continues up to the time of abandonment or success.") ("A conspiracy is a partnership in criminal purposes . . . [and] an overt act of one partner may be the act of all without any new agreement specifically directed to that act."); see also Hyde v. United States, 225 U.S. 347, 369, 32 S. Ct. 793, 803 (1912) (the liability of an individual conspirator continues until the conspiracy accomplishes its goals or that conspirator withdraws, the latter of which requires an affirmative action). Conspiracy is, therefore, a continuing

statements to a federally insured savings and loan, holding that government cannot exceed convictions it bargained for by ordering restitution for other counts); see also United States v. Young, 953 F.2d 1288, 1290 (11th Cir. 1992) (where defendant approved at least thirty loans in exchange for "gifts" while acting as a bank loan officer, and then pled guilty to only two counts of accepting and receiving a commission or gift in connection with a loan approval, holding that restitution had to be limited to losses resulting from those two offenses); United States v. Wainwright, 938 F.2d 1096, 1098 (10th Cir. 1991) (where defendant pled guilty to one count of bank fraud, holding that restitution ordered encompasses losses stemming from charges which were dismissed). Moreover, even if we were to follow the approach Chaney proposes by eliminating all conduct for which Chaney was acquitted, Chaney was generally charged and convicted of conspiring to make false entries in Western Bank records. Chaney was acquitted only of specific conduct--conduct included within Charge One but not encompassing the conduct alleged in that charge. Therefore, the district court was not precluded from basing its restitution award on losses resulting from the conduct protruding beyond her acquittals, such as the false entries made in connection with the three renewals--November 1985, May 1986, and September 1986--of the $645,000 loan. See generally supra note 39 (listing other instances of false entries and omissions).

offense and, in accordance with this principle, "[t]he district court had the authority to order restitution for the losses caused by the entire fraud scheme, not merely for the losses caused by the specific acts of fraud proved by the government at trial." United States v. Brothers, 955 F.2d 493, 497 (7th Cir. 1992) (holding that restitution order did not exceed scope of convictions where defendant, challenging that order under Hughey, argued that district court could only require restitution for checks he was convicted of improperly receiving) (remanded on grounds that restitution order was unacceptably vague), discussing United States v. Bennett, 943 F.2d 738, 741 (7th Cir. 1991); see United States v. Wallen, 953 F.2d 3, 5-6 (1st Cir. 1991) (holding that, "although it may encompass a number of underlying acts, a RICO conviction is a conviction for a single offense" for VWPA purposes and a defendant may be ordered to pay restitution for all losses resulting from this continuing offense); Bennett, 943 F.2d at 741 (7th Cir. 1991) (where eighty acts constituting mail fraud scheme were discussed in plea agreement but only two specific fraudulent acts supported defendant's two mail fraud convictions, holding that district court had authority to order restitution for losses caused by entire scheme).

Because they caused Western Bank to issue and then not question the cumulative loans, the false entries effected by Chaney and her co-conspirators,49 along with Chaney's failure to accurately respond to question five on the Officer's Questionnaire,50 were part of a continuing conspiracy offense and they are inextricably related to the losses suffered as a result of default on the loans.^[51] Accordingly, we affirm both the district court's award of restitution and the joint and several liability imposed upon Chaney for that restitution.^[52]

III

For the foregoing reasons, we AFFIRM.