Full opinion text
MEMORANDUM ORDER AND OPINION DENYING MOTIONS FOR JUDGMENT OF ACQUITTAL AND NEW TRIAL ROBINSON, District Judge. At the close of the government’s evidence, defendants jointly moved for judgment of acquittal pursuant to Fed. R.Crim.P. 29(a) (Doc. 493); and at the close of the trial defendants orally moved for judgment of acquittal. This Court took the motions under advisement. Defendants Wittig and Lake subsequently filed a Joint Motion for Judgment of Acquittal (Doc. 541) on October 26, 2005. Defendant Wittig filed a Motion for New Trial (Doc. 538); and defendant Lake filed a motion to join in the motion for new trial (Doc. 544). On March 27, 2006 — over five months past the deadline for filing post-trial motions, and on the eve of the sentencing hearing in this case, defendant Lake filed a Motion for Leave to File a Supplemental Memorandum of Law in Support of Defendants’ Pending Rule 29 Motions, attaching the memorandum to his motion (Doc. 658). Defendant Wittig filed a motion to join in the motion for leave to file the same supplemental memorandum (Doc. 670), and the government objects to any consideration of this supplemental memorandum. Although the Court will grant defendant Lake’s motion for leave and consider the memorandum in this order, the Court notes the extreme untimeliness of the motion. The October 26, 2005 original deadline for submission of post-trial motions was set in response to a request by defendants for an extension of time (Doc. 517). Additionally, the Court accommodated defendants’ request to continue the sentencing hearing in this case from January 9 to April 3, 2006. Despite providing these extra months to defendants to prepare their post-trial motions and sentencing filings, the defendants waited until five months past the original deadline to add arguments that do not rely on new evidence or recent developments in the law. Nevertheless, the Court will consider the defendants’ most recent filing along with the other post-trial motion briefs previously filed. For the reasons set forth in this opinion, the Court denies the motions for judgment of acquittal and new trial. I. INTRODUCTION The first trial commenced on October 12, 2004 and concluded on December 20, 2004 when the Court declared a mistrial after the jury was unable to reach a unanimous verdict. The retrial of this case began with voir dire on June 14, 2005 and lasted over two months. The jury began deliberating on August 24, 2005 and returned its verdicts in the guilt phase of the trial on September 12, 2005 (Docs.512, 515). The jury found defendant Lake guilty on Counts 1 (conspiracy), 3 through 15 (circumvention of internal controls), 16 through 18 and 20 through 22 (wire fraud), and 30 through 39 (money laundering). The jury found Lake not guilty on Count 2 (circumvention of internal controls), 19 (wire fraud), and 23 through 29 (money laundering). The jury found defendant Wittig guilty on Counts 1 through 39. The forfeiture phase of the trial began the next day and the jury returned split verdicts as to both defendants on September 15, 2005 (Docs.534, 535). Most of the grounds asserted in these post-trial motions are either: (1) unsupported, “shotgun” challenges to evidentia-ry rulings; (2) rehashes of oral or written motions raised before or during trial and ruled on by this Court orally or in writing; or (3) challenges to the sufficiency of the evidence, based on the defendants’ recitation of the facts or evidence viewed in the light most favorable to the defendants. The Court has considered each and every ground raised in these motions, whether or not the Court had previously ruled on the same objection or motion. While the Court will not distinctly address each of the numerous points raised by defendants, the Court has considered them and concludes that no errors necessitating a new trial were committed and that the jury’s verdict was reasonable and supported by sufficient evidence. This lengthy order thus addresses the most salient arguments. Notably, the defendants often couch their grounds for a new trial or judgment of acquittal by comparing certain pretrial and evidentiary rulings made by the Court before or during their first trial, with such rulings made before or during the retrial. The Court observes at the outset, that with respect to evidentiary rulings, a comparison with rulings made in the first trial is not dispositive; rather the Court will evaluate the substance of the rulings made in the retrial, in light of the evidence presented in the retrial. The evidentiary rulings in the retrial were contemporaneous with the presentation of the evidence, and made in the context of the evidence presented at that time. While the evidentiary rulings at the first trial are irrelevant, for evidentiary rulings are to be analyzed in the contemporaneous context in which they are made, limine rulings from the first trial were largely adopted by the Court upon retrial. There are a few exceptions; however, where the Court either excluded evidence it did not exclude at the first trial, or admitted evidence that it did not admit at the first trial. To the extent there are differences in the limine rulings in the first trial and second trial, it does not change the analysis, to wit: whether the limine rulings in the second trial were erroneous, and if so, prejudicially erroneous. Notably, the second trial was not a mirror or carbon copy of the first trial; there were differences in witnesses, substance and scope of testimony, objections, arguments, evidence, strategies of counsel and order of proof. And, although many of the Court’s limine orders continued in effect after the first trial, the Court ruled differently on some issues raised in limine motions filed before the retrial. Needless to say, pretrial rulings on limine motions are generally anticipatory of the evidence, and reliant on statements of counsel as to what the evidence will be. But in this case, this Court heard over two months of evidence during the first trial, which gave it a frame of reference beyond that available to a court ruling on limine motions in anticipation of evidence. Moreover, the Court’s frame of reference included the fact that in the first trial, defendants repeatedly abused the Court’s rulings on limine motions. This Court granted a number of limine motions of the defendants, thus precluding the government from presenting certain evidence, or placing parameters on the government’s use of certain evidence. These limine rulings were intended to protect or shield the defendants; instead the defendants repeatedly used these rulings to their tactical advantage. Again and again, the very evidence this Court had precluded the government from offering was offered by the defendants in cross-examining the government’s witnesses. Often, the evidence was offered by the defendants in a manner suggesting that the government had not offered the evidence because they were trying to hide the truth from the jury. This tactic was repeatedly employed by both defendants and was one of many ethical breaches and abusive tactics this Court attempted to prevent at retrial. The Court’s limine rulings at the second trial necessarily took into account the defendants’ abusive tactics with respect to certain limine rulings. Thus, to the extent the defendants are challenging this Court’s rulings on the basis that they were different than a ruling made during the first