United States v. Abbey ( 1998 )

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
JUN 5 1998
TENTH CIRCUIT
PATRICK FISHER
Clerk
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 97-1284
(D.C. No. 95-CR-214-01-N)
DENNIS R. ABBEY, (D. Colo.)
Defendant-Appellant.
ORDER AND JUDGMENT*
Before HENRY, BARRETT, and BRISCOE, Circuit Judges.
Defendant Dennis R. Abbey appeals his convictions and sentences for twelve
criminal offenses arising out of his misconduct while a fiduciary responsible for
overseeing the financial affairs of eighteen incompetent military veterans. We exercise
jurisdiction pursuant to 28 U.S.C. § 1291 and affirm.
I.
Abbey is a resident of Longmont, Colorado, and a veteran of the Vietnam war. He
began working for Boulder County, Colorado, in July 1974 as a veterans service officer,
*
This order and judgment is not binding precedent, except under the doctrines of
law of the case, res judicata, and collateral estoppel. The court generally disfavors the
citation of orders and judgments; nevertheless, an order and judgment may be cited under
the terms and conditions of 10th Cir. R. 36.3.
assisting veterans and their dependents in filing claims. In 1985, Abbey was persuaded
by employees of the Veterans Administration (VA), in particular VA attorney John
Lancelot, to act as a fiduciary for incompetent veterans. This fiduciary role, which was
entirely separate from his position with Boulder County, involved overseeing the
financial affairs of veterans who for various reasons were unable to manage their own
financial affairs. The VA often appointed banks to act as fiduciaries, but such
arrangements did not work well with veterans who had severe emotional problems.
Colorado state law prohibited fiduciaries other than banks or trust companies from
having more than five wards, but VA employees occasionally bypassed the law by
appointing a fiduciary in name only and then having another person act as de facto
fiduciary. Lancelot persuaded Abbey to act as fiduciary for more than five veterans. The
VA appointed Abbey’s wife as fiduciary for six veterans and appointed Charles Keeran,
Abbey’s friend, as fiduciary for seven veterans. The primary responsibility of the named
fiduciaries was to sign blank checks for Abbey, who acted as de facto fiduciary for all of
the veterans.
Abbey did not receive any formal training concerning his fiduciary duties.
Lancelot advised Abbey whenever questions arose and effectively acted as Abbey’s legal
advisor until Lancelot retired. Lancelot specifically advised Abbey to petition in state
court to be appointed guardian for several veterans; however, he generally advised Abbey
to act as de facto guardian for all of the veterans. In his role as both actual and de facto
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fiduciary, Abbey controlled the finances of the eighteen veterans. Abbey received their
benefit checks and had discretion to spend the funds in any manner he concluded would
benefit the veterans. Abbey was to insure that the veterans had housing, clothing, food,
and other basic necessities. He also exercised his discretion to purchase other items for
the veterans, such as vehicles and baseball tickets, and he made charitable contributions
on behalf of the veterans. Abbey submitted an annual accounting to the VA for each
veteran, summarizing how each veteran’s funds were spent.
In return for his work as a fiduciary, Abbey was entitled to an administrative fee
under Colorado law equal to five percent of each veteran’s income. He submitted, at
Lancelot’s urging, at least one petition for extraordinary fees for additional services. In
addition to the regular administrative fee, Abbey also routinely charged the veterans for
time he and others spent visiting or caring for the veterans. It is unclear whether any of
these charges were submitted for approval in state court.
Beginning in approximately October 1989 (roughly coinciding with Lancelot’s
absence from work because of cancer and his subsequent retirement), Abbey began to
engage in a variety of questionable practices. For example, he asked Margaret Schaefer-
Sachs, a licensed social worker, to continue billing veterans for counseling services after
she had moved to California. According to Schaefer-Sachs, Abbey told her he was
counseling many of the veterans without compensation and it would be a conflict of
interest for him to personally submit bills to the veterans for counseling. Abbey called
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Schaefer-Sachs on a regular basis to tell her the alleged hours he spent with each veteran
and she prepared and submitted corresponding bills to Abbey, as if she had performed the
counseling services. Abbey then wrote checks on the veterans’ accounts payable to
Schaefer-Sachs and deposited the checks in an account she maintained in Colorado.
