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Is The Insurer Obligated To Notify The Insured Of Any Inadequacy Of Automobile Liability Coverage?
On behalf of Steven Plitt, Insurance Expert posted in Injuries on Thursday, March 14, 2019.
The question of whether an insurance company had an obligation to provide advice to the insured on the adequacy of liability coverage was recently addressed by the Washington Court of Appeals in Junfang He v. Norris v. Farmers Ins. Co. of America, 415 P.3d 1219 (Wash. App. Div. I, 2018). In this case, the Washington Appellate Court found that there were insufficient grounds to support the insured's claim that the insurance company was responsible for inadequate bodily injury limits that the insured purchased.
On behalf of Steven Plitt, Insurance Expert posted in Injuries on Wednesday, January 2, 2019.
In Hahn v. GEICO Choice Insurance Co., 420 P.3d 1160 (Alaska 2018), the Alaska Supreme Court held that UIM benefits did not extend to a person falling on an insured vehicle after it struck him. In this case, the insured was sitting on his motorcycle while stopped at a traffic signal. The tortfeasor's vehicle struck the insured's motorcycle, throwing the insured backward onto the tortfeasor's vehicle's hood, windshield, and roof. The motorcyclist then landed on the pavement. Focusing on the "upon" language in the GEICO UIM coverage, the motorcyclist attempted to argue that he was an occupant of the tortfeasor's vehicle which was insured by GEICO. The Alaska Supreme Court found this argument to be unreasonable. The Court found that the policy insured covered persons who were actually occupying the vehicle, and not persons who happened to be "upon" the insured vehicle. According to the Court, the concept of "occupying" meant "in, upon, getting into, or getting out of" in accordance with the policy's language. When the phrase was read in context rather than in isolation, the term "upon" was a subset of "occupying." The Court found that no reasonable person would come to the conclusion that the fortuity of where a person's body bounced enroute to being thrown to the pavement allowed for UIM coverage attachment.
By Steven Plitt of Steven Plitt, Insurance Expert posted in Injuries on Friday, September 15, 2017.
The Missouri Supreme Court in Swadley v. Shelter Mutual Insurance Co., 513 S.W.3d 355 (Mo. 2017) held that UIM coverage did not apply when the underinsured motorist had liability coverage limits greater than the insured's underinsured motorist limits. Previously, the Missouri Court of Appeals had explained the purpose of UIM coverage. "The purpose of underinsured motorist coverage is to provide insurance coverage for insureds who have been bodily injured by a negligent motorist whose own automobile liability insurance coverage is insufficient to pay for the injured person's actual damages." Wasson v. Shelter Mutual Insurance Co., 358 S.W. 3d 113, 117 (Mo. App. 2011).
By Steven Plitt of Steven Plitt, Insurance Expert posted in Injuries on Friday, September 8, 2017.
The Mississippi Supreme Court in Rylee v. Progressive Gulf Insurance Co., 2017 WL 949545 (Miss. Mar. 9, 2017) found that a UIM policy's "each person" limit applied not only to a husband's bodily injury claim, but also to the wife's loss of consortium claim, i.e., loss of consortium claims are part of the "each person" limit and are not afforded a separate "each person" limit. The court noted that on two separate prior occasions, the court had interpreted similar policy language and reached the same conclusion that to recover more than the "each person" limit for one person, there must be more than one person who sustained bodily injury during the accident. Citing State Farm Mutual Auto Insurance Co. v. Acosta, 479 S.2d 1089, 1090‑91 (1985) and Old Sec. Cas. Insurance v. Clemmer, 455 S.2d 781, 782 (Miss. 1984). Because the wife in the case at bar was not with her husband during the crash, her husband was the only person who sustained bodily injury in the accident. Therefore, the wife's loss of consortium claim fell under the "each person" policy limit available to the husband. The court also noted that the 5th Circuit Court of Appeals relied upon the Acosta decision when it rejected a similar claim. See, Reed v. State Farm Mutual Insurance, 784 F.2d 577, 578-79 (5th Cir. 1986).
By Steven Plitt of Steven Plitt, Insurance Expert posted in Injuries on Friday, June 23, 2017.
By Steven Plitt of Steven Plitt, Insurance Expert posted in Bad Faith on Friday, April 14, 2017.
In Barickman v. Mercury Cas. Co., 2 Cal.App.5th 508, 206 Cal.Rptr.3d 699 (2d Dist. 2016), an insurance company's refusal to consent to additional release language which was designed to preserve the claimant's rights to receive criminal restitution from the insured tortfeasor caused the case not to settle and, as a result, it was found that the insurance company breached the implied covenant of good faith and fair dealing by not doing all that it could do within its power to effectuate the settlement.
By Steven Plitt of Steven Plitt, Insurance Expert posted in Injuries on Friday, January 27, 2017.
In Arceneaux, et al. v. Amstar Corp., et al., 299 So.3d 277, 2015-0588(La., 9/7/16), the Louisiana Supreme Court allocated the costs of defending long legacy disease claims between the insurer and insured based on a time-on-the-risk allocation model. Under existing Louisiana law, an insurer's duty to indemnify was to be prorated among insurance carriers based on a time-on-the-risk approach the insurance carriers that were on the risk during the period of exposure to the injurious conditions. While the law in Louisiana was settled regarding time-on-the-risk pro rata allocation applying to indemnification, there was no Louisiana precedent on whether the insurer's duty to defend could also be pro rated among the insurers and the insured during periods of self-insurance in long latency disease cases. The Court then adopted the time-on-risk method of allocation for defense costs, adopting the reasoning of the Sixth Circuit United States Court of Appeals in Ins. Co. of North America v. Forty-Eight Insulations, Inc., 633 F.2d 1212 (6th Cir. 1980), clarified on re'hrg 657 F.2nd 814 (6th Cir. 1981), cert denied, 454 U.S. 1109 (1981). The Louisiana Court found that the pro rata allocated scheme was an equitable system.
By Steven Plitt of Steven Plitt, Insurance Expert posted in Injuries on Friday, November 4, 2016.
In United States Fidelity & Guaranty Co. v. Fendi Adele S.R.I., 823 F.3d 146 (2nd Cir. 2016), the United States Court of Appeals held in favor of USF&G finding that USF&G's policy did not provide coverage for the legal liability of its insured for selling counterfeit handbags and other goods with counterfeit brand labels. The insured, Ashley Reed Trading, Inc., was in the business of purchasing and selling off-price branded handbags and other luxury goods. Ashley Reed was insured by USF&G under two liability policies for "advertising injury." Under the policies, "advertising injury" was defined by the policies as the act of "attracting the attention of others by any means for the purpose of seeking customers or supporters or increasing sales or business." The policies listed four advertising injury offenses which included the "use of another's advertising idea in your 'advertising,'" as well as "infringement of another's copyright, trade dress or slogan in your 'advertising.'"
Does a Parent Corporation Have Standing to Bring a Declaratory Judgment Action Against One of Its Subsidiaries Insurers? This question was recently answered by the California Court of Appeals.
By Steven Plitt of Steven Plitt, Insurance Expert posted in Insurance Law on Friday, October 21, 2016.
The California Court of Appeals recently held in D.Cummins Corp. v. U.S. Fidelity & Guar. Co., 246 Cal.App.4th, 201 Cal.Rptr.3d 585 (1st Dist., 2016), that a parent corporation lacked standing to sue one of its subsidiary's insurers for declaratory relief. In this case, the parent corporation did not qualify as an insured under the subsidiary's liability policies. Therefore, the Court held that the parent company lacked standing to seek a declaratory judgment establishing the duties of the subsidiary's liability insurers to defend and indemnify for asbestos claims. The Court found that a mere practical interest in the outcome of a contractual dispute was not sufficient to establish standing. Under the Declaratory Judgment Act the plaintiff must show the existence of an "actual controversy" which required the court to evaluate the rights and duties that the plaintiff was asserting in making a standing determination. The Court found that the parent corporation's responsibility for the subsidiary's litigation strategy, which included making decisions about when to settle the personal injury actions, did not give the parent corporation sufficient direct in the subsidiary's liability policy to support jurisdiction. The California Declaratory Judgment Act gave discretion to the trial court in which the court could refuse to exercise the power granted by the Act in any case where the declaration or determination was not necessary or proper at the time under all of the circumstances presented. When the trial court declined jurisdiction under the Act, the trial court's decision would be viewed on an abuse of discretion standard.

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Entitlement to service connection for a respiratory disability, to include asthma.
Appellant represented by:	Adam S. Neidenberg, Esq.
The Veteran, who is the appellant in this case, had active service in the United States Marine Corps from August 1989 to April 1992.
This matter comes to the Board of Veterans' Appeals (Board) on appeal from a December 2009 decision of the Department of Veterans Affairs (VA) Regional Office (RO) in Atlanta, Georgia.
In February 2015, the Veteran testified at a Board hearing before the undersigned Veterans Law Judge (VLJ); a transcript of the hearing is associated with the claims file.  Additional evidence was received at the hearing and was accompanied by a waiver of RO consideration.  See 38 C.F.R. § 20.1304(c)(2016).
The Board previously considered this appeal in January 2017, and remanded this issue for further development in order to obtain a VA examination.  That development was completed, and the case returned to the Board for further appellate review.
The Board notes that the Veteran submitted a request for a second Board hearing in May 2017 as well as a private medical opinion in June 2017 without a waiver of RO consideration.  However, in light of the grant of the benefit sought, the Board finds that there is no prejudice.
1.  The Veteran has a current diagnosis for asthma.
2.  The Veteran's asthma clearly and unmistakably pre-existed entry to service.
3.  Reasonable minds can differ as it is not clear and unmistakable that the Veteran's asthma was not aggravated by service.
4.  The Veteran's asthma was incurred during service.
5.  The evidence is at least in equipoise as to whether there is a nexus between the Veteran's current asthma and the asthma condition that was incurred in service.