trial, such challenges are overruled and denied as improper. The proper analysis is what error, if any, this Court made in its pretrial, limine and evidentiary rulings at the retrial. II. MOTIONS FOR JUDGMENT OF ACQUITTAL At the close of the government’s evidence the defendants moved for judgment of acquittal and the Court took those motions under advisement. The defendants moved for judgment of acquittal at the close of all the evidence and again in post-trial motions based on insufficiency of evidence on a number of grounds. When considering a motion for acquittal under Fed.R.Crim.P. 29, the court may not weigh the evidence or consider the credibility of witnesses. The Court looks to the record and determines “only whether, taking the evidence — both direct and circumstantial, together with the reasonable inferences to be drawn therefrom- — in the light most favorable to the’ government, a reasonable jury could find [defendants] guilty beyond a reasonable doubt.” Moreover, “while the evidence supporting the cónviction[s] must be substantial and do more than raise a mere suspicion of guilt, it need not conclusively exclude every other reasonable hypothesis' and it need not negate all possibilities except guilt.” The Court must defer to the jury’s verdict so long as the government’s proof meets this standard. The Court denies the defendants’ motions for judgment of acquittal, substantially for- the following reasons. A. Evidence of Wire Fraud In order to establish wire fraud under 18 U.S.C. section 1343, the government must prove (1) a scheme or artifice to defraud, and (2) use of interstate wire communications to facilitate that scheme. To prove a scheme to defraud, the government must show that the “conduct intended or reasonably calculated to deceive persons of ordinary prudence or comprehension.” A wire is used in furtherance of the scheme if it “is incident to an essential fact of the scheme, or a step in the plot.” 1. Nexus between the Scheme and the Wires There was sufficiently strong evidence of a nexus between the scheme, as charged and the wires, as charged. Not only were the wires used prior to and as one step toward the receipt of the fruits of the fraud; but, they were also used to maintain the ongoing viability of the fraud, by presenting a deceitfully rosy picture and a tellingly silent voice concerning the executives’ management and compensation. Here the wires at' issue were: the 1998 and 1999 Form 10-K annual reports, and the 2000-2001 10-Ks and proxies, as well as the 2002 proxy for Westar. Thé fruits of this fraud, as charged against defendant Wittig, spanned everything from Wittig’s relocation and signing bonus provisions, obtained in 1995, to his causing Westar to prop up the KMF hedge fund, in which Wittig had a personal, undisclosed interest, with an investment by Westar in KMF in April 2000. The fruits of the fraud charged against defendant Wittig also involve the February 2002 falsification of the 2001 proxy statement, which omitted the $267,000 short term incentive bonus he had been awarded in 2001, as well as the split dollar provisions, as finally amended in June 2002, allowing a lump sum “put” of $4 million in death benefits to receive $2 million in cash. The fruits of this fraud, as charged against defendant Lake, spanned everything from his use of the relocation provision in 1998 to Lake’s abuse of the company loan program and receipt of a $1 million dollar loan in December 2001. The fruits of this fraud, as charged against both defendants, spanned everything from Wittig and Lake’s personal use of corporate aircraft during the entire course of their respective tenures, to Wit-tig and Lake’s obtaining additional compensation in early 2002 despite agreeing to salary reductions in 2001, to Wittig and Lake’s manipulating the Board into agreeing to their receipt of Guardian International, Inc. (“Guardian”) restricted share units (“RSUs”) in January 2002, allowing a double dip of dividends and setting the stage for massive premiums upon the redemption of these into Series D and E shares, triggered by the change-in-control provision, ie., Richard Ginsburg’s sale of one share of stock. The fruits of this fraud spanned Wittig and Lake’s manipulating the Board of Directors, in April 2002, to approve an exchange offer of Wes-tar RSUs to undervalued Guardian Series C shares, to Wittig and Lake’s causing Westar to invest in QuVis in December 2001, a company in which they had personal financial stakes through themselves or their wives. In short, the fruits of this fraud predated and antedated the charged wires, which spanned the time period of April 14, 1999 to May 6, 2002. Moreover, the charged wires — 10-Ks and proxies, presentations to the investing public, the shareholders, and the outside directors — were critical to maintaining the ongoing viability of the fraud. There is substantial evidence that this fraud was intended to continue long past 2002. There were hurdles and obstructions in the way, such as the Kansas Corporation Commission (“KCC”), the outraged shareholders, dissident outside directors, Public Service Company of New Mexico (“PNM”), a New Mexico utility, backing out of a merger, and pesky internal auditors. Yet, the picture painted through annual filings masked the ugly and covered the lead with foolsgold. 2. Victims of the Fraud Incumbent in the defendants’ motions is an argument that the government failed to prove that the wired materials furthered the fraud, by failing to prove actual fraud, harm or loss, to specific victims. But it is important to note that while the government is required to prove a scheme to defraud, it is not required to prove actual fraud, actual loss to a victim, or actual harm. Nor must the government prove the identity of a fraud victim, for that is not an essential element of the crime of wire fraud. Thus, reference to the investing public in the Superseding Indictment does not rise to the level of an impermissible amendment of the Superseding Indictment. There is a distinction between an amendment and a variance to an indictment. A variance occurs when the evidence at trial differs materially from the facts alleged in an indictment. A defendant’s right to adequate notice is not prejudiced where the defendant was not misled by such a variance. Prejudice occurs only when the variance creates a substantial likelihood that the defendant may have been convicted of an offense other than that charged by the grand jury. Based upon the evidence submitted at trial and the record before the Court, defendants were not prejudiced in any way by a reference to the investing public as a victim in the Superseding Indictment. 