United States v. Bornman ( 2009 )

Opinions of the United
2009 Decisions States Court of Appeals
for the Third Circuit
3-6-2009
USA v. Bornman
Precedential or Non-Precedential: Precedential
Docket No. 07-3447
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PRECEDENTIAL
IN THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
NO. 07-3447
UNITED STATES OF AMERICA
v.
CHARLES BORNMAN
Appellant
On Appeal From the United States District Court
For the District of the Virgin Islands
(D.C. Crim. Action No. 03-cr-00127-1)
District Judge: Hon. Raymond L. Finch
Argued December 10, 2008
BEFORE: FISHER, JORDAN and
STAPLETON, Circuit Judges
(Opinion Filed: March 6, 2009)
Treston E. Moore (Argued)
P.O. Box 310, E.G.S.
Charlotte Amalie
St. Thomas, USVI
Attorney for Appellant
Jason T. Cohen
Office of U.S. Attorney
U.S. Courthouse
5500 Veterans Building - Suite 260
Charlotte Amalie
St. Thomas, USVI
and
William D. Dillon (Argued)
U.S. Department of Justice
75 Sprint Street, S.W. - Suite 1176
Atlanta, GA 30303
Attorneys for Appellee
OPINION OF THE COURT
STAPLETON, Circuit Judge:
Appellant Charles Bornman, an official of the
Government of the Virgin Islands (“GVI”), was found guilty of
two counts of conspiracy to commit bribery in violation of 18
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U.S.C. §§ 371 and 666(a)(1)(B) (Counts One and Two), and two
counts of extortion in violation of 18 U.S.C. § 1951 (Counts
Three and Four). His appeal presents two issues. The first is
whether Counts One, Three, and Four of the indictment are
barred by the statute of limitations. We conclude that they are
and vacate his convictions on those counts. The second issue is
whether sufficient evidence supported his conviction on Count
Two. We conclude that the supporting evidence was sufficient
and affirm his conviction on Count Two.
I. Background
The events giving rise to this case began in 1995 and
1996, when the Virgin Islands was devastated by Hurricanes
Marilyn and Bertha, respectively. In the aftermath of these
storms, the Federal Emergency Management Agency (“FEMA”)
made available approximately $30 million of federal funding to
homeowners who had lost their roofs in the storms. This
program became known as the Governor’s Home Protection
Roof Program (“HPRP”). Bornman, a licensed engineer, began
working for the Government of the Virgin Islands at HPRP on
October 1, 1997. He worked as a subordinate of Dean Luke, the
Commissioner of the Department of Property and Procurement
for the GVI at the time, who was subsequently indicted and tried
along with Bornman.
II. Jurisdiction & Standard of Review
We have jurisdiction over Bornman’s appeal of his
conviction under 28 U.S.C. § 1291. United States v. Helbling,
209 F.3d 226, 231 n.1 (3d Cir. 2000). We exercise plenary
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review over whether counts of an indictment should have been
dismissed for violating the statute of limitations. In re Merck &
Co., Sec., Derivative & "ERISA'' Litig. 543 F.3d 150, 160 (3d
Cir. 2008). We also exercise plenary review over whether there
was sufficient evidence from which the jury could have
concluded that the government proved a conspiracy charged in
an indictment. See United States v. Lee, 359 F.3d 194, 207 (3d
Cir. 2004). In making this determination, “[o]ur standard of
review is highly deferential. ‘We determine whether there is
substantial evidence that, when viewed in the light most
favorable to the government, would allow a rational trier of fact
to convict.’” Helbling, 209 F.3d at 238 (citing Government of
the Virgin Islands v. Charles, 72 F.3d 401, 410 (3d Cir. 1995)).
III. Limitations
A. Count One
The indictment describes the Count One conspiracy as
follows:
THE OBJECT OF THE CONSPIRACY
It was the object of the conspiracy for
Defendants BORNMAN and LUKE to enrich
themselves by corruptly soliciting and accepting
payments from contractors with the intent of
being influenced and rewarded in connection with
the HPRP roofing program.
MANNER AND MEANS OF THE CONSPIRACY
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It was part of the conspiracy that
BORNMAN, while he was the Project Manager
of the HPRP program, would and did solicit and
accept payments from two contractors that
regularly performed work for the HPRP program.