The criteria to establish service connection for asthma have been met.  38 U.S.C.A. §§ 1101, 1110, 1111, 1131, 1137, 1153, 5107 (West 2014); 38 C.F.R. §§ 3.102, 3.303, 3.304, 3.306 (2016).
The Board has thoroughly reviewed all the evidence in the Veteran's claims file.  Although the Board has an obligation to provide reasons and bases supporting this decision, there is no need to discuss, in detail, all of the evidence submitted by the Veteran or on his behalf.  See Gonzales v. West, 218 F.3d 1378, 1380-81 (Fed. Cir. 2000) (the Board must review the entire record, but does not have to discuss each piece of evidence).  The analysis below focuses on the most salient and relevant evidence and on what this evidence shows, or fails to show, on the claims.  The Veteran must not assume that the Board has overlooked pieces of evidence that are not explicitly discussed herein.  See Timberlake v. Gober, 14 Vet. App. 122 (2000) (the law requires only that the Board address its reasons for rejecting evidence favorable to the Veteran).
The Board must assess the credibility and weight of all evidence, including the medical evidence, to determine its probative value, accounting for evidence that it finds to be persuasive or unpersuasive.  When all the evidence is assembled, VA is responsible for determining whether the evidence supports the claim or is in relative equipoise, with the appellant prevailing in either event, or whether a preponderance of the evidence is against a claim, in which case, the claim is denied.  See Gilbert v. Derwinski, 1 Vet. App. 49 (1990).  Equal weight is not accorded to each piece of evidence contained in the record; not every item of evidence has the same probative value.  When there is an approximate balance in the evidence regarding the merits of an issue material to the determination of the matter, the benefit of the doubt in resolving each such issue shall be given to the claimant.  38 U.S.C.A. § 5107(b) (West 2014); 38 C.F.R. § 3.102 (2016).  The Court has held that an appellant need only demonstrate that there is an "approximate balance of positive and negative evidence" in order to prevail.  See Gilbert, 1 Vet. App. at 53.  The Court has also stated, "It is clear that to deny a claim on its merits, the evidence must preponderate against the claim."  Alemany v. Brown, 9 Vet. App. 518, 519 (1996), citing Gilbert.
The Veteran contends that his current respiratory disability is related to service.  Specifically, the Veteran asserts that his pre-existing asthma condition was aggravated beyond its natural progression due to service.
Service connection may be granted for a disability resulting from disease or injury incurred in or aggravated by active military, naval, or air service.  38 U.S.C.A. § 1110, 1131 (West 2014); 38 C.F.R. § 3.303(a) (2016).  Service connection may be granted for any disease diagnosed after discharge, when all the evidence, including that pertinent to service, establishes that the disease was incurred in service.  38 C.F.R. § 3.303(d).
As a general matter, service connection for a disability requires evidence of: (1) the existence of a current disability; (2) the existence of the disease or injury in service, and; (3) a relationship or nexus between the current disability and any injury or disease during service.  Shedden v. Principi, 381 F.3d 1163 (Fed. Cir. 2004); see also Hickson v. West, 12 Vet. App. 247, 253 (1999), citing Caluza v. Brown, 7 Vet. App. 498, 506 (1995), aff'd, 78 F.3d 604 (Fed. Cir. 1996).
A veteran shall be taken to have been in sound condition when examined, accepted, and enrolled for service, except (1) as to defects, infirmities, or disorders noted at the time of the examination, acceptance, and enrollment, or (2) where clear and unmistakable evidence demonstrates that the injury or disease existed before acceptance and enrollment and was not aggravated by such service.  See 38 U.S.C.A. §§ 1111, 1137; 38 C.F.R. § 3.304(b).  Only such conditions as recorded in examination reports are to be considered as "noted," and a history of pre-service existence of conditions recorded at the time of examination does not constitute a notation of such conditions, but will be considered together with all other material evidence in determinations as to inception.  See 38 C.F.R. § 3.304(b); Paulson v. Brown, 7 Vet. App. 466, 470 (1995); Crowe v. Brown, 7 Vet. App. 238, 246 (1995).  However, "the presumption only attaches where there has been an induction examination in which the later complained-of disability was not detected."  Bagby v. Derwinski, 1 Vet. App. 225, 227 (1991).
Where the disease or injury at issue is not noted at the time of the examination, acceptance, and enrollment for service, the Veteran is presumed to have been in sound condition.  See 38 U.S.C.A. §§ 1111, 1137; 38 C.F.R. § 3.304(b).  The presumption of soundness is rebutted when VA shows by clear and unmistakable evidence (1) that the injury or disease existed prior to service and (2) that pre-existing injury or disease was not aggravated by service.  Id.; see also VAOPGCPREC 3-2003 (July 16, 2003).  Under 38 C.F.R. § 3.303(c), symptoms of chronic disease from date of enlistment, or so close thereto that the disease could not have originated in so short a period, will establish preservice existence thereof.  VA may show a lack of aggravation by establishing that there was no increase in disability during service or that any increase in disability was due to the natural progress of the pre-existing condition.  See Wagner v. Principi, 370 F.3d 1089 (Fed. Cir. 2004).  However, the increase need not be so severe as to warrant compensation.  Browder v. Derwinski, 1 Vet. App. 204, 207 (1991).  In order to conclude that there was no aggravation in service, VA may not rest on the notion that the record contains insufficient evidence of aggravation.  Instead, VA must rely on affirmative evidence to prove that there was no aggravation.  Horn v. Shinseki, 25 Vet. App. 231, 235 (2012).
First, the Board finds that the Veteran has a current asthma diagnosis.  Post-service treatment records throughout the period on appeal document the Veteran's ongoing treatment for symptoms of asthma.
Second, the Board finds that the presumption of soundness is not rebutted.  While the evidence of record clearly and unmistakably demonstrates that the Veteran was diagnosed with asthma prior to entering service, it is not clear and unmistakable that the condition was not aggravated by service.  Accordingly, the Board also finds that the evidence is at least in equipoise as to whether the present condition manifested during active service.
The Veteran's August 1988 Report of Medical History shows that the examiner recorded a prior history of asthma until age 11, but was "NCD" (not considered disqualifying).  However, the contemporaneous entrance examination did not note any abnormalities of the lungs and otherwise found the Veteran as qualified for service.  His physical profile also did not list any abnormalities.
A March 1991 Medical Board (MB) report stated that the Veteran had a life long history of asthma, which was quiescent between the ages of 11 and 18 years old.  The MB report said that this evaluation of asthma was "not considered disqualifying" on the Veteran's entrance examination.  The MB report noted that the Veteran was found "not recommended for overseas duty secondary to asthma" on an overseas screening dates February 26, 1990.  The report noted that the Veteran had multiple exacerbations of his asthma while stationed in Twenty-Nine Palms where the disease recurred shortly after his completion of boot camp and had multiple exacerbations since stationed on Okinawa.  The MB report noted that the Veteran had an exacerbation of his disease immediately on arrival in Okinawa and wheezed especially at night with an occasionally productive cough, yielding a small amount of tenacious cloudy sputum.  He was variously treated as an outpatient and was unaware of his medications at the time of initial evaluation.  The Veteran was prescribed various medications in order to help alleviate symptoms of wheezing, cough, and rhinorrhea.  The MB report diagnosed the Veteran with chronic allergic rhinitis and allergic asthma.  The MB report also found that both diagnoses existed prior to service and were not aggravated by service.
In March 1991, the Veteran filed a statement of rebuttal to MB report and the Discharge of Erroneous or Defective Enlistment.  The Veteran argued that his asthma disability was not quiescent between the ages of 11 and 18.  However, the Veteran then said that during the ages of 11 to 18 he participated in numerous physical activities including sports and dance without incident, proving that he had outgrown his asthma diagnosis, which the Board notes would tend to prove his position that his asthma was inactive.  The Veteran also said that he informed his recruiter of the prior asthma diagnosis.  He stated that during his entrance examination he participated in a series of medical testing and was determined medically fit for the military.  The Veteran did not agree that he should be separated by reasons of erroneous or defective enlistment due to his asthma.  He did not believe he was erroneously or defectively enlisted because his asthma symptoms did not occur again until seven and a half years after his last asthma attack.  The Veteran then affirmed his belief that his childhood asthma problems reoccurred due to the military.
A February 1992 MB report diagnosed the Veteran with allergic rhinitis and reactive airway disease.  This second MB report noted that the Veteran had complaints of frequent episodes of wheezing and shortness of breath while stationed in Camp Lejeune.  His symptoms were noted to be worse with moderate to heavy exercise and especially in damp, cool environments.  He was placed on prolonged periods of light duty, and excluded from any field duty.  His medications were found to be "only [sporadically] effective in preventing and breaking attacks."  The second MB report made specific findings that the Veteran "has a well-documented asthma history in his chart.  He has never required hospitalization for treatment.  His past medical history is significant only for a long history of allergic rhinitis."  As a result, he was found unfit for further military duty due to a physical disability.  The second Medical Board also determined that the Veteran's physical disability was neither incurred in, nor aggravated by active military service.  The Veteran received a medical discharge in April 1992.
The Veteran testified before the undersigned in February 2015.  Therein, he endorsed having problems with asthma as a child, but stated that he "totally overcame that problem."  He also said that as a child he was treated by a doctor for shortness of breath and prescribed an inhaler for emergencies, though he did not recall ever having to use the medication.  The Veteran explained that he did not have any asthma problems upon entrance into service and "breezed" through boot camp and infantry training.  He said that it was not until he was transferred to Twenty-Nine Palms, California where he began experiencing asthma symptoms after a seven and a half-year remission.  The Veteran also endorsed an increased worsening in asthma symptoms since service.  The Veteran is competent to report symptomatology relating to his asthma because this requires only personal knowledge as it comes to him through his senses.  See Layno v. Brown, 6 Vet. App. 465 (1994).  He is also competent to report on his prior asthma symptoms as they are supported by a later diagnosis from a medical professional.  See Davidson v. Shinseki, 581 F.3d 1313, 1316 (Fed. Cir. 2009); Jandreau v. Nicholson, 492 F.3d 1372, 1376-77 (Fed. Cir. 2007).