3. Evidence in Support of the Government’s Theories of False Statements and Lulling Defendants argue that the proxies and annual reports were not false, or if false, not false to the “requisite material degree” to further the fraud, citing Parr v. United States. This issue was raised in the defendants’ pretrial motions, and addressed at length in the Court’s pretrial rulings on these motions. The Court will not reiterate its analysis and findings here, but incorporates the same in denying these motions for acquittal. The government presented evidence establishing a nexus between the wires in question and the scheme to defraud. Notably, the defendants now acknowledge that the “bar is not high,” for the government need only show that the wire be “incident to an essential fact of the scheme, or a step in the plot.” The requisite nexus exists if the mailings or wirings were necessary in maintaining the ongoing viability of the fraud. The defendants maintain that the government’s theory on this element is “confused” in that the government has argued both that the proxies and annual reports were false, and that they “lulled” the investing public. Indeed, at the stage of pretrial motions and at the early stages of the government’s case, this Court observed that it was unclear which theory the government was pursuing. The evidence demonstrated, subsequently, that the government was pursuing both theories. The evidence suggested that the proxies and annual reports omitted items of compensation, or more often, failed to accurately describe or disclose the nature and extent of compensation. For example, defendant Wittig misrepresented to the Board of Directors the value of the “put” provision of the split dollar life insurance policy and how it operated. And, because the defendants disclosed no personal use of the airplanes, and defendant Wittig blocked an audit of personal use of the airplanes, the company did not disclose any executive compensation attributable to personal airplane usage. Nor did the company receive the benefit of a deduction for income attributable to executives’ personal use of the planes, as discussed in detail, infra. The proxies were based on incomplete, inaccurate, and fraudulently withheld information. Indeed, the jury heard a number of witnesses testify to this very issue, including David Schneweis who testified to his efforts to persuade the executives to claim the personal airplane usage as income to take advantage of the more favorable valuation. In fact, the defendants’ expert Keith Swirsky also testified to this, bolstering the government’s evidence on this issue. Furthermore, a reasonable jury could find that these proxies were vehicles to lull the investing public, including Westar shareholders and investors. Courts have addressed this lulling aspect in the mail fraud context and have held these mailings are within the mail fraud statute “if they were designed to lull the victims into a false sense of security, postpone their ultimate complaint to the authorities, and therefore make the apprehension of the defendant less likely than if no mailings had taken place.” Thus, mailings that do not include false information are no less part of the scheme if they are intended to be lulling. Defendants argue that the government offered no evidence supporting a “lulling” theory. But there was evidence that while the proxies and annual reports purported to provide a complete picture of executive compensation to the investing public, they did not. Indeed, Jane Sadaka, a director, testified that although the Board of Directors should have had a complete picture of executive compensation, she attempted to ascertain the situation by examining the proxies and public filings, but could not determine the complete compensation package of the defendants. In addition, the defendants used these transactions to lull Westar, its shareholders and the investing public into the false sense of security that they could rely on the completeness of the information. Further, the wires gave the defendants the added protection of deterring any complaints regarding their level of compensation, and therefore made the discovery of the defendants’ scheme less likely than if the wires had not occurred. To the extent the value of the airplane usage did not trigger the SEC disclosure requirement, the proxies still “lulled” the investing public into thinking that the company made an informed business judgment as to how to treat personal use of the airplanes. But, these defendants schemed to defraud the company in a manner that precluded the company from making any such informed business judgments. In short, these theories are not mutually exclusive. A filed proxy can be false. Needless to say, a false proxy can also lull the investing public through false statement or omission of adverse information. A filed proxy can be true, yet lull the public because it does not represent the statement of an informed company, but instead represents the statement of a company that has been deluded and defrauded. There was evidence in this case that the proxies included both false statements by commission and omission, as well as statements or information that lulled the investing public. Defendants further argue that the government should have been precluded from arguing a “lulling” theory or seeking a “lulling” instruction, as either would constitute an impermissible constructive amendment to the Superseding Indictment. Yet the Superseding Indictment does mention lulling. Although the Superseding Indictment and jury instructions focused on the fraud on Westar and its shareholders, there was no constructive amendment in presenting evidence that the proxies defrauded or lulled the investing public. In fact, the investing public includes Westar shareholders, and there was substantial evidence that Westar shareholders received proxies by mail, and of course, like the rest of the investing public, had access to the EDGAR system website as well. To be sure, the defendants have always been on notice, through the extensive description of the scheme and conspiracy in the Superseding Indictment, that the wired materials underlying the wire fraud counts were electronically filed, publicly accessible proxies and annual reports. The defendants cannot have been surprised or prejudiced by evidence or argument that the proxies served to defraud or lull those who read them, in furtherance of the defendants’ scheme to defraud the company and shareholders in many ways, including obtaining compensation unknown to the company, and/or obtaining compensation through misrepresentation, omission and false pretenses. Moreover, the defendants’ argument that these filings were routine and required by law does not negate the fact that they could have been vehicles to lull the investing public, the Board of Directors and shareholders of the company. Moreover, as noted hereinafter, there is no requirement that any particular victim or recipient relied upon the information. The information only must be material, or have a natural tendency to influence or be capable of influencing a decision. Thus, the wires furthered the scheme and conspiracy by concealing the compensation of personal use of the corporate aircraft that should have been imputed to Wittig and Lake. 4. Evidence of Interstate Commerce Element Finally, there was sufficient evidence for a reasonable jury to find that the wires crossed into interstate commerce, thus satisfying the jurisdictional element of wire fraud. James Zakoura testified that since 1996, 10-Ks and proxies have been filed with the SEC, and that interested parties can access these reports online through the SEC’s EDGAR system. Cynthia Couch, a Westar. employee, testified that she was personally involved with the SEC filings and that since 1996, Westar’s 10-Ks and 14As have been submitted electronically to the SEC. Couch explained that the public reports were wired electronically from Kansas to a contract vendor located in Lancaster, Pennsylvania who put them in final form and then wired them from New York to the SEC in Washington, D.C. Beth Forry, a representative of the contract vendor, R.R. Donnelley arid