Schaefer-Sachs signed blank checks on her Colorado account and sent them to Abbey so
he could withdraw his share (he took $50 of every $60 charged). Between January 1990
and March 1993, approximately $75,000 was deposited in the Colorado account pursuant
to this arrangement, of which Schaefer-Sachs received approximately $15,000 and Abbey
received the remainder.
Abbey engaged in other uses of the veterans’ funds which directly or indirectly
benefited him. In 1991, he donated a total of $2,000 from several veterans’ accounts to
the local Disabled American Veterans (DAV). Abbey was a member and officer of the
local DAV and had signature authority over its checking account. Shortly after the
donations were made, DAV funds were used to purchase a fax machine which was
donated to the office where Abbey worked. Notably, the DAV check for the fax machine
was signed by Abbey. Subsequently, Abbey made several donations to the DAV on
behalf of several of the veterans totaling approximately $13,000. The DAV used the
funds to send Abbey on three trips to Vietnam.
A seventeen-count indictment was returned against Abbey and Schaefer-Sachs on
June 15, 1995. Count 1 charged the two with conspiracy to make false statements (18
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U.S.C. §§ 371, 1001, 2); counts 2 through 5 charged Abbey with embezzlement of VA
funds (38 U.S.C. § 6101, 18 U.S.C. § 2); counts 6 through 9 charged Abbey with making
false statements (18 U.S.C. §§ 1001, 2); counts 10 through 13 charged Abbey with wire
fraud (18 U.S.C. §§ 1343, 2); count 14 charged Abbey with money laundering (18 U.S.C.
§§ 1956(a)(1)(B)(i), 2); and counts 15 through 17 charged Abbey with making false
statements on a tax return (26 U.S.C. § 7206(1)). Schaefer-Sachs pleaded guilty to count
1 and agreed to testify against Abbey. Abbey’s motions for judgment of acquittal as to
counts 5 and 14 were granted. He was convicted by jury of counts 1, 2, 6 through 9, 11
through 13, and 15 through 17, and was acquitted on the remaining three counts. Abbey
was sentenced to 46 months’ imprisonment, a $10,000 fine, and three years’ supervised
release.
II.
Calculation of loss as to count 1
The district court concluded the veterans received nothing for the money paid to
Abbey and Schaefer-Sachs for the billed counseling services. Accordingly, under
U.S.S.G. § 2F1.1(b)(1), the court concluded the loss associated with count 1 was the
entire $79,227.46 paid by the veterans for the billed counseling services. Abbey contends
he actually performed services for the veterans in exchange for the money and that the
value for those services must be subtracted from the total payments. He further contends
the court erred in requiring him to prove he actually performed work for the money rather
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than requiring the government to prove the opposite.
We review a district court’s interpretation of the guidelines de novo and the court’s
factual findings for clear error, giving due deference to its application of the guidelines to
the facts. United States v. Janusz, 135 F.3d 1319, 1324 (10th Cir. 1998). With respect to
a district court’s determination of a U.S.S.G. § 2F1.1 loss in particular, we apply a clear
error standard. United States v. Yarnell, 129 F.3d 1127, 1136 (10th Cir. 1997).
“Loss, under § 2F1.1(b)(1), ‘is the value of the money, property, or services
unlawfully taken.’” Janusz, 135 F.3d at 1324 (quoting U.S.S.G. § 2F1.1, comment n.7).
We interpret “loss” to “mean the ‘net value, not the gross value, of what was taken.’”
United States v. Pappert, 112 F.3d 1073, 1079 (10th Cir. 1997) (quoting United States v.
Gennuso, 967 F.2d 1460, 1462 (10th Cir. 1992)). Accordingly, in cases where a victim of
fraud has received something of value from the defendant, the net value is determined by
subtracting the value received by the victim from the gross value of what was
fraudulently taken. However, we have not required a sentencing court to factor in
“money subsequently returned to victims.” Id. Because amounts of loss over $2,000
increase a defendant’s base offense level for crimes involving fraud and deceit, the
government bears the burden of proof on the loss amount. Yarnell, 129 F.3d at 1136.
To meet its burden of proof on the amount of loss issue, the government presented
evidence indicating the veterans paid a total of $79,227.46 to Schaefer-Sachs and Abbey
pursuant to the fraudulent billing scheme they created and executed. The government
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also incorporated the evidence presented at trial, which included testimony from several
veterans suggesting they received little or no counseling from either Abbey or Schaefer-
Sachs. Based upon this evidence, as well as the fraudulent nature of the billing scheme
itself, the government argued the veterans received nothing of value for their money.