The February 2017 VA examiner observed the following based on her review of the Veteran's service treatment records: the Veteran's August 1988 entrance physical showed that he reported a history of childhood asthma with no symptoms since age 11; the entrance examiner indicated that the Veteran's asthma was "NCD" (not considered disqualifying) and the Veteran was admitted to service on August 2, 1989.  The examiner noted that a treatment note from August 4, 1989, indicated the Veteran was referred to sick call, but the VA examiner could not determine if this was related to his reported history of asthma or other symptoms; the Veteran's chief complaint, as reported in this service treatment record, was for complaints of asthma.  The entrance examiner indicated that the Veteran had complaints of asthma since age 12, but that he was "Completely ok;" and the entrance examiner questioned a diagnosis of asthma and the treatment or recommendations were unclear to the VA examiner, with the only notation being "CMR" and "RTC with [sic];".  The examiner noted that the Veteran was seen in October 1989 complaining of shortness of breath; his examination revealed clear lungs and he was discharged, but told to return for repeat symptoms.  The Veteran was then treated in February 1990 for wheezing, and his lung exam was notable for wheezing, so he was prescribed multiple medications, which included an inhaler. The Veteran subsequently had repeated visits for asthma symptoms which eventually led to his being referred for an Internal Medicine evaluation for his symptoms and consideration of possible medical board in December 1990.  Prior to his referral, the Veteran's symptoms and history resulted in his initially being disqualified for overseas training based on a screening examination performed in February 1990.  He was later cleared for deployment in May 1990, however, as mentioned, by December 1990, symptoms were persistent; repeated visits were noted and asthma exacerbations were found over his remaining years in service with his requiring repeated refills for bronchodilators as well as limited duty restrictions at times.  The Veteran also underwent a physical evaluation board in February 1992 and was then discharged from service in April 1992, although it was unclear to the VA examiner if the Veteran's ultimate reason for separation was related to his medical board evaluation or due to an administrative separation for his claim of being a "conscientious objector."
The February 2017 VA examiner opined that the Veteran's asthma, which clearly and unmistakably existed prior to service, was not aggravated beyond its natural progression by an in-service event, injury or illness.  The VA examiner explained, "[The] Veteran's onset of breathing difficulty within two days of entrance into service suggest he had [a] disease [that] was not manifested previously due to environmental conditions being different possibly, as well as the more strenuous nature of physical activity in service."  She stated, "[The] Veteran has reported being prescribed an inhaler when he was a child for his breathing symptoms in his [November] 2016 Statement in Support of Claim, but reported he never used it and suggested he only required over the counter medications, referring to Vicks Vapor Rub and cough syrup."
However, the February 2017 VA examiner noted that the Veteran's service entrance Report of Medical History, dated August 4,1988, indicated that he had asthma until age 11 and "took medication."  The VA examiner also found that the Veteran reported during that physical that he had not had asthma symptoms since age 11; however, on his overseas screening Report of Medical History, dated February 26, 1990, the VA examiner point out that the Veteran affirmatively indicated he was seen at a hospital in April 1989 for an asthma attack that was triggered at work.  The VA examiner observed that this treatment record further elaborated that the Veteran was "seen and treated for asthma at hospital for 5 [sic]."  According to the VA examiner, the quantifier is not legible, but appeared to indicate the symbol used in medical documentation for hours (rather than days).  In addition, the Veteran affirmatively indicated for question 18c that he was "a busboy of a restaurant and it got [too] hot one [night].  It caused [the Veteran] to have an attack."  The VA examiner found that no date was provided for this event; however, she assumed he was not working as a busboy at age 11 and his asthma event was likely at an age later than that he reported as his last episode of asthma symptoms on his service entrance examination.
The February 2017 VA examiner reasoned, "No matter the date, [the Veteran's] responses for his overseas screen are in direct contradiction to the history he offered on his [entrance examination Report of Medical History] and are indicative [of] an ongoing disease prior to admittance to service."  In addition, the VA examiner found that the Veteran's report from the August 4, 1989 evaluation due to his history of asthma that he had only "...one asthma attack since age 12," was contrary to his report on the entrance Report of Medical History.  The VA examiner further expressed that the "Veteran's presentation within two months of entrance to service in October 1989 suggests that his disease was not quiescent for years given he was symptomatic so quickly."
The VA examiner summarized her findings by stating that the inconsistencies reported in the Veteran's admissions and later overseas screening exams "suggest his symptomatology was minimized at entrance and therefore, it is not felt that the Veteran's asthma, which was significant enough to result in a hospital visit in [April] 1989, just 4 months prior to entrance, was not aggravated by service."  In addition, the VA examiner noted that the "more frequent attacks in relationship to dust exposure or exercise, conditions which the Veteran reports being subjected to while in service and particularly in Okinawa, are not representative of aggravation of asthma, but rather the natural course of this particular disease process."  The VA examiner also pointed out that the Veteran was documented in February 1990 as smoking ("7cig/day"), which she said can also cause exacerbation of asthma symptoms.  In conclusion, the VA examiner noted her review of current medical literature and found that while the Veteran reported his symptoms were resolved for years prior to service, this is not considered to represent a resolution of asthma.  Based on article abstracts, included in the VA examination opinion, the examiner found that there is "evidence that certain individuals, up to 50 [percent] by one report, are at risk for relapse.  As such, [the Veteran's] recurrence of symptoms [is] again not representative of an aggravation, but part of the natural course for some patients."  She also found it "questionable" if the Veteran "was completely free of symptoms as previously discussed and thus, negates this argument besides the medical evidence."  Based on the foregoing, the VA examiner found that the Veteran's current disease severity "is not considered abnormal or deviant from the normal course for this condition."
The June 2017 private examiner opined that the Veteran's service treatment records "clearly show that his asthma was aggravated beyond the natural history of the disease by his military service."  The private physician noted that the Veteran did not have any documented treatment between ages 11 to 18.  She pointed out that the Veteran completed boot camp without any medical complications, and that he only began to experience asthma symptoms associated with dust exposure when he was stationed at Twenty-Nine Palms, California in the fall of 1989.  The private examiner noted that the Veteran's "first in-service wheezing was documented in February 1990 in the setting of viral bronchitis."  She also observed that an overseas screening from February 1990 documented an "overall mild course of asthma."  The private physician also found that the Veteran endorsed an "undated prior episode of difficulty breathing and an attack in April 1989 requiring a 5-hour hospital evaluation for asthma; there are no other records confirming that event and all other available documentation in the service medical records documents a complete lack of asthma symptoms prior to February 1990."  She further pointed out that the "remainder of the Veteran's service [treatment] records document the progressive nature of his symptoms, requiring frequent evaluations at the Battalion Aid Station, referrals to medical specialists, emergency room treatment, and an escalating course of medications to include daily inhaled steroids and frequent use of an albuterol rescue inhaler."  She concluded, "By the time of his medical discharge in 1992, [the Veteran's] asthma was significantly worse than it had ever been during his childhood as evidenced by the prescribed chronic daily inhaled steroid."
The June 2017 private physician also commented on the February 2017 VA examiner's opinion that the Veteran's asthma "was not aggravated beyond its natural progression due to service because his symptoms manifested early in his military course."  The private examiner observed that the August 1989 treatment note "appears to be addressing his reported history of asthma rather than any acute symptoms, although the brief note is not entirely clear either way."  She elaborated, "In my clinical experience working with Marine Corps recruits, however, I find it highly unlikely that a recruit experiencing respiratory symptoms would be sent back to training without close follow-up.  Generally, recruits are seen in sick call daily until back to their usual condition."  She further stated, "I think that the note dated [August 4, 1989] in the medical record is unclear, I disagree with the [VA] examiner that the Veteran clearly and unmistakably experienced 'onset of breathing difficulty within two days of entrance into service.'"  The private physician then stated, "The medical record does not support such a strong claim."  She observed that the VA examiner relied on the Veteran's comments found on his February 1990 overseas screening form that he had a recent asthma attack shortly before his entrance into service.  However, the private physician found that this one form "contradicts all the other documentation in the medical records," which she said "include multiple treating corpsman and physicians across multiple clinics and hospitals over the course of two and a half years."  In her professional opinion, the private physician said, "[T]he record is not clear and unmistakable on this point."
The June 2017 private physician also commented on medical literature as it pertains to the natural history of childhood asthma and military recruits.  She found, "While the majority of childhood asthmatics remain asymptomatic, a significant minority do have a recurrence of symptoms in early adulthood."  She then noted that the VA examiner also cited a 2009 comparative study of 24 subjects with a history of childhood asthma in remission and found that 40-50 percent of that group had elevated laboratory findings suggestive of airway hyper-responsiveness and that they might be at risk of future relapse.  The private examiner commented that while this study is important to furthering medical knowledge in that it identifies a target for future research and intervention, "it is not a study of clinical outcomes and does not identify patients who do relapse."  She then identified additional, larger studies that specifically examined military populations and the risk of asthma recurrence.  She summarized that the three studies of large military cohorts that she discussed in her opinion "are more pertinent to [the Veteran's] clinical situation than the [study cited by the VA examiner]."
Moreover, the June 2017 private physician explained why her three studies were more probative than the study presented by the VA examiner, "They demonstrated that the demands of military service such as heavy exercise and exposure to environmental triggers were well tolerated by most soldiers with a history of childhood asthma that had been quiescent during adolescence, and even by those with active but mild disease upon entrance."  She continued, "Notably, military recruits, even those with mild, active asthma who successfully completed basic training-as [the Veteran] did-went on to have the same military performance, health care utilization, and attrition as their nonasthmatic cohort."  In her opinion, the majority of the service treatment records "supports that [the Veteran's] asthma was quiescent for approximately seven years prior to his enlistment, but even in the setting of a single asthma exacerbation in 1989, his asthma would have been qualified as mild, intermittent given that he did not require daily medication use for control."  She reported that the Veteran's asthma had progressed during his time in service as evidenced by the February 1992 physical evaluation board's narrative that the Veteran had "prolonged periods of light duty, excluding him from any field duty," as well as daily use of inhaled controller medication.  She found that this evidence of progression represented "a significantly more severe disease process than would be expected based on studies of comparable soldiers, and a significantly more severe disease process than would be expected based on his mild childhood disease."  In conclusion, the private physician found that the Veteran's asthma remains persistent and severe, requiring two controller medications and one rescue medication for control.  She opined, "Given the unexpected severity of his asthma, it is at least as likely as not that [the Veteran's] asthma was permanently aggravated beyond its natural progression over the course of his military service."
