United States v. Sandra Ruballo ( 2020 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 19-12700
Non-Argument Calendar
________________________
D.C. Docket No. 1:18-cr-20393-MGC-1
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
SANDRA RUBALLO,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(October 29, 2020)
Before BRANCH, FAY, and EDMONDSON, Circuit Judges.
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PER CURIAM:
Sandra Ruballo appeals her 120-month below-guidelines 1 sentence imposed
after Ruballo pleaded guilty to conspiracy to commit wire fraud, 18 U.S.C. § 1349;
wire fraud, 18 U.S.C. § 1343; conspiracy to commit money laundering, 18 U.S.C.
§ 1956(h); and money laundering, 18 U.S.C. § 1956(a)(1)(B)(i). Ruballo also
appeals the district court’s restitution and forfeiture orders. Reversible error has
been shown; we affirm in part and vacate in part and remand for further
proceedings.
Briefly stated, Ruballo was charged with conspiring with others in a scheme
to defraud the government. Ruballo was the Executive Director of Highland Food
Resources, Inc. (“Highland”), an organization that contracted with Florida daycare
centers to process paperwork and claims for meal reimbursements under the Child
Care Food Program (“CCFP”). The CCFP -- a federal program funded by the
United States Department of Agriculture (“USDA”) and administered by the
Florida Department of Health (“Florida”) -- aims to provide nutritious meals to
underprivileged children in daycare centers.
1
The district court calculated Ruballo’s advisory guidelines range as 168 to 210 months’
imprisonment.
2
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As a “sponsoring organization” under the CCFP, Highland was responsible
for approving free and reduced meal applications, conducting site inspections, and
reviewing meal counts and enrollment rosters. Highland electronically submitted
monthly claims for reimbursement on behalf of its 53 associated daycare centers.
Florida issued reimbursement payments directly to Highland, which would then
distribute the payments (minus Highland’s administrative costs) to the daycare
centers. Through a bidding process, Highland also contracted with a caterer --
Montoya Holdings, Inc., owned by co-conspirator Carlos Montoya -- to deliver
meals to the daycare centers.
Highland and Montoya Holdings came under investigation following a
foodborne illness outbreak at several of Highland’s daycare centers, which resulted
in the hospitalization of 30 children. Investigators discovered that Ruballo and her
co-conspirators had been submitting inflated monthly CCFP reimbursement
claims. Also -- in exchange for kickbacks from Montoya -- Ruballo rigged the
catering bid process to ensure that Montoya Holdings received the contract.
Ruballo also concealed from Florida complaints about Montoya’s catering, and
Ruballo instructed her employees to falsify complaints about other caterers.
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Ruballo pleaded guilty without a plea agreement. Montoya pleaded not
guilty. Following a month-long trial, the jury found Montoya guilty of conspiracy
to commit wire fraud and federal program bribery, in violation of 18 U.S.C. § 666.
The district court then conducted a combined sentencing hearing for both
Ruballo and for Montoya. The district court sentenced Ruballo to a total of 120
months’ imprisonment. The district court also ordered Ruballo to pay restitution in
the amount of $13,231,277 and ordered the forfeiture of over $14 million. The
district court sentenced Montoya to 97 months’ imprisonment and ordered
Montoya to pay $12,962,399 in restitution and ordered the forfeiture of over $13
million.
I. Sentencing Hearing Evidence2
On appeal, Ruballo first contends that her total sentence was based on
2
In a footnote -- toward the end of the section of Ruballo’s appellate brief challenging chiefly
the district court’s consideration of evidence from Montoya’s criminal trial -- Ruballo asserts for
the first time that the district court’s forfeiture order (1) was contrary to the Supreme Court’s
decision in Honeycutt v. United States, 137 S. Ct. 1626 (2017), and (2) violated the Eighth
Amendment’s Excessive Fines Clause. We will not address these arguments on appeal. When --
as in this case -- a party fails to “devote a discrete, substantial portion” of his appellate brief to an
issue and, instead, “buries” the issue within other arguments, the issue is deemed abandoned.