Company, also testified corroborating Couch’s testimony. Moreover, the reports themselves show that they are pulled down from the EDGAR website, thus proving circumstantially that the'interstate communication is involved in filing these reports. Clearly, these documents were in interstate commerce, as they were electronically transferred, several times, through the internet, which means they not only crossed interstate lines, they may have crossed international and intercontinental lines, as cyberspace has no “lines” at all. 5. Proof of Reliance In addition to arguing that there were no false or fraudulent statements in the wired documents, defendants argue that neither Westar nor its shareholders relied upon the electronically filed proxies and annual reports, such that these filings could not have furthered the fraud, nor been essential to the fraud. Many of the defendants’ arguments revolve around identifying the type of victim in this case and the victim’s reliance. But common law fraud requirements of justifiable reliance and damages have no place in federal mail fraud, wire fraud, and bank fraud statutes. Nor is the government required to prove the identity of a crime victim as an element of the crime. Accordingly, all of the defendants’ challenges premised upon these arguments must fail. Defendants’ argument that there was no identified Westar shareholder who relied on the EDGAR filings instead of the mailed proxies and reports, is wholly without merit. As already discussed, identifying a victim is neither necessary to the proof, nor an element of the crime. B. Evidence in Support of Conspiracy to Circumvent Internal Accounting Controls and Underlying Circumvention Counts 1. Conspiracy Liability The Superseding Indictment alleges a conspiracy between defendants Wittig and Lake to violate 15 U.S.C. sections 78m(b)(5) and 78ff by circumventing internal controls of Westar designed to account for use and disposition of assets to ensure accurate reporting as required by law. Under 18 U.S.C. section 371, “[i]f two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined under this title or imprisoned not more than five years, or both.” Defendant Lake, joined by defendant Wittig, now argues that the circumvention of internal accounting controls statute may not serve as an object of the conspiracy, because a conspiracy to violate that statute is not an offense. Specifically, defendants argue that a plain reading of the circumvention statute and its legislative history support their contention that there is “a unique prohibition against the imposition of criminal liability” for conspiracy to circumvent internal accounting controls. Defendants argue for the first time in their most recent supplemental memorandum, that under the terms of section 78m(b)(4) and (5), no criminal liability may lie except for the “direct” violation described in section 78m(b)(5). Subsection (b)(4) provides: “No criminal liability shall be imposed for failing to comply with the requirements of paragraph (2) of this subsection except as provided in paragraph (5).” Defendants argue that since subsection (5) does not explicitly provide for conspiracy liability, the government fails to allege a valid offense in the Superseding Indictment. The Court disagrees. The plain language of section 78m(b)(4) and (5) does not prohibit liability for conspiracy to circumvent internal accounting controls. And the general conspiracy statute applies to a conspiracy to commit any federal offense. Furthermore, none of the caselaw cited by defendants supports this proposition. In Gebardi v. United States, the United States Supreme Court held that when a statute explicitly exempts a class of defendants from criminal liability, a person in that class cannot then be prosecuted for conspiracy to violate the same statute. This line of cases does not apply to the conspiracy charged in this case, nor does it support defendants’ interpretation of the circumvention statute. Here, defendants assert that no person could be charged with conspiracy to violate the circumvention statute. But, Gebardi and its progeny concern the class of defendants allowed to be charged in the underlying statutes, necessarily acknowledging that certain classes of defendants may be charged in the underlying crime. Finally, defendants urge that neither may be convicted as a co-conspirator on the basis of a substantive circumvention violation by the other under a Pinkerton conspiracy theory. Defendants state that because this form of conspirator liability is even more indirect than conspiracy liability itself, under this statutory analysis, neither defendant may be liable. For the reasons already discussed, the Court does not find that the circumvention statute prohibits liability on any type of conspiracy theory. Moreover, the government presented sufficient evidence of a conspiracy; thus, with respect to the circumvention counts as well as the other substantive counts (wire fraud and money laundering), the defendants can be found guilty on either an aiding or abetting or a Pinkerton conspiracy theory, particularly if there was sufficient evidence to prove the charged conspiracy and to link the substantive offenses to it. There is evidence that personal usage of airplanes by one defendant was reasonably foreseeable to the other. This evidence includes evidence of flights in which the defendants, together with their families, flew together to Palm Beach and other recreational venues, without any apparent business purpose for a week or longer stay, except a sporadic, short meeting, if any. There is evidence that defendant Wittig flew to the Hamptons on flights that were shared, or linked to similar personal usage flights by defendant Lake to White Plains, New York. There is sufficient evidence of defendant Wittig’s knowledge and wilfulness and the reasonable foreseeability of that to defendant Lake. Conversely, there is sufficient evidence of defendant Lake’s knowledge and wilfulness and the reasonable foreseeability of that to defendant Wittig. 2. Evidence that Defendants Knowingly and Wilfully Responded Falsely to the Director and Officer Questionnaires As addressed in connection with the defendants’ motion for new trial, there was substantial evidence justifying a deliberate ignorance instruction with respect to the scienter element of the circumvention counts. Not only was there evidence that both defendants deliberately avoided and ignored the rules governing disclosure of their personal use of airplanes, much of that same evidence circumstantially showed that the defendants omitted this information from the Director and Officer (“D & 0”) questionnaires, with knowledge that such omission rendered the questionnaires false. D & 0 questionnaires were an annual filing that recorded transactions necessary to permit preparation of financial statements and to maintain accountability of assets (ie., use of assets, value received). For example, both defendants signed off on Westar’s Ethics Code each year, which forbade any personal use of the corporate airplane. The evidence established that Wittig and Lake falsified or caused to be falsified plane reservation logs, which always showed that trips were for business although Lake later acknowledged that a substantial number of these trips were personal by his own definition. Further, Wittig testified falsely before a Grand Jury that executives tended not to use the company