Based on the foregoing, the Veteran's history of pre-service existence of asthma recorded at the time of the entrance examination does not constitute a notation of such conditions.  However, when considered together with the two Medical Board reports, the service treatment records, the Veteran's statements of record, and the two post-service medical examination reports that affirmatively discuss inception of the condition prior to service, the evidence clearly and unmistakably shows that the Veteran's asthma preexisted service.  See 38 C.F.R. § 3.304(b); Paulson v. Brown, 7 Vet. App. 466, 470 (1995); Crowe v. Brown, 7 Vet. App. 238, 246 (1995).
Next, the Board finds that it is not clear and unmistakable that the Veteran's asthma was not aggravated by service.
The February 2017 VA examiner opined that the Veteran's asthma was not aggravated due to service.  The VA examiner's opinion relied on showing no increase in severity during service; however, the June 2017 private examiner adequately explained that the Veteran's asthma symptoms did in fact progress.  The private examiner discussed how the Veteran had increased usage of medications after he was treated for asthma in February 1990, and also how the Veteran continued to seek treatment for increased symptoms during service.  This would tend to prove that his condition was aggravated by service due to increased medication usage and increased severity of symptoms.  The VA examiner also did not account for the Veteran's credible lay statements as to the onset of symptoms, specifically failing to address the Veteran's credible statements of treatment prior to service as well as complaints regarding the progressive severity of asthma symptoms during service and thereafter.  See Buchanan v. Nicholson, 451 F.3d 1331, 1336-37 (Fed. Cir. 2006) (holding that the absence of contemporaneous medical records does not, in and of itself, render lay testimony not credible); cf. Dalton v. Nicholson, 21 Vet. App. 23, 39-40 (2007) (holding that a VA opinion was inadequate where the examiner did not comment on the Veteran's report of in-service injury and relied on lack of evidence in service medical records to provide a negative opinion).  See also Stefl v. Nicholson, 21 Vet. App. 120, 124 (2007) (holding that a medical opinion "must support its conclusion with an analysis that the Board can consider and weigh against contrary opinions."); see also Nieves- Rodriguez v. Peake, 22 Vet. App. 295, 302 (2009).
Additionally, the VA examiner based the negative aggravation determination primarily on the fact that the Veteran was possibly treated for asthma symptoms prior to service entrance.  However, as noted by the June 2017 private examiner, the August 4, 1989 service treatment record is not entirely clear about whether there was actual treatment for asthma at this time or if it was only a documentation pertaining to the history of the Veteran's symptoms.  The private physician also found that while the Veteran may have endorsed an "undated prior episode of difficulty breathing and an attack in April 1989 requiring a 5-hour hospital evaluation for asthma;" but she also noted that "there are no other records confirming that event and all other available documentation in the service medical records documents a complete lack of asthma symptoms prior to February 1990."  The private physician further pointed out that the subsequent service treatment records document a progressive nature of the Veteran's asthma symptoms, such as requiring frequent evaluations at the Battalion Aid Station, referrals to medical specialists, emergency room treatment, and an escalating course of medications, to include daily inhaled steroids and frequent use of an albuterol rescue inhaler.  Unlike the VA examiner, the private physician made a finding that the Veteran's symptoms not only increased in severity during service, but also have remained persistent and severe since separation, which is further supported by VA treatment records showing continued treatment for asthma symptoms.
Based on the foregoing, the Board finds that because reasonable minds can differ, it is not clear and unmistakable that the Veteran's asthma was not aggravated by service.  Therefore, the Veteran is presumed sound at entrance.
It follows then, based on the presentation of the facts above, that the evidence is at least in equipoise that the Veteran's asthma was incurred during service as both of the post-service medical examination opinions discuss the presence of asthma symptoms occurring during service.  As a result, because the Veteran's asthma was incurred in-service and VA treatment records show a current diagnosis for asthma, this also supports the Board's finding that that the evidence is at least in equipoise as to whether there is a nexus between the present asthma disability and the asthma condition that was incurred in service.  In particular support of this finding, the June 2017 private physician opined that the Veteran's symptoms not only increased in severity during service, but also have remained persistent and severe since separation.  Thus, service connection for asthma must be granted.
VA has duties to notify and assist veterans in substantiating a claim for VA benefits.  38 U.S.C.A. §§ 5100, 5102, 5103, 5103A, 5107, 5126 (West 2014); 38 C.F.R. §§ 3.102, 3.156(a), 3.159 and 3.326(a) (2016).  The Board is granting, in full, the benefit sought on appeal and thus VA has no further duty to notify or assist.
Service connection for asthma is granted.


text:
Carlos QUINTANILLA and Leticia Gutierrez, Defendants-Appellants.
Barry R. Elden, Asst. U.S. Atty., Kathleen T. Murdock, Asst. U.S. Atty., argued, Criminal Receiving, Appellate Div., Chicago, IL, for plaintiff-appellee in Nos. 91-2223 and 91-2224.
Nan R. Nolan, argued, Robinson, Curley & Clayton, Kenneth G. Mason, Chicago, IL, for defendant-appellant in No. 91-2223.
Robert S. Bailey, argued, Chicago, IL, for defendant-appellant in No. 91-2224.
Before RIPPLE and KANNE, Circuit Judges, and WOOD, Jr., Senior Circuit Judge.
This case involves a scheme to defraud the G. Heileman Brewing Company through the submission of false funding proposals to the company's corporate sponsorship program. Carlos Quintanilla and Leticia Gutierrez, two participants in the scam, were convicted of conspiring to violate the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. Sec. 1962(c), and of transporting stolen property in interstate commerce, 18 U.S.C. Secs. 2 and 2314. In addition, Gutierrez was convicted of money laundering, 18 U.S.C. Sec. 1956(a)(1)(A) and (B)(i), conspiracy to defraud the IRS, 18 U.S.C. Secs. 2 and 371, and failure to file income tax returns, 26 U.S.C. Sec. 7203. The defendants appeal their convictions, alleging assorted errors. We affirm.
As part of its marketing strategy, G. Heileman Brewing Company of Wisconsin operates a nationwide corporate sponsorship program. Under the program, Heileman funds activities, such as sporting events and neighborhood festivals, at which it can advertise and promote its various brands of beer. Organizations seeking Heileman's financial assistance must submit proposals describing the event to be sponsored with a request for the necessary funds. The funds awarded under the program are to be used exclusively for the proposed event.
In 1983, Heileman made Joseph Monreal its Director of Hispanic Market Development. As part of his job, Monreal screened proposals for corporate sponsorship funds and made preliminary recommendations. At the time, Monreal, who lived in Milwaukee, was romantically involved with Leticia Gutierrez, the assistant manager and administrator of the Mexico Medical Center in Chicago.
In late summer 1983, Monreal devised a scheme to defraud Heileman using the corporate sponsorship program. Gutierrez agreed to help him. Monreal approached officials of several Chicago-area Hispanic organizations, persuading them to allow Gutierrez to draft proposals on behalf of their groups. Once the proposals were submitted to Heileman, Monreal would recommend they be funded. In return, the officials would kick back a portion of the award to Monreal. Gutierrez cashed the kickback checks.
Carlos Quintanilla, who had met Monreal in 1982, was the founder and executive director of Operation Search, a not-for-profit community organization providing employment services to low and moderate income residents in the Westtown and Humboldt Park communities of Chicago. Quintanilla joined Monreal's scheme; in return for favorable recommendations on proposals submitted on behalf of Operation Search, Quintanilla would give Monreal a cut of the award.
From 1983 to 1987, in addition to the Operation Search proposals, Monreal and Gutierrez drafted and submitted fraudulent funding requests for seven other community organizations in the Chicago area. Some proposals inflated the amount requested; others sought funding for nonexistent events. As a result of Monreal's scheme, Heileman authorized expenditures totalling $693,964. Of this amount, Monreal pocketed $295,054. Through Operation Search, which he controlled, Quintanilla received $175,000. Gutierrez received $38,000, and obtained another $12,400 for certain friends of hers.
Gutierrez's relationship with Monreal turned sour and, in June 1986, she informed Heileman's General Counsel about Monreal's scheme. The matter was eventually referred to the Office of the United States Attorney for the Northern District of Illinois and, from late 1986 to May 1990, Gutierrez cooperated with the Assistant United States Attorneys ("AUSAs") investigating Monreal.1 In 1987, Gutierrez made monitored phone calls to Monreal, and wore a concealed electronic recording device during conversations with him. She also produced copies of relevant documents.
In August 1987, AUSA Scott Mendeloff issued a subpoena directing Gutierrez to appear before a federal grand jury impanelled to investigate Monreal's doings. She was advised of her right to counsel, and consulted Patrick Reilly, an attorney with whom she had previously worked on a Hispanic community project to build a soccer stadium. Reilly called Mendeloff to ask if Gutierrez would receive immunity in exchange for her cooperation in the investigation. Mendeloff told Reilly that no immunity would be granted, indicating that Gutierrez had admitted to her participation in the scheme and that her signature was on all the kickback checks. Mendeloff further stated that he was prepared to indict, convict, and, if necessary, immunize Gutierrez at a later date in order to obtain testimony against other participants.