It was part of the conspiracy that LUKE,
while he was the Commissioner of Property and
Procurement and acting as the supervisor of the
HPRP program, would and did solicit payments
from two contractors that regularly performed
work for the HPRP program.
It was further part of the conspiracy that
BORNMAN and LUKE disguised the solicited
payments from HPRP contractors as short term
loans.
App. at 16-17.
The first four alleged “Overt Acts” occurred “[o]n or
about April 24, 1998.” App. at 17. On or about that date, Luke
allegedly “solicited” and Bornman allegedly “solicited and
accepted” a $10,000 payment from the head of a construction
company and a $15,000 payment from the head of an
engineering firm. The “Overt Acts” segment of Count One then
concluded with two further “acts”:
On or about January 1999, the exact date being
unknown to the Grand Jury, Defendant
BORNMAN returned $15,000 to the head of an
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engineering firm, in payment of the “short term
loan.”
Between April 24, 1998 and the date of the
Indictment, Defendant BORNMAN, on numerous
occasions, refused to return the $10,000 to the
head of the construction company, as repayment
of the “short term loan.”
App. at 17.
The applicable statute of limitations specifies a five year
limitations period. 18 U.S.C. § 3282. Bornman insists that the
statute of limitations on Count One began to run of April 24,
1998, the date he received the $25,000. Since the indictment
was not returned until August 7, 2003, he contends that it was
untimely.
For a conspiracy indictment to fall within the statute of
limitations, it is “incumbent on the Government to prove that .
. . at least one overt act in furtherance of the conspiracy was
performed” within five years of the date the Indictment was
returned. Grunewald v. United States, 353 U.S. 391, 396
(1957). “[T]he crucial question in determining whether the
statute of limitations has run is the scope of the conspiratorial
agreement, for it is that which determines both the duration of
the conspiracy, and whether the act relied on as an overt act may
properly be regarded as in furtherance of the conspiracy.” Id. at
397.
The agreement of Luke and Bornman alleged in Count
One is an agreement to commit a federal crime; namely, “to
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enrich themselves by corruptly soliciting and accepting
payments from contractors with the intent of being influenced
and rewarded in connection with the HPRP roofing program.”
App. at 16. Once those payments had been solicited and
accepted with the requisite intent to be influenced, the crime had
been committed and the object of the conspiracy accomplished.
The statute of limitations thus began to run on April 24,
1998. While it is true, as the government stresses, that the last
two overt acts are alleged to have occurred later than that date,
the government has failed to explain how either of those acts –
the returning of one payment and the refusal to return the other
– could have been in furtherance of an agreement to solicit and
to accept payments from contractors. The government’s brief
asserts only that because “Bornman and Luke conspired to take
money from contractors in the ‘guise’ of short-term loans [in
order] to conceal the true nature of the transaction, . . . the
conspiracy to solicit bribes . . . was not complete until the ‘short-
term loans’ were either repaid or disavowed by Appellant.”
Appellees’ Br. at 22. We are unpersuaded.
With respect to concealment, the indictment does not
allege that Luke and Bornman agreed upon anything other than
calling the payments “short term loans,” and that was
accomplished on April 24, 1998. The government cannot
extend the limitations period by insisting that there was an
implicit agreement to conceal the conspiracy. Grunewald, 353
U.S at 413. Nor can the government retroactively amend the
indictment to allege that the conspiracy included a scheme to
solicit and accept forbearance of debt collection from the
contractors who “lent” Bornman money. If the indictment had
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alleged that, we would have a different case, for we do not doubt
that using one’s position as a government official to force a
lender to forbear the collection of a debt could form the basis of
a criminal charge, including a charge of violating 18 U.S.C. §
666(a)(1)(B). Instead, however, the government chose to frame
the scheme as one to corruptly solicit and accept payments, a
scheme which was accomplished in full when the payments
were received.
Moreover, as the indictment makes clear, it is not claimed
that Bornman ever intended to “borrow” the payments received;
rather, those payments were “disguised as short term loans.”