Abbey attempted to rebut this evidence by presenting exhibits and testimony indicating he
performed $80,245.12 worth of services under Schaefer-Sachs’ name and performed
2483.5 hours of work for the veterans for which he was not compensated.
In finding the amount of loss associated with count 1 was $79,227.46, the district
court rejected entirely the evidence presented by Abbey, concluding it was “palpably
false” and “unreliable in every respect.” The court challenged Abbey’s methodology for
reconstructing the number of hours of work he performed for the veterans, noted there
were inconsistencies between Abbey’s trial testimony and sentencing testimony, noted
there were numerous inconsistencies in documentation Abbey submitted at sentencing,
and emphasized Abbey knew how to properly bill for services, including any counseling
services he may have performed. Ultimately, the court found “[n]either Abbey,
Schaefer[-Sachs], nor anyone else really gave the veterans anything of value for this
money.” Record I at 56.
Based upon our review of the record, we conclude the district court’s findings on
this issue are not clearly erroneous. The amount of money paid by each veteran pursuant
to the fraudulent billing scheme is essentially uncontroverted. Thus, the only factual issue
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for purposes of determining the net value of the loss is whether the veterans received
anything of value in return for their money. Critical to this issue was Abbey’s credibility.
In light of the nature of the scheme itself, and in light of Abbey’s implausible explanation
for engaging in the scheme (i.e., to keep track of how many hours of supervision he
received from Schaefer-Sachs so he could become a licensed counselor), we believe it
was entirely appropriate for the district court to reject outright Abbey’s testimony and
evidence on this point and conclude the veterans received nothing of value for their
money.
We also find no merit to Abbey’s complaint that the district court shifted the
burden of proof to him on the amount of loss. During the sentencing hearing, the court
clearly indicated the government bore the burden of proof on the amount of loss with
respect to count 1. Record XI at 3039-40 (“the law is pretty clear that net loss is the
Government’s burden”).
Obstruction of justice enhancement
In calculating Abbey’s sentence, the district court enhanced his offense level by
two levels pursuant to U.S.S.G. § 3C1.1 for obstruction of justice. In imposing this
enhancement, the court found Abbey willfully prepared and filed materially false
information with the court concerning the amounts of loss associated with the conspiracy
and the tax-related counts in an attempt to reduce his overall sentence. With respect to
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the exhibit Abbey prepared and filed concerning the amount of loss related to count 1, the
court found “repeated patterns of falsity throughout the exhibit,” including
(a) repeated billing for time spent on veterans’ affairs, when the time could
not possibly have been spent--because Mr. Abbey was touring Vietnam; (2)
repeated billing of hours for time spent on veterans’ affairs, when the time
could not have been spent--because Mr. Abbey was at a series of out-of-
state conferences in this country; and (3) billing for time spent [on] the
affairs of multiple veterans on the same day, resulting in implausible
twenty-hour days or impossible days in excess of twenty-four hours.
Record I at 54. On appeal, Abbey contends the court erred in imposing this obstruction of
justice enhancement. According to Abbey, any errors in the sentencing exhibits he
prepared were simply mistakes and were not the result of any intent to willfully disobey
or disregard the law.
In reviewing a district court’s decision to impose an obstruction of justice
enhancement pursuant to § 3C1.1, we review the underlying factual findings for clear
error and the legal conclusions de novo. United States v. Shumway, 112 F.3d 1413, 1424
(10th Cir. 1997). Section 3C1.1 provides for a two-level upward adjustment “[i]f the
defendant willfully obstructed or impeded, or attempted to obstruct or impede, the
administration of justice during the investigation, prosecution, or sentencing of the instant
offense.” Obstruction of justice includes “producing . . . a false . . . document or record
during an official investigation or judicial proceeding.” U.S.S.G. § 3C1.1, comment n.
3(c).
After reviewing the record on appeal, we conclude the district court’s factual
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findings on this issue are not clearly erroneous.1 Although it is conceivable a large
exhibit summarizing detailed time expenditures may contain innocent mistakes, the
inconsistencies in the exhibits produced by Abbey and submitted to the district court were
so glaring it was entirely reasonable for the court to conclude they were “palpably false”
and “unreliable,” and were the product of a willful attempt to “mislead[] the court into
minimizing defendant’s sentence.” Record I at 54, 69.
