United States v. Freeman E. Jockisch , 159 F. App'x 145 ( 2005 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 04-14723 FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
December 16, 2005
D. C. Docket No. 03-00246-CR-CB THOMAS K. KAHN
CLERK
UNITED STATES OF AMERICA
Plaintiff-Appellee,
versus
FREEMAN E. JOCKISCH,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Alabama
_________________________
(December 16, 2005)
Before ANDERSON, BLACK and CARNES, Circuit Judges.
PER CURIAM:
The Defendant was convicted in federal district court of various mail fraud
charges and appeals his conviction, arguing, among other things, insufficiency of
the evidence and improper jury instructions. We conclude that the Defendant’s
claims are insufficient to warrant reversal and affirm his conviction on all counts.
I. FACTUAL AND PROCEDURAL BACKGROUND
During the early 1990s, Freeman Jockisch owned Jockisch Automatic
Sprinkler, a company licensed to install fire sprinklers in commercial buildings in
Alabama. In 1995, Jockisch stopped running the company and began working with
Reed Fire Protection, a company that installed fire sprinklers in public and private
buildings under renovation or construction in the Mobile, Alabama, area but that, at
the time, did not itself possess a permit to install sprinklers. In return for the use of
his sprinkler permit, as well as engineering work, Jockisch was paid a portion of
the profits of Reed Fire Protection.
In 1992, Jockisch was elected County Commissioner of District Two in
Mobile. The Commission provides for the safety and welfare of the citizens by
administering a budget and delivering public services to the community. As part of
his job as Commissioner, Jockisch was required to complete state-mandated ethics
forms detailing his personal finances, including any economic interests he had with
businesses.
Between 1997 and 2002, Reed Fire Protection began bidding and working on
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public projects in Mobile County, including the construction of a new county office
building (the Michael Square project) and the construction and renovation of public
school buildings. In his capacity as Commissioner, Jockisch voted on the budgets
and hiring of general contractors for the Michael Square project, and voted on
funding allocations for the Mobile County School Board construction projects at
nine different locations. Reed Fire Protection was hired as a subcontractor for
those projects, and as a result of Reed’s involvement in the construction and
Jockisch’s relationship with Reed, Jockisch received significant financial benefits
related to the construction contracts. Jockisch did this, the Government alleged,
while failing to fully and honestly disclose his relationship to Reed Fire Protection
in the ethics and economic interest forms he was required to complete.
Jockisch was indicted by a grand jury in November 2003, which was
followed by a superseding indictment in February 2004. The superseding
indictment alleged Jockisch’s financial gains from Reed Fire Protection’s contracts
and Jockisch’s failure to disclose his involvement with the company constituted a
scheme to defraud the citizens of Mobile County of the right to his honest services
as a Commissioner in violation of 18 U.S.C. §§ 1341 and 1346. The indictment
charged four separate honest services mail fraud schemes: (1) counts One through
Five (the Michael Square project) (2) counts Six through Sixteen (the school
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projects) (3) counts Seventeen through Twenty (filing falsified ethics forms), and
(4) counts Twenty-One through Twenty-Four (converting campaign funds to
personal use). The first three schemes alleged that Jockisch used the United States
Postal Service to receive checks from Reed Fire Protection for payments for work
the company performed on projects Jockisch had voted on, as well as to mail ethics
and economic interest forms he had filled out with the intent to mislead the public
and hide his relationship with Reed.
The fourth scheme alleged that Jockisch had converted funds held in his
campaign account for personal use. The Government claimed this constituted mail
fraud because to hide his conversion of campaign funds, Jockisch had
misrepresented the amount of campaign-related contributions he received when he
filled out state-mandated summaries of contributions and expenditures which were
sent through the mail.
Finally, the Government charged in counts Twenty-Five through Twenty-
Eight that for tax years 1998-2001, Jockish had willfully under-reported his total
income when filing his income tax returns in violation of 26 U.S.C. § 7206. The
Government claimed that Jockisch had done so despite the fact that he knew and
believed his actual income was substantially in excess of what he reported on the
returns.
4
At the close of the Government’s case, the defendant moved for judgment of
acquittal on all counts. The district court denied the motions as to counts One
through Twenty and Twenty-Five through Twenty-Eight, but reserved ruling on the
campaign finance mail fraud scheme (counts Twenty-One through Twenty-Four).