plane for personal purposes, when he knew that he used the planes for personal purposes. The evidence showed that Wittig used the planes to shuttle he and his family, their nanny and their dog, to their Hamptons vacation home, his sons to summer camp, he and his family for a two week vacation in Europe, and he and his family to Texas to catch a connecting commercial flight for a vacation in Costa Rica. Lake was overseer of the airplane logs after Carl Koupal, the former Chief Administrative Officer of Westar, left the company. Lake was sufficiently concerned about Wittig’s glaring personal use of the plane for a ten day European trip that he refused to initial the logs for that month. - Defendants further argue that the subject D & 0 questionnaires for Western Resources, Protection One, Westar Energy, or Westar Industries, ask about use of property of the particular corporate entity identified in the D & 0, yet there was no evidence that use of aircraft should have been disclosed on any of these D & Os because there was no evidence that any of these entities owned or held a leasehold interest in the aircraft. Defendants contend that the sole lease in evidence was Westar Capital, Inc.’s (“Westar Capital”) lease for the Citation X plane, but that lease does not show that there was a property interest conveyed. Defendants further argue that even if there was evidence that Westar Capital received a property interest in the aircraft, there is no evidence that any of the corporate entities, other than Protection One, made any lease payments. Defendants further posit that even with respect to Count 15, the evidence is insufficient, because while the 2002 proxy reflects that Protection One compensated Westar Aviation for the use of the aircraft in 2001, there is no evidence that Lake flew on an aircraft leased by Westar Aviation and paid for by Protection One during that period. Thus, defendants argue that there is no proof that defendants’ omissions on the D & Os were with knowledge that the particular entity had an interest in the aircraft used for personal trips. But the government did produce leases and purchase agreements for two of the corporate aircraft, showing that Westar Capital had a leasehold interest in the two planes. The government also produced a purchase agreement on the third airplane, showing Westar Aviation, Inc. as the buyer. Moreover, there was evidence, including the testimony of Paula Cox, Westar flight coordinator, that despite the leases and purchase agreements held in the names of the subsidiaries, these were company aircraft, in light of the company’s consolidated corporate structure, as well as its manner of treating the planes. There was evidence presented that Western Resources owned 100 percent of Wes-tar Industries and more than 85 percent of Protection One. And Koupal testified that both Westar Capital and Westar Aviation, Inc., were wholly owned subsidiaries of Westar. These were related or affiliate companies, so the defendants had no reason to distinguish or differentiate this disclosure. These various entities were simply subsidiaries of a consolidated corporation. Westar included the financial results of these companies in its financial statements, including Protection One, which was not wholly-owned. Finally, irrespective of which entity held the lease or purchase agreement for the planes, the tax department factored in plane usage on Westar’s corporate tax returns. Thus the defendants’ receipt of value in form of personal usage of the aircraft, the evidence suggests and a reasonable jury could find, required disclosure on each of these D & O questionnaires. A reasonable jury could find that given the consolidated financial statement, disclosure was required on each of these D & Os. It is disingenuous for defendant Wittig, the CEO, and defendant Lake, overseer of the flight reservation logs, to disclaim knowledge as to which D & O for which entity required disclosure of plane use. Notably, both defendants were directors of Protection One and Westar Industries, as well as officers of Westar. Also, there was evidence that Westar Capital, the company that held the leasehold interest in the planes, was later called Westar Industries for purposes of the split merger and spinoff. Furthermore, defendants’ control over the corporate aircraft also belies the argument that they did not know what company “owned” the planes. Defendant Wittig’s extensive involvement with the corporate aircraft was evidenced by the fact that he made all critical decisions regarding aircraft acquisition and use. Wit-tig also determined who could use the plane and what rate would be charged to other companies for plane usage. Wittig gave Annette Beck, President of Protection One, permission to use the corporate aircraft for Protection One business by telling her that they would be available for her use. He further determined that Protection One would be billed for use of the plane and he determined the rate. According to Beck, Wittig asked her to continue using the corporate aircraft for Protection One business so that he could justify purchasing another plane. And according to testimony of Cox, Beck, and Koupal, Wittig’s assistant was in charge of receiving requests to use the plane. In addition, defendant Lake was responsible for the records; he began reviewing the flight logs in October 2001 after Koupal left the company. In short, a reasonable jury could either find that defendants deliberately ignored the requirement to disclose their personal use of the airplane, or that the defendants actually knew about such disclosure requirements. The defendants were extensively involved with the corporate aircraft, exerted control over the acquisition and use of the aircraft, or monitored and reviewed the use of the aircraft. Their argument that the D & Os did not list the entity that held the lease or purchase agreement does not test the reasonableness of the jury’s verdict, for a reasonable jury could find that irrespective of the ownership or interests of these related entities, defendants’ knowledge or deliberate ignorance is evidenced by an important fact: the defendants did not list personal use of the corporate aircraft on any of the D & 0 questionnaires. A reasonable jury could find that the defendants wilfully denied personal use of airplanes on all the questionnaires, because to do otherwise would have exposed their fraudulent conduct. 