United States v. Solomon

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
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m 00-11210
Summary Calendar
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UNITED STATES OF AMERICA,
Plaintiff-Appellee,
VERSUS
TEDDY WAYNE SOLOMON,
Defendant-Appellant.
_________________________
Appeal from the United States District Court
for the Northern District of Texas
(3:98-CR-299-1-X)
_________________________
September 21, 2001
Before JONES, SMITH, and
EMILIO M. GARZA, Circuit Judges.
PER CURIAM:*
Teddy Solomon appeals his convictions of
mail and wire fraud under 18 U.S.C. §§ 1341
and 1343 (2001). Finding no error, we affirm.
I.
Based on complaints concerning Solomon’s
investment program, the FBI, the Securities
and Exchange Commission (“SEC”), and the
Texas State Securities Board conducted an
investigation of Quantum Group, which listed
Solomon as its president and CEO. After
being questioned by undercover agents about
* Pursuant to 5TH CIR. R. 47.5, the court has
determined that this opinion should not be
published and is not precedent except under the
limited circumstances set forth in 5TH CIR. R.
47.5.4.

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his investment program, Solomon represented
that investments with Quantum would yield a
900% return over three months.
The agents then revealed their identities and
questioned Solomon about his investment
scheme. He admitted that he had made false
representations and that he falsely had told
investors that Quantum had made profits
through its trading programs. The agents told
Solomon that the trading programs he had ad-
vertised did not exist, that he was not author-
ized to offer securities, and that he needed to
cease operations. Solomon, however, contin-
ued to do business at Quantum, even after the
federal district court had issued a temporary
restraining order to cease operations.
At trial, one of Solomon’s employees tes-
tified as a government witness concerning false
representations Solomon had made during the
course of his scheme. Several investors
testified about the money they lost. FBI agent
Brian Hurst testified that some investors had
received money back as part of a Ponzi
scheme and that Solomon had used the in-
vestor deposits for personal expenditures, in-
cluding purchases of luxury automobiles and
had used none of the disbursements for
legitimate trading programs. Phil Offil of the
SEC testified about the fraudulent nature of
Solomon’s trading program and described the
operation as a Ponzi scheme. Investors depos-
ited approximately $4 million in Quantum’s
bank accounts between May and October
1997.
II.
A jury found Soloman guilty. The court
departed upward from the sentencing guide-
lines and assessed 293 months’ imprisonment,
five years’ supervised release, $2,357,701.94
in restitution, and a fine of $150,000.
III.
Solomon argues that the court erred in al-
lowing the government to include his prior
conviction in the indictment,2 because that
conviction was not a necessary element of the
offense as charged. We review only for abuse
of discretion the decision whether to strike
allegations from an indictment. United States
v. Hernandez-Guevara, 162 F.3d 863, 869
(5th Cir. 1998); United States v. Graves, 5
F.3d 1546, 1550 (5th Cir. 1993).
Rule 7(d), FED R. CRIM P., provides that
“[t]he Court on motion of the defendant may
strike surplusage from indictment or infor-
mation.” To strike surplusage, the language in
the indictment must be “irrelevant, inflamma-
tory, and prejudicial.” Graves, 5 F.3d at 1550
(citing United States v. Bullock, 451 F.2d 884,
888 (5th Cir. 1971)). Because this standard is
strict, a court rarely grants such a motion. See
Bullock, 451 F.2d at 888; United States v.
Oakar, 111 F.3d 146, 157 (D.C. Cir. 1997);
see also 1 CHARLES A. WRIGHT, FEDERAL
PRACTICE AND PROCEDURE § 127, at 639 (3d
ed. 1999).
Where information in an indictment is suf-
ficiently relevant to the charged offense, the
2 The indictment alleged as follows:
Also, as part of the scheme and artifice
to defraud Defendant Solomon and Stevens
failed to notify investors that Defendant
Solomon was convicted in 1994 on federal
charges of mail fraud and possession of a
forged security, and that he had been
sentenced to twenty-four (24) months in
prison followed by three years of supervised
release. The defendants were required to
make these disclosures to potential investors
as a condition of offering and selling
securities to the public.