Following the presentation of all evidence, the defendant renewed his motion for
judgment of acquittal on all counts. This time, the district court granted the motion
with regard to the campaign finance counts but denied the motion as to all other
counts.
Shortly before closing arguments, the district court announced that it was
reconsidering its ruling with regard to the motion for judgment of acquittal for
counts Six through Sixteen (the school projects). The case was given to the jury,
which returned a verdict of not guilty on counts One through Five, but guilty as to
all the remaining counts.
The district court, concerned about the sufficiency of evidence supporting
counts Six through Sixteen, asked the parties to brief the following issues: (1)
whether there was sufficient evidence presented from which the jury could have
determined that the defendant took discretionary action in his official capacity that
benefitted his undisclosed personal interest and (2) whether the defendant could
still be convicted on those counts if there was no evidence that he took
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discretionary action in his official capacity that benefitted his undisclosed personal
interest.
The district court’s concern arose because the defense had presented
evidence at trial that the Alabama legislature had ordered the City of Mobile and
the County to give the School Board funds in order to alleviate its financial burden.
The defendant claimed that his votes on the Commission were therefore
“mandatory,” not discretionary, and that in the alternative, the funds allocated by
the Commission were used for operational expenses, not construction projects.
The district court answered its first question in the affirmative, finding the
jury could have determined that “[a] reasonable construction of the evidence is that
by helping to keep the school system operating, the County helped to keep the
School Board’s construction projects afloat. Since the defendant’s company was a
subcontractor on a number of those projects, the defendant also benefitted.” Order
of July 19, 2004 at 8. The court dismissed the second issue as moot. The result was
to affirm the jury’s verdict to convict on counts Six through Sixteen.
Jockisch’s appeals raises five issues for this court:
(1) whether the district court’s failure to instruct the jury on the “materiality”
element of mail fraud is plain error;
(2) whether the evidence of the defendant’s discretionary action as Commissioner
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benefitting his personal financial interests is sufficient to sustain a conviction on
counts Six through Sixteen;
(3) whether the evidence of mailing of the checks related to School Board contracts
is sufficient to sustain a conviction on counts Seven through Sixteen;
(4) whether counts Six, Seven, and Eight are time-barred by the five-year statute of
limitations;
(5) and whether the sentences for the tax count convictions should be reconsidered
if the mail fraud counts are overturned.
II. STANDARDS OF REVIEW
Challenges to statements or omissions in a jury instruction which were not
made before the trial court are reviewed for plain error. Johnson v. United States,
520 U.S. 461, 466-68, 117 S.Ct. 1544, 1548-49 (1997); United States v. Meester,
762 F.2d 867, 879-80 (11th Cir. 1985).1 An appeal attacking the sufficiency of
evidence is a question of law to be reviewed de novo. The test is whether–with all
reasonable inferences and credibility choices made in the government’s favor–a
reasonable trier of fact could conclude that the evidence establishes guilt beyond a
1
Under plain error review, the defendant has the burden of demonstrating (1) error from
the lower court’s action (2) that was plain, clear, and obvious (3) that affected his substantial
rights. If these three prongs are satisfied, the defendant must then show that the error (4) affected
the fairness, integrity, or public reputation of the judicial proceedings.
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reasonable doubt. United States v. Miles, 290 F.3d 1341, 1355 (11th Cir. 2002).
An appeal relying on the statute of limitations is a challenge alleging defects in the
indictment. Because this challenge is being raised for the first time in this appeal,
it is waived. United States v. Ramirez, 324 F.3d 1225, 1227-28 (11th Cir. 2003)
(holding that a statute of limitations defense raised for the first time during trial
was waived, construing a previous version of Federal Rule of Criminal Procedure
12, that was not substantively different from the current version).2
III. DISCUSSION
A. The absence of an instruction on “materiality” before the jury.
The Government charged Jockisch under 18 U.S.C. §§ 1341 and 1346 with a
“scheme or artifice to defraud” the citizens of Mobile County of their right to his
“honest services.” The Supreme Court has held that “materiality of falsehood is an
element of the federal mail fraud, wire fraud, and bank fraud statutes.” Neder v.