See Sapuppo v. Allstate Floridian Ins. Co., 739 F.3d 678, 681-82 (11th Cir. 2014); United States
v. Jernigan, 341 F.3d 1273, 1283 n.8 (11th Cir. 2003).
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disputed facts that the government failed to prove by a preponderance of the
evidence. Briefly stated, Ruballo says the district court -- in enhancing Ruballo’s
sentence and in calculating the restitution and forfeiture amounts -- relied
improperly on testimony and exhibits introduced during Montoya’s criminal trial.
Ruballo also says the district court erred in considering an email sent from Florida
to the probation officer. No objection was made to the district court about the
purported improper taking into account of these things.
Because Ruballo raises these arguments for the first time on appeal, we
review her arguments only for plain error. See United States v. Vandergrift, 754
F.3d 1303, 1307 (11th Cir. 2014). Under the plain-error standard, we will correct
an error only if the defendant demonstrates that (1) an error occurred; (2) the error
was plain; (3) the error affected the defendant’s substantial rights; and (4) the error
“seriously affects the fairness, integrity, or public reputation of judicial
proceedings.” United States v. Turner, 474 F.3d 1265, 1276 (11th Cir. 2007). To
be plain, an error must be obvious and clear under current law. United States v.
Lange, 862 F.3d 1290, 1296 (11th Cir. 2017). Plain-error review involves
substantial deference to the district court’s acts. See United States v. Simmons,
961 F.2d 183, 185 (11th Cir. 1992). Needless to say, the standard of review is
important in deciding appeals.
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Montoya Trial Evidence:
Generally speaking, “evidence presented at the trial of another may not . . .
be used to fashion a defendant’s sentence,” unless the defendant is given an
“opportunity to rebut the evidence or generally to cast doubt upon its reliability.”
United States v. Castellanos, 904 F.2d 1490, 1496 (11th Cir. 1990). Thus, when
the government seeks to rely on evidence presented at a co-conspirator’s trial or
sentencing hearing, the government must make transcripts of the pertinent
proceedings available to the defendant and to the district court. United States v.
Washington, 714 F.3d 1358, 1362 (11th Cir. 2013).
The district court committed no plain error in considering the Montoya trial
evidence. In written objections and responses to the Pre-Sentence Investigation
Report (“PSI”), both Ruballo and the government cited to transcripts and to
exhibits from Montoya’s trial. Both parties again relied on trial evidence during
the sentencing hearing. The record thus demonstrates that Ruballo had access to at
least some of the pertinent trial transcripts and exhibits. Ruballo’s lawyer also said
expressly during the sentencing hearing that he had “read the testimony” in the trial
transcripts.
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In addition, the government’s response to Ruballo’s PSI objections put
Ruballo on notice of the trial evidence upon which the government intended to rely
at sentencing. Ruballo was also able to present arguments during the sentencing
hearing rebutting and casting doubt upon the trial evidence introduced by the
government. Under these circumstances, we see no obvious and clear error in the
district court’s consideration of the complained-of trial evidence in imposing
Ruballo’s sentence.
Restitution Email:
Ruballo also challenges the district court’s giving any consideration to an
email -- titled “United States v. Sandra Rubal[l]o, et al. 18-CR-20393
(Restitution)” -- sent by Florida’s Bureau Chief to the probation officer and to the
government in preparation for sentencing (“Restitution Email”). Ruballo says she
never received a copy of the email. Nor was a copy of the email admitted into
evidence during the sentencing hearing. No objection was made in district court;
so again we must see plain error for us to interfere with the district court.
After the sentencing hearing, the government filed a copy of the Restitution
Email with the district court but included none of the attachments referenced in the
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email. The text of the email said that Florida’s estimate of Ruballo’s restitution
amount was $13,231,277 based on “fraudulent meal reimbursement gross
overpayments and fraudulent administrative earnings for fake employees and
services.” The email indicated that “spreadsheets” used to estimate Ruballo’s
restitution amount were attached, but those documents are not in the record.