But even if he had intended to extort loans from the contractors,
we believe the government’s conclusion would remain a faulty
one. In United States v. Hare, 618 F.2d 1085 (4th Cir. 1980),
the indictment charged Hare with receiving a loan at a favorable
interest rate in violation of 18 U.S.C. § 201(g), which makes it
unlawful to receive “anything of value” because of the
performance of an official act. The indictment was returned in
1979, and it alleged that Hare received the loan in 1970. In an
attempt to avoid the five-year limitation, the government argued
that the defendant continued to receive the benefit of the loan
until 1975, when he paid it off. The Fourth Circuit rejected the
government’s argument, holding:
If the government's argument were accepted, the
term of the loan would determine the application
of the statute of limitations. For example, a
twenty-five year loan would permit prosecution
under § 201(g) thirty years after the terms of the
loan had been fixed and the loan proceeds had
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been received by the errant public official. Such
a result would be contrary to the Supreme Court's
admonition in Toussie v. United States, 397 U.S.
112, 90 S. Ct. 858, 25 L. Ed. 2d 156 (1970), that
federal statutes of limitations should be applied
strictly in order to further the congressional policy
favoring repose. See also Carroll v. United States,
326 F.2d 72, 85-86 (9 [sic] Cir. 1963); United
States v. Sloan, 389 F. Supp. 526 (S.D.N.Y.1975).
Id. at 1086-87.
The government also contended that Hare had received
a thing of value within the statute of limitations, “namely
forebearance [sic] on the part of the creditor from initiating
remedial legal action after a prolonged series of defaults.” Id.
at 1087. The Fourth Circuit rejected that argument because, as
in the case before us now, the government had not alleged in the
indictment that the crime had anything to do with forbearance in
collections. The Court observed that the indictment “did not
allege receipt of things of value other than the loan, and its
favorable terms,” and it concluded that “the indictment was
based solely on the 1970 loan; and, since we must decide the
case on the basis of the facts alleged therein, it was properly
dismissed as time-barred.” Id.
The conclusion that we here reach also follows, a
fortiori, from that reached by the Court of Appeals for the
Second Circuit in United States v. Roshko, 969 F.2d 1 (2d Cir.
1992). There, the Second Circuit dismissed as untimely an
indictment charging Irene Roshko with conspiracy to change the
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immigration status of her husband, Meir. The prosecution’s
theory was that Meir entered into a sham marriage with a United
States citizen in order to obtain a green card, and then
subsequently divorced that citizen and married Irene. The
Indictment was returned more than five years after Meir
received his green card, but within five years of his divorce and
his subsequent remarriage to Irene. The Second Circuit agreed
with Irene that “the only legitimate prosecution permitted under
the language of the indictment – conspiracy to change the
immigration status of Meir – was time-barred, because the grand
jury’s indictment was filed more than five years after the
conspiracy was terminated.” Id. at 4. Despite the indictment’s
explicit reference to Meir’s sham marriage, the Second Circuit
noted that Meir’s divorce and re-marriage did not extend the
statute of limitations, since they “did not further the conspiracy’s
principal objective of altering an alien’s immigration status.” Id.
at 7 (citing United States v. Rubenstein, 151 F.2d 915 (2d Cir.
1945), cert. denied, 326 U.S. 766 (1945)).
Likewise, in this instance, Count One of the Indictment
charges Bornman with seeking to enrich himself by corruptly
soliciting and accepting payments. His subsequent actions with
respect to retaining or returning the money did not further the
underlying scheme, and consequently, they may not extend the
statute of limitations.
B. Counts Three and Four
Counts Three and Four allege the substantive extortion
offenses that were the objectives of the Count One conspiracy.
Specifically, Count Three alleges that “Bornman unlawfully
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obtained money, that is the $15,000 check designated as a ‘short
term loan’ which money was not due Defendant Bornman and
his office, which was money paid by the head of an engineering
firm to Defendant Bornman, with the consent of the payor under
color of official right.” App. at 20. Count Four contains an
identical allegation regarding the $10,000 cash payment from
the head of a construction company. As the indictment makes
clear, these offenses were complete as of April 24, 1998, and
prosecution of them is, accordingly, barred by limitations.
IV. Sufficiency of Evidence Regarding Count Two
Count Two of the indictment alleges a conspiracy to
violate 18 U.S.C. § 666(a)(1)(B) which allegedly began in
August 1998 and continued “at least through April 26, 1999.”