Excusing prospective juror
Abbey contends the district court abused its discretion and violated the Jury
Selection and Service Act of 1968, 28 U.S.C. §§ 1861-77, by granting the government’s
challenge for cause and excusing Thanh Kay Vu from the jury panel. According to
1
Abbey makes a passing reference in his opening brief to the appropriate standard
of proof on this issue. In particular, he points to language in Application Note 1 to the
applicable version of § 3C1.1 which states: “In applying this provision in respect to
alleged false testimony or statements by the defendant, such testimony or statements
should be evaluated in a light most favorable to the defendant.” Based on this language,
he contends the proper standard of proof is “clear and convincing” rather than
“preponderance of the evidence.” Although a few circuits have apparently agreed a
“clear and convincing” standard applies when a sentencing court is relying on a
defendant’s perjury as a basis for the obstruction of justice enhancement, see, e.g., United
States v. Walsh, 119 F.3d 115, 121 (2d Cir. 1997); United States v. Gaviria, 116 F.3d
1498, 1518 (D.C. Cir. 1997), cert. denied, 118 S.Ct. 865 (1998), this circuit has not
decided the issue. In all other contexts, we have held the appropriate standard of proof
for obstruction of justice enhancement is a preponderance of the evidence. United States
v. Pelliere, 57 F.3d 936, 938 (10th Cir. 1995). Ultimately, we find it unnecessary to
decide whether a “clear and convincing” standard of proof applies in cases involving a
defendant’s perjury because the enhancement in this case is not based on defendant’s
testimony, but rather on false documents he prepared and submitted to the court.
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defendant, “the scope of voir dire was inadequate to permit the court to make an informed
judgment as to whether Mr. Vu could sit as an impartial juror,” and the court “made no
attempt to elaborate on or to reiterate the jury instruction regarding reasonable doubt or
the presumption of innocence as was suggested by defense counsel.” Br. at 26, 28.
A trial court’s decision to strike a juror for cause is reviewed on appeal for abuse
of discretion. United States v. Contreras, 108 F.3d 1255, 1265 (10th Cir.), cert. denied,
118 S.Ct. 116 (1997). Any questions involving interpretation of the Jury Selection and
Service Act of 1968 are reviewed de novo. Id. “Under the Jury Selection and Service
Act of 1968, . . . any person is qualified to serve on grand and petit juries in the district
court unless, inter alia, that person ‘(2) is unable to read, write, and understand the
English language with a degree of proficiency sufficient to fill out satisfactorily the juror
qualification form; [or] (3) is unable to speak the English language.’” United States v.
Dempsey, 830 F.2d 1084, 1087 (10th Cir. 1987) (quoting 28 U.S.C. § 1865(b)(2) and
(3)). “[A] juror who fails to meet the statutory qualifications is subject to challenge ‘for
cause.’” 2 Charles Alan Wright, Federal Practice and Procedure § 383, at 361 (2d ed.
1982).
There is no indication Vu was unable to satisfactorily complete the juror
qualification form and it appears he met the statutory requirement set forth in
§ 1865(b)(2). Accordingly, the only conceivable basis for striking him for cause would
have been an inability “to speak the English language.” In Dempsey, we acknowledged
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the phrase “‘speak the English language’ is often used to mean ‘speak and understand
spoken English,’” but refused to adopt this construction of the phrase for purposes of
applying the Jury Selection and Service Act. 830 F.2d at 1087. Instead, we applied the
phrase literally to refer only to a person’s speaking ability. Under Dempsey’s
construction of § 1865(b)(3), it appears Vu satisfied the Act because he was able to speak
the English language when questioned by the court.
Assuming, arguendo, the district court abused its discretion in striking Vu from the
panel for cause, Abbey is entitled to a new trial only if he can demonstrate actual
prejudice resulting from the error. See United States v. Mills, 987 F.2d 1311, 1314 (8th
Cir. 1993); United States v. Griley, 814 F.2d 967, 974 (4th Cir. 1987) (improper striking
of prospective juror for cause subject to harmless error analysis). Notably, Abbey has not
even attempted to argue actual prejudice and, after carefully reviewing the entire trial
transcript, we are not convinced any prejudice resulted from Vu’s removal.
