United States v. Boutte ( 1997 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 96-40068
_____________________
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
GREGORY BOUTTE,
Defendant-Appellant.
_______________________________________________________
Appeal from the United States District Court for
the Eastern District of Texas
(1:94-CV-102)
_______________________________________________________
February 10, 1997
Before REAVLEY, GARWOOD and BENAVIDES, Circuit Judges.
REAVLEY, Circuit Judge:*
Gregory Boutte appeals the district court’s summary judgment
award to the government of $1,019.881 in statutory damages and
fines for twenty-three violations of the False Claims Act. 31
U.S.C. § 3729, et seq. Boutte was charged with submitting false
and fraudulent claims to an agency of the U.S. Department of
Commerce to fund his Triplex Minority Business Development Center
(Triplex). In an earlier 1992 criminal proceeding, Boutte was
tried and convicted for these same offenses. He was sentenced to
*
Pursuant to Local Rule 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in Local Rule
47.5.4.
41 months in prison and ordered to pay $150,813.75, exactly half
of $301,627.50, the amount the district court determined had been
the government’s loss. United States v. Boutte, 907 F.Supp. 239(E.D.Tex. 1995), aff’d 13 F.3d. 855 (5th Cir. 1994), cert.
denied, 115 S.Ct. 71 (1994).
Defendant contends that these subsequent civil charges are
barred by the Double Jeopardy Clause of the Constitution. He
further argues that under Halper1 the recovery sought is barred
as punitive because the Government has not made a showing of what
amount of recovery would make it whole. Because we find that the
fines were not grossly disproportionate to the government’s loss,
we affirm.
In its summary judgment award, the district court set
damages at $1,018,881. This amount represents the statutorily
authorized sum of treble the Government’s loss, determined in the
1992 criminal proceeding to be $301,627, and a $5,000 fine for
each of the 23 counts of the False Claims Act for which Boutte
was convicted. [(3 x $301,627) + (23 x $5,000) = $1,018,881].
The criminal court’s finding that the Government’s loss was
$301,627 is prima facie proof of that fact. Under the provisions
of the False Claims Act, Boutte is liable for civil penalties of
between $5,000 and $10,000 per violation, plus three times the
amount of damages sustained by the Government because of his
acts. 31 U.S.C. § 3729(a), et seq.
1
United States v. Halper, 490 U.S. 435, 109 S.Ct. 1892(1989).
2
The Government correctly asserts, and the court below
agreed, that Boutte is collaterally estopped from challenging the
facts underlying the 23 counts for which he has already been
convicted. The Government is not required to reprove the same
facts especially when, as here, a lower standard of proof applies
to the civil violations under the False Claims Act. 31 U.S.C. §
3731(d).
Boutte’s contention that only five of the twenty-three
counts charged subject him to statutory fines under the False
Claims Act is unsupported by the record. The convictions on
Counts 1-5 for wire fraud establish that defendant fraudulently
caused wire transfers of government funds to Triplex for payment
of non-Triplex employees who were working on Boutte’s private
accounting business.2
The criminal convictions on Counts 11-23 were predicated on
a finding that the listed quarterly reports falsely stated the
amount of work done by Triplex, and the convictions on all counts
were predicated on the scheme to defraud the Government and
obtain payments to which the defendant was not entitled. In
finding Boutte guilty for violations of §1001, the jury found him
to have overstated the assistance his center provided to minority
businesses, thus making it appear that he had met the
requirements to obtain and continue receiving program funds.
2
Convictions under the wire fraud statute cover wire
transmissions for the purpose of executing “any scheme or
artifice to defraud, or for obtaining money or property by means
of false or fraudulent pretenses, representations, or
promises...” 18 U.S.C. § 1343.
3
Each of the thirteen quarterly reports listed in Counts 11-23
falsely stated the amount of reimbursable work done by Triplex.
In the criminal trial, two Government witnesses testified that
these reports were heavily relied on by the Government in
deciding to fund Triplex.
While a prior criminal conviction for a §1001 violation
might not, without more, collaterally estop a defendant in a
subsequent civil suit under the False Claims Act, in the instant
case the court correctly held on summary judgment that the False
Claims Act applied to all counts. The criminal indictment
alleged that the false statements were part of a scheme to
defraud the government, and were submitted in order to ensure
continued federal funding, and there was uncontradicted
testimony that the false statements were relied on by the
Government in deciding whether to fund defendant’s program. In
addition to the facts underlying the convictions, the evidence of
payment to Boutte based on his false statements support the
summary judgement.
There being no contrary evidence by defendant as to the
earlier determination of the government’s losses at $301,627, the
record presents no genuine issue of any material fact. Summary
judgment is, therefore, warranted. See Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348,
1356 (1986).
To satisfy the rule in Halper and not implicate the Double
Jeopardy Clause, civil remedies must constitute a “mere penalty”
4
and not punishment. The purpose of civil damages is to make the
Government whole, not to function as a “deterrent or
retribution.” Halper, 490 U.S. at 449, 109 S.Ct. at 1902 (1989).
Thus, the issue on appeal is whether the civil award bears a
rational relationship to the government’s total damages.
Boutte’s case is not the type of rare case addressed in
Halper, where overwhelmingly disproportionate sanctions amounted
to 200 times the government’s proven loss. The district court
correctly decided that there is no issue of disproportionality
where the imposed fine is 3.38 times the amount of the
government’s damages. On these facts, Boutte’s contention that
the Government should be required to make an accounting of
damages is untenable. The complicated prosecution and expenses
involved in this civil action are necessarily great enough that
the gross disproportionality and irrational relationship factors
of Halper are not reached.
AFFIRMED.
5