App. at 18. The prosecution’s theory was that Bornman
corruptly solicited and accepted certain things of value from
Eugene Sardelli, the owner of the Superior Shotcrete
Construction Company, with the intent of being influenced in
regard to Bornman’s approval of work on a particular HPRP
project, the Postle House.
The government introduced evidence that on April 26,
1999, Bornman, acting in his capacity as an HPRP official,
inspected the Postle House and approved final payment of over
$70,000 to Superior Shotcrete, even though work on the project
was incomplete. In addition, it introduced evidence from which
the jury could have inferred that in February and March of 1999
and while he was working for HPRP, (1) Bornman worked with
Sardelli to organize a new company, Pioneer Shotcrete, into
which Sardelli intended to transfer much or all of his contracting
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business; (2) Sardelli promised Bornman employment with
Pioneer Shotcrete, provided office space and a cell phone for
Bornman, and had business cards printed for Pioneer Shotcrete
showing Bornman as its vice president; and (3) Bornman
distributed business cards showing him as the vice president.
Although Bornman presented an alternative explanation for his
behavior – namely, that he discontinued his employment with
HPRP in January – the jury could infer that Bornman’s
employment with HPRP was ongoing as of April 26, 1999. If
the jury drew these inferences, it would have been entitled to
conclude that Bornman accepted something of value – i.e., the
offer of employment – with the intent, inter alia, of having that
relationship influence his remaining official actions with respect
to Superior Shotcrete. When the evidence is viewed in the light
most favorable to the government, Helbing, 209 F.3d at 238,
substantial evidence supports the conviction.
V. Additional Count Two Arguments
Bornman makes a number of additional arguments
relating to Count Two, which we find without merit. His
argument that the government failed to introduce evidence of a
quid pro quo is without merit, because the statute requires no
such evidence. See Sabri v. United States, 541 U.S. 600, 604
(2004) (§ 666(a)(2) requires no connection between the federal
funds and the alleged bribe); United States v. Gee, 432 F.3d 713,
714 (7th Cir. 2005).
He also contends that the District Court erred by denying
his motion to sever Count Two from the other counts. A
severance should be granted “‘only if there is a serious risk that
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a joint trial would compromise a specific trial right of one of the
defendants, or prevent the jury from making a reliable judgment
about guilt or innocence.’” United States v. Lore, 430 F.3d 190,
205 (3d Cir. 2005) (quoting United States v. Urban, 404 F.3d
754, 775 (3d Cir. 2005)). “Defendants seeking a severance bear
a ‘heavy burden’ and must demonstrate not only that the court
would abuse its discretion if it denied severance, ‘but also that
the denial of severance would lead to clear and substantial
prejudice resulting in a manifestly unfair trial.’” Id. (quoting
Urban, 404 F.3d at 775).
Bornman’s argument that the evidence relating to Count
Two was more damaging than the evidence relating to the other
counts is not sufficient to meet his “heavy burden.” It is well-
established that a defendant is not entitled to a severance solely
on the basis that the evidence against his co-defendant is more
damaging than the evidence presented against himself. Urban,
404 F.3d at 775. It follows from this that a defendant is not
entitled to a severance solely on the basis that the evidence in
regard to certain counts is more damaging than evidence in
regard to other counts. Moreover, we note that the District
Court expressly instructed the jury to compartmentalize the
evidence presented and consider each count separately and
independently. App. at 1631-1632. “We presume that the jury
follows such instructions, and regard such instructions as
persuasive evidence that refusals to sever did not prejudice the
defendant.” Urban, 404 F.3d at 775 (internal citations omitted).
Finally, Bornman also argues that his conviction violates
Wharton’s Rule. Wharton’s Rule is “a doctrine of criminal law
enunciating an exception to the general principle that a
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conspiracy and the substantive offense that is its immediate end
are discrete crimes for which separate sanctions may be
imposed.” Iannelli v. United States, 420 U.S. 770, 771 (1975).
In the classic Wharton’s Rule offenses – adultery, bigamy,
incest, and duelling – the harms attendant upon the commission
of the substantive offense are restricted to the parties in the
agreement. Id. at 782-83. Hence, Wharton’s Rule has no
applicability here.
VI. Conclusion
We will reverse the judgment of the District Court and
remand with instructions to dismiss Counts One, Three and Four
and to resentence on Count Two only.
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