Although Abbey attempts to argue the district court’s dismissal of Vu resulted in
violations of the equal protection component of the Fifth Amendment and the fair cross-
section requirement of the Sixth Amendment, we are not convinced such challenges are
applicable where, as here, a potential juror is stricken for cause. See United States v.
Elliott, 89 F.3d 1360, 1364-65 (8th Cir. 1996) (concluding “Batson applies only to
peremptory strikes”), cert. denied, 117 S.Ct. 963 (1997); United States v. Blackman, 66
F.3d 1572, 1575 n.3 (11th Cir. 1995) (same); United States v. Bergodere, 40 F.3d 512,
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515-16 (1st Cir. 1994) (“defendant must show that the challenge was peremptory rather
than for cause” to invoke Batson). As the Eighth Circuit noted in Elliott, the
extrapolation of the Batson2 framework to for-cause strikes “fails to recognize that
peremptory strikes, for which no reasons need be given (absent a Batson challenge), are
different from challenges for cause, which by definition require a showing of cause.” 89
F.3d at 1365. Even assuming, for purposes of argument, that Abbey’s Fifth and Sixth
Amendment challenges are proper, we are not convinced a trial court’s abuse of
discretion in striking a potential juror for cause, in and of itself, is sufficient to establish a
prima facie violation of either the Fifth or the Sixth Amendment. See generally United
States v. Gault, ___ F.3d ___, 1998 WL 177982 at *2 (10th Cir. 1998) (outlining
requirements to establish prima facie violation of the Sixth Amendment); Contreras, 108
F.3d at 1268 (outlining requirements to establish prima facie violation of Fifth
Amendment equal protection clause). Any error on the part of the district court in
dismissing Vu for cause is harmless and does not entitle Abbey to a new trial.
Trial judge’s conduct
Abbey alleges that, during trial, the trial judge was openly hostile toward him, his
defense counsel, and several defense witnesses, inappropriately curtailed testimony from
Abbey and one of his defense witnesses (Dr. Carl Sternberg), and asked argumentative
2
Batson v. Kentucky, 476 U.S. 79 (1986).
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questions of witnesses and made unnecessary comments during testimony that conveyed
his own impressions to the jury. Taken together, Abbey contends, these actions deprived
him of his right to a fair trial.
“A charge of misconduct by a trial judge ‘should not be lightly made and once
made, should not be casually treated by a reviewing court.’” United States v. Welch, 745
F.2d 614, 620 (10th Cir. 1984) (quoting United States v. Cardall, 550 F.2d 604, 606 (10th
Cir. 1976)). Charges of partiality or misconduct on the part of the trial judge “should be
judged not on an isolated comment or two, but on the record as a whole.” United States
v. Polito, 856 F.2d 414, 418 (1st Cir. 1988). A trial judge is “‘the governor of [a] trial for
the purpose of assuring its proper conduct.’” Id. (quoting Quercia v. United States, 289
U.S. 466, 469 (1933)). It is “beyond dispute” that a trial judge has authority to question
witnesses. United States v. Albers, 93 F.3d 1469, 1485 (10th Cir. 1996). In particular,
such questioning is appropriate when necessary to clarify testimony for the court and jury,
or to correct misstatements by witnesses. See id. at 1486. “[H]owever, . . . in exercising
this power a judge must take care not to create the appearance that he or she is less than
totally impartial.” Id. at 1485. In addition to questioning witnesses, a trial court also has
“broad discretion ‘to comment reasonably upon the evidence.’” United States v. Pearson,
798 F.2d 385, 387 (10th Cir. 1986) (quoting United States v. Baker, 638 F.2d 198, 203
(10th Cir. 1980)). Again, however, the trial court must “‘be[] careful not to become an
advocate for any of the parties.’” Id.-14-
Before directly addressing Abbey’s arguments, we note he did not raise
contemporaneous objections to some of the misconduct now alleged on appeal. Although
he did move for a mistrial at one point in the proceedings, the trial judge’s alleged
improper questioning of witness Kent Olsen occurred the day after the motion for
mistrial. Similarly, the alleged improper comments made during Abbey’s own testimony
occurred two days after the motion for mistrial had been denied. Because Abbey never
renewed his motion for mistrial, any alleged misconduct that occurred after the denial of
his motion for mistrial is subject to review only for plain error. See Fed. R. Crim. P.
52(b).