Reilly then asked Mendeloff if the government would consider granting Gutierrez immunity if it were able to convict "the big fish." Mendeloff's notes of the conversation indicate he told Reilly that, in such a situation, he did not know what the government would do, adding that it "may not prosecute [Gutierrez], but probably would have to." The conversation ended with Mendeloff saying that he would inform the sentencing court of "every iota of [her] cooperation." In a second phone call that day, Reilly told Mendeloff that he had consulted with Gutierrez, who had decided to continue cooperating with the authorities because "she doesn't have much choice." Mendeloff replied that he would do what he could for her, iterating that he would inform the court "in great detail" of her cooperation.
In November 1987, Gutierrez phoned Mendeloff, stating that she was upset over the case and had contemplated suicide. She asked if conversations with her doctor were privileged. Mendeloff advised her that he was not her attorney, and explained that conversations with her doctor were privileged as long as she did not disclose the contents to others. Gutierrez subsequently continued to cooperate with the AUSA without obtaining counsel.
In April 1990, Gutierrez was served with a second grand jury subpoena. The next month she met with Mendeloff to review a draft of a grand jury statement prepared by the AUSA and based on Gutierrez's previous statements about the scheme to defraud Heileman as well as documents she had provided. Gutierrez was also presented with a draft of a plea agreement pertaining to charges against her being considered by the grand jury. When she asked what would happen to her, Gutierrez was told that "in all likelihood the government would charge her with crimes," but that her cooperation would be made known to the sentencing court. Gutierrez said that perhaps she should get a lawyer; Mendeloff offered to obtain one for her and called the Federal Defender's Office. Mendeloff gave Gutierrez the name of the attorney on duty at the Defender's Office and told her she could go downstairs to see him. Gutierrez subsequently indicated that she did not think she would get a lawyer, stating, "I did wrong and I knew I did wrong from the beginning." As she left Mendeloff's office, Gutierrez stated that she would continue to cooperate and "see what happens." She never testified before the grand jury.
In September 1990, the grand jury issued a four count indictment listing Monreal and Quintanilla as defendants. The next month, the grand jury returned a forty count superseding indictment that added Gutierrez as a defendant. Monreal pleaded guilty to RICO conspiracy and eventually testified against Quintanilla and Gutierrez. Gutierrez filed a pre-trial motion to dismiss the indictment or, in the alternative, for a hearing under Kastigar v. United States, 406 U.S. 441, 92 S.Ct. 1653, 32 L.Ed.2d 212 (1972), to determine whether the indictment was tainted by the improper use of statements she believed should be immunized. The district court denied the motion. United States v. Quintanilla, 760 F.Supp. 687, 694-96 (N.D.Ill.1991).
The case proceeded to trial, and the jury convicted Quintanilla and Gutierrez of the aforementioned crimes. The district court sentenced each defendant to six months in prison on the RICO conspiracy count, and five years of probation on each remaining count.2 Both defendants timely appealed their convictions.
Quintanilla challenges his convictions on five counts of interstate transportation of stolen property ("ITSP") under the National Stolen Property Act, 18 U.S.C. Sec. 2314, and for conspiracy to violate RICO, 18 U.S.C. Sec. 1962(d). According to his first argument, his ITSP convictions should be reversed because the government amended the indictment during trial, thus depriving him of his Fifth and Sixth Amendment rights.3 We recount the events necessary to address this claim.
After some of the counts charged in the superseding indictment had been severed on motion by the defendants, Quintanilla went to trial on charges of RICO conspiracy, mail and wire fraud, interstate transportation of funds obtained by fraud, and conspiracy to defraud the IRS. At the close of the government's case-in-chief, the district court granted Quintanilla's motion for judgment of acquittal on the mail fraud count (Count Four) and the wire fraud count. The government voluntarily dismissed as multiplicitous five of the ITSP counts. Then, after the defense had rested but before the jury was instructed, the government, over objection by Quintanilla's counsel, deleted the severed counts from the indictment and amended other counts that referred to the severed counts. The jury thus had a redacted version of the superseding indictment during its deliberations.
Quintanilla argues that the government materially revised the indictment, in violation of the settled rule that "an indictment may not be amended except by resubmission to the grand jury, unless the change is merely a matter of form." Russell v. United States, 369 U.S. 749, 770, 82 S.Ct. 1038, 1050, 8 L.Ed.2d 240 (1962). See also Leichtnam, 948 F.2d at 376; United States v. Field, 875 F.2d 130, 133 (7th Cir.1989). An indictment is amended when the charging terms "are altered, either literally or in effect, by the prosecutor or a court after the grand jury has last passed upon them." United States v. Auerbach, 913 F.2d 407, 413 (7th Cir.1990). Specifically, Quintanilla claims that the government altered the intent element required for a violation of the ITSP statute. The ITSP counts in the original superseding indictment incorporated by reference the allegations of the mail fraud scheme charged in Count Four.4 After judgment of acquittal was granted as to Count Four, the ITSP counts were amended to remove any reference to Count Four or the scheme to defraud charged in that count.5 Thus, Quintanilla submits, the ITSP counts in the original indictment required the government to prove that the transportation of stolen property was committed in furtherance of a scheme to defraud. According to Quintanilla, the amended ITSP counts contained no such element, "leaving an ambiguity as to the intent charged" in each of those counts.
In short, Quintanilla contends that the amendment of the indictment prejudiced his defense. He argues that the government's entire case for the ITSP counts was based upon the premise that the kickback checks transported in interstate commerce were "in furtherance of a scheme to defraud." Quintanilla's defense "was predicated on an attempt to rebut the crime as it was charged in the indictment, i.e. an attempt to show that there was no scheme to defraud [Heileman] in which Quintanilla participated." By removing any reference to such a scheme in the redacted ITSP counts, the government improperly altered the elements of the charged offense. In so doing, Quintanilla claims, the government deprived him of his constitutional right to notice of the charges against him so that he could prepare a defense.
The government responds that a scheme to defraud is not an element of the ITSP crime with which Quintanilla was charged. The ITSP counts in the superseding indictment included a reference to the scheme to defraud alleged in Count Four simply to provide detail as to how money was taken by fraud from Heileman. Thus, according to the government, the deletion of any reference to Count Four did not alter the intent element required to violate the ITSP statute, but only changed the form of the indictment in response to the district court's granting of Quintanilla's motion for acquittal.
369 U.S. at 763, 82 S.Ct. at 1046 (quoting Smith v. United States, 360 U.S. 1, 9, 79 S.Ct. 991, 996, 3 L.Ed.2d 1041 (1959)).
... A part of the indictment unnecessary to and independent of the allegations of the offense proved may normally be treated as a "useless averment" that "may be ignored."
United States v. Miller, 471 U.S. 130, 136, 105 S.Ct. 1811, 1815, 85 L.Ed.2d 99 (1985) (quoting Ford v. United States, 273 U.S. 593, 602, 47 S.Ct. 531, 534, 71 L.Ed. 793 (1927)). See also Mastrandrea, 942 F.2d at 1293 ("Allegations in an indictment that are not necessary to establish a violation of the statute in issue are mere surplusage and may be disregarded if the remaining allegations are sufficient to charge a crime.").
We agree with the government that the reference in the ITSP counts to the scheme to defraud alleged in Count Four was mere surplusage meant only to elaborate the nature of Quintanilla's fraudulent activity. See United States v. Lennon, 814 F.2d 185, 190 (5th Cir.), cert. denied, 484 U.S. 928, 108 S.Ct. 295, 98 L.Ed.2d 254 (1987). "[A]mendments to an indictment will be allowed to stand if they do not 'change an 'essential' or 'material' element of the indictment so as to cause prejudice to the defendant.' " Field, 875 F.2d at 133 (quoting United States v. Cina, 699 F.2d 853, 857 (7th Cir.), cert. denied, 464 U.S. 991, 104 S.Ct. 481, 78 L.Ed.2d 679 (1983)). The amendment of the ITSP counts falls into this category.
Contrary to Quintanilla's assertion, his case bears little resemblance to Leichtnam, 948 F.2d at 379-81, in which we reversed the defendant's conviction because the evidence presented by the government at trial broadened the possible bases of conviction set out in the indictment. Leichtnam was charged with one count of "having 'knowingly use[d] and carr[ied] a firearm: to wit, a Mossberg rifle,' " while trafficking in drugs. Id. at 374. At trial, the jury was shown three guns, the Mossberg and two handguns, and was later instructed that it could convict if convinced that Leichtnam had used " 'a firearm'--in effect any one of the three." Id. at 379. We found that the introduction of the handguns, together with the jury instruction, impermissibly amended the indictment, thereby violating Leichtnam's Fifth Amendment right to be tried only on the charges contained in his indictment. Id. at 379-81.
Our opinion emphasized that the government could have originally drafted the firearm count to charge Leichtnam with possession or use of "a firearm," but that the decision to make the Mossberg rifle an essential element of the crime was a deliberate one. Id. at 380. Indeed, the AUSA who drafted the indictment and tried the case informed this court at oral argument that he purposefully did not charge the two handguns introduced at trial because of a dearth of evidence that those guns had been used or carried during a drug deal. Id. The combination of the narrowly drafted indictment, the government's intentional introduction at trial of the handguns it did not charge, and the instruction allowing the jury to convict Leichtnam of having used or carried any one of those guns required us to reverse the firearm conviction. Id. at 380-81.
In the case before us, we cannot say that the government made the scheme to defraud set forth in Count Four the centerpiece of the ITSP counts. A firearm (any firearm will do) is an essential element of the firearm statute, 18 U.S.C. Sec. 924(c); as noted, however, a scheme to defraud is not essential to the crime of transporting checks taken by fraud in interstate commerce. The deletion of the reference to Count Four's scheme to defraud in the ITSP counts thus cannot be said to have broadened the basis of Quintanilla's liability on those counts. Leichtnam thus does little to aid our analysis of Quintanilla's claims.
each aiding and abetting the other, for the purpose of executing the aforesaid scheme and artifice to defraud, did knowingly cause to be transported in interstate commerce, through normal banking channels, Firstours' check number 22194 in the amount of $5,000 drawn on the Security Pacific National Bank of Los Angeles, California, which check was deposited in an account in the name of Kenneth R. Mastrandrea at the Norwest Bank Metrowest, Hopkins, Minnesota, all in violation of Title 18, United States Code, Sections 2314 and 2.