The district court committed no plain error in considering information from
the Restitution Email (for what it was worth) at the sentencing hearing. That no
witness testified about the email does not bar the district court from considering the
information. A sentencing court has wide discretion to consider information that is
relevant to sentencing “without regard to [the] admissibility [of the information]
under the rules of evidence applicable at trial.” U.S.S.G. § 6A1.3(a); see also
Pepper v. United States, 562 U.S. 476, 480 (2011). Moreover, although a copy of
the Restitution Email itself was not introduced during the sentencing hearing, the
substance of the email -- including Florida’s estimated restitution amount -- was
described in an addendum to the PSI and was thus already a part of the record.
II. Sentencing Enhancements
We review the district court’s factual findings for clear error and review de
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novo the district court’s application of those facts to the guidelines. See United
States v. Williams, 527 F.3d 1235, 1247-48 (11th Cir. 2008).
“When the government seeks to apply an enhancement under the Sentencing
Guidelines over a defendant’s factual objection, it has the burden of introducing
‘sufficient and reliable’ evidence to prove the necessary facts by a preponderance
of the evidence.” Washington, 714 F.3d at 1361.
Abuse of Public Trust, U.S.S.G. § 3B1.3:
A defendant is subject to a two-level enhancement if the government
establishes that the defendant (1) held a position of public or private trust; and (2)
“abused that position in a way that significantly facilitated the commission or
concealment of the offense.” United States v. Ward, 222 F.3d 909, 911 (11th Cir.
2000); U.S.S.G. § 3B1.3. Whether the abuse-of-trust enhancement is appropriate
is “highly dependent on the specific facts in each situation.” United States v.
Morris, 286 F.3d 1291, 1296-97 (11th Cir. 2002).
A position of public or private trust is one “characterized by professional or
managerial discretion (i.e., substantial discretionary judgment that is ordinarily
given considerable deference).” U.S.S.G. § 3B1.3, cmt. (n.1). People in these
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positions “ordinarily are subject to significantly less supervision than employees
whose responsibilities are primarily non-discretionary in nature.” Id. In
determining whether a defendant occupied a position of trust for purposes of
section 3B1.3, courts consider the defendant’s relationship to the victim and
whether “the defendant has abused discretionary authority entrusted to the
defendant by the victim.” Williams, 527 F.3d at 1250 (emphasis omitted). “[I]n
the fraud context, there must be a showing that the victim placed a special trust in
the defendant beyond ordinary reliance on the defendant’s integrity and honesty
that underlies every fraud scenario.” Id. at 1250-51.
The district court committed no error in determining that Ruballo held a
position of public trust. Highland contracted with Florida to help administer and to
oversee the CCFP. As Highland’s Executive Director, Ruballo had considerable
discretion to administer federal funds, conduct a competitive bidding process for
catering contracts, and to conduct audits of daycare centers and catering companies
to ensure compliance with CCFP rules and regulations.
The government showed by a preponderance of the evidence that Ruballo
abused her position of trust for her own personal profit and to conceal evidence of
her and her co-conspirators’ fraud. Among other things, Ruballo took affirmative
steps and directed others to hide and to destroy food quality complaints about
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Montoya’s catering. See United States v. Harness, 180 F.3d 1232, 1236-37 (11th
Cir. 1999) (affirming application of abuse-of-trust enhancement to an accountant
who -- as the Director of a federally-funded program -- embezzled federal funds
and falsified the organization’s books: defendant “used his position to illegally
divert [federal] funds and used his position to conceal his and his co-defendants’
fraudulent activity”).