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court should not strike it, no matter how
prejudicial it may be. United States v. Scarpa,
913 F.2d 993, 1013 (2d Cir. 1990); United
States v. Edwards, 72 F. Supp. 2d 664, 667
(M.D. La. 1999), appeal dismissed, 206 F.3d
461 (5th Cir. 2000). The mere fact that infor-
mation in an indictment does not constitute an
element of the charged offense does not re-
quire that it be stricken. Id. (citation omitted).
Solomon’s prior conviction was sufficiently
relevant to the mail and wire fraud indict-
ments.3 Thus, the court did not abuse its
discretion.
IV.
Solomon contends that the indictment was
defective because it failed to allege the mate-
riality element required for establishing mail
and wire fraud. He reasons that the indictment
failed to “tie a particular mailing or wire
transfer to any specified false represen-
tation(s).” Normally, we review the sufficien-
cy of an indictment de novo. United States v.
Fitzgerald, 89 F.3d 218, 221 (5th Cir. 1996).
Because Solomon did not raise this objection
in the district court, however, we review this
issue giving “maximum liberality” to the in-
dictment. United States v. Richards, 204 F.3d
177, 191 (5th Cir.), cert. denied, 531 U.S. 826
(2000).
A mail or wire fraud indictment must allege
that the defendant made false representations
that were material. Neder, 527 U.S. at 25. A
matter is material if
(a) a reasonable man would attach im-
portance to its existence or nonexistence
in determining his choice of action in the
transaction in question; or (b) the maker
of the representation knows or has
reason to know that its recipient regards
or is likely to regard the matter as
important in determining his choice of
action, although a reasonable man
would not so regard it.
Id. at 22 n.5 (quoting RESTATEMENT
(SECOND) OF TORTS § 538 (1977)).
In determining the sufficiency of an in-
dictment, the law does not compel “a ritual of
words.” Richards, 204 F.3d at 191. Though
the indictment did not contain the word “mate-
riality,” it did allege many specific material
omissions and misrepresentations made by
Solomon. In a mail fraud indictment that does
not specifically allege materiality, allegations
of specific facts may be sufficient to warrant
the inference of materiality. Richards, 204
F.3d at 192; United States v. McGough, 510
F.2d 598, 603 (5th Cir. 1975). Solomon’s
indictment alleged specific facts by plainly stat-
ing that the investment scheme relied on
misrepresentations and that “as a result of the
aforementioned scheme and artifice to defraud,
investors . . . lost in excess of $1 million.”
V.
Solomon avers that the district court erred
by allowing him to go to trial with the lawyers
3 Materiality of falsehood is an element of the
mail and wire fraud offenses. Neder v. United
States, 527 U.S. 1, 25 (1999). One can demon-
strate fraud by a material misrepresentation or
omission. United States v. Finney, 714 F.2d 420,
423 (5th Cir. 1983). The government contends
that Solomon was required to disclose his prior
conviction as an SEC licensing requirement. Be-
cause we conclude that Solomon’s convictions
were sufficiently relevant to be included in the
indictment, we express no view on the issue of
whether Solomon’s failure to disclose his prior
conviction to investors constituted a material
omission for the offenses of wire and mail fraud.