Relying on the reference to a scheme to defraud, Mastrandrea claimed that the wording of the indictment led him to believe that he had been charged under the second paragraph of Sec. 2314, which, he contended, required proof that the illicit interstate transportation was in furtherance of a scheme to defraud. Id. at 1293. Like Quintanilla, Mastrandrea asserted that the indictment failed to give him adequate notice of the charges against him so that he could prepare his defense. Id.
The Eighth Circuit rejected Mastrandrea's argument, holding that "the interstate transportation of fraudulently obtained checks for the purpose of executing a scheme to defraud is not an element of the offense, and the inclusion of this language in the indictment does not make it an element of the offense." Id. at 1294. The court went on to conclude that Mastrandrea had not been prejudiced by the surplusage in the indictment. Id. See also Lennon, 814 F.2d at 190. We believe the same result should obtain in the case before us. Because a scheme to defraud is not an element of Sec. 2314, the deletion of all references to a scheme to defraud did not prejudice Quintanilla's Fifth or Sixth Amendment rights.
Finally, Quintanilla's argument that the government's action deprived him of notice of the ITSP charges against him is severely flawed. The district court acquitted Quintanilla on Count Four before the defense had presented its case to the jury. (The indictment, on the other hand, was not amended until after the defense had rested.) Quintanilla knew that the mail fraud count had been severed before he began his defense; consequently, he should have known that he would have to defend against the ITSP counts independently of the scheme to defraud Heileman alleged in Count Four.
Quintanilla argues, for the first time on appeal, that the redacted ITSP counts did not clearly allege that he knew the funds he helped transport had been taken by fraud, an element of a Sec. 2314 offense. Having argued that the government charged too much by including a reference to a scheme to defraud, Quintanilla now contends that the government left too little once it amended the indictment, in effect failing to allege fraudulent intent.7 By not presenting this argument to the district court, however, Quintanilla waived it. We will reverse based on this issue only if we find plain error, Fed.R.Crim.P. 52(b), which is to say an error that must be corrected in order to avert a miscarriage of justice. United States v. Caputo, 978 F.2d 972, 974 (7th Cir.1992).
There is no plain error here. "In determining whether the essential elements of the offense are sufficiently stated, it is not necessary that any particular words or phrases be used, nor is it necessary that the indictment track the exact language of the statute as long as each element of the offense is alleged in a form which substantially states it." United States v. Lowe, 860 F.2d 1370, 1373 (7th Cir.1988) (citations omitted), cert. denied, 490 U.S. 1005, 109 S.Ct. 1639, 104 L.Ed.2d 155 (1989). Title 18 U.S.C. Sec. 2314 prohibits one from transporting, in interstate or foreign commerce, "any ... money, of the value of $5,000 or more, knowing the same to have been stolen, converted or taken by fraud." The ITSP counts charged either that Quintanilla "knowingly caused" a check "representing funds obtained by fraud from Heileman[ ] to be transported in interstate commerce," or that he "knowingly caused a check obtained by fraud from Heileman ... to be transported in interstate commerce".8 We believe these counts, given a complete and objective reading, adequately informed Quintanilla that, in order to violate the statute, he had to know the transported checks represented fraudulently obtained funds.
he did knowingly sell ... stolen United States Treasury Bonds, ... said stolen bonds having an aggregate value in excess of $500 ... [in] violation of Title 18 United States Code, Section 510(b).
"[w]hoever, with the knowledge that such Treasury check or bond ... is stolen ... buys, sells, exchanges, receives, delivers, retains or conceals any such Treasury check or bond ... that in fact is stolen ... shall be fined not more than $10,000 or imprisoned for not more than 10 years, or both."
Clemmons argued that he understood the phrase "knowingly sell stolen bonds" in the indictment to mean that he was cognizant only of the sale, not that the bonds were stolen. For this reason, he claimed the indictment failed to inform him of an essential element of the offense. Id. at 1158-59. The Third Circuit disagreed, finding that Clemmons's reading of the indictment was "unduly crabbed." According to the court, "an objective reader would understand from the charging document that the grand jury found probable cause to believe that Clemmons sold bonds he knew were stolen." Id. at 1159.
It was further a part of the conspiracy that defendants CARLOS QUINTANILLA, JOSEPH MONREAL and LETICIA GUTIERREZ, did knowingly and willfully transport and cause to be transported in interstate commerce money taken by fraud from Heileman, that is, checks drawn to Operation Search and checks and cash kicked back to defendants JOSEPH MONREAL and LETICIA GUTIERREZ, which checks and cash represented funds defendants obtained by false and fraudulent pretenses, representations, and promises, well knowing at the time that the pretenses, representations, and promises would be and were false when made ... (emphasis added).
Moreover, the district court instructed the jury that to find Quintanilla guilty of the ITSP counts, it must find that "at the time the defendant caused the check or funds described in the particular count to be transported or transmitted[,] he knew it had been taken by fraud."Finally, the redacted ITSP counts sufficiently alleged the other elements of the offense. Each count cited the statute Quintanilla was accused of violating; the reference in each count to transportation of property (i.e., checks) having a value greater than $5,000 indicated that the charge was brought under the first paragraph of Sec. 2314. Cf. United States v. Sloan, 939 F.2d 499, 501-02 (7th Cir.1991) (legally sufficient indictment cited tax evasion statute defendant was accused of violating), cert. denied, --- U.S. ----, 112 S.Ct. 940, 117 L.Ed.2d 110 (1992). In addition, each count set forth the date, the source of the funds, the amount of the check, the payee, and the points of origin and destination. We conclude that the amended ITSP counts sufficiently charged a violation of 18 U.S.C. Sec. 2314.
In a final attempt to obtain reversal of his ITSP convictions, Quintanilla claims that under Sec. 2314 there must be a physical identity between the funds obtained by fraud and those transported in interstate commerce. According to Quintanilla, because the government "offered only one theory of prosecution"--that the checks were transported as part of a scheme to defraud Heileman--his defense was prejudiced because he was unable to argue that the Heileman funds sent to Operation Search had been commingled with other Search funds before being transported in interstate commerce. Quintanilla bottoms his argument on United States v. Poole, 557 F.2d 531 (5th Cir.1977), suggesting that there may have been sufficient surplus funds in the Operation Search bank account to cover the amounts kicked back to Monreal without applying the proceeds of funds fraudulently obtained from Heileman. According to Quintanilla, if the checks sent to Monreal were drawn on legitimate Search funds, then no funds taken by fraud from Heileman were transported in interstate commerce, and his convictions under Sec. 2314 cannot stand. See id. at 535-36.
We fail to see how the government's "theory of prosecution" prevented Quintanilla from defending against the ITSP charges on any ground his counsel saw fit to argue. The suggestion that the amendment of the indictment somehow precluded Quintanilla from raising a commingling defense is a non-starter. As we previously pointed out, the district court granted Quintanilla's motion of acquittal on Count Four after the government had rested. At that time, Quintanilla's counsel knew that his possible defense theories were not limited to rebutting the overarching scheme alleged in that count. Thus, his failure to raise an objection to the ITSP counts based on the rationale of Poole waived that argument. We review for plain error.
Two of the five ITSP counts of which Quintanilla was convicted involved Heileman checks payable to Operation Search and transported from Milwaukee to Chicago. Quintanilla's commingling argument is not a defense to the transportation of these checks because the crime occurred before the checks were deposited into Operation Search's bank account. As for the other three counts, Sec. 2314 does not require that the precise item stolen, converted, or taken by fraud be transported in interstate commerce; it is sufficient if the item transported is directly derived from the property stolen, converted, or obtained by fraud. See, e.g., United States v. Cardall, 885 F.2d 656, 674 (10th Cir.1989); United States v. Morgan, 805 F.2d 1372, 1377-78 (9th Cir.1986), cert. denied, 480 U.S. 949, 107 S.Ct. 1612, 94 L.Ed.2d 797 (1987). See also Lennon, 814 F.2d at 189; United States v. Levy, 579 F.2d 1332, 1337 (5th Cir.1978), cert. denied, 440 U.S. 920, 99 S.Ct. 1243, 59 L.Ed.2d 471 (1979); United States v. Pomponio, 558 F.2d 1172, 1174-75 (4th Cir.1977), cert. denied, 434 U.S. 1062, 98 S.Ct. 1233, 55 L.Ed.2d 761 (1978); Poole, 557 F.2d at 535; United States v. Walker, 176 F.2d 564, 566 (2d Cir.), cert. denied, 338 U.S. 891, 70 S.Ct. 239, 94 L.Ed. 547 (1949).
The evidence at trial showed, and Quintanilla does not dispute, that he agreed to pay Monreal a portion of every Heileman grant that Operation Search received. Accordingly, the ultimate source of the funds used to pay Monreal was Heileman. The evidence also showed that Quintanilla followed Monreal's directions concerning exactly how the kickbacks were to be made;9 there is no suggestion that these directions were not followed to the last detail. Given the nexus between the Heileman grants and the kickbacks made to Monreal, we do no think that Sec. 2314 liability hinges in this case on whether or not Operation Search had sufficient clean funds in its bank account each time a kickback check was drawn and transported across state lines to Monreal.
Congress had in mind preventing further frauds or the completion of frauds partially executed. But it also contemplated coming to the aid of the states in detecting and punishing criminals whose offenses are complete under state law, but who utilize the channels of interstate commerce to make a successful get away and thus make the state's detecting and punitive processes impotent. This was indeed one of the most effective ways of preventing further frauds as well as irrevocable completion of partially executed ones.