Ruballo’s reliance on Williams is misplaced. In Williams, we concluded the
defendant lacked the requisite discretion to justify an abuse-of-trust enhancement
because the victim federal agency awarded federal funds “only after reviewing and
pre-approving a specific line-item budget” and never entrusted the defendant with
discretion to allocate those funds. See 527 F.3d at 1251. Unlike the defendant in
Williams, Ruballo had significant discretion -- with little oversight from Florida or
from USDA -- to award the catering contract, to conduct site audits, to submit
claims for meal reimbursement, and to distribute federal funds. We also reject
Ruballo’s contention that the conduct underlying the abuse-of-trust enhancement is
already accounted for in her base offense level. See United States v. Bracciale,
374 F.3d 998, 1005, 1007-09 (11th Cir. 2004) (concluding that defendant’s abuse
of trust was not included in the base offense level for his fraud offense because the
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base offense level was “not dependent on any abuse of trust or breach of fiduciary
duty.”).
Obstruction of Justice, U.S.S.G. § 3C1.1:
The guidelines provide for a two-level enhancement if “the defendant
willfully obstructed or impeded, or attempted to obstruct or impede, the
administration of justice with respect to the investigation, prosecution, or
sentencing of the instant offense of conviction.” U.S.S.G. § 3C1.1. Conduct
warranting an obstruction-of-justice enhancement includes “destroying or
concealing or directing . . . another person to destroy or conceal evidence that is
material to an official investigation or judicial proceeding (e.g., shredding a
document or destroying ledgers upon learning that an official investigation has
commenced or is about to commence), or attempting to do so.” Id., cmt. (n.4(D)).
We see no error in the district court’s application of a two-level
enhancement for obstruction of justice. The government presented evidence
showing that -- during the execution of a search warrant on Highland -- Ruballo
deleted incriminating information from her phone, including a kickback ledger.
Only a fraction of that information was later recovered. In addition, after learning
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about Florida’s investigation into Highland, Ruballo attempted to hinder the
investigation by shredding complaints about Montoya’s food and by ordering her
employees to falsify complaints about other caterers.
Given the evidence that Ruballo destroyed evidence and directed others to
conceal evidence material to Florida’s investigation, the district court applied
properly a two-level enhancement for obstruction of justice.
III. Loss Amount and Restitution Obligation
Ruballo challenges the district court’s determination of a loss amount of $14
million: an amount that resulted in a 20-level offense increase under U.S.S.G. §
2B1.1(b)(1). Ruballo also challenges the district court’s determination that she
was obligated to pay $13,231,277 in restitution.
We review for clear error the district court’s determination about the amount
of loss under the guidelines and about the district court’s factual findings for the
amount of restitution. See United States v. Barrington, 648 F.3d 1178, 1197 (11th
Cir. 2011) (loss amount); United States v. Huff, 609 F.3d 1240, 1247 (11th Cir.
2010) (restitution).
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Loss Amount:
Under the guidelines, the loss is calculated as “the greater of the actual loss
or intended loss.” U.S.S.G. § 2B1.1, cmt. (n.3(A)). “A sentencing court need only
make a reasonable estimate of the loss, given the available information.”
Barrington, 648 F.3d at 1197. Because estimating a loss amount is a highly fact-
dependent inquiry, we have said that “district judges are entitled to considerable
leeway in choosing how to go about this task.” United States v. Campbell, 765
F.3d 1291, 1301 (11th Cir. 2014). The district court however must “support its
loss calculation with reliable and specific evidence.” Id. at 1304. The government
bears the burden of proving the loss amount by a preponderance of the evidence.
Id.
In determining the loss amount attributable to Ruballo, the district court said
-- without further explanation -- that the government’s proposed loss amount
($26.37 million) was “overstated” and that the loss amount was, instead, $14
million.
We are unable to determine from this statement the evidence upon which the
district court relied in calculating the loss amount. Based on the district court’s
mention of the Restitution Email during an earlier exchange with Ruballo’s lawyer
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about loss amount, however, we cannot rule out that the district court relied chiefly
on the Restitution Email (and Florida’s estimated restitution of $13,231,277) in
determining the $14 million loss amount.