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he chose. The court allowed him to substitute
counsel on the eve of trial; he does not aver
that the court erred in denying a continuance.
Instead, he contends that the court should
have advised him of the risks of proceeding
with substitute, unprepared counsel. Because
Solomon did not challenge these matters in the
district court, we review for plain error. See
United States v. Richardson, 168 F.3d 836,
839 n.9 (5th Cir.), cert. denied, 526 U.S. 1145
(1999).
Solomon cites no authoritySSand we know
of noneSSrequiring a court to advise a criminal
defendant of the perils of proceeding with
substitute counsel after the court has granted
a motion for substitution of counsel. Having
made the motion for substitution, Solomon
should have realized the risks inherent in
substituting counsel.4
VI.
Solomon argues that the court abused its
discretion by granting the government’s chal-
lenge of a juror for cause. The prospective
juror suffered from an obsessive compulsive
disorder that he said affected him adversely
from time to time. To alleviate this condition,
the juror took medication and received treat-
ment from a psychiatrist. The court asked the
juror whether he would be able to focus suf-
ficiently on the case. He responded that
“[t]here’s no way to know. Most of the time,
yes, I’d be able to focus on the case.” The
government successfully challenged that pro-
spective juror for cause.
A court may excuse for cause any juror
who is incapable, by reason of mental or
physical infirmity, to render satisfactory ser-
vice. 28 U.S.C. § 1865(b)(4) (2001). A court
has broad discretion to determine whether to
excuse a juror for cause. United States v.
Gonzalez-Balderas, 11 F.3d 1218, 1222 (5th
Cir. 1994). Thus, we reverse only for abuse of
discretion. Id. The court properly exercised
its discretion in concluding that the prospec-
tive juror’s mental condition prevented him
from rendering satisfactory service. This
determination finds substantial support in the
record.
VII.
Solomon contends that the court violated
the Sixth Amendment by unduly restricting his
lawyer’s cross-examination of Lisa Stevens,
Solomon’s co-defendant. We review restric-
tions on cross-examination for abuse of discre-
tion. United States v. Freeman, 164 F.3d 243,
249 (5th Cir.), cert denied, 526 U.S. 1105
(1999). If we find abuse, we employ the
harmless error doctrine. United States v.
Townsend, 31 F.3d 262, 268 (5th Cir. 1994).
To obtain relief for an unduly limited cross-
examination, “a defendant must show that the
restrictions were [plainly] prejudicial, based on
the overall strength of the prosecution’s case,
the circumstances surrounding the challenged
testimony, the importance of that testimony,
and its corroboration or contradiction
elsewhere at trial.” United States v. Gray, 105
F.3d 956, 965 (5th Cir. 1997) (quotation
marks omitted).
During cross-examination, Solomon’s law-
yer asked Stevens why her sentencing had
been postponed. Counsel intimated that the
government had postponed sentencing because
4 Cf. United States v. Kizzee, 150 F.3d 497,
500 (5th Cir. 1998) (concluding that there was a
fair trial after the court let defendant assume his
own defense); United States v. Jackson, 50 F.3d
1335, 1340 n.6 (5th Cir. 1995) (declining to find a
Fifth Amendment due process violation where
lawyer had seven days to prepare for trial).

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it did not trust her until she had testified. She
responded that her pregnancy had caused the
delay. At that point, the court stated that the
question was wholly conjectural and told
counsel to ask a question for which Stevens
would know the answer. In another instance,
Solomon’s lawyer attempted to question
Stevens regarding her involvement in a
separate business entity. The government ob-
jected on relevance grounds, but the court
allowed Solomon to proceed “for a little bit”
before ending that inquiry.
We are hard-pressed to find abuse of dis-
cretion in limiting the cross-examination. Both
lines of questions constituted nothing more
than “fishing expeditions.” The court allowed
Solomon’s lawyer to cross-examine Stevens in
a manner consistent with the Sixth
Amendment. Pursuant to its discretion, how-
ever, the court placed limitations on cross-
examination to prevent irrelevant discussion.
See, e.g., United States v. Perez, 217 F.3d
323, 330 (5th Cir.), cert. denied, 531 U.S. 973
(2000). Solomon does not show how the
court’s instruction to his lawyer to conduct a
relevant and timely cross-examination done
was “[plainly] prejudicial.” Gray, 105 F.3d at
965.
VIII.
Solomon argues that the court erred by not
giving a definition of the term “specific intent”
as part of the jury instruction. Because
Solomon did not object, we review for plain
error. Richardson, 168 F.3d at 839 n.9.
Though it did not present a definition of “spe-
cific intent,” the court instructed the jury that,
to find Solomon guilty, it would have to find
that he acted with “the specific intent to com-
mit fraud.”5 Specific intent concerns willful
and knowing engagement in criminal behavior,
while general intent concerns willful and
knowing acts. United States v. Berrios-Cen-
teno, 250 F.3d 294, 298-99 (5th Cir. 2001).
Because its instruction made plain that a find-
ing of guilt required the conclusion that Solo-
mon intended to commit the criminal act of
fraud, the court did not commit plain error in
formulating the jury instruction.
IX.
Solomon contends that the upward depar-
ture from the sentencing guidelines was un-
reasonable. We review an upward departure
for abuse of discretion. Koon v. United States,
518 U.S. 81, 98 (1996); United States v.
Nevels, 160 F.3d 226, 229 (5th Cir. 1998).
Federal sentencing guidelines establish ranges
of criminal sentences. Koon, 518 U.S. at 85.
A court must impose a sentence within the
applicable guideline range if it finds the case to
be typical of the sort envisioned by the
guidelines. Id. Should the court find the case
to be atypical because of “aggravating or miti-
gating circumstance[s] of a kind, or to a de-
gree, not adequately taken into consideration
by the Sentencing Commission in formulating
the guidelines,” the court may depart from the
guidelines and impose a sentence that is great-
er than what the guidelines prescribe. 18
U.S.C. § 3553(b) (2001).
In Koon, the Court outlined the questions a
5 The court defined “knowingly” as an act
“done voluntarily and intentionally, not because of
mistake or accident.” The court defined “inten-
tionally” to mean “that the act was committed vol-
untarily and purposefully” and that it is “rea-
sonable to draw the inference and find that a person
intends the natural and probable consequences of
acts done or knowingly omitted.”