Having reviewed the entire trial transcript, we conclude the trial judge’s actions
did not deprive Abbey of the right to a fair trial. It is without question the trial judge
required counsel to ask proper questions and required witnesses to respond only to
questions asked by counsel. In addition, the judge sometimes questioned witnesses from
both sides and occasionally commented on evidence or exhibits. However, based on the
entire record, it is clear he did not favor the prosecution. Moreover, the record
demonstrates the judge was generally cordial to witnesses from both sides, and attempted
to prevent any disputes that might harm Abbey in front of the jury. See, e.g., Record VIII
at 2086 (out of presence of jury, trial judge instructed defense counsel to have Abbey
watch his demeanor and responses during cross-examination so the judge would not have
to interject and to “avoid hopefully confrontations in front of the jury”).
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Sufficiency of evidence
Abbey contends the evidence presented at trial was insufficient to support his
convictions on counts 2, 6, and 7. We review de novo the question of whether the
evidence at trial was sufficient. United States v. Ivy, 83 F.3d 1266, 1284 (10th Cir.
1996). Viewing the evidence and the reasonable inferences therefrom in the light most
favorable to the government, we ask whether a reasonable jury could find the defendant
guilty beyond a reasonable doubt. We will reverse only if we conclude no reasonable jury
could have reached the disputed verdict. Id.Count 2--embezzlement of VA benefit funds. Count 2 of the indictment charged
Abbey with violating 38 U.S.C. § 6101 and 18 U.S.C. § 2 by embezzling and
misappropriating funds held by him in a fiduciary capacity for veteran Grant Totten.
More specifically, the count charged Abbey with depositing into his own account a U.S.
Treasury check that was a refund to Totten of money kept in a patient fund account at a
VA medical center. On appeal, Abbey argues the evidence was insufficient to support his
conviction on this count because it was uncontroverted he was never appointed as
fiduciary for Totten’s estate.
At the time the embezzlement/misappropriation occurred, the controlling statute,
38 U.S.C. § 6101(a), provided:
Whoever, being a guardian, curator, conservator, committee, or person
legally vested with the responsibility or care of a claimant or a claimant’s
estate, or any other person having charge and custody in a fiduciary capacity
of money heretofore or hereafter paid under any of the laws administered by
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the Department for the benefit of any minor, incompetent, or other
beneficiary, shall lend, borrow, pledge, hypothecate, use, or exchange for
other funds or property, except as authorized by law, or embezzle or in any
manner misappropriate any such money or property derived therefrom in
whole or in part and coming into such fiduciary’s control in any manner
whatever in the execution of such fiduciary’s trust, or under color of such
fiduciary’s office or service as such fiduciary, shall be fined in accordance
with title 18 or imprisoned not more than five years, or both.
To prove a violation of § 6101(a), the language of the statute itself suggests the
government must demonstrate, in part, that the defendant was either “legally vested with
the responsibility or care of a claimant or a claimant’s estate,” or was in “charge and
custody in a fiduciary capacity of money . . . paid under any of the laws administered by
the [VA] for the benefit of any minor, incompetent, or other beneficiary.” Although the
statute does not define the term “fiduciary capacity,” Black’s Law Dictionary indicates a
person acts in a “fiduciary capacity” when
the business which he transacts, or the money or property which he handles,
is not his own or for his own benefit, but for the benefit of another person,
as to whom he stands in a relation implying and necessitating great
confidence and trust on the one part and a high degree of good faith on the
other part.
Black’s Law Dictionary 625 (6th ed. 1990). Recently, the Second Circuit approved this
very definition of “fiduciary capacity” in concluding a defendant was properly convicted
of violating § 6101, even though he had never personally signed a fiduciary agreement
with the VA. United States v. Zyskind, 118 F.3d 113, 117 (2d Cir. 1997) (defendant,
administrator of home for handicapped adults, was placed in relationship of fiduciary
with respect to funds paid by VA to home for care of veteran, even though defendant did
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not personally sign fiduciary agreement with VA).
Here, the evidence clearly indicates Abbey was acting in a “fiduciary capacity”
toward Totten and his estate when he cashed the government check. Although Abbey had
never been officially appointed as fiduciary for Totten, his friend Keeran was the
appointed fiduciary for Totten, and, under the arrangement devised by Abbey and VA
attorney Lancelot, Abbey acted as Totten’s de facto fiduciary. Accordingly, we conclude
the evidence presented at trial was sufficient to support Abbey’s conviction on Count 2.