The body of the Restitution Email, however, provides no indication about
how the restitution amount was calculated. Instead, the email references
spreadsheets that were purportedly attached to the email but that seem never to
have been placed in the record. Because nothing in the record evidences how the
particular dollar amount was derived, the Restitution Email by itself is no “specific
and reliable” evidence supporting the $14 million loss calculation: just not worth
much as evidence on loss/restitution.
To allow for meaningful appellate review, the district court must provide
information sufficient to permit us to determine the factual basis upon which the
district court relied to reach its loss calculation. See United States v. Gupta, 572
F.3d 878, 889 (11th Cir. 2009) (remanding the issue of loss amount where the
district court made no factual findings supporting its loss estimate and, instead,
merely picked a number in between the parties’ estimates). Although other
evidence in the record might support the district court’s loss calculation, we are
unable at this point to reconstruct the district court’s reasoning. Thus, a remand is
necessary.
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Restitution Amount:
Under the Mandatory Victim Restitution Act (“MVRA”), the district court
“shall order restitution to each victim in the full amount of each victim’s losses as
determined by the court and without consideration of the economic circumstances
of the defendant.” 18 U.S.C. § 3664(f)(1)(A); see also United States v. Robertson,
493 F.3d 1322 (11th Cir. 2007) (applying the MVRA to cases involving wire or
mail fraud). The “amount of restitution owed to each victim must be based on the
amount of loss actually caused by the defendant’s conduct.” United States v.
Martin, 803 F.3d 581, 595 (11th Cir. 2015) (quotations and emphasis omitted).
We have said that “the method for calculating actual loss, as opposed to
intended loss, under the Sentencing Guidelines is largely the same as the method
for establishing actual loss to identifiable victims under the MVRA.” See United
States v. Stein, 846 F.3d 1135, 1153 (11th Cir. 2017). The government bears the
burden of proving the restitution amount and “must deduct any value that a
defendant’s fraudulent scheme imparted to the victims.” Huff, 609 F.3d at 1247.
When a district court orders restitution, it “must explain its findings with
sufficient clarity to enable this court to adequately perform its function on
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appellate review.” Id. at 1248. In doing so, “the district court must make specific
factual findings of whether the victim suffered a loss and the amount of those
actual losses,” including whether value had been rendered to the victim that would
be offset against the restitution amount. Id. at 1249 (emphasis omitted) (vacating
and remanding the issue of restitution where the district court adopted a PSI
restitution calculation and made no specific findings about the victims’ actual loss
amount).
In ordering restitution, the district court adopted expressly the restitution
amount set forth in the Restitution Email. As already discussed, however, the
record is void of information about how that restitution amount was calculated.
Moreover, the district court made no specific factual findings about the amount of
actual loss suffered by Florida, including about the potential value of services
actually rendered by Ruballo and by her co-conspirators that might be deducted
from the total loss amount. The record before us allows for no meaningful
appellate review of the restitution award; we remand for further proceedings.
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IV. Conclusion
We affirm the district court’s application of sentencing enhancements for
abuse of trust and for obstruction of justice. We vacate Ruballo’s sentence and
remand for the district court to reconsider and to explain more fully its calculation
of the amount of loss and the amount of restitution owed. In addition, we grant --
in part only -- the government’s request that it be permitted on remand to introduce
into evidence a complete copy of the Restitution Email: attachments in fact unseen
by the sentencing judge by the time of imposing sentence are not to be introduced
into the record. 3 For background, see United States v. Washington, 714 F.3d 1358,
1362 (11th Cir. 2013) (we have discretion to permit the government to present
evidence at resentencing).
AFFIRMED IN PART, VACATED IN PART, AND REMANDED.
3
We expect the lawyers and the district judge will need to confer to determine what can be
introduced into the record per this opinion. We also expect that the lawyers will be allowed a
reasonable chance to object to the contents of the added documents and to debate the weight the
email documents should bear on the questions of loss and restitution.
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