United States, 527 U.S. 1, 25, 119 S.Ct. 1827, 1841 (1999). Materiality is therefore
clearly an element that must be proven to the jury in order to obtain a conviction on
these charges. On appeal, Jockisch claims that the judge’s failure to specifically
2
Therefore we decline to address defendant’s fourth ground for appeal–the statute of
limitations challenge.
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instruct the jury on the element of “materiality” constituted plain error.3
To address the defendant’s claim, we look first to the precise instructions
given at trial. The jury in Jockisch’s case was told that the Government was
required to prove beyond a reasonable doubt that:
[The] Defendant knowingly devised a scheme to fraudulently deprive the
public of the intangible right of honest services as charged. That the
Defendant did so willfully and with an intent to defraud and that the
Defendant used the United States Postal Service by mailing or causing to be
mailed some matter or thing for the purpose of executing the scheme to
defraud.
Trial Transcript at 1090.
The judge’s instructions to the jurors did not specifically define the concept
of “materiality of falsehood.” The instructions were, however, virtually a verbatim
recitation of the 11th Circuit’s 2003 Offense Pattern Jury Instruction Number 50.2.
Moreover, the district judge defined the terms in the above instruction in greater
detail for the jury. He described a “scheme” as “any plan or course of action
intended to deceive or cheat someone,” and said that “to act with intent to defraud
means to act knowingly and with the specific intent to deceive someone ordinarily
for the purpose of causing some financial loss to another or bringing about some
financial gain to one’s self.” Trial Transcript at 1090-91.
3
The parties agree that Jockisch did not preserve an objection to the instruction in the
district court.
9
In United States v. Fern, 155 F.3d 1318 (11th Cir. 1998), this court reviewed
a trial court’s failure to specifically instruct a jury on materiality in a case involving
a defendant’s conviction under 42 U.S.C. § 7143(c)(2)(A) for knowingly making
false material statements in documents filed in accordance with the Clean Air Act.
In Fern, we held, “The jury's finding that Fern acted ‘knowingly’ in this case is, in
our view, so closely related to the materiality issue that it is functionally equivalent
to a materiality finding. Accordingly, the district court's failure to properly
describe the elements of a false statement offense under section 7413(c)(2)(A), if
error, was harmless in this particular case.” Id. at 1329. The same rationale applies
in this case. For the jury to convict Jockisch of the charged offenses, it had to find
that he “knowingly devised a scheme to fraudulently deprive the public of the
intangible right of honest services.” This was sufficiently close to a finding of
materiality that any error in failing to instruct on materiality did not affect the
substantial rights of Jockisch, and therefore did not rise to the level of plain error.
Moreover, both parties made closing arguments to the jury that focused on
the issue of materiality. The Government emphasized that Jockisch’s failure to
disclose his relationship to Reed Fire Protection was a significant omission,
arguing that when he “signed this [financial disclosure form] under oath and he
swears and affirms, that means something, or it should. . . . We should expect just a
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little bit more from someone we’re paying out of our tax dollars.” Trial Transcript
at 1020. In its closing, the defense claimed that the relationship between Jockisch
and Reed Fire Protection was not hidden from the public and that the omission on
the disclosure form was meaningless: “Anybody that was interested in Reed at all
or anybody interested in Jockisch at all could have gone out there and seen them
doing the work that they did.” Trial Transcript at 1055.
Under plain error review, the defendant has the burden of proving not only
plain and obvious error, but error affecting his substantial rights that also affected
the fairness, integrity, or public reputation of the judicial proceedings. Johnson,
520 U.S. at 466-67, 117 S.Ct. at 1548-49; see also United States v. Olano, 507 U.S.
725, 736, 113 S.Ct. 1770, 1779 (1993) (holding that courts of appeal should only
correct a forfeited error at the trial level “in those circumstances in which a
miscarriage of justice would otherwise result”).
Defendant was unable to point to any manner in which he was substantially
adversely affected by the error. No one suggested that materiality was not relevant,
and the fact that the arguments of counsel focused on that very issue – i.e., the
significance of the failure to fully disclose conflict of interest information – makes
it unlikely that the absence of an instruction adversely affected Defendant’s rights,
especially in light of the closely related instruction. No matter how the Defendant
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frames the issue, no “miscarriage of justice” or damage to the “fairness, integrity,
or public reputation of judicial proceedings” would result by upholding Jockisch’s
conviction. The district court’s alleged failure to specifically instruct the jury on
the concept of materiality does not rise to the level of plain error. As a result, relief
must be denied.