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court should address in considering a de-
parture:
1) what features of this case take
it outside of the guidelines’
“heartland” and make of it a
special or unusual case?
2) has the sentencing commission
forbidden departures based on
those features?
3) if not, has the commission en-
couraged departures based on
those features?
4) if not has the commission dis-
couraged departures based on
those features?
Koon, 518 U.S at 95. Should the court depart
from the guidelines, it must state “the specific
reason for the imposition of a sentence outside
the guideline range.” § 3553(c)(2).
The court elaborated on the features that
took this case outside the guidelines’ “heart-
land,” noting that Solomon’s prior convictions
were similar to the current conviction, which
indicated a great likelihood of recidivism.
Solomon’s conduct involved violating the trust
of numerous victims and swindling them of
millions of dollars. He violated a court order
to cease and desist from engaging in fraud,
continued to operate his scheme even after his
arrest and conviction, and made veiled threats
to the prosecutor after his conviction. The
court did not abuse its discretion in granting an
upward departure.6
X.
Solomon avers that the district court imper-
missibly “double counted” when it assessed an
upward departure and sentencing enhance-
ments for mass marketing, use of sophisticated
means, more than minimal planning, and abuse
of a position of trust. We note, initially, that
the court did not apply the mass marketing and
abuse-of-position-of-trust-enhancements.
Thus, these two enhancements did not
constitute double counting. We normally
review a court’s interpretation of sentencing
guidelines de novo. United States v. Loe, 248
F.3d 449, 463 (5th Cir.), clarified, 255 F.3d
228 (5th Cir. 2001). Solomon did not object
to the mo re-than-minimal-planning
enhancement or the use-of-sophisticated-
means enhancement. Accordingly, we review
the application of these enhancements for plain
error. Richardson, 168 F.3d at 839 n.9.
Double counting is permissible where
“[e]ach enhancement targets different aspects
of a defendant’s behavior.” United States v.
Scurlock, 52 F.3d 531, 540 (5th Cir. 1995).
Solomon’s conduct involved more than mini-
mal planning, because it entailed repeated acts
over a period of time and numerous victims.
Solomon’s conduct involved sophisticated
meansSSshell companies, offshore bank ac-
counts, supposed international securities trad-
ers, Ponzi transactions, and professionally de-
signed offering documents. The challenged
enhancements and departures may overlap in
some regards. When one compares the ex-
planations given for each application, however,
it is apparent that they measure different
aspects of Solomon’s behavior. Accordingly,
the court did not commit plain error.
AFFIRMED.
6 See Nevels, 160 F.3d at 229-30; United States
v. Rosogie, 21 F.3d 632 (5th Cir. 1994).

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