3. Proof of Circumvention of a “System of Internal Accounting Controls” Defendants argue that while the government presented evidence of circumvention of an “internal audit function,” that is not a cognizable violation of 15 U.S.C. section 78m(b)(5), which proscribes circumvention of a system of internal accounting controls. The government responds that there is no legal distinction between internal accounting controls and internal accounting functions, for “[i]nter-nal controls, whether labeled audit or accounting, are intertwined issues and serve the same purpose.” As the government posits, the purpose of the statute is to make certain that companies subject to SEC regulation keep accurate records regarding the use and maintenance of corporate assets so that such information will be accurately reported in the companies’ financial statements submitted to the SEC and the public. When assessing the adequacy of a system of internal controls, the investigating authority considers the following factors: (i) the role of the Board of Directors; (ii) communication of corporation procedures and policies; (iii) assignment of authority and responsibility; (iv) competence and integrity of personnel; (v) accountability for performance and compliance with policies and procedures; and (vi) objectivity and effectiveness of the internal audit function. The government proved through the testimony of Jenny Tryon, the company’s Audit Director, that monitoring internal controls is a function of the auditing department, and that for most audits her office performed, they evaluated internal controls to make sure such controls existed and were operating properly. Essentially, internal audit function and internal controls are synonymous terms referring to the same concept. Because the purpose of the statute is to maintain accurate books and records for the company, the charged conduct — disallowing the Audit Director to conduct an audit of the use of the corporate aircraft (an asset) — falls within the purview of the statute. The statute defines “system of internal accounting controls” as a system sufficient to provide reasonable assurances that transactions are executed in accordance with management’s general or specific authorization, that transactions are recorded as necessary to permit preparation of financial statements, and to maintain accountability for assets. A “book, record or account” are those which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company. Internal audit records are also records that are used for internal controls, and that fairly reflect transactions and dispositions of assets and maintain accountability for assets. Defendants argue to the contrary, that “internal audit records” are a part of a “system of internal accounting controls.” The fact that defendant Wittig rejected Tryon’s attempt to perform an internal audit recommended by Arthur Anderson, an outside accounting firm, does not mean that there was no system of internal accounting controls. Internal audits are in fact a system of internal accounting controls. And the fact that Wit-tig refused an audit does not mean that there was no system. In fact, the evidence showed that there was a system, of flight logs and plane logs, which was the system that Tryon was attempting to audit, and that defendant Wittig circumvented by refusing her request to audit. 4. Proof of Circumvention on Count 9 Defendants further argue that Wittig could not have prevented Tryon from performing an internal audit. Tryon testified that she had an independent right and duty to perform audits but that Wittig, nonetheless, prevented her from conducting an audit, by thwarting her efforts. Despite Tryon’s authority to conduct an audit, she did not have access to the flight logs and she did not know who was in possession of them. Other evidence showed that for most of the subject period, defendant Lake oversaw the flight logs. When Tryon asked defendant Wittig for access to the flight logs, he refused, despite her repeated explanations to him that she needed them for an audit. Defendant Wittig repeatedly rebuffed her attempts and finally ordered her not to conduct the audit. Notably, although she had survived an earlier restructuring and had been assured that her job was secure, one or two days after Tryon asked Wittig for the flight logs, Westar management presented Tryon with an “offer” for a severance package, under terms that made it unreasonable for her to do anything other than resign. A reasonable jury could thus conclude that although Wittig was not supposed to have authority to refuse Tryon permission to conduct the audit, he effectively denied her the ability to do so. A jury could reasonably conclude that Wittig circumvented the company’s internal controls by blocking an internal audit, and by getting rid of the Audit Director. C. Evidence of the Money Laundering Objective of the Conspiracy Charge and Underlying Money Laundering Counts 1. Interdependence Defendants argue that they should be granted judgment on the money laundering objective of the conspiracy, for there was insufficient evidence of the essential element of interdependence with respect to this charge. Defendants further argue that the government offered no evidence that any of Lake’s monetary transactions underlying the money laundering charges furthered either the conspiracy or Wittig’s goals. Interdependence is not an element of 18 U.S.C section 1957, and thus the government is not required to prove interdependence with respect to the underlying money laundering counts. But, defendants correctly posit that in the Tenth Circuit, interdependence is an essential element of the conspiracy charge. As long as there is evidence of interdependence with respect to the conspiracy, there is no requirement that interdependence be shown with respect to any substantive offense, simply because that was an object of the conspiracy. To establish the interdependence element of conspiracy, “[a] defendant need not have knowledge of all the details or all the members of the conspiracy and may play only a minor role ....” The government only needed to prove that the defendant “knew at least the essential objectives of the conspiracy, and ... knowingly and voluntarily became part of it.” The government provided substantial evidence that Lake and Wittig were interdependent with respect to this objective of the conspiracy (as well as with respect to the other two objectives of the conspiracy). Defendant Lake certainly depended on defendant Wittig to cause the production of various agreements and documents triggering, generating, accelerating and maximizing various components and types of compensation for Lake and Wittig. Defendant Wittig depended on defendant Lake to oversee the investigation of suspected dissident employees, officers and directors, and adversaries in the KCC proceedings. Additionally, the objective of the conspiracy was to engage in monetary transactions with criminally derived property. Even before the particular monetary transactions that are the subject of the substantive money laundering counts, there is evidence that shows the interdependence of these defendants in the money laundering objective of the conspiracy. For example, the PNM split merger and rights offering contemplated that the defendants would buy significant amounts of stock in Westar Industries. Of course the plan never culminated, as the KCC rejected the split merger and rights offering. But, buying stock is a monetary transaction and money laundering was an objective of the conspiracy, as the documents and testimony evidences that the defendants intended and planned to buy shares in the new company. It is important to note that the objective of the conspiracy, money laundering, is evidenced not only by the evidence supporting the substantive money laundering counts, but by other evidence of plans, objectives, goals, and anticipated monetary transactions from criminally derived property. One example is the planned redemption of Guardian stock, which was derived from criminal activity, to wit: undisclosed or false information in proxy filings that were wired in execution of a scheme of fraud. The point is that interdependence, with respect to the conspiracy to commit money laundering is supported by more than the evidence underlying the substantive money laundering counts. There is a great deal of circumstantial evidence showing that the conspiracy to commit money laundering was much broader than the transactions set forth in the substantive money laundering counts. 