Counts 6 and 7--false statements regarding Fred Ball’s estate. Counts 6 and 7 of
the indictment each charged Abbey with violating 18 U.S.C. § 1001 by making false
statements to the VA regarding the estate of veteran Fred Ball. Count 6 alleged that on or
about January 28, 1991, Abbey completed and submitted to the VA a form entitled
“Statement in Support of Claim,” that fraudulently indicated a truck had been purchased
for Fred Ball and his estate was below $20,000.3 Count 7 alleged that on or about May
10, 1991, Abbey submitted to the VA an interim accounting on behalf of Ball that falsely
indicated a Ford Explorer costing $24,915.16 had been purchased for Ball. On appeal,
Abbey contends his convictions on these two counts must be reversed because the
government did not produce sufficient evidence that any of the statements in the two
3
At that time, there was in effect the “$25,000 rule,” which compelled the VA to
cease paying benefits to any veteran whose estate exceeded $25,000. According to the
evidence presented at trial, it was apparently common for VA fiduciaries to spend down
their veterans’ accounts to avoid application of the rule.
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documents were “material.” With respect to Count 6, Abbey argues there was nothing in
the January 28, 1991, document submitted to the VA that was “material” because “it had
no bearing on whether the VA would or would not continue benefits payments [for Ball]
until March 31, 1991.” Br. at 43. Similarly, as to Count 7, Abbey contends there was
nothing in the May 10, 1991, accounting submitted to the VA that was “material”
because, even though a Ford Explorer had not been purchased for Ball, a Ford Ranger
truck had been purchased for him. According to Abbey, either vehicle purchase was
sufficient to drop Ball’s estate below $25,000 and prevent the VA from stopping benefit
payments to Ball. Thus, Abbey argues, the statement regarding the purchase of the
Explorer did not cause the VA to do something it would not have otherwise done had it
known the true facts.
Abbey himself acknowledges that, in the context of 18 U.S.C. § 1001, we have
consistently held a “‘false statement is material if it has a natural tendency to influence, or
is capable of influencing, the decision of the tribunal in making a determination required
to be made.’” United States v. Meuli, 8 F.3d 1481, 1485 (10th Cir. 1993) (quoting United
States v. Brittain, 931 F.2d 1413, 1415 (10th Cir. 1991)). Actual reliance on the false
statement is unnecessary; all that need be shown is it “has the capacity to influence the
decision.” United States v. Haddock, 956 F.2d 1534, 1550 (10th Cir. 1992) (construing
similar materiality provision in 18 U.S.C. § 1014).
With respect to count 6, it is apparent the statement had the capability of
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influencing the VA. More specifically, because the statement falsely indicated a vehicle
had been purchased for Ball and the total value of his estate was less than $25,000, the
statement had the capability of influencing the VA to not implement the $25,000 rule and
cease benefit payments to Ball. Moreover, evidence presented at trial indicated the VA in
fact acted upon the false statement and sent a follow-up letter to Abbey on February 12,
1991, indicating it would not cease benefit payments to Ball in light of the information
submitted (i.e., the false statement). Thus, the false statement at issue in count 6 was
clearly “material” for purposes of § 1001.
Similarly, the false statement at issue in count 7, i.e., that a Ford Explorer had been
purchased for Ball, had the capability of influencing, and in fact did influence, the VA.
Joann Roybal, an estate analyst for the VA, testified at trial that the VA regularly audited
accountings submitted by fiduciaries to ensure the benefits of incompetent veterans were
administered properly. In light of this testimony, we believe it is reasonable to conclude
the false statement at issue in count 7 prevented the VA from properly auditing the
accounting submitted by Abbey and from ensuring that Ball’s VA benefits were
administered properly. In particular, the VA was falsely persuaded to believe Ball was
the owner of a $25,000 vehicle when, in fact, he was the owner of a $15,000 vehicle, and
the value of his estate (excluding the vehicle) was $10,000 less than it actually was.
Accordingly, we conclude the statement at issue in count 7 was “material.”
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Amendment of count 1 by expanded language in instruction
Abbey contends the district court impermissibly amended count 1 of the indictment
(i.e., the conspiracy count) when it instructed the jury it could convict him of conspiracy
if it found he conspired with any person, whether named in the indictment or not. As
noted by Abbey, count 1 of the indictment listed only Abbey and Schaefer-Sachs as
conspirators, and made no mention of any other unnamed conspirators.