329 U.S. 379, 384, 67 S.Ct. 332, 335, 91 L.Ed. 359 (1946) (footnote omitted).
We think that Quintanilla's actions are wholly within the range of conduct Congress sought to criminalize in enacting Sec. 2314. Looking to the substance of Quintanilla's conduct, it is apparent that the checks he caused to be transported in interstate commerce represented, and were directly derived from, fraudulently obtained Heileman funds. Our conclusion is reinforced by considering the effects of a contrary ruling. If Quintanilla's conduct falls outside the ambit of Sec. 2314 simply because the fraudulently obtained money was laundered through Operation Search's bank account, "sophisticated criminals will be able to spirit stolen funds from one state to another through the use of checking accounts and thereby: (1) remain immune from federal criminal laws; and (2) remove the proceeds of their wrongdoing from the jurisdiction of the state where the offense took place." Levy, 579 F.2d at 1337. We conclude that Quintanilla's commingling argument does not demonstrate plain error. His ITSP convictions will therefore stand.
Quintanilla also challenges his conviction for RICO conspiracy on three grounds. First, he argues that Count One charged multiple conspiracies. Alternatively (as best we can tell), he contends that, if Count One alleged only a single conspiracy, then a fatal variance exists between the racketeering conspiracy charged and the proof adduced at trial. Finally, he makes a brief but unavailing reference to misjoinder of offenses in the indictment. We begin by describing relevant portions of the procedural history of this case.
The superseding indictment can be described charitably as a convoluted tangle of alleged frauds, some of which involved Monreal, Quintanilla (through Operation Search) and Leticia Gutierrez, others of which involved Monreal, Gutierrez, and various different organizations. As originally drafted, Count One of the superseding indictment identified Operation Search as the enterprise under 18 U.S.C. Sec. 1961(4), and charged Quintanilla, Monreal, and Gutierrez, as persons associated with Operation Search, with conspiring to conduct the affairs of that organization through a pattern of racketeering activity, in violation of 18 U.S.C. Sec. 1962(d). According to Count One, the racketeering activity consisted of various racketeering acts set forth in Count Two.10 That count, in turn, charged Quintanilla with substantive RICO violations, id. Sec. 1962(c), and listed a total of twelve frauds as predicate acts. See id. Sec. 1961(1) and (5).
Still other counts in the superseding indictment mentioned frauds not associated with Operation Search or Quintanilla (the "non-Search frauds"). These frauds involved proposals submitted by Monreal and Gutierrez on behalf of five organizations (Caballaros De San Juan, LIGA Hispanoamerica de Fut-Bol, the Minnie Minoso Sports Foundation, the International Amateur Soccer League, and P.O.D.E.R.).15 The non-Search frauds were alleged in various counts charging the interstate transportation of stolen property, 18 U.S.C. Sec. 2314 (charging Monreal and Gutierrez), money laundering, 18 U.S.C. Sec. 1956(a)(1)(A) and (B)(i) (charging Gutierrez), and conspiracy to defraud the IRS, 18 U.S.C. Secs. 2 and 371 (charging Quintanilla, Monreal, and Gutierrez).
Quintanilla's claim that Count One alleged multiple conspiracies is meritless. "[A] RICO conspiracy requires only an agreement to conduct or participate in the affairs of an enterprise through a pattern of racketeering activity [i.e., two acts of racketeering activity within at least ten years of each other]." Neapolitan, 791 F.2d at 498. Count One specifically alleged that Quintanilla, Monreal, and Gutierrez agreed to conduct the enterprise of Operation Search through a pattern of racketeering activity, to wit, the six Search frauds. We conclude that the indictment did not allege multiple conspiracies.
Alternatively, Quintanilla seems to suggest that, for the reason he was acquitted on Count Four, his conviction on Count One should be reversed. That is, he contends that evidence of the non-Search frauds alleged in that Count (as well as other counts) was admitted against him to prove the RICO conspiracy alleged in Count One. In fact, he argues, according to the government's theory of the case, the RICO conspiracy consisted of the Search and non-Search frauds. Because the non-Search frauds were not charged (via Count Two) as predicate acts in Count One, Quintanilla insists that a material variance exists between the conspiracy charged and the government's proof at trial, requiring reversal of his conviction.
As should be clear by now, Count One and Count Four were not coextensive. Count One alleged only the Search frauds as predicate acts; Count Four alleged both Search and non-Search frauds. That the district court concluded the government had presented insufficient evidence to show Quintanilla participated in the mail fraud scheme alleged in Count Four did not preclude the jury from finding Quintanilla guilty of the conspiracy alleged in Count One. With this in mind, we turn, albeit briefly, to Quintanilla's argument that a variance exists between Count One of the superseding indictment and the government's proof at trial.
A conspiracy variance claim "amounts to a challenge to the sufficiency of the evidence supporting the jury's finding that each defendant was a member of the same conspiracy." United States v. Townsend, 924 F.2d 1385, 1389 (7th Cir.1991). It is well settled that, even if the evidence presented at trial arguably established multiple conspiracies, there is no material variance from an indictment charging a single conspiracy if a reasonable juror could have found beyond a reasonable doubt the single conspiracy charged in the indictment. Id. See also United States v. Maholias, 985 F.2d 869, 874-75 (7th Cir.1993); United States v. Mojica, 984 F.2d 1426, 1432 (7th Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 2433, 124 L.Ed.2d 653 (1993); United States v. Ashman, 979 F.2d 469, 484 (7th Cir.1992), petition for cert. filed, April 6, 1993.
Count One of the superseding indictment alleged a single conspiracy to conduct the affairs of Operation Search through a pattern of racketeering activity. A review of the record indicates both that substantial evidence supports Quintanilla's conviction for that crime, and that the district court properly instructed the jury on the law of conspiracy to violate RICO. Consequently, the defendant's variance claim must fail. See United States v. Aguilar, 948 F.2d 392, 396 n. 6 (7th Cir.1991).
Finally, we take a moment to address an argument buried in Quintanilla's brief and somewhat related to his claim that the superseding indictment charged multiple conspiracies. Quintanilla obliquely suggests that the government improperly joined offenses in the indictment, presumably because different counts alleged Search, non-Search, or (in Count Four), both sets of frauds. See Fed.R.Crim.P. 8, 14.17 Under this theory, Quintanilla was prejudiced because the jury heard evidence of frauds that did not pertain to him or to Operation Search.
Gutierrez makes two arguments on appeal. First, that the district court erred in denying her pre-trial motion to dismiss the indictment or for a Kastigar hearing. Second, that her conviction for RICO conspiracy should be reversed in light of the Supreme Court's recent decision in Reves v. Ernst & Young, --- U.S. ----, 113 S.Ct. 1163, 122 L.Ed.2d 525 (1993), rendered after we heard oral argument in this case. We consider each argument in turn.
Gutierrez voluntarily provided evidence to the government that was subsequently presented to the grand jury which indicted her. She argues that, at the least, the district court should have conducted a hearing to determine if this evidence was immunized.
To be clear, Gutierrez does not claim that she testified before the grand jury, that she received a statutory grant of immunity pursuant to 18 U.S.C. Secs. 6002 and 6003, or that she was even promised immunity in return for her cooperation. Gutierrez admits that "Assistant United States Attorney [Mendeloff] cannot be criticized for making promises he did not keep because the record reveals that he was careful to make no explicit promises and that on several occasions he advised defendant of her right to counsel." Gutierrez asks this court to find an implied grant of immunity, or to infer such immunity, on the basis of her cooperation with the investigation performed by the United States Attorney's Office. "[E]nforceable assurances," she suggests, "may be spelled out of a course of dealing between the prosecutor and [a putative defendant], whether they are explicit or implicit, whether they are written or not[,] and whether they are undertaken pursuant to the [federal use immunity] statute or in some other fashion."
In Kastigar, the Supreme Court held that if the government proceeds to prosecute a previously immunized witness, it has "the affirmative duty to prove that the evidence it proposes to use is derived from a legitimate source wholly independent of the compelled testimony." 406 U.S. at 460, 92 S.Ct. at 1665. This usually requires a hearing to determine whether the government derived the evidence it proposes to use from a legitimate independent source.
Under Kastigar, the individual claiming the government breached a promise not to use evidence acquired from her must show that, in fact, she offered testimony under a grant of immunity. See id.; Braswell v. United States, 487 U.S. 99, 1117, 108 S.Ct. 2284, 2295, 101 L.Ed.2d 98 (1988); Pillsbury Co. v. Conroy, 459 U.S. 248, 255, 103 S.Ct. 608, 613, 74 L.Ed.2d 430 (1983). Although Kastigar concerned a grant of immunity conferred pursuant to Sec. 6002, this court has previously recognized that, at least where the issue is not in dispute, informal grants of use and derivative use immunity are fully enforceable and implicate the provisions of Kastigar. United States v. Palumbo, 897 F.2d 245, 248 (7th Cir.1990) (citing cases).
Nevertheless, Gutierrez cannot show even an informal grant of immunity from the United States Attorney's office. She approached federal authorities with the story of Monreal's scam. AUSA Mendeloff made clear to her that he was not her attorney, that she had a right to an attorney, and that the Federal Public Defender's office would provide her with one. Mendeloff never told Gutierrez or Patrick Reilly, who spoke to the AUSA on Gutierrez's behalf, that Gutierrez would not be prosecuted for her crimes. Quite the contrary, Mendeloff gave every indication that Gutierrez would probably be indicted. Thus, even if Gutierrez expected that her cooperation would shield her from prosecution, Mendeloff's statements demonstrate that any such belief was unreasonable. See Sophie, 900 F.2d at 1071.
Despite the absence of an offer of immunity, Gutierrez decided, on more than one occasion, to continue cooperating with the government in the hope of escaping prosecution. This unilateral decision, although understandable given her situation, in no way binds the government. See United States v. Costello, 750 F.2d 553, 556 (7th Cir.1984); United States v. Rothman, 567 F.2d 744, 746-47 (7th Cir.1977). Gutierrez makes no claim that, in return for her help, the government failed to make good on its promise to inform the district court of her cooperation at sentencing. Accordingly, because Gutierrez failed to raise a significant, disputed factual issue regarding whether or not the government made a formal or informal grant of immunity to her, the district court did not err in denying her motion for a Kastigar hearing. See Sophie, 900 F.2d at 1071.