2. Venue for Money Laundering Counts 33 and 35 through 39 On August 23, 2005, at the close of all of the evidence, defendant Lake orally moved for judgment of acquittal for lack of venue on Counts 33 and 35 through 39, which concerned his sale of Westar stock from his Bear Stearns account. The Court took this oral motion under advisement. Under Fed.R.Crim.P. 29(b), if the court reserves ruling on a motion, it must decide the motion on the basis of the evidence at the time the ruling was reserved. Defendants moved for judgment of acquittal regarding venue on August 23, 2005, at the close of the guilt phase of the trial. The court reserved ruling on the issue on the same day. Thus, the government may rely on any evidence presented in the record during the guilt phase of the trial, including the evidence presented during the defendants’ cases. The statute providing venue for a violation of 18 U.S.C. section 1957 states: (i) Venue. — (1) Except as provided in paragraph (2), a prosecution for an offense under this section or section 1957 may be brought in— (A) any district in which the financial or monetary transaction is conducted; or .(B) any district where a prosecution for the underlying specified unlawful activity could be brought, if the defendant participated in the transfer of the proceeds of the specified unlawful activity from that district to the district where the financial or monetary transaction is conducted. The Tenth Circuit has held that “[v]enue in federal criminal cases is a question of fact which is part of the prosecution’s case.” But the Tenth Circuit has treated venue differently from other substantive elements of offenses, requiring proof of this element by a preponderance of evidence, not beyond a reasonable doubt. To establish venue under section 1956(i)(B), the money laundering counts may be brought in the district where a prosecution of the underlying specified unlawful activity could be brought, if the defendant participated in the transfer of the proceeds of the specified unlawful activity from that district to the district where the financial or monetary transaction occurred. Money laundering Counts 33 and 35 through 39 concern defendant Lake’s sale of Westar stock held in his Bear Stearns account. The evidence at retrial showed Lake acquired the Westar stock in several ways. Defendant Lake testified that he used his proceeds from his employment at Bear Sterns to purchase Westar stock in September or October 1998. He continued to purchase stock through the various programs offered at Westar and also received Westar stock as part of his compensation. Lake testified that he acquired Westar Stock through the following means: (1) he used Westar’s loan program; (2) he invested almost 100 percent of his 401K Plan in Westar stock; (3) he purchased Westar shares in the “stock for comp” program, where he allocated half of his' salary to the purchase of Westar shares; and (4) he utilized the direct stock purchase plan. He also received some RSUs that vested while he was employed. Most importantly, defendant Lake testified that he acquired this Westar stock in Kansas and transferred it to his Bear Stearns account in New York. By Lake’s own admission, he transferred the Westar stock to New York, the district where the charged transaction occurred. Thus, even based solely on the testimony of defendant Lake, there was sufficient evidence in the record to establish that defendant Lake participated in the transfer of funds from Kansas to New York. A witness from Bear Stearns also testified that the account holder, in this case, Lake, directed the transfer of stock from the place of purchase to the domicile of Bear Stearns, where it was held. The Court finds that the venue element of these money laundering counts was supported by substantial evidence in the record. 3. Tracing Dollars Used to Acquire Westar Stock under the Money Laundering Counts Defendants argue that there is insufficient evidence supporting the money laundering charges, Counts 30 through 39, because the government failed to prove that every dollar of Westar compensation was fraudulently obtained, and alternatively failed to trace the defendants’ acquisition of stock underlying these money laundering counts to the proceeds of the wire fraud. But there is no requirement that the acquisition of the stock transacted in the money laundering counts be traced to proceeds of the wire fraud. Proceeds of wire fraud can be acquired prior to and independent of the actual execution of the scheme and can occur at any time during the scheme. 18 U.S.C. section 1957 prohibits “monetary transaction [s] in criminally derived property.” A “monetary transaction” is defined as “the deposit, withdrawal, transfer, or exchange ... of funds or a monetary instrument ... by, through, or to a financial institution,” and “criminally derived property” is defined as “any property constituting, or derived from, proceeds obtained from a criminal offense.” According to the Tenth Circuit: The government had the burden of showing that the criminally derived property used in the monetary transactions was in fact derived from specified unlawful activity. This does not mean, however, that the government had to show, that funds withdrawn from the defendant’s account could not possibly have come from any source other than the unlawful activity. Once proceeds of unlawful activity have been deposited in a financial institution and have been credited to an account, those funds cannot be traced to any particular transaction and cannot be distinguished from any other funds deposited in the account. The “tainted” funds may be commingled with “untainted” funds, with the result being simply a net credit balance in favor of the depositor. The credit balance gives the depositor a claim against the bank and allows him to withdraw funds to the extent of the credit. In the context of a withdrawal, the portion of § 1957 requiring a showing that the proceeds were in fact “derived from specified unlawful activity” could not have been intended as a requirement that the government prove that no “untainted” funds were deposited along with the unlawful proceeds. Such an interpretation would allow individuals to avoid prosecution simply by commingling legitimate funds with proceeds of crime. This would defeat the very purpose of the money-laundering statutes. Thus, these money laundering transactions, as long as they involved money or property acquired at some time during the wire fraud scheme, are legally sufficient. Moreover, there was sufficient evidence for a reasonable jury to conclude that the wire fraud scheme began when Wittig joined the company, armed with the knowledge he had about the financial affairs and operations of the company. There was evidence that prior to joining Westar, Wit-tig had done work for the company, and was well aware of the company’s assets, liabilities and general operations. There was evidence that at or soon after joining the company, Wittig began effectuating his scheme to obtain various types of compensation, by not disclosing, or by misrepresenting to the Board, the nature, means and potential payout of such compensation. The split dollar life insurance agreement, with the novel “put” provision, was one such compensation vehicle, which Wittig negotiated