As Abbey acknowledges in his opening brief, this issue is subject to review for
plain error since no objection was made to the jury instructions at trial. Fed. R. Civ. P.
52(b); see United States v. Galbraith, 20 F.3d 1054, 1057 (10th Cir. 1994). Plain error
affects the defendant’s right to a fair and impartial trial, and it must have been both
obvious and substantial. Id.“[T]he Fifth Amendment forbids amendment of an indictment by the court,
whether actual or constructive.” United States v. Wacker, 72 F.3d 1453, 1474 (10th Cir.
1995). A variance between the indictment and the jury instructions “becomes a
constructive amendment if the evidence presented at trial and the instructions raise the
possibility that a defendant may have been convicted on a charge other than that alleged
in the Indictment.” United States v. Davis, 55 F.3d 517, 520-21 (10th Cir. 1995); see also
United States v. Williamson, 53 F.3d 1500, 1513 (10th Cir. 1995) (a constructive
amendment is a type of variance because it modifies an essential element of the offense
charged).
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Here, a review of the trial transcript demonstrates there was no constructive
amendment of the indictment. Although the district court’s jury instructions mentioned
the possibility of conspirators not listed in the indictment, there was simply no evidence
of any such conspirators’ involvement in the acts alleged in count 1. In instructing the
jury on count 1, the district court stated:
The government must prove that the defendant, Dennis R. Abbey, and at
least one other person knowingly and deliberately arrived at some type of
agreement or understanding that they, and perhaps others, would violate
some laws by some means of some common plan or course of action as
alleged particularly in Count 1 of the indictment.
Record IX at 2548. The court further instructed that the acts and statements of Schaefer-
Sachs could be considered by the jury in determining whether the government had proven
count 1. Count 1 of the indictment included the following language:
3. It was part of the conspiracy that defendants, DENNIS R.
ABBEY and MARGARET J. SCHAEFER, made and caused to be made
and filed yearly accountings that listed MARGARET J. SCHAEFER as
receiving money for providing counseling services to the veterans when, in
fact, she did not provide the counseling services as listed in the accountings
and did not receive the money as payment as listed in the accountings.
4. In furtherance of this conspiracy and to effect the objects of the
conspiracy, one or more of the defendants committed and caused to be
committed one or more of the following overt acts, among others:
(a.) DENNIS R. ABBEY submitted and caused to be submitted
accountings for sixteen of the eighteen qualified veterans . . ., which stated
that MARGARET J. SCHAEFER provided counseling services in the
aggregate amount of approximately $83,980.00, when, in fact, she did not
provide the counseling services as described.
(b.) MARGARET J. SCHAEFER allowed DENNIS R. ABBEY to
use her name on the accountings so that it appeared to the VA that the
money was paid to her for providing counseling services that, in fact, she
had not performed.
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(c.) MARGARET J. SCHAEFER provided DENNIS R. ABBEY
with deposit slips and checks that were signed by her but otherwise in blank
for her account # 2836459 at FirstBank of South Longmont, N.A. in
Longmont, Colorado, the accounts of which were insured by the Federal
Deposit Insurance Corporation. This financial institution became a branch
of FirstBank of North Longmont, N.A. on December 10, 1991.
(d.) Using the deposit slips provided by MARGARET J.
SCHAEFER, DENNIS R. ABBEY deposited checks drawn on the accounts
of these 16 veterans in the approximate amount of $76,827.46 into
MARGARET J. SCHAEFFER’s account.
(e.) DENNIS R. ABBEY withdrew approximately $62,660.00 from
this account by completing and negotiating the checks which MARGARET
J. SCHAEFER provided him.
(f.) MARGARET J. SCHAEFER received and retained in this
account for her use approximately $14,167.46.
Record I at 6-7. The only evidence presented to the jury which would pertain to the acts
described in the instructions on count 1 which incorporated the common plan or course of
action set forth in count 1 of the indictment involved only one co-conspirator and that was
Schaefer-Sachs. Thus, there was no possibility Abbey was convicted on a charge other
than that alleged in count 1 of the indictment.
III.
The judgment of the district court is AFFIRMED.
Entered for the Court
Mary Beck Briscoe
Circuit Judge
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