We point out, as did the district court, that the authority to immunize a witness is explicitly an executive branch responsibility. In enacting the use immunity statute, "Congress expressly left this decision exclusively to the Justice Department." United States v. Doe, 465 U.S. 605, 616-17, 104 S.Ct. 1237, 1244, 79 L.Ed.2d 552 (1984). For this reason, the Supreme Court has refused to adopt a "doctrine of constructive use immunity" under which federal courts could themselves grant immunity under 18 U.S.C. Sec. 6003. Id. at 616, 104 S.Ct. at 1244. See also Pillsbury, 459 U.S. at 253-54, 103 S.Ct. at 612-13; United States v. Angiulo, 897 F.2d 1169, 1190 (1st Cir.), cert. denied, 498 U.S. 845, 111 S.Ct. 130, 112 L.Ed.2d 98 (1990). Accordingly, in the absence of any evidence of either a formal grant of immunity by the government under the federal use immunity statute, or an informal grant that would satisfy that statute's requirements,19 Gutierrez's claim that the evidence she provided the AUSA is somehow immunized must fail.
Gutierrez has not shown that she was charged under an indictment based on immunized evidence. The district court's decision denying her motion to dismiss the indictment or conduct a Kastigar hearing is affirmed.V.
Gutierrez argues next that this court should review her conviction for RICO conspiracy in light of the Supreme Court's recent decision in Reves, --- U.S. at ----, 113 S.Ct. at 1169-73.20 In that case, the Court interpreted 18 U.S.C. Sec. 1962(c), which makes it unlawful "for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs, through a pattern of racketeering activity...." The Supreme Court adopted the Eighth Circuit's "operation or management" test for Sec. 1962(c) liability, see Arthur Young & Co. v. Reves, 937 F.2d 1310, 1324 (8th Cir.1991); Bennett v. Berg, 710 F.2d 1361, 1364 (8th Cir.) (en banc), cert. denied, 464 U.S. 1008, 104 S.Ct. 527, 78 L.Ed.2d 710 (1983), holding that "[i]n sum, ... 'to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs,' ... one must participate in the operation or management of the enterprise itself." Reves, --- U.S. at ----, 113 S.Ct. at 1173.
Gutierrez points out that this circuit has defined Sec. 1962(c) liability somewhat more broadly than the Eighth Circuit and, consequently, has not used the "operation or management" test. See, e.g., Overnight Transportation Co. v. Local No. 705, 904 F.2d 391, 393 (7th Cir.1990); United States v. Garner, 837 F.2d 1404, 1420 (7th Cir.1987), cert. denied, 486 U.S. 1035, 108 S.Ct. 2022, 100 L.Ed.2d 608 (1988); United States v. Horak, 833 F.2d 1235, 1239 (7th Cir.1987). Now, however, the Supreme Court has adopted that test for participation in a RICO enterprise. Gutierrez suggests that, because she was not employed by Operation Search, and thus had no connection with the management of that enterprise, Reves requires that her conviction for RICO conspiracy be reversed.
The defendant confuses her conviction for conspiracy (an agreement to commit a crime) with a conviction for a substantive crime. She was charged in Count One of the superseding indictment with violating 18 U.S.C. Sec. 1962(d), which makes it unlawful "for any person to conspire to violate any of the provisions of subsection (a), (b), or (c) of this section" (emphasis added). Section 1962(d), unlike Sec. 1962(c), is not a substantive RICO offense; rather, Sec. 1962(d) merely makes it illegal to conspire to violate any of the preceding sections of the statute. Neapolitan, 791 F.2d at 497. See also United States v. Glecier, 923 F.2d 496, 499-500 (7th Cir.), cert. denied, --- U.S. ----, 112 S.Ct. 54, 116 L.Ed.2d 31 (1991).
"The content of the agreement criminalized by RICO is ... defined against the backdrop of general conspiracy law." United States v. Carter, 721 F.2d 1514, 1529 (11th Cir.), cert. denied, 469 U.S. 819, 105 S.Ct. 89, 83 L.Ed.2d 36 (1984). As mentioned, a RICO conspiracy requires only an agreement to conduct or participate in the affairs of an enterprise through a pattern of racketeering activity. Neapolitan, 791 F.2d at 498. "Under this approach, it is only necessary that the defendant agree to the commission of the two predicate acts on behalf of the conspiracy." Id. See also United States v. Stern, 858 F.2d 1241, 1246-47 (7th Cir.1988).
One violates Sec. 1962(d), then, when she agrees to violate a substantive RICO offense, regardless of whether she personally agreed to commit the predicate crimes or actually participated in the commission of those crimes. See Glecier, 923 F.2d at 500. "Agreement that the [crimes] will be committed by any of the coconspirators on behalf of the conspiracy is sufficient." United States v. Campione, 942 F.2d 429, 437 (7th Cir.1991). See also Ashman, 979 F.2d at 485. We have reasoned thus because to require the government to show that all of the alleged coconspirators conducted, or participated in the conduct of, the affairs of the racketeering enterprise to the extent mandated by Sec. 1962(c) or other substantive RICO offense would entail "a degree of involvement in the affairs of the conspiracy that is not required in any other type of conspiracy, where agreeing to a prescribed objective is sufficient." Neapolitan, 791 F.2d at 498.
In short, our cases make clear that Sec. 1962(d) liability is not coterminous with liability under Sec. 1962(c). It follows that the Supreme Court's decision in Reves does not disturb Gutierrez's conviction for RICO conspiracy. Reves addressed only the extent of conduct or participation necessary to violate a substantive provision of the statute; the holding in that case did not address the principles of conspiracy law undergirding Sec. 1962(d).
We agree with the district court for the District of Columbia that "[t]o hold that under Sec. 1962(d) [the government] must show that an alleged coconspirator was capable of violating the substantive offense under Sec. 1962(c), that is, that he participated to the extent required by Reves, 'would add an element to RICO conspiracy that Congress did not direct.' " Jones v. Meridian Towers Apartments, Inc., 816 F.Supp. 762, 773 (D.D.C.1993) (quoting United States v. Pryba, 900 F.2d 748, 760 (4th Cir.), cert. denied, 498 U.S. 924, 111 S.Ct. 305, 112 L.Ed.2d 258 (1990)). See also Fidelity Federal Savings and Loan Assoc. v. Felicetti, 830 F.Supp. 257, 259 (E.D.Pa.1993).21 Gutierrez's conviction stands.
The convictions of Carlos Quintanilla and Leticia Gutierrez are AFFIRMED.
In violation of Title 18, United States Code, Sections 2 and 2314.
Count Seventeen involved a slight variation. That count charged that Quintanilla "knowingly caused a check obtained by fraud from Operation Search ... and representing funds obtained by fraud from Heileman[ ] to be transported in interstate commerce"
It was further a part of the conspiracy that defendants CARLOS QUINTANILLA, JOSEPH MONREAL and LETICIA GUTIERREZ knowingly devised and intended to devise a scheme and artifice to defraud Heileman and to obtain money from Heileman by means of false and fraudulent pretenses, representations, and promises, well knowing at the time that the pretenses, representations, and promises would be and were false when made, which scheme was in substance as set forth in Counts Two and Four through Twenty-One and is incorporated by reference herein.
We do not believe this isolated reference to Count Four can reasonably be interpreted to mean that Count One alleged the non-Search frauds listed in Count Four as predicate acts. If anything, the reference was intended to reallege the Search frauds listed in Count Four and no others.
This is a case in which the government needs to be reminded, however, that the desire to be "inclusive" in an indictment is a poor substitute for careful drafting. Through its ability to draft the indictment, the government "is the master of the scope of the charged RICO conspiracy." United States v. Neapolitan, 791 F.2d 489, 501 (7th Cir.), cert. denied, 479 U.S. 940, 107 S.Ct. 422, 93 L.Ed.2d 372 (1986). Of course, the ability to define the conspiracy carries with it the responsibility of proving what is specifically alleged.

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87 ous laws enacted since 1866.74 In 1891, Congress required that, with respect to vessels arriving at or departing from localities where navigation improvements are carried on, there be fur- nished a "comprehensive statement" of vessels, passengers, freight and tonnage.75 This requirement was implemented in 1922 when the Secretary of the Army was authorized to specify the scope of such statements.76 In the collection of such statistics, Congress in 1912 required the Army Engineers to adopt a uniform system of classification for freight, and upon rivers and inland waterways to collate ton-mileage statistics as far as practicable.77 Improvement of Navigable Waters In the early decades of our national history, improvement of waterways was undertaken by states and private companies.78 For example, construction of the Erie Canal by the State of New York was commenced in 1817 and completed in 1825.79 We have already noted instances where the Federal Govern- ment aided and encouraged development by states and private companies.80 Such instances included grants of public lands for specific projects and for river improvement generally, and federal purchase of stock in canal companies. But the responsibilities which have been assumed by the Fed- eral Government for the protection and promotion of commerce 74 Act of June 23, 1866, § 4, 14 Stat. 70, 74; Act of June 13, 1902, § 14, 32 Stat. 331, 376. Under the provisions of the Federal Reports Act of 1942, the Corps of Engineers is the sole federal agency to collect, compile and publish data on domestic water-borne commerce. Act of December 24,1942, § 3, 56 Stat. 1078, 5 U. S. C. 139-139f; see RHB Form No. 1, Budget No. 49-R 268.2 and RHB Form No. lb, Budget No. 49-R 302.1. A like function as to foreign commerce is similarly assigned to the Bureau of the Census. See Department of Commerce Form No. 7525V, Budget No. 41-R 397.2; Customs Form No. 7501, Budget No. 48-R 217.1. "Act of February 21,1891, § 1, 26 Stat. 766, 33 U. S. C. 554. "Act of September 22,1922, § 11, 42 Stat. 1038,1043, 33 U. S. C. 555. " Act of July 25, 1912, § 1, 37 Stat. 201, 223, 33 U. S. C. 553. TO See Potlio Aids to Transportation, Federal Coordinator of Transpor- tation, toI. Ill, p. 10 (1939). 80 See supra, pp. 75-76.