with the former CEO, but failed to obtain Board approval of, for several years. And, when Wittig finally presented this form of compensation to the Board for approval, he misrepresented the value of the compensation and what would trigger the payment of the compensation. There is evidence that the split dollar life insurance was not fully or truthfully disclosed in proxies and/or 10-K discussions, for the forms failed to disclose that this “put” provision was essentially a mode of compensation that had no real economic relationship to the insurance policy. The executives who benefitted from this policy could draw down cash value, even before accrued and never pay it back. This would reduce the death benefit payable to the company, which had paid a sizeable premium supposedly in exchange for collecting at the executive’s death. But, the company essentially fronted a sizeable premium, and only stood to collect the death benefit, while the executive could skim off the cash value, even before accrued, without having to pay the company back. There was also evidence that as early as 1998, there was an effort to avoid or minimize proxy disclosure of compensation obtained through fraud or false pretenses, such as the split dollar policy with “put” provision. In a 1998 meeting in Chicago between Arthur Anderson consultants and company executives, there was in fact discussion on how to avoid or minimize proxy disclosure of this scheme. The fraudulent nature of this scheme is revealed in the Arthur Anderson records, which also reference that Wittig was not being candid or truthful with the Board about the particulars of the split dollar policy. This is consistent with the testimony of Frank Becker, who was a director and Chair of the Compensation Committee of the Board, that Wittig gained this split dollar policy by subterfuge and deceit. There was also evidence that in 2002, Wittig caused the policy to be amended to even more favorable terms, gaining Board approval by falsely representing that the amendment was merely to allow the executive to exercise the “put” in small increments. As soon as he got approval, Wittig exercised the entire “put,” obtaining $2 million in one lump sum. Thus, the transactions with Capital City Bank are loan proceeds obtained with collateral that was criminally derived from a specified unlawful activity, wire fraud. The split dollar policy was derived from wire fraud, because, as is charged in the wire fraud counts, there were false or fraudulent proxies and 10-Ks fried to effectuate the wire fraud scheme, which included the fraudulent acquisition and approval of this split dollar life insurance policy. Acquisition of the split dollar policy preceded the Capital City Bank money laundering counts. With respect to the stock transactions, which commenced on June 8, 2001, these transactions preceded Wittig obtaining the split dollar policy with “put” provision by fraud, the fraudulent relocation fee scenario, and the undisclosed acceleration of the signing bonus, among other things. There was also sufficient evidence that defendant Lake joined the conspiracy and scheme to defraud contemporaneous with joining the company. In fact, there was evidence that even before Lake joined Westar, Wittig placed him on the Board of Guardian as the putative representative of Westar. Guardian was integral to the defendants’ conspiracy, in that they used Westar’s relationship with this company as a vehicle to increase their compensation through: (1) misleading Westar to award RSUs and shares of Guardian, tied to Guardian’s performance, rather than Wes-tar’s performance, without the approval of the Board; (2) misleading the Human Resources Committee of Westar’s Board to authorize an RSU exchange to convert previously awarded Westar RSUs into undervalued Guardian shares; and (3) manipulating the timing of the exchange so that Wittig and Lake could “double dip” on Guardian dividends. Finally, as defendants point out, the jury determined not to forfeit all compensation and benefits ever received. Yet, this Court is not called to speculate on the jury’s basis for its split verdict on Count 40; but rather, this Court must determine whether a reasonable jury could believe that the defendants committed money laundering as charged in Counts 30 through 39. This Court concludes that a reasonable jury could find that there was fraud at the inception of each defendant’s commencement at Westar. Yet a reasonable jury need not fully agree with that theory to convict the defendants of Counts 30 through 39, for there is no requirement that the laundered monies be traced. Defendants have offered no authority that precludes the employment benefits obtained as a result of this fraudulent scheme from being considered criminally derived property. Because the government provided sufficient evidence that Wittig and Lake began their employment under false pretenses, all compensation obtained by Wittig and Lake is criminally derived property, including compensation in the form of stock. Any sale or further disposition of that stock comes within the prohibitions of 18 U.S.C. section 1957. The Tenth Circuit has explicitly determined that the government is not required to show that no “untainted” funds were part of the transaction or that the funds used in the transaction were exclusively derived from the specified unlawful activity. These verdicts may or may not be inconsistent. Because the government’s theory of fraud at the inception was not specifically decided by the jury, this Court would merely be speculating what the jury thought about that theory. It is possible that the jury did not believe the government’s “fraud at the inception theory.” On the other hand, the jury decided against forfeiting a number of other company-awarded benefits. It is possible that the jury decided not to forfeit stock because it was, at least in part, company-awarded compensation available not just to these defendants but to other management at the company. On the other hand, there were components of compensation that these defendants received that were either not received by other management, or not received under the favorable terms or to the same extent that these defendants received. Notably, it was these types of compensation, such as the split dollar life insurance agreement with the “put” provision and the relocation benefits, that the jury decided to forfeit. Moreover, to the extent the convictions on the money laundering counts are inconsistent with the nonforfeiture of Westar stock, inconsistent verdicts are not the basis for a judgment of acquittal. III. MOTIONS FOR NEW TRIAL Defendants assert 41 grounds they say individually and collectively deprived them of their right to due process and a fair trial, requiring a new trial in the interest of justice pursuant to Fed.R.Crim.P. 33(a). Many of these grounds for a new trial were ruled on by the Court, in lengthy memorandum opinions filed prior to trial, or in detailed oral rulings from the bench. Nothing occurred during the retrial that alters the efficacy or appropriateness of those rulings. Thus, the Court will not reiterate its basis for denying defendants’ motions for severance and for recu-sal. Additionally, the Court will neither address defendants’ motions to strike Wes-tar ratepayer jurors for cause, nor the basis for its order for trial practices and procedures for the retrial. And, the Court will not r