B. The “No Discretionary Action” claim.
The Defendant’s second ground for appeal attacks the sufficiency of the
evidence presented at trial. Specifically, Jockisch argues that the evidence on
counts Six through Sixteen (the School Board construction charges) was not
sufficient to sustain the conviction because he did not misuse his office to further
his personal interests.4
An “honest services” fraud occurs when an official “secretly makes his
decision based on his own personal interests [thereby] defraud[ing] the public of
4
The defendant’s third ground of appeal argues that insufficient evidence was presented
linking the checks sent to Jockisch with the School Board projects from counts Seven through
Sixteen. Since the evidence demonstrated Jockisch worked on a number of projects for Reed
totally unrelated to the school construction projects, the defendant contends that there is
insufficient evidence linking the checks to the school construction work.
The evidence suggested that rather than paying him on a project-by-project basis, Reed
Fire Protection paid Jockisch a salary or lump sum every two or three months. The checks need
not have included a notation in the subject line detailing the purpose of the payments for the jury
to determine the money was tied to the school construction work. We conclude that the
evidence was sufficient for a jury to find that the money paid by Reed to Jockisch via the checks
was related to the school projects.
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his honest services.” United States v. Lopez-Lukis, 102 F.3d 1164, 1169 (11th Cir.
1997). The defendant claims the Alabama legislature’s appropriation
requirement–which ordered the Commission to give money to the Mobile County
School Board–demonstrates that there was no nexus between Jockisch’s role as
Commissioner and his receipt of payment for engineering work for Reed Fire
Protection’s subcontract on the school construction projects. Because the Alabama
legislature required the County to allocate the funds to the School Board, Jockisch
argues that he took no discretionary action based on his own personal interests, and
therefore the evidence was insufficient to convict him of mail fraud on the school
project charges.
Jockisch’s challenge comes to us as a challenge to the sufficiency of the
evidence. Thus we assume all reasonable inferences and questions of credibility in
favor of the government. The defendant’s only evidence supporting his claim that
he did not exercise discretionary action with regard to the state-mandated
appropriations was a witness, whose credibility was weighed by the jury. Evidence
of the “mandatory” nature of the payments to the School Board was presented by
the defense through Charles Wilcox, the former assistant superintendent for
business operations for the Mobile County School Board. He testified at trial
regarding the County Commission’s annual contributions to the Board and the
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Board’s use of those funds. Wilcox testified that the contributions began in 1991
or 1992 when the school system was deeply in debt and the school superintendent
was threatening to close the schools after a tax referendum failed at the polls. To
pull the School Board out of debt, the state legislature ordered the City of Mobile
and the County each to contribute $1.2 million annually to the school system for a
period of ten years.5
After careful consideration of Jockisch’s argument that he had no discretion
with respect to the $1.2 million annual allotments to the School Board and thus
could not have intended to serve his own personal interests by his votes, we reject
his argument for a number of reasons.6 According to Wilcox, the County was
“ordered by the State of Alabama to make the payments. If they had refused to
5
The defense also claimed that the funds allocated to the School Board from the County
were limited to being used for “operational expenses,” but the evidence does not support this
contention. Wilcox testified that the County’s contributions were placed in the School Board’s
general fund and that, while the general fund money was not used for construction projects, it
could have been used for such a purpose. He further testified that money from the general fund
was sometimes combined with capital fund money to repair and maintain the schools. Trial
Transcript at 788-89.
6
Jockisch also suggests that because the County Commission and the School Board are
entirely separate entities, and because the School Board used a competitive bidding process to
select contractors for its construction projects, Jockisch’s actions as a Commission member could
not have benefitted his personal interests. This argument is not persuasive because the jury could
have found that although Jockisch did not know which general contractor would be selected or
whether that contractor would employ Reed Fire Protection as a sub-contractor, Jockisch knew
the appropriations would enhance the Board’s financial position, increasing the likelihood it
would undertake construction projects and the likelihood his company would get work.
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vote, they’d have been in trouble with the State.” Trial Transcript at 808. But
Wilcox also testified that while the County Commissioners voted to make the
annual payments of $1.2 million, the City of Mobile, which was operating under
the same mandate from the state, successfully negotiated out of the 10-year
payment plan by paying the School Board $4 million up front. Trial Transcript at
788, 801. No evidence was presented by either party that suggested that the
County was not free to try to structure a similar deal in order to avoid annual
payments to the School Board. Because the County Commission, including
Jockisch, had discretion to attempt to negotiate lesser payments but did not
exercise that discretion, Jockisch’s argument that he lacked discretion is
undermined.
In addition, the evidence presented at trial revealed that Jockisch voted to
authorize a one-time $5 million payment from the County to the School Board in
August 2001. This $5 million vote was in addition to the $1.2 million annual
allotment and clearly was not “required” of the County Commissioners.
Also, the evidence offered by the Government in support of the Michael
Square charges (Counts One through Five) reflects on the defendant’s state of mind
with regard to the school construction projects. Larry Wettermark, the County
attorney, testified that he confronted Jockisch about the potential conflict of
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interest between Jockisch’s work for Reed Fire Protection and his work as a
Commissioner on the Michael Square project. According to Wettermark, Jockisch
immediately called Doug Reed, his partner at Reed Fire Protection, and told him to
withdraw as subcontractor. Wettermark testified to hearing this phone
conversation, and to confirming with Jockisch some time afterward that Reed was
no longer involved in the Michael Square construction.
A reasonable jury could conclude that Jockisch deceived Wettermark. Doug
Reed testified at trial that he and Jockisch continued the initial phone call after
Wettermark had left Jockisch’s office. During that call, Jockisch suggested that
rather than withdrawing as subcontractor, Reed Fire Protection should continue to
have its employees work on the project, but should request that the checks for
payment be issued to Precision Fire Protection, a company owned and operated by
Doug Reed’s brother. In Doug Reed’s words, “[H]e [the Defendant] suggested
doing it that way to where – I guess where he couldn’t get tied into it.” Trial
Transcript at 349. The jury was free to view this testimony as a reflection on
Jockisch’s credibility and, more directly, as evidence that Jockisch understood the
nature of his conflict as a County Commissioner and co-owner of Reed Fire
Protection, and intentionally sought to conceal its revelation.
A jury looking at the totality of the evidence could have concluded that, at
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least after 2000, any revelation of Jockisch’s conflict with respect to the school
projects–either by abstaining from the votes or otherwise disclosing the conflict to
his colleagues–would have jeopardized Jockisch’s financial interests in other Reed
Fire Protection subcontracts, such as the Michael Square project. Even prior to
that, and prior to 2001 when the clearly discretionary $5 million allocation was
voted for the schools, the evidence showed Jockisch had a personal interest in
concealing his conflict on the school projects. Revealing his relationship with
Reed during that time could have jeopardized Reed’s ability to bid on the school
projects or on other county-related projects, which would have adversely affected
Jockisch’s personal income. This evidence, plus the evidence that Jockisch failed
to exercise his discretion to attempt to negotiate lesser payments to the School
Board, is sufficient evidence to support the jury’s rejection of Jockisch’s “no
discretion” argument.
This court will reverse a conviction based on insufficient evidence only if
“no reasonable trier of fact could have found guilt beyond a reasonable doubt.”
United States v. Gunn, 369 F.3d 1229, 1234 (11th Cir. 2004), cert. denied,125 S.Ct.
324 (2004).
The evidence demonstrated that over a five-year period, Reed Fire Protection
made nearly half a million dollars on the school construction projects, and at no
time during that period did Jockisch properly disclose his business interest in Reed
17
or tell the County Commission or its members of his conflict of interest. Jockisch
could have divested himself of his interest in Reed, or could have properly
reflected his interest on the required ethics forms, or could have abstained on the
votes relating to projects in which Reed and Jockisch would benefit. But instead
each time he voted for the appropriations. The evidence that defendant made no
attempt to renegotiate state-mandated payments (as the City of Mobile had done),
his votes to authorize the annual $1.2 million allotments instead of abstaining, and
his clear exercise of discretion in voting the $5 million payment, as well as the
unrestricted nature of the funds given to the School Board, presented the jury with
sufficient evidence upon which to convict the defendant.
AFFIRMED.7
7
Because of our disposition of the other four issues, the fifth issue